Apple Marketing Group Pty Ltd
[2010] FWA 5192
•15 JULY 2010
[2010] FWA 5192 |
|
DECISION |
Fair Work (Transitional Provisions and Consequential Amendments) Act 2009
Sch. 3, Item 16 - Application to terminate collective agreement-based transitional instrument
Apple Marketing Group Pty Ltd
(AG2010/11350)
COMMISSIONER ROE | MELBOURNE, 15 JULY 2010 |
Termination of Apple Marketing Group Employee Collective Agreement 2007.
[1] This decision concerns an application by Apple Marketing Group Pty Ltd (the Applicant) pursuant to Item 16 of Schedule 3 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (the Transitional Act) and s 225 of the Fair Work Act 2009 (the FW Act)to terminate the Apple Marketing Group Employee Collective Agreement (the Agreement).
[2] The Agreement is a collective agreement-based transitional instrument for the purposes of the Transitional Act (Item 2(5)(c)(v) of Schedule 3) with a nominal expiry date of 30 June 2010. The nominal expiry date is expressed in the Agreement as three years from the date of lodgement. Fair Work Online shows that the Agreement was lodged on 29 June 2007. I am satisfied that the Agreement has passed its nominal expiry date. The uncontested submission of the applicant is that the Agreement currently applies to 183 casual workers employed by the Applicant in Queensland.
[3] The Australian Municipal, Administrative, Clerical and Services Union (ASU) is not a party to the Agreement but has members who are covered by the Agreement.
[4] At the hearing of this matter on 14 July 2010 the Applicant was represented by Darren Musilli, General Manager of the Applicant, and Leigh Bernhardt, Industrial Relations Consultant. The ASU was represented by Simon Clayer.
[5] I am satisfied that in June 2010 the employer consulted with employees about the proposed termination of the Agreement at a series of briefing meetings. The employer then advised all employees in writing and also the ASU that it intended to apply for the termination of the Agreement. The employer provided a guarantee to employees that they would not be worse off and that they would not apply the transitional provisions in moving to the new Modern Award but would apply the provisions of the Modern Award as from 1 July 2010. The employer has advised that no employees expressed any opposition to the termination of the Agreement and the ASU has also indicated their support for the termination of the Agreement.
[6] I have undertaken an examination of the Modern Award, the Contract Call Centres Award 2010 and compared that to the Agreement. It is quite clear to me that if the Agreement had been lodged under the present legislation, the Fair Work Act 2009, it would not have been able to be approved as employees would have been clearly disadvantaged. The Agreement could not pass the Better Off Overall Test. Employees are significantly worse off than the Award in a number of respects including:
• The Agreement provides for a wider span of hours in which ordinary hours can be worked on any seven days of the week when compared to the Award and the consequence of this is of course reduced overtime and penalty payments and also reduced quality of work and family life.
• The effect of the Agreement is to reduce the occasions and amount of penalty and overtime payments for working additional or inconvenient hours when compared to the Award
• The effect of the Agreement is to reduce employee rights to meal breaks when compared to the Award
• The effect of the Agreement to reduce employee casual loadings when compared to the Award
• The effect of the Agreement is to reduce the minimum pay rates when compared to the Award for a number of classifications
• The Agreement provides a disputes settlement process which offers employees less access to Fair Work Australia than the Award disputes settlement process
The Relevant Legislation
[7] Item 16 of Schedule 3 of the Transitional Act provides:
“16 Collective agreement-based transitional instruments: termination by FWA
(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.”
[8] 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 FWA for the termination of the agreement:
(a) one or more of the employers covered by the agreement;
(b) an employee covered by the agreement;
(c) an employee organisation 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, FWA must terminate the agreement if:
(a) FWA is satisfied that it is not contrary to the public interest to do so; and
(b) 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.”
[9] It is therefore necessary to consider each of the matters in s 226 to determine whether Fair Work Australia is required by that section to terminate the Agreement. I do not have a general discretion in this matter. Section 226 specifies the nature of considerations to be taken into account and the test to be applied to determine the matter.
[10] The FW Act is significantly different in two major respects from the Workplace Relations Act 1996 (WR Act) in respect to the termination of agreements after their nominal expiry date where there is not agreement of all the parties covered by the agreement.
[11] Firstly, the WR Act provided that the Tribunal must terminate an agreement in these circumstances unless it was contrary to the public interest. The FW Act retains the public interest requirement in s 226(a) and it is expressed in similar terms to the previous s 170MH(3) of the WR Act. However, the FW Act provides that, in addition to the public interest requirement, the Tribunal must only terminate the agreement if it considers it appropriate after considering all the circumstances, including the views of the parties and the likely effect of the termination on each of them (s 226(b)). This is significant since it is precisely these considerations which the AIRC previously found were distinguishable from the public interest. The AIRC previously found that evidence that termination of an agreement was opposed by employees and or would be likely to have an adverse impact on employees was not necessarily sufficient to activate the public interest. However, it is clear that the legislators have now decided that such matters are relevant considerations in their own right and may lead to a decision to refuse to terminate an agreement.
[12] Secondly, Section 226 concerning the termination of agreements is found in Part 2-4 of the FW Act which deals with Enterprise Agreements. The legislative scheme and objects of the Act and the objects of Part 2-4 in particular in this respect are quite different from the WR Act. Part 8 of the WR Act which dealt with Workplace Agreements did not have separate objects. The FW Act places a strong emphasis on the objective of facilitating and enabling collective bargaining, bargaining in good faith and the making of enterprise agreements. The termination of an agreement without the agreement of all parties covered by the agreement must now be considered in this context. It is clearly a public interest consideration under s 226(a) if the termination of an agreement would be contrary to the objectives and scheme of the legislation in respect to facilitating and encouraging bargaining and agreements. It is also a context within which the interests of and effects on the parties should be considered as required by Section 226(b).
[13] It has certainly been the case since the introduction of a legislative scheme for collective bargaining in Australia that the platform for bargaining replacement agreements has been with very few exceptions the old agreement. That is, the terms and conditions provided by the old agreement remain in place until a new agreement is negotiated by the parties. There has never been a drop dead date for agreements. The FW Act reinforces this by making the unilateral termination of agreements more difficult including by the introduction of s 226(b) and by the removal of any equivalent to Section 393 of the WR Act. The FW Act also reinforces this by removing the option of statutory individual contracts and by encouraging and facilitating bargaining in good faith.
[14] The termination of an agreement in many cases will result in a significant shift in the balance of forces in bargaining. The legislature has deemed it fair to restrict the unilateral termination of agreements and to preserve a situation where in most cases collective agreements remain in place until a new agreement is negotiated to replace it.
[15] I have considered the submissions of the parties and the views of the employer, the employees and the union and the likely effect of the termination on them. I have concluded that there is no public interest reason why the termination should not be approved. I have also concluded that there will be no disadvantage to the parties. I have also concluded that the termination of the Agreement will not be contrary to the objective of promoting collective bargaining and collective agreements. I say this for two reasons. Firstly because the Agreement provides inferior wages and conditions in many respects to the Award and hence the platform for bargaining is not being reduced. Secondly because the legislation provides that either party can initiate bargaining for a new agreement at any future date should they so wish and have access to the various provisions concerning good faith bargaining.
[16] I therefore find that it is appropriate to terminate the Agreement.
Orders
[17] I am required having considered the matters in Section 226(a) and (b) to order the termination of the Agreement. I order that the termination shall operate from 14 July 2010.
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