CSL Limited

[2022] FWCA 4076

[2022] FWCA 4076

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

s.225—Enterprise agreement

CSL Limited

(AG2022/4413)

CSL Agreement 2018

Pharmaceutical industry
DEPUTY PRESIDENT BELL	MELBOURNE, 22 NOVEMBER 2022

Application for termination of the CSL Agreement 2018.

1. On 21 October 2022, CSL Limited (the Applicant) filed in the Fair Work Commission (Commission) an application under s.225 of the Fair Work Act 2009 (Cth) (the Act) for the termination of the CSL Agreement 2018 (the 2018 Agreement).

1. The 2018 Agreement passed its nominal expiry date on 30 June 2022 and the Applicant is the employer covered by the agreement.

1. Also covered by the 2018 Agreement are the “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU), CPSU, the Community and Public Sector Union, and the United Workers’ Union (together in these reasons who are referred to as the Union Parties).

1. In support of its application to terminate the 2018 Agreement, the Applicant filed the following documents:

• Form F24B - Application for termination of an enterprise agreement after the nominal expiry date; and

• Form F24C - Declaration of Mr Warren Fridell (Declaration) in relation to termination of an enterprise agreement after the nominal expiry date and accompanying Attachment A, filed in the Commission on 21 October 2021.

(Applicant’s Documents)

1. The Declaration in support of the Application sets out in some detail relevant background material. I will not repeat that detail but I have had regard to it and the summary below draws from it.

1. A majority of employees covered by the 2018 Agreement bargained for, and voted to approve, a new enterprise agreement, being the CSL Agreement 2022 (2022 Agreement).

1. The coverage of the 2022 Agreement was not identical to the coverage under the 2018 Agreement. Specifically, the 2022 Agreement did not include employees classified as Level 6 employees under the 2018 Agreement or employees in specifically defined categories, which included human resources, finance, and legal.

1. As such, there are a number of employees who remain covered by the 2018 Agreement and for whom that agreement continues to operate. The Declaration described those employees as “Management and Enabling Functions” employees. There are approximately 450 such employees. In about August 2021, the Applicant first commenced communicating with that cohort of employees about the Applicant’s intention to transition them from being covered by the 2018 Agreement to instead being remunerated under the Applicant’s global remuneration model.

1. Between around 8 – 12 July 2022, save for a small number of exceptions (who received contracts at a later date), all Management and Enabling Function employees were sent proposed individual employment contracts. Those contracts were expressed to be conditional upon the termination of the 2018 Agreement. Further consultation ensued, including ‘Q&A’ sessions and other fora.

1. Between 3 and 7 October 2022, the Applicant conducted a poll of the Management and Enabling Functions employees. The poll was conducted by Computershare, who conducted an online ballot to determine if that cohort of employees supported the termination of the 2018 Agreement. The declaration of that poll records that, of the 457 eligible voters, 267 voted in favour of terminating the 2018 Agreement and 15 opposed.

1. By 18 October 2022, about 97% (i.e. about 432 of 446) of the initial contracts sent to Management and Enabling Function employees had been signed and returned.

1. On 25 October 2022, I issued directions. Among other matters, the directions required the Applicant to notify affected employees covered by the Agreement by various means, which included providing them with a copy of the Applicant’s Documents. The notifications were to be made by 2 November 2022. Any affected employee was to be informed that if they wished to provide their views in relation to the Application, they were to do so by filing any such material with the Commission.

1. On 2 November 2022, the Applicant filed and served a statutory declaration, declaring that the notification steps had been undertaken.

1. The directions required the Union Parties to file material (if any) in response to the Application, by 9 November 2022. None of the Union Parties sought to be heard, although the CPSU indicated its opposition to the application and provided short submissions in support of that position. Affected employees were required to file material (if any), by 16 November 2022. No material was received by the Commission by any employee.

Statutory provisions

1. The Commission must be satisfied that the requirements in s.225 and s.226 of the Act are met prior to approving the termination of the Agreement.

1. Section 225 of the Act 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.”

1. Section 226 of the Act provides as follows:

“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.”

Consideration and orders

1. As the employer covered by the 2018 Agreement, the Applicant is entitled to make an application under s.225 of the Act.

1. Based on the material before me, including that contained in the employer declaration filed with the application, I am satisfied that termination of the 2018 Agreement is not contrary to the public interest.

1. Taking into account all of the circumstances, including those in s.226(b)(i) and (ii) of the Act, I consider that it is appropriate to terminate the 2018 Agreement, noting:

(a)the views of the Applicant, the Union Parties (including the submission received from the CPSU), and the employees covered by the 2018 Agreement. In relation to the affected employees covered by the 2018 Agreement, they have been consulted by the Applicant and, on the material before me, support the termination of the agreement;

(b)the circumstances of the Applicant, the Union Parties and the affected employees covered, including the likely effect that the termination of the agreement will have on them.

1. Having regard to the above findings, I must terminate the 2018 Agreement. The termination will operate from 22 November 2022.

DEPUTY PRESIDENT

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