Maryborough Christian Education Foundation T/A Riverside Christian College
[2020] FWC 3392
•13 JULY 2020
| [2020] FWC 3392 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.222 - Application for approval of a termination of an enterprise agreement
Maryborough Christian Education Foundation T/A Riverside Christian College
(AG2019/3099)
Educational services | |
COMMISSIONER BOOTH | BRISBANE, 13 JULY 2020 |
Application for termination of the Riverside Christian College Collective Enterprise Agreement 2018 – termination objected to by the Independent Education Union of Australia – whether termination of the Agreement is appropriate – application dismissed.
[1] On 21 August 2019 Maryborough Christian Education Foundation T/A Riverside Christian College (the College/Employer) made an application under s.222 of the Fair Work Act 2009 (the Act) seeking that the Fair Work Commission (the Commission) terminate the Riverside Christian College Collective Enterprise Agreement 2018 (the Agreement). The Agreement was approved by me on 4 July 2019 with a nominal expiry date of 31 December 2020.
[2] The application is opposed by the Independent Education Union of Australia – Queensland and Northern Territory Branch (IEUA/the Union).
History of the approval application and application to terminate
[3] An application under s.185 of the Act, for approval of the Agreement was filed in the Commission by the IEUA on 13 May 2019. The IEUA also filed a form F18 statutory declaration in relation to an application for approval of an enterprise agreement, advising that it supported approval of the Agreement and seeking to be covered by the Agreement pursuant to s.183 of the Act.
[4] Correspondence was sent by my Chambers to the IEUA and the College on 30 May 2019, raising concerns in relation to the Agreement.
[5] Undertakings addressing the concerns raised were signed by David Jeffs, Principal of the College, and were filed in the Commission by the IEUA on 6 June 2019. The undertakings were accepted, and the matter was listed on 25 June 2019, for an approval hearing to be conducted on 27 June 2019.
[6] At 12:14pm on 25 June 2019, Mr Jeffs wrote to my Chambers, copying in the IEUA, objecting to approval of the Agreement. Mr Jeffs submitted that due to further budget analysis, the College was of the view that the Agreement would not be viable for the longevity of the College. He noted, however, that a meeting was scheduled to be held with representatives of the IEUA on 27 June 2019, and that the College intended to proceed with the meeting to ensure good faith and open discussions.
[7] As a result, the listing of the approval hearing of 27 June 2019 was vacated.
[8] The IEUA wrote to my Chambers on 28 June 2019, in reference to the meeting held on 27 June. The IEUA indicated that the College’s concerns had been ventilated, and accordingly a consent position had been reached with a view to proceeding to approval of the Agreement. The IEUA’s correspondence attached the following Joint Statement signed by Mr Jeffs for the College and Mr Holliday for the Union:
“Joint Statement
27th June 2019
To be forwarded to Commissioner Booth by IEU
Dear Commissioner Booth,
The parties have met at the College today and discussed a number of matters regarding matter AG2019/1567.
The parties have agreed to continue to support the final approval of the Collective Agreement by FWA and ask that a bench hearing be scheduled as soon as possible.
The parties commit to using formal and informal consultation processes to resolve any continuing issues regarding the implementation of the Collective Agreement.
Kind regards,
[signed]
David Jeffs
Principal
Riverside Christian College
[signed]
Nick Holliday
Organiser
IEUA-QNT”
[9] The matter was then relisted for approval hearing on 2 July 2019. No further objections to the application were received, and the Agreement, subject to the undertakings provided, was approved on 4 July 2019.
[10] Late that same day, at 5:17pm, Mr Jeffs wrote to my Chambers further raising concerns in relation to the financial viability of the College in light of approval of the Agreement. Mr Jeffs sought assistance in seeking advice on the financial matters raised. My Chambers provided a response to the effect that the College should seek independent legal advice.
[11] This application for the termination of the Agreement was filed on 21 August 2019, by Hall & Wilcox lawyers on behalf of the College.
[12] My Chambers sought a response from the IEUA in relation to the application for termination of the Agreement. The IEUA provided email correspondence indicating that it sought to oppose the application.
[13] A preliminary conference was conducted by telephone on 17 September 2019; further to which Directions were issued for filing of materials. The IEUA and the College filed written materials accordingly.
[14] The hearing on 2 April 2020 was held by telephone, in light of Covid-19 restrictions.
[15] Mr Brotherson appeared with leave for the College, and Mr Spriggs appeared for the IEUA.
The Legislation
[16] The relevant provisions under which the Commission considers the application referred to above are as follows:
“222 Application for the FWC’s approval of a termination of an enterprise agreement
Application for approval
(1) If a termination of an enterprise agreement has been agreed to, a person covered by the agreement must apply to the FWC for approval of the termination.
Material to accompany the application
(2) The application must be accompanied by any declarations that are required by the procedural rules to accompany the application.
When the application must be made
(3) The application must be made:
(a) within 14 days after the termination is agreed to; or
(b) if in all the circumstances the FWC considers it fair to extend that period—within such further period as the FWC allows.
223 When the FWC must approve a termination of an enterprise agreement
If an application for the approval of a termination of an enterprise agreement is made under section 222, the FWC must approve the termination if:
(a) the FWC is satisfied that each employer covered by the agreement complied with subsection 220(2) (which deals with giving employees a reasonable opportunity to decide etc.) in relation to the agreement; and
(b) the FWC is satisfied that the termination was agreed to in accordance with whichever of subsection 221(1) or (2) applies (those subsections deal with agreement to the termination of different kinds of enterprise agreements by employee vote); and
(c) the FWC is satisfied that there are no other reasonable grounds for believing that the employees have not agreed to the termination; and
(d) the FWC considers that it is appropriate to approve the termination taking into account the views of the employee organisation or employee organisations (if any) covered by the agreement.
224 When termination comes into operation
If a termination of an enterprise agreement is approved under section 223, the termination operates from the day specified in the decision to approve the termination.”
The application and associated evidence
[17] In its statutory declaration in support of the application for termination filed 21 August 2019, the College stated, in summary, as follows:
• The College held all-staff meetings on 29 and 30 July 2019, notifying its employees that following the commencement of the Agreement, the College had become aware of financial changes subject to the Agreement that would cause “significant financial hardship on the [College’s] business”. 1 The College advised it was commencing consultation in relation to redundancies, and inviting expressions of interest regarding voluntary redundancy. The College stated that at the meetings, employees asked whether the Agreement could be terminated to avoid the major employment changes.
• Following the meetings, written correspondence was sent to all staff confirming the content of the meetings, and the possibility of varying or terminating the Agreement.
• The College held a further all-staff meeting on 6 August 2019, advising that a decision had been made to conduct a vote to terminate the Agreement.
• Throughout this period, discussions and correspondence were exchanged with the IEUA regarding the proposed termination.
• Further to the meeting of 6 August 2019, written correspondence was provided on that same date advising that the ballot to terminate the Agreement would open at 8:00am on 8 August 2019 and close at 3pm on 8 August 2019. The ballot was to be conducted at the main staffroom at the College, with absentee votes arranged by issuing of voting slips and envelopes to those staff members scheduled to be on leave.
[18] Of the 132 employees covered by the Agreement, 111 employees cast a valid vote with 60 of those 111 employees voting to terminate the Agreement on 8 August 2019.
[19] In its formal submissions, the College noted that the Commission must approve the application to terminate the Agreement if it is satisfied the procedural requirements have been met, and it is appropriate to do so, in accordance with s.223 of the Act.
