MC Scaffolds Pty Ltd T/A MC Scaffolds

[2021] FWCA 5158

[2021] FWCA 5158

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.225 - Application for termination of an enterprise agreement after its nominal expiry date

MC Scaffolds Pty Ltd T/A MC Scaffolds
(AG2021/6767)

MC SCAFFOLDS ENTERPRISE AGREEMENT 2013

Building, metal and civil construction industries
COMMISSIONER SPENCER	BRISBANE, 14 SEPTEMBER 2021

Application for termination of the MC Scaffolds Enterprise Agreement 2013.

[1] An application pursuant to s.225 of the Fair Work Act 2009 (the Act) was made by MC Scaffolds Pty Ltd T/A MC Scaffolds (the Applicant) to terminate the MC Scaffolds Enterprise Agreement 2013 (the Agreement).

[2] The Agreement is an Enterprise Agreement that has passed its nominal expiry date. The nominal expiry date for the Agreement was 1 December 2017.

[3] 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.”

[4] Mr Jason Hilton Crockett, Director of the Applicant, filed a Form 24C Statutory Declaration in support of the application to terminate the Agreement.

[5] Mr Crockett stated that the current Agreement is more than 3 years past its nominal expiry date, and as a result, the Agreement is dated with respect to the developments in industrial relations over the past 7 years. Mr Crockett further stated that the Agreement was prepared, having regard to the industry and business circumstances at the time (being in 2013/14). There has been significant change since 2013, including a significant review of the Building and Construction General On-site Award and Clerks Private Sector Award, which, particularly in the case of the Building and Construction General On­site Award, has led to simplification of that Award and its application, making it easier for employers in the industry to understand and apply this Award correctly.

[6] Mr Crockett stated that, rather than negotiating a new Enterprise Agreement, the business intends to maintain its current pay rates with current employees, but otherwise comply with the Building and Construction General On-site Award and the Clerks Private Sector Award (as relevant to its employees). In his statutory declaration, Mr Crockett confirmed that the Applicant undertook to maintain all existing employees on their current renumeration arrangements. Mr Crockett confirmed that if the application is approved, employee’s current remuneration arrangements will be continued, and they will be provided with an appropriate Employment Contract, confirming their coverage under the relevant Award, and the continuation of their current remuneration and entitlements arrangements.

[7] It was submitted on behalf of the Applicant that there are no factors known to the Applicant, to suggest that termination of the Enterprise Agreement could be contrary to the public interest.

[8] The Applicant submitted, by way of context, that the Enterprise Agreement was sought and approved in 2013, in an effort to simplify the Applicant's payroll arrangements and to meet market expectations around remuneration, and in the face of otherwise applying the Building and Construction General On­site Award and Clerks Private Sector Award (Awards), as they were at the time. It was submitted that one of the former directors in the business at the time, who was experienced in negotiating and operating under Enterprise Agreements, believed that an Enterprise Agreement was the appropriate strategy at the time for the Applicant's business.

[9] The Applicant submitted that since that time, the industry and the business has changed, with the director who was supportive of the Enterprise Agreement leaving the business in 2013. Further, following the review process of the Modern Awards, the otherwise applicable Modern Awards, and in particular the Building and Construction General On-site Award has been simplified and made easier to understand and apply.

[10] The Applicant submitted that rather than negotiating another Enterprise Agreement, it views the Awards as now enabling ease of understanding for the Employer and its Employees, making it a more attractive option for the Employer (as opposed to renegotiation).

[11] It was further submitted that the termination of the Enterprise Agreement will enable the Applicant to revert to the Building and Construction General On-site Award and Clerks Private Sector Award, making it consistent with what it understands to be the majority of operators in the industry, and the region within which it provides its services.

[12] The Applicant confirmed that, despite the reversion to the Award, no employee will suffer a pay reduction as a result of the change, and it was confirmed that employees will be paid in excess of what they would be entitled to under the Award, for their duties and hours of work.

[13] In his statutory declaration, Mr Crockett stated that the Applicant engaged in an extensive consultation process with its employees, relevant to its consideration of applying to have the Enterprise Agreement terminated.

[14] In terms of the consultation process, Mr Crockett stated that on 16 October 2021, a letter was sent to all affected employees, outlining an intention to consult with them on termination of the Enterprise Agreement. A copy of that correspondence was provided to the Commission.

[15] Mr Crockett stated that the Applicant then conducted group meetings with all affected employees. Three group meetings were conducted to capture all affected staff, and those meetings were conducted on 20 October, 21 October and 3 November 2020. It was confirmed with each employee that they had received the letter. Only one employee confirmed that he had not received the letter (as he had started employment after the letters were sent out). Mr Crockett confirmed that a copy of the letter was then supplied to him that day.

[16] Mr Crockett stated that at the group meetings, the only clarifying area of concern for the employees, was in relation to their remuneration arrangements. It was confirmed with the employees that if the Enterprise Agreement was terminated, their current remuneration arrangements would not be affected and that they would continue to receive their current remuneration arrangements (which are in excess of current Award rates).

[17] To ensure that there was no employee opposition to the proposed termination of the Enterprise Agreement, Mr Crockett stated that the Applicant then conducted a secret ballot, and this was conducted between Monday 30 November and Sunday 6 December 2020. Employees were informed of the ballot process on 23 November 2020.

[18] A Returning Officer, Mali Cairns was appointed to count and tally the ballots and the end of the secret ballot process. The result of the ballot was that of 16 ballots issued, 12 voted in favour of the termination and 4 votes were not returned. There were zero votes against the termination of the Enterprise Agreement. A copy of the Ballot Return Form was provided to the Commission.

[19] Mr Crockett confirmed that whilst three employees had left the Applicant's business since the ballot, the workforce remains consistent. Prior to filing of this Application, all employees were notified of the pending lodgement of the application and were invited again to raise any issues or change of position prior to filing. Mr Crockett confirmed that no further issues or concerns were raised.

[20] In response to concerns raised with the Applicant regarding pay rates, a further Statutory Declaration was provided from Mr Crockett dated 7 September 2021. This was to ensure that the employees would be paid no less than they would be entitled to under the relevant Awards.

[21] Taking into account the information provided in response to the matters in s. 226 of the Act, I consider it appropriate to terminate the Agreement on the basis that the material satisfies the legislative requirements. The application is therefore granted, and the Agreement is terminated. The termination of the Agreement will take effect from 14 September 2021.

[22] I Order accordingly.

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