H&M Store Enterprise Agreement failed

by Ben Desir, Workplace Advisor, NRA Legal

After a lengthy application process, Swedish fashion retailer, H&M has had their proposed national enterprise agreement rejected by the Fair Work Commission (FWC) after failing to pass the Better Off Overall Test (BOOT).

The agreement, which proposed to trade lower weekend and public holiday penalty rates for higher weekday rates, was found by the FWC to leave casual employees in a worse position than the General Retail Industry Award 2010 (Modern Award).

The Shop Distributive and Allied Employees’ Association (SDA) and Retail and Fast Food Workers Union (RAFFWU) raised a number of concerns that the agreement could disadvantage some employees, for example those who work every Sunday for extended periods. These concerns were validated by the FWC analysis of the agreement.

In an attempt to address these concerns H&M provided a number of undertakings to the FWC however, Deputy President Geoff Bull ultimately found these undertakings insufficient and refused to pass the agreement.

In his decision he said “I consider that the undertakings result in financial detriment to casual employees covered by the Agreement and as such the Agreement cannot be approved. Having regard to the exhaustive attempts to obtain satisfactory undertakings to date, I am not prepared to allow the approval process to be extended any longer”.

Deputy President Bull had also raised concerns about H&M’s time frames allocated to resolve any underpayments. H&M had expressed difficulty reconciling wages within a normal pay period. Ultimately, Deputy President Bull found that the undertakings had failed to substantially address these concerns.

Deputy President Bull also took issue with H&M’s undertaking to pay casual employees an additional $0.65 per hour. He said that this needed to be contrasted with the limitation of casual weekend work to not more than 65% of their hours. He said that this would result in H&M being able to roster casual employees for “100% of their hours on weekends for significant periods”. He viewed this as inferior to the Award, which provided for award rates at least every fortnight. “A wait of three months or more to receive an award entitlement plus $0.58 per week is an inferior condition,” he said.

He was also particularly critical H&M for providing an unheralded revision to an undertaking late in the application process that reduced salaried employees’ pay by up to $5,000 on the basis of “budget reviews and new stores having opened”.

This case illustrates how difficult it can be to get enterprise agreements to pass the BOOT, even with extensive negotiations and revisions.

For further information on enterprise agreements, contact the National Retail Association Hotline and speak to one of our Workplace Advisors on 1800 RETAIL (1800 738 245).