Essendon Football Club Inc T/A Essendon Football Club

[2019] FWCA 4521

[2019] FWCA 4521

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.225—Enterprise agreement

Essendon Football Club Inc T/A Essendon Football Club
(AG2019/1572)

Licensed and registered clubs
DEPUTY PRESIDENT CLANCY	MELBOURNE, 28 JUNE 2019

Application for termination of the Essendon Football Club (Windy Hill Employees) Enterprise Agreement 2013.

[1] On 13 May 2019, Essendon Football Club Inc T/A Essendon Football Club filed an application pursuant to s.225 of the Fair Work Act 2009 (the Act) to terminate the Essendon Football Club (Windy Hill Employees) Enterprise Agreement 2013 (the Agreement). The Agreement is a single-enterprise agreement which nominally expired on 30 October 2016.

[2] Accompanying the application was a statutory declaration of Ms Lisa Lawry, General Manager – People & Culture at the Essendon Football Club.

[3] The Act relevantly 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.

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.”

[4] Ms Lawry declared there are employees covered by the Agreement. She said that the termination of the Agreement was likely to result in an overall increase in labour costs for Essendon Football Club as the terms of the Registered & Licensed Clubs Award 2010 (the Award) are, on an overall basis, more beneficial to the employees than the terms of the Agreement. By way of example, Ms Lawry referred to the fact that the Agreement did not contain penalty rates for work performed on weekday evenings and weekends, while the Award did. Ms Lawry further declared that the termination of the Agreement would not have any detrimental impact on or result in a shift in bargaining power to enterprise bargaining because the Essendon Football Club and the employees are not engaged in bargaining, and that there would be no reduction of labour hours offered or employment levels generally. Moreover, Ms Lawry declared that the Essendon Football Club would obtain the benefit of a more streamlined payroll structure as a result of the Agreement being terminated, as it employs employees at another venue under the terms of the Award.

[5] I am satisfied that should the Agreement be terminated, the Award would apply to employees who were covered by the Agreement.

[6] On 16 May 2019, Directions were issued which required Essendon Football Club, by 4:00pm on 24 May 2019, to post the following documents on the staff noticeboard at the workplace, and to also provide the material via email to each employee covered by the Agreement:

•  the Directions;

•  the application filed by Essendon Football Club; and

•  the statutory declaration made by Ms Lawry.

[7] The Directions provided that any employee who wished to do so should file and serve any material upon which they rely in response to the application regarding their views, circumstances and the likely effect the termination of the Agreement will have on them, by 4:00pm on 7 June 2019. No material was received.

Section 225 of the Act

[8] I am satisfied that Essendon Football Club, as the employer covered by the Agreement, is eligible to apply to the Commission for the termination of the Agreement under s.225(a) of the Act). I am also satisfied that the Agreement has passed its nominal expiry date of 30 October 2016.

Section 226(a) of the Act – Public Interest

[9] Having regard to s.226(a) of the Act and the manner in which the public interest is to be assessed, the Full Bench in Aurizon Operations Limited; Aurizon Network Pty Ltd; Australian Eastern Railroad Pty Ltd 1(Aurizon)cited various passages from the Full Bench of the Australian Industrial Relations Commission’s decision in Re Kellogg Brown and Root, Bass Strait (Esso) Onshore/Offshore Facilities Certified Agreement 20002(Kellogg) which had concerned the corresponding, but not identical, provision from the Workplace Relations Act 1996. Relevantly, these passages included:

“The notion of public interest refers to matters that might affect the public as a whole such as the achievement or otherwise of the various objects of the Act, employment levels, inflation, and the maintenance of proper industrial standards. An example of something in the last category may be a case in which there was no applicable award and the termination of the agreement would lead to an absence of award coverage for the employees. While the content of the notion of public interest cannot be precisely defined, it is distinct in nature from the interests of the parties. And although the public interest and the interests of the parties may be simultaneously affected, that fact does not lessen the distinction between them…” 3

[10] It is also relevant to highlight the Full Bench in Aurizon concluded that it cannot be expected that the terms and conditions of an agreement will continue unaltered in perpetuity after it has passed its expiry date. This is because the Act contemplates the terms and conditions of an agreement may be altered by making a new agreement or by terminating the existing agreement. 4

[11] As was also recognised in Aurizon, s.226 of the Act is not limited to circumstances in which an agreement no longer applies to any employee. The Act clearly contemplates an agreement that still applies to employees being terminated and prescribes a safety net upon termination in such circumstances. The prescribed safety net is not a prior agreement and nor are undertakings mandatory. Rather, the prescribed safety net is the relevant modern award created during the Award Modernisation process and the National Employment Standards (NES). In this case, the relevant modern award is the Registered & Licensed Clubs Award 2010 (the Award).

