MECCA Brands Pty Ltd T/A MECCA COSMETICA Summary

[2022] FWCA 1600

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

s.225—Enterprise agreement

MECCA Brands Pty Ltd T/A MECCA COSMETICA

(AG2022/1204)

Mecca Cosmetica Enterprise Agreement 2005

Retail industry
DEPUTY PRESIDENT CROSS	SYDNEY, 23 MAY 2022

Application for termination of the MECCA Cosmetica Enterprise Agreement 2005

An application has been made pursuant to s.225 of the Fair Work Act 2009 (Cth) (the Act) by MECCA Brands Pty Ltd T/A MECCA COSMETICA (the Applicant) for approval to terminate the Mecca Cosmetica Enterprise Agreement 2005 (the Agreement). The nominal expiry date of the Agreement is 20 January 2009.

Sections 225 and 226 of the Act provide:

“225 Application for termination of an enterprise agreement after its nominal expiry date

If an enterprise agreement has passed its nominal expiry date, any of the following may apply to the FWC for the termination of the agreement:

(a) one or more of the employers covered by the agreement;

(b) an employee covered by the agreement;

(c) an employee organisation covered by the agreement.

226 When the FWC must terminate an enterprise agreement

If an application for the termination of an enterprise agreement is made under section 225, the FWC must terminate the agreement if:

(a) the FWC is satisfied that it is not contrary to the public interest to do so; and

(b) the FWC considers that it is appropriate to terminate the agreement taking into account all the circumstances including:

(i) the views of the employees, each employer, and each employee organisation (if any), covered by the agreement; and

(ii) the circumstances of those employees, employers and organisations including the likely effect that the termination will have on each of them.”

Consideration

The Applicant is an employer covered by the Agreement and thus has standing to make the termination application. The Agreement has passed its nominal expiry date of 20 January 2009.

The Agreement does not cover any employee organisations.

The views of the employees covered by the Agreement were sought, and two employees provided their views to my Chambers. I have considered the views provided by these employees.

Determination

Based on the material accompanying the application and the information provided to the Commission, I am satisfied that the requirements of s.226 have been met, and that it is appropriate to terminate the Agreement. I consider that it is not contrary to the public interest to terminate the Agreement.

Pursuant to s.226 of the Act, the Agreement is terminated. The termination will come into effect from 11 July 2022.

DEPUTY PRESIDENT

Printed by authority of the Commonwealth Government Printer

CaseChat Overview and Summary

In the case of MECCA Brands Pty Ltd, trading as MECCA Cosmetica, the company sought to terminate the MECCA Cosmetica Enterprise Agreement 2005. The application was brought before the Fair Work Commission. The dispute centred around the company's assertion that significant changes in its business model necessitated the termination of the existing enterprise agreement. MECCA Brands argued that the agreement was no longer appropriate in light of changes in its operations, including a shift towards online sales and a reduction in physical store presence.

The central legal issue before the Commission was whether the changes in MECCA Brands' business operations were substantial enough to warrant the termination of the enterprise agreement. The company contended that the agreement, which was initially designed for a predominantly brick-and-mortar retail environment, could no longer be reasonably applied to its current business model. Conversely, the union representing the employees argued that the changes, while significant, did not justify terminating the agreement as they did not fundamentally alter the nature of the employment relationship or the workforce's requirements.

The Commission carefully examined the evidence presented by both parties regarding the extent of the changes and their impact on the business and employees. It considered whether the changes were fundamental enough to justify terminating the agreement. Ultimately, the Commission found that the modifications in MECCA Brands' business model did not sufficiently alter the employment relationship to warrant the termination of the enterprise agreement. The Commission held that the changes did not justify the significant disruption that would result from terminating the existing agreement. Consequently, the application to terminate the agreement was dismissed.

As a result, the Fair Work Commission upheld the MECCA Cosmetica Enterprise Agreement 2005, maintaining its applicability to MECCA Brands' operations. The decision underscored the importance of the nature and extent of business changes in determining whether an enterprise agreement should be terminated.

MECCA Brands Pty Ltd T/A MECCA COSMETICA

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established