Lake Karrinyup Country Club Inc

[2021] FWCA 2381

[2021] FWCA 2381

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

Lake Karrinyup Country Club Inc
(AG2021/4783)

LAKE KARRINYUP COUNTRY CLUB (INC) EMPLOYEE COLLECTIVE AGREEMENT

Hospitality industry
DEPUTY PRESIDENT BEAUMONT	PERTH, 26 MAY 2021

Application for termination of the Lake Karrinyup Country Club (Inc) Employee Collective Agreement.

[1] On 22 April 2021, Lake Karrinyup Country Club Inc (Applicant) applied pursuant to Schedule 3, Item 16 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth) (Transitional Act) to terminate the Lake Karrinyup Country Club (Inc) Employee Collective Agreement 2008 (Agreement).

[2] Ms Howe, the Employee Relations Manager of the Applicant, explained that the Applicant had commenced bargaining for a new enterprise agreement on 28 November 2020. During bargaining, it became apparent that one of the challenges was landing consistent terms of employment for employees across various departments. Those departments included administration, retail, golfing operations, horticulture, and food and beverage. Some departments worked a seven day rotating roster, whereas others worked only five. Some departments operated both on days and nights, and others on days only. The outcome of bargaining was the decision to make an application to the Commission to terminate the Agreement and revert to the relevant modern award.

[3] Because the Agreement is a collective agreement-based transitional instrument, Item 16 of Schedule 3 of the Transitional Act applies. The effect of Item 16 is that the termination of agreement provisions found in Subdivision D of Division 7 of the Fair Work Act 2009 (Cth) (the Act) applies to the Agreement as if a reference to an enterprise agreement included a reference to a collective agreement-based transitional instrument. The relevant termination provisions set out:

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.

[4] For reasons that follow, I am satisfied that the termination of the Agreement is not contrary to the public interest, and in the circumstances of this case, it is appropriate to terminate the Agreement.

Background

[5] The Agreement came into operation in June 2009. Its nominal expiry date is 1 June 2014.

[6] Ms Howe gave evidence that the termination of the Agreement would result in more flexibility in the rostering of employees, with employees being able to work weekends and public holidays without restriction. She elaborated, noting that rostering in accordance with the Agreement was onerous due to the requirement to ensure that the ‘loaded’ rates paid during the week were sufficient to offset weekend rates of pay. Ms Howe said that the ‘loading’ is currently being paid for all hours of work, which satisfies neither Applicant nor the employees’ requirements. Some employees, she said, preferred to work on weekends and under the Agreement, work on weekends and public holidays was restricted.

[7] Ms Howe further explained that having made the decision to apply for the termination of the Agreement, a comprehensive briefing note was distributed on 28 February 2021 to relevant employees about the outcome of the bargaining meetings held between December 2020 to February 2021. The briefing note provided:

Bargaining for the proposed EA continued during December to February. This resulted in Course employees requesting to be excluded from the ‘scope’ of the new EA and revert to the terms of the Award. This request was subsequently approved by the Course Superintendent and the General Manager.

With the consideration to this outcome and additional research, it has been decided by Management and the General Committee that they would seek the approval of employees to terminate the current Employee Collective Agreement (ECA)….

Employees who are employed at the time of voting to terminate the ECA, will retain their current entitlements, inclusive of any ‘above award’ payments currently being received.

[8] The briefing note also covered that meetings would be held with employees over a period of three days in March 2021.

[9] Ms Howe said that during the meetings in March, employees were given a whiteboard presentation of rate comparisons between the Agreement and the Registered and Licensed Clubs Award 2010 (the Award) regarding ordinary hours and penalty rates.

[10] A voting declaration was distributed to each employee by hand and email on 28 February 2021.

[11] Voting to terminate the Agreement commenced on 8 March 2021 and concluded on 12 March 2021. The voting was conducted by forwarding via email the voting declaration to Ms Howe or placing the voting declaration in the ballot box at the Applicant’s premises. Ms Howe reports that out of 78 employees, 43 voted to terminate the Agreement, with 35 employees opting not to vote.

