Integrated Technology Services Pty Ltd

[2016] FWCA 6469

[2016] FWCA 6469

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.222 - Application for approval of a termination of an enterprise agreement

Integrated Technology Services Pty Ltd
(AG2016/3662)

Business equipment industry
DEPUTY PRESIDENT BULL	SYDNEY, 22 SEPTEMBER 2016

Application for termination of the Integrated Technology Services Pty Ltd and Transport Workers Union New South Wales ATM Technicians Agreement 2013

[1] On 28 June 2016, Integrated Technology Services Pty Ltd (the applicant) made an application in the Fair Work Commission (the Commission) to terminate the Integrated Technology Services Pty Ltd and Transport Workers Union New South Wales ATM Technicians Agreement 2013 (the Agreement) The application was made under s.222 Subdivision C Termination of enterprise agreements by employers and employees of Division 7 Variation and termination of enterprise agreements Part 2.4 Enterprise Agreements of Part 2-4 Enterprise Agreements of the Fair Work Act 2009 (the Act).

[2] Section 222 of the Act relates to the termination of an agreement where a ballot has been held asking employees to approve a proposed agreement termination.

[3] The Agreement has a nominal expiry date of 1 September 2016.

Background

[4] On 1 July 2016 directions were issued by Senior Deputy President Hamberger for any “party” opposing the application to file submissions by 21 July 2016. If there was no opposition to the application the Agreement would be terminated effective 22 July 2016. The Commission directed the applicant to provide a copy of the Commission’s directions of 1 July 2016 to all employees covered by the Agreement, and directed that any party opposing the application should provide advice of their objection in writing to the Commission.

[5] On 20 July 2016 the Transport Worker’s Union (TWU), being an employee organisation covered by the Agreement, filed an objection to the application stating the following grounds:

● Employees were not properly notified of how to vote;

● Employees were not properly notified of what they were voting on;

● Employees were not properly notified of their employment conditions should the vote be successful;

● The TWU, as the relevant employee organisation and party to the Agreement had not been consulted and opposes the application; and

● It is unclear as to what conditions employees would be employed under should the Agreement be terminated and it is likely that they would be worse off following the termination of the Agreement.

[6] The TWU requested that the matter be listed for conference before Senior Deputy President Hamberger. On this basis the 22 July 2016 approval hearing did not proceed and the matter was listed for a conference before the Senior Deputy President.

[7] On 1 August 2016, a conference as requested by the TWU was held and attended by the applicant and the TWU, no resolution was reached. The application was subsequently allocated to my Chambers

[8] Following the conference the applicant, represented by Solicitors Herbert Smith Freehills, wrote to the Commission requesting that the TWU file and serve an outline of submissions in opposing the application to terminate the Agreement, with the applicant to respond. On 2 August 2016 a number of directions were issued, including, that any party opposing the application file an outline of submissions and any materials sought to be relied upon in opposing the application by 29 August 2016. The matter was listed for hearing on 9 September 2016.

[9] On 30 August 2016 the Applicant requested the Commission vacate the 9 September 2016 hearing on the basis that the TWU had not complied with the directions to provide submissions and materials substantiating the basis on which it opposed the application and that the matter be determined on the papers, on the basis of the material before the Commission already filed.

[10] On 30 August 2016, at the Commission’s request, the TWU provided a response to the Applicant’s request to the Commission. The TWU stated that it had made unsuccessful attempts to discuss the matter with the Applicant’s legal representatives and that it had attempted to obtain a copy of any document which would replace the Agreement which had not been forthcoming. The Applicant refuted both of those assertions by way of reply email on 31 August 2016.

[11] In its correspondence of 30 August 2016, the TWU stated that “If it would assist the Commission, the TWU would not object to the matter being determined on the papers.” This being the request of the Applicant, and not objected to by the TWU, I will now determine the matter on the material before the Commission.

[12] The applicant chose not to file any further submissions or documentation relying on the Statutory Declaration filed by Ms Jodie O’Neil the Human Resources Manager dated 27 June 2016.

Relevant Legislation

[13] Section 220 of the Act states that employers may request employees to approve a proposed termination of an enterprise agreement by voting for it and prescribes the steps and methods in doing so under ss. 220(2):

“Section 220 Employers may request employees to approve a proposed termination of an enterprise agreement”

  (2)  Before making the request, the employer must:
            (a)  take all reasonable steps to notify the employees of the following:

   (i)  the time and place at which the vote will occur;
   (ii)  the voting method that will be used; and

(b)  give the employees a reasonable opportunity to decide whether they want to approve the proposed termination.
            
(3)  Without limiting subsection (1), the employer may request that the employees vote by ballot or by an electronic method.”

