Centrogen Pty Ltd

[2023] FWCA 902

[2023] FWCA 902

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

s.225—Enterprise agreement

Centrogen Pty Ltd

(AG2022/5122)

CENTROGEN PTY LTD EMPLOYEE COLLECTIVE AGREEMENT

Gardening services
DEPUTY PRESIDENT LAKE	BRISBANE, 27 MARCH 2023

Application for termination of the Centrogen Pty Ltd Employee Collective Agreements.

1. On 6 December 2022, Ms Nickola Cividin on behalf of Centrogen Pty Ltd (the Applicant) lodged an application to the Fair Work Commission (the Commission) pursuant to s.225 of the Fair Work Act 2009 (the Act) to terminate the Centrogen Pty Ltd Employee Collective Agreement[1] and the Centrogen Pty Ltd Employee Collective Agreement[2] (the Agreements). I note there are two Agreements published under this name. Both Agreements have passed their nominal expiry date, being five years from the date the Agreements were approved. The Applicant confirmed that both Agreements are to be terminated. Therefore, both Agreements are considered for termination in this decision.

1. The Agreements were made prior to the amendments of the Act coming into force and are a “collective agreement-based transitional instrument” (CABTI). The application is made pursuant to s.225(a) of the Act and made under Schedule 3, Item 16 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (the Transitional Act). For applications brought under Schedule 3, Item 16 of the Transitional Act, the application is dealt pursuant to s.225 of the Act, with the same considerations required as if they were agreements made under the Act.

1. The application was made using Forms F24B and F24C. I exercise my discretion under s.586 of the Act to treat the application made on 6 December 2022 as though it were made using a Form F28.

1. This application will be determined on the papers.

Legislation

1. 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.”

1. The Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022 amended s.226 of the Act. The amendments took effect from 7 December 2022 and relevantly provide as follows:

“226    Terminating an enterprise agreement after its nominal expiry date

(1) 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 the continued operation of the agreement would be unfair for the employees covered by the agreement; or

(b) the FWC is satisfied that the agreement does not, and is not likely to, cover any employees; or

(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.

(1A) However, the FWC must terminate the enterprise agreement under subsection (1) only if the FWC is satisfied that it is appropriate in all the circumstances to do so.

(2) This subsection covers a termination of the employment of an employee:

(a) at the employer’s initiative because the employer no longer requires the job done by the employee to be done by anyone, except where this is due to the ordinary and customary turnover of labour; or

(b) because of the insolvency or bankruptcy of the employer.

(3) In deciding whether to terminate the agreement, the FWC must consider the views of the following covered by the agreement:

(a) the employees (unless there are no employees covered by the agreement);

(b) each employer;

(c) each employee organisation (if any).

Note: The President may be required to direct a Full Bench to perform a function or exercise a power in relation to the matter if any of the employers, employees, or employee organisations, covered by the agreement oppose the termination (see subsection 615A(3)).

(4) In deciding whether to terminate the agreement (the existing agreement), the FWC must have regard to:

(a) whether the application was made at or after the notification time for a proposed enterprise agreement that will cover the same, or substantially the same, group of employees as the existing agreement; and

(b) whether bargaining for the proposed enterprise agreement is occurring; and

(c) whether the termination of the existing agreement would adversely affect the bargaining position of the employees that will be covered by the proposed enterprise agreement.

(5) In deciding whether to terminate the agreement, the FWC may also have regard to any other relevant matter.”

1. Section 227 of the Act provides when termination comes into operation:

“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.”

Consideration

1. On 10 February 2023, Ms Cividin provided my chambers with further information on the two Agreements. Both AC328431 and AC328740 are identical with two exceptions. Firstly, AC328740 was signed three months after AC328431. Ms Cividin assumes that AC328740 should have replaced AC328431 when it was published. Secondly, AC328740 has a minor increase in rates.

1. The Form F24B states:

(a) the Applicant is an employer covered by the Agreements;

(b) they are single Enterprise Agreements;

(c) the Applicant is the only employer covered by the Agreements;

(d) the Applicant is not covered by the Agreements because of a transfer of business; and

(e) there are no employee bodies covered by the Agreements.

1. The Form F24C states that these Agreements are ‘zombie agreements’ and there are no employees covered by them, the Agreements do not meet the minimum requirements for pay and conditions under the Award, and new employees cannot be employed under the Agreements.

1. I confirmed that both Agreements are on the list of possible ‘zombie agreements’ published by the Fair Work Commission on 6 March 2023.

1. As the Applicant is an employer covered by the Agreements, I am satisfied that the Applicant has standing to bring the application pursuant to s.225(a) of the Act.

1. Based on the material contained in the declarations filed by Ms Cividin, I am satisfied that the Agreements must be terminated under s.226(1)(b) of the Act.

1. As the Applicant is the employer covered by the Agreements and their position is to terminate both Agreements, and there are no employees or employee organisations covered by the Agreements, I am satisfied that the criteria under s.226(3) is met.

1. I am satisfied that none of the criteria in s.226(4) apply and that there are no other relevant matters to consider in deciding whether to terminate the Agreements pursuant to s.226(5).

Conclusion

1. Taking into account all of the circumstances including those in ss.225 and 226, I consider that it is appropriate to terminate the Agreements. Accordingly, I Order that the Agreements be terminated, and the termination will operate from the date of this decision.

DEPUTY PRESIDENT

<PR760608>

[1] AC328431.

[2] AC328740.

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