Nardia Plumbing Pty Ltd

[2016] FWCA 3482

[2016] FWCA 3482

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.225 - Application for termination of an enterprise agreement after its nominal expiry date

Nardia Plumbing Pty Ltd
(AG2016/3190)

NARDIA PLUMBING PTY LTD AND CEPU PLUMBING DIVISION AGREEMENT 2011-2015

Plumbing industry
SENIOR DEPUTY PRESIDENT RICHARDS	BRISBANE, 1 JUNE 2016

Application for termination of the Nardia Plumbing Pty Ltd and CEPU Plumbing Division Agreement 2011-2015 – contested application – public interest

[1] This decision concerns an application made by Nardia Plumbing Pty Ltd (“the employer”) seeking the termination of the Nardia Plumbing Pty Ltd and CEPU Plumbing Division Agreement 2011-2015 (“the Agreement”) under s.225 of the Fair Work Act 2009 (“the Act”). The Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia – Plumbing Division – Queensland Branch (“the CEPU”) is an employee organisation covered by the Agreement and opposes the termination of the Agreement on the grounds set out further below.

Relevant legislative provisions

[2] Section 225 of the Act states:

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.

[3] Section 226 of the Act states:

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

[4] The application as made is an application for the purposes of s.225 of the Act. There is no contest between the CEPU and the employer in this regard. The threshold requirement of s.226 is therefore satisfied.

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

[5] The employer seeks to terminate the Agreement

[6] There are no employees covered by the Agreement. This is because there is no work being carried out under the Agreement. There are no views of the employees that can be ascertained, as a result. This is not a matter that is in contest.

[7] Nothing was put to me that the CEPU’s interests were affected in some adverse manner, other than at a future point (if employees were to be employed to perform the same work once again as performed under the Agreement) it might potentially be involved in enterprise bargaining in the manner stipulated by the Act.

[8] The employer seeks to terminate the Agreement because it has passed its nominal expiry date (31 October 2015) and there are no employees employed under the classifications in the Agreement. There is some dispute between the parties as to whether future employees will be covered by the Plumbing and Fire Sprinklers Award 2010 or otherwise be covered by another agreement made under the Act, that being the Major Commercial Plumbing Union Collective Agreement 2015 – 2019.

[9] The CEPU argues that the interests of future employees who might be required to perform work under the Agreement will be disadvantaged if the Agreement is terminated. The CEPU contends that in all likelihood, such employees if they were to be employed in the future, would be remunerated in accordance with the Plumbing And Fire Sprinklers Award 2010 and not the terms of the Agreement:

“On this basis, it is in the public's interest that the Agreement […] remain in place to cover any potential future employees.”

[10] The CEPU contends that agreement making is time-consuming and the continued operation of the Agreement to ensure that any new employees who might perform work under the Agreement can derive the benefits of the terms and conditions of the Agreement and avoid the inferior terms and conditions of the Plumbing And Fire Sprinklers Award 2010.

[11] The CEPU also contends that the employer has provided no substantial argument as to why the Agreement should be terminated:

“[…] the applicant “has not made out the public interest argument, the fact that this agreement has no impact on the applicant, given employees no employees under it at this particular time and that should it do so in the future the applicant is committed to negotiating a new agreement with the respondent, there is no reason for this agreement to be terminated at this point in time.” (sic)

[12] The CEPU continued that:

“Given the applicant has not made any substantial arguments as to why the Agreement should be terminated, the commission cannot be satisfied that terminating the Agreement is not contrary to the public interest nor can it find that it is appropriate to do so after taking into consideration the views of the respondent or the likely negative impact it will have on any future employees […]“ (sic)

[13] The Full Bench of the Commission in Kellogg Brown & Root Pty Ltd and others v Esso Australia Pty Ltd[2005] AIRC 72 considered the Commission's function under s.170MH of the Workplace Relations Act1996. Former section 170 MH provided for termination of an agreement in the public interest will. The Full Bench made the following finding in relation to the role of the public interest in the termination of an agreement:

"[23] 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.

[…]

[26] [...] The ascertainment of the public interest may involve balancing countervailing public interests. That the Commission should take all of the circumstances into account is made clear by Dawson J in Re Australian Insurance Employees Union; Ex parte Academy Insurance Pty Ltd (1988) 28 IR 214 at [214-215]. These authorities provide useful general guidance in the application of the test in s.170MH(3). They illustrate the types of interests which can be properly described as public interests and confirm the breadth of circumstances which may be relevant to the ascertainment of those interests." [My emphasis]

[14] The Full Bench decision provides guidance that the reversion to a safety net award does not give rise to a public interest consideration. However, where employees may revert upon termination of agreement to an unregulated or award free environment the public interest may be invoked (noting that the statutory-based safety net has been expanded since the time of the decision of the Full Bench). The objects of the Act, such as 3(f) are not compromised by the application. This is because future employees are not denied access to enterprise bargaining and may have representation for such a purpose.

[15] In this particular instance before me, the public interest cannot be excited for reasons that there are no employees who will be affected upon termination of the Agreement. Moreover, even if there were employees whose work was covered by the Agreement, the termination of the Agreement alone (putting aside other statutory considerations such as the views of the respective persons), would not give rise to a public interest consideration in its own right.

Conclusion

[16] I am satisfied that an application for the termination of an enterprise agreement has been made, and further that the employer, as the applicant, is a person able to make an application pursuant to s.225(a) of the Act.

[17] I am satisfied, for the reasons given above that it is not contrary to the public interest to order the termination of the Agreement.

[18] I am also satisfied that it is appropriate in all the circumstances to do so having considered the views of the CEPU and the employer and the employees, to the extent that that has been possible given no employees are covered by the Agreement.

[19] I am not satisfied that section 226(b) of the Act requires me to consider the views and circumstances of potential future employees. Further, I am not satisfied that it would be contrary to the public interest not to do so, under section 226(a) of the Act, in the circumstances of this application.

[20] Having considered the material and s.226 of the Act, the Agreement must be terminated.

[21] The termination will operate from the date of this decision.

SENIOR DEPUTY PRESIDENT

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