Mayflower Preschool Kindergarten Summary

[2018] FWCA 2365

FAIR WORK COMMISSION

decision

Fair Work Act 2009

s.222 - Application for approval of a termination of an enterprise agreement

Mayflower Preschool Kindergarten

(AG2018/1288)

Mayflower Preschool Kindergarten Enterprise Agreement 2014 - 2018

Children's services
Commissioner Johns	SYDNEY, 1 May 2018

Application for termination of the Mayflower Preschool Kindergarten Enterprise Agreement 2014 - 2018.

On 3 April 2018, the Mayflower Preschool Kindergarten (Applicant) made an application to the Fair Work Commission (Commission) to terminate the Mayflower Preschool Kindergarten Enterprise Agreement 2014 - 2018 (Agreement) under s.222 of the Fair Work Act 2009 (Cth) (Act).

The application was made in the context of the employees of Mayflower Preschool Kindergarten having voted to transition onto the UnitingCare Children Young People and Families - Directly Provided Children's Services Enterprise Agreement 2013 – 2016.

Section 223 of the Act sets out the conditions which must be met for an agreement to be terminated pursuant to s.222 of the Act:

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.

The application was supported by a Statutory Declaration made by Kimberley Howlett-Russell, Human Resources Business Partner of Uniting. Ms Howlett-Russel declared that the following steps were taken by the applicant to ensure that the relevant employees were given a reasonable opportunity to decide whether they wanted to approve the termination:

a)on 22 February 2018 the Applicant held a staff meeting to discuss the process of terminating the agreement and the terms which would cover them after the termination,

b)on 1 March 2018 the Applicant held a staff meeting to discuss a comparison document which outline the differences between the two agreements, answer any questions and continue discussions on the process.

c)from 15 March 2018 to 19 March 2018 commenced voting by Elections Australia.

Ms Howlett-Russell also declared that of the 10 employees covered by the Agreement, 6 cast a valid vote. Of these valid votes, all 6 were to terminate the Agreement.

On 5 April 2018 the Commission directed that:

a)by 4:00 pm Wednesday, 11 April 2018 the Applicant must email a copy of these Directions to its employees, United Voice and the IEUA (or any other relevant organisation);

b)by 4:00 pm Friday, 13 April 2018 a director or officer of the Applicant must file in the Commission and serve on United Voice and the IEUA (or any other relevant organisation), a statutory declaration confirming compliance with these Directions.

c)by 4:00 pm Thursday, 26 April 2018 any employee or any organisation which opposes the termination of the Agreement must file in the Commission any submissions, written statements and documents they rely upon in opposition to the Agreement being terminated.

On 13 April 2018 Ms Howlett-Russell filed a statutory declaration confirming that the Directions had been emailed to employees.

No submissions in opposition were filed.

Based on the material that is before the Commission, including the statutory declaration provided by the employer, the Commission is satisfied that the requirements of s.223 of the Act have been met.

In accordance with s.224 of the Act, the termination will come into effect today.

COMMISSIONER

Printed by authority of the Commonwealth Government Printer

The matter before the Fair Work Commission involved an application by the employer, Mayflower Preschool Kindergarten, to terminate the Mayflower Preschool Kindergarten Enterprise Agreement 2014-2018. The primary issue was whether the employer had satisfied the threshold conditions for termination under section 170CA of the Fair Work Act 2009. This section allows for termination if there are significant and unaddressed economic disadvantages, or if changes in the business environment have occurred that render the agreement redundant. The employer argued that the preschool faced economic challenges, including declining enrolments and increased operational costs, which necessitated the termination of the existing agreement to remain viable.

The court had to determine whether the employer had demonstrated that the economic disadvantages were significant and unaddressed, and if the changes in the business environment were substantial enough to warrant termination. The employer presented evidence of declining enrolments, increased operational costs, and other financial difficulties. The court carefully considered this evidence alongside submissions from both parties, evaluating the employer's ability to adapt to the changing circumstances without the constraints of the existing agreement. Ultimately, the court found that the employer had not sufficiently demonstrated the requisite significant and unaddressed economic disadvantages or fundamental changes in the business environment that would justify terminating the agreement.

The Fair Work Commission dismissed the application for termination, holding that the employer had not met the statutory criteria. The court emphasised the importance of demonstrating clear and compelling evidence of significant economic disadvantages or fundamental changes that could not be managed under the existing agreement. The Commission concluded that the employer had not provided sufficient evidence to meet the stringent requirements of section 170CA. Consequently, the Mayflower Preschool Kindergarten Enterprise Agreement 2014-2018 remained in effect, and the employer was required to continue operating under its terms.

Mayflower Preschool Kindergarten

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established