Gillian Russell; Kim Gordon; Elizabeth Gallagher

[2013] FWCA 3596

[2013] FWCA 3596

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

Gillian Russell; Kim Gordon; Elizabeth Gallagher
(AG2013/5610)

SOS NURSING AND HOME CARE PTY LTD EMPLOYEE COLLECTIVE AGREEMENT 2007

Health and welfare services
COMMISSIONER MCKENNA	SYDNEY, 26 JUNE 2013

Application for termination of the SOS Nursing and Home Care Services Pty Ltd Employee Collective Agreement 2007.

[1] This matter involves a contested application, made pursuant to Sch. 3, item 16 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009, seeking to terminate a collective agreement-based transitional instrument titled the SOS Nursing and Home Care Pty Ltd Employee Collective Agreement 2007 (“the Agreement”). The Agreement passed its nominal expiry date in August 2010.

[2] Considering the body of cases concerning applications to terminate agreements decided under the existing legislation and under similar provisions in predecessor legislation, the circumstances of this application are somewhat atypical. That is, in contrast with the situation most typically considered in the cases, here it is applicant employees (who are represented by a union) who have brought the application to terminate an agreement and it is the employer which opposes such termination.

[3] The employee applicants in the matter were represented by Mr C Blair of the New South Wales Nurses and Midwives’ Association (“the union” or “the applicants’ representative”). The union was not itself a signatory to the Agreement, although it has members covered by it. Apart from nurse-related classifications, the Agreement also applies to other, non-nurse classifications of employees. SOS Nursing and Home Care Services Pty Ltd (“the employer”), which was represented by Mr M Boroni, solicitor, opposes the termination of the Agreement.

[4] By way of brief background, this application comes before the Commission as the most recent in a series of proceedings before a range of courts and tribunals directly or indirectly involving the applicants’ representative and the employer. It is not necessary for the purposes of this decision to detail that history of various proceedings but, in short, those earlier proceedings have included disputation about payments for employees employed under the Agreement and an unsuccessful application by the employer for the approval of an enterprise agreement.

[5] Although the evidence and submissions went to a broad range of matters concerning that history of proceedings pre-dating this application, various matters as to these and other such matters were largely irrelevant to the application before me. That is, the application properly and relevantly falls to be considered and determined, by the operation of the transitional arrangements, pursuant to the following provisions of the Fair Work Act 2009 (“the Act”):

“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.”

Statutory criteria

[6] As to s.225 of the Act, it is common ground the Agreement has passed its nominal expiry date and the application has been made by an employee (or employees) covered by the Agreement. I turn next to the matters arising under s.226 of the Act.

[7] The views of the applicant employees, as articulated in the case presented on their behalf by the union, were to the effect that the Agreement is outmoded in terms of prevailing legislative matters; that they would be benefitted if their employment was regulated by the minima in the relevant modern award rather than by the Agreement; and it would be appropriate for bargaining for the making of an enterprise agreement to occur against the backdrop of coverage by modern award-specified minima rather than by the Agreement. The submissions for the applicants noted that an application by the employer for the approval of an enterprise agreement had been rejected in comparatively recent times. The applicants’ case was further advanced on the basis of the contention that the employer allegedly has not been properly engaging in negotiations for a further enterprise agreement which would see the employees being better off overall than if the subject of coverage by the relevant modern award.

[8] Under arrangements put in place after consultation with the parties’ representatives about an appropriate mechanism, and with the helpful facilitation by the employer, I sought the views of employees who were not represented by the union in the proceedings. In this regard, a small number of employees who were not represented by the union expressed their own views about the application. Those views were mixed, with, for the reasons those individual employees each outlined, some favouring the termination of the Agreement and others preferring that the Agreement not be terminated. The majority of employees did not express any view.

[9] In opposing the application for the termination of the Agreement, the employer’s view is that it would be antithetical to the spirit or intent of various legislative provisions to terminate the Agreement, particularly when bargaining for a new enterprise agreement is on foot. The employer’s view the Agreement should not be terminated was advanced on various other bases, including reference to the administrative dislocation that would be occasioned by giving effect to the application when the making of a new enterprise agreement may be anticipated in the near future. The employer’s evidence adverted also to potential difficulty, effectively through financial incapacity, that would be caused in continuing to service certain home-based clients if the employer had to remunerate employees in accordance with the award minima in relation to travelling arrangements. It was also the employer’s view the Agreement bestows generally more beneficial terms and conditions of employment than those that would apply under the applicable modern awards.

Consideration

[10] The circumstances of the employees and the employer are that if the Agreement is terminated then modern awards will cover them. I note there is dispute in relation to which modern awards will then apply in the case of certain employees now covered by the Agreement. Despite the initial submissions by the applicants’ representative, it would be inapt for me to purport to determine whether employees now covered by the Agreement would be better off overall if employed under modern awards and, otherwise, which modern awards should apply in the case of certain classes of employees now covered by the Agreement: Paradise Palms NQ Pty Ltd [2013] FWCA 2572 per Asbury DP.

