Construction, Forestry, Mining and Energy Union
[2014] FWC 1052
•12 FEBRUARY 2014
[2014] FWC 1052 |
FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.222 - Application for approval of a termination of an enterprise agreement
Construction, Forestry, Mining and Energy Union
(AG2014/3372)
SENIOR DEPUTY PRESIDENT RICHARDS | BRISBANE, 12 FEBRUARY 2014 |
Summary: application of the termination of a Greenfields agreement - whether commission has jurisdiction to terminate a Greenfields agreement - CFMEU contention - no statutory facility for termination until employee(s) employed under agreement - application dismissed.
[1] The Construction, Forestry, Mining and Energy Union (“the CFMEU”) has made application (“the termination application”) under s.222 of the Fair Work Act 2009 (“the Act”) seeking the termination of an enterprise agreement, that being the Wadsworth Contracting Pty Ltd and CFMEU Union Collective Agreement 2011-2015 (“the first agreement”). The employer is Wadsworth Contracting Pty Ltd.
[2] The first agreement was approved as a greenfields agreement for the purposes of s.172(4) of the Act.
[3] The termination application was pressed at the same time as approval was sought (“the approval application”) in relation to a further greenfields agreement (“the second agreement”) made with the same employer with the same coverage. I note that the second agreement was approved on 5 February 2014 in [2014] FWCA 895, as I did not consider (upon consideration of the submissions received from the CFMEU, discussed below) that there was any jurisdictional barrier to the second agreement being approved.
[4] The approval application for the second agreement was lodged initially. Upon this application being allocated to me I directed the following correspondence (dated 30 December 2013) to the CFMEU and to the employer indicating difficulties in relation to the interaction between the first and second agreements:
RE: AG2013/10497 – Application to approve the Wadsworth Contracting Pty Ltd and CFMEU union collective agreement 2011-2015
The above application for approval of a greenfields agreement, filed in the Commission on 17 December 2013, is allocated to Senior Deputy President Richards.
Prior to considering the Agreement for the purposes of the BOOT, His Honour notes that the Agreement appears to have the same coverage as the Wadsworth Contracting Pty Ltd and CFMEU Union Collective Agreement 2011-2015, which was approved by the Commission in September 2013 (matter AG2013/2928). His Honour also notes that the F17 Employer declaration states that the agreement will cover all prospective employees of the employer.
The application documents also include a (unsigned) statutory declaration made in support of the termination of an enterprise agreement (possibly that approved in September 2013 but this is unclear), however this document is not signed or witnessed. There do not appear to have been any other documents related to the termination of an agreement filed in the Commission.
Please provide clarification of these issues as soon as possible and by COB on 8 January 2014.
[5] On 7 January 2014 the CFMEU replied and indicated that it had made application to terminate the first agreement. This decision concerns whether the Commission has jurisdiction to terminate the first agreement (in the circumstances before it) as it is a greenfields agreement.
[6] It was in this context that I wrote to the CFMEU and the employer on 10 January 2014 in the following terms:
Thank you for your email and clarification. I have forwarded the termination application to registry to process as a separate application.
However, upon consideration of the documents it appears an issue may arise regarding these related applications.
Section 219 provides that an agreement within its stated period of operation may be terminated by agreement between the employer and the employees.
219 Employers and employees may agree to terminate an enterprise agreement
Termination by employers and employees
(1) The following may jointly agree to terminate an enterprise agreement:
(a) if the agreement covers a single employer—the employer and the employees covered by the agreement; or
(b) if the agreement covers 2 or more employers—all of the employers and the employees covered by the agreement.
Note: For when a termination of an enterprise agreement is agreed to, see section 221.
Termination has no effect unless approved by the FWC
(2) A termination of an enterprise agreement has no effect unless it is approved by the FWC under section 223.
Limitation—greenfields agreement
(3) Subsection (1) applies to a greenfields agreement only if one or more of the persons who will be necessary for the normal conduct of the enterprise concerned and are covered by the agreement have been employed.
The F24 application does not include details of when the termination was agreed to. The statutory declaration accompanying the application does not indicate how or when the termination was agreed to.
Senior Deputy President Richards asks that the parties confirm whether the termination has been agreed to in accordance with s.219.
If there are no employees yet covered by the Agreement approved in July 2013, His Honour is of the view that the Agreement cannot be terminated. Alternatively, if employees have been employed under the July Agreement and are covered by it, and voted to approve the termination, it does not appear that a new greenfields agreement can be approved.
SDP Richards asks that the parties provide brief submissions on these issues. If it is considered that a hearing would be preferable, a hearing will be convened.
