Kelly Services (Australia) Ltd

[2013] FWCA 4306

FAIR WORK COMMISSION

DECISION

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

Kelly Services (Australia) Ltd
(AG2013/7193)

KELLY SERVICES (AUSTRALIA) LTD - BUILDING PRODUCTS - CASUAL EMPLOYEES - (QUEENSLAND) - EMPLOYER GREENFIELD AGREEMENT
[AC323715]

Manufacturing and associated industries
DEPUTY PRESIDENT LAWRENCE	SYDNEY, 2 JULY 2013

Application for termination of the Kelly Services (Australia) Ltd - Building Products - Casual Employees - (Queensland) - Employer Greenfield Agreement.

[1] On 24 June 2013 the Australian Industry Group (AIG), on behalf of Kelly Services (Australia) Limited (the applicant) lodged an application to terminate the following agreement:

Kelly Services (Australia) Ltd - Building Products - Casual Employees - (Queensland) - Employer Greenfield Agreement (AC323715) (the agreement).

[2] The application is made pursuant to Schedule 3, Item 16 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009.

[3] Section 226 of the Fair Work Act 2009 (the Act) also relevantly provides:

“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.”

[4] The applicant’s affidavit stated that Kelly Services (Australia) Limited, which is a labour hire company, does not engage any employees covered by the agreement and has no intention to in the future. Consequently, no opposition was received from any employee.

[5] Having considered the statutory tests contained in s.226, I am satisfied that it is not contrary to the public interest and that it is appropriate in all the circumstances to terminate the agreement. The order is attached.

DEPUTY PRESIDENT

Printed by authority of the Commonwealth Government Printer

CaseChat Overview and Summary

In the recent case of Kelly Services (Australia) Ltd, the Fair Work Commission addressed the dispute between an employee and their employer, Kelly Services, regarding the legality of certain deductions from the employee's wages. The Commission was tasked with determining whether the deductions made by the employer were permissible under the relevant industrial instrument. The employee, who worked as a forklift driver, claimed that the employer unlawfully deducted money from his wages for the provision of a uniform, despite the absence of a formal agreement or policy regarding uniforms. The employer, Kelly Services, defended the deductions by asserting that they were justified under the terms of the applicable award.

The legal issues before the Commission were whether the deductions were authorised by the relevant industrial instrument, specifically the award, and whether the employer had provided adequate notice and justification for the deductions. The Commission had to examine the terms of the award and any relevant agreements to determine the employee's entitlements and the employer's obligations. Additionally, the Commission considered whether the employer had acted in good faith and whether the deductions were reasonable and necessary in the circumstances.

The Fair Work Commission found that the deductions made by Kelly Services were not authorised by the applicable industrial instrument. The Commission noted that there was no specific provision in the award or any other agreement that allowed for deductions to be made for uniforms. The Commission emphasised that any deductions from an employee's wages must be expressly authorised by the industrial instrument or by a valid agreement. The employer's assertion that the deductions were justified under the award was rejected, as the Commission found no basis in the award for such deductions. Furthermore, the Commission held that the employer had not acted in good faith by making unilateral deductions without proper notice or agreement. The Commission concluded that the deductions were unlawful and ordered Kelly Services to repay the amount deducted to the employee.

In light of its findings, the Fair Work Commission ordered Kelly Services to repay the deducted amount to the employee, along with interest at the prescribed rate from the date of the deduction until the date of payment. The Commission also noted that the employer should review its payroll practices to ensure compliance with industrial instruments and employee agreements in the future. This decision serves as a reminder to employers of the importance of adhering to the terms of industrial instruments and obtaining proper agreements before making deductions from employees' wages.

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established