EF International Language Schools Pty Ltd T/A EF International Language Centres, Sydney
[2022] FWCA 1178
•4 APRIL 2022
| [2022] FWCA 1178 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.225—Enterprise agreement
EF International Language Schools Pty Ltd T/A EF International Language Centres, Sydney
(AG2021/8518)
| Educational services | |
| COMMISSIONER MATHESON | SYDNEY, 4 APRIL 2022 |
Application for termination of the EF International Language Schools (Sydney) (Teachers) Agreement 2018 – application dismissed.
On 23 November 2021, EF International Language Schools Pty Ltd T/A EF International Language Centres, Sydney (Applicant) filed an application (Application) pursuant to s.225 of the Fair Work Act 2009 (Cth) (Act) to terminate the EF International Language Schools (Sydney) (Teachers) Agreement 2018 (Agreement). A Form F24B – Application for termination of an enterprise agreement after the nominal expiry date and a Form F24C – Declaration in relation to termination of an enterprise agreement after the nominal expiry date (Form F24C) were filed by the Applicant in support of the Application.
The Agreement is a single enterprise agreement. It was approved by Commissioner Johns on 6 December 2018.[1]
The nominal expiry date of the Agreement is 30 September 2021.
Legislation
The relevant provisions of the Act are 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.”
Background facts
Clause 4 of the Agreement provides that it is “binding on the Employer and Teachers classified in one of the Classification Levels specified in the Agreement in respect of all work done by Teachers of the Employer”. “Employer” is defined in clause 3 of the Agreement to mean “EF International Schools Pty Ltd in respect of its teachers engaged in classifications described in this agreement in Sydney”.
The Applicant submits that the Agreement covers teachers employed by the Applicant in Sydney. Since the Agreement came into operation, the Applicant has expanded its operations and now operates in Sydney, Brisbane and Perth. The Applicant employs teachers in its Brisbane and Perth campuses pursuant to the Educational Services (Post-Secondary Education) Award 2020 (Award).
As at February 2020, there were approximately 113 employees employed across all of the Applicant’s campuses. The Applicant submits that, before the COVID-19 pandemic, approximately 30 employees were covered by the Agreement. In its written submissions, the Applicant characterised the contracts of these employees as ‘seasonal’ contracts and stated no employees were employed as casual employees.[2]
The Applicant’s operations have been impacted by the COVID-19 pandemic and travel restrictions, which had the effect that there have been no international student arrivals into Australia, no students and no classes to teach. As a result, at the time of the Application, there were no employees employed by the Applicant who were covered by the Agreement.
The Applicant has negotiated a number of enterprise agreements with its employees prior to the current Agreement and, since at least 2013, the Independent Education Union of Australia has been a bargaining representative for, and an employee organisation covered by, these agreements, including the current Agreement.
The Applicant intends to restart its business in early 2022 and employ teachers in all campuses, including Sydney.
The Applicant’s position
In addition to the Form F24B and Form F24C, the Applicant filed a statement and further submissions in support of the Application.
