Employee X

[2019] FWCA 8023

[2019] FWCA 8023

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.225—Enterprise agreement

Employee X
(AG2019/3371)

ORIGINAL MATTRESS FACTORY PTY LTD NEW SOUTH WALES ENTERPRISE AGREEMENT 2009

Retail industry
DEPUTY PRESIDENT MILLHOUSE	MELBOURNE, 25 NOVEMBER 2019

Application for termination of the Original Mattress Factory Pty Ltd New South Wales Enterprise Agreement 2009.

[1] The Shop, Distributive and Allied Employees’ Association (SDA) has made an application on behalf of Employee X (Applicant) under s.225 of the Fair Work Act 2009 (Act) to terminate the Original Mattress Factory Pty Ltd New South Wales Enterprise Agreement 2009 (AG2009/24729) (Agreement).

[2] The Agreement covers Original Mattress Factory Pty Ltd T/A OMF (OMF) and sales team members and store managers employed by OMF within the state of New South Wales. 1

[3] For the reasons that follow, I am satisfied that termination of the Agreement is not contrary to the public interest and that it is appropriate to terminate the Agreement. Accordingly, the Agreement is terminated.

The application

[4] I issued directions on 1 October 2019 in which OMF and any employee covered by the Agreement were invited to advise the Fair Work Commission (Commission) of their response to the application.

[5] OMF advised that it does not object to the application. No material was received from any employee covered by the Agreement.

[6] In the circumstances, I have decided to deal with the application on the papers without conducting a hearing.

Statutory framework

[7] Section 226 of the Act provides:

“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

[8] The Agreement nominally expired on 5 August 2014. 2

[9] The Applicant filed a statutory declaration asserting that he/she is an employee of OMF, and therefore has standing to make the application. Appended to the statutory declaration were three payslips and a PAYG payment summary, each which identify OMF as the Applicant’s employer.

[10] On the basis of the material before me, I am satisfied that the jurisdictional prerequisites for the making of an application under s.225 of the Act are satisfied.

Section 226(a) – public interest

[11] The Applicant contends that it is not contrary to the public interest to terminate the Agreement for the following reasons:

•  The terms and conditions of employment under the Agreement have fallen below the minimum terms and conditions of the General Retail Industry Award 2010 (GRIA).

•  Increases in the rates of pay under the Agreement have not kept up with the rate of increases in the GRIA, so that over time, the buy-out of penalty rates has been absorbed. As a consequence, the base rate of pay under the Agreement no longer compensates for lower penalty rates in the Agreement for work performed in the evening, Saturdays and Sundays, when compared to the GRIA.

•  As a consequence of (b) above, some employees under the Agreement suffer a disadvantage when compared with the rates of pay and terms and conditions of employment under the GRIA (depending upon their hours of work).

[12] OMF submits that it would not be contrary to the public interest to terminate the Agreement in circumstances where employees revert to the GRIA. 3

[13] The notion of public interest refers to matters that might affect the public as a whole, and is distinct in nature from the interests of the parties. 4 There is nothing before me which raises public interest considerations that might militate against termination of the Agreement, such as the achievement or otherwise of the various objects of the Act, employment levels, inflation, and the maintenance of proper industrial standards.5

[14] On the material filed with the Commission, I am satisfied that termination of the Agreement is not contrary to the public interest.

Section 226(b) – appropriate to terminate the Agreement

[15] In respect of s.226(b)(i) of the Act:

•  The Applicant wishes to terminate the Agreement on the basis that it would have a beneficial effect on the terms and conditions of employment of the employees covered by it. The views of the employees covered by the Agreement were sought by the Commission, but no responses were received.

•  OMF does not oppose the termination of the Agreement with a transition period of four weeks to accommodate its payroll and rostering system changes. 6

[16] In respect of s.226(b)(ii) of the Act, the Applicant submits that should the Agreement be terminated, the terms and conditions of the employees covered by the Agreement would be governed by the GRIA. The Applicant filed with the Commission a document which compares entitlements between the Agreement and the GRIA in respect of the following matters:

•  part-time hours of work;

•  the casual loading;

•  allowances (specifically the meal allowance, special clothing, laundry allowance, excess travelling costs, travelling time reimbursement, transfer of employment reimbursement, transport allowance and reimbursement, recall allowance, higher duties and the Broken Hill allowance);

•  penalty rates;

•  annual leave loading;

•  superannuation; and

•  rostering principles.

[17] The Applicant submits that the Agreement either does not contain the above entitlements, or the Agreement contains an inferior entitlement when compared to the GRIA. It says that this leaves employees at a significant disadvantage when their current entitlements under the Agreement are compared to the GRIA.

[18] OMF does not object to the contents of the comparison document filed by the Applicant. 7 It accepts that the Agreement does not improve upon the conditions in the GRIA.8 OMF submits that the termination of the Agreement will not have an adverse impact upon it.9

[19] Taking into account the material before me as to the considerations relevant to s.226(b) of the Act, I consider that it is appropriate to terminate the Agreement.

Conclusion

[20] Given my findings in respect of ss.225 and 226(a) and (b) of the Act, the Agreement is terminated.

[21] The Applicant did not express any views regarding OMF’s request for a four-week transition period to adjust its payroll and rostering systems to accommodate the requirements of the GRIA.

[22] In the circumstances, I consider it reasonable to give OMF a four-week period to transition to the GRIA. The termination of the Agreement will therefore come into effect from the first pay period on or after 24 December 2019.

DEPUTY PRESIDENT

 1   Original Mattress Factory Pty Ltd New South Wales Enterprise Agreement 2009, Clauses 1.2 and 4.1.

 2   [2010] FWAA 6015 at [6]; Clause 1.3 Agreement.

 3   Submissions of Original Mattress Factory Pty Ltd dated 14 October 2019 (OMF Submissions) at [7].

 4   See Re Kellogg Brown and Root, Bass Strait (Esso) Onshore/Offshore Facilities Certified Agreement 2000 (2005) 139 IR 34.

 5 Ibid at [23].

 6   OMF Submissions at [2] and [14].

 7 Ibid at [6].

 8 Ibid at [5].

 9   Ibid.

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