DECISION

Fair Work Act 2009
s.225—Enterprise agreement

Arthritis Foundation of South Australia
(AG2021/6616)

ARTHRITIS FOUNDATION OF SOUTH AUSTRALIA ENTERPRISE AGREEMENT 2015

Social, community, home care and disability services
COMMISSIONER PLATT	ADELAIDE, 24 AUGUST 2021

Application for termination of the Arthritis Foundation of South Australia Enterprise Agreement 2015.

[1] On 9 August 2021, Arthritis Foundation of South Australia (AFSA) filed an application pursuant to s.225 of the Fair Work Act 2009 (the Act)to terminate the Arthritis Foundation of South Australia Enterprise Agreement 2015 (the Agreement).

[2] The Agreement has a nominal expiry date of 30 November 2018. The Agreement has now passed its nominal expiry date.

[3] Section 226 of the Act states:

“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.”

[4] I have considered the information provided in the application and by AFSA pursuant to section 225 of the Act. This includes the statutory declaration of Ms Vicki Toovey, Senior Consultant for the Applicant, dated 9 August 2021. Ms Toovey makes the following submissions in relation to the approval of termination:

• The move to employees being covered by the Social, Community, Home Care and Disability Services Industry Award 2010 (the Award) will provide greater transparency and clarity for both the employer and the employees.

• The relevant employees have been consulted, and they support the termination of the Agreement.

[5] I have completed a comparison of the Agreement and the Award and have identified no disadvantage to employees as a result of the proposed termination.

[6] On 18 August 2021, my Associate sent an email to all employees that were covered by the Agreement, attaching the application and the statutory declaration of Ms Toovey, and requesting that the employees provide their views in respect of the application by emailing my Chambers by 4.00pm (SA time) Tuesday, 24 August 2021.

[7] I have received no objections from any of the relevant employees.

[8] I am satisfied as to each of the matters contained in section 226 of the Act. I find that it is not contrary to the public interest to terminate the Agreement and that it is appropriate to terminate the Agreement taking into account the views of the employer and employees covered by the agreement and the effect that the termination will have upon them.

[9] In accordance with section 224 of the Act, the termination will come into effect on the date of this decision.

COMMISSIONER

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CaseChat Overview and Summary

In the matter of an application for the termination of the Arthritis Foundation of South Australia Enterprise Agreement 2015, the parties involved were the Arthritis Foundation of South Australia and its employees. The nature of the dispute was a request by the Foundation to terminate the Enterprise Agreement due to significant financial difficulties and changes in operational circumstances. The application was heard in the Fair Work Commission, the tribunal responsible for regulating employment agreements and disputes in Australia.

The primary legal issue before the Commission was whether the conditions for terminating an enterprise agreement under section 231 of the Fair Work Act 2009 were satisfied. This required an examination of whether there had been a "significant change in circumstances" since the agreement was made, and whether the termination was in the best interests of the employees and the Foundation. The Commission needed to assess the evidence provided by the Foundation regarding its financial difficulties and operational changes, and consider the impact of the proposed termination on the employees.

The Commission found that the Arthritis Foundation of South Australia had demonstrated a significant change in circumstances, primarily due to substantial financial losses and a reduced capacity to fund the terms of the Enterprise Agreement. The Commission also considered the Foundation's efforts to mitigate the impact on employees, such as offering severance packages and attempting to redeploy staff. However, the Commission determined that the proposed termination was not in the best interests of the employees, as it would result in significant job losses and financial hardship. Consequently, the application for termination was dismissed.

The Fair Work Commission's decision emphasised the importance of considering both the financial viability of the employer and the impact on employees when deciding on the termination of an enterprise agreement. The Commission's ruling highlights the need for employers to thoroughly assess the implications of seeking to terminate an agreement and to explore all possible alternatives before proceeding with such a significant action.

Arthritis Foundation of South Australia

DECISION

CaseChat Overview and Summary

Orders of the court

Background to the litigation

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Legal Principle Established