James Wilson

[2020] FWCA 2534

[2020] FWCA 2534

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.225—Enterprise agreement

James Wilson
(AG2019/2043)

JMD GROUP ENTERPRISE AGREEMENT 2013

[AE406964]

Security services
DEPUTY PRESIDENT BULL	SYDNEY, 22 MAY 2020

Application for termination of the JMD Group Enterprise Agreement 2013.

[1] On 13 June 2019, Mr James Wilson applied to have the JMD Enterprise Agreement 2013 1(the Agreement) terminated under s.225 of the Fair Work Act 2009 (the Act). Mr Wilson described himself as an employee covered by the Agreement. The Agreement defines the employer under clause 1.2 Definitions as JMD Facility Services Pty Ltd or JMD Security Pty Ltd (the Employers).

[2] The application is made pursuant to s.225 of the Act which states:

“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.”

[3] As the applicant was an employee covered by the Agreement at the time of making the application s.225(b) of the Act is satisfied. Mr Wilson’s subsequent resignation from JMD Facility Services Pty Ltd as a cleaner Level 1 does not invalidate his application, although it may reduce any weight placed on his personal circumstances in applying to have the Agreement terminated. Further, the Agreement has passed its nominal expiry date being 15 November 2017. The Agreement was approved by the Fair Work Commission on 19 February 2014. 2

[4] I am satisfied that the requirements of s.225 of the Act have been met as the applicant is an employer covered by the Agreement with standing to make the termination application and that the Agreement has passed its nominal expiry date.

[5] The application was not accompanied by a statutory declaration nor did it contain any grounds as to why the Agreement should be terminated. Following a request to the nominated contact person, a form F24C Statutory Declaration was filed by Mr Justin Davis an Industrial Officer of the United Workers Union (the Union) on 18 June 2019.

[6] The statutory declaration stated that the Agreement provided for rates of pay below the relevant modern award and that there were no offsetting benefits which compensate for the lesser wage rates. Annexure A of the declaration provided a comparison of rates in the Agreement with those of the Cleaning Services Award and the Security Services Industry Award (the Awards).

[7] On 24 July 2019, an Employer response opposing the application to terminate the enterprise agreement was filed which submitted that the rates contained in the Attachment to Mr Davis’ statutory declaration were incorrect.

[8] A conciliation conference was held on 26 July 2019 following which the parties agreed to hold further discussions. On 26 September 2019, my chambers contacted the parties requesting an update as to whether the application was still pressed, Mr Davis advised that the parties were still meeting. Chambers again contacted the parties on 27 November 2019 asking for a status update, upon which Mr Davis advised the following day that the parties would put forward consent submissions regarding the application.

[9] On 13 January 2020, my chambers contacted Mr Davis regarding the consent submissions following which Mr Davis requested a conference be held. On 23 January 2020, Mr Davis asked that the matter be listed for hearing.

[10] A further conference was held on 30 January 2020, following which directions were issued on 4 February 2020, for a hearing to take place on 6 April 2020, during the intervening period the parties would continue to discuss a possible consent position. On 6 March 2020, Mr Davis advised that a consent position had not been reached and requested that the directions be amended. The matter was further relisted for 7 May 2020.

[11] Despite the earlier advice on 6 March on 27 March 2020, Mr Davis advised that the parties had reached a consent position with the termination of the Agreement to have effect from 1 July 2020. Amended directions were issued for consent submissions, which were filed by both parties.

[12] On receipt of the written submissions the parties were asked if they required a hearing. As a hearing was not required the application has been dealt with on the papers. The employer’s submissions were supplemented by statements from the Employer’s Human Resources Manager and the Chief Financial Officer.

[13] Section 226 of the Act sets out when the Commission must terminate an expired enterprise agreement where an application to terminate is made.

“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.”

[14] The Agreement does not cover any employee organisation.

[15] Section 226 of the Act requires the Commission to terminate an expired enterprise agreement if it is not contrary to the public interest and it considers it is appropriate to do so taking into account all the circumstances including consideration of the views of the employees, the employer, and any employee organisation covered by the Agreement and the circumstances of the employees, the employer and employee organisation including the likely effect that the termination will have on each of them.

Employee Views

[16] While the Union submits that that they have not been able to seek the views of employees currently covered by the Agreement, the Employers submit that steps have been taken to seek the views of the employees and they have provided employees with an opportunity to provide their views. The Employer’s efforts to obtain the views of employees has been hampered as a result of the changes that were required in March 2020 following government directives to close non-essential businesses in response to COVID-19 which have had a significant impact on the Employer’s business.

[17] On 25 April 2020, the relevant employees were notified about the potential termination of the Agreement, and an email was sent to each affected employee.

[18] Consultation with employees was reduced as fewer employees were on-site due to closures at shopping centres in conjunction with limited ability to communicate face-to-face with employees due to social distancing in the workplace.

Effect of the termination

[19] Prior to the coronavirus pandemic there were approximately 700 security and cleaning employees covered by the Agreement, this has now been reduced to approximately 485. The effect of the termination of the Agreement on employees is that they would revert to being covered by the Awards with their rates of pay remaining the same, however these rates would be underpinned by the Awards and not reliant on the practice of the Employers to pay the Award rates. Although s.206 of the Act would appear to require the Employers to pay, as a minimum the base rates contained in the Awards.

Public Interest

[20] The Union submits that it is not contrary to the public interest to terminate the Agreement as the base rate of pay under the Agreement is significantly lower than the Award rates and employees covered by the Agreement will receive the Award rates effective on termination of the Agreement.

[21] The Employers accept that the base rates of pay in the underlying Awards have now exceeded the base rate of pay provided under the Agreement. Although the Employers submit that the base rates of pay being paid are equivalent to the minimum base rates of pay in the respective Awards. 3 It was further submitted that the Agreement has become obsolete as the Employers continue to match the minimum rates provided for in the underlying modern Awards.

[22] Following the expiry of the Agreement’s nominal expiry date there has not been any bargaining for a replacement agreement.

[23] As stated above, this application now proceeds with the consent of the applicant’s Union (although not covered by the Agreement) and the Employers party to the Agreement

[24] The objects of the Act include 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.⁴ In this application the termination of the Agreement would result in two modern Awards having application.

[25] I am satisfied that the views of the employees covered by the Agreement have been sought in accordance with s.226(b)(i) of the Act.

[26] I am otherwise satisfied that it is not contrary to the public interest to terminate the Agreement.

[27] Pursuant to s.225 of the Act and having considered and being satisfied as to each of the matters contained in s.226 of the Act, the Agreement will be terminated.

[28] Section 227 of the Act provides that if an enterprise agreement is terminated under s.226 of the Act, the termination operates from the day specified in the decision to terminate the Agreement. The Agreement termination will take effect as requested by the parties on 1 July 2020. An order to this effect will issue with this decision.

DEPUTY PRESIDENT

 1   AE406964

 2   [2014] FWC 1261

 3   This would appear to the Commission to be a requirement of s.206 of the Act

4 Section.3(b)

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<AE406964  PR719374>