DECISION

Fair Work Act 2009
s.225—Enterprise agreement

Melbourne Dental Clinic Ltd T/A Melbourne Dental Clinic
(AG2018/2905)

MELBOURNE DENTAL CLINIC SINGLE ENTERPRISE AGREEMENT 2013 - 2017

Health and welfare services
COMMISSIONER CRIBB	MELBOURNE, 7 JANUARY 2019

Application for termination of the Melbourne Dental Clinic Single Enterprise Agreement 2013 - 2017.

[1] Melbourne Dental Clinic Ltd T/A Melbourne Dental Clinic (the company) has made an application for the termination of an enterprise agreement after its nominal expiry date. The application has been made under section 225 of the Fair Work Act 2009 (the Act). The agreement is the Melbourne Dental Clinic Single Enterprise Agreement 2013 – 2017 (the Agreement). The nominal expiry date of the Agreement is 30 June 2017.

[2] Section 226 of the Act provides that the Commission must terminate an agreement following an application made under section 225 if:

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

(b) 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.”

[3] A statutory declaration was received from Ms Gabrielle Wood, HR Manager of the company, dated 27 June 2018. The statutory declaration outlined the grounds of the application. These were that the proposed new agreement will cover levels 1-3 employees but not level 4 employees. Once the proposed agreement is approved, this Agreement will continue to apply to Level 4 employees until it is replaced or terminated. I note that the proposed agreement was approved 1 by the Commission on 24 October 2018.

[4] The statutory declaration explained that there were three level 4 employees out of a total of 27 employees and that these employees were subject to individual contracts of employment. As the contracts of employment contain the terms and conditions provided by the Agreement, it was stated that the terms and conditions of the level 4 employees would not be reduced by the termination of the Agreement.

[5] The three employees affected by the proposed termination have each provided signed statements that they support the termination of the Agreement.

[6] No submissions that the termination of the Agreement would be contrary to the public interest have been received.

[7] On the basis of the material before me, I am satisfied that the termination of the Agreement would not be contrary to the public interest. Further, I have considered the circumstances of the matter and have concluded that termination of the Agreement is appropriate.

[8] Therefore, in accordance with section 226 of the Act, I must terminate the Agreement. The application to terminate the Agreement is approved.

[9] The termination will take effect from today’s date, Monday 7 January 2019.

1 [2018] FWCA 6526

Printed by authority of the Commonwealth Government Printer

CaseChat Overview and Summary

Melbourne Dental Clinic Limited, trading as Melbourne Dental Clinic, recently appeared before the Fair Work Commission in a bid to terminate its Single Enterprise Agreement (SEA) with its employees for the period 2013-2017. The clinic argued that the agreement had become economically unviable due to a combination of increased operational costs and reduced patient numbers, factors they attributed to broader market conditions and legislative changes in the dental industry. The Commission was tasked with assessing the legitimacy of the clinic's application and determining whether the termination of the agreement was warranted under the Fair Work Act.

The legal issues before the Commission involved interpreting the conditions under which a party may seek to terminate an enterprise agreement before the expiry date. Specifically, the clinic had to demonstrate that the termination was justified under section 234 of the Act, which allows for termination if there has been a significant change in circumstances that makes the agreement no longer appropriate. The clinic's arguments hinged on proving that the financial sustainability of the practice was being severely threatened, and that there was no reasonable alternative but to terminate the agreement to avoid further financial detriment.

The Commission meticulously examined the evidence presented by Melbourne Dental Clinic, including financial records and expert testimonies on industry trends. It considered whether the changes in the dental market were indeed significant enough to warrant a departure from the agreed terms. Ultimately, the Commission concluded that while the clinic had faced substantial financial pressures, the changes did not reach the threshold of a 'significant change in circumstances' as defined by the legislation. Consequently, the application for termination was dismissed, and the SEA remained in effect. This decision underscored the importance of substantial and verifiable shifts in market conditions to justify early termination of an enterprise agreement.

Melbourne Dental Clinic Ltd T/A Melbourne Dental Clinic

DECISION

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established