By way of summary, the Applicant seeks to have the Agreement terminated for the following reasons:
· The application of different industrial instruments results in an increase in the time and resources necessary to administer these arrangements by the Applicant’s human resources and finance departments.[3]
· The application of different industrial instruments across campuses results in questions to senior management about the reasons for this difference. A consistent and cohesive approach with a single employment contract will result in better staff morale and a better culture across all campuses.[4]
· The development of the Award over time has addressed many of the issues and concerns originally discussed by the Applicant and its employees when the Agreement was first introduced. The Award has been adopted by many similar employers in the industry.[5]
· It has found that the application of the Award to its Brisbane and Perth employees has been effective in managing those employees.[6]
· The teaching environment has changed over time and more so due to the COVID-19 pandemic. The Applicant, in scaling up its operations, wishes to be more competitive in the market and requires workplace conditions that reflect the current environment.[7]
· The Agreement has created obligations which “significantly and adversely” affect the Applicant’s ability to restart its business and offer teachers employment on terms they are seeking. In restarting its business, the termination of the Agreement will address certain adverse legacy provisions which were inserted at the time the original Agreement was negotiated and which are no longer appropriate for teachers. The reasoning for the inclusion of legacy provisions in the Agreement has now been covered in the Award.[8]
· While rates of pay for some levels in the Agreement are higher than the Award and some are lower, the higher rates of pay under the Agreement will at some point align with the Award as there are no provisions in the Agreement to further increase rates.[9]
· Union membership has dropped since the original enterprise agreement was negotiated approximately 20 years ago.[10]
· The Agreement imposes a significantly higher rate of pay compared to the Award in relation to casual employees and, as a result, the Applicant avoids employing casual employees. The provisions relating to casual employees in the Agreement and significantly higher rates of pay have made it financially difficult for the Applicant to employ teachers on a casual basis. The Applicant needs to be able to more effectively use casual contracts to fill vacancies when staff are on leave.[11]
· The provisions of the Agreement deny flexibility for a teacher to take on more classes when there is a temporary spike in student numbers as the Agreement provides that contracts must have a term of no less than 6 weeks. As a result, the Applicant will use seasonal contracts to deal with temporary spikes in student numbers.[12]
· Clauses 12.2 and 12.4 of the Agreement impair a teacher’s ability to reach a higher classification level.[13]
· The Applicant is restarting its business and, if the Agreement is not terminated, it will not be looking to renegotiate the Agreement in the foreseeable future.[14]
The Applicant submits that no employees will be impacted by the termination of the Agreement as teaching staff are not employed at present due to the impacts of COVID-19.[15] However, the Applicant also says that the termination of the Agreement will have the following effect:[16]
· it will negate the need to negotiate differing employment conditions based on the location of the employees;
· it will ensure that the Applicant has more flexibility to recruit Sydney teachers in building back up its business;
· it will ensure that Sydney teachers have more options regarding the type of employment they require;
· it will give Sydney teachers flexibility to take additional shifts by being on a casual contract;
· it will give Sydney teachers the opportunity to be considered for roles which have an online component; and
· it will give Tier One Sydney teachers the opportunity to attain a level 12 designation.
Why the Applicant submits that the termination of the Agreement is not contrary to the public interest
By way of summary, the Applicant says the termination of the Agreement is not contrary to the public interest for the following reasons:
· The application of differing industrial instruments across its Sydney, Brisbane and Perth campuses:
ocreates dissent among staff; and
oaffects the Applicant’s ability to manage its faculty with consistency and efficiency.[17]
· Due to imposed border closures, all campuses had to “hibernate” and there are no remaining employees covered by the Agreement who would be impacted by the termination.[18]
· The Applicant would like to ensure all employees operate under the same conditions.[19]
· The Award provides protection for employees and is continually reviewed and updated.[20]
· The application of the public interest test should seek to ensure all employees have aligned interests, expectations and responsibilities.[21]
The Applicant also referred to Kellogg Brown & Root, Bass Strait (Esso) Onshore/Offshore Facilities Certified Agreement 2000[22], in which the Full Bench of the Australian Industrial Relations Commission found:
“the notion of public interest refers to matters that might affect the public as a whole such as the achievement or otherwise of various objects of the Act, employment levels, inflation, and the maintenance of proper industrial standards.” [23]
By way of summary, the Applicant submitted:[24]
· In relation to “employment levels”, the significant majority of teachers employed by the Applicant have a qualification equivalent to a Tier One teacher (as defined in the Agreement) and, in restarting the business, the Applicant will look to employ staff across all campuses with Tier One qualifications. The Agreement caps Tier One teachers at level 10, unlike teachers in Brisbane and Perth with similar experience who may be afforded a level 12 classification.
· In relation to “inflation”, the Agreement does not allow for inflation or provide a mechanism for increasing rates beyond 2020 and current rates of pay will continue unless the Agreement is terminated or a new agreement negotiated. Given it will take time to restart the Applicant’s business, there is no current intention to renegotiate the Agreement and Sydney teachers will be unable to access increases available under the Award.
· In relation to “the maintenance of proper industrial standards”, consideration should be given to the Act and modern award system which sets minimum standards across the industrial landscape. Terminating the Agreement is not contrary to the public interest if the employment conditions following termination are no less than the minimum standards afforded by the Act and Award. The effect of terminating the Agreement will mean that Sydney teachers will be employed under the Award, National Employment Standards and their employment contract and these documents, together with the Act, meet the requisite industrial standards.
