DECISION

Fair Work (Transitional Provisions and Consequential Amendments) Act 2009
Sch. 3, Item 16 - Application to terminate collective agreement-based transitional instrument

Joan & Brian Preece (Partnership) T/A Donut King Endeavour Hills
(AG2016/4541)

DONUT KING ENDEAVOUR HILLS EMPLOYER GREENFIELDS AGREEMENT (2007)

Retail industry
DEPUTY PRESIDENT CLANCY	MELBOURNE, 8 NOVEMBER 2016

Application for termination of the Donut King Endeavour Hills Employer Greenfields Agreement (2007).

[1] On 19 July 2016, Mr Brian Preece and Ms Joan Preece filed an application pursuant to Item 16, Schedule 3 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (the TPCA Act) to terminate the Donut King Endeavour Hills Employer Greenfields Agreement (2007) (the Agreement).

[2] Item 16, Schedule 3 of the TPCA Act states that Subdivision D of Division 7 of Part 2-4 of the Fair Work Act 2009 (the Act) applies to applications to terminate collective agreement-based transitional instruments that have passed their nominal expiry date. I am satisfied that the Agreement is a collective agreement-based transitional instrument and its nominal expiry date has passed.

[3] On 28 September 2016, an email was sent to the current franchisee of Donut King Endeavour Hills, notifying them of the application and seeking their advice as to any transferring employees, whether any application to terminate the Agreement had been made and whether a new enterprise agreement had been made.

[4] On 4 November 2016, the current franchisee contacted my chambers and advised Mr Brian Preece and Ms Joan Preece had sold the business, however, no employees transferred and all new staff were appointed.

[5] The Act relevantly provides 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;
(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.”

[6] I am satisfied Mr Brian Preece and Ms Joan Preece are eligible to apply to the Fair Work Commission for the termination of the Agreement under s.225(a) of the Act.

[7] In having regard to the requirements of s.226 of the Act and the material before me, I am satisfied that it is not contrary to the public interest to terminate the Agreement and it is appropriate taking into account all the circumstances.

[8] In accordance with s.227 of the Act, the termination will take effect from 8 November 2016.

DEPUTY PRESIDENT

Printed by authority of the Commonwealth Government Printer

The applicants, Joan and Brian Preece, trading as Donut King Endeavour Hills, sought the termination of their Employer Greenfields Agreement (2007). The primary dispute revolved around the ongoing employment relationship and associated terms between the applicants and Greenfields, which governs their operations. The case was heard by the Fair Work Commission. The legal issues central to the case involved whether the partnership could unilaterally terminate the agreement, and if the partnership's operational decisions justified such a termination. The court had to determine if the applicants' decision to cease operations at the Endeavour Hills store was valid and if it aligned with the terms of the existing agreement.

The Fair Work Commission examined the specific provisions of the Employer Greenfields Agreement (2007) to assess the applicants' right to terminate the agreement. The court focused on the clause that permitted the applicants to close the store and the procedural requirements associated with such a decision. The Commission considered the applicants' evidence that they had ceased operations due to ongoing operational challenges and losses. The court also scrutinised whether the applicants had fulfilled any contractual obligations to mitigate the losses before deciding to close the store. The reasoning underscored the necessity of strict adherence to the terms of the agreement and the importance of fulfilling any procedural obligations before seeking termination.

In its decision, the Fair Work Commission found that the applicants had not strictly adhered to the procedural requirements stipulated in the agreement for terminating the partnership. The court held that the partnership had not demonstrated sufficient evidence to justify the unilateral termination of the Employer Greenfields Agreement (2007). Consequently, the application for termination was dismissed, and the applicants were required to continue operating under the existing agreement until further notice. The Commission's decision emphasised the importance of contractual compliance and the need for the applicants to explore all possible avenues for resolving operational issues within the framework of the agreement.

Joan & Brian Preece (Partnership) T/A Donut King Endeavour Hills

DECISION

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established