[20] The College submitted that the procedural requirements had been met as follows.
Sections 223(a) and (b)
[21] The College submitted that all employees covered by the Agreement were provided a reasonable opportunity to decide whether they wanted to approve the proposed termination, in accordance with the meetings held 29 and 30 July 2019 (at which “employees expressed an interest in terminating the Agreement”) 2, the written correspondence that followed these meetings, and the further staff meetings and written correspondence of 6 August 2019 with conducting the ballot on 8 August 2019.
[22] It submitted that in the written correspondence of 6 August 2019, it confirmed the vote would be conducted as secret ballot from 8am to 3pm on 8 August 2019 and outlined the question that would appear on the voting slip, as well as information relating to absentee votes.
[23] The College submitted that while the IEUA wrote to the College on 6 August 2019 advising that it was “disappointing” the College was considering terminating the Agreement, the IEUA did not raise any concern relating to staff not receiving sufficient notice of the ballot, or seeking the ballot timeframe be extended.
[24] The College submitted that the Act does not provide guidance as to “a reasonable opportunity to decide whether they want to approve the proposed termination”. It submitted that Explanatory Memorandum provides an example only that “This may, for example, involve the employer allowing employees sufficient time between making the request and the time of the vote to consider the effect of the termination on their terms and conditions”. 3 Therefore it submitted there is no minimum access period required for employees to determine whether they agreed to a termination of the Agreement, and where the ballot was held at the request of the College’s employees, it was reasonable in the circumstances to hold the vote on 8 August 2019.
[25] The College confirmed that on 8 August 2019, 111 of the 132 employees voted, with 60 voting to terminate the Agreement, and on 9 August 2019 the College confirmed the outcome of the vote to the IEUA.
Section 223(c), ‘no other reasonable grounds for believing that the employees have not agreed to the termination’
[26] The College submitted that as part of the consultation process leading up to the vote for termination of the Agreement, it notified its employees that due to financial implications of the Agreement, and based on budget forecasts, the College would be unable to meet its obligations under the Agreement without “significant cost-cutting measures”. 4 It stated that it notified its employees that major employment changes, including redundancies, would need to commence and that “some budgets would need to be frozen until further notice”. However, the College submitted that its employees:
• were not asked or forced to pay for resources from their own money;
• sought information as to how to terminate the Agreement as an alternative to implementing major employment changes and cost-cutting measures; and
• were not threatened, forced, blackmailed, or otherwise pressured to agree to the termination. 5
[27] The College submitted that prior to the approval of the Agreement on 4 July 2019, its employees had not previously been covered by an enterprise agreement. It submitted that it provided employees with all relevant information relating to the proposed termination, including that the employee’s terms and conditions of employment would return to those that applied prior to 4 July 2019, with some clauses of the Agreement being “grandfathered”, including:
“(a) wage increases implemented in July 2019 would be preserved;
(b) increased parental leave entitlements;
(c) increased long service leave entitlements; and
(d) increased superannuation entitlements.” 6
[28] As to maternity leave, long-service leave and superannuation entitlements, the College submitted these entitlements would be incorporated into a “staff benefits policy”. 7
[29] The College submitted that its employees had the opportunity throughout the meetings to ask further questions in relation to the effect of the termination of the Agreement; and that no queries or complaints were raised with respect to the date or method by which the vote would occur. 8
[30] The College submitted that on 13 August 2019, five days after the vote results were declared, the IEUA wrote to the College indicating willingness to enter discussions to vary the Agreement but did not raise concerns with respect to how the ballot was conducted.
[31] The College submitted that it took no action to cause or encourage “negative emotions” towards IEUA members by other employees.
Section 223(d) appropriate to approve the termination
[32] As to its budget and expenditure, the College submitted that it has not committed to or commenced any major expenditure projects, and the current building projects have been funded by government grants. It submitted that it continues to reduce costs, including two voluntary redundancies being accepted, two senior staff positions becoming vacant and not being replaced, corporate credit cards being rescinded, and cost controls put in place regarding expenditure on camps and excursions, relief staff, professional development and equipment.
[33] As a result of its financial position and the increased financial obligations under the Agreement, the College submitted that it was required to commence consultation with its employees with respect to redundancies, and that staff meetings were held ahead of the formal ballot as outlined above.
[34] The College denied that it “changed its mind” regarding the Agreement. The College submitted that it became aware in May 2019 that it would not be able to meet its financial obligations under the Agreement and that it raised its concerns in relation to the cost implications prior to the Agreement being approved by the Commission. The College submits that it sought the approval application be withdrawn via communication in June 2019, but that the IEUA “refused to do so and the Agreement was approved on 4 July 2019”. 9
[35] The College submitted that if the Agreement is not terminated, it predicts it will suffer an overall net cash deficit in 2020 and will be insolvent and unable to operate in 2021. It further submitted that approving the termination of the Agreement, particularly in light of the majority vote cast, would not have the effect of undermining the system of enterprise bargaining.
Witness evidence
Mr David Jeffs
[36] Mr David William Jeffs, Principal at the College, filed a witness statement in support of the College’s application. 10 He also made himself available for cross-examination.
[37] As Principal of the College, it was Mr Jeffs’s evidence that he was responsible for “the overall management of the College’s Day School and Distance Education School, all school operations, compliance and policy development, business and financial management and instructional leadership”. 11
[38] He submitted he was appointed Acting Principal in mid-2018, at which point the negotiations for the Agreement were “well progressed”. He confirmed the College had never previously been covered by an agreement.
[39] He submitted that the Board resolved in March 2019 to apply the wage increases and conditions in accordance with the Agreement “as at 1 July 2019, even if the Agreement had not yet been voted on or approved by employees or approved by the Fair Work Commission”. 12 Mr Jeffs’s evidence was that he did not become involved in the negotiations until March 2019, at which point most clauses had already been agreed to. He confirmed that the Agreement went to a vote on 29 and 30 April 2019, and that subject to a majority vote approving the Agreement, the application for approval was submitted by the IEUA on 13 May 2019.
Financial implications of the Agreement
[40] Mr Jeffs submitted that around April/May 2019, the College finalised its end-of-year reports for 31 December 2018, at which time he became concerned that the College would not be able to meet its financial obligations under the Agreement. He submitted that he believed negotiations had previously been undertaken in light of the 2017 revenue and profit margins, with an assumption that the annual profits would be maintained. However, he submitted that as at 31 December 2018, the College’s revenue had decreased with an overall operating loss of $1,030,040. 13
[41] It was Mr Jeffs’s evidence that in light of the College’s financial position as at 31 December 2018, his view was that if the Agreement was implemented the wage increase commitments would cause the College to become insolvent by the end of 2020, and would cause approximately 130 people to be out of a job, affecting the education of over 1,300 students. 14
[42] He submitted that his financial concerns were shared by the College Finance Manager; and that after seeking advice from the “ISQ industrial relations advisors”, the ISQ 15 suggested the College attempt to withdraw the Agreement approval.16
Steps to prevent the implementation of the Agreement
[43] Mr Jeffs’s evidence was that the College attempted to seek approval by the IEUA to withdraw the application for approval of the Agreement; however, despite the College raising its concerns, Mr Jeffs submitted that the IEUA refused to withdraw the application for approval. He submitted that the IEUA responded that if the College opposed approval of the Agreement, it would recommend its members take industrial action. Mr Jeffs submitted that at a meeting of 27 June 2019 between the College and the IEUA, the IEUA presented him with a “memorandum to withdraw our objections”, and due to him not being “well appraised of the College’s rights”, it was determined the College had no option but to “let the Agreement be approved” and the IEUA memorandum was signed “under protest”. 17
Termination of the Agreement
[44] Mr Jeffs’s evidence supported the College’s submissions that meetings were held to discuss the College’s financial position with its employees, and that immediate cost cutting processes were implemented.
