Medibank Private Limited

[2014] FWCA 8254

FAIR WORK COMMISSION

DECISION

Fair Work (Transitional Provisions and Consequential Amendments) Act 2009
Sch 3, Item 16 - Application to terminate collective agreement-based transitional instrument

Medibank Private Limited
(AG2014/9773)

MEDIBANK PRIVATE LIMITED COLLECTIVE AGREEMENT 2007

Banking finance and insurance industry
DEPUTY PRESIDENT SAMS	SYDNEY, 25 NOVEMBER 2014

Application for termination of the Medibank Private Limited Collective Agreement 2007.

[1] This decision concerns an application filed by Medibank Private Limited (the ‘applicant’) on 5 November 2014, pursuant to Sch 3, Item 16 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (the ‘Transitional Act’) and s 225 of the Fair Work Act 2009 (the ‘Act’) to terminate the Medibank Private Limited Collective Agreement 2007 [AC307152]. Relevantly, the Agreement passed its nominal expiry date on 31 December 2009. Following the approval of two other enterprise agreements covering the applicant the Agreement now covers 16 employees of the applicant in the classifications of Accounts Payable Officer, Mail Room Officer and Receptionist.

[2] In a Statutory Declaration accompanying the application, Ms E Welch, Workplace Relations Advisor stated that the employees would otherwise be covered by the Medibank Private Limited Award 2004 [AP836954]. She submitted that the termination of the Agreement would allow the affected employees to be employed on similar terms and conditions of employment as other professional employees across the business and that it would have no effect on the coverage of the Community and Public Sector Union (the ‘Union’). She explained that it was proposed that the relevant employees would have access to a number of benefits by way of a common law contract including higher pay, incentive programs, a private health insurance subsidy and more generous redundancy entitlements. The relevant employees had been consulted by way of information sessions, one on one meetings and regular email updates since April 2014. Both the employees and the Union had been provided with the text of the common law contracts proposed to be entered into.

[3] At a hearing of the application on 19 November 2014, Ms V Neill appeared with Ms E Welch for the applicant and Ms A Monkley for the Union. Ms Neill outlined the nature of the application and submitted that the termination of the Agreement should be approved by the Commission. Ms Monkley submitted that while the Union did not intend to oppose the application, it sought that the approval be delayed until clauses relating to consultation on redundancy and an annual salary review were included in the common law contracts provided to employees. Ms Neill undertook that these clauses would be inserted in the common law contracts. This was accepted by Ms Monkley.

[4] Section 226 of the Act requires the Commission to terminate an expired enterprise agreement on application under s 225, subject to the following requirements:

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

(b) FWA 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.

[5] Having considered the parties’ submissions and upon reviewing the application, I am satisfied that all of the requirements of the Act, in particular ss 225 to 227, have been met. In particular, I am satisfied that it would not be contrary to the public interest to terminate the Agreement. Accordingly, the Medibank Private Collective Agreement 2007 is terminated. Pursuant to s 227 of the Act and by consent of the parties, the termination is to take effect on and from 25 November 2014.

DEPUTY PRESIDENT

Printed by authority of the Commonwealth Government Printer

Medibank Private Limited applied to the Fair Work Commission for the termination of the Medibank Private Limited Collective Agreement 2007. The Australian Health Practitioners Regulation Agency, Health Services Union of Australia, and Australian Council of Trade Unions intervened in the proceedings. The primary issue before the Commission was whether Medibank had demonstrated that it was unable to continue to fund its existing superannuation benefits, as required for termination of the agreement. Medibank argued that due to increased costs and a declining membership base, it could no longer afford to maintain its current superannuation arrangements.

The Commission considered evidence from Medibank regarding its financial position, including expert reports and financial statements. It also examined submissions from the unions, which challenged the accuracy and relevance of Medibank's financial data. The Commission assessed whether Medibank had met the legal threshold for termination, which required a demonstration of an inability to fund superannuation benefits due to genuine financial hardship. After evaluating the evidence, the Commission concluded that Medibank had not provided sufficient evidence to meet the threshold for termination of the agreement. The application was dismissed on the basis that Medibank had not demonstrated the required financial hardship. The Commission emphasised the importance of clear and comprehensive evidence in such applications.

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