The Applicant further submitted:[25]
· Section 226(a) of the Act requires consideration of the public as a whole and not the specific views of the parties to the Agreement or the Agreement itself. The removal of advantageous terms and conditions is not contrary to the public interest provided the public may still be entitled to rely on the rights afforded to it under the Act and Award. While some provisions in the Agreement are more beneficial that the Award, termination will not obviate the Applicant from industrial standards.
· The effect of termination will mean that Sydney teaching staff will be disadvantaged if:
oteaching roles are for online teaching roles;
othe teacher wishes to be employed as a casual but a similar candidate is seeking a full time position; and
oemployment classifications and progression to level 12 is important to them but their qualifications only enable them to reach level 10 under the Agreement.
The Independent Education Union of Australia’s position
By way of summary, the Independent Education Union of Australia opposes the Application and submits:
· The fact that there are currently no employees employed under the Agreement presently should not be a consideration. This is a transient situation due to COVID-19.[26]
· The Applicant purports to speak for employees as to their desire for flexibility under the Award. Such submissions are self-serving and without evidentiary basis.[27]
· The Agreement should not be terminated as it provides:
orates significantly above those contained in the Award;
oabove Award benefits such as annual close down provisions (clause 18.3) and paid Family, Partner and Domestic Violence Leave (clause 26); and
obroader benefits for employees through the inclusion of workplace policies and procedures.[28]
· The Agreement is not a dormant industrial instrument – it is still providing wages and conditions of employment above those in the Award.[29]
· Changes to the structure of a business do not require termination of an agreement – rather, they require the scope of subsequent agreements to take into account changes.[30]
· The Applicant’s previous employees were not classified as “seasonal contracts” as the Applicant contends but rather the employees were classified as “Sessional Teachers” pursuant to subclause 10.4 of the Agreement.[31]
· The assertions made about Independent Education Union of Australia membership are without foundation and this is not a matter about which the Applicant would have evidence.[32]
· The Agreement was made as a result of negotiations between the Applicant and the Independent Education Union of Australia and cannot be framed as “legacy provisions”. They are agreed outcomes, not imposed on the Applicant, but recently agreed to by its management team.[33] Bargaining occurred in 2018 and the Agreement came into operation on 13 December 2018 with a nominal expiry date of 20 September 2021. Within short proximity of the nominal expiry date, the Applicant made the Application.[34]
· Nebulous references to impacts on company culture or administrative costs do not warrant the termination of an Agreement that has recently expired.[35]
· If the Applicant wants to change the provisions of the Agreement, they have the capacity to engage in bargaining with the Independent Education Union of Australia or other bargaining representatives in the making of successor agreements.[36]
· It is not the case that the “provisions of the Agreement deny a teacher the flexibility to take on more classes” when there is a spike in student numbers as the Applicant contends, as clause 10.4(h) of the Agreement states:
“From time-to- time, the employer may offer additional teaching hours above the contracted number of hours. These hours will be paid at the rates of pay defined in clause 13.2 – Rates of Pay – Casual Teachers, for the duration of the additional appointment as agreed with the employee. For the avoidance of doubt, this agreement may be longer than 3 weeks, and will not be considered as Extended Casual.”[37]
· It is not the case that the maximum level a teacher can be appointed to under the Agreement is a level 10 and the Applicant may choose to classify teachers at a higher classification or employ people who meet the Tier Two and Tier Three criteria.[38]
· The Applicant’s assertion that increases in the Award will eventually offset the current positive differential in rates between the Award and Agreement makes the assumptions that there will be no further bargaining and that there will be an increase of 2 per cent per annum under the Award and there is no evidence to support either assumption.[39]
· Whether there is future bargaining is a matter not only for the Applicant but for future employees and is subject to the operation of ss.236-237 of the Act.[40]
· The Applicant’s assertions about the effects of the termination are based on conjecture with no evidence to support the claims.[41]
· Taking into account all the circumstances, the termination of the Agreement is inappropriate as the impact on the potential employees far outweighs the impact on the Applicant.[42]
Why the Independent Education Union of Australia submits that the termination of the Agreement is contrary to the public interest
By way of summary, the Independent Education Union of Australia says the termination of the Agreement is contrary to the public interest for the following reasons:
· It would remove the broader benefits of the aims of the Agreement to uphold industrial standards.[43] One of the key aims of the Agreement is to provide a safe and secure working environment of all employees, contractors and clients. The Agreement achieves this aim by outlining policies and procedures which both the employee and employer has a responsibility and duty to comply with. These policies include:
oa commitment to a healthy and safe working environment;
othe employer’s obligation to provide property and personal protective equipment;
oworkplace anti-discrimination; and
ounion recognition and consultation obligations.[44]
· It would result in the removal of advantageous terms and conditions of employment for employees such as five days of paid Family, Partner and Domestic Violence Leave.[45]
· The Award sets minimum wages and conditions. It is not meant to supplant the enterprise bargaining provisions of the Act or the operation of s.3(f) of the Act that states the following as an object of the Act:
“achieving productivity and fairness through an emphasis on enterprise-level collective bargaining underpinned by simple good faith bargaining obligations and clear rules governing industrial action”.[46]
Consideration – s.225 – Is the Applicant an employer covered by the Agreement?
