DECISION

Fair Work (Transitional Provisions and Consequential Amendments) Act 2009
Item 16 Sch. 3—Termination of transitional instrument

Hartley Lifecare Incorporated
(AG2021/74)

HARTLEY LIFECARE/UNION COLLECTIVE AGREEMENT 2008 (1 JULY 07- 30 JUNE 2010)

Health and welfare services
DEPUTY PRESIDENT DEAN	SYDNEY, 27 JANUARY 2021

Application for termination of the Hartley Lifecare/Union Collective Agreement 2008 (1 July 07- 30 June 2010).

[1] On 19 January 2021, Hartley Lifecare Incorporated (the Applicant) made an application pursuant to Item 16 of Schedule 3 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (the TPCA Act) to terminate the Hartley Lifecare/Union Collective Agreement 2008 (1 July 07- 30 June 2010) (the Agreement).

[2] The Agreement is a collective agreement-based transitional instrument and has passed its nominal expiry date of 30 June 2011. The Applicant sought the termination to take effect from 1 July 2021.

[3] Item 16 of Schedule 3 of the TPCA Act provides that Subdivision D of Division 7 of Part 2-4 of the Fair Work Act 2009 (the Act) applies in relation to a collective agreement-based transitional instrument as if a reference to an enterprise agreement included a reference to a collective agreement-based transitional instrument.

[4] The relevant provisions under Subdivision D of Division 7 of Part 2-4 of the Act are 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;

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.

[5] The application was supported by a statutory declaration by Ms Susan Granger, Senior Manager – Business Operations of the Applicant.

[6] Ms Granger stated that the termination of the Agreement is not contrary to the public interest. Rather, it favours the public interest because it will:

(a) mitigate the risk of significant damage caused to the Applicant’s vulnerable clients and the broader ACT community by enabling the Applicant greater clarity to introduce and implement COVID-19 safety response measures;

(b) enable the Applicant to implement improvements in productivity and flexibility;

(c) contribute to longer term, sustainable employment for its workforce by increasing flexibility to adjust to changing environmental pressures (such as the implementation of the National Disability Insurance Scheme and COVID-19); ensure conditions for employees align with community expectations for the industry, including through access to industrial safeguards.

[7] Ms Granger detailed the consultation that the Applicant had engaged in with affected employees about the proposed termination. This involved 32 separate group meetings attended by about 280 staff and a survey conducted at the end of the consultation period which indicated 63.4% of staff supporting the termination of the Agreement and transition to the Social, Community, Housing and Disability Services Award (the Modern Award).

[8] Ms Granger said that the Agreement was negotiated in 2007 and is no longer fit for purpose. It does not include important roster protections, and is drafted in terms which are ambiguous and have created confusion for both the employer and employees. The termination will remove such ambiguity and will also ensure that the Applicant can support a new rostering arrangement designed to reduce the risk of COVID-19 transmission between its operating sites.

[9] In terms of the likely effect on the affected employees if the Agreement is terminated, Ms Granger deposed that they would benefit from the termination when conditions between the Agreement and the Modern Award are compared. Further, the Applicant has made an undertaking to retain the more beneficial sleepover rates from the Agreement.

[10] Overall, the Applicant considers the termination of agreement will ensure employment terms and conditions are modernised and align with industry standards.

[11] The Health Services Union of Australia, being an organisation covered by the Agreement, was advised of the application and did not raise any objection.

[12] Having considered the material contained in the employer’s statutory declaration set out above, I am satisfied that termination of the Agreement is not contrary to the public interest. I have taken into account all of the circumstances including those specified in s.226(b) and consider that it is appropriate to terminate the Agreement. Accordingly, I approve the termination of the Agreement.

[13] The termination will come into effect from 1 July 2021.

DEPUTY PRESIDENT

Printed by authority of the Commonwealth Government Printer

Hartley Lifecare Incorporated, an employer, applied to terminate the Hartley Lifecare/Union Collective Agreement 2008, which was in effect from 1 July 2007 to 30 June 2010. The application was made to the Fair Work Commission, which was asked to decide whether the termination was warranted under the Fair Work Act 2009. The Union, representing the employees, contested the application.

The central legal issue before the Commission was whether the employer could justify the termination of the agreement, as it was required to demonstrate that a significant change in circumstances had occurred since the agreement was made. The employer argued that there had been significant changes, including a deterioration in the financial health of the organisation, which necessitated the termination of the agreement. The Union argued that there was no significant change and that the employer was attempting to unilaterally alter the agreement without proper justification.

The Commission found that the employer had failed to demonstrate a significant change in circumstances that would warrant the termination of the agreement. The employer's financial difficulties did not constitute a change of such magnitude that it would render the agreement unworkable. The employer had not shown that the agreement was no longer able to be implemented in good faith or that it was no longer appropriate in the changed circumstances. The Commission also considered that the employer had not taken all reasonable steps to avoid the termination of the agreement. The application was dismissed.

The Fair Work Commission ordered that the Hartley Lifecare/Union Collective Agreement 2008 remain in effect until its expiration on 30 June 2010. The Union was directed to give reasonable notice to the employer of any intention to commence bargaining for a new agreement. The employer was ordered to continue to abide by the terms of the existing agreement during this period.

Hartley Lifecare Incorporated

DECISION

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Background to the litigation

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Legal Principle Established