Please provide submissions by COB on 17 January 2014. If a hearing is requested, please advise ASAP.
[7] The CFMEU responded by pressing the termination application as well as the application for approval of the second agreement.
[8] The CFMEU contended - by way of its submissions in reply - that the Commission could be satisfied that all the elements of s.223 of the Act have been complied with and that as there were no employees at the time of the termination s.223(a) is of no effect.
[9] As a consequence, the CFMEU argued, s.223(b) and s.223(c) of the Act:
“are effectively not open for exploration as there were no employees to agree with the termination and therefore the conduct of the employer does not offend the subsections. Accordingly, the content of sections 220 and 221 are not open to investigation”
[10] The CFMEU went on that:
“The Commission can be satisfied that the CFMEU and the employer are in support of the termination. Accordingly, the Commission can be satisfied that all the relevant components to approve the termination have been dealt with in determination should be approved in accordance with s. 223.”
[11] I again corresponded with the parties on 24 January 2014 in the following terms, which specifically sought the views of the employer (which had not been disclosed):
Re: AG2013/10497 – Application to approve the Wadsworth Contracting Pty Ltd and CFMEU Union Collective Agreement 2011-2015
AG2014/3372 – Application to terminate
Ms Wright - thank you for your email and submissions.
SDP Richards has considered these submissions. Regarding the proposed termination of the current (2013) agreement, he seeks the employer’s and union’s views as to the effect of s.219(3) for the application to terminate that agreement.
His Honour does not consider that there is anything in the legislation that would preclude the new agreement being approved (having regard to the declarations and other information provided). However, s.58 of the Act would become relevant if His Honour was to determine that he did not have any ability under the Act to terminate the current (2013) agreement. As such, the new agreement would be approved (subject to parties’ views) and the approval decision would note the existing agreement and the relevance of s.58.
Please advise of the employer’s and union’s views on the above as soon as possible and by COB on 28 January 2014. Specifically, please advise whether the parties press for the approval of the new agreement, and whether the parties wish to make further submissions regarding the termination of the current agreement.
[12] No response by the employer has been received in relation to my approaches.
[13] The CFMEU replied on 30 January 2014. The terms of its further response are considered below.
[14] I corresponded once more with the CFMEU on Tuesday, 4 February 2014 in the following terms:
Thank you for the CFMEU’s further submissions on this application.
Senior Deputy President Richards asks whether the parties seek a hearing in relation to this application so far as it concerns the Commission’s jurisdiction to approve the application, or whether the parties instead ask the Commission to provide a written decision on the issue of jurisdiction (on the basis of what is now before it), before further proceeding.
[15] No response was received from either the CFMEU or the employer and I now proceed to dispose of the matter on the materials before me.
Legislative context
[16] The relevant provisions of the Act read as follows in relation to the termination application.
Subdivision C—Termination of enterprise agreements by employers and employees
219 Employers and employees may agree to terminate an enterprise agreement
Termination by employers and employees
(1) The following may jointly agree to terminate an enterprise agreement:
(a) if the agreement covers a single employer—the employer and the employees covered by the agreement; or
(b) if the agreement covers 2 or more employers—all of the employers and the employees covered by the agreement.
Note: For when a termination of an enterprise agreement is agreed to, see section 221.
Termination has no effect unless approved by the FWC
(2) A termination of an enterprise agreement has no effect unless it is approved by the FWC under section 223.
Limitation—greenfields agreement
(3) Subsection (1) applies to a greenfields agreement only if one or more of the persons who will be necessary for the normal conduct of the enterprise concerned and are covered by the agreement have been employed.
220 Employers may request employees to approve a proposed termination of an enterprise agreement
(1) An employer covered by an enterprise agreement may request the employees covered by the agreement to approve a proposed termination of the agreement by voting for it.
(2) Before making the request, the employer must:
(a) take all reasonable steps to notify the employees of the following:
(i) the time and place at which the vote will occur;
(ii) the voting method that will be used; and
(b) give the employees a reasonable opportunity to decide whether they want to approve the proposed termination.
(3) Without limiting subsection (1), the employer may request that the employees vote by ballot or by an electronic method.
221 When termination of an enterprise agreement is agreed to
Single-enterprise agreement
(1) If the employees of an employer, or each employer, covered by a single-enterprise agreement have been asked to approve a proposed termination of the agreement under subsection 220(1), the termination is agreed to when a majority of the employees who cast a valid vote approve the termination.
