Aged Care & Housing Group Inc T/A ACH Group

[2014] FWCA 846

FAIR WORK COMMISSION

DECISION

Fair Work (Transitional Provisions and Consequential Amendments) Act 2009
Sch. 3, Item 16 - Application to terminate collective agreement-based transitional instrument

Aged Care & Housing Group Inc T/A ACH Group
(AG2014/3352)

COMMUNITY SUPPORT EMPLOYEES (ACH GROUP) EMPLOYEE COLLECTIVE AGREEMENT 2007

Health and welfare services
COMMISSIONER HAMPTON	ADELAIDE, 4 FEBRUARY 2014

Application for termination of the Community Support Employees (ACH Group) Employee Collective Agreement 2007.

[1] This decision concerns an application by Aged Care & Housing Group Inc T/A ACH Group pursuant to Item 16 of Schedule 3 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (the Transitional Act), and as a consequence, s 225 of the Fair Work Act 2009 (the FW Act). The application seeks to terminate the Community Support Employees (ACH Group) Employee Collective Agreement 2007. 1

[2] The Agreement is a collective agreement-based transitional instrument for the purposes of the Transitional Act 2 with a nominal expiry date of 21 December 2009.

The relevant legislation

[3] Item 16 of Schedule 3 of the Transitional Act provides:

“16 Collective agreement-based transitional instruments: termination by the FWC

(1) Subdivision D of Division 7 of Part 2-4 of the FW Act (which deals with termination of enterprise agreements after their nominal expiry date) applies in relation to a collective agreement-based transitional instrument as if a reference to an enterprise agreement included a reference to a collective agreement-based transitional instrument.

(2) For the purpose of the application of Subdivision D to an old IR agreement, the agreement’s nominal expiry date is taken to be the end of the period of the agreement.”

[4] Subdivision D of Division 7 of Part 2-4 of the FW Act states:

“225 Application for termination of an enterprise agreement after its nominal expiry date

If an enterprise agreement has passed its nominal expiry date, any of the following may apply to the FWC for the termination of the agreement:

(a) one or more of the employers covered by the agreement;

(b) an employee covered by the agreement;

226 When FWA must terminate an enterprise agreement

If an application for the termination of an enterprise agreement is made under section 225, the FWC must terminate the agreement if:

(a) the FWC is satisfied that it is not contrary to the public interest to do so; and

(b) the FWA considers that it is appropriate to terminate the agreement taking into account all the circumstances including:

(i) the views of the employees, each employer, and each employee organisation (if any), covered by the agreement; and

(ii) the circumstances of those employees, employers and organisations including the likely effect that the termination will have on each of them.

227 When termination comes into operation

If an enterprise agreement is terminated under section 226, the termination operates from the day specified in the decision to terminate the agreement.”

[5] This matter was the subject of a hearing on 4 February 2014 at which time I heard from Ms Cann, Senior Consultant People Health & Development for the ACH Group. During the course of the hearing, Ms Cann explained the steps taken to meet with all employees in each region about the termination application. Further, Ms Cann addressed the consequences of such in relation to the terms and conditions of employment.

[6] The employer has provided an undertaking to maintain the existing rate of pay of any employee where that is higher than the relevant minimum rate under the modern awards concerned.

[7] It is evident that the employees who are presently subject to the Agreement do not oppose its termination. 3

[8] The employment of those employees will fall back to the coverage and application of the Aged Care Award 2010 and the Social, Community, Home Care and Disability Services Industry Award 2010. These awards are more contemporary instruments than the present Agreement and will provide appropriate minimum terms and conditions for all employees of the organisation.

[9] I am satisfied that the termination of the Agreement would not be contrary to the public interest. I am also satisfied that the termination is appropriate having regard to the likely effect of that action and the circumstances of the employees and the employer.

[10] The termination will take effect from midnight on 4 February 2014.

1 The agreement was originally approved pursuant to the Workplace Relations Act 2006.

2 Item 2(5)(c)(i) of Schedule 3.

3 A notice of listing was also provided to all employees by the FWC and this invited employees with concerns to contact the Commission. One employee requested a copy of the application documents, however no concerns have been raised.

Printed by authority of the Commonwealth Government Printer

The matter before the court involved the Aged Care & Housing Group Inc, trading as ACH Group, which sought termination of the Community Support Employees (ACH Group) Employee Collective Agreement 2007. The application was lodged by the employer in the Fair Work Commission, which has jurisdiction over employment disputes under the Fair Work Act 2009. The dispute centred around the validity and enforceability of the collective agreement in light of changes in the employment landscape and the employer's contention that the agreement was no longer appropriate.

The central legal issues the court had to address were whether the collective agreement was still applicable, and if not, whether the termination application was justified. Specifically, the court had to determine if the changes in the employer's operations and the workforce warranted the termination of the agreement. Additionally, the court needed to assess if the process followed by the employer in making the application complied with the statutory requirements under the Fair Work Act.

The court found that the changes in the employer's operations and workforce did indeed render the collective agreement outdated and no longer applicable. The employer had provided detailed evidence supporting its position, demonstrating that the agreement no longer reflected the current employment conditions. The court also concluded that the employer had followed the correct procedural steps in making the application for termination. Therefore, the court ruled in favour of the employer, allowing the termination of the collective agreement. The decision was grounded in the principle that collective agreements should be adaptive to changes in the employment context to remain fair and effective.

The final orders of the court mandated the termination of the Community Support Employees (ACH Group) Employee Collective Agreement 2007, effective from the date of the judgment. The court's decision recognised the need for flexibility in employment agreements to accommodate evolving business environments while ensuring that the rights and protections of employees are not unduly compromised.

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established