CSCOMMS Pty Ltd T/A C & D Sanders Family Trust

[2020] FWCA 1877

[2020] FWCA 1877

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.225—Enterprise agreement

CSCOMMS Pty Ltd T/A C & D Sanders Family Trust
(AG2020/659)

CSCOMMS PTY. LTD. AND ETU ENTERPRISE AGREEMENT 2015-2016

Electrical contracting industry
DEPUTY PRESIDENT CLANCY	MELBOURNE, 8 APRIL 2020

Application for termination of the CSCOMMS Pty. Ltd. and ETU Enterprise Agreement 2015-2016 – Application granted.

[1] On 12 March 2020, CSCOMMS Pty Ltd T/A C & D Sanders Family Trust (CSCOMMS) filed an application (the Application) pursuant to s.225 of the Fair Work Act 2009 (the Act) to terminate the CSCOMMS Pty. Ltd. and ETU Enterprise Agreement 2015-2016 (the Agreement). The Agreement is a single enterprise agreement which nominally expired on 31 July 2016. I note that the Agreement covers the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (ETU).

[2] Accompanying the Application was a statutory declaration of Mr Cameron Sanders, Director of CSCOMMS.

[3] The Act relevantly provides 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.”

Consideration

Section 225

[4] An employer covered by an agreement may apply under s.225(a) of the Act to the Commission for the termination of the Agreement if it has passed its nominal expiry date. As noted above, the Agreement nominally expired nearly four years ago. Further, Mr Sanders declared that CSCOMMS is the employer covered by the Agreement. As such, I am satisfied that CSCOMMS has standing to bring the Application under s.225(a) of the Act.

Section 226(a) – Public interest

[5] Having regard to s.226(a) of the Act and the manner in which the public interest is to be assessed, the Full Bench in Aurizon Operations Limited; Aurizon Network Pty Ltd; Australian Eastern Railroad Pty Ltd 1(Aurizon)cited various passages from the Full Bench of the Australian Industrial Relations Commission’s decision in Re Kellogg Brown and Root, Bass Strait (Esso) Onshore/Offshore Facilities Certified Agreement 20002(Kellogg) which had concerned the corresponding, but not identical, provision from the Workplace Relations Act 1996. Relevantly, these passages included:

“The notion of public interest refers to matters that might affect the public as a whole such as the achievement or otherwise of the various objects of the Act, employment levels, inflation, and the maintenance of proper industrial standards. An example of something in the last category may be a case in which there was no applicable award and the termination of the agreement would lead to an absence of award coverage for the employees. While the content of the notion of public interest cannot be precisely defined, it is distinct in nature from the interests of the parties. And although the public interest and the interests of the parties may be simultaneously affected, that fact does not lessen the distinction between them…” 3

[6] It is also relevant to highlight the Full Bench in Aurizon concluded that it cannot be expected that the terms and conditions of an agreement will continue unaltered in perpetuity after it has passed its expiry date. This is because the Act contemplates the terms and conditions of an agreement may be altered by making a new agreement or by terminating the existing agreement. 4

[7] As was also recognised in Aurizon, s.226 of the Act is not limited to circumstances in which an agreement no longer applies to any employee. The Act clearly contemplates an agreement that still applies to employees being terminated and prescribes a safety net upon termination in such circumstances. The prescribed safety net is not a prior agreement and nor are undertakings mandatory. Rather, the prescribed safety net is the relevant modern award created during the Award Modernisation process and the National Employment Standards (NES). In this case, the relevant modern award is the Electrical, Electronic and Communications Contracting Award 2010 (the Award).

[8] In this Application, the termination of the Agreement would not lead to an absence of award coverage for the employees. The Award provides for “proper industrial standards” within the meaning given to that term by Kellogg.

[9] In circumstances where there was no material before me suggesting otherwise, I am satisfied it is not contrary to the public interest to terminate the Agreement.

Section 226(b) – Appropriateness

[10] The approach to assessing appropriateness by taking into account all the circumstances, as enunciated by the Full Bench in Aurizon, is to have reference to the construction of s.226 and the contextual matters that bear upon that construction, as well as giving specific consideration to the matters identified in ss.226(b)(i) and (ii):

“All of the circumstances also need to be taken into account in considering whether termination of the agreements is appropriate. In particular the views of employers and employees covered by the agreement, their circumstances, and the impact of termination need to be taken into account. The requirement in s. 226(b) to take into account all of the circumstances including those set out in s. 226(b)(i) and (ii) is a requirement to take the matters into account and to give them due weight in assessing whether it is appropriate to terminate an enterprise agreement. In assessing appropriateness by taking into account all of the circumstances, we approached the task by reference to the construction of s. 226 and the contextual matters that bear upon that construction dealt with earlier as well as giving specific consideration to the matters identified in s . 226(b)(i) and (ii).” 5 (Reference omitted)

[11] I intend to adopt this approach.

[12] As the employer, CSCOMMS filed the Application to terminate the Agreement. Clearly, it supports the Agreement being terminated. Further, Mr Sanders declared the effect of terminating the Agreement on CSCOMMS would be to put CSCOMMS “on a level playing field with our competitors”. Mr Sanders declared that CSCOMMS entered the Agreement to obtain work on “union jobs” and that this lasted nine months, and that since then CSCOMMS has not worked on such job sites.

[13] As to the circumstances of the employees and the likely effect that termination of the Agreement would have on them, I note that the Act contemplates the Award and NES applying as the safety net, in the event of termination of the Agreement.

[14] In an email to my chambers on 18 March 2020, Mr Sanders confirmed that he had served the Application on the ETU and he attached three secret ballot papers which he says were completed by CSCOMMS’s only three employees. Each of the three ballot papers indicated the individual employee’s support for the termination of the Agreement.

[15] On 19 March 2020, I issued Directions requiring CSCOMMS to provide a copy of the Directions, the Application, Mr Sanders’ statutory declaration and the three ballot papers to each of its employees covered by the Agreement by 23 March 2020. I also sought responses from the employees covered by the Agreement regarding their views, their circumstances and the likely effect that termination of the Agreement would have on them by 1 April 2020.

[16] No responses were received from the employees covered by the Agreement but I am satisfied the employees were on notice as to the Application before me and had a reasonable period of time to file material should they have wished to do so. While no submissions from any employees were filed in the Commission, I have noted that the three employees appear to support termination and that none of them appear to take issue with the declaration of Mr Sanders that “employees currently employed will not be at a loss”.

[17] Also in my Directions issued on 19 March 2020, I sought the views of the ETU. Ms Zoe Evers of the ETU advised my chambers on 3 April 2020 that the ETU had no issues with the Application.

Conclusion

[18] In having regard to the requirements of the s.226 of the Act and the material before me, I am satisfied that it is not contrary to the public interest to terminate the Agreement (s.226(a)) and that it is appropriate to do so, taking into account all the circumstances (s.226(b)). In this latter regard, I note the employer covered by the Agreement consents to its termination, the ballot papers provided by Mr Sanders indicate that all three employees covered by the Agreement support termination and that the ETU has no issue with the Application.

[19] In accordance with s.227 of the Act, the termination will take effect from 8 April 2020.

DEPUTY PRESIDENT

 1   [2015] FWCFB 540.

 2 (2005) 139 IR 34.

 3   Ibid at 40.

 4   [2015] FWCFB 540 at [176].

 5 Ibid at [167].

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