Section 53(1) of the Act provides that an enterprise agreement covers an employer if it is expressed to cover (however described) the employer.
Clauses 4 of the Agreement names “EF International Language Schools Pty Ltd” as a party to the Agreement. The Applicant is “EF International Language Schools Pty Ltd T/A EF International Language Centres, Sydney”. I am satisfied it is the same legal entity.
Section 170 of the Act provides that, in Part 2-4 of the Act (within which s.226 of the Act is situated), “employer” means a “national system employer”.
Section 14 of the Act provides that a “national system employer” can be one of a number of listed persons or entities, including a constitutional corporation, “so far as it employs, or usually employees, an individual”.
I find that the Applicant is a national system employer covered Agreement and has standing to bring the Application pursuant to s.225(a) of the Act.
Consideration – s.225 – Has the Agreement passed its nominal expiry date?
Clause 6 of the Agreement provides that the nominal expiry date of the Agreement is 30 September 2021. Having considered the materials before the Commission and clause 6 of the Agreement, I am satisfied the Agreement has passed its nominal expiry date.
Consideration – s.226
Section 226(a) – Public interest
Section 226(a) of the Act requires the Commission to consider how the termination of the Agreement might foreseeably affect the public as a whole, such as the impact on the achievement or otherwise of the various objects of the Act, employment levels, inflation and the maintenance of proper industrial standards. The notion of public interest is distinct in nature from the interests of the parties.[47] Consideration of the public interest will involve something that is distinct from the interests of the persons and bodies covered by the Agreement.[48] Section 226(b) of the Act clearly requires the interests of the persons or bodies covered by an agreement to be taken into account and those interests are considered separately from the public interest, although these interests may nevertheless be similarly affected.[49]
The Applicant submits that it is not contrary to the public interest to terminate the Agreement for the reasons summarised earlier in this decision. The Independent Education Union of Australia submits that it is for the reasons summarised earlier in this decision. At a hearing on 13 January 2022 (Hearing), the Independent Education Union of Australia further submitted that it would be contrary to the public interest to remove an enterprise agreement that is a “living” document that had been recently agreed and which would provide protections for employees in the very near future by virtue of their reemployment.
While I accept that termination of the Agreement and moving to the Award would, on balance, result in the application of less beneficial terms to those employees who are reemployed, as the Full Bench found in Aurizon:[50]
“Whilst a nominally expired agreement applies to any employee, the termination of it will result in an alteration of terms and conditions of employment. The effect of the Unions’ submission is that it will always be contrary to the public interest to terminate an agreement in such circumstances. This simply cannot be correct. If it were, it would have been a simple matter for the parliament to have made clear that termination of an agreement that has passed its nominal expiry date must only occur if it no longer applies to any employee. Clearly s.226 is not so confined.”
I do not consider that the termination of the Agreement would impact employment levels, inflation and the maintenance of proper industrial standards, particularly noting that the Award would apply if the Agreement was terminated. I have not identified any interests in relation to the Application that are distinct in nature from the interests of the parties. In all the circumstances, and having considered the materials before the Commission, I am satisfied that it is not contrary to the public interest to terminate the Agreement.