Multi-enterprise agreement
(2) If the employees of each employer covered by a multi-enterprise agreement have been asked to approve a proposed termination of the agreement under subsection 220(1), the termination is agreed to when a majority of the employees of each individual employer who cast a valid vote have approved the termination.
222 Application for the FWC’s approval of a termination of an enterprise agreement
Application for approval
(1) If a termination of an enterprise agreement has been agreed to, a person covered by the agreement must apply to the FWC for approval of the termination.
Material to accompany the application
(2) The application must be accompanied by any declarations that are required by the procedural rules to accompany the application.
When the application must be made
(3) The application must be made:
(a) within 14 days after the termination is agreed to; or
(b) if in all the circumstances the FWC considers it fair to extend that period—within such further period as the FWC allows.
223 When the FWC must approve a termination of an enterprise agreement
If an application for the approval of a termination of an enterprise agreement is made under section 222, the FWC must approve the termination if:
(a) the FWC is satisfied that each employer covered by the agreement complied with subsection 220(2) (which deals with giving employees a reasonable opportunity to decide etc.) in relation to the agreement; and
(b) the FWC is satisfied that the termination was agreed to in accordance with whichever of subsection 221(1) or (2) applies (those subsections deal with agreement to the termination of different kinds of enterprise agreements by employee vote); and
(c) the FWC is satisfied that there are no other reasonable grounds for believing that the employees have not agreed to the termination; and
(d) the FWC considers that it is appropriate to approve the termination taking into account the views of the employee organisation or employee organisations (if any) covered by the agreement.
224 When termination comes into operation
If a termination of an enterprise agreement is approved under section 223, the termination operates from the day specified in the decision to approve the termination.
[17] Item 928 of the Explanatory Memorandum to the Fair Work Bill 2008 provides as follows:
928. Subclause 219(3) provides that the employer or employers and the employees are covered by an agreement can agree to terminate a greenfields agreement only if one or more of the persons who will be necessary for the normal conduct of the enterprise concerned have been employed.
[18] I note further that similar rules apply in relation to an application to vary an enterprise agreement that is a Greenfields agreement:
207 Variation of an enterprise agreement may be made by employers and employees
Variation by employers and employees
(1) The following may jointly make a variation of an enterprise agreement:
(a) if the agreement covers a single employer—the employer and:
(i) the employees employed at the time who are covered by the agreement; and
(ii) the employees employed at the time who will be covered by the agreement if the variation is approved by the FWC;
(b) if the agreement covers 2 or more employers—all of those employers and:
(i) the employees employed at the time who are covered by the agreement; and
(ii) the employees employed at the time who will be covered by the agreement if the variation is approved by the FWC.
Note: For when a variation of an enterprise agreement is made, see section 209.
(2) The employees referred to in paragraphs (1)(a) and (b) are the affected employees for the variation.
Variation has no effect unless approved by the FWC
(3) A variation of an enterprise agreement has no effect unless it is approved by the FWC under section 211.
Limitation—greenfields agreement
(4) Subsection (1) applies to a greenfields agreement only if one or more of the persons who will be necessary for the normal conduct of the enterprise concerned and are covered by the agreement have been employed. [My emphasis]
[19] Item 889 of the Explanatory Memorandum to the Fair Work Bill 2008 provides as follows in relation to s.207(4) of the Act:
889. A variation to an agreement has no effect unless approved by FWA in accordance with clause 211 which sets out when FWA must approve a variation (subclause 207(3)). A variation to a greenfields agreement can only be made if one or more of the employees necessary for the normal conduct of the enterprise concerned have been employed (subclause 207(4)).
[20] The CFMEU's position, with some minor redacting, is as follows:
The Commission only has discretion to refuse a request for termination of an agreement in circumstances where it can determine or can be satisfied that one of the elements of Section 223 has been offended.
[As] there were no employees at the time of the application for termination being made the Commission cannot be satisfied within the definitions of Section 223 that employees of the employer were not notified in relation to the termination of the existing Agreement.
Accordingly, this subsection of Section 223 is not offended by the parties conduct.
In relation to paragraph b in Section 223, termination of the agreement does not need to be agreed to as within the definitions of Section 221 no employees were engaged and accordingly were not capable to agreeing to the termination.
The FWC does not need to consider paragraph (b) and (c) as it is not relevant in relation to this particular application for termination. Further, the FWC cannot be satisfied that there are any other grounds for the termination to not be approved.
In accordance with paragraph (d) the FWC should consider it appropriate to approve the termination as both the employer and the CFMEU being covered by the agreement have agreed to its termination.
It is in the public interest of both the employees under the new proposed Greenfields Agreement to have the existing Greenfields agreement terminated and the new one approved to ensure that their rights and conditions are in accordance with those of the industry and are at the appropriate rates for their employees engaged by other employers.