[12] An email sent to the employees on 31 March 2021 attached a notice titled ‘Important Notice: re weekend and public holiday penalty rates’. It stated:

Pending approval of the termination of the Lack Karrinyup Country Club Employee Collective Agreement (ECA), the General Manager (Damon Lonnie) has approved payment of weekend and public holiday penalties to commence from the week of Monday 29 March 2021. The purpose is to provide our employees with the benefit of penalties applicable under the Award over the Easter period and up until the Award has effect.

Consideration

[13] I am satisfied the requirements of s 225 of the Act are met. The Agreement has passed its nominal expiry date, and pursuant to s 225(a), Ms Howe declared the Applicant is the employer covered by the Agreement. As such, the Applicant has standing to bring the Application under s 225(a) of the Act.

Section 226(a) of the Act – Not contrary to the public interest

[14] Attention first turns to whether I am satisfied that termination of the Agreement is ‘not contrary to the public interest’.

[15] The ‘public interest’ refers to matters that might affect the public as a whole, such as the achievement or otherwise of the object of the Act, employment levels, inflation, and the maintenance of proper industrial standards. 1 It is distinct in nature from the interests of the parties, though those interests may be simultaneously affected.2

[16] The object of the Act set out in s 3 is to provide a balanced framework for cooperative and productive workplace relations that promotes national economic prosperity and social inclusion for all Australians. The object is to be achieved, among other things, by ensuring a guaranteed safety net of fair, relevant and enforceable minimum terms and conditions, and by achieving productivity and fairness through an emphasis on enterprise-level collective bargaining. Section 578 requires that in performing functions or exercising powers, the Commission must take this object into account.

[17] It is also relevant to highlight that the Full Bench in Aurizon Operations Limited; Aurizon Network Pty Ltd; Australian Eastern Railroad Pty Ltd (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. 3 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.

[18] If the Agreement was terminated and the Applicant engaged new employees, those future employees would be covered by theAward, as will the existing ones. On this basis, the termination of the Agreement would not adversely affect the public interest in so far as the maintenance of proper industrial standards was concerned.

[19] The Applicant contended that the foreseeable consequences of the termination are: (a) it being better positioned to roster employees on weekends and public holidays whilst ensuring appropriate rates of pay and accommodating employees’ preferences; (b) decreasing the administrative burden arises from dealing with the loaded rates.

[20] Based on the material contained in the declaration of the Applicant filed with the application and additional materials filed, I am satisfied that the termination of the Agreement is not contrary to the public interest.

Section 226(b) of the Act – Appropriateness

[21] The approach to assessing ‘appropriateness’ in the context of ss 226(b)(i) and (ii) of the Act was detailed by the Full Bench in Aurizon. It said:

[A]ll 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). 4

[22] I intend to adopt this approach.

[23] The Applicant has undertaken a comprehensive consultative process with its employee bargaining representatives and employees regarding the proposed termination and the effect that it would have on them. Those same employees have demonstrated support for the termination, albeit some opted not to vote. During the consultative process, the Applicant has provided the employees with an undertaking ‘that all employees employed at the time of conversion to the Award will retain the Agreement loaded hourly rate of pay for work performed on Monday to Friday’.

[24] Taking into account all of the circumstances including those in ss 226(b)(i) and (ii), I consider that it is appropriate to terminate the Agreement.

Conclusion

[25] An Order 5 will be issued terminating the Agreement with effect on 25 May 2021.

DEPUTY PRESIDENT

 1   Re Aurizon Operations Limited[2015] FWCFB 540 (‘Aurizon’) [129].

 2   Re Kellogg Brown and Root Bass Strait (Esso) Onshore/Offshore Facilities Certified Agreement 2004 PR955357 [23].

 3   Aurizon [176].

 4 Ibid [167].

 5   PR730163.

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