Kuranda Food Farmacy Pty Ltd t/a Kuranda Food Farmacy
[2022] FWCA 1671
•20 MAY 2022
| [2022] FWCA 1671 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.225—Enterprise agreement
Kuranda Food Farmacy Pty Ltd t/a Kuranda Food Farmacy
(AG2022/1385)
Kuranda Foodworks (The Retailers Association) Employee Collective Agreement 2009
| Food, beverages and tobacco manufacturing industry | |
| COMMISSIONER HUNT | BRISBANE, 20 MAY 2022 |
Application for termination of the Kuranda Foodworks (The Retailers Association) Employee Collective Agreement 2009
Introduction
On 9 May 2022, Kuranda Food Farmacy Pty Ltd t/a Kuranda Food Farmacy (the Employer) made an application pursuant to s.225 of the Fair Work Act 2009 (the Act) to terminate the Kuranda Foodworks (The Retailers Association) Employee Collective Agreement 2009 (the Agreement).
The Agreement covers the Employer and all employees of the Employer for whom classifications and classes of work are contained in the Agreement. The manner by which the Employer has come to be covered by the Agreement is discussed in detail below.
The application was made using a Form F24B - application for termination of an enterprise agreement after the nominal expiry date (F24B) and was accompanied by a Form F24C – declaration in in relation to termination of an enterprise agreement after the nominal expiry date (F24C) of Mr Stephen Faithfull, Store Manager of the Employer. The application has been made using the correct form and accompanying declaration, as required by Rule 26 of the Fair Work Commission Rules 2013.
The Employer stated at item 1.3 of the F24B that the Agreement passed its nominal expiry date on 16 September 2014. The nominal expiry date of the Agreement has passed. The Employer acknowledged that in the event the Agreement is approved for termination, it will be required to pay increased payments to employees pursuant to the General Retail Industry Award 2020.
Included with the F24B and F24C of Mr Faithfull, the Employer also lodged further F24C declarations completed by five employees covered by the Agreement, indicating that they supported termination of the Agreement. It is evident the Employer has informed employees that if the Agreement is approved for termination, employees will become entitled to higher conditions within the General Retail Industry Award 2020.
On 12 May 2022, I sent correspondence to the Employer relevantly stating:
“The Commissioner has reviewed the application materials and notes the provision of a Form 24C by employees covered by the Agreement. It is not necessary for each of the employees to have completed this form. It is clear, however, that each of the employees who completed a form support termination of the Agreement. The Applicant is to confirm exactly how many employees are covered by the Agreement.
The Commissioner directs the Applicant to detail how the Agreement applies to the Applicant, Kuranda Food Farmacy. The Agreement covers RC Perry Pty Ltd ATF Raycol Family Trust t/a Kuranda Foodworks. The Applicant should complete a witness statement of a responsible officer of the Applicant explaining the relationship, including correct entity names and whether there has been any transfer of business arrangements over the years. Please provide this information by no later than 4:00pm (AEST) on Monday, 16 May 2022.”
On 16 May 2022, the Employer provided a statement from Mr Robert McCosker, Director of the Employer. Mr McCosker stated the following:
“RC Perry Pty Ltd went into liquidation in June 2018 and the business was operated by the Liquidators (Grant Thornton) until a purchaser could be found for the business.
McCosker Retail Trust T/A Kuranda Foodworks purchased the business from the Liquidators and commenced operating on 22nd November 2018. Part of the purchase arrangement was that the existing terms and conditions and accrued entitlements of the employees would continue with the new business owner.
McCosker Retail Trust T/A Kuranda Foodworks completed a transfer of business to Kuranda Food Farmacy Pty Ltd in February 2020. I am the responsible officer for both entities involved in the transfer.
There are currently 5 individuals that are employed under the Collective Agreement, all of whom have confirmed their support to terminate this Agreement.”
I accept on the material before the Commission that the Employer is a ‘new employer’ within the meaning of s.311 the Act. There is nothing before me in the application to indicate that the Employer is not covered by the Agreement. There has been no order pursuant to s.318 of the Act made by the Commission that the Agreement will not cover the Employer.
I am therefore satisfied that the Employer is an employer covered by the Agreement, for the purpose of Subdivision C of Division 7 of Part 2-4 of the Act and has standing to make this application pursuant to s.225(a) of the Act.
Termination of an enterprise agreement after its nominal expiry date
Subdivision D of Division 7 of Part 2-4 of the Act provides for the termination of an enterprise agreement after its nominal expiry date. This subdivision consists of ss.225, 226 and 227, the terms of which are 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.”
Not contrary to the public interest (s.226(a))
I will first consider whether I am satisfied that termination of the Agreement is “not contrary to the public interest”.
In his decision to approve the termination of the McDonald’s Australia Enterprise Agreement 2013, Deputy President Colman observed that:[1]
“Section 226(a) does not require the Commission to be satisfied that the termination of an enterprise agreement is in the public interest. It sets a lower requirement. The Commission must be satisfied that it is not contrary to the public interest to terminate the agreement.” (emphasis is in the original)
The Agreement was made approximately 13 years ago and has less beneficial terms and conditions to employees than those contained within the modern award that would otherwise apply to employees covered by the Agreement. I am satisfied it is not contrary to the public interest to terminate the Agreement.
Appropriate (s.226(b))
I must consider whether it is “appropriate” to terminate the Agreement, taking into account all the circumstances, including the views of the employees, each employer and each employee organisation covered by the Agreement, and the circumstances of those employees, employers and organisations, including the likely effect that the termination will have on each of them.
The Employer’s views are, naturally and by virtue of having made this application, that it supports termination of the Agreement. I commend the Employer for making the application, even in the face of increased costs to its business.
As earlier noted, all five employees completed F24C declarations indicating that they supported termination of the Agreement.
Taking into account the views of the persons (including the Employer) referred to in s.226(b) that have been presented to the Commission, and the circumstances of those persons, as well as the effect that termination will have on each of them, I consider that it is appropriate to terminate the Agreement.
The operative date of the termination
The remaining issue for determination in this application is: when should the Agreement be terminated?
Section 227 provides that, if an enterprise agreement is terminated under s.226, the termination ‘operates from the day specified in the decision to terminate the agreement.’
The employees who provided views did not provide any views as to the operative date of termination of the Agreement.
I consider it suitable for termination of the Agreement to take effect from the day of this decision.
Conclusion
For the reasons given above, in consideration of s.226(a), I am satisfied that the termination of the Agreement is not contrary to the public interest. There is nothing before me which raises public interest considerations which might militate against the termination of the Agreement.
For the reasons given above, in consideration of the material before me relevant to ss.226(b)(i) and (ii), I consider that it is appropriate to terminate the Agreement.
In accordance with s.226, I must terminate the Agreement. The application to terminate the Agreement is approved.
Having regard to s.227 of the Act, the termination will operate from the day of this decision, being 20 May 2022.
COMMISSIONER
[1] [2019] FWCA 8563 at [16].
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