C&G and K&A Hill Pty Ltd T/A Hilly’s Value Plus IGA
[2022] FWCA 2560
•29 JULY 2022
| [2022] FWCA 2560 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.225 - Application for termination of an enterprise agreement after its nominal expiry date
C&G and K&A Hill Pty Ltd T/A Hilly’s Value Plus IGA
(AG2022/1939)
HILLY'S VALUE PLUS IGA
| Retail industry | |
| DEPUTY PRESIDENT YOUNG | MELBOURNE, 29 JULY 2022 |
Application for termination of the Hilly’s Value Plus IGA Employee Collective Agreement 2008-2013
An application was filed with the Fair Work Commission (Commission) by C&G and K&A Hill Pty Ltd (Applicant), seeking the termination of the Hilly’s Value Plus IGA Employee Collective Agreement 2008-2013 (the Agreement) pursuant of section 225 of the Fair Work Act 2009 (Act) (Application). The Agreement’s nominal expiry date was 1 December 2013.
Master Grocers Australia Limited (MGA) represent the Applicant.
The Agreement covers the Applicant and all employees of the Applicant who work in, or in conjunction with, the operation of Hilly’s Plus IGA Supermarket.
If the Agreement is terminated, employees terms and conditions will be governed by the General Retail Industry Award 2020 (award).
Directions
Directions were issued on 17 June 2022 and directed the following:
a)By close of business Friday, 24 June 2022 the Applicant is to provide a copy of the directions, Form F24B and Form F24C to all employees covered by the Agreement and file proof of compliance with this direction.
b)By close of business Friday, 1 July 2022 the Applicant is to file any further material in support of its application to terminate the Agreement, including material outlining their views, circumstances, and the likely effect the termination of the Agreement will have. Such advice is to be sent to the Chambers of Deputy President Young and is to be available for the employees and should be placed on a noticeboard used for communications with staff.
c)By close of business Friday, 8 July 2022 any employee covered by the Agreement who wishes to do so, is directed to file written material in response to the application regarding their views, their circumstances and the likely effect that termination of the Agreement will have on them. Such material is to be sent to the Chambers of Deputy President Young and served on MGA.
d)By close of business Friday, 15 July 2022 the Applicant is to file any further material in reply to any material filed by the any employee covered by the Agreement. Such material is to be sent to the Chambers of Deputy President Young and is to be available for employees.
On 23 June 2022 the Applicant provided proof of compliance with the Direction to provide a copy of the directions, Form F24B and Form F24C to employees that are covered by the Agreement.
No further material from the Applicant or any employee has been filed. Accordingly, in light of this and the comprehensive material filed by the Applicant, I have decided to determine the matter on the papers.
Legislation
Subdivision D of Division 7 of Part 2-4 of the Act sets out the mechanism by which an enterprise agreement may be terminated after the agreement has passed its nominal expiry date.
Section 225 of the Act provides:
“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.”
Section 226 of the Act provides:
“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.”
Consideration
Section 225 of the Act
I am satisfied that the two threshold requirements set out in s.225 of the Act have been
met.
Firstly, the Agreement has passed its nominal expiry date of 1 December 2013. Secondly, the Applicant is an employer covered by the Agreement at the time the application was made.
Not contrary to the public interest – s226(a)
The Full Bench in Aurizon Operations Limited; Aurizon Network Pty Ltd; Australian Eastern Railroad Pty Ltd (Aurizon) cited various passages from the Full Bench of the Australian Industrial Relations Commission’s decision in Re Kellogg Brown and Root, Bass Strait (Esso) Onshore/Offshore Facilities Certified Agreement 2000 (Kellogg) which had concerned the corresponding, but not identical, provision from the Workplace Relations Act 1996. Relevantly, these passages included:
“The notion of public interest refers to matters that might affect the public as a whole such as the achievement or otherwise of the various objects of the Act, employment levels, inflation, and the maintenance of proper industrial standards. An example of something in the last category may be a case in which there was no applicable award and the termination of the agreement would lead to an absence of award coverage for the employees. While the content of the notion of public interest cannot be precisely defined, it is distinct in nature from the interests of the parties. And although the public interest and the interests of the parties may be simultaneously affected, that fact does not lessen the distinction between them”
It is also relevant to highlight the Full Bench in Aurizon concluded that it cannot be expected that the terms and conditions of an agreement will continue unaltered in perpetuity after it has passed its expiry date. This is because the Act contemplates the terms and conditions of an agreement may be altered by making a new agreement or by terminating the existing agreement.
Having regard to the Application, the termination of the Agreement would not lead to an absence of award coverage for the employees. The Award provides for “proper industrial standards” within the meaning given to that term by Kellogg and in circumstances where there was no material before me suggesting otherwise, I am satisfied it is not contrary to the public interest to terminate the Agreement.