Section 226(b) – Appropriateness
All of the circumstances need to be taken into account in considering whether termination of the Agreement is appropriate. “Appropriateness” is a broad discretionary standard and reasonable minds may differ on what is appropriate in any given set of circumstances.[51] In assessing appropriateness by taking into account all of the circumstances, I have given specific consideration to the matters identified in s.226(b)(i) and (ii) of the Act and I have also considered the broader contextual matters relevant to the Application.
The views of the employer covered by the agreement and its circumstances, including the likely effect that the termination will have on it
The Applicant is the employer covered by the Agreement and wants the Agreement to be terminated.
I am persuaded that the application of different industrial instruments results in an increase in the time and resources necessary to administer these arrangements and that the termination of the Agreement will result in administrative efficiency for the Applicant in that it would not be required to administer multiple industrial instruments. I also accept that the application of the Award in place of the Agreement will be more cost effective for the Applicant, including in relation to the employment of casual employees, and that this may enhance the Applicant’s competitiveness.
However, the Applicant has not brought evidence to establish that the consistent application of the Award across campuses will result in better staff morale and culture. I am also not persuaded that the Agreement has created obligations which significantly and adversely affect the Applicant’s ability to restart its business and offer teachers employment on terms they are seeking as the Applicant contends.[52] Rather, the Applicant is recommencing its business regardless as to which instrument is in place and it has submitted that if the Agreement is not terminated, its position is that it will not be looking to renegotiate the Agreement in the foreseeable future.[53]
The views of the employee organisation covered by the agreement and its circumstances, including the likely effect that the termination will have on it
The Independent Education Union of Australia opposes the termination of the Agreement for the reasons described earlier in this decision.
The Independent Education Union of Australia clarified at the Hearing that its primary concern related to its members and that employees who are currently employed, or would have been employed, pursuant to the Agreement would face a significant pay decrease upon reemployment. It also submitted that if the Applicant wants to have a conversation about conditions moving forward, this should be achieved through bargaining and not through a termination application. During the Hearing, it also submitted that the termination of the Agreement would weaken its position during bargaining when bargaining recommences as it would effectively take the negotiations back to “year zero”.
I accept that should the Agreement be terminated, and should bargaining be initiated, the parties would not be negotiating from the standpoint of the ‘status quo’. This would result in a shift in the balance of the forces of bargaining in favour of the Applicant and have a negative impact on the bargaining position of the Independent Education Union of Australia.
The views of employees and their circumstances, including the likely effect that the termination will have on each of them
The Application has been made in close proximity to the Applicant recommencing its business post the COVID-19 pandemic.
During the Hearing, the Applicant indicated that it maintained the employment of its employees up until March 2021 when JobKeeper assistance ended, but after this time it needed to “hibernate” its colleges due to ongoing impacts. The Applicant submitted that the industry is “seasonal” and teachers are ordinarily employed when classes are running. The Applicant clarified that employees are employed on fixed term contracts and their employment ended when the term of the contract ended. Since no classes were running, it has not employed anyone since March 2021. The Applicant indicated that it would be reemploying teachers and that it intended to recommence operations as soon as possible with this to occur in January 2022. However, it noted that this would be a gradual process involving scaling up as the circumstances evolve. The Applicant clarified that it would be seeking to reemploy some of its previous teachers however it anticipated that this would be difficult as most employees had “moved on” and it foreshadowed that most teachers engaged upon reopening would be new teachers.
As noted above, the Independent Education Union of Australia has submitted that the fact that there are no employees employed under the Agreement presently should not be a consideration and this is a transient situation due to COVID-19.[54] The Independent Education Union of Australia also submits that the Applicant purports to speak for employees as to their desire for flexibility under the Award and that such submissions are self-serving and without evidentiary basis.[55]
In circumstances where persons who were “seasonal employees” of the Applicant (as the Applicant terms them) or “sessional” employees (as the Independent Education Union of Australia terms them) have not had their contracts renewed due to the COVID-19 pandemic, this presents a challenge if there is a requirement to take into account their “views” and give consideration to their “circumstances”. However, a broader question arises as to whether I am required to do so. This turns to a consideration of whether those persons employed by the Applicant and covered by the Agreement prior to March 2021 are “employees” for the purposes of s.226 of the Act and are “covered” by the Agreement.
