Application by firsthealth Ltd
[2018] FWCA 5529
•4 SEPTEMBER 2018
| [2018] FWCA 5529 |
| FAIR WORK COMMISSION |
| decision |
Fair Work Act 2009
s.225—Enterprise agreement
Application by firsthealth Ltd
(AG2018/2166)
FIRSTHEALTH LIMITED AGREEMENT 2009
| Australian Capital Territory | |
| Deputy President Kovacic | CANBERRA, 4 SEPTEMBER 2018 |
Application for termination of the firsthealth Limited Agreement 2009 – Agreement terminated.
Firsthealth Ltd (the Applicant) made an application under s.225 of the Fair Work Act 2009 (Cth) (the Act) to terminate the firsthealth Limited Agreement 2009[1] (the Agreement). The application was received by the Fair Work Commission (the Commission) on 23 May 2018.
The Agreement has a nominal expiry date of 19 February 2014.
The relevant provisions of the Act are as follows:
“225Application 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;
(c) an employee organisation covered by the agreement.
226 When the FWC 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 FWC 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.”
Consideration of the issues
With regard to the requirements of s.225, as mentioned above the Agreement has passed its nominal expiry date. As the Applicant is covered by the Agreement, I am therefore satisfied that it is entitled to make an application for termination of the Agreement.
I turn now to deal with the considerations set out in s.226 of the Act.
s.226(a) – Public Interest
The Applicant submits that it is not contrary to the public interest to terminate the Agreement.
No material was put to the Commission suggesting that it would be contrary to the public interest to terminate the Agreement.
s.226(b)(i) – the views of the employees, each employer, and each employee organisation (if any), covered by the agreement
The Agreement was replaced by the firsthealth Enterprise Agreement 2018[2] (the 2018 Agreement) which commenced operation on 23 July 2018. The 2018 Agreement does not cover some 8 to 10 employees who are covered by the Agreement (these employees are referred to as the Excluded Employees). The Excluded Employees include the Chief Executive Officer, executive management and any employee who was paid above the minimum rate for level 6, pay point six (as provided for under Schedule 2 of the 2018 Agreement). The Excluded Employees are the only employees who would be affected by termination of the Agreement.
On 24 July 2018 the Commission requested that the Applicant provide its views in support of the application. On 27 July 2018 the Applicant’s representative, Mr John Wilson of Bradley Allen Love Lawyers, filed submissions in support of termination of the Agreement. Mr Wilson advised that in about 2015 the nature of the Applicant’s operations changed from delivering health services to providing funding for medical services to other bodies. Mr Wilson submits that as a result the nature of work undertaken by the Applicant’s employees changed considerably. More particularly, Mr Wilson submitted that the Excluded Employees now have additional senior managerial responsibilities, adding that their remuneration under the Agreement does not reflect these additional duties/responsibilities. Mr Wilson also submitted that the Applicant wanted more flexible regulation of the Excluded Employees. For these reasons, he submitted, it was no longer appropriate that the Agreement cover the Excluded Employees, adding that termination of the Agreement would give the Applicant greater flexibility in setting the terms of the Excluded Employee’s engagement which in turn would improve efficiency and productivity. Mr Wilson further submitted that the Excluded Employees had been consulted about not being covered by the 2018 Agreement and had agreed to be covered by common law contracts
On 24 July 2018, the Commission contacted the Health Services Union of Australia (HSU), which is covered by the Agreement and requested its views on terminating the Agreement. The HSU advised on 1 August 2018 that it did not oppose termination of the Agreement.
On 9 August 2018 the Commission issued Directions instructing the Applicant to provide a copy of the Directions to all employees covered by the Agreement by close of business on 13 August 2018. The Directions invited any employee covered by the Agreement who wanted to provide their views on the application to terminate the Agreement to do so by providing a written statement by close of business on 20 August 2018. No written statements were received by the Commission.
In short, the views received by the Commission either support or do not oppose termination of the Agreement.
s.226(b)(ii) – the circumstances of those employees, employers and organisations including the likely effect that the termination will have on each of them
In her Statutory Declaration Ms Melissa Neal, the Applicant’s Chief Executive Officer, declared that termination of the Agreement would have a beneficial impact on the Applicant as it would improve productivity.
Mr Wilson submitted that the Excluded Employee’s rates of pay are well above the relevant rates in both the Agreement and the 2018 Agreement.
Summary
Having regard to the requirements of s.226 of the Act and based on the material that is before the Commission, I am satisfied that it is not contrary to the public interest to terminate the Agreement and that it is appropriate to do so having regard to all the circumstances. As such, consistent with s.226 of the Act the Commission must terminate the Agreement.
Conclusion
Pursuant to s.226 of the Act, the Agreement is terminated. The termination of the Agreement shall operate from 4 September 2018. An Order to that effect will be issued in conjunction with this Decision.
[1] AE874027
[2] AE429203
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