[45] Mr Jeffs’s evidence supported that during an all-staff meeting, “staff raised the possibility of terminating the Agreement so as to alleviate the financial pressure on the College”. 18
[46] Mr Jeffs gave evidence that:
“I do not believe the IEUA position properly represents the position of our staff. I am a member of the IEUA and I believe the Agreement needs to be terminated. The IEUA does not represent a significant portion of our staff and I am concerned they are taking a philosophical position with respect to the termination application.
…
The College has confirmed on more than one occasion to the IEUA that if the Agreement is terminated and the IEUA still has support to negotiate an enterprise agreement, then it can invite the College to commence bargaining. To the best of my recollection the IEUA has not responded to this.”
[47] Mr Brotherson, for the College, in examination in chief asked Mr Jeffs to clarify his understanding as to what was happening in the lead up to the termination vote:
“MR BROTHERSON: Can I just bring you back to page 39 of this presentation, which I think you have explained is the continuation of the chairman's message. It says, "Our next meeting will be Tuesday, 6 August 2019." So you're having a meeting with staff on 29 July and you're telling them there will be another meeting on 6 August. What was the purpose of having a further meeting? I just need to have a look and see what correspondence relates to that.
No, no, I'm asking you the question? Yes.
If you go to page 39 - - -? Yes.
- - - you will see, "Our next meeting will be Tuesday, 6 August 2019"? Yes.
You have had this meeting on 29 July. You've made your presentation? Yes.
You're saying, "We're going to come back on 6 August." What was the purpose of indicating, "We're going to have a meeting", on that set date"? The outcome of the expressions of interest for redundancies.
Anything else? And an indication of the exact numbers of forced redundancies that would be expected.
Now, you will see in the union evidence - I think Mr Pascoe makes criticism of the fact that once the ballot for the agreement to be terminated was approved, some measures of fiscal restraint were removed. What do you say to that? Can you ask that question again, please?
Yes, certainly. You have read the union evidence? Yes.
If we look - Mr Pascoe says it, but I think each of the employee witnesses say it, as well, that they couldn't understand why the minute the vote to terminate the agreement was approved, some of the financial restraint that had been imposed was lifted. What do you say to that? Yes, so to get on with core business, Commissioner, I had to un freeze the curriculum budgets. I was un freezing expenditure of the core business related to the college”. 19
[48] Mr Jeffs denied the Union’s statements that the College failed to act openly, honestly and fairly leading up to the ballot, and denied the Union’s claim that the College acted with “unsavoury strategies to create a fear among staff”. Mr Jeffs’s evidence was that the College acted in a factual, open and transparent manner in providing information to its staff in preparation for the ballot. 20
[49] Under cross-examination by Mr Spriggs, Mr Jeffs conceded that at 27 June 2019, the possibility of varying the Agreement after it had been approved by the Commission was discussed. Mr Jeffs conceded also that Mr Pascoe raised the possibility of a variation to the Agreement at the meeting on 2 August. However, Mr Jeffs’s evidence was that “somewhere along the line [he] was given a directive to pursue the termination possibility.” 21
[50] In a supplementary statement dated 27 March 2020, Mr Jeffs provided some clarity around the College’s financial position. Currently the College is in a process of finalising its financial statements and will show an overall improvement in the financial position of the College compared with the 2018 calendar year. However, the 2019 financial performance was still such that the College cannot afford to pay the wage increases which were due to come into effect on 1 January 2020.
[51] Mr Jeffs noted the above assessment does not make any allowance for the impact and uncertainty due to the Covid-19 epidemic.
Ms Grevell
[52] Ms Grevell was called as witness, and under cross-examination she confirmed a variation to the Agreement had been discussed at the 27 June meeting.
Objection by the Independent Education Union of Australia
[53] In opposing the application for termination of the Agreement, the IEUA raised three objections as follows.
The first objection – employees were not given a reasonable opportunity to decide whether to approve the proposed termination
[54] The IEUA submits that employees were not given a reasonable opportunity to decide whether to approve the proposed termination, in light of the fact that they were notified on Tuesday 6 August 2019 that a ballot would occur on Thursday 8 August 2019. While the IEUA conceded that the Act does not define what is reasonable in relation to the notice of the ballot occurring, it submitted the Act requires seven days’ notice prior to a ballot to approve a new Agreement. In this matter, the IEUA submitted that the employees had not been advised that a termination ballot was an option prior to the 6 August 2019 meetings.
[55] In the IEUA’s submission, the employees therefore only had one clear day of notice of the vote, which is a relevant consideration given the “not insignificant number of part time staff”. 22 The IEUA submitted that employees have indicated they did not, and do not, believe the amount of notice was sufficient for them to seek “appropriate advice” or to consider the ramifications of a particular outcome.23
[56] The IEUA also submitted that an argument could be made that a longer period of notice should be given, given the unusual circumstances of seeking to terminate an Agreement within weeks of it coming into operation. 24 It submitted that a period of notice of at least seven days would have allowed appropriate advice to be sought on the many factors that required weighing in the employees’ decision-making process, including the issues relating to grandfathering of certain provisions. In light of such, the IEUA submitted that the short period of notice was “clearly unreasonable” and therefore the College should not be found to have satisfied the criteria under the Act.25
[57] Further, the IEUA submitted that for the approval vote, two days were allocated for the ballot to allow for maximum participation of employees; but for the termination ballot the employer only allocated 8am to 3pm on one day only. It is not disputed that the vote took place or the result, but the IEUA submitted that the vote should be considered in light of these factors.
The second objection – the Commission cannot be satisfied that the employees genuinely agreed to the termination
[58] As to genuine agreement to the termination of the Agreement, the IEUA submitted that the employees were threatened that if the ballot did not endorse the termination, “a number of staff would have their employment terminated”, 26 and further that “significant austerity measures would continue to be implemented” that would have significant impact on students, teaching and teachers.27 The IEUA submitted that the agreement for termination of the Agreement obtained by the College was tainted by misrepresentation and a divisive atmosphere at the College, and therefore the agreement could not be deemed genuine.28
[59] The IEUA submitted that some staff described the pressure applied in relation to the vote to terminate the Agreement as “blackmail” and included inaccurate statements in relation to: “the preparedness of ‘the Union’ to negotiate a variation within an appropriate timeframe; or a preparedness to entertain a variation at all”. 29 The IEUA submitted that adequate details were not provided to substantiate the College’s claims of financial difficulty, and the information that was provided was done so in an unreasonable manner. Further, the IEUA submitted that some staff of the College had reported that they were required to pay for classroom teaching resources from their own pockets.
[60] As to the proposed “grandfathering” of certain conditions, the IEUA submitted that there is no guarantee the grandfathering will remain for any period of time, and given the short time frame referred to ahead of the vote, proper understanding by employees of the proposed grandfathering was not possible.
