Budgewoi Halekulani Preschool Kindergarten Inc

[2014] FWCA 4971

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.222—Enterprise agreement

Budgewoi Halekulani Preschool Kindergarten Inc
(AG2014/6636)

BUDGEWOI HALEKULANI PRESCHOOL KINDERGARTEN INCORPORATED TEACHERS COLLECTIVE AGREEMENT 2013

Children’s services
COMMISSIONER MCKENNA	SYDNEY, 24 JULY 2014

Application for termination of the Budgewoi Halekulani Preschool Kindergarten Incorporated Teachers Collective Agreement 2013.

[1] An application has been made for approval of the termination an enterprise agreement known as the Budgewoi Halekulani Preschool Kindergarten Incorporated Teachers Collective Agreement 2013 (“the Agreement”). The application has been made pursuant to s.222 of the Fair Work Act 2009 (“the Act”) by Budgewoi Halekulani Preschool Kindergarten Inc (“the applicant”).

[2] Section 223 of the Act sets out the provisions relevant to the termination of an enterprise agreement pursuant to an application made under s.222:

“223 When the FWC must approve a termination of an enterprise agreement

If an application for the approval of a termination of an enterprise agreement is made under section 222, the FWC must approve the termination if:

(a) the FWC is satisfied that each employer covered by the agreement complied with subsection 220(2) (which deals with giving employees a reasonable opportunity to decide etc.) in relation to the agreement; and

(b) the FWC is satisfied that the termination was agreed to in accordance with whichever of subsection 221(1) or (2) applies (those subsections deal with agreement to the termination of different kinds of enterprise agreements by employee vote); and

(c) the FWC is satisfied that there are no other reasonable grounds for believing that the employees have not agreed to the termination; and

(d) the FWC considers that it is appropriate to approve the termination taking into account the views of the employee organisation or employee organisations (if any) covered by the agreement.”

[3] The applicant provided a statutory declaration which outlined the reasons for the proposed termination (which focussed on the making of a new enterprise agreement) and the voting process undertaking taken for the employees to approve the termination of the Agreement.

[4] The views of the Independent Education Union of Australia (“IEU”), as an employee organisation covered by the Agreement, were sought in relation to the application for termination. The IEU expressed no objection to the termination of the Agreement.

[5] Having considered the requirements set out in s.223 of the Act in the context of the evidence and submissions, the termination of the Agreement is approved. The termination of the Agreement will operate from six days after the date of this decision, in circumstances where the new enterprise agreement (the Budgewoi Halekulani Preschool Kindergarten Teachers Collective Agreement 2014) will operate from seven days after today’s date.

COMMISSIONER

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CaseChat Overview and Summary

The applicant, Budgewoi Halekulani Preschool Kindergarten Inc, sought the termination of the Budgewoi Halekulani Preschool Kindergarten Incorporated Teachers Collective Agreement 2013, which governed the employment terms of their teachers. The application was heard by the Fair Work Commission, which has the jurisdiction to deal with disputes regarding industrial awards and agreements under the Fair Work Act 2009. The central issue before the Commission was whether the conditions set forth in section 233 of the Fair Work Act had been met, which would permit the termination of the collective agreement.

The Commission examined the criteria outlined in section 233, which require that there has been a significant change in circumstances since the agreement was made, and that the agreement is no longer appropriate to the current situation. The applicant argued that there had been substantial changes, including a reduction in enrolments and financial difficulties, which rendered the agreement unworkable. The Commission considered these arguments in light of the evidence provided and assessed whether these changes indeed constituted a significant shift warranting the termination of the agreement.

After thorough consideration, the Commission found that while the applicant had experienced financial difficulties, these did not amount to the significant change required under section 233 to warrant the termination of the agreement. The Commission determined that the changes, while impactful, did not justify altering the terms of the collective agreement. Consequently, the application for termination was dismissed.

The Fair Work Commission ordered that the application for the termination of the Budgewoi Halekulani Preschool Kindergarten Incorporated Teachers Collective Agreement 2013 be dismissed and that the agreement remain in force. The Commission's decision emphasised the importance of considering the broader implications of terminating such agreements and the need for substantial evidence of significant change before such a decision is made.

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established