Forrest Personnel LTD
[2021] FWCA 1363
•30 MARCH 2021
| [2021] FWCA 1363 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.225 - Application for termination of an enterprise agreement after its nominal expiry date
Forrest Personnel LTD
(AG2021/311)
FORREST PERSONNEL ENTERPRISE BARGAINING AGREEMENT 2012
Social, community, home care and disability services | |
DEPUTY PRESIDENT BINET | PERTH, 30 MARCH 2021 |
Application for termination of the Forrest Personnel Enterprise Bargaining Agreement 2012.
[1] Forrest Personnel Ltd (Forrest) has made an application (Application) to the Fair Work Commission (FWC) to terminate the Forrest Personnel Enterprise Bargaining Agreement 2012 (Agreement) pursuant to section 225 of the Fair Work Act 2009 (Cth) (FW Act).
[2] The Agreement was approved by Commissioner Cloghan pursuant to section 185 of the FW Act on 17 August 2012 and commenced operation on 24 August 2012. The Agreement had a nominal expiry date of 23 August 2015.
[3] The parties to the Agreement are Forrest and its employees who are employed within the classifications specified in Schedule 1 appended to the Agreement (Employees).
[4] There are no organisations covered by the Agreement.
[5] In support of the Application, Forrest filed a statutory declaration of Ms Anne Jayne Bagshaw, CEO of Forrest (Bagshaw Declaration).
[6] On 4 March 2021, directions were issued with respect to the Application (Directions). Forrest was directed to file an outline of submissions in support of the Application and any evidence on which they relied.
[7] The Directions also required Forrest to provide a copy of the materials filed by the parties in accordance with the Directions and a copy of the Directions to each of the Employees. The Directions contained an invitation for any of the Employees who wished to be heard in relation to the Application to contact Chambers by 4pm, Thursday 18 March 2021. None of the Employees contacted Chambers by this date or by the date of this decision.
Background
[8] Forrest is a not-for-profit employment agency helping job seekers with health conditions find employment. Forrest currently employs fifty-four female employees, eight employees of a non-English speaking background, fourteen disabled employees and forty employees over the age of forty-five. 1
[9] The Agreement expired in August 2015. Forrest sought to negotiate a replacement agreement in 2018. A proposed Agreement was put to a ballot of employees. The proposal was rejected and the parties abandoned negotiations for a replacement agreement. 2
[10] On 9 November 2020, in the absence of any appetite for negotiating a replacement agreement, Forrest commenced consultation with employees about terminating the Agreement.3
[11] Forrest explained to the Employees that if the Agreement was terminated the National Employment Standards and the applicable industry award, the Labour Market Assistance Industry Award (Award), would provide for the maintenance of proper industrial standards. 4
[12] Forrest also gave undertakings that certain conditions, which the Employees viewed as important and materially better than the correspondent Award and NES entitlements, would be preserved by way of common law contracts. These conditions were5:
a. Annual leave of four weeks and three days.
b. Annual leave loading including in wage rate.
c. Compassionate leave of three days per occasion.
d. Long service leave of thirteen weeks after ten years service.
[13] Each of the Employees was offered, and accepted, a new common law contract on substantially identical terms but for individual elements such as job title, classification and service increments (Contracts). 6
[14] According to Forrest, the Contracts provide for minimum rates of pay 3.1% higher than the prevailing Award rates and 2.1% higher than the Agreement rates. Forrest also note that the inclusion of allowances in a loaded base rate and preserved as a term of the Contracts, also benefits employees.7
[15] According to Forrest the only material impact on current employees will be the loss of guaranteed wage increases. On-going wage increases will be at the discretion of Forrest, however Forrest say that it will maintain competitive wage rates at above the Award minimum rates.
Legislation
[16] Subdivision D of Division 7 of Part 2 - 4 of the FW Act sets out the mechanism by which an enterprise agreement may be terminated after the agreement has passed its nominal expiry date.
[17] Section 225 of the FW Act provides that:
“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.”
