Bega Dairy and Drinks Pty Ltd formerly known as National Foods (Dairy Foods) Limited
[2023] FWCA 692
•3 MARCH 2023
[2023] FWCA 692
The attached document replaces the document previously issued with the above code on 3 March 2023.
· Removed mark-up at [6]
Dylan Pietrocola
Associate to Deputy President Millhouse
Dated 7 March 2023
| [2023] FWCA 692 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.225—Enterprise agreement
Bega Dairy and Drinks Pty Ltd formerly known as National Foods (Dairy Foods) Limited
(AG2023/269)
National Foods Limited Engineering Services Agreement (Morwell) 2009
| Manufacturing and associated industries | |
| DEPUTY PRESIDENT MILLHOUSE | MELBOURNE, 3 MARCH 2023 |
Application for termination of the National Foods Limited Engineering Services Agreement (Morwell) 2009
On 8 February 2023, Bega Dairy and Drinks Pty Ltd formerly known as National Foods (Dairy Foods) Limited (Employer) filed an application with the Commission seeking the termination of the National Foods Limited Engineering Services Agreement (Morwell) 2009[1] (Agreement) pursuant to s 225 of the Fair Work Act 2009 (Cth) (Act). The Agreement has passed its nominal expiry date of 30 June 2012.[2]
For the reasons that follow, I am satisfied that the Commission must terminate the Agreement because the Agreement does not, and is not likely to, cover any employees. Accordingly, the Agreement is terminated.
Procedural context
The Agreement covers the Employer, the “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU), the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (ETU Victorian Branch) and “all Engineering Services team (EST) employees of the Company, whether members of the Unions or not, who are eligible to become members of the Unions and whose employment by the Company is covered by the classifications specified in this agreement and who are employed at the Company’s Morwell operation.”[3]
On 13 February 2023, my Chambers emailed the Employer, the AMWU and the CEPU attaching directions, the Form F24B and Form F24C application materials, and the Agreement with the accompanying decision which approved the Agreement.[4] The directions set out the relevant legislation; ss 225, 226 and 615A of the Act. The directions stated as follows:
“By its F24C, the Employer declared the following information:
· The Agreement has not covered or applied to any employees for over 10.5 years.
· The employees that were covered by this Agreement are no longer employed by the Employer and are no longer the type of employees that are employed by the Employer at the Morwell site.
· The Employer does not intend to employ any new employees that would be covered under the Agreement in the foreseeable future.”
The Employer was directed to file in the Commission and serve on the AMWU and the CEPU a witness statement explaining the circumstances which lead to the Employer ceasing to employ persons who would have been covered by the Agreement. The statement was filed accordingly on 16 February 2023.
The directions also required the AMWU and the CEPU to advise the Commission whether (a) they disagree with any part of the Employer’s evidence, and (b) they oppose the application. No response was received from the unions. As such, on 2 March 2023, my Chambers issued further correspondence by email to the unions, requesting a response to the question of whether they opposed the application by 4:00pm on Friday, 3 March 2023. No response was received.
It is noted that the Commission has received no notification of delivery failure that indicates the emails containing the directions and reminders have not been received by the unions, and the CEPU returned an automatic email confirming receipt of emails sent to it by Chambers.
Legislation
Section 225 of the Act provides as follows:
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.
The recently amended s 226 of the Act provides as follows:[5]
226 Terminating an enterprise agreement after its nominal expiry date
(1)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 the continued operation of the agreement would be unfair for the employees covered by the agreement; or
(b) the FWC is satisfied that the agreement does not, and is not likely to, cover any employees; or
(c) all of the following apply:
(i) the FWC is satisfied that the continued operation of the enterprise agreement would pose a significant threat to the viability of a business carried on by the employer, or employers, covered by the agreement;
(ii) the FWC is satisfied that the termination of the enterprise agreement would be likely to reduce the potential of terminations of employment covered by subsection (2) for the employees covered by the agreement;
(iii) if the agreement contains terms providing entitlements relating to the termination of employees’ employment—each employer covered by the agreement has given the FWC a guarantee of termination entitlements in relation to the termination of the agreement.
(1A) However, the FWC must terminate the enterprise agreement under subsection (1) only if the FWC is satisfied that it is appropriate in all the circumstances to do so.
(2) This subsection covers a termination of the employment of an employee:
(a) at the employer’s initiative because the employer no longer requires the job done by the employee to be done by anyone, except where this is due to the ordinary and customary turnover of labour; or
(b) because of the insolvency or bankruptcy of the employer.
(3)In deciding whether to terminate the agreement, the FWC must consider the views of the following covered by the agreement:
(a) the employees (unless there are no employees covered by the agreement);
(b) each employer;
(c) each employee organisation (if any).