Appropriate to terminate the Agreement - s226(b)
I am required to consider whether it is ‘appropriate’ to terminate the Agreement, taking into account all the circumstances, including the views of the employees, each employer and each employee organisation covered by the Agreement, and the circumstances of those employees, employers and organisations, including the likely effect that the termination will have on them.
The approach to assessing appropriateness by taking into account all the
circumstances, as enunciated by the Full Bench in Aurizon, is to have reference to the
construction of s.226 and the contextual matters that bear upon that construction, as well as
giving specific consideration to the matters identified in ss. 226(b)(i) and (ii):
“All of the circumstances also need to be taken into account in considering whether
termination of the agreements is appropriate. In particular the views of employers and
employees covered by the agreement, their circumstances, and the impact of
termination need to be taken into account. The requirement in s. 226(b) to take into
account all of the circumstances including those set out in s. 226(b)(i) and (ii) is a
requirement to take the matters into account and to give them due weight in assessing
whether it is appropriate to terminate an enterprise agreement. In assessing
appropriateness by taking into account all of the circumstances, we approached the
task by reference to the construction of s. 226 and the contextual matters that bear
upon that construction dealt with earlier as well as giving specific consideration to the
matters identified in s. 226(b)(i) and (ii).”
The Applicant contends that the Agreement should be terminated. The views of the employees are not known. There are no organisations covered by the Agreement.
The Applicant contends that the Award provides for superior entitlements than the Agreement and filed a comprehensive comparative analysis of the Agreement and the Award.[1] It contends that the rates of pay under the Agreement have long since been surpassed by the rates of pay contained in the Agreement [2] and that many penalties, allowances, overtime, and other entitlements under the Agreement have fallen well below the Award.[3] It also contends that a number of entitlements provided under the Award are not provided for in the Agreement.[4] The Applicant also contends that termination of the Agreement will allow it to upgrade its rostering/time management system to one that is Award pre-configured which will dramatically enhance accessibility for all staff and management.[5]
I note that the Award provides:
a range of allowances that are not contained in the Agreement;
a 25% loading for casual employees, whereas the Agreement provides for a loading of 20%;
penalty rates for evening work on a Monday to Friday, work on a Saturday and work on a Sunday, whereas the Agreement provides for a loaded rate which varies depending on when an employee is rostered. The applicable loaded rates are, however, below the minimum rates contained in the Award;
notification requirements for roster changes while the Agreement does not have any such requirement;
a requirement for a 12 hour break between shifts (or 10 hours by agreement) while the Agreement does not;
enhanced overtime rates compared to the Agreement and for overtime to apply in excess of 38 ordinary hours for full time employees and beyond the agreed number of hours for part time employees, whereas overtime under the Agreement applies in excess of 152 ordinary hour in a 4-week period for full time employees only;
3 hour minimum engagement for casuals compared to a 2 hour minimum engagement under the Agreement;
Penalty rates for work on all public holidays at the rate of 125% of permanent employees and 150% for casuals while the Agreement provides that payment for up to 30.4 hours (4 days) work on public holidays per annum is included in the loaded rate and payment thereafter is paid at the rate of 250%.
Few conditions of the Agreement are superior to those of the Award. In my view, the terms of the Award are overall more favourable to employees that those of the Agreement. This is relevant to the consideration of the ‘circumstances’ of employees covered by the Agreement and the ‘likely effect that the termination will have’ on them, for the purpose of section 266(b)(ii). I also accept the Applicant’s contention that that termination of the Agreement will be administratively beneficial. I consider these matters support a conclusion that it is appropriate to terminate the Agreement.
Operative date of termination
Section 227 of the Act provides as follows:
“227 When termination comes into operation
If an enterprise agreement is terminated under section 226, the termination operates from the day specified in the decision to terminate the agreement.”
Section 227 of the Act affords the Commission a discretion as to the operative date of termination of an agreement. It is to be expected that new conditions of employment will apply following the termination of an enterprise agreement and it is foreseeable that preparations will need to be made in order to implement them. The Applicant seeks an additional period of time until 11 August 2022 to allow for adjustment to the Award. In my opinion, it is reasonable to allow a period of time for the Applicant to prepare and make adjustments to its business to apply the Award. The period needs to be sufficient to allow the Applicant to make changes to payroll systems and administrative arrangements associated with the application of the Award. As such, I consider the period until 11 August 2022 sought by the Applicant to be appropriate.
Conclusion
In relation to the application that has been made under section 225, I am satisfied that it is not contrary to the public interest to terminate the Agreement and I consider it is appropriate to do so taking into account all the circumstances. I am therefore required by section 226 to terminate the Agreement.
The Agreement is terminated.
The termination will operate from 11 August 2022.
DEPUTY PRESIDENT
[1] Form F24C at [4], Form F24C Annexure A
[2] Ibid
[3] Form F24C, q.2.1 at [4], Form F24C Annexure A
[4] Ibid
[5] Form F24C, q2.1 at [5]
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