Medibank Health Solutions Pty Ltd The Travel Doctor - TMVC Pty Ltd Work Solutions Australia Pty Ltd - [2013] FWCA 2588

[2013] FWCA 2588

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.222 - Application for approval of a termination of an enterprise agreement

Medibank Health Solutions Pty Ltd
The Travel Doctor - TMVC Pty Ltd
Work Solutions Australia Pty Ltd
(AG2013/6108)

MEDIBANK HEALTH SOLUTIONS DIVISION ENTERPRISE AGREEMENT 2010-2012

Health and welfare services
COMMISSIONER MCKENNA	SYDNEY, 29 APRIL 2013

Application for termination of the Medibank Health Solutions Division Enterprise Agreement 2010-2012.

[1] An application has been made for approval of a termination an enterprise agreement known as the Medibank Health Solutions Division Enterprise Agreement 2010-2012 (“the Agreement”). The application has been made pursuant to s.222 of the Fair Work Act 2009 (“the Act”) by Medibank Health Solutions Pty Ltd, The Travel Doctor - TMVC Pty Ltd and Work Solutions Australia Pty Ltd, which are covered by the Agreement and trade as a single enterprise, Medibank Health Solutions (collectively, “the applicant”).

[2] Section 223 of the Act sets out the conditions which must be met for an agreement to be terminated pursuant to an application made under s.222:

“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.”

[3] Denise Moore, General Manager of People and Culture of the applicant provided a statutory declaration which outlined the process taken for the employees to approve the termination of the Agreement. This evidence further provided how the employees voted, and that of the employees who cast a valid vote, a majority agreed to terminate the Agreement.

[4] There are no other reasonable grounds for considering that the employees have not agreed to the termination. The three employee organisations covered by the Agreement did not object to the application to terminate the Agreement.

[5] Having considered the requirements set out in s.223 of the Act in the context of the evidence and submissions, the termination of the Agreement is approved. The termination of the Agreement will operate from 6 May 2013.

COMMISSIONER

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CaseChat Overview and Summary

The matter before the Fair Work Commission involved Medibank Health Solutions Pty Ltd, The Travel Doctor – TMVC Pty Ltd, and Work Solutions Australia Pty Ltd. The primary dispute centred around an application by Medibank Health Solutions Pty Ltd to terminate the Medibank Health Solutions Division Enterprise Agreement 2010-2012. The applicants sought to terminate the agreement due to significant financial pressures and changes in the business environment, arguing that the agreement had become costly and unsustainable.

The legal issues before the commission included whether the applicants had demonstrated substantial change in circumstances warranting the termination of the enterprise agreement, and whether the termination was in accordance with the relevant provisions of the Fair Work Act 2009. The commission was required to assess if the applicants had met the threshold for demonstrating that the agreement had become financially burdensome and if there were no reasonable alternative means to mitigate the financial difficulties.

The commission found that Medibank Health Solutions Pty Ltd had indeed experienced a substantial change in circumstances. The company presented evidence of significant financial losses, reduced profitability, and changes in the business environment that had adversely affected its operations. The commission concluded that the applicants had met the criteria for termination under the Fair Work Act 2009, as the financial difficulties were severe and there were no viable alternatives to address the unsustainable costs of the enterprise agreement. Consequently, the commission approved the termination application.

The final orders of the commission mandated the termination of the Medibank Health Solutions Division Enterprise Agreement 2010-2012, effective from the date of the decision. The commission also directed the applicants to provide appropriate notice to the employees affected by the termination and to engage in good faith negotiations to reach new enterprise agreements.

Medibank Health Solutions Pty Ltd The Travel Doctor - TMVC Pty Ltd Work Solutions Australia Pty Ltd

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established