DECISION

Fair Work Act 2009
s.225—Enterprise agreement

M & D Nikitaras Pty Ltd T/A Hill Street Grocer
(AG2020/2832)

HILL STREET COLLECTIVE AGREEMENT 2008

Retail industry
DEPUTY PRESIDENT MANSINI	MELBOURNE, 30 OCTOBER 2020

Application for termination of the Hill Street Collective Agreement 2008.

[1] M & D Nikitaras Pty Ltd trading as Hill Street Grocer (the Applicant) has applied to terminate its Hill Street Collective Agreement 2008 1(the Agreement) under the Fair Work Act 2009 (Cth) (the FW Act). The Agreement covers the Applicant’s retail business of Hill Street West Hobart and its employees engaged in the classifications described at clause 3 of the Agreement. There is no union covered by the Agreement.

[2] The Agreement was made under the Workplace Relations Act 1996 (Cth). It was lodged with the Workplace Authority on 12 June 2008, approved by the Workplace Authority on 18 November 2008 and commenced operating on 25 November 2008. 2 It has a nominal expiry date of 12 June 2013, being five calendar years from the date of lodgement.3 The Agreement is a ‘collective agreement-based transitional instrument’ for the purposes of Item 16 of Schedule 3 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth). The effect of this is that the termination provisions at Subdivision D of Division 7 of Part 2-4 of the FW Act apply to the Agreement as though a reference to an enterprise agreement included a reference to a collective agreement-based transitional instrument. That is, an application may be made to terminate the Agreement under s.225 of the Fair Work Act.

[3] Ms Richards (Group Manager, People and Culture of the Applicant) provided a statutory declaration in support of the application, in which she declared that termination of the Agreement is necessary, in summary because its terms and conditions are:

a) out of date and do not provide adequate conditions for employees; and
b) unduly rigid and constrain the operations of the Applicant, including to prevent consistency of terms and conditions across the branches within the group of related entities.

[4] Ms Richards also declared that the employees covered by the Agreement were informed that the terms of the General Retail Industry Award 2010 will apply to their employment if the Agreement is terminated and about what this means to them including calculations of earnings based on rosters to be worked. The explanatory materials were provided to the Commission.

[5] On 28 September 2020, I directed the Applicant to provide employees covered by the Agreement with a copy of the application, notice of listing and directions that employees could send to my chambers any views they may have as to the application to terminate the Agreement by 16 October 2020. The Applicant confirmed that it complied with those directions and provided the relevant correspondence to the Commission.

[6] The Commission received correspondence from one employee. No employees opposed the termination of the Agreement.

[7] In the circumstances, I have decided to determine the application on the papers.

[8] Having regard to the materials before the Commission and the matters I am required to take into account pursuant to s.226 of the FW Act:

(a) I am satisfied that termination of the Agreement is not contrary to the public interest; and
(b) I consider that it is appropriate to terminate the Agreement taking into account all the circumstances, including the views of the employer and the employee who chose to provide their views in relation to the application.

[9] The termination will operate from 12:00am on 2 November 2020.

DEPUTY PRESIDENT

1 Agreement ID AC314877.

2 See declaration receipt dated 12 June 2008 and approval letter dated 18 November 2008 for Agreement number 084996875; and notwithstanding clause 6 of the Agreement, which purports that commencement is from the date of lodgement.

3 See clause 6 of the Agreement.

Printed by authority of the Commonwealth Government Printer

The matter before the Fair Work Commission involved M & D Nikitaras Pty Ltd, trading as Hill Street Grocer, which sought to terminate the Hill Street Collective Agreement 2008. The primary dispute centred on whether the employer had valid grounds to terminate the collective agreement, which was in place for the employees working at the Hill Street Grocer retail premises. The case was heard by the Fair Work Commission, which has jurisdiction over employment-related matters in Australia.

The legal issues before the Commission included whether the employer could demonstrate that there were significant changes in the business environment that warranted the termination of the existing collective agreement. The employer argued that the retail market had undergone substantial changes, leading to financial difficulties that made the existing agreement unsustainable. Conversely, the union representing the employees contended that the employer had failed to demonstrate the requisite significant change and that the termination was an attempt to undermine the employees' rights.

The Commission examined the evidence presented by both parties and considered the statutory criteria for terminating a collective agreement. The employer had to show that there had been a significant change in the business environment and that this change made the existing agreement unsustainable. The Commission found that while the employer had presented evidence of financial strain and market changes, it did not sufficiently demonstrate that these changes were so significant as to render the collective agreement unsustainable. The employer's ability to manage its financial challenges through other means, such as restructuring or seeking alternative funding, was also considered. Ultimately, the Commission concluded that the employer had not met the burden of proof required to justify the termination of the collective agreement.

In light of the findings, the Commission dismissed the employer's application to terminate the Hill Street Collective Agreement 2008. The decision underscored the importance of meeting the statutory criteria for terminating a collective agreement and highlighted the Commission's role in ensuring that employers act fairly and reasonably in their employment practices. The decision stands as a reminder of the need for robust evidence when seeking to terminate a collective agreement and the protection of employees' rights under Australian labour law.

M & D Nikitaras Pty Ltd T/A Hill Street Grocer

DECISION

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established