Central Canberra Family Day Care

[2024] FWCA 3989

[2024] FWCA 3989

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

s.225—Enterprise agreement

Central Canberra Family Day Care

(AG2024/4149)

CENTRAL CANBERRA FAMILY DAY CARE ENTERPRISE AGREEMENT 2013

Children’s services
COMMISSIONER MCKINNON	SYDNEY, 18 NOVEMBER 2024

Application for termination of the Central Canberra Family Day Care Enterprise Agreement 2013

1. Central Canberra Family Day Care trading as Cubby House has applied to terminate the Central Canberra Family Day Care Enterprise Agreement 2013 (the Agreement) under section 225 of the Fair Work Act 2009 (the Act).

1. The Agreement was made in 2013 by Central Canberra Family Day Care (ABN 13 475 819 712) and its employees engaged as Children Services Workers. The Agreement was approved on 9 January 2014 and nominally expired on 9 January 2018.

1. Section 226 of the Act requires the Commission to terminate an enterprise agreement if the conditions in that section are met. Mandatory considerations apply in relation to the termination of an enterprise agreement under section 226. In this case, the application for termination of the Agreement is made under section 226(1)(c), which requires the Commission to terminate an enterprise agreement on application if three statutory conditions relating to business viability and reduced potential for termination of employment are met.

1. I am not satisfied that the conditions for termination of the Agreement are met or that it is appropriate in all the circumstances to terminate the Agreement. Accordingly, the application will be dismissed. These are my reasons.

Section 226(1)(c)

1. Section 226(1)(c) of the Act requires the Commission to terminate an expired enterprise agreement on application by a person covered by the agreement, but only if the conditions in s.226(1)(c) are met and it is appropriate in all the circumstances to do so. Relevantly, it provides as follows:

“(1) If an application for the termination of an enterprise agreement is made under section 225, the FWC must terminate the agreement if:

…

(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.”

Continued operation of the Agreement would pose a significant threat to the viability of a business carried on by the employer

1. Cubby House is a small not-for-profit children’s daycare service located at the Australian National University (ANU) campus in Acton, ACT. In June 2024, the ANU notified Cubby House that for building maintenance reasons, it would not have its lease renewed. Cubby House was unable to find an alternative solution and instead decided to close the business.

1. In the circumstances, I am not satisfied that continued operation of the Agreement would pose a significant threat to the viability of the business. With or without the Agreement, the business will have closed by the time of this decision after a resolution of its Board to cease operations on 8 November 2024.

Whether termination would be likely to reduce the potential of terminations of employment by reason of redundancy, insolvency or bankruptcy

1. Cubby House has 5 employees and is negotiating with the provider of a new childcare facility on campus for the transition of its staff and children. The new facility will not open until February 2025 and in the meantime Cubby House has ceased operations. Although not confirmed on the materials, it seems likely that all 5 of the employees have been made redundant. I am thus not satisfied that termination of the Agreement will be likely to reduce the potential for redundancies affecting employees of Cubby House.

Whether guarantee of termination entitlements given

1. The Agreement contains terms dealing with notice of termination and redundancy, which meet the description of “terms providing entitlements relating to the termination of employees' employment” (s 226(1)(c)(iii)). No guarantee of termination entitlements has been given by Cubby House in connection with the termination of the agreement. On the contrary, the stated purpose of the application is to avoid an obligation to pay redundancy pay under the Agreement because it does not have sufficient funds to cover the payments.

Views of persons covered by the Agreement

1. There are no longer any persons covered by the Agreement, because Cubby House is no longer an employer; its employees are no longer employed; and no employee organisation is covered by the Agreement.

Conclusion

1. The conditions for termination of an enterprise agreement in s.226(1)(c) are not met in the circumstances of this case. It follows that I cannot terminate the Agreement.

Order

1. The application is dismissed.

COMMISSIONER

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