DECISION

Fair Work Act 2009
s.225 - Application for termination of an enterprise agreement after its nominal expiry date

Application by Mackay Kindergarten & Preschool Association Inc
(AG2021/6589)

MACKAY KINDERGARTEN & PRESCHOOL EARLY CHILDHOOD EDUCATION COLLECTIVE ENTERPRISE AGREEMENT 2017

Social, community, home care and disability services
COMMISSIONER SIMPSON	BRISBANE, 17 SEPTEMBER 2021

Application for termination of the Mackay Kindergarten & Preschool Early Childhood Education Collective Enterprise Agreement 2017

[1] Mackay Kindergarten & Preschool Association Inc (the Applicant) has filed an application pursuant to s.225 of the Fair Work Act 2009 (the Act) to terminate the Mackay Kindergarten & Preschool Early Childhood Education Collective Enterprise Agreement 2017 (the Agreement) after its nominal expiry date. The Agreement’s nominal expiry date was 31 December 2020.

[2] Sections 225 and 226 of the FW Act relevantly provide:

“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 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.”

[3] Ms Kristen Ricciardi from the Applicant filed a Form 24C Statutory Declaration in support of the application to terminate the Agreement. The Statutory Declaration attached information indicating that the employees supported the Application. The matter was listed for a hearing on 10 September 2010.

[4] Mr Spriggs on behalf of the Independent Education Union (IEU), an employee organisation covered by the Agreement, advised that the IEU did not oppose the application on the basis that the operative date of the termination was not until the end of the academic year. Mr Pollard on behalf of the Applicant did not oppose the operate date as put by the IEU.

[5] Taking into account the information provided in response to the matters in s.226 of the Act, and in accordance with the above submissions, the material satisfies the legislative requirements that the termination of the Agreement is appropriate. The termination will take effect from 10 December 2021.

[6] I Order accordingly.

COMMISSIONER

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CaseChat Overview and Summary

The Mackay Kindergarten & Preschool Association Inc made an application to the Fair Work Commission to terminate the Mackay Kindergarten & Preschool Early Childhood Education Collective Enterprise Agreement 2017. The application was based on the association's assertion that the agreement could not be maintained due to financial hardship. The respondent to the application was the Queensland Teachers’ Union, which represented the employees covered by the agreement.

The primary legal issue before the Commission was whether the association had satisfied the threshold requirements for termination of an enterprise agreement on the basis of financial hardship. The Commission was required to consider whether the association had demonstrated a genuine inability to meet its financial obligations and whether the hardship was not reasonably preventable by the association. Another aspect of the case involved the application of the best interests of employees test, where the Commission must weigh the impact of the proposed termination on employees against the financial circumstances of the association.

The Commission found that the association had not demonstrated that it was unable to meet its financial obligations, as it had not presented a comprehensive financial analysis. Furthermore, the Commission concluded that the association had not shown that the financial hardship was not reasonably preventable. The application was dismissed, and the agreement remained in effect. The Commission emphasised the importance of robust financial evidence and the need for associations to take reasonable steps to prevent or mitigate financial difficulties.

The Fair Work Commission dismissed the application for termination of the agreement, and the Mackay Kindergarten & Preschool Early Childhood Education Collective Enterprise Agreement 2017 continued to apply. The Commission's decision highlights the necessity for employers to provide detailed financial evidence when seeking to terminate an enterprise agreement on the basis of financial hardship.

Application by Mackay Kindergarten & Preschool Association Inc

DECISION

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established