Care Options Inc
[2018] FWCA 4248
•17 AUGUST 2018
| [2018] FWCA 4248 |
| FAIR WORK COMMISSION |
| decision |
Fair Work (Transitional Provisions and Consequential Amendments) Act 2009
Item 16 Sch. 3—Termination of transitional instrument
Care Options Inc
(AG2018/2922)
CARE OPTIONS INC EMPLOYEE COLLECTIVE AGREEMENT 2009
| Health and welfare services | |
| Deputy President Binet | PERTH, 17 AUGUST 2018 |
Application for termination of the Care Options Inc Employee Collective Agreement 2009.
On 29 June 2018, Care Options Inc (Care Options) made an application (Application) to the Fair Work Commission (FWC) pursuant to Schedule 3 Item 16 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Transitional Act) to terminate the Care Options Inc Employee Collective Agreement 2009 (Agreement)
The parties to the Agreement are Care Options and its employees employed in the classifications of employment specified in Schedule 2 of the Agreement (Employees).
The Agreement has a nominal expiry date in September 2014.
The relevant reference award is the Social, Community, Home Care and Disability Services Industry Award 2010 (Award).
The Application was filed by Ms Lorrae Trotter, Group Manager People and Culture (Ms Trotter) on behalf of Care Options and was accompanied by a Statutory Declaration by Ms Trotter in support of the Application (Trotter Declaration).
Directions were issued on 29 June 2018 inviting Care Options and United Voice to file submissions in relation to the Application (Directions). United Voice is not covered by the Agreement but in its capacity as the union representing home care and disability support services workers in Western Australia United Voice was invited, pursuant to section 590 of the FW Act, to make submissions in relation to the Application.
Inter alia, the Directions required Care Options to file evidence as to whether Employees are better off overall under the Award than the Agreement (including a comparison table settling out all the terms which differ) and which if any employees may not be better off overall.
On 2 July 2018, Care Options filed submissions in support of the Application and a copy of the notice issued by the former Workplace Authority advising the Agreement met the No Disadvantage test. On 5 July 2018 United Voice filed submissions in support of the Application.
The Directions also required Care Options to provide a copy of the Application, the Trotter Declaration, Care Option’s submissions, United Voice’s submissions and the Directions to all Employees.
On 12 July 2018, Care Options filed a Statutory Declaration stating that the Directions had been complied with.
The Directions invited any of the Employees who wished to be heard in relation to the Application to contact Chambers by close of business 19 July 2018. No written correspondence has been received from any Employee as at the date of this decision.
Legislative Framework
For the purposes of Schedule 3, Item 16 of the Transitional Act, the Agreement is a Collective Agreement-Based Transitional Instrument. By virtue of Item 16 of the Transitional Act, the Agreement may be terminated pursuant to sections 225 and 226 of the Fair Work Act 2009 (FW Act).
Section 225 of the FW Act states:
“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 FW Act states:
“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.”
Under Rule 26(2) of the Fair Work Commission Rules 2013 (Cth) (FW Rules), an application made pursuant to section 225 of the FW Act must be accompanied by a statutory declaration made by an officer or authorised employee of the applicant, and must set out the basis upon which the FWC can be satisfied that the requirements of section 226 of the FW Act have been met.
Submissions
In the Trotter Declaration Ms Trotter explains that in October 2016, Care Options agreed to merge with two other non-profit entities (Community First International Ltd and Volunteer Task Force Inc) and in doing so, Care Options has effectively become a subsidiary of Chorus Australia Ltd (Chorus).
The Trotter Declaration states that the merger of these entities was effective in February 2017, but all existing employees of the separate merged entities presently remain employed by the respective entities. The Trotter Declaration further states that it is the intention of the merged entities to rebrand and trade as Chorus, and in taking on the role of employing entity, it is Chorus’ intention to implement harmonised employment conditions for all employees by offering common law contracts consistent with the conditions provided by the Award.
Care Options say that the Agreement no longer reflects industry standards and submit that it is in the public interest of maintaining proper industrial standards if the Agreement is terminated and Employees’ employment is consequently covered by a modern award.
In relation to the views of employees in relation to the proposed termination of the Agreement the Trotter Declaration states that Care Options conducted 11 town hall meetings between 7 May 2018 and 17 May 2018, for the purpose of explaining to its employees Care Option’s intention to apply to have the Agreement terminated, the likely effect its termination would have on employees and the proposed timeline for doing so. The Trotter Declaration states that these meetings gave employees the opportunity to ask questions in relation to the proposed action to terminate the Agreement.
Attached as Annexure 3 to the Trotter Declaration were ‘petitions of support’ being signed documents from 46 of 160 Employees indicating that they support the proposed termination of the Agreement. The Trotter Declaration states that the petitions of support were received by Care Options between 22 May 2018 and 1 June 2018.
In relation to the effect of the proposed termination of the Agreement on the Employees Care Options submitted that the Employees will not suffer a reduction in the overall terms and conditions of their employment if the Agreement is terminated, as the Award, on balance, provides better terms and conditions of employment than the Agreement.
On 2 July 2018, in accordance with the Directions, Care Options filed with the FWC, inter alia, a modelling document setting out the remuneration of all Care Options’ 160 employees and how their rates of pay under the Agreement compare against the Award. This document revealed that for each classification under the Agreement, the rate of pay for the relevant Award classification would either increase or remain unchanged. The document also revealed that each of the Employees’ annual salaries would either reamin unchanged, or would increase under the Award, with the majority of the Employees receiving an increase in their annual salary.
In relation to the effect of the proposed termination of the Agreement on its business Care Options submit that termination of the Agreement would provide Care Options and Chorus with the opportunity to offer their respective employees an aligned set of employment terms and conditions. This would enable Chorus to develop administrative efficiencies with respect to payroll and associated processes once the merger of the entities is complete.
United Voice filed submissions on 5 July 2018 supporting the Application. While noting that some items in the Agreement are either more beneficial than the Award or not provided for in the Award, United Voice submit that it is in the public interest to terminate the Agreement as it no longer reflects the current industry terms and conditions.
Consideration
As the Agreement has passed its nominal expiry date and Care Options is an employer covered by the Agreement, I find that Care Options has standing to make the Application pursuant to section 225(a) of the FW Act.
In accordance with Rule 26(2) of the FW Rules the Application was accompanied by the Trotter Declaration.
Based on the materials filed by Care Options and United Voice, there is nothing before me which raises public interest considerations which might weigh against the termination of the Agreement. I am therefore satisfied that it is not contrary to the public interest to terminate the agreement.
Modelling conducted internally by the FWC confirms that while the Agreement provides for a more beneficial entitlement to shift work payments in certain circumstances, given the low rates of pay, Employees are better off overall under the Award than the Agreement.
Care Options and United Voice support the Application. No written correspondence has been received from any Employee as at the date of this decision opposing the Application.
Having considered and being satisfied as to each of the matters contained in section 226 of the Act, the Agreement is terminated.
The termination will come into effect from 17 August 2018.
DEPUTY PRESIDENT
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