Excelior Pty Ltd

[2011] FWA 2493

[2011] FWA 2493

FAIR WORK AUSTRALIA

REASONS FOR DECISION

Fair Work Act 2009
s.185—Enterprise agreement

Excelior Pty Ltd
(AG2010/24460)

Contract call centre industry
SENIOR DEPUTY PRESIDENT KAUFMAN	MELBOURNE, 27 APRIL 2011

Greenfields agreement - genuine new enterprise - employer establishing or proposing to establish

[1] An application for the approval of a greenfields agreement, the Excelior Fair Work Greenfields Enterprise Agreement 2010, was made by Excelior Pty Ltd. The National Union of Workers (NUW) was the relevant employee organisation with which the agreement was made.

[2] At a hearing on 18 April 2011 I dismissed the application despite both the employer and the union contending for its approval. Brief reasons for doing so were provided at the hearing. I now publish those reasons, slightly edited and expanded. This decision provides an outline of those reasons.

[3] In respect of making a greenfields agreement, the Fair Work Act 2009 (the Act) provides at s.172(4) that “[a] single-enterprise agreement made as referred to in paragraph (2)(b), or a multi-enterprise agreement made as referred to in paragraph (3)(b), is a greenfields agreement.”

[4] Relevantly, s.172(2) provides:

“(2) An employer, or 2 or more employers that are single interest employers, may make an enterprise agreement (a single-enterprise agreement):

(a) with the employees who are employed at the time the agreement is made and who will be covered by the agreement; or

(b) with one or more relevant employee organisations if:

(i) the agreement relates to a genuine new enterprise that the employer or employers are establishing or propose to establish; and

(ii) the employer or employers have not employed any of the persons who will be necessary for the normal conduct of that enterprise and will be covered by the agreement.

Note: The expression genuine new enterprise includes a genuine new business, activity, project or undertaking (see the definition of enterprise in section 12).”

[5] The issue that concerned me is the requirement set out in s.172(2)(b)(i) of the Act, that is, whether or not the proposed greenfields agreement related to a genuine new enterprise that the employer was establishing, or proposed to establish.

[6] Clause 2 of the proposed agreement read as follows:

“2. COVERAGE & INTENTION OF AGREEMENT

2.1 This Agreement specifies the minimum rates of pay and conditions of employment for employees of Excelior Pty Ltd in any state or territory of the Commonwealth of Australia, who are engaged to perform work covered by classifications contained in Clause 16 Classifications and Rates of Pay, of this Agreement.

2.2 The intention of this Agreement is to cover work performed in the classifications within this Agreement at any site which Excelior operates post the date of lodgement of the Agreement. This Agreement does not cover sites which are covered by an existing Certified Agreement or Collective Agreement which applies to Excelior.”

[7] There is no indication in clause 2 as to what new enterprise Excelior was establishing or proposed to establish as required by s.172(2)(b)(i) of the Act.

[8] I instructed my Associate to seek clarification with the company and the NUW to ascertain whether there was in contemplation the establishment of any new enterprise.

[9] As it appeared that there was not any such contemplation, after several exchanges of correspondence between the company and my Associate, the matter was listed for hearing so that the parties could address me on this issue.

[10] It was clear at the hearing that the employer was not in the process of establishing, nor proposing to establish, a new enterprise. Rather, the company, which operates call centres, had sought the approval of this agreement so that it would have a certified industrial instrument to cover any future enterprise that it might establish.

[11] The parties submitted that there was a strong commercial benefit for a company in this business to be able to quickly engage new employees on the appropriate terms and conditions provided for in the proposed agreement. This was said to provide a benefit for the company in negotiating and being awarded new contracts, and by enabling a short turnover time between being awarded the new contract and commencing the new operation.

[12] The parties conceded however, that this factor is not relevant to the requirement of s.172(2)(b)(i) of the Act.

[13] It was further submitted that it would have been parliament’s intention that a greenfields agreement would cover this type of arrangement, that is, where a company wants to secure certain terms and conditions for future employees it may wish to engage in respect of any genuinely new enterprise. The parties however could not point to any reference in the Explanatory Memorandum that supported this assertion. In fact, on my reading of the Explanatory Memorandum, I was unable to find anything that assisted this submission.

[14] Finally, the parties referred to a number of Fair Work Australia decisions that had approved greenfields applications which were similar in nature to this proposed agreement in the sense that the agreement did not relate to a specific new enterprise that was being, or was proposed to be, established by the employer. None of these decisions is persuasive as there was no indication that the issue with respect to s.172(2)(b)(i) of the Act had been considered in any of them.

[15] In these circumstances, I considered it necessary to dismiss the application on the basis that the requirement in s.172(2)(b)(i) of the Act had not been met.

SENIOR DEPUTY PRESIDENT

Appearances:

S. Jackel on behalf of the applicant.

G. Moase on behalf of the NUW.

Hearing details:

MELBOURNE
2011
April 18

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