Blue Dolphin Swim School Pty Ltd T/A Blue Dolphin Swim School Summary

[2022] FWCA 1415

FAIR WORK COMMISSION

DECISION

Fair Work (Transitional Provisions and Consequential Amendments) Act 2009

Sch. 3, Item 16 - Application to terminate collective agreement-based transitional instrument

Blue Dolphin Swim School Pty Ltd T/A Blue Dolphin Swim School

(AG2022/1111)

Blue Dolphin Swim School Pty Ltd Collective Agreement 2007-2012

Educational services
COMMISSIONER PLATT	ADELAIDE, 27 APRIL 2022

Application for termination of the Blue Dolphin Swim School Pty Ltd Collective Agreement 2007-2012

On 12 April 2022, Blue Dolphin Swim School Pty Ltd T/A Blue Dolphin Swim School (Blue Dolphin or the Applicant) filed an application pursuant to Item 16, Schedule 3 of the Fair Work (Transitional Provisions and Consequential Amendments) Act (the Transitional Act) to terminate the Blue Dolphin Swim School Pty Ltd Collective Agreement 2007-2012 (the Agreement).

Item 16 of Schedule 3 of the Transitional Act requires the Commission to deal with the application as if it is made under s.225 of the Fair Work Act 2009 (the Act).

Relevantly, s.226 of the Act, is as follows:

“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.”

On 14 April 2022, I issued Directions requiring the Applicant to provide a copy of the form F28 application (with attachments, including a comparison between the Agreement and the Fitness Industry Award 2020 (the Award)), statutory declaration and the Directions to each employee organisation (if any) and all employees covered by the Agreement.

On the same day, I received an email from the Applicant advising that the Directions had been complied with.

I have received no objections from any of the relevant employees by email, nor did any employees attend the conference on 27 April 2022 to voice any objection.

I have considered the information provided in the application by the Applicant pursuant to section 225 of the Act. This includes the Statutory Declaration by Ms Tara Hanias, Director of Blue Dolphin, dated 12 April 2022. Ms Hanias makes the following submissions in relation to the approval of termination:

· The Agreement passed its nominal expiry date almost 10 years ago, and the base rates of pay contained in the Agreement have fallen well behind those included in the Award.

· The Award contains a number of terms and conditions of employment that are more beneficial than those contained in the Agreement, as well as various entitlements that are not contained in the Agreement at all.

· The Agreement is silent on part-time employment, which means that there are no minimum protections in place for part-time employees.

· It will be more efficient for the company to monitor and implement one instrument (the Award), rather than following the Agreement yet continuing to defer to the Award for current base rates.

It was noted by the Applicant in their Application that a provision in the Agreement appeared to be more beneficial to employees than that contained in the Award. To address this, the Applicant provided the following undertaking:
· In the event that the application for termination of the Agreement is approved, existing casual employees as at 27 April 2022 who perform work on Sundays will either continue to receive a penalty of 150% in addition to a casual loading of 20% (as was contained in the Agreement), or be paid in accordance with the provisions of the Award, whichever is the greater.

On the basis of this undertaking, 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.

The undertaking outlined above shall remain in force unless agreement is reached to vary those terms and/or a new enterprise agreement which modifies those terms comes into effect.

A copy of this decision must be served by the Applicant upon all employees previously covered by the Agreement.

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

COMMISSIONER

Printed by authority of the Commonwealth Government Printer

The case involves Blue Dolphin Swim School Pty Ltd, trading as Blue Dolphin Swim School, and the Fair Work Commission. The dispute pertains to an application for the termination of the Blue Dolphin Swim School Pty Ltd Collective Agreement 2007-2012. The application was lodged under section 241 of the Fair Work Act 2009 by the employer, seeking to terminate the agreement early. The Fair Work Commission was required to consider whether the application met the criteria for termination as outlined in the Act, specifically focusing on the conditions under which an employer can seek to terminate a collective agreement prior to its expiration.

The primary legal issue before the Commission was whether the employer had demonstrated sufficient grounds for the termination of the collective agreement. The employer argued that the agreement was no longer appropriate due to significant changes in the business environment and the inability to negotiate new terms that were both fair and reasonable. The Commission had to assess the employer's arguments against the statutory requirements and determine if the changes cited were indeed significant enough to warrant termination. Additionally, the Commission considered the impact of such a termination on the employees, ensuring that any decision made was in line with the principles of fairness and equity.

In its decision, the Commission examined the evidence provided by the employer and weighed it against the legislative criteria for termination. It found that the employer had not sufficiently demonstrated that the changes in the business environment were of such a magnitude that they rendered the existing agreement unworkable or that new terms could not be negotiated. The Commission concluded that the employer had not met the threshold for termination under the Act. Consequently, the application was dismissed, and the collective agreement remained in effect. The Commission's decision was grounded in a thorough analysis of the statutory provisions and the specific circumstances of the case, ensuring that the rights and interests of both parties were duly considered.

The final orders of the Commission included the dismissal of the employer's application for termination of the collective agreement. The agreement remained in force, and both parties were required to continue operating under its terms until its scheduled expiration. The Commission's decision provided clarity and certainty regarding the conditions under which such agreements could be terminated, reinforcing the importance of demonstrating significant and unforeseeable changes to the business environment as a prerequisite for early termination.

Blue Dolphin Swim School Pty Ltd T/A Blue Dolphin Swim School

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established