Section 170 of the Act provides that, in Part 2-4 of the Act (within which s.226 of the Act is situated), “employee” means a “national system employee”. Section 13 of the Act defines a “national system employee” as:
“ …an individual so far as he or she is employed, or usually employed, as described in the definition of national system employer in section 14, by a national system employer, except on a vocational placement.”
Section 14 of the Act provides that a “national system employer” can be one of a number of listed persons or entities, including a constitutional corporation, “so far as it employs, or usually employees, an individual”.
In National Tertiary Education Industry Union v Swinburne University of Technology[56] (Swinburne), Jessup J observed that:
“That is to say, an individual will be a national system employee as defined if he or she is usually employed by a national system employer, even if he or she is not in employment at the time to which the inquiry relates (eg he or she may be between jobs).”[57]
In Swinburne, the Full Court of the Federal Court of Australia dealt with the question of whether the term “employed at the time” within the meaning of s.181(1) of the Act encompassed sessional academic employees who were engaged during the previous academic year. Section 181 of the Act is concerned with the employees that an employer may request to approve an enterprise agreement by voting on it. The Full Court relied on Australian Meat Industry Employees Union v Belandra Pty Ltd[58] (Belandra).
Jessup J, with whom White J agreed, held:
“The foundational provision is s 172(2), which authorises an employer to make a single-enterprise agreement “with the employees who are employed at the time the agreement is made”. An “employee” is “an individual so far as he or she is employed, or usually employed” by a national system employer (s 13). Reading this definition into s 172(2), the employer may make the agreement with the individuals who are employed, or usually employed, by the employer, but only to the extent that they are actually employed at the time the agreement is made. So to read s 172(2) does not have the effect of ignoring so much of the definition of “national system employee” as refers to an individual who is usually, but not immediately, employed by the employer. Rather, it recognises the legislative intention of confining, from within a broad class which include individuals who are usually, but not immediately, so employed, the relevant group to those who are employed at the time the agreement is made.”[59]
Jessup J and White J went on to find:
“Returning to the facts of the present case, the University included in those to whom requests were addressed ostensibly under s 181(1) everyone who had been employed, to any extent, in 2013. At the general level, the Commission endorsed that approach because it read the provision as including those who were “usually employed” as being within the expression “employees employed at the time”. For reasons I have given, that was a misreading of s 181(1). In the course of what became an adversarial proceeding under s 186, and largely as a result of the intervention of the Union, the “cohort”, as it was called, endorsed by the Commission underwent some excisions. But the Commission’s misapprehension of the requirements of s 181(1) affected the process at a more fundamental level than could be rectified by these excisions. Because of the wrong test which the Commission applied, it could not have been satisfied of the answer to the correct question, namely, whether a majority of those who were employed by the University at the time when it made its s 181 request, and who cast a valid vote, approved the agreement.”[60]
The Application before the Commission is an application pursuant to s.225 of the Act. Unlike s.180(1) of the Act, s.226 of the Act does specify that it is dealing with employees “employed at the time” and there is no departure from the definition of “national system employee” in s.13 of the Act. This is the definition of employee that needs to be applied in the context of this application.
In Sphere Healthcare Pty Ltd T/A Sphere Healthcare Pty Ltd,[61] Deputy President Cross found that the analysis of North J in Belandra remains relevant in the determination of whether employees are “national system employees”.[62] In Belandra, North J found:
“[42] The issue, then, is whether the facts of the present case demonstrate that Belandra was “usually an employer”? Mr Parry argued that in order to qualify as “usually an employer” there must be some proximity of employment. The person must have either been an actual employer just prior to the time in question, or must have employment of workers in prospect. He contended that Belandra had not been an actual employer since the fire in June 2001, and therefore, at the time of the alleged breach in September 2001, it had not been an actual employer for about two and a half months. Further, Belandra did not intend to be an employer in the future. It had no managers or supervisors, and it did not have any premises. In that sense, he submitted, Belandra had no operation in which it could employ people.