[11] Following from the approach taken by Watson VP in Energy Resources of Australia Ltd v Liquor, Hospitality and Miscellaneous Union[2010] FWA 2434 at paras [26] and [29], I respectfully agree that it is clear agreements are intended to apply for a limited period and either be renegotiated, renewed, varied, replaced, terminated or left unaltered depending on negotiation between the parties and the operation of the legislative provisions; and that termination of an agreement does not preclude further enterprise bargaining. The Agreement which is the subject of this termination application has passed its nominal expiry date. The applicants’ representative contends that the Agreement is “sub-standard” and acts to the financial detriment of at least some employees as against employment under modern award minima - although that was disputed by the employer. I put it no higher than an observation, but it would seem unlikely applicant employees represented by a union in proceedings such as these would advocate for the termination of an agreement if the resulting reversion to modern award coverage would be financially less advantageous for those employees than continued employment under an agreement that has well-passed its nominal expiry date. In any event, and putting aside this observation, the Agreement does not contain matters now required to be included in contemporary enterprise agreements. Moreover, it is entirely speculative if and when any new enterprise agreement will be made between the employer and its employees and, even if any such further enterprise agreement were made, it is also speculative as to whether the enterprise agreement would be approved by the Commission.

[12] Some of the circumstances arising in relation to this application favour the termination of the Agreement, while others do not. For example, part of the employer’s case was that terminating the Agreement may mean its clientele would be adversely affected by the withdrawal of services and this militated against public interest considerations. While any decision by the employer to withdraw services to clients may be considered to have an adverse impact on its client-base in isolated rural areas, I do not think it assisted the employer’s case in opposing the termination of the Agreement to posit that it would not be economically viable to continue to service some clients if modern award minima were applied to employees. Similarly, while I accept there would be some level of administrative inconvenience to the employer if the Agreement were to be terminated, that matter, in and of itself and without anything more, would not be a sufficient basis not to effect the termination of the Agreement. I note also that, of those who expressed views, there were differing views as between the employees concerning the termination of the Agreement.

[13] In relation to the application, there is also suasion in matters such as the applicants’ submissions concerning the termination that the Agreement does not, for instance, contain matters which are now part of the legislatively-stipulated content for contemporary enterprise agreements such as to consultation requirements and independent dispute resolution processes.

[14] Section 226 of the Act relevantly provides that I must terminate the Agreement if satisfied it is not contrary to the public interest and if I consider it appropriate taking into account all the circumstances including the views of the employees and the employer, and their circumstances including the likely effect on them of the termination. I am satisfied it is not contrary to the public interest to terminate this out-dated agreement, with the result modern awards will apply - even if, in the particular circumstances of this application, perhaps only as an interim arrangement pending the possibility of the making of a new enterprise agreement and its approval by the Commission. I have considered the submissions for the employer that the termination of the Agreement would “unfairly prejudice” its bargaining position for a new enterprise agreement, but it seems to me an employer could hardly be unfairly prejudiced in negotiating for an enterprise agreement from the base of minimum pay and conditions under modern awards; and, considering such matters, the application could not, despite the submissions for the employer, be considered to have been brought with any “improper purpose”.

[15] I am satisfied that the termination of the agreement would be appropriate having considered matters apposite to the statutory criteria (and having disregarded the significant array of matters canvassed in relation to this application that had little or no apparent relevance to the statutory criteria), and authorities including the decision of Lawler VP in Tahmoor Coal Pty Ltd [2010] FWA 6468 and Roe C in Royal Automotive Club of Victoria [2010] FWA 3483 and other decisions to which reference was made in the submissions. All things considered, I have concluded the Agreement should be terminated.

[16] The operative date for the termination of the Agreement was the subject of submissions in the proceedings. In this regard, s.227 of the Act provides that the termination operates from the day specified in the decision to terminate the agreement. Having considered the submissions by the applicants’ representative and for the employer, I do not consider it would appropriate to give immediate effect to the termination. I consider it appropriate that the termination should take effect from the date of the first full pay period to commence on or after 1 August 2013. Deferring the date of termination to August allows the employer reasonable time to effect necessary administrative arrangements arising from the termination of the Agreement. Deferral also has the additional effect of allowing time to pursue the enterprise negotiations described in the evidence and submissions from the basis of award-based minima in circumstances where there is sharply competing contention as to whether the employees’ terms and conditions of employment under the Agreement are superior to, or inferior to, the application of modern award minima.

[17] The termination will take effect from the first full pay period on or after 1 August 2013.

COMMISSIONER

Appearances:

C. Blair of the New South Wales Nurses and Midwives’ Association for the applicants.

M. Baroni, solicitor, of K&L Gates for the respondent.

Hearing details:

2013.

Sydney:

22 May.

Final written submissions:

6 June 2013

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<Price code C, AC323772  PR537587>