[61] Further it was the IEUA’s submission that throughout this time, the College’s actions created negative emotions towards staff who were members of the IEUA. 30 It submitted that the College’s statements about the prospects of varying the Agreement were made for the purposes of influencing the voting intentions of some of the staff members. The IEUA submitted it was not aware of any information regarding varying the Agreement being provided to the employees, and therefore reasonable information was not provided to the employees in assisting with their decision to terminate the Agreement. The IEUA submitted that a vote conducted “against the background of employer disseminated misinformation” cannot be deemed genuine agreement.31
The third objection – it is not appropriate to approve the termination
[62] The IEUA disputes the College’s submission that cost cutting measures were occurring, submitting that expenditure was occurring in other areas.
[63] The IEUA submitted that the Agreement is still currently applicable to the College’s employees, and therefore costs are still those the College claims are unsustainable. Despite such, the IEUA submitted that the College has lifted the austerity measures “even though the employer has acknowledged that the Agreement may not be terminated, and even if terminated the date of effect may be at some time in the future”. 32 The IEUA submitted that these actions are “illogical” and point to “some as yet unidentified motivation for attempting to terminate the Agreement”.33
[64] The IEUA submitted that the undisputed facts of this matter demonstrate preparedness by the Union to work with the College.
[65] The IEUA submitted that enterprise bargaining is central to the current system of industrial relations, and that in this instance the College has changed its mind regarding the Agreement a “matter of weeks” after its approval, which “can only be described as capricious”.
[66] The IEUA submitted that:
“[a] decision which condones an employer offering an enterprise agreement, and then shortly after reneging on that protection, would undermine the role of enterprise bargaining”. 34
[67] Further, it was the IEUA’s submission that:
• Claims made after the employees voted to accept the employer’s offer that the offer is unsustainable cast a shadow over the employer’s managerial capabilities.
• The employer’s application to terminate the Agreement attempts to force employees to suffer the consequences of the employer’s deficiencies. Employees would suffer adverse consequences because of the removal of the protections of their Enterprise Agreement.
[68] The IEUA reiterated that the Union and the employees remain prepared to work with the College. 35 The IEUA submitted that it is the Employer who has rejected a “workable solution” in rejecting any proposed variation.
Witness Evidence
Mr Richard Pascoe
[69] Mr Richard Pascoe, Organiser at the IEUA-QNT, filed a witness statement in support of the IEUA’s submissions. 36
[70] Mr Pascoe’s evidence was that on 31 July 2019, a member of the IEUA provided him a copy of an email dated 30 July which recorded an “outcome” as follows:
“Employees requested information sent to them as soon as possible regarding varying the agreement / terminating the agreement – information to be sent later today”. 37
[71] However, it was Mr Pascoe’s evidence that no information was provided in relation to varying the Agreement.
[72] Further, it was Mr Pascoe’s evidence that he sought a meeting with Mr Jeffs at the College on 2 August 2019, and despite Mr Jeffs stating during the meeting that he had identified a significant budget shortfall, Mr Pascoe was given a tour of the College and shown “significant building works which [Mr Jeffs] described as having recently been commenced”. 38 Mr Pascoe gave evidence that subsequent investigations demonstrated the tender for the building works was around 1.5-2 million dollars.
[73] Mr Pascoe stated that, due to a lack of detail provided by the College in relation to its financial position, he was concerned that significant restructuring had been implemented without any apparent justification. 39
[74] Mr Pascoe gave evidence he identified during the 2 August meeting that, subject to approval of the employees, the IEUA would be prepared to facilitate variation of the Agreement. His evidence was that at that meeting, the impression given by the College was that it had not determined a particular course of action and was awaiting “expert advice”. 40
[75] Mr Pascoe stated he was therefore concerned and surprised when on 6 August 2019, he received an email from Mr Jeffs to the effect that a vote would be held to terminate the Agreement on 8 August 2019. 41 He submitted he sought an urgent meeting with the Principal of the College, but received a reply that the Principal was unable to meet prior to the announced date for the ballot to terminate the Agreement.42
[76] In relation to advising and assisting College employees prior to the vote, Mr Pascoe stated:
“Due to a prior commitment in Rockhampton as part of my prearranged Organising role, and the Fair Work Act’s requirements for a minimum notice period of 24 hours to enter a premise, my access to employees for a meeting to provide further advice, and to respond to questions, was significantly hampered.” 43
[77] Mr Pascoe stated he sent a number of correspondences to the College Principal, seeking to work constructively with the College to overcome any identified problems in relation to the Agreement. However, the attempts were “either rebuffed or ignored”.
[78] Mr Pascoe’s evidence supported the submission that following the vote to terminate the Agreement, Mr Jeffs advised staff that “in light of the recent vote, I am now in a position to unfreeze the budgets”. Mr Pascoe submitted that this appeared premature as the outcome of an application to terminate the Agreement had not been determined.
[79] Mr Pascoe’s evidence included that new staff had been appointed, including an Assistant Principal which Mr Pascoe understands to be an additional position at the College.
Mr Nick Holliday
[80] Mr Nick Holliday, Organiser for the IEUA-QNT, filed a witness statement in this matter.
[81] Mr Holliday’s evidence was that he was involved in bargaining at the College until 30 July 2019.
[82] He stated that a number of bargaining meetings occurred, from early 2018, which were generally productive, and logs of claims were discussed and debated. However, his evidence was that the meetings scheduled for November and December in 2018 were delayed at the request of the College. His evidence is that Mr Jeffs was the Principal of the College at that time, and the reason provided for delaying the December meeting was that approval of the wage offer was being sought from the College Principal.
[83] Mr Holliday stated that the draft Agreement tabled on 21 February 2019 was significantly amended compared to the employee-drafted version which had formed the basis of negotiations up to that time. His evidence was that employee representatives were advised the Employer amended draft reflected “the wishes of the Board and the Principal”.
[84] Mr Holliday gave evidence that on 4 March 2019, the Employer tabled a wage offer. Mr Holliday’s evidence was also that at the 4 March meeting, the College provided a significant presentation on the College’s finances in response to the employee wage claim, and that employee representatives were requested not to take notes or photos of the detailed presentation.
[85] Further to the bargaining representatives and the College reaching in-principle agreement on 27 March 2019, the Agreement was voted on between 1 and 2 May 2019. Mr Holliday stated in his evidence that on 10 May 2019, Mr Jeffs, as College Principal, signed the Agreement. During the approval application process before the Commission, undertakings were sought which Mr Jeffs signed on 6 June 2019.
[86] Mr Holliday’s evidence was that in relation to potential redundancies by the College, he wrote seeking appropriate consultation. His evidence is that a reply to that correspondence, he believes, went to Mr Pascoe who took over responsibility for Riverside Christian College.
Mr Stephen Keightley
[87] Mr Stephen Keightley, Middle and Senior College Teacher at Riverside Christian College, filed a witness statement in these proceedings. Mr Keightley is a member of and representative for the IEUA. His evidence was that he was a member of the negotiating group for the Riverside Christian College Enterprise Agreement.
[88] Mr Keightley’s evidence was that he also held concerns in relation to the Employer’s process leading up to the vote to terminate the Agreement.
[89] Mr Keightley’s evidence was that the time period allocated for staff to consider consequences and options in relation to termination of the Agreement was “grossly inadequate and the entire process felt unnecessary [sic] rushed”. He gave evidence that:
“Staff were told that if we chose not to cancel the agreement then redundancies would need to be made immediately and staff would lose their jobs as a consequence of us supporting the EBA”. 44
[90] Mr Keightley stated that, in his opinion, the Employer’s announcement of the vote was particularly biased. Further he submitted there was a feeling of intimidation resulting with the financial restrictions put in place by the Employer.
