Contract Pharmaceutical Services of Australia Pty Ltd T/A CPSA

[2017] FWCA 2860

[2017] FWCA 2860

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.225—Enterprise agreement

Contract Pharmaceutical Services of Australia Pty Ltd T/A CPSA
(AG2017/1637)

CPSA EMPLOYEE ENTERPRISE AGREEMENT 2014

Pharmaceutical industry
COMMISSIONER MCKENNA	SYDNEY, 24 MAY 2017

Application for termination of the CPSA Employee Enterprise Agreement 2014.

[1] On 10 May 2017, Contract Pharmaceutical Services of Australia Pty Ltd (“the applicant”) made an application pursuant to s.225 of the Fair Work Act 2009 (“the Act”) for the termination of the CPSA Employee Enterprise Agreement 2014 (“the Agreement”). The Agreement was approved on 4 April 2014 [2014] FWCA 2224. The nominal expiry date of the Agreement recently expired, namely on 11 April 2017.

[2] The applicant’s Form F24C (Statutory declaration in relation to termination of an enterprise agreement after the nominal expiry date) referred to matters including that:

• Future pay increases will be based on rates in the relevant modern award (which I see from the initial Form F17 - Employer’s statutory declaration in support of application for approval of an enterprise agreement – that was originally made in relation to the application for the approval of the Agreement is the Pharmaceutical Industry Award 2010).



• Any employee who is currently paid above-award rates will receive pay increases notionally based on CPI movements and individual performance.



• No employees will have a pay reduction as a result of the termination of the Agreement, if approved.

[3] The application was listed on 12 May 2017 and, at that time, I directed that Commission correspondence be circulated to employees inviting them to express any views by 19 May 2017.

[4] I have received certain views in response to that correspondence. Shortly stated, as to the effect of the proposed termination of the Agreement, it was pointed out that the termination of the Agreement would mean that the employees would not have access to two forms of cashing-out of leave arrangements otherwise specified in the Agreement.

[5] In that regard, clause 20.3 of the Agreement deals with the cashing-out of personal/carer’s leave. However, the clause concerning such cashing-out does not meet the requirements of s.101 of the Act, which reads:

“101  Modern awards and enterprise agreements may include terms relating to cashing out paid personal/carer’s leave

(1)  A modern award or enterprise agreement may include terms providing for the cashing out of paid personal/carer’s leave by an employee.

(2)  The terms must require that:

(a) paid personal/carer’s leave must not be cashed out if the cashing out would result in the employee’s remaining accrued entitlement to paid personal/carer’s leave being less than 15 days; and

(b)  each cashing out of a particular amount of paid personal/carer’s leave must be by a separate agreement in writing between the employer and the employee; and

(c)  the employee must be paid at least the full amount that would have been payable to the employee had the employee taken the leave that the employee has forgone.”

[6] As to the second matter of cashing-out to which reference was made, clause 20.6 purports to allow for the cashing-out of long service that has been accrued “in accordance with the relevant legislation.” I take the relevant legislation to be the Long Service Leave Act 1955 (NSW). It is, however, generally not permitted under the Long Service Leave Act to cash-out long service leave; and the inclusion of a provision in an enterprise agreement does not affect that legal situation: Re Armacell Australia Pty Ltd and others: [2010] FWAFB 9985; Re St Marys Rugby League Club Employees Enterprise Agreement: [2010] FWA 9314.

[7] The provisions of the Act relevant to the application before me read as follows:

“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.”

[8] I am satisfied that it is not contrary to the public interest to terminate the Agreement, and in so concluding I have taken into account all the circumstances including the views of the applicant and employee views (there are no views to be sought from any organisation, as none is covered). Indeed, a range of matters in certain clauses in the Agreement lead me to the view that it would not only be “not contrary to the public interest” to terminate the Agreement, but that it would affirmatively serve the public interest to terminate the Agreement (e.g. see purported reference to Australian Fair Pay and Conditions Standard in clause 12 (Hours); notice period in clause 13 (Qualifying period); aspects of clause 14 (Remuneration); clause 19 (Allowances); and purported ousting of payment of annual leave loading on annual leave that is cashed-out and/or paid-out on termination of employment). While the provisions of the National Employment Standards apply regardless, among other matters, the likely effect of the termination of the Agreement is having minimum terms and conditions of employment regularised under the Pharmaceutical Industry Award 2010 and the proper application of the National Employment Standards, coupled with the assurance provided in the applicant’s statutory declaration in support of the application for the termination of the Agreement that there will be no reduction in existing wages for any employee.

[9] I consider it appropriate to terminate the Agreement. The termination takes effect from today’s date.

COMMISSIONER

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