Mental Health Foundation (ACT) Inc T/A Mental Health Foundation ACT
[2018] FWCA 267
•12 JANUARY 2017
| [2018] FWCA 267 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work (Transitional Provisions and Consequential Amendments) Act 2009
Item 16 Sch. 3—Termination of transitional instrument
Mental Health Foundation (ACT) Inc T/A Mental Health Foundation ACT
(AG2017/6016)
MENTAL HEALTH FOUNDATION (ACT)
Australian Capital Territory | |
DEPUTY PRESIDENT KOVACIC | CANBERRA, 12 JANUARY 2017 |
Application for termination of the Mental Health Foundation (ACT) Inc Collective Agreement 2006-2009 – Agreement terminated.
[1] On 7 December 2017 the Mental Health Foundation (ACT) Inc T/A Mental Health Foundation ACT (MHF - the Applicant) made an application to terminate the Mental Health Foundation (ACT) Inc Collective Agreement 2006-2009 1(the Agreement) under item 16 of schedule 3 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth) (the TPCA Act).
[2] A statutory declaration from Ms Angela Ingram, MHF’s Executive Officer, was provided in support of the application.
[3] The Agreement does not specify a nominal expiry date, simply stating that “This Agreement shall operate from the date of lodgement and shall continue in force for a period of three years.” Given the title of the Agreement, it is likely to have passed its nominal expiry date several years ago.
[4] If the Agreement were to be terminated, employees would be employed under the Social, Community, Home Care and Disability Services Industry Award 2010 2 (the Award).
[5] Item 16 of schedule 3 of the TPCA Act provides that Subdivision D of Division 7 of Part 2-4 of the Fair Work Act 2009 (the Act) applies in relation to a collective agreement-based transitional instrument as if a reference to an enterprise agreement included a reference to a collective agreement-based transitional instrument.
[6] The relevant provisions of the Act relating to termination of an enterprise agreement are as follows:
“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.
227 When termination comes into operation
If an enterprise agreement is terminated under section 226, the termination operates from the day specified in the decision to terminate the agreement.”
[7] The application was heard by the Fair Work Commission (the Commission) on 11 January 2018. At the hearing, Mr Bede Gahan appeared with permission for MHF together with Ms Karen McKernan and Ms Ingram from the MHF.
Consideration of the issues
[8] With regard to the requirements of s.225, as mentioned above the Agreement is likely to have passed its nominal expiry date several years ago. Further, as clause 3 of the Agreement explicitly states that it shall apply to the MHF, I am satisfied that MHF is entitled to make an application to the Commission for termination of the Agreement.
[9] I turn now to consider each of the matters specified in s.226 of the Act.
s.226(a) – the FWC is satisfied that it is not contrary to the public interest to do so
[10] Ms Ingram stated in her statutory declaration that it was not contrary to the public interest to terminate the Agreement as it no longer was an appropriate minimum set of terms and conditions for MHF employees.
[11] The Full Bench in Aurizon Operations Limited; Aurizon Network Pty Ltd; Australia Eastern Railroad Pty Ltd 3 (Aurizon) considered the issue of public interest in the context of s.226(a) and observed as follows:
“[129] Section 226(a) requires a consideration of whether termination of the agreements is not contrary to the public interest. It seems to us that a consideration of the public interest will involve something that is distinct from the interests of the persons and bodies covered by the agreements. This distinction seems to be reflected in the structure of s. 226. The question of how the public interest is to be assessed was considered by a Full Bench of the Australian Industrial Relations Commission in Re Kellogg Brown and Root, Bass Strait (Esso) Onshore/Offshore Facilities Certified Agreement 2000. The decision in Kellogg Brown concerned an application to terminate a certified agreement pursuant to s. 170MH of the WR Act. The Full Bench observed:
“The absence of any reference to the interests of the negotiating parties in s.170MH(3) is significant. It follows that the views of persons bound by the agreement may be relevant to the exercise of the discretion if they shed light upon the effect of termination on the public interest, but they should not be given any independent weight. To do so would be to import into the application of the section something which on its proper construction it does not include.
The notion of public interest refers to matters that might affect the public as a whole such as the achievement or otherwise of the various objects of the Act, employment levels, inflation, and the maintenance of proper industrial standards. An example of something in the last category may be a case in which there was no applicable award and the termination of the agreement would lead to an absence of award coverage for the employees. While the content of the notion of public interest cannot be precisely defined, it is distinct in nature from the interests of the parties. And although the public interest and the interests of the parties may be simultaneously affected, that fact does not lessen the distinction between them.”“ (Endnotes not included)
[12] Having regard to the decision in Aurizon, there is nothing before the Commission which enlivens the public interest in this case.
s.226(b)(i) – the views of the employees, each employer, and each employee organisation (if any), covered by the agreement
[13] Ms Ingram deposed in her statutory declaration that correspondence was sent to all employees inviting their views on the proposed termination 4.
