Application by Flinders Ports Pty Ltd
[2023] FWCA 2154
•12 JULY 2023
| [2023] FWCA 2154 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.222—Enterprise agreement
Application by Flinders Ports Pty Ltd
(AG2023/2000)
Flinders Ports and Flinders Ports Management Services Enterprise Agreement 2018 – 2022
[AE502186]
| DEPUTY PRESIDENT ANDERSON | ADELAIDE, 12 JULY 2023 |
Application for termination of the Flinders Ports and Flinders Ports Management Services Enterprise Agreement 2018 - 2022
On 19 June 2023 Flinders Ports Pty Ltd (the applicant employer) applied to terminate the Flinders Ports and Flinders Ports Management Services Enterprise Agreement 2018 – 2022[1] (Agreement) under s 222 of the Fair Work Act 2009 (Cth) (FW Act).
Section 222 concerns applications for termination where termination has been agreed by employees.
Two employee organisations are covered by the Agreement: the Australian Maritime Officers Union (AMOU) and the Maritime Union of Australia Division of the Construction Forestry Maritime Mining and Energy Union (MUA).
The application was the subject of a hearing on 12 July 2023 at which time I heard from Mr Costi (with permission) with Ms Feaviour for applicant employer, Mr Larkin South Australian Branch Secretary MUA and Mr Neiberding of the AMOU.
I issued directions on 21 June 2023. In accordance with my directions, employees and employee organisations with an interest in the matter were provided an opportunity to indicate whether an objection would be taken to the termination application or if they sought to be heard.
Mr Larkin for the MUA SA Branch notified a concern, with qualifications. The AMOU supported the MUA SA position. This is considered below. No other objection has been indicated by employees covered by the Agreement and no employee sought to be heard.
I have considered the material provided in the application and by Ms Feaviour pursuant to s 223 of the FW Act. This includes the Form F24A – declaration in support of termination of an enterprise agreement (Form F24A) lodged with the Commission on 8 June 2023. I have also considered the statutory declaration of Ms Feaviour dated 27 June 2023.
I note that in the Form F24A Ms Feaviour declares that:
· on 31 May 2023 the applicant employer emailed relevant employees with an explanation for the proposed termination of the Agreement and a comparative table comparing the Agreement and the underpinning modern awards and National Employment Standards. Included in this correspondence was a commitment by the applicant employer to preserve certain conditions of employment by new contracts of employment, to provide backpay of 4.7% from 1 July 2022 and to pay a sign-on payment of $1,500 less tax to each employee;
· between 5 June 2023 and 8 June 2023 the applicant employer held two information sessions with relevant employees on the proposed termination of the Agreement, including why the Agreement was proposed to be terminated and impacts on them;
· between 31 May 2023 and 9 June 2023 management of the applicant employer made themselves available to employees to answer questions concerning the proposal, and did so;
· on 31 May 2023 the applicant employer notified employees of the date, time, method and duration of the voting process for the Agreement termination;
· voting by secret ballot commenced on 9 June 2023 and concluded on 13 June 2023; and
· on 13 June 2023 the result of the ballot was declared with a majority of eligible employees voting to terminate the Agreement.
In the statutory declaration lodged with the Commission on 27 June 2023, Ms Feaviour declared that employees and the employee organisations were provided with the Notice of Listing, directions, Form F24A and application form as directed by the Commission.
In proceedings before me on 11 July 2023, I sought further information from the applicant employer including on the terms of the undertaking made by the applicant employer to preserve certain conditions of employment and related matters.
The applicant employer submitted that the requirements of s 223 of the FW Act have been met such that the Agreement must be terminated.
Consideration
I am required to deal with this matter in accordance with the provisions of the FW Act. Section 222 provides:
“222 Application for FWC approval of a termination of an enterprise agreement
Application for approval
(1) If a termination of an enterprise agreement has been agreed to, a person covered by the agreement must apply to FWC for approval of the termination.
Material to accompany the application
(2) The application must be accompanied by any declarations that are required by the procedural rules to accompany the application.
When the application must be made
(3) The application must be made:
(a) within 14 days after the termination is agreed to; or
(b) if in all the circumstances FWC considers it fair to extend that period - within such further period as FWC allows.
The Agreement is a single enterprise agreement. It was approved by the Commission on 12 March 2019. It was approved to operate from 19 March 2019 with a nominal expiry date of 31 March 2022.
The applicant employer is entitled to apply for termination of the Agreement under s 222 of the FW Act. I note that the applicant employer is one of two named employers covered by the Agreement. The other is Flinders Port Management Services Pty Ltd. Flinders Port Management Services Pty Ltd is an associated entity. I am satisfied that Flinders Port Management Services Pty Ltd is aware of the application and not opposed to the orders sought by the applicant employer.
