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Industry pushes back on packing shed peculiarities

A stoush is playing out between unions and the horticulture sector, over whether workers in packing sheds should be treated differently depending on the location of the shed.

The National Farmers’ Federation (NFF) has been leading the charge to overturn a peculiar 2014 decision which placed off-farm packing sheds outside the scope of the Horticulture Award.

With industry now eagerly awaiting a decision, we take a look at what transpired to get us here. 

Packing sheds: off-site vs on-site

The NFF maintains that it makes sense for off-site packing sheds and on-site packing sheds to be covered by the same award, namely the Horticulture Award.

On-site packing sheds are those which are on the land where crops are grown. Off-site packing sheds are at a separate location such as a centralised facility for a larger horticulture operation, or a shed that is shared by a number of growers.

The National Union of Workers (NUW), supported by the Australian Workers’ Union (AWU), takes the view that off-site packing sheds are different to those which are on-site.

In 2014 they successfully made this argument to the Fair Work Commission, leaving us with a Full Bench decision (the Mitolo Decision) which states that “all off-site packing sheds should be covered by the Storage Services and Wholesale Award 2010 instead of the Horticulture Award which had long been applied”. In making this decision, the Bench relied on language that limited coverage to within the “farm gate”.

The difference? The Storage Services Award is not designed for an industry that is subject to variables like ripening produce, weather and market fluctuations. 

What does this mean?
Horticulture Award (On Farm Packing Sheds) Storage Services Award (Off Farm Packing Sheds)
Permanent Employees work 6am-6pm
Monday to Friday
Permanent Employees work 7am-530pm
Monday to Friday
Three hour minimum engagement on Sunday Four hour minimum engagement on Sunday
No overtime for casuals Overtime for casuals
Employees can elect to work Sunday instead of Saturday at Saturday rates No election permitted
Special provisions for hours at harvest time No flexibility for harvest

The Mitolo Decision bought with it a wave of confusion and uncertainty. Questions being asked included:

  • Is a cooperative a good business choice now?
  • Do I need to grow a small amount of crops near the packing shed to ensure it stays in the Horticulture Award?
  • Should I continue to work toward building a centralised packing facility?
  • Should I reconsider my business plans to relocate my packing facility?

The Mitolo Decision has created a divide between on- and off-site packing facilities – throwing horticulture businesses into uncertainty.

What is the NFF doing about this?

The Full Bench in the Mitolo Decision suggested that the parties raise this issue as part of the 4 yearly review to seek some clarity and certainty. So, when the time came NFF made an application to amend the Horticulture Award to make it clear that it covered off-site packing sheds.

We were joined in making this application by a number of other industry representatives, including Mitolo Group, the original business for whom this issue arose. We mounted a significant evidentiary case in the face of union opposition. 

The hearings

The NFF, and the employer parties collectively filed large amounts of evidence to show why both on-site and off-site packing sheds need to be covered by the Horticulture Award.

Some of the key arguments included:

  • The work is the same regardless of where the shed is located. 
  • The horticulture industry has particular labour needs that are relevant to both on-site and off-site packing sheds. The Horticulture Award is the most appropriate for these businesses. 
  • It is unfair and illogical to have competing businesses covered by different awards, and therefore exposed to different costs. 
  • The limitation on the coverage of the Horticulture Award to the “farm gate” does not refer to a physical farm gate, but rather a concept.
  • There are good business reasons why a farm may locate their packing shed off-site.

In early July the parties travelled to Virginia in South Australia with the Commissioners to conduct a site visit of two neighbouring packing facilities owned by Mitolo Group and Zerella Fresh. The Mitolo Group facility was covered by the Storage Services Award, while the identical Zerella facility was covered by the Horticulture Award because some crops are grown on the same land as the shed. In our view, this site visit highlighted the absurdity of the demarcation of coverage arising from the Mitolo Decision. 

Where to now?

The Commission must be convinced that the amendment proposed by the NFF and other parties is necessary, when looking at the modern award objectives. This is a high bar. We are optimistic but reluctant to count our chickens before they hatch.

A Decision is expected later this year or early next year and until then, we wait with bated breath.

Ben Rogers is the General Manager, Workplace Relations & Legal Affairs at the National Farmers’ Federation.

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