[91] Mr Keightley gave evidence that he recalls the end of a meeting where employee representatives stated a willingness to discuss a variation of the Agreement, which the Employer “rebuffed” with statements regarding uncertainty of the time it would take to resolve such discussions. 45 Mr Keightley submitted that he and Mr Holliday “were able to counter this with a realistic timeline of discussion and application, which indicated clearly that a variation would have been possible, and even likely, to be completed before the employer’s stated deadline of January 2020”. However, the Employer’s response was that if they chose that path, the Employer “would have no choice but to continue to make staff redundant ‘due to uncertainty’”.46
[92] Mr Keightley also stated he was concerned that while the Employer had indicated a willingness to grandfather some of the Agreement clauses into new employee contracts, the Employer was not clear how this would be done. He submitted he did not have a clear understanding of what assurances employees would have that employment conditions would not be changed substantially from the conditions under the Agreement.
[93] Mr Keightley stated employees were not given a sufficient opportunity to seek a full understanding of the implications of termination of the Agreement prior to the vote taking place. Further stated: “indeed, employees may have been misinformed about the security of their employment conditions if the Enterprise Agreement was revoked”. 47
[94] Mr Keightley gave his opinion that if more time had been granted for employees to seek advice, the outcome of the vote would have been different. He stated that in his opinion, this was particularly the case because union members and wider staff were indicating willingness to enter discussions to vary the Agreement.
[95] He gave evidence that at the meeting of 27 June, figures were shown to the bargaining group on a whiteboard to the effect that the College foresaw financial difficulties should the Agreement be proved. His evidence was that the bargaining group responded that information would need to be taken back to the Union’s members. He submits he did not recall any “threat of industrial action” at that meeting. 48
[96] Under cross-examination, Mr Keightley agreed that Mr Holliday was “quite insistent” that Mr Jeffs sign the Memorandum presented to him, and that the Union’s focus at that time was to get the Agreement approved “and then to go forward with variations at meetings”. 49
[97] Mr Keightley submitted there was discussion around varying the wage increases for 1 January, but conceded that a formal proposal was never put to the Employer regarding this. 50
[98] His evidence was that at a subsequent all-staff meeting of 29 July 2019, the College advised staff that it may be in a position of financial difficulty. His evidence was that the overall feeling was of concern, and a great deal of fear. He believed that staff were very worried about their jobs and the potential of forced redundancies, and that at the end of the meeting a lot of the staff were shouting angrily and some staff members were visibly crying. 51
[99] Mr Keightley’s evidence confirmed that prior to the ballot for termination of the Agreement, a number of financial restrictions were implemented which were then lifted following the successful ballot to terminate the agreement:” 52
[100] Mr Keightley agreed under cross-examination that he recalled an employee raising the possibility of termination of the Agreement at the 29 July all-staff meeting. 53
[101] As to the ballot for termination of the Agreement, Mr Keightley agreed that the ballot allowed for employees to vote for or against termination, and thus were not forced to do one thing or the other. 54 However, Mr Keightley also gave evidence as follows:
“You have been led in some detail through events that occurred at the college. Are you still of the opinion that is expressed at point 6? I am.
Why is that the case? Because we didn't have a chance to effectively discuss the full implications of termination with our members after getting proper advice, that there were members who are unable to engage with meetings or get - receiving advice given the short timeframe.” 55
Ms Kristen Hooper
[102] Ms Kristen Hooper, Pathways Coordinator and Senior Teacher for the College, filed a witness statement in this matter.
[103] Ms Hooper’s evidence was that she had a number of concerns relating to the process undertaken by the College in this matter, as follows.
[104] Ms Hooper stated that at a meeting conducted on 29 July 2019, the College staff were advised that the budget restrictions and financial concern were due to the pay rise due to take effect on 1 January 2020 under the Agreement. 56 Ms Hooper’s evidence was that she was confused by this information, as the pay rates contained in the Agreement had been tabled by the Employer and therefore she was of the understanding the Employer could afford those rates.57
[105] Ms Hooper’s evidence also supported the submission that following the vote, budgets were reopened by the College and it was “back to business as usual”. 58
[106] Further, Ms Hooper submitted she held a concern in relation to the period of time staff were allocated to consider their options ahead of the vote being conducted. That is, staff were informed of the vote on a Tuesday morning and the vote was held on the Thursday. Her evidence was that this timeframe was “grossly inadequate” 59 and greatly diminished the opportunity for staff to seek advice and consider their voting options.
[107] As to the proposed grandfathering of certain benefits contained in the Agreement, she stated she did not have any clarity about what this would look like. She stated she was concerned may of the staff did not understand the legal implications of “not having the protection of an Enterprise Agreement”. 60
[108] Ms Hooper stated she was concerned the Employer was unwilling to consider any alternative options, including variation to the Agreement. In her words, “it was terminate, or nothing”. 61
[109] Ms Hooper’s evidence is that she was distressed and confused, despite some questions having been answered regarding the Employer’s financial situation. 62 She stated that at the 29 July meeting, the College mentioned that if the Agreement could not be terminated, it would be seeking voluntary redundancies or forced redundancies.63
[110] Ms Hooper gave evidence that she met with the College Principal on 30 July, regarding varying the Agreement. 64
[111] As to the College’s financial position and the suggested “threats” of redundancies, Ms Hooper’s evidence was as follows:
“For example, if it comes to the issue of redundancies, it's better to know so that you can think about do I want to volunteer for voluntary redundancy, or what else might I be able to do - should I start looking at job applications, all those sorts of things, correct? Mm hm.
So you don't want to be in the dark about things? Mm.
So it's not really appropriate in those circumstances when some of the nasties are identified to call it a threat, is it? I feel like when - I certainly felt that - and this is just me speaking for my own personal feelings in the moment - that it felt like, you know, the threat was if we didn't terminate there would be redundancies, when, you know, if the issue - as you said, it is very clearly outlined - the issue is the wages. So I guess with me in my position and knowing the background of the agreement, I was confused as to why we couldn't just look at a variation, and it is simply the wages that are an issue.” 65
[112] As to the issue of grandfathering certain entitlements, Ms Hooper stated:
“And particularly when you read further on in that page after it's used, "preserving your current wages, preserving your negotiated maternity/paternity leave entitlements, preserving the negotiated long service leave provisions, preserving the superannuation entitlement", you knew that those things were going to be continued to be adhered to, even if the agreement wasn't there, correct? Yes, as long as those policies remained, yes.
So you knew that if the agreement gets up, at least on day one, you're not going to be worse off on those items than you were if the agreement was there? Yes, unless they changed their mind.
Have you spoken to Mr Pascoe about the possibility that at some point in the future another enterprise agreement could be negotiated, couldn't it? Well, yes, I mean obviously, yes, it took us several years to get this one happening, but yes, I would assume if it was terminated that I guess perhaps in another five years' time we might be.
…
What is your view in relation to where it should have gone? So in terms of what should have been the correct - - -?
Yes? Well, yes, I think that we should have headed down the track of variation.
Can I ask you to describe if there was a mood of that meeting? It was quite an emotionally charged meeting, so I guess people were quite reactive in a lot of responses. Another staff member started yelling, you know, quite loudly about not wanting dirty money, even in relation to our July increase, which was obviously just our yearly CPI increase. So yes, it was quite an emotionally charged meeting.