(4)In deciding whether to terminate the agreement (the existing agreement), the FWC must have regard to:
(a) whether the application was made at or after the notification time for a proposed enterprise agreement that will cover the same, or substantially the same, group of employees as the existing agreement; and
(b) whether bargaining for the proposed enterprise agreement is occurring; and
(c) whether the termination of the existing agreement would adversely affect the bargaining positionof the employees that will be covered by the proposed enterprise agreement.
(5)In deciding whether to terminate the agreement, the FWC may also have regard to any other relevant matter.
Section 615A of the Act provides that the President must direct a Full Bench to perform a function or exercise a power in relation to a matter arising under s 226 if an employee, employer or employee organisation opposes the application.
Consideration
By s 225(a) of the Act, and relevant to this application, an employer covered by the Agreement may apply to the Commission for its termination if the Agreement has passed its nominal expiry date. Clause 4.1 of the Agreement provides that the Agreement nominally expired on 30 June 2012. Clause 3.2 provides that the Agreement covers “National Foods (Dairy Foods) Limited (ACN 004486631).” It is noted the ACN matches the Employer’s ACN on the Form F24B application. As such, I am satisfied that the Employer has standing to bring the application under s 225(a) of the Act.
I turn to consider the primary basis for the application, being that the Agreement does not, and is not likely to, cover any employees such that s 226(1)(b) of the Act applies.
As stated at [4] of this decision, the Employer declared that the Agreement has not covered or applied to any employees for over 10.5 years, the employees that were covered by this Agreement are no longer employed by the Employer and are no longer the type of employees that are employed by the Employer at the Morwell site, and the Employer does not intend to employ any new employees that would be covered under the Agreement in the foreseeable future.[6]
Mr Nadeem Hekmat, Senior Workplace Relations Specialist for the Employer, filed a witness statement in accordance with the directions.[7] Mr Hekmat provided the following summary regarding the historical application of the Agreement:[8]
(a)the Employer’s Morwell site was originally part of the National Foods business. On 27 November 2008, National Foods acquired Dairy Farmers Co-operative;
(b)in 2009, National Foods and Lion Nathan merged to create Lion Nathan National Foods;
(c)in 2011, Lion National Foods separated into two divisions: Lion, and Lion Dairy & Drinks; and
(d)Lion Dairy & Drinks owned and operated the Morwell site until its sale to Bega Cheese Limited on 25 January 2021.
Mr Hekmat relevantly provides:[9]
“…Based on my enquiries, it appears that the functions performed by employees covered by the Agreement ceased to be performed ‘in house’ and since that time, the engineering functions at the Morwell Site have been sourced from labour hire providers.
Since Bega purchased the Morwell Site, it has not employed any employees who would be covered by the Agreement at the Morwell Site. The Applicant has continued to engaged labour hire workers to fulfill the engineering functions and requirements at the Morwell Site…”
As earlier stated, each of the employee organisations covered by the Agreement were provided with two opportunities to respond to the application. No submissions were received in response to these directions. I consider that the employee organisations have been afforded an appropriate opportunity to raise any objection to the application or to the evidence of Mr Hekmat.
Having regard to Mr Hekmat’s evidence, which is not contested, I am satisfied that the Agreement does not, and is not likely to, cover any employees.
Section 226(1A) of the Act provides that the Commission must terminate the Agreement only if it is satisfied that it is appropriate in all the circumstances to do so. Further, by s 226(5), the Commission may have regard to any relevant matters in deciding whether to terminate the Agreement. In the circumstances described, I take into account the following:
(a) there is no opposition to the termination of the Agreement, which is also relevant to the consideration in s 226(3) of the Act; and
(b) the Employer intends, for the foreseeable future, to continue its current arrangements involving the engagement of labour hire workers to fulfil the engineering functions and requirements at the Morwell site. Accordingly, the Employer does not intend to employ any persons who would fall within the scope of the Agreement at the Morwell site for the foreseeable future.[10]
On the material before the Commission, s 226(4) has no relevant application.
Order and disposition
As I am satisfied that the Agreement does not, and is not likely to, cover any employees, s 226(1)(b) of the Act is engaged. Taking into account all of the circumstances, including the matters at [18] of this decision, I consider that it is appropriate to terminate the Agreement. Accordingly, I must terminate the Agreement.
The Agreement is terminated and in accordance with s 227 of the Act, the termination operates from 3 March 2023.
DEPUTY PRESIDENT
[1] AE878761
[2] Agreement, clause 4.1
[3] Agreement, clause 3
[4] [2010] FWAA 4825
[5] Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022 in force 7 December 2022
[6] Form F24C at [4]
[7] Dated 16 February 2023
[8] Statement of Nadeem Hekmat, 16 February 2023 at [8]
[9] Ibid at [11]-[12]
[10] Ibid at [13]
Printed by authority of the Commonwealth Government Printer
<AE878761 PR751358>
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