Employee X Represented by the Shop, Distributive and Allied Employees Association

[2023] FWC 2053

[2023] FWC 2053

FAIR WORK COMMISSION

DECISION

Fair Work (Transitional Provisions and Consequential Amendments) Act 2009

Sch. 3, Item 16 - Application to terminate collective agreement-based transitional instrument

Employee X

Represented by the Shop, Distributive and Allied Employees Association

(AG2022/4878)

DEPUTY PRESIDENT GOSTENCNIK MELBOURNE, 18 AUGUST 2023

Application for termination of the Pearce Johnson Pty Ltd Employee Collective Agreement

1. On 22 November 2022 Employee X, who is represented by the Shop, Distributive and Allied Employees Association (SDA) (Applicant), filed an application pursuant to Item 16, Schedule 3 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (TPCA Act) to terminate the Pearce Johnson Pty Ltd Employee Collective Agreement (Agreement). The Agreement is a collective agreement-based transitional instrument, the nominal expiry date of which had long ago passed.

1. The relevant modern award that will apply to employees covered by the Agreement if it is terminated is the Fast Food Industry Award 2020 (Award).

1. This application has some procedural history. On 1 December 2022 I issued directions concerning the application providing for employees covered by the Agreement to be informed about the application and an opportunity to express a view on the application. I directed that the SDA serve a copy of the termination application, statutory declaration and supporting materials and the directions to Pearce Johnson Pty Ltd trading as Subway, the employer covered by the Agreement (Respondent Employer). And I directed that the Respondent Employer give a copy of the termination application, statutory declaration and supporting materials and the directions to all employees covered by the Agreement. The parties were to have some discussions about the application.

1. On 21 December 2022 I directed the Applicant and Respondent Employer to provide a written report as to the status of discussions and any proposal for the furtherance of this application. And, in the event of parties not having an agreed position, to each file its respective positions on the status of negotiations and any proposal for the furtherance of this application.

1. On 27 February 2023 the SDA advised that the Respondent Employer had issued a Notice of Employee Representational Rights, that the SDA had surveyed employees about bargaining and the parties were in bargaining discussions. The SDA requested a report back in the first week of April, and I arranged for the parties to report on progress by 7 April 2023. This was later extended to 13 April 2023.

1. On 13 April 2023 the SDA advised that the parties had met several times to bargain, drafting proposals had been exchanged and the SDA had advanced a log of claims. The SDA requested a further report back to the Commission in the first week of June, which was subsequently fixed for Friday 9 June 2023.

1. The SDA subsequently advised that the parties had, concluded in-principal negotiations for an agreement, were finalising its drafting and had agreed to an initial timeline of 7 to 20 August 2023 for the access period with the vote occurring between 21 to 27 August 2023. In so far as is relevant to this application the SDA proposed that termination of the Agreement take effect when the proposed agreement is approved by the Commission.

1. The Respondent subsequently confirmed that it agrees with the position outlined by the SDA.  

1. The Respondent Employer also advised that it consented to the termination of Agreement once the proposed agreement is approved by the Commission.

1. The SDA contends the Agreement, is disadvantageous to all the employees covered under the Agreement compared to the Award because the terms and conditions in the Agreement have fallen below the minimum terms and conditions of the Award. So much is not in dispute and is obvious from a cursory review of the Agreement compared to the Award.

1. Item 16, Schedule 3 of the TPCA Act provides that Subdivision D of Division 7 of Part 2-4 of the Fair Work Act 2009 (FW Act) (including s 226) applies to applications to terminate collective agreement-based transitional instruments which have passed their nominal expiry date.

1. Section 226 of the FW Act provides (or more accurately, provided at the time the application was made):

“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.”

1. Having regard to the requirements of s 226 and based on the material before me, including the statutory declaration of Gerard Dwyer of 23 November 2022, I am satisfied that it is appropriate to terminate the Agreement. No employee opposes the termination of the Agreement, and the employer supports its termination. The likely impact on the Respondent Employer and the employees, is that the employment relationships currently regulated by the Agreement will for a short period be regulated by the superior conditions set out in the Award as a safety net. But that is only proper since it is the Award together with the National Employment Standards which combine to provide a fair safety net of minimum terms and conditions of employment. Thereafter it is likely, given the in-principal agreement earlier mentioned, the employment relationships will be regulated by a new enterprise agreement, under which employees will be better off overall and the Respondent Employer will be providing terms and conditions of employment for which it has recently bargained. There is no suggestion by the Respondent Employer of any material adverse consequences on it because of the termination of the Agreement.

1. I also consider that termination of the Agreement it is not contrary to the public interest because the Agreement long ago ceased to reflect contemporary industrial standards much less provided a safety net set of terms and conditions of employment comparable to the Award.

1. The SDA have sought a prospective date of operation to allow employees to be informed of the Commission’s decision and to transition to these new arrangements. I consider that an appropriate course. As earlier noted, the SDA proposed that termination of the Agreement take effect when the proposed agreement is approved by the Commission. That is not a course that I will accommodate for two reasons. First, because the approval of the proposed agreement by the Commission is contingent, and might not eventuate, and so no date of effect is presently known. Section 227 requires that a day on which the termination takes effect be specified. That which is presently not known cannot be specified. Second, to give effect to the SDA’s proposal would require a further delay in dealing with this application. Given the history of this matter it is not a course that I consider appropriate.

1. In accordance with s 227 of the FW Act, the termination will take effect from 1 September 2023.

Order

1. I order:

1. Pursuant to s 226 of the Fair Work Act 2009 the collective agreement-based transitional instrument titled “Pearce Johnson Pty Ltd Employee Collective Agreement” is terminated; and

1. The termination of the Pearce Johnson Pty Ltd Employee Collective Agreement will take effect on 1 September 2023.

DEPUTY PRESIDENT

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