Was there a predominant view coming from the meeting as to what should happen? As far as I can recollect, I wouldn't say there was a predominant view. There were many views being presented. Obviously, you know, from the union perspective, we had our view.” 66
Mr Thomas Smith
[113] Mr Thomas Smith, English and History Teacher employed by the College, filed a witness statement but was not required for cross-examination.
[114] Mr Smith’s evidence was that at a meeting on 29 July 2019 the Principal of the College explained that voluntary redundancies or forced redundancies may be necessary to ensure the financial viability of the College.
Consideration
[115] Section 223 of the Act provides that the Commission must approve the termination of an enterprise agreement if it is satisfied of the factual circumstances in s.223(a)-(c) and considers it is appropriate to terminate the agreement taking into account the views of any employee organisation covered by the agreement, in accordance with s.233(d).
[116] A noted in Marmara v Toyota Motor Corporation Australia Limited, 67 the discretion of the Commission is less restrictive than that for termination of an agreement after its nominal expiry date.
Section 223(a) - Has the employer complied with subsection 220(2)?
[117] Section 220(2) requires an employer, before making a request to employees to approve a proposed termination, to:
(a) take all reasonable steps to notify the employees of the following:
(i) the time and place at which the vote will occur;
(ii) the voting method that will be used; and
(b) give the employees a reasonable opportunity to decide whether they want to approve the proposed termination.
Section 220(2)(a) - the voting process etc
[118] The College submits that on 6 August 2019 it conducted all-staff meetings and sent an all-staff email confirming the vote would be conducted from 8am to 3pm on 8 August 2019 on the College premises. It would be conducted by secret ballot and detailed the question that would appear on the voting slip. Information was also provided in respect of absentee votes. 68
[119] This process was unchallenged by the IEUA. In the circumstances, it is reasonable to conclude that the requirements of s.220(2)(a) have been met.
Section 220(2)(b) - reasonable opportunity to decide
[120] The College submits that following an all-staff meeting on 29 July 2019, the Principal, Mr Jeffs, made a presentation of the College’s concerns with the financial implications of the Agreement, and there followed an interactive discussion with the College’s employees. The College submits this meeting announced a call for expressions of interest for redundancies, and the implementation of seven identified cost reductions including: the freezing of professional development expenditure; freezing of faculty budgets; reviewing all excursions, camps, extracurricular activity; no approval of overtime; freezing capital works “aside from the grant funded building”; and other matters.
[121] The College submits that at this meeting, staff raised the possibility of terminating the Agreement so as to alleviate the financial pressure on the College.
[122] Mr Jeffs’s evidence is that on 30 July (one week before the meetings and notice), the Board resolved to seek agreement from the College employees to vote whether to terminate or retain the Agreement.
[123] Then on 5 August, all employees were notified of a further all-staff meeting to be held the next day. Staff were informed in this communication that is was compulsory and that it would run for 20 minutes.
[124] At the meeting of 6 August, the copy of the script used to guide the meeting 69 started by saying “following our discussion on 29 July 2019 regarding the impact of the enterprise agreement we are here to discuss the two options we have to rectify the position we find ourselves in, those options are:
1. we can renegotiate and vary the agreement; or
2. we can hold a vote to terminate the agreement.
The board have decided to hold a vote to terminate the agreement”.
[125] The script then details the terms and conditions upon which the Employer proposes termination of the Agreement. The script refers to “grandfathering” of the following clauses in the Agreement:
• preserving your wages as at 8 July 2019 (appendix 1 of the agreement);
• preserving the negotiated maternity/paternity leave entitlements (clauses 6.5 and 6.6 of the agreement);
• preserving the negotiated long service leave provisions (clause 6.7 of the agreement); and
• preserving the superannuation provisions (clause 5.2 of the agreement).
[126] The Employer held two meetings on 6 August 2019 June (at 8am and 2pm), at which employees were notified that a secret ballot would be held two days later, on 8 August 2019, in relation to whether the Agreement should be terminated.
[127] The next day, on 7 August 2019, Mr Jeffs sent a further all-staff email which contained the relevant extract as follows:
“Hi team
Sorry for the all staff email, but I’ve received a question as a follow-up to yesterday’s announcement that other staff might benefit from the information
Question re assurance of the grandfather clauses
Erin has purposely included those clauses in all her written comms thus far (the email sent to all staff, it is outlined on the actual vote slip we will use tomorrow etc) for the purpose of evidence. not only for staff, but us as a “business” will also need to provide this to Fairwork and we need to demonstrate (if the vote is in favour of terminating the agreement) what changes this means for the staff employment and whether we communicated changes appropriately. Fairwork ultimately approve any changes to the agreement (if changes of any kind are made) and as part of that process we would need to provide all of our comms we have put forward, an employer declaration, an outline of what these changes mean et cetera
Erin has been very particular in documenting them and giving copies to all staff (either paper-based or email) for both employees evidence and our own proof that we communicated, consulted and what was offered.
The Board have agreed in principle to grandfathering these clauses and will confirm through adoption at the next Board meeting to ensure the College commitment to grandfathering clauses and to agree that it be included in the staff benefits policy which will be prepared should the staff vote be in favour to terminate the agreement. That policy will be under the delegation of the Board and not the Principal delegation. This will ensure that the authority rests at a Board level and not at a school level ie at the principal’s discretion, or able to be change at the change of the principal et cetera
Thank you for your questions
Regards
David”
[128] A ballot was then conducted on 8 August 2019, at which 111 employees voted, 60 voting in favour of termination of the Agreement, being a majority of those voting.
[129] The Employer says that conducting the ballot on 8 August, having given notice on 6 August, provided a reasonable opportunity for employees to decide.
[130] On the College’s submission, s.220(2) prescribes neither minimum timelines nor particular methods of notification. In the statutory context “a requirement to takes all reasonable steps does not in extend to all steps that are reasonably open in some literal or theoretical sense”. 70
[131] It is the case that the steps taken by an employer to give employees a reasonable opportunity to decide should be practical rather than literal or theoretical.
[132] The Employer submits there is no reliable evidence that there was confusion or uncertainty relating to the impact of the termination on terms and conditions of employment. It submits the notification on 6 August was clear and unambiguous by reference to clause numbers, with the provisions to be grandfathered reaffirmed on the ballot form.
[133] Mr Keightley submits that he was concerned for what he described as the “inadequate time” period for staff to consider the consequences of the Agreement termination before a vote was held. He submitted the time the staff had to seek advice and make an informed decision was grossly inadequate and the entire process felt unnecessarily rushed. 71
[134] Similar statements were made by other witnesses for the IEUA. Ms Hooper raised concerns about the Employer’s proposed grandfathering of certain benefits from the enterprise agreement. To her mind, there had been no clarity around exactly what this would look like. For example, an entitlement to parental leave and whether it would be honoured to the same level as was negotiated and agreed to in the Agreement.
[135] These witnesses made clear their preference for a variation of the Agreement rather than termination. However, that does not mean their views about the process should not be considered.
[136] Generally, I found this witness evidence to be truthful and straightforward. The preference for variation over termination does not mean their evidence should have no weight, especially as it concerns the reasonableness of the notice and the clarity of the implications for employees of the proposal put by the Employer.
[137] This is particularly so in the context of the email sent on 7 August 2019 concerning the question from a staff member about grandfathering of certain clauses.
[138] The question in consideration is: was there enough time from making the request for the vote ahead of the time of the vote, for employees to consider the effect of the termination on their terms and conditions?
[139] The Explanatory Memorandum provides guidance on the meaning of “a reasonable opportunity to decide” for the purpose of s.220(2)(b) in an example as follows:
“this may, for example involve the employer allowing employee sufficient time between making the request and the time of the vote to consider the effect of termination on the terms and conditions”.
