Community Care (Northern Beaches) Inc

[2016] FWCA 173

[2016] FWCA 173

FAIR WORK COMMISSION

DECISION

Fair Work (Transitional Provisions and Consequential Amendments) Act 2009
Sch. 3, Item 16 - Application to terminate collective agreement-based transitional instrument

Community Care (Northern Beaches) Inc
(AG2015/7173)

Health and welfare services
COMMISSIONER JOHNS	MELBOURNE, 29 JULY 2016

Application for termination of the CCNB Employee Collective Agreement 2007.

[1] This decision concerns an application by Community Care (Northern Beaches) Inc (Applicant/CCNB), under Item 16 of schedule 3 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Transitional Act), and as a consequence, section 225 of the Fair Work Act 2009 (Act).

[2] The application seeks to terminate the CCNB Employee Collective Agreement 2007 (Agreement). The Agreement is a collective agreement-based transitional instrument for the purposes of the Transitional Act. The Agreement passed its nominal expiry date on 19 April 2012. No employee organisation was covered by the Agreement.

Background

[3] In support of the application a Statutory Declaration was filed by Sarah Brisbane, Chief Executive Officer (Brisbane Declaration). The Brisbane Declaration asserted that:

• termination of the Agreement would provide the applicant with flexibility in responding to significant government led reforms, enhancement and sustainability of the organisation and protect jobs. It was indicated that a termination would not lead to the reduction in annual salary for any staff members.

[4] Ms Brisbane provided the following information about the discussions held with employees:

• On 22 October Ms Brisbane conducted a meeting with CCNB’s Leadership Team (compromising of 10 senior employees) during which details of the proposed changes were provided. Ms Brisbane claimed that all senior employees supported the proposed changes.

• All staff were given 4 weeks notice of the meeting to be held on 29 October 2015. Nearly all staff attended the meeting. The purpose of the meeting was to explain the proposed changes and inform staff of the applicant’s intention to make an application to terminate the Agreement.

• Staff were provided with child minding services, an information kit, a set of 52 frequently asked questions, a copy of the presentation slides, copies of board-approved changes to company policies, and sample old and new individual Employment Agreements.

• Smaller meetings were held on several occasions with employees allowing them the opportunity to ask questions and express their thoughts.

[5] On 20 January 2016 Directions were issued directing any employee or organisation opposing the termination of the Agreement to file submissions by 27 April 2016.

[6] On 27 April 2016, the Australian Services Union (ASU) filed submissions. The ASU submitted that their members do not oppose the termination of the Agreement. The ASU asked that it have an opportunity to respond to any further submissions made by the applicant.

[7] On 11 May 2016 Directions were issued directing the applicant to file and serve on the ASU an updated Statutory Declaration in support of its application

[8] On 19 May 2016, Mr Gary Jacobson, the interim-Chief Executive Officer of CCNB submitted a Statutory Declaration (Jacobson Declaration). The Jacobson Declaration was a more detailed version of the Brisbane Declaration. Mr Jacobson declared that:

a) CCNB is seeking to terminate the Agreement and replace it with individual agreements that match the Social Community Home Care and Disability Service Industry Award 2010 (Award) hours of 76 per fortnight and introduce pay for performance;

b) employees are paid above the Award and this would not change with the termination of the agreement. There will be no reduction in their annual salary or take home pay; and

c) the applicant has had extensive discussions with staff. The views of their employees and the ASU resulted in CCNB modifying its proposed reforms.

[9] On 26 May 2016, the ASU filed further submissions. The ASU, submitted that a collective agreement would be a more equitable and efficient mechanism for the regulation of rates of pay and conditions employment at CCNB.

[10] On 27 May 2016, the applicant consented to the application being dealt with on the papers. On the same day the ASU advised that it, neither supports nor opposes the termination of the Agreement.

[11] On 22 June 2016, the ASU wrote to the Commission seeking an opportunity to make further submissions in light of a restructure announced by the employer on 17 June 2016.

[12] On 23 June 2016, Directions were issued that any final submissions must be made by 1 July 2016.

