Nat Pty Limited
[2022] FWCA 649
•23 FEBRUARY 2022
| [2022] FWCA 649 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.225—Enterprise agreement
Nat Pty Limited
(AG2021/8666)
Nat Pty Ltd Enterprise Agreement 2001
| Manufacturing and associated industries | |
| DEPUTY PRESIDENT EASTON | SYDNEY, 23 FEBRUARY 2022 |
Application for termination of the Nat Pty Ltd Enterprise Agreement 2001.
Nat Pty Limited (“Nat”) made an application for the termination of the Nat Pty Ltd Enterprise Agreement 2001 (the Agreement) pursuant to s.225 of the Fair Work Act 2009 (Cth) (the Act). The Agreement was made pursuant to the Workplace Relations Act 1996 (Cth) and has passed its nominal expiry date.
Section 225 and section 226 of the Act provides:
“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.”
The application was accompanied by a F24C declaration completed by Mr Janusz Polozenko (Managing Director for Nat). Mr Polozenko provided the following reasons for the termination of the Agreement:
“• the Agreement was made in 2001 and notionally expired over 17 years ago (in 2004);
· the Agreement was made pursuant to the Workplace Relations Act 1996 and does not comply with the statutory requirements for Enterprise Agreements under Part 2-4 of the Fair Work Act 2009 (e.g. mandatory flexibility and consultation terms);
· the Agreement contains terms that are inconsistent with the National Employment Standards (NES) in several key aspects, including in respect of a proposed ‘all-in rate’ which purports to absorb certain NES entitlements;
· the wage rates set out in the Agreement are no longer competitive or ‘better off overall’ than the minimum rates and entitlements prescribed by the aligned modern award (i.e. the Manufacturing and Associated Industries and Occupations Award 2020);
· the Agreement refers to and purports to incorporate the pre-reform National Joinery & Building Trades Products Award, however this award does not properly relate to the employer’s industry (i.e. associated with Manufacturing) and/or the particular work functions performed by the employees;
· the employer has recently issued the employees with up-to-date employment agreements, which were prepared by reference to the correct aligned award and when taken together with that award cause many of the Agreement’s terms to become irrelevant; and
· at the current time, no substantive good-faith bargaining negotiations have taken place between the employer and the employees (or any union bargaining representatives) in respect of a replacement enterprise agreement.”
A telephone directions hearing was held on 21 December 2021 where Mr Peter Doughman of Matthews Folbigg Lawyers appeared for Nat and Mr Ben Kruse of the Construction, Forestry, Maritime, Mining and Energy Union (CFMMEU) appeared for two employees engaged by Nat and who are covered by the Agreement.
At the directions hearing, the CFMMEU advised that the two employees they represented did not oppose the termination of the Agreement. Nat also confirmed that it would email all of the employees covered by the Agreement and invite them to provide their views to the Commission regarding the application. The employees were invited to provide any response they wished to make by no later than 4:00pm on 21 January 2022.
Only one of the five employees provided a response. Mr Siembab raised concerns regarding clause 7.3 – Increases to Wage Rates and Clause 8 – 24-Hour Income Protection Insurance.
In response to Mr Siembab’s concerns, Nat submitted that the ‘all in’ rate contemplated under the Agreement has now been replaced by the NES and Award-compliant hourly rates of pay as set out in the individual employment agreements. Nat submits that the individual employment agreements would provide for flat rates that are significantly higher than the minimum rates of pay specified in the Manufacturing and Associated Industries and Occupations Award 2020. In addressing Mr Siembab’s concerns with Clause 8 – 24-hour Income Protection Insurance, Nat submits that there is no equivalent entitlement under the NES or the Manufacturing and Associated Industries and Occupations Award 2020 and the above Award rates of pay would allow for each employee to make their own income protection arrangements if and as required.
Taking into account Mr Siembab’s views, and Nat’s submissions in reply, and noting that the CFMMEU has advised that it did not intend to make any further submissions in response to the employee’s submissions, I am satisfied that Nat has addressed those concerns.
Based on the material contained in the employer’s declaration filed with the application and the submissions in reply, I am satisfied that termination of the Agreement is not contrary to the public interest (per s.226(a)) and that it is appropriate to terminate the agreement in the circumstances (per s.226(b)).
The termination will operation from the date of this decision.
DEPUTY PRESIDENT
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