The application was made within time. It was accompanied by the relevant declarations.
The formal requirements in s 222 have been met.
I now consider the substantive issues.
Section 223 provides:
“223 When FWC must approve a termination of an enterprise agreement
If an application for the approval of a termination of an enterprise agreement is made under s 222, the FWC must approve the termination if:
(a) the FWC is satisfied that each employer covered by the agreement complied with subsection 220(2) (which deals with giving employees a reasonable opportunity to decide etc.) in relation to the agreement; and
(b) the FWC is satisfied that the termination was agreed to in accordance with whichever of subsection 221(1) or (2) applies (those subsections deal with agreement to the termination of different kinds of enterprise agreements by employee vote); and
(c) the FWC is satisfied that there are no other reasonable grounds for believing that the employees have not agreed to the termination; and
(d) the FWC considers that it is appropriate to approve the termination taking into account the views of the employee organisation or employee organisations (if any) covered by the agreement.”
Section 223(a) is made out. On the evidence before me, I am satisfied that employees were provided a reasonable opportunity to decide whether they wanted to approve the proposed termination. Advance notice of the time and place at which the vote was to occur and of the voting method were provided. Information provided by the applicant employer between 31 May 2023 and 8 June 2023 was sufficient to reasonably inform an employee on whether to vote to approve the termination.
In reaching this level of satisfaction, I take into account that after sending the aforementioned material to employees on 31 May 2023 the applicant employer conducted two information sessions prior to the voting period commencing.
Section 223(b) is made out. The evidence before me establishes that a majority of employees who were eligible to vote cast a valid vote approving the termination. Indeed, the majority was overwhelming. Of the twenty-six employees covered by the Agreement, twenty-two of twenty-four persons voting approved the termination.
Section 223(c) is made out. There are no other reasonable grounds for believing that employees have not agreed to the termination. I note that the employer offered incentives by way of enhanced terms and conditions should the Agreement be terminated. I do not consider that offering incentives of such a nature, in and of itself, constitutes unreasonable pressure such that employees did not freely agree to the termination. There is no evidence before me of duress or undue influence.
Section 223(d) requires the Commission to take into account the views of employee organisations covered by the Agreement.
In its submission, the MUA SA Branch Secretary Mr Larkin stated:
“The employees/members have voted a majority in favour of terminating the agreement. I fear many will now be worse off but accept the majority position. My opposition to this is only based on future concerns and job security as the vote has already spoken.”
The AMOU indicated:
“The AMOU shares the same opinion of the MUA that members in the office area of Flinders Ports may be worse off. We do however recognise the vote was in favour of the EA.”
This concern, qualified by the realism that a clear majority voted in favour of termination, is based on a belief by the MUA and AMOU that short term benefits may be offset by future losses. Whilst it is understandable that a trade union may be concerned that the termination of a collective instrument may, over time, weaken bargaining power and the terms and conditions or employment or job security this concern has to be tempered by the fact that collective bargaining rights continue to exist under the FW Act whatever the status of industrial instruments that underpin employment in this industry.
I take the MUA SA and AMOU stated concern into account but do not consider it compelling in the context of an overwhelming vote of the current workforce in favour of termination and the overall bargaining framework under the FW Act.
I also take into account that modern awards made by the Commission (the Port Authorities Award 2020 and the Clerks Private Sector Award 2020), together with the National Employment Standards in the FW Act, operate to not only provide mandatory minimum terms and conditions of employment but also underpin collective industrial rights should the Agreement be terminated.
In the context of impact on employees, I also note that the applicant employer has given undertakings on the record to contractually preserve certain conditions of employment and provide backpay and a sign on payment. Those issues were notified to employees in advance of the vote and were a matter for employee assessment when casting a vote.
Conclusion
I am satisfied as to each of the matters contained in ss 222 and 223 of the FW Act.
It is appropriate that there be a short period of prospectivity before the Agreement is terminated to enable employees to be advised by the applicant employer of this Decision and for employee organisations to inform their members.
The termination will come into effect from 12.01am on 19 July 2023. An Order[2] to this effect will be issued.
DEPUTY PRESIDENT
DEPUTY PRESIDENT
Appearances:
Mr Z Costi with permission on behalf of Flinders Ports Pty Ltd and Flinders Port Management Services Pty Ltd with Ms J Feaviour of Flinders Port Holdings Group
Mr B Larkin on behalf of the Construction, Forestry, Maritime, Mining and Energy Union (Maritime Union of Australia Division)
Mr C Neiberding on behalf of the Australian Maritime Officers Union
Hearing details:
Adelaide (by video)
12 July
[1] [2019] FWCA 1512
[2] PR764172
Printed by authority of the Commonwealth Government Printer
<PR764171>
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