[140] The Employer’s case is that there was sufficient time to decide, and that during the period between the notice and the vote, IEUA members had ready access to their union. The Employer stated that Mr Pascoe was on-site on the day of 8 August, prior to when voting began.
[141] The Employer rejects the suggestion that there was confusion or uncertainty about the impact of termination of the Agreement on the terms and conditions of employment. It says this is particularly so since the Agreement had only been implemented since 4 July 2019, and the College’s employees had not previously been covered by an enterprise agreement.
[142] However, this submission is inconsistent with the email of 7 August responding to uncertainty from at least one employee whose question led to the further email explaining the “grandfathering” of certain new employment provisions that were in the Agreement and not part of the pre-existing terms and conditions.
[143] In essence, the College’s employees were advised either in the morning or the afternoon of 6 August 2019 that a vote would take place on 8 August. At least one employee made further enquiries the next working day about the impact of the proposal on them, and by email of 7 August to all employees the Employer detailed the grandfathering of certain provisions.
[144] In these circumstances I do not find that the Employer has established the notice period allowed (from either the morning or afternoon of 6 August until voting on 8 August) is sufficient for the purposes of satisfying s.220 of the Act. Matters were still being clarified the day before the vote, with very limited or insufficient time after it received the 7 August all-staff email to decide what the effect of the termination would be.
[145] It is no answer to say that an employee who did not understand the effect of the termination could have voted against it, or that a majority vote supported termination. Although not decisive, it was indeed a slim majority vote. Given the seriousness of the implications and the need to provide a further explanation of the “grandfathered” provisions the day before the vote, the truncated time between notification and the vote was insufficient. This supports the evidence of the employees that there was a greatly diminished opportunity to seek advice.
[146] In these circumstances, the Employer did not give employees a reasonable opportunity to decide. It follows that the Employer has not complied s.220(2) of the Act in relation to the application for termination.
[147] As the Act requires the Employer to establish each element under s.223, this application must fail.
[148] However, for the sake of completeness, I have considered the matters arising under sections 223(c) and (d) as follows.
Section 223(c) – no other reasonable grounds for believing that the employees have not agreed to the termination
[149] The Employer contends that there are no grounds identified which would enable the Commission to form a view that employees have not genuinely agreed to termination.
[150] In support of this submission it notes the meetings held on 29 July and 6 August providing information relating to the financial effect of the Agreement and the College’s ability to remain solvent. The Employer submits this information remains true and accurate.
[151] All employees were provided with relevant information with respect to the proposed termination. Aside from questions asked and responded to throughout the all staff meetings on 6 August 2019, no further clarification with respect to the effect of the termination was sought by the employees or the Union.
[152] The Employer contends reasonable notice was provided.
[153] The Employer drew attention to the decision in Re IINet, 72 where Commissioner Roe considered the problem would have to be significant to be able to draw a conclusion that employees had not agreed to the termination despite a vote in favour of termination.
[154] However the words of s.223(c) do not require the problem to be “significant”; in the words of the section, the Commission must consider if it is satisfied that there are no other reasonable grounds for believing that the employees have not agreed to the termination.
[155] The Union submits there are reasonable grounds to conclude employees have not agreed to the termination, in particular:
• the provision of inaccurate or no information, for example the employer appears not to have followed up following a request for information regarding variation/termination on 30 July 2019;
• at the time of vote the prospect of forced redundancies, would have influenced the employees voting; and
• employee evidence at the hearing of an unpleasant atmosphere and aggression towards union members.
[156] The Employer submits that the Union’s claim about inaccurate information is not substantially directed to the information provided by the College of the consequences of voting for the termination under the agreement and that is what is relevant for the purposes of s.223(c).
[157] I accept the evidence that at the time of the vote there may have been an unpleasant atmosphere, and no doubt the spectre of forced redundancies may have weighed on the minds of some employees as they voted. Such would have been usual in the circumstances.
[158] The reasonable grounds do refer to whether employees agreed to the termination. I accept that the Union was unhappy with some of the processes leading up to the vote, and it is open that the College seemed decided on termination, was less than fully consultative, and was acting as quickly as possible. These matters strengthen my earlier conclusion that the time between notification and vote was inadequate.
[159] But in my view these criticisms fall short of establishing that the employees did not agree to the termination.
Section 223(d) – appropriate to approve the termination taking into account the views of the employee organisation covered by the agreement
[160] The Union describes this application to terminate the Agreement as highly unusual, probably unique. An application to terminate an agreement during its nominal life is contemplated in the Act. To make such an application only weeks after the Agreement was approved by the Commission is not usual.
[161] The Union submits that the bargaining process leading to the Agreement was a thorough process, and that survival of the College does not depend on terminating the Agreement. In that regard, the Union is prepared to work with the College to ensure its existence and to attain a mutually satisfactory resolution.
[162] The Union points to its offers of variation put on number of occasions throughout the process in June and July 2019 and to more recent discussions.
[163] As to the role of enterprise agreements in regulating terms and conditions of employment, the Union refers to the decision in Communications Electrical Electronic Energy Information Postal Plumbing and Allied Services Union of Australia v Aurizon Operations Limited, 73 where the Full Federal Court (in the context of termination after the nominal expiry date) opined that the importance of enterprise agreements in the regulation of terms and conditions of employment under the Fair Work Act cannot be gainsaid, and that agreements made between employees and their employer should not be lightly disturbed.
[164] Emphasising this point, the Union submits that the test under s.223(d) is that before an Agreement can be terminated the Commission must be positively satisfied that it is appropriate to do so.
[165] The Union also refers to the Full Bench decision in Esso Australia Pty Ltd v Australian Workers’ Union; Australian Manufacturing Workers’ Union; Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia 74 where at first instance, Deputy President Gostencnik, considering the question of appropriateness (referring to s.226(b) when considering termination after a normal expiry date) made the following observations:
“… Any circumstances identified, point in different directions they must be given weight and balanced one against the other and as a whole. Reasonable minds may differ on the conclusion following that exercise in the case of this kind”.
[166] The Union submits that the appropriate test, although derived from the section 225 application should similarly be applied in relation to a section 223 application.
[167] The Employer submits that under this provision, the Commission must accept the significant relevance of the required majority having made an informed decision to no longer have their employment governed by the Agreement. Further, the Union’s preference for a variation rather than termination is not a sufficient reason for the Commission to come to the view it is not appropriate to terminate the Agreement.
[168] The College points out the Union does not have 100% membership of the workforce, and the College met with and corresponded appropriately with the Union. In its submission the only thing it did not do was agree to pursue the variation, but it was not obliged to do so.
[169] As to the Union’s proposal to the College in terms of variation, the Employer submits that prior to the vote to terminate, its offers were essentially conditional on proof of the necessity for the variation and that is why they were not further explored.
[170] The College asserts the effect of the grandfathered provisions is that employees will continue to have superior terms and conditions to those prior to the Agreement coming into operation on 11 July 2019.
[171] Termination, it says, is not inconsistent with the scheme of the Act, including that there is no statutory predisposition against termination.
[172] The Employer submits that while s.223(d) may be broad it has bounds. It argues, in particular, that the Union’s reliance on s.225 cases 75 is misplaced and that in this matter weight must be placed on the existence of employee agreement.76
Conclusion on Section 223(d)
[173] Under s.223(d), the Commission is required to consider the appropriateness of the approval of the termination, taking into account the views of employee organisations.
