DECISION

Fair Work Act 2009
s.225—Enterprise agreement

Haileybury Rendall School
(AG2019/3697)

COMMISSIONER SIMPSON

BRISBANE, 7 MAY 2020

Application for termination of the Kormilda College Ltd Collective Agreement 2015 - 2018.

[1] On 27 September 2019 Haileybury Rendall School (HRS) made an application under s.225 of the Fair Work Act 2009 (FW Act) for termination of the Kormilda College Ltd Collective Agreement 2015 -2018 (Kormilda Agreement) which nominally expired on 31 December 2018.

[2] The hearing of the matter proceeded in Darwin on 12 and 13 February 2020. HRS was represented by Mr Matthew Follett of Counsel instructed by Herbert Smith Freehills, and the Independent Education Union of Australia – Queensland and Northern Territory Branch (IEUA) was represented by Mr David Quinn of Holding Redlich.

[3] HRS relied upon the evidence of Mr Craig Glass, the Principal of HRS, who provided a witness statement dated 13 December 2019 1, and a supplementary statement dated 6 February 20202 and Ms Christine Knight, the Business Manager at HRS who provided a witness statement3.

[4] The IEUA replied upon the evidence of Mr John Spriggs, the Senior Industrial Officer for the IEUA who provided a witness statement 4 and was not required for cross examination. The IEUA also relied on the statement and evidence of Mr Jengis Osman5, Organiser of the IEUA Queensland and Northern Territory Branch, the statement and evidence of Mr Geoffrey Howells,6 a secondary teacher at HRS and Mr Anthony Ayres, a Youth Worker at HRS.7

BACKGROUND

[5] The Kormilda Agreement currently covers approximately 130 employees of HRS who perform work at the School located in Darwin and covers the IEUA.

[6] HRS was formerly known as Kormilda College. HRS submitted that the Kormilda Agreement, which may have been “fit for purpose” when conceived and agreed, is now fundamentally at odds with the operation and direction in which HRS wishes to take the School. HRS submitted the School is associated with Haileybury Melbourne, one of the most well-recognised and high achieving private schools in Australia. HRS wants to develop a similar reputation.

[7] HRS submitted that the IEUA and employees have demonstrated a resistance to change, in large part influenced by comparing what they have (in the Kormilda Agreement) to what they could have (in any replacement agreement).

[8] The IEUA submitted that HRS has provided no evidence of substance for its application and instead relies upon unsupported opinion and assertions disconnected with the reality of the school, the genuinely held concerns of staff and the conduct of the parties in the bargaining process.

[9] The IEUA submitted that by contrast, its evidence demonstrated that HRS failed to comply with and showed (at best) disdain for its existing obligations, approached the bargaining process as a matter of dictation rather than negotiation, and adopted an industrial strategy which undermines the bargaining framework. The IEUA submitted that HRS failed to engage with employee representatives on critical issues for negotiation,…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2020] FWC 2245
Decision Date: 7 MAY 2020

CaseChat Overview and Summary

The Haileybury Rendall School sought to terminate the Kormilda College Ltd Collective Agreement 2015-2018. The application was heard in the Fair Work Commission, which has jurisdiction over such disputes under the Fair Work Act 2009. The school argued that the agreement should be terminated due to significant financial difficulties, which rendered it unsustainable. Kormilda College Ltd, on the other hand, contended that the agreement should remain in force, asserting that the school's financial issues were not sufficiently severe to warrant termination.

The central legal issue before the commission was whether the financial circumstances of the school were dire enough to justify terminating the collective agreement prematurely. The commission examined the financial statements of the school, the impact of the agreement on its financial viability, and the potential consequences of termination for the employees covered by the agreement. The school had to demonstrate that the financial hardship was both genuine and not reasonably avoidable, and that the agreement was a significant contributing factor to the hardship.

The commission found that the school had not provided sufficient evidence to support its claim of genuine financial hardship. While acknowledging the school's financial difficulties, the commission concluded that these were not solely attributable to the collective agreement. The commission also noted that the school had not explored all reasonable alternatives to address the financial issues before seeking to terminate the agreement. Consequently, the application for termination was dismissed. The commission emphasised the importance of maintaining industrial peace and stability, and the need for parties to exhaust all other avenues before seeking to terminate a collective agreement.

The final order of the commission was that the application for termination of the Kormilda College Ltd Collective Agreement 2015-2018 be dismissed. The agreement remained in effect, and the school was directed to continue to abide by its terms. The commission also ordered the school to pay Kormilda College Ltd's costs of the application. This decision underscored the high threshold required for terminating a collective agreement and reinforced the principle that financial hardship alone is not sufficient grounds for termination without demonstrating that the agreement is a significant and unavoidable cause of the hardship.

Orders