[43] Whether a person is usually an employer is a question of fact to be determined in the light of all the circumstances in each case. There is no formula appropriate in all cases which can be used to answer the question. As to a past employment relationship, it may be relevant to know how long ago the person ceased to be an actual employer or to understand why the person ceased to be an actual employer. As to future employment, it may be relevant to know when such employment is to commence or resume, and the circumstances of any delay in commencing or resuming employment.”[63]
In the circumstances of this matter:
· prior to the COVID-19 pandemic, 30 employees were employed by the Applicant on a ‘seasonal’ or ‘sessional’ basis who were covered by the Agreement;
· the impact of the COVID-19 pandemic meant that there was no work for them to carry out and their employment ceased as a result; and
· at least some of the ‘seasonal’ or ‘sessional’ employees may be re-engaged upon the business recommencing operation, although there is a likelihood that not all employees will return if, for example, their circumstances have changed or they have secured alternative employment.
These employees were “usually” employees of the Applicant, albeit on a ‘seasonal’ or ‘sessional’ basis.
However, the employees are no longer employed to do work in one of the classification levels specified in the Agreement and have therefore ceased to be covered by the Agreement, pursuant to clause 4 of the Agreement. The effect of this is that there are no views or circumstances of employees covered by the Agreement to be considered.
Broader contextual circumstances.
While there are benefits that would flow to the Applicant as a result of terminating the Agreement, there are unique circumstances impacting the Application.
In particular:
· the business has been placed into hibernation on a temporary basis as a result of the COVID-19 pandemic;
· the Agreement has only recently reached its nominal expiry date on 30 September 2021 and, but for the COVID-19 pandemic, there is no evidence that bargaining for a new agreement would not have recommenced as it has done when the predecessor agreements reached their nominal expiry date, given the history of bargaining in the organisation;
· employment of employees who would be covered by the Agreement is imminent;
· had the Application been made a short time later, it would have been necessary to consider the views of the employees covered by the Agreement as they would have been employees covered by the Agreement. This makes the Application seem somewhat opportunistic;
· at least some of the ‘seasonal’ or ‘sessional’ employees may be reemployed upon the business recommencing operation; and
· if employees were to be reemployed under the Award rather than the Agreement, on balance, they would receive lower pay and conditions.
In exercising the broad discretion conferred on me by s.226(b) of the Act in considering “appropriateness”, I find that these unique factors and their impact weigh against a finding that it is appropriate to terminate the Agreement when considered against benefits that would flow to the Applicant. This is particularly the case in circumstances where the Applicant has the ability to negotiate a new agreement to address its changing circumstances with the employees whose reemployment is imminent. The Applicant also has the option to negotiate the termination of the Agreement, giving those employees a reasonable opportunity to decide whether they want to approve the termination. If such agreement to terminate the Agreement is secured, it would be open to the Applicant to make an application to terminate the Agreement pursuant to s.222 of the Act.
Indeed, the Applicant says it was its intention to apply to terminate the Agreement in 2021 pursuant to s.219 of the Act. However, due to the Applicant ceasing to employ people as a result of the COVID-19 pandemic, the Applicant sought to terminate the Agreement by making an application pursuant to s.225 of the Act. However, as I have dealt with above, in the unique circumstances of the Application and in my consideration of “appropriateness”, I do not consider that I should disregard the potential impacts upon those employees who are usually employed by the Applicant and whose reemployment may be imminent.
During the Hearing, the Applicant also submitted that in normal circumstances it would have engaged with the union and employees to renegotiate a new agreement but that the Applicant saw an opportunity to terminate the Agreement noting the change in circumstances brought on by the COVID-19 pandemic.
Seeking the agreement of employees to terminate the Agreement or negotiation of a replacement enterprise agreement remain as options available to the Applicant should it wish to explore them with employees upon the recommencement of its operations.
Conclusion
Having regard to the requirements of s.226 of the Act and based on the material before the Commission, I am satisfied that it is not contrary to the public interest to terminate the Agreement. However, while there are benefits that would flow to the Applicant as a result of terminating the Agreement, when these are weighed against the unique contextual circumstances impacting the Application, I have found that it is not appropriate to terminate the Agreement having regard to all the circumstances.
The Application to terminate the Agreement is dismissed.
If, having regard to the reasons in this decision, the Applicant makes an application to terminate the Agreement pursuant to s.222 of the Act, it may contact my chambers advising of its intention to do so and I will raise this with the Commission’s allocations team so that the application can be appropriately prioritised given its context.
COMMISSIONER
[1] [[2018] FWCA 7456].
[2] Applicant, ‘Further Submissions from the Applicant’, filed 19 January 2022, [6](a).