[13] On 29 June 2016, the ASU wrote to the Commission, confirming that it was satisfied the proposed restructure will not change, modify or alter contracts of employment.

[14] The Commission must give consideration to the following legislation to determine whether it is viable to terminate the Agreement.

The relevant legislation

[15] Item 16 of Schedule 3 of the Transitional Act provides:

“16 Collective agreement-based transitional instruments: termination by FWA

(1) Subdivision D of Division 7 of Part 2-4 of the FW Act (which deals with termination of enterprise agreements after their nominal expiry date) applies in relation to a collective agreement-based transitional instrument as if a reference to an enterprise agreement included a reference to a collective agreement-based transitional instrument.

(2) For the purpose of the application of Subdivision D to an old IR agreement, the agreement’s nominal expiry date is taken to be the end of the period of the agreement.”

[16] Subdivision D of Division 7 of Part 2-4 of the 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.

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.

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

s.226(a) - not contrary to the public interest to do so

[17] CCNB submitted that termination of the Agreement is not contrary to public interest because:

● the Agreement will be replaced with individual agreements that match the Award hours per fortnight;

● it will introduce a pay for performance scheme, allowing for greater flexibility to respond to significant government-led industry reforms which will enhance the organisation’s sustainability;

● it will protect jobs, by offering competitive employment conditions to attract and retain high quality staff;

● the Agreement was made in 2007, there have been variations to operating mechanisms through sector reforms, causing CCNB to run programs at a loss. These losses will be mitigated if the Agreement is terminated;

● if the Agreement continues to operate, there is a possibility CCNB will become financially unviable and may cease operation, which is contrary to public interest, particularly the 1000 clients across Northern Sydney; and

● terminating the Agreement will allow CCNB to provide its services for longer hours.

[18] The ASU submitted that other employers within the industry have continued to operate under collective bargaining arrangements, including as a response to current sector reforms.

[19] The Commission, as presently constituted, is satisfied it is not contrary to public interest to terminate the Agreement.

s.226(b)(i) - Views of the employees, each employer, and each employee organisation (if any)

[20] The views of the employer are that termination of the Agreement will ensure sustainability of CCNB to deliver cost effective, quality service to its clients and as a result sees that the replacement of the Agreement with individual contracts is the preferred industrial instrument.

[21] Despite being provided with the opportunity to do so, no employee submitted an individual view.

[22] The view of the ASU is that, while it does not oppose the application, it says the collective agreement would be a more equitable and efficient mechanism for the regulation of rates of pays and conditions employment at CCNB.

s.226(b)(ii) - Circumstances of those employees, employers and organisations including the likely effect of termination.

[23] The employer says termination of the agreement will have the following effects:

● no reduction in the annual salaries or take home pay of any CCNB employee;

● employees would not be reverted back to the Award, but instead, the salaries will be maintained through individual agreements;

● individual employment agreements, will give employees the option to reduce their working hours per week to 68.4 hours per fortnight with no reduction in salary;

● allow CCNB to make crucial competitiveness, productivity and performance enhancements, by introducing performance based pay for future salary reviews; and

● a significant number of employees are electing to increase their weekly hours, in turn increasing CCNB’s potential productivity.

[24] Despite being provided with the opportunity to do so, no employee made a submission about the likely effect of termination on them.

[25] The ASU submitted that the proposed termination of the Agreement may create two classes of employees, which may foster different conditions of employment for different employees.

[26] However the ASU clarified that its members do not oppose the termination of the Agreement. The ASU itself does not support the application or make a joint application for the termination of the Agreement.

[27] On the basis of the material before it, the Commission is satisfied that the termination of the Agreement would not be contrary to the public interest (section 226(a) of the Act). Further, in accordance with section 226(b) of the Act, the Commission has considered the circumstances of the matter and have concluded that termination of the Agreement is appropriate.

[28] Therefore, in accordance with section 226 of the Act, the Commission must terminate the Agreement. The application to terminate the Agreement is approved.

[29]The termination will take effect from today, 29 July 2016.

COMMISSIONER

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