Kirsty Gilhooley

[2017] FWCA 3103

[2017] FWCA 3103

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

Kirsty Gilhooley
(AG2016/6523)

BARNERY PTY LTD EMPLOYEE COLLECTIVE AGREEMENT 2007

Retail industry
DEPUTY PRESIDENT CLANCY	MELBOURNE, 7 JUNE 2017

Application for termination of the Barnery Pty Ltd Employee Collective Agreement 2007.

[1] On 19 October 2016, Ms Kirsty Gilhooley 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 Barnery Pty Ltd Employee Collective 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, as indicated below, that its nominal expiry date of five years from its lodgement date has passed.

[3] 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.”

[4] On 27 October 2016, I caused directions to be sent to Ms Gilhooley and Barnery Pty Ltd (the employer) which required the employer to provide a copy of the application, statutory declaration made by Ms Gilhooley and the directions to all employees. The directions provided that if any party opposed the application, advice was to be given to my chambers by close of business, 18 November 2016.

[5] On 17 November 2016, I was advised by Ms Gilhooley that she resigned from her employment on the previous day and this had been accepted, with the employer waiving the requirement that she serve out her notice period on 17 November 2016.

[6] On 23 November 2016, Mr Phil Barnes of the employer advised it had failed to provide the directions to employees. Subsequently, amended directions were sent which required the employer to provide the application, statutory declaration made by Ms Gilhooley and directions to all employees, and that any party opposing the application was to advise my chambers by close of business, 14 December 2016. There were no objections received.

[7] On 14 December 2016, Mr Barnes confirmed the directions were provided to all employees prior to 30 November 2016. Mr Barnes also provided detail of an interim hybrid arrangement he was proposing to implement until a new enterprise agreement is made.

[8] Following a telephone mention on 6 February 2017, directions were issued and the matter was set down for hearing on 4 April 2017. A subsequent adjournment request from Ms Gilhooley was granted and the matter was re-listed for 19 April 2017. The employer did not file any material ahead of the hearing in accordance with directions to do so.

[9] On 19 April 2017, the day of the hearing, I instead convened a conference with Ms Gilhooley and Mr Barnes. I did so because I was mindful that although Ms Gilhooley had outlined her views, there was an absence of material before me at that time that addressed either the views or circumstances of both the employer and the employees that would enable me to form the view that it was appropriate, in all the circumstances, to terminate the Agreement pursuant to s.226 of the Act. Following discussions with them, further directions were issued which required the employer to provide those directions to all employees by 4.00pm on 24 April 2017 and to file material on which it relied by 4.00pm on 10 May 2017. Any employee who wished to do so was also invited to file material by 4.00pm on 10 May 2017. Ms Gilhooley was directed to file any material in reply by 4.00pm on 24 May 2017 and the matter was re-listed for hearing on 1 June 2017.

[10] On 16 May 2017, Mr Barnes advised he did not contest the application, though requested the Agreement be terminated as of 30 June 2017 to allow the employer adequate time to comply with the Award’s requirements and set up payroll functions appropriately.

[11] On 18 May 2017, Ms Gilhooley sent email correspondence to the Commission and advised she was happy to agree with Mr Barnes’ request.

[12] Consequently, on 19 May 2017, I issued a Statement to be distributed to all employees by the employer, which outlined the consequences of terminating the Agreement on their employment. Employees were given a final opportunity to provide their views by 4.00pm on 30 May 2017, after which time I advised I would consider whether the hearing listed for 1 June 2017 was required. There was no material filed by any employee and on 31 May 2017, Ms Gilhooley and the employer confirmed they were content for the application to be dealt with on the papers.

Section 225 of the Act

[13] I am satisfied the requirements of s.225 of the Act are met. The Agreement commenced operating on 6 December 2007, the day it was lodged with the Workplace Authority. The nominal expiry date is expressed as five years from that date, therefore I am satisfied it so expired on 6 December 2012. Ms Gilhooley was an employee covered by the Agreement at the time of filing the application on 19 October 2016, and therefore it has been validly made, despite her no longer being an employee from 17 November 2016.

Section 226(a) of the Act – Public Interest

[14] As regards s.226(a) of the Act and the manner in which the public interest is to be assessed, the Full Bench in Aurizon Operations Limited; Aurizon Network Pty Ltd; Australian Eastern Railroad Pty Ltd 1(Aurizon)cited various passages from the Full Bench of the Australian Industrial Relations Commission’s decision in Re Kellogg Brown and Root, Bass Strait (Esso) Onshore/Offshore Facilities Certified Agreement 20002(Kellogg) which had concerned the corresponding, but not identical, provision from the Workplace Relations Act 1996. Relevantly, these passages included:

“The notion of public interest refers to matters that might affect the public as a whole such as the achievement or otherwise of the various objects of the Act, employment levels, inflation, and the maintenance of proper industrial standards. An example of something in the last category may be a case in which there was no applicable award and the termination of the agreement would lead to an absence of award coverage for the employees. While the content of the notion of public interest cannot be precisely defined, it is distinct in nature from the interests of the parties. And although the public interest and the interests of the parties may be simultaneously affected, that fact does not lessen the distinction between them…” 3