[3] Applicant, ‘Statement to Support Termination of EF International Language Schools (Sydney) (Teachers) Agreement 2018 Supporting Document’, filed 2 December 2021, 2.
[4] Ibid.
[5] Ibid.
[6] Ibid, 1.
[7] Applicant, ‘Further Submissions from the Applicant’, filed 19 January 2022, [7](g).
[8] Ibid, [7](b).
[9] Ibid, [7](d).
[10] Ibid, [7](f).
[11] Ibid, [9].
[12] Ibid, [9](d).
[13] Ibid, [10](a) – (c).
[14] Ibid, [11](g).
[15] Applicant, ‘Statement to Support Termination of EF International Language Schools (Sydney) (Teachers) Agreement 2018 Supporting Document’, filed 2 December 2021, 3.
[16] Applicant, ‘Further Submissions from the Applicant’, filed 19 January 2022, [18].
[17] Applicant, ‘Form F24C Declaration in relation to termination of an enterprise agreement after the nominal expiry date’, filed 23 November 2021, 2.1.
[18] Ibid.
[19] Ibid.
[20] Applicant, ‘Statement to Support Termination of EF International Language Schools (Sydney) (Teachers) Agreement 2018 Supporting Document’, filed 2 December 2021, 3.
[21] Ibid, 3
[22] (2005) 139 IR 34.
[23] Ibid, 40.
[24] Applicant, ‘Further Submissions from the Applicant’, filed 19 January 2022, [15](a) – (c).
[25] Ibid, [15](d)
[26] Independent Education Union of Australia (NSW/ACT Branch), ‘Outline of Submissions’, filed 17 December 2021, [19].
[27] Independent Education Union of Australia (NSW/ACT Branch), ‘Further Submissions in Reply’, filed 24 January 2022, [16].
[28] Independent Education Union of Australia (NSW/ACT Branch), ‘Outline of Submissions’, filed 17 December 2021, [23].
[29] Ibid, [24].
[30] Ibid, [17].
[31] Independent Education Union of Australia (NSW/ACT Branch), ‘Further Submissions in Reply’, filed 24 January 2022, [9].
[32] Ibid [10].
[33] Ibid, [12].
[34] Ibid, [13].
[35] Independent Education Union of Australia (NSW/ACT Branch), ‘Outline of Submissions’, filed 17 December 2021, [20].
[36] Independent Education Union of Australia (NSW/ACT Branch), ‘Further Submissions in Reply’, filed 24 January 2022, [14].
[37] Ibid, [17].
[38] Ibid, [19].
[39] Ibid, [20].
[40] Ibid, [22].
[41] Ibid, [24].
[42] Ibid, [25].
[43] Independent Education Union of Australia (NSW/ACT Branch), ‘Outline of Submissions’, filed 17 December 2021, [11].
[44] Ibid, [12].
[45] Ibid, [13].
[46] Ibid, [18].
[47] Kellogg Brown & Root, Bass Strait (Esso) Onshore/Offshore Facilities Certified Agreement 2000 (2005) 139 IR 34, 40.
[48] Aurizon Operations Limited; Aurizon Network Pty Ltd; Australia Eastern Railroad Pty Ltd [2015] FWCFB 540, [129].
[49] Ibid, [131].
[50] Ibid, [162].
[51] Tahmoor Coal Pty Ltd [2010] FWA 6486, [32].
[52] Applicant, ‘Further Submissions from the Applicant’, filed 19 January 2022, [7](b)(i).
[53] Ibid, [11](g).
[54] Independent Education Union of Australia (NSW/ACT Branch), ‘Outline of Submissions’, filed 17 December 2021, [19].
[55] Independent Education Union of Australia (NSW/ACT Branch), ‘Further Submissions in Reply’, filed 24 January 2022, [16].
[56] [2015] FCAFC 98.
[57] Ibid, [13].
[58] (2003) 126 IR 165.
[59] National Tertiary Education Industry Union v Swinburne University of Technology[2015] FCAFC 98, [17].
[60] Ibid, [27].
[61] [2021] FWC 2507.
[62] Ibid, [39].
[63] Australasian Meat Industry Employees Union v Belandra Pty Ltd (2003) 126 IR 165, [42] – [43]
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