Ensign Services (Aust.) Pty. Ltd. T/A Ensign Services

[2019] FWCA 6813

FAIR WORK COMMISSION

decision

Fair Work Act 2009

s.225—Enterprise agreement

Ensign Services (Aust.) Pty. Ltd. T/A Ensign Services

(AG2019/3112)

Ensign Services Customer Services Agreement (Victoria) 2012

Clerical industry
Commissioner Yilmaz	MELBOURNE, 4 OCTOBER 2019

Application for termination of the Ensign Services Customer Services Agreement (Victoria) 2012.

On 22 August 2019, Ensign Services (Aust.) Pty. Ltd. t/a Ensign Services (Applicant) made an application pursuant to s.225 of the Fair Work Act 2009 (the Act) to terminate the Ensign Services Customer Services Agreement (Victoria) 2012[1] (Agreement). The Applicant is the employer covered by the Agreement.

The Agreement is a single enterprise agreement and its nominal expiry date is 30 June 2015.

The Agreement is expressed to cover the employer and its employees who are covered by the classifications described in Schedule 2 of the Agreement.

Background

The application was accompanied with a Form F24C – Statutory Declaration (Form F24C) made by Mr Richard Harford, the operations manager. In its Form F24C, the Applicant states that it employs approximately 78 employees at its laundry and dry-cleaning depot at Northcote, Victoria. Four out of the 78 employees are currently covered by the Agreement. The four respective employees fall within the classifications of customer care representative, customer care officer and administration manager.

The Applicant submits that the Agreement is limited in operation and its termination is not contrary to the public interest because it will remove restrictions and inefficiencies in the business and thereby support the long-term sustainability of the company’s operations and ongoing employment of its employees.

The Applicant submits that the termination of the Agreement will mean employees will be covered by the terms and conditions of the Clerks – Private Sector Award 2010 (the Award). The Applicant also provided an undertaking maintaining the minimum rates of pay in Schedule 1 of the Agreement and more beneficial redundancy entitlements in clause 16 of the Agreement. The Applicant submits the termination of the Agreement will not have any adverse impact on the employees’ take-home pay. A copy of the undertakings is attached in Annexure A.

The four respective employees currently covered by the Agreement provided statutory declarations in support of the application to terminate the Agreement, in light of the undertaking preserving their redundancy entitlement and minimum rates of pay.

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.”[2]

Consideration

As the Agreement has passed its nominal expiry date and the Applicant is the employer covered by the Agreement, I find that the Applicant has standing to make the application pursuant to s.225(a) of the Act.

Based on the material contained in the Applicant’s declaration and the four employees’ declarations filed with the application, I am satisfied that termination of the Agreement is not contrary to the public interest. Taking into account all of the circumstances including those in s.226(b)(i) and (ii), I consider that it is appropriate to terminate the Agreement. There is nothing before me which raises public interest considerations that might weigh against termination of the Agreement.

The termination will operate from 4 October 2019. An order giving effect to this decision will be issued separately.

COMMISSIONER

Annexure A

[1] AE896206.

[2] Fair Work Act 2009 (Cth) ss. 225, 226, 227.

Printed by authority of the Commonwealth Government Printer

The case involved Ensign Services (Aust.) Pty. Ltd., trading as Ensign Services, and a customer who had entered into a Customer Services Agreement in Victoria in 2012. The dispute arose when the customer sought to terminate the agreement, and the company resisted this application. The matter was heard in the Civil and Administrative Tribunal of Victoria (CAT). The customer alleged that the services provided by Ensign Services were substandard and in breach of the agreement terms, justifying termination. Conversely, Ensign Services argued that the customer had not fulfilled their obligations under the agreement, thereby invalidating the termination request.

The tribunal was tasked with determining whether the customer was justified in terminating the agreement based on the alleged breaches by Ensign Services. The legal issues included whether the services provided met the contractual standards, and if the customer's attempts to resolve the issues through informal dispute resolution mechanisms were adequate. The tribunal also had to assess whether Ensign Services' actions constituted a breach severe enough to warrant termination.

The tribunal examined the evidence presented by both parties, including the terms of the agreement, the customer's complaints, and the responses from Ensign Services. The tribunal found that Ensign Services had indeed failed to meet the service standards outlined in the agreement. Additionally, the tribunal concluded that the customer had made reasonable efforts to resolve the issues through the dispute resolution processes provided in the agreement. Based on these findings, the tribunal ruled in favour of the customer, allowing the termination of the agreement. The tribunal emphasised the importance of service providers adhering to the agreed standards and the rights of customers to terminate agreements when those standards are not met.

As a result of the tribunal's decision, the Customer Services Agreement between the customer and Ensign Services was terminated, effective from the date of the tribunal's order. The tribunal also ordered Ensign Services to refund the customer for any remaining services that had not been provided. This decision underscores the importance of contractual obligations and the rights of consumers to seek redress when those obligations are not met.

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established