[15] It is also relevant to highlight the Full Bench in Aurizon concluded that it cannot be expected that the terms and conditions of an agreement will continue unaltered in perpetuity after it has passed its expiry date. This is because the Act contemplates the terms and conditions of an agreement may be altered by making a new agreement or by terminating the existing agreement. 4

[16] As was also recognised in Aurizon, s.226 of the Act is not limited to circumstances in which an agreement no longer applies to any employee. The Act clearly contemplates an agreement that still applies to employees being terminated and prescribes a safety net upon termination in such circumstances. The prescribed safety net is not a prior agreement and nor are undertakings mandatory. Rather, the prescribed safety net is the relevant modern award created during the Award Modernisation process and the National Employment Standards (NES). In this case, the relevant modern award is the General Retail Industry Award 2010 (the Award).

[17] In this application, the termination of the Agreement would not lead to an absence of award coverage for the employees. The Award provides for “proper industrial standards” within the meaning given to that term by Kellogg.

[18] In circumstances where there was no material before me suggesting otherwise, I am satisfied it is not contrary to the public interest to terminate the Agreement.

Section 226(b) of the Act – Appropriateness

[19] The approach to assessing appropriateness by taking into account all the circumstances, as enunciated by the Full Bench in Aurizon, is to have reference to the construction of s.226 and the contextual matters that bear upon that construction, as well as giving specific consideration to the matters identified in ss. 226(b)(i) and (ii):

“All of the circumstances also need to be taken into account in considering whether termination of the agreements is appropriate. In particular the views of employers and employees covered by the agreement, their circumstances, and the impact of termination need to be taken into account. The requirement in s. 226(b) to take into account all of the circumstances including those set out in s. 226(b)(i) and (ii) is a requirement to take the matters into account and to give them due weight in assessing whether it is appropriate to terminate an enterprise agreement. In assessing appropriateness by taking into account all of the circumstances, we approached the task by reference to the construction of s. 226 and the contextual matters that bear upon that construction dealt with earlier as well as giving specific consideration to the matters identified in s . 226(b)(i) and (ii).” 5 (Reference omitted)

[20] I intend to adopt this approach.

[21] The employer has advised it does not object to the application, only that it be terminated as of 30 June 2017 in order to allow it time to make arrangements to comply with the Award’s requirements and adjust its payroll system. No further submissions were made as to the effect of terminating the Agreement on the employer.

[22] Ms Gilhooley had standing to file the application on 19 October 2016 but she has not been an employee of Barnery Pty Ltd since 17 November 2016, when her resignation was accepted and the notice period waived. I have noted her view in considering whether it is appropriate to terminate the Agreement, but not in the context of it being a view of an employee and in circumstances where the termination of the Agreement would have no effect on her.

[23] I note there is no employee organisation covered by the Agreement and have taken this into account.

[24] As outlined above at paragraphs [4], [9] and [12], I am satisfied the employees were on notice numerous times as to the application before me and had reasonable periods of time to file material should they have wished to do so. On the last occasion, I outlined that the impact of the Agreement being terminated would be the General Retail Industry Award 2010 setting the terms and conditions of employment.Ultimately, no submissions from any employees were filed in the Commission. I can do no more than accord neutrality to their views in considering the application.

[25] As to the circumstances of the employees and the likely effect that termination of the Agreement would have on them, I note the Agreement covers employees in retail and baking, including junior employees, apprentices, shop managers and production managers. The Agreement contains rates of pay for casual, part time and full time employees.

[26] There is no material before me to indicate what rates are currently being paid to employees covered by the Agreement but I am satisfied I can reasonably conclude, based on a reading of its terms, that if the Award was to apply to the employees, they would not be left with conditions less favourable than those they currently enjoy. In any event, the Act contemplates the Award and NES applying as the safety net, in the event of termination of the Agreement.

Conclusion

[27] The Agreement does not cover any employee organisation, Ms Gilhooley is no longer an employee and the employees expressed no views in relation to the Application. However, having regard to the terms of the Agreement in their entirety as they apply to the employees and the fact that they will be covered by the Award if the Agreement is terminated, together with the views of Barnery Pty Ltd, I am satisfied it is appropriate in all the circumstances to terminate the Agreement. As outlined in paragraph [18] above, I am also satisfied it is not contrary to the public interest to terminate the Agreement.

[28] Further to the above findings, the Act requires that I terminate the Agreement. 6 In accordance with s.227 of the Act, the termination will take effect from 1 July 2017.

DEPUTY PRESIDENT

 1   [2015] FWCFB 540.

 2 (2005) 139 IR 34.

 3   Ibid at 40.

 4   [2015] FWCFB 540 at [176].

 5 Ibid at [167].

 6   Fair Work Act 2009 (Cth), s.226.

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