[14] A number of employees expressed concern regarding the following issues:
• the reduction of annual leave from 6 weeks under the Agreement to 4 weeks under the Award (as per the National Employment Standards – NES);
• the reduction of personal leave reduced from 18 days in the first year of employment and 15 days in subsequent years (of which 10 days accumulates if not used) under the Agreement to 10 days under the Award (as per the NES);
• the reduction in vehicle allowance from 81c/km under the Agreement to 78c/km under the Award;
• the reduction in ‘on-call’ allowance from $20 per day to $18.55 per day under the Award; and
• the loss of three additional paid public holidays provided for in the Agreement for those week days between Christmas and the New Year. 5
[15] Employees also asked a number of questions such as what Award classification they would move to if the Agreement was terminated, whether they could choose to remain under the Agreement if it was terminated and what would happen in respect of study leave. 6
[16] At the hearing, MHF submitted that it currently had 30 employees, with 15 employees employed on either a full time or part-time basis and with the remaining 15 employed as casual employees. MHF further submitted that 5 employees responded to the invitation to comment on the proposed termination of the Agreement, with no more than 3 employees commenting on any of the abovementioned issues.
[17] MHF also submitted that under the National Disability Insurance Scheme (NDIS) it was moving from a situation where it received block funding (i.e. guaranteed funding for a specific period) to a fee for service model. As a result, MHF was taking steps to ensure its future financial viability, with seeking termination of the Agreement one of the steps taken by MHF. To that end MHF cited that a number of staff were not taking their full annual leave entitlement which resulted in accrued annual leave being reflected as a liability in its financial statements.
s.226(b)(ii) – the circumstances of those employees, employers and organisations including the likely effect that the termination will have on each of them
[18] Ms Ingram deposed that there would be no financial disadvantage in terminating the Agreement, with no impact or change to employee’s remuneration, ordinary hours, termination notice or redundancy pay. She further submitted that employees would gain access to a number of additional entitlements, including allowances, that were absent in the Agreement and the right to be consulted in relation to major workplace change and changes to their ordinary hours of work/roster changes.
[19] Ms Ingram accepted however that employees would no longer be entitled to an additional two weeks of annual leave per year.
[20] I note that in her statutory declaration Ms Ingram indicated in the attachment 7 which set out those employee comments received regarding the proposed termination that MHF would maintain the level of vehicle allowance at 81c/km, did not intend to reduce the on-call allowance below $20 per day and proposed to offer eligible staff up to one week’s paid study leave each year. This was confirmed at the hearing.
[21] At the hearing, MHF submitted that there were “swings and roundabouts” associated with termination of the Agreement. More specifically, MHF submitted that casual employees would benefit from a more generous safety net, e.g. the casual loading would increase from 20 per cent under the Agreement to 25 per cent under the Award and they would also benefit from improved overtime payments and allowances under the Award. In respect of full time and part-time employees, MHF acknowledged the reductions in annual and personal leave and the loss of the additional public holidays between Christmas and the New Year which would flow from termination of the Agreement. However, it also pointed to a number of benefits which would flow to full time and part-time employees if the Agreement was terminated. These included that time off in lieu of payment for overtime would no longer be the default form of compensation for overtime worked and that the overtime rates specified in the Award were more beneficial than those provided for in the Agreement. In addition, these employees would be covered by the Award’s more beneficial allowance provisions and provisions relating to breaks and would also have access to the Award’s flexibility term.
Summary
[22] The above analysis indicates that termination of the Agreement would not be contrary to the public interest, that a small number of employees (5 out of 30) expressed concerns regarding the proposed termination of the Agreement, that termination of the Agreement will benefit MHF’s casual employees (about half of MHF’s current workforce) and that full time and part-time employees would be both positively and negatively impacted by termination of the Agreement. While I acknowledge the impact of termination of the Agreement on full time and part-time employees, I also note the implications for MHF of the implementation of the NDIS. Against that background, on balance, I consider it appropriate to terminate the Agreement having regard to all the circumstances in this case.
Conclusion
[23] For all the above reasons, I am satisfied that termination of the Agreement would not be contrary to the public interest and consider that it is appropriate to terminate the agreement taking into account all the circumstances in this case. Accordingly, as required by s.226 of the Act, the Commission must therefore terminate the Agreement. The termination will come into effect from the date of this decision. An Order to that effect will be issued in conjunction with this Decision.
1 AC3012152
2 MA000100
3 (2015) 249 IR 55
4 Statutory Declaration in Relation to Termination of a Collective Agreement-Based Transitional Instrument at Attachment B
5 Ibid at Attachment C
6 Ibid
7 Ibid
Printed by authority of the Commonwealth Government Printer
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