[14] Section 223 of the Act sets out the provisions relevant to the termination of an enterprise agreement pursuant to an application made under s.222:

"223 When the FWC must approve a termination of an enterprise agreement

If an application for the approval of a termination of an enterprise agreement is made under section 222, the FWC must approve the termination if:

(a) the FWC is satisfied that each employer covered by the agreement complied with subsection 220(2) (which deals with giving employees a reasonable opportunity to decide etc.) in relation to the agreement; and

(b) the FWC is satisfied that the termination was agreed to in accordance with whichever of subsection 221(1) or (2) applies (those subsections deal with agreement to the termination of different kinds of enterprise agreements by employee vote); and

(c) the FWC is satisfied that there are no other reasonable grounds for believing that the employees have not agreed to the termination; and

(d) the FWC considers that it is appropriate to approve the termination taking into account the views of the employee organisation or employee organisations (if any) covered by the agreement."

Consideration

[15] As stated above the application was supported by a Statutory Declaration made by Jodie O’Neill, the Human Resources Manager of the Applicant. Ms O’Neill declared that the following steps were taken by the Applicant to ensure that the relevant employees were given a reasonable opportunity to decide whether they wanted to approve the termination:

a) On 13 May 2016 relevant employees were provided with information on the proposed terms and conditions of employment should they wish to terminate the current agreement and move to individual contracts of employment. This included information relating to overtime payments, public holiday payments, breaks and shift penalties;

b) On 30 May 2015 the relevant employees were advised by way of email about the process of voting for the termination of the Agreement. Employees were also advised of what their terms and conditions would be if the Agreement was terminated. A standard contract of employment was provided to employees with this email;

c) On 2 June 2016 relevant employees were notified by way of email of the time and place at which the vote would occur and the method which would be used to vote. Employees were advised that termination of the Agreement would be agreed where the majority of employees who cast a valid vote voted to approve the termination;

d) The voting period opened on 2 June 2016 and concluded on 15 June 2016;

e) Two reminder emails on the voting process and the close of the voting period were sent to relevant employees during the voting period.

[16] Ms O’Neill declared that 26 of the 44 relevant employees cast a vote and 25 employees of the 26 voted in favour of terminating the Agreement.

[17] In respect of s.223(a) and based on the employer’s declaration as made by Ms O’Neil, I am satisfied that the employer has complied with subsection 220(2) by taking all reasonable steps to notify employees of the time and place at which the vote was to occur, the voting method to be used and has provided a reasonable opportunity for employees to decide whether they wish to approve the proposed termination.

[18] I am further satisfied in respect of s.223(b) that the majority of employees who cast a valid vote, voted to approve the proposed termination.

[19] I now turn to ss. 223(c) and (d) which require the Commission to be satisfied that there are no other reasonable grounds for believing that the employees have not agreed to the termination and for the Commission to take into account the views of the employee organisation covered by the Agreement when considering whether it is appropriate to approve the termination. Other than the TWU,there are no unions covered by the Agreement

[20] The applicant’s declaration states that in March 2016, consultation with employees regarding their on-going terms and conditions commenced. In April 2016, employee feedback indicated that employees were not happy with the Agreement and that they were considering whether an enterprise agreement was what they wanted for the future. Based on this feedback employees were provided with an opportunity to vote on whether they wished to enter into negotiations to bargain for a new agreement with the majority view to prevail. Based on the total number of employees to be covered by a new agreement a majority vote to commence negotiations was not obtained.

[21] Following this exercise, communication concerning the possible next steps to be taken including terminating the Agreement was forwarded to employees asking them to advise the employer of their view. On 13 May 2016, employees were provided with information on the proposed terms and conditions that would apply should the Agreement be terminated and individual contracts offered.

[22] On 30 May 2016, a template contract to apply to employees should the Agreement be terminated was provided to employees for review. As discussed above, employees subsequently voted to approve the Agreement’s proposed termination.

[23] The TWU advised the Commission that it objected to the Agreement’s termination and provided its grounds in correspondence dated 20 July 2016. The grounds are outlined above.

[24] As also discussed above, a conference was held before SDP Hamberger to discuss the TWU’s concerns. I am not privy to what was discussed.

[25] The TWU have been provided the opportunity on two occasions to provide material or submissions to support its objections to the application but for various reasons no material to substantiate the allegations has been forthcoming. The Commission only has before it the bald assertions contained in TWU’s correspondence of 20 July 2016, which are rejected by the applicant.

[26] The applicant asks the Commission to draw the conclusion that the lack of evidence, further submissions or other material from the TWU leads to a conclusion that the grounds of objection cannot be substantiated.

[27] While I have taken into account the contents of the TWU letter of objection of 20 July 2016, the Statutory Declaration filed by the applicant is compelling evidence that the process it has followed is consistent with the Act.

[10] While there is a modern award that the employer and employees will be covered by if the Agreement is terminated, (the Business Equipment Award 2010) the Applicant’s statutory declaration reveals that employees will revert to individual contracts, the details of which were made available to employees prior to the vote on terminating the Agreement.

[28] On this basis there are “no other reasonable grounds” for believing that the employees have not agreed to the proposed termination of the Agreement. The employees have genuinely voted in favour of the termination, the requirements of s.223 have been met and I consider that it is appropriate to approve the termination.

[29] Pursuant to s.224 of the Act, the approval of the termination of the Agreement will be effective as of today’s date.

DEPUTY PRESIDENT

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