LP&E Construction Pty Ltd T/A O’Brien Electrical and Plumbing Lismore South
[2023] FWCA 1395
•16 MAY 2023
| [2023] FWCA 1395 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.225 - Application for termination of an enterprise agreement after its nominal expiry date
LP&E Construction Pty Ltd T/A O’Brien Electrical and Plumbing Lismore South
(AG2023/1031)
LP&E CONSTRUCTION PTY LTD ENTERPRISE AGREEMENT 2018-2022
| Electrical contracting industry | |
| DEPUTY PRESIDENT CROSS | SYDNEY, 16 MAY 2023 |
Application for termination of the LP&E Construction Pty Ltd Enterprise Agreement 2018-2022
An application has been made pursuant to s.225 of the Fair Work Act 2009 (Cth) (the Act) by LP&E Construction Pty Ltd T/A O’Brien Electrical and Plumbing Lismore South (the Applicant) for approval to terminate the LP&E Construction Pty Ltd Enterprise Agreement 2018-2022 (the Agreement). The nominal expiry date of the Agreement is 9 October 2022.
The Application was accompanied by a Form F24B and F24C provided by Ms Angela Grayndler, Business Operations Manager for LP&E Construction, dated 13 April 2023.
On 18 April 2023, I issued directions requiring LP&E Construction to provide all
employees covered by the Agreement a copy of the directions and the Application. Employees covered by the Agreement were invited to file any material in response to the Application by 4:00PM on 21 April 2023:
1.LP&E Construction Pty Ltd (the Applicant) is to notify the employees covered by the LP&E Construction Pty Ltd Enterprise Agreement 2018 – 2022 (Agreement) (the Agreement) via email, of Direction 2 below, by 5:00pm 21 April 2023.
2.Any employee covered by the Agreement, who wishes to make any submission in relation to the Applicant’s application to terminate the Agreement pursuant to s.225 of the Fair Work Act 2009 (Cth) (the Application) is to email [email protected] with their submissions, by 4:00pm 28 April 2023.
3.Contemporaneously with sending the above email to employees, the Applicant must attach, or otherwise evidence communication of, the documents relevant to the Application, including but not limited to the Application documents, and the Agreement.
On 11 May 2023, I issued amended directions, directing the Applicant to forward the correspondence to all employees covered by the Agreement:
I refer to the above matter which is listed for Hearing before Deputy President Cross at 10:00AM on 16 May 2023.
Applicants’ non-compliance
The Directions were issued by the Commission in writing on 18 April 2023 at 9:47AM:
Any employee covered by the Agreement, who wishes to make any submission in relation to the Applicant’s application to terminate the Agreement pursuant to s.225 of the Fair Work Act 2009 (Cth) (the Application) is to email [email protected] with their submissions, by 4:00pm 28 April 2023.
Contemporaneously with sending the above email to employees, the Applicant must attach, or otherwise evidence communication of, the documents relevant to the Application, including but not limited to the Application documents, and the Agreement.
Further Directions were issued on 9 May 2023 at 10:38AM, extending the time to file relevant materials.
The Deputy President notes that still no materials have been filed by Applicant in accordance with paragraphs 2 & 3 of the Directions, as well as the updated directions issued on 9 May 2023. There has been no request from the Applicant for an extension to file their materials.
What do you need to do now?
The Deputy President directs that:
By no later than 4:00pm (Sydney time) on 12 May 2023, the Applicant advise the Commission:
i. whether they wish to proceed with this matter; and
ii. if so, the reason(s) for your non-compliance with the Commission’s Directions with evidence (if any) in support of those reason(s).
Important notes
If you would like to discontinue the application, then you can reply to confirm this, and the file will be closed with no further action required.
If the Commission does not hear otherwise by 1:00pm (Sydney time) on 15 May 2023, the matter will be determined based on the materials currently before the Commission.
If you have any questions, please contact me on the details below.
On 12 May 2023, Ms Grayndler emailed my chambers advising that LP&E Construction had complied with my amended directions by way of forwarding all correspondence and communicating to staff to address any issues they had with terminating the agreement to my Chambers.
No employees filed any material in response to the Application by 1:00PM on 15 May 2023.
Legislation
Sections 225 and 226 of the Act provide:
“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.”
Consideration
Section 225
I am satisfied that LP&E Construction, as the employer covered by the Agreement is eligible to apply to the Commission for the termination of the Agreement under s.225(a) of the Act. I am also satisfied that the Agreement has passed its nominal expiry date of 9 October 2022.
Section 226(a) – Public Interest
Having regard to 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 (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 2000 (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…”.
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.
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 awards are the Plumbers and Fire Sprinklers Award 2010 (PFS Award) and the Electrical, Electronic and Communications Contracting Award 2010 (EECC Award).
In this Application, the termination of the Agreement would not lead to an absence of award coverage for the employees. The Awards provide for “National Employment Standards”.
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) – Appropriateness
The approach to assessing appropriateness by considering 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).” (Reference omitted)
I intend to adopt this approach.
As LP&E Construction Pty Ltd filed the Application to terminate the Agreement, it clearly supports the Agreement being terminated. Ms Grayndler did not declare the effect of terminating the Agreement on LP&E Construction Pty Ltd, other than that it will create greater individual flexibility and less ambiguity for the business and its employees, as the Business has now downgraded and employs less staff. There were no objections or materials filed by any employees.
There is no employee organisation covered by the Agreement.
I am satisfied the employees were on notice as to the Application before me and had a reasonable period of time to file material should they have wished to do so. While no submissions from any employees were filed to the Commission, I am prepared to conclude that they are not opposed to such a level that has motivated them to register their opposition, through the filing of material in response to my directions. They appear indifferent.
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 full-time and part-time employees in the positions of Registered Plumber (3+ years), Registered Plumber (under 3 years), Registered Electricians, Trade Assist (Plumber), Trade Assist (Electrician) and Plant and Machine Operators making up 6 levels of classifications.
It would appear that the pay rates under the Agreement currently incorporate the rates established in the relevant Awards. Under the PFS Award, the following allowances are payable: industry allowance, industry specific redundancy scheme, Plumbing Trade allowance, special fixed allowance, lost time loading and the tool allowance. Further, in the EEC Award, industry allowance, electrician licence allowance, special allowance, travel time allowance and the tool allowance.
The Act contemplates the relevant Awards and NES applying as the safety net, in the event of termination of the Agreement. Further, my assessment is that the Awards provide a more comprehensive range of entitlements than the Agreement.
Conclusion
Having regard to the terms of the Agreement in their entirety as they apply to the employees, the circumstances of the employees and the likely effect on them if the Agreement is terminated, together with the views and circumstances of LP&E Construction Pty Ltd, I consider it is appropriate in all the circumstances to terminate the Agreement. As outlined above, I am also satisfied it is not contrary to the public interest to terminate the Agreement.
Further to the above findings, the Act requires that I terminate the Agreement. In accordance with s.227 of the Act, the termination will take effect from 16 May 2023.
DEPUTY PRESIDENT
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