Ausco Modular Pty Ltd
[2022] FWCA 3863
•3 NOVEMBER 2022
| [2022] FWCA 3863 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.225 - Application for termination of an enterprise agreement after its nominal expiry date
Ausco Modular Pty Ltd
(AG2022/4128)
ausco modular pty ltd brisbane enterprise agreement 2017
| Manufacturing and associated industries | |
| COMMISSIONER SPENCER | BRISBANE, 3 NOVEMBER 2022 |
Application for termination of the Ausco Modular Pty Ltd Brisbane Enterprise Agreement 2017.
An application pursuant to s.225 of the Fair Work Act 2009 (the Act) was made by Ausco Modular Pty Ltd (the Applicant) to terminate the Ausco Modular Pty Ltd Brisbane Enterprise Agreement 2017 (the Agreement).
The Agreement is an Enterprise Agreement that has passed its nominal expiry date. The nominal expiry date for the Agreement was 14 February 2021.
Sections 225 and 226 of the Act 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;
(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.”
Ms Suzanne O’Brien, Senior HR Business Partner for the Applicant, filed a Form 24C Declaration in support of the application to terminate the Agreement. Ms O’Brien stated that the Application was made on the basis that the Agreement provided no benefit to the Applicant and the Joinery and Building Trades Award 2020 (Award) was sufficient for the Company’s operational needs. Ms O’Brien further stated that terminating the Agreement would ensure that their Brisbane operation aligned with the Applicant’s similar operating sites nationally, which operate under the Award and do not have Enterprise Agreements in place.
CONSIDERATION
s.226(a) – not contrary to the public interest
Ms O’Brien stated that the termination would not be contrary to the public interest as no employees would be disadvantaged by the termination of the Agreement. The Applicant committed the following to the employees on termination of the Agreement:
Back payment of proposed new pay rates to 15 February 2021 (the day after the Agreement’s nominal expiry date);
Back payment of superannuation to 15 February 2021 at the rate of 10.5%; and
Inclusion in the next company wage increase occurring in April 2023.
s.226(b)(i) – the views of the employees, employer, and employee organisation
Mr Shane Dabner, an Operations Technican employed by the Applicant who is covered by the Agreement, provided a statement in support of terminating the Agreement. Mr Dabner will be covered by the Award should the agreement be terminated.
Mr Dabner stated that on 12 September 2022, the Applicant advised employee representatives covered by the Agreement that the Applicant would prefer to terminate the Agreement as the Agreement provided no benefit to the Applicant and the Award was sufficient for the Applicant’s operational needs. Mr Dabner further stated that the Applicant advised that terminating the Agreement would ensure that Brisbane was in alignment with the Applicant’s similar operating sites nationally, that operate under the Award and do not have Enterprise Agreements in place.
Mr Dabner stated that the Applicant advised employees that they would ensure that that through terminating the Agreement, no employees currently covered by it are disadvantaged and therefore proposed a 3.6% increase in current rates to be back paid from the nomination expiry date of the Agreement, i.e., 15 February 2021 (or date of employment if commencement was after this date) on termination of the Agreement.
Mr Dabner stated that the Applicant advised employees that on termination of the Agreement, future wage increases would then occur in the same annual salary/wage review cycle as the rest of the business and become effective in April each year.
Mr Dabner stated that the Applicant advised employees that if the Agreement was terminated, superannuation would be back paid from 15 February 2021 (or date of employment. if commencement was after this date) at a percentage of 10.5%.
Mr Dabner stated that on 27 September 2022, the Applicant provided all employees covered by the Agreement with a copy of a template employment contract that would apply in circumstances where the Agreement was terminated.
Mr Dabner stated that the Applicant explained to all employees that the current Agreement applies unless terminated and, if terminated, employee terms and conditions would be governed by the Award and the relevant employment contracts.
Mr Dabner stated that on 27 September 2022, the Applicant issued all employees covered by the Agreement with a voting form asking for them to vote in favour, or against, the termination of the Agreement.
Mr Dabner stated that on 30 September 2022, he acted as an employee representative for the Redbank branch and, together with Mr Keith Wilson-Mitchell, acted as a scrutineer in the counting of votes for the branch.
Mr Ben Cleveland, a Forklift Operator/Material Handler employed by the Applicant who is covered by the Agreement, also provided a statement in support of terminating the Agreement. Mr Cleveland’s statement included the same procedural steps taken by the Applicant. Mr Cleveland will be covered by the Award should the agreement be terminated.
Mr Cleveland stated that on 30 September 2022, that he acted as an employee representative for the Riverview branch and, together with Mr Aron Lal, acted as a scrutineer in the counting of votes for the branch.
The voting summary for the proposed termination of the Agreement was provided in the Application. There were 21 total votes received, with 19 in favour of terminating the Agreement and 2 votes against terminating the Agreement.
There is no employee organisation covered by the Agreement.
s.226(b)(ii) – the circumstances of the employees, employer, and employee organisation, including the effect of termination
As identified in the employee statements of Mr Dabner and Mr Cleveland, the Applicant provided employees with a letter on 27 September 2022 which stated that the Applicant wished to ensure that through terminating the Agreement, no employee was disadvantaged and, accordingly, proposed new weekly and hourly rates which were between 21 and 37% above the Award rates. These rates were to be back paid from 15 February 2021, or the date of employment commencement if after 15 February 2021.
The letter also confirmed that if the Agreement was terminated, superannuation would be back paid from 15 February 2021, or the date of employment commencement if after 15 February 2021, at a percentage of 10.5%.
After correspondence from Chambers, Ms O’Brien submitted a further response in support of the Application. Ms O’Brien’s further submissions included a comparison table which outlined the inconsistencies between the Agreement and the Award. The comparison table identifies how the proposed employment contract incorporates these inconsistencies to the benefit of employees.
As noted, the Agreement does not cover any employee organisation.
Taking into account the information provided in response to the matters in s.226 of the Act, I consider it appropriate to terminate the Agreement on the basis that the material satisfies the legislative requirements. The application is therefore granted, and the Agreement is terminated. The termination of the Agreement will take effect from 3 November 2022.
I Order accordingly.
COMMISSIONER
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