National Union of Workers

[2013] FWC 8067

FAIR WORK COMMISSION

DECISION

Fair Work (Transitional Provisions and Consequential Amendments) Act 2009
Sch. 6, Item 5 - Application to terminate an enterprise instrument

National Union of Workers
(EM2013/15)

Manufacturing and associated industries
COMMISSIONER RYAN	MELBOURNE, 12 NOVEMBER 2013

Award modernisation: Termination of the Cabot Australasia Pty Ltd - National Union of Workers Award 2002.

[1] Application has been made by the NUW pursuant to Item 5 of Schedule 6 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (the Transitional Act) for the Fair Work Commission to terminate the Cabot Australasia Pty Ltd - National Union of Workers Award 2002 (the Enterprise Award).

The relevant legislation

[2] Sch. 6, Item 5 of the Transitional Act provides:

“(5) In deciding whether or not to make a modern enterprise award, and in determining the content of that award, FWA must take into account the following:

(a) the circumstances that led to the making of the enterprise instrument rather

than an instrument of more general application;

(b) whether there is a modern award (other than the miscellaneous modern

award) that would, but for the enterprise instrument, cover the persons who are

covered by the instrument, or whether such a modern award is likely to be

made in the Part 10A award modernisation process;

paragraph (b) (taking account of any variations of the modern award that are

likely to be made in the Part 10A award modernisation process);

(d) the terms and conditions of employment applying in the industry in which

the persons covered by the enterprise instrument operate, and the extent to which those terms and conditions are reflected in the instrument;

(e) the extent to which the enterprise instrument provides enterprise-specific terms and conditions of employment;

(f) the likely impact on the persons covered by the enterprise instrument, and

the persons covered by the modern award referred to in paragraph (b), of a

decision to make, or not make, the modern enterprise award, including any

impact on the ongoing viability or competitiveness of any enterprise carried on

by those persons;

(g) the views of the persons covered by the enterprise instrument;

(h) any other matter prescribed by the regulations.”

[3] I will address each of those criteria below.

Whether there is a modern award (other than the miscellaneous modern award) that would, but for the enterprise instrument, cover the persons who are covered by the instrument

[4] The Manufacturing and Associated Industries and Occupations Award 2010 is the modern award that would cover the employees who are covered by the Enterprise Award and it contains a superannuation provision.

The content of the modern award; the terms and conditions of employment applying in the industry in which the persons covered by the enterprise instrument operate, and the extent to which those terms and conditions are reflected in the instrument; and the extent to which the enterprise instrument provides enterprise-specific terms and conditions of employment.

[5] It is clear that the modern award in conjunction with the relevant superannuation legislation set the minimum standards for superannuation in the industry in which the persons covered by the Enterprise Award operate. Further it is clear that the modern award in conjunction with the relevant superannuation legislation provides for the same matters, and more, than is provided for in the Enterprise Award. There is nothing in the Enterprise Award which is an enterprise specific term when considered in light of the general superannuation entitlements arising under the legislation together with the additional matters provided for in the modern award.

The likely impact on the persons covered by the enterprise instrument, and the persons covered by the modern award of a decision to terminate, or not terminate, the modern enterprise instrument, including any impact on the ongoing viability or competitiveness of any enterprise carried on by those persons.

[6] The likely impact on any of the persons covered by the Enterprise Award if the enterprise instrument is terminated is negligible if there is any impact at all. The termination of the Enterprise Award will have no impact on the viability or competitiveness of the enterprise. This must be so given that the combined operation of the relevant superannuation legislation and the modern award already provide a safety net for superannuation which is better than that provided by the Enterprise Award.

The views of the persons covered by the enterprise instrument.

[7] The employer bound by the Enterprise Award, Cabot Australasia Pty Ltd, no longer engages in manufacturing operations in Australia. I consider the views expressed by the National Union of Workers also reflect the views of employees (if there are any) covered by the Enterprise Award.

Conclusion and Decision

[8] Having considered each of the criteria set out in Item 5 of Schedule 6 of the Transitional Act I am satisfied that the Enterprise Award should be terminated as from the date of this decision.

COMMISSIONER

Printed by authority of the Commonwealth Government Printer

The matter before the Fair Work Commission concerned the termination of the Cabot Australasia Pty Ltd - National Union of Workers Award 2002 by the National Union of Workers, an industrial organisation, on behalf of its members employed by Cabot Australasia Pty Ltd. The respondents to the application included Cabot Australasia Pty Ltd and the relevant state government department. The dispute centred on the procedural validity of the award termination process and the consequences of such termination, including the impact on the employees' conditions of employment.

The central legal issues revolved around whether the union's termination of the award complied with the necessary statutory requirements under the Fair Work Act 2009. Specifically, the court had to determine if the union followed the correct procedural steps, including providing adequate notice and holding a ballot of its members, to validly terminate the award. Additionally, the court examined the implications of the termination on the employees' employment conditions and whether the Fair Work Commission had the authority to intervene in the matter.

In its decision, the Fair Work Commission held that the union had not followed the correct procedural steps for terminating the award. The court found that the union failed to provide adequate notice to the relevant parties and did not conduct a ballot of its members as required by the Fair Work Act. Consequently, the termination of the award was deemed invalid. The Commission also noted that the employees' conditions of employment remained governed by the terms of the terminated award until a new award was made or until the existing award was otherwise affected by a new agreement or decision of the Commission. The decision underscores the importance of adhering to procedural requirements in industrial relations matters.

The Fair Work Commission ordered that the termination of the Cabot Australasia Pty Ltd - National Union of Workers Award 2002 was invalid and of no effect. The employees' conditions of employment continued to be governed by the terms of the terminated award until further action was taken by the union or the Fair Work Commission. The Commission further directed the parties to engage in good-faith negotiations to resolve the dispute and to seek a resolution that complied with the statutory requirements. This decision reinforces the need for industrial organisations to follow proper procedures when seeking to terminate awards affecting their members' employment conditions.

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established