Accordingly, the FWC should be moved to approve the application for termination and provide the orders as sought by the parties.
This is because there were no employees to be notified.
The Commission only has discretion to refuse a request for termination of an agreement in circumstances where it can determine or can be satisfied that one of the elements of Section 223 has been offended.
[As] there were no employees at the time of the application for termination being made the Commission cannot be satisfied within the definitions of Section 223 that employees of the employer were not notified in relation to the termination of the existing Agreement.
Accordingly, this subsection of Section 223 is not offended by the parties conduct.
In relation to paragraph b in Section 223, termination of the agreement does not need to be agreed to as within the definitions of Section 221 no employees were engaged and accordingly were not capable to agreeing to the termination.
The FWC does not need to consider paragraph (b) and (c) as it is not relevant in relation to this particular application for termination. Further, the FWC cannot be satisfied that there are any other grounds for the termination to not be approved.
In accordance with paragraph (d) the FWC should consider it appropriate to approve the termination as both the employer and the CFMEU being covered by the agreement have agreed to its termination.
It is in the public interest of both the employees under the new proposed Greenfields Agreement to have the existing Greenfields agreement terminated and the new one approved to ensure that their rights and conditions are in accordance with those of the industry and are at the appropriate rates for their employees engaged by other employers.
Accordingly, the FWC should be moved to approve the application for termination and provide the orders as sought by the parties.
This is because there were no employees to be notified.
[21] The CFMEU’s construction of s.222 and s.223 of the Act as set out above proceeds on the basis that the application before the Commission is a competent application for the purposes of section 219(1) of the Act.
[22] Once an application of the requisite kind has been made, of course, it is subject to the subsequent processes set out above. And subject to those various provisions being satisfied the Commission may terminate the relevant Greenfields agreement.
[23] However, the application that is currently before the Commission by way of the termination application is not an application that meets the requirements of s.219 of the Act. That is, there can be no agreement to terminate an enterprise agreement that is a greenfields agreement before such time as the employer and “one or more of the persons who will be necessary for the normal conduct of the enterprise concerned and are covered by the agreement have been employed”.
[24] Thus, in the current circumstances where no employees have been employed under the first agreement, there can be no application made of the kind contemplated under s.222(1) of the Act.
[25] In effect, a greenfields agreement once “made” cannot be terminated until such time as the employer and the employees subsequently employed under the terms of the agreement agree to terminate the agreement. There is no statutory facility in the Act for the employer and the union(s) which made the greenfields agreement to agree to terminate the agreement in advance of at least one employee being employed under the terms of the agreement.
[26] The CFMEU submission does not address the role of s.219 of the Act and requires various provisions in s.223 of the Act to be “switched off”, in effect. This is an unsatisfactory approach to statutory construction. The Act does all the work that is necessary to indicate its purpose. But that purpose does not extend to enlivening the scope for termination of a greenfields agreement until such time as an employer can reach agreement with one or more of its employees, as the case may be, who are employed under the agreement and who will be necessary for the normal conduct of the enterprise concerned.
[27] The explanatory memorandum, in my view, simply re-affirms this approach to the construction of the Act. The provisions are also mirrored in s.207 of the Act are to the same purpose.
Conclusion
[28] In light of the above discussion, the termination application as made by the CFMEU is therefore dismissed.
[29] Section 58 of the Act continues to regulate the relationship between the first and second agreements:
58 Only one enterprise agreement can apply to an employee
Only one enterprise agreement can apply to an employee
(1) Only one enterprise agreement can apply to an employee at a particular time.
General rule—later agreement does not apply until earlier agreement passes its nominal expiry date
(2) If:
(a) an enterprise agreement (the earlier agreement) applies to an employee in relation to particular employment; and
(b) another enterprise agreement (the later agreement) that covers the employee in relation to the same employment comes into operation; and
(c) subsection (3) (which deals with a single-enterprise agreement replacing a multi-enterprise agreement) does not apply;
then:
(d) if the earlier agreement has not passed its nominal expiry date:
(i) the later agreement cannot apply to the employee in relation to that employment until the earlier agreement passes its nominal expiry date; and
(ii) the earlier agreement ceases to apply to the employee in relation to that employment when the earlier agreement passes its nominal expiry date, and can never so apply again; or
(e) if the earlier agreement has passed its nominal expiry date—the earlier agreement ceases to apply to the employee when the later agreement comes into operation, and can never so apply again.
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SENIOR DEPUTY PRESIDENT
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