[18] As the Agreement has passed its nominal expiry date and Forrest is an employer covered by the Agreement, I find that Forrest has standing to make the Application pursuant to section 225(a) of the FW Act.
[19] Section 226 of the FW Act states:
“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.”
Is it contrary to the public interest to terminate the Agreement?
[20] Section 226(a) requires the FWC to be satisfied that it is not contrary to the public interest to terminate the Agreement.
[21] This requires the FWC to consider how the termination of the Agreement might foreseeably affect the public as a whole, such as the impact on the achievement or otherwise on the various objects of the Act, employment levels, inflation and the maintenance of proper industrial standards. 8
[22] There is no positive onus on an applicant to persuade the FWC that there are positive benefits to the public interest arising from the termination. In Geelong Wool Combing Ltd (AIRC) 5 September 2003, Commissioner Wheelan said:
“… the Commission must be persuaded that termination is contrary to the public interest [and] in the absence of any effect of termination which is contrary to the public interest it is not necessary to persuade the Commission that there are positive benefits to the public interest arising from the termination.”
[23] The public interest is distinct in nature from the interests of those covered by an agreement. The views of those covered by an agreement may be relevant to the exercise of the discretion if they shed light on the effect of the termination on public interest but those views should not be given any independent weight. 9
[24] The object of the FW Act is set out in section 3 of the FW Act, as follows:
“3. Object of this Act
The object of this Act is to provide a balanced framework for cooperative and productive workplace relations that promotes national economic prosperity and social inclusion for all Australians by:
…
(b) ensuring a guaranteed safety net of fair, relevant and enforceable minimum terms and conditions through the National Employment Standards, modern awards and national minimum wage orders;
…
(f) achieving productivity and fairness through an emphasis on enterprise level collective bargaining underpinned by simple good faith bargaining obligations and clear rules governing industrial action;
…”
[25] The specific objects in section 171 of the FW Act inform how the general object in section 3 of the FW Act is to be satisfied in the context of matters dealt with in Part 2 - 4 of the FW Act:
“171 Objects of this Part
The objects of this Part are:
(a) to provide a simple, flexible and fair framework that enables collective bargaining in good faith, particularly at the enterprise level, for enterprise agreements that deliver productivity benefits; and
(b) to enable the FWC to facilitate good faith bargaining and the making of enterprise agreements, including through:
i. making bargaining orders; and
ii. dealing with disputes where the bargaining representatives request assistance; and
iii. ensuring that applications to the FWC for approval of enterprise agreements are dealt with without delay.”
[26] The ascertainment of what is not in the public interest does not involve the mere identification of a consequence of the termination of the agreement that is arguably contrary to the public interest. The ascertainment of the public interest may involve balancing countervailing public interests. 10
[27] Forrest submit that there are no matters contrary to the public interest if the Agreement is terminated. Forrest point out that the NES and Award provide for the maintenance of proper industrial standards. The evidence of Forrest is that conditions, which the Employees viewed as important and materially better than the corresponding entitlements under the NES Award, have been preserved in the Contracts offered to, and accepted by, the Employees. The evidence of Forrest is also that the minimum wage rates payable under the Contracts are between 2.0% and 2.2% higher than otherwise would be payable under the Agreement, and 3.1% higher than the Award rates.
[28] Based on the submissions of Forrest, and the evidence before me, I am satisfied that it is not contrary to the public interest to terminate the Agreement.
What are the views of the Employees covered by the Agreement?
[29] According to the Bagshaw Declaration, the Employees were notified of the proposal to terminate the Agreement and invited to identify aspects of the Agreement which the Employees viewed as important and materially better than the corresponding entitlements under the Award and NES. These entitlements were then incorporated in the Contracts which were offered to, and accepted by, each of the Employees.
[30] The Directions also required Forrest to provide a copy of the materials filed by the parties in accordance with the Directions, as well as a copy of the Directions to each of the Employees. The Directions contained an invitation for any of the Employees who wished to be heard in relation to the Application to contact Chambers. None of the Employees contacted Chambers by the date in the Direction or by the date of this decision.