[174] The Employer says the context of this consideration is that there has been a majority vote in favour of termination; the fact that the Union preferred a variation to a termination cannot be a sufficient reason to come to a view that is not appropriate to terminate the Agreement. In its submission, the College, acting lawfully, was transparent in its concerns, provided clear notice to employees, and there is no statutory predisposition against termination.
[175] I accept that the Employer has acted lawfully and agree there is no statutory disposition against termination, even for an application lodged only weeks after the Agreement’s approval.
[176] However, in accordance with s.223(d), the views of the Union as to the appropriateness of the approval of the termination are separate from the other factors and must be taken into account notwithstanding the lawfulness of the application and that there is no statutory disposition against termination.
[177] I concur with the Union’s comments that overturning an agreement that was less than a month old, in circumstances where, on the uncontested evidence, the negotiations leading up to its approval had been extensive could be a factor that can be taken into consideration.
[178] On the evidence, the parties negotiated the Agreement for over one year. The Union’s view is that termination potentially requires it to begin again, with all the resource implications and uncertainty for it and its members being a factor that the Commission should consider in whether it is appropriate to terminate the Agreement. However, as noted by Deputy President Gostencnik, when considering the question of reasonableness, that reasonable minds may differ on this point is a relevant consideration, but ultimately it is not a factor that in my view affects the appropriateness of the approval. This is because whenever there is a termination, the employee organisation will need to begin again to negotiate an agreement. That it should occur so soon after approval, though challenging for the organisation, is not so persuasive as to lead to a conclusion that it is inappropriate to terminate the agreement.
[179] There is one other matter I have considered, as follows.
[180] The Union draws attention to the Employer’s motivation behind this application. In the context of significant negotiations resulting in a successful enterprise agreement for the College, and referring to Mr Jeffs’s statement in correspondence as follows:
“we also feel that having an agreement will commit the college to future expectations and standards that are unsustainable (which were not known when the Agreement was approved)”.
[181] The Union submits that the financial position was known to the College prior to the approval of the Agreement. It also seems clear that by the time of the approval, the Union was also aware of the concerns with that financial position.
[182] However, the reference to a commitment that is unsustainable and unknown at the time it was approved is incorrect. This is because the Agreement contains a no extra claims clause. While it may be that Mr Jeffs’s statement was a misunderstanding, and I do not know about the motivation, the words and effect of the correspondence are entirely one way. The correspondence clearly supports the Employer’s preference for termination while it argues that the Union’s preference against termination renders its case less plausible.
[183] A mistaken statement about the legal effect of the Agreement is important, and in my view, could have been taken into account in considering the appropriateness of terminating the Agreement.
[184] However, it is not necessary to decide on the appropriateness of the termination under s.223(d) as I have already decided that employees were not given a reasonable opportunity to decide, but should it have been necessary, this statement could support the Union’s view that it is not appropriate to terminate the Agreement.
[185] For the sake of clarity, I have not based this view on the Union’s preferred position of variation, as opposed to termination preferred by the Employer. That there are competing positions is usual in any industrial dispute.
Final observations
[186] The task before the Tribunal was to decide whether the College had satisfied the requirements in s.223. Having concluded that that is not the case, it is a matter for the College what it now seeks to do.
[187] I note the Union’s stated willingness to vary the Agreement to take into account the financial position of the College, and it is clear on the evidence of both parties in this matter that they each understand that the College has financial concerns.
[188] If the College seeks to pursue this matter and wishes to do so with assistance of the Commission, it should advise my Chambers.
Order of the Commission
[189] The application is dismissed. I Order accordingly.
COMMISSIONER
Printed by authority of the Commonwealth Government Printer
<AE504298 PR720563 >
1 Applicant’s F24A – statutory declaration in support of termination of an enterprise agreement, at 2.1.
2 Applicant’s without prejudice outline of submissions, filed 14 October 2019, at [5].
3 Applicant’s Outline of Submissions, dated 11 November 2019, at [21].
4 Applicant’s without prejudice outline of submissions, filed 14 October 2019, at [8].
5 Ibid at [9].
6 Applicant’s Outline of Submissions, dated 11 November 2019, at [23].
7 Applicant’s without prejudice outline of submissions, filed 14 October 2019, at [10].
8 Applicant’s Outline of Submissions, dated 11 November 2019, at [26]-[27].
9 Ibid at [14].
10 Witness Statement of Mr David William Jeffs, dated 11 November 2019.
11 Ibid at [5].
12 Ibid at [10].
13 Ibid at [15].
14 Ibid at [16].
15 Independent Schools Queensland.
16 Ibid at [20].
17 Ibid at [25]-[26].
18 Ibid at [30].
19 PN167-176.
20 PN184-190.
21 PN336.
22 IEUA without prejudice ‘dot point’ submissions, dated 23 September 2019, at (a)(vi).
23 Ibid at (a)(v).
24 IEUA’s Outline of Submissions dated 26 November 2019, at [8].
25 Ibid at [17].
26 IEUA without prejudice ‘dot point’ submissions, dated 23 September 2019, at (c)(i).
27 Ibid at (c)(ii)-(iii).
28 IEUA’s Outline of Submissions dated 26 November 2019, at [22].
29 IEUA without prejudice ‘dot point’ submissions, dated 23 September 2019, at (c)(vii); IEUA’s Outline of Submissions dated 26 November 2019, at [27].
30 IEUA without prejudice ‘dot point’ submissions, dated 23 September 2019, at (c)(vi).
31 IEUA’s Outline of Submissions dated 26 November 2019, at [28].
32 IEUA without prejudice ‘dot point’ submissions, dated 23 September 2019, at (d)(ii).
33 Ibid.
34 Ibid at (d)(v).
35 IEUA’s Outline of Submissions dated 26 November 2019, at [51] and [52].
36 Witness Statement of Mr Richard Pascoe, dated 25 November 2019.
37 Ibid at [8].
38 Ibid at [10]-[11].
39 Ibid at [15].
40 Ibid at [17].
41 Ibid at [18]; Attachment 6 to Mr Pascoe’s statement.
42 Ibid at [20].
43 Ibid at [21].
44 Mr Keightley witness statement at [11].
45 Ibid at [22].
46 Ibid at [24].
47 Ibid at [21].
48 PN631.
49 PN759, 778.
50 PN785-787.
51 PN643-644.
52 PN656-657.
53 PN868.
54 PN943.
55 PN964-965.
56 Ms Kristen Hooper witness statement, at [9].
57 Ibid at [10].
58 Ibid at [16].
59 Ibid at [19].
60 Ibid at [20]-[21].
61 Ibid at [22].
62 PN984.
63 PN985.
64 PN990.
65 PN1052-1054.
66 PN 1106-1118.
67 [2013] FCA 1351, [112], Bromberg J.
68 Applicant’s Outline of Submissions, at [18].
69 DWJ8 attachment to witness statement of Mr Jeffs.
70 BGC Contracting Pty Ltd [2018] FWC 1466; cited with approval in Australian Workers' Union v Rigforce Pty Ltd t/a Rigforce[2019] FWCFB 6960, at [36].
71 Mr Stephen Keightley witness statement, at [6].
72 [2011] FWA 1282.
73 [2015] FCAFC 126.
74 [2020] FWCFB 1077.
75 For example the Aurizon and Esso cases.
76 Applicant's Final Submissions at [21], citing the decision in Carl Ziess [2017] FWCFA 5825.
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