[12] In this application, the termination of the Agreement would not lead to an absence of award coverage for the employees. The Award provides for “proper industrial standards” within the meaning given to that term by Kellogg.

[13] In circumstances where there was no material before me suggesting otherwise, I am satisfied it is not contrary to the public interest to terminate the Agreement.

Section 226(b) of the Act – Appropriateness

[14] The approach to assessing appropriateness by taking into account all the circumstances, as enunciated by the Full Bench in Aurizon, is to have reference to the construction of s.226 and the contextual matters that bear upon that construction, as well as giving specific consideration to the matters identified in ss.226(b)(i) and (ii):

“All of the circumstances also need to be taken into account in considering whether termination of the agreements is appropriate. In particular the views of employers and employees covered by the agreement, their circumstances, and the impact of termination need to be taken into account. The requirement in s. 226(b) to take into account all of the circumstances including those set out in s. 226(b)(i) and (ii) is a requirement to take the matters into account and to give them due weight in assessing whether it is appropriate to terminate an enterprise agreement. In assessing appropriateness by taking into account all of the circumstances, we approached the task by reference to the construction of s. 226 and the contextual matters that bear upon that construction dealt with earlier as well as giving specific consideration to the matters identified in s . 226(b)(i) and (ii).” 5 (Reference omitted)

[15] I intend to adopt this approach.

[16] As the employer, Essendon Football Club filed the application to terminate the Agreement. Clearly, it supports the Agreement being terminated. Ms Lawry stated the effect of terminating the Agreement on Essendon Football Club would be that on an overall basis, there is a beneficial impact on the terms and conditions of employees covered and further, that it would obtain the benefit of a more streamlined payroll structure.

[17] There is no employee organisation covered by the Agreement.

[18] I am satisfied the employees were on notice as to the application before me and had a reasonable period of time to file material should they have wished to do so. However, no submissions from any employees were filed in the Commission and I will therefore accord neutrality to their views in considering the application.

[19] As to the circumstances of the employees and the likely effect that termination of the Agreement would have on them, I note the Agreement covers full-time, part-time and casual employees in the positions of Level 1 Service Provider, Level 2 Service Provider, Supervisor and Senior Supervisor.

[20] There is no material before me to indicate precisely what base hourly rates of pay are currently being paid to employees covered by the Agreement, however I am satisfied that if the Award was to apply to the employees, they would receive more favourable conditions in terms of the casual loading and penalty rates for evening, weekend and public holiday work and I have regard to the fact that the Act contemplates the Award and NES applying as the safety net, in the event of termination of the Agreement.

Conclusion

[21] The Agreement does not cover any employee organisation and the employees expressed no views in relation to the Application. However, having regard to the terms of the Agreement in their entirety as they apply to the employees and the fact that they will be covered by the Award if the Agreement is terminated, together with the views and circumstances of Essendon Football Club, I am satisfied it is appropriate in all the circumstances to terminate the Agreement. As outlined in paragraph [13] above, I am also satisfied it is not contrary to the public interest to terminate the Agreement.

[22] On 26 June 2019, my chambers received an email from Ms Vanessa Carpenter, People Performance Manager of the Essendon Football Club, advising the preference of the Essendon Football Club to transition to the Award on 1 July 2019.

[23] Further to the above findings, the Act requires that I terminate the Agreement. 6 In accordance with s.227 of the Act and having regard to the preference of the Essendon Football Club, the termination will take effect from 1 July 2019.

DEPUTY PRESIDENT

<AE402924  PR709837 >

 1   [2015] FWCFB 540.

 2 (2005) 139 IR 34.

 3   Ibid at 40.

 4   [2015] FWCFB 540 at [176].

 5 Ibid at [167].

 6 Section 226 of the Fair Work Act 2009 (Cth).

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