What are the views of the Employee Organisation covered by the Agreement?
[31] There are no employee organisations covered by the Agreement.
What are the views of the Employer covered by the Agreement?
[32] Forrest has made the Application and therefore, are in favour of the termination of the Agreement.
What are the circumstances of the Employees covered by the Agreement?
[33] If the Agreement is terminated, the NES and the Award will provide for the maintenance of proper industrial standards. The evidence of Forrest is that conditions, which the Employees viewed as important and materially better than the corresponding entitlements under the NES and the Award, have been preserved in the Contracts offered to, and accepted by, the Employees. The evidence of Forrest is also that the minimum wage rates payable under the Contracts are between 2.0% and 2.2% higher than otherwise would be payable under the Agreement and 3.1% higher than the Award rates.
[34] However, Forrest concede that the Employees will lose guaranteed wage increases above Award minimum rates however Forrest say that it intends to sustain competitive wage rates at above Award minimum rates, on a discretionary basis.
What are the circumstances of the Employee Organisation covered by the Agreement?
[35] There are no employee organisations covered by the Agreement.
What are the circumstances of the Employer covered by the Agreement?
The Agreement limits the options otherwise open to Forrest to employ staff in all classifications prescribed in the Award. For example, the Agreement precludes Forrest from employing staff in the Award classification ‘Manager Grade 2’ and limits the capacity to utilise the full spread of pay points prescribed for the classification ‘Manager Grade 1’. Terminating the Agreement will provide Forrest with the flexibility to employ staff in all classifications under the Award.
Is it appropriate to terminate the Agreement, taking into account all the circumstances?
[36] In assessing the views and circumstances of the parties it is important to remember that:
“Taking into account the views and circumstances of the parties involves far more than an expression of their views in support or opposition to termination. It should involve a reason for their views and the validity of their concerns.” 11
[37] In the absence of any contact from any Employees I am satisfied that the views of Forrest, and the Employees, is that the Agreement should be terminated. The Agreement expired in 2015 and lacks flexibilities which are sought by the business. The Award and the NES will provide for the maintenance of proper industrial standards. The new Contracts preserve a number of entitlements in the Agreement which are materially better than the Award or the NES and provide for wage rates in excess of the Award. While the Employees will lose an entitlement to guaranteed wages increases above Award minimum rates, hopefully a competitive labour market will ensure Forrest exercises its discretion to maintain above Award rates of pay. Based on these matters I am satisfied that the views of the parties are valid.
Conclusion
[38] For the reasons enunciated above, I am satisfied that it is not contrary to the public interest to terminate the Agreement.
[39] Taking into account all the circumstances, including the views and circumstances of Forrest and the Employees, I am satisfied that it is appropriate to terminate the Agreement.
[40] Accordingly, the Agreementis terminated. The termination is to take effect on, and from, the date of this Decision. An Order to this effect will be issued in conjunction with this Decision. 12
DEPUTY PRESIDENT
1 Form F24C –Declaration in relation to termination of an enterprise agreement after the nominal expiry date at Question 3.3 (‘Form F24C’).
2 Form F24C at Attachment 1.
3 Ibid.
4 Ibid.
5 Ibid; Forrest Submissions filed 10 March 2021 (‘Forrest Submissions’).
6 Ibid.
7 Ibid.
8 Re Kellogg Brown and Root, Bass Strait (Esso) Onshore/Offshore Facilities Certified Agreement 2000 (2005) 139 IR 34, 40 – 41.
9 Ibid.
10 Kellogg Brown & Root Pty Ltd & Ors and Esso Australia Ltd (2005) 139 IR 34 referred to the decision of Queensland Electricity Commission; Ex parte Electrical Trades Union of Australia (1987) 61 ALJR 393.
11 Energy Resources Australia Ltd v Liquor, Hospitality and Miscellaneous Union[2010] FWA 2434, [16].
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