National Union of Workers

[2013] FWC 7494

[2013] FWC 7494

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
(EM2013/13)

National Union of Workers
(EM2013/18)

Food, beverages and tobacco manufacturing industry
COMMISSIONER RYAN	MELBOURNE, 26 SEPTEMBER 2013

Award modernisation - application to termination an enterprise instrument.

[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 each of the following enterprise instruments:

● Bonlac Foods Limited Superannuation Award 1987 [AP769491]
● Storemen and Packers’ (Meadowlea - Superannuation) Award 1987 [AP796063]

[2] Item 10 of Schedule 6 of the TransitionalActprovides that the Fair Work Commission must, before July 2013, advise persons covered by an enterprise instrument that they have until 31 December 2013 to make applications for either the modernisation of the enterprise instrument or the termination of the enterprise instrument and that if no such application is made then the enterprise instrument terminates on 31 December 2013 by operation of Item 9 of Schedule 6 of the Transitional Act.

[3] On 22 May 2013 Senior Deputy President Acton issued a Statement 1 outlining the approach adopted by the Fair Work Commission to deal with the matters raised by Item 10 of Schedule 6 of the Transitional Act. The two awards in these matters were included in the list of enterprise instruments identified by the Fair Work Commission. The applications appear to be in direct response to the Fair Work Commission’s actions under Schedule 6.

[4] A Full Bench of the Commission in Yum Restaurants P/L and the Shop, Distributive and Allied Employees’ Association, [2011] FWAFB 1077 (the Yum matter) said:

“[5] Division 2 of Schedule 6 of the Transitional Act deals with the Enterprise Instrument Modernisation Process. Item 4 deals with applications to replace an enterprise instrument with a modern enterprise award as Yum has done in this case. Sub-item 4(5) sets out matters to be taken into account in determining whether or not to make an enterprise award and the content of any such award. Item 5 deals with applications to terminate an enterprise instrument as the SDA has done in this case. Sub-item 5(4) sets out matters to be taken into account in determining the application. The matters in items 4(5) and 5(4) are identical. They are as follows:

“(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;

(c) the content, or likely content, of the modern award referred to in 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.”

[5] In the Yum matter the Commission had before it two applications, one by Yum to modernise the enterprise instrument and the other by the SDA to terminate the enterprise instrument.

[6] The decision of the Full Bench in that matter was expressed as follows:

“[49] In all of the circumstances we do not believe that Yum has made out a case for the modernisation of the Pizza Hut Award. We dismiss the Yum application and grant the application by the SDA to terminate the Pizza Hut Award.”

[7] However the very structure of Division 2 of Schedule 6 of the Transitional Act meant that once the Full Bench decided not to grant the application by Yum to modernise the enterprise instrument the application by the SDA became redundant because Item 9(3) of Schedule 6 of the Transitional Act provided that an automatic consequence of a decision not to modernise an enterprise instrument was that the enterprise instrument “terminates when that decision comes into operation”.

[8] In each of the present matters there is only an application to terminate the enterprise instrument.

[9] I turn to each of the criteria in Item 5 of Schedule 6 of the Transitional Act.

The circumstances that led to the making of the enterprise instrument rather than an instrument of more general application

[10] Each of the two enterprise instruments are superannuation awards. Both the Bonlac Foods Limited Superannuation Award 1987 and the Storemen and Packers’ (Meadowlea - Superannuation) Award 1987 were made in 1987. The two awards reflected a push at that time by unions to obtain superannuation benefits for employees and the only effective means of doing so was through the award system.

[11] By the early 1990’s Superannuation legislation had been introduced which provided superior superannuation benefits than that provided through the award system although the superannuation awards still had some residual benefit for some employees. The need for awards to create and protect employee superannuation entitlements passed once the raft of Superannuation legislation was introduced in the 1990’s.

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

[12] The Food, Beverage and Tobacco Manufacturing Award 2010is a modern award that would cover the employees who are covered by the enterprise instrument in each of these three matters. The modern award contains a superannuation provision in the following terms:

“29. Superannuation

29.1 Superannuation legislation

(a) Superannuation legislation, including the Superannuation Guarantee (Administration)Act 1992 (Cth), the Superannuation Guarantee Charge Act 1992 (Cth), the Superannuation Industry (Supervision) Act 1993 (Cth) and the Superannuation (Resolution of Complaints) Act 1993 (Cth), deals with the superannuation rights and obligations of employers and employees. Under superannuation legislation individual employees generally have the opportunity to choose their own superannuation fund. If an employee does not choose a superannuation fund, any superannuation fund nominated in the award covering the employee applies.

(b) The rights and obligations in these clauses supplement those in superannuation legislation.

29.2 Employer contributions

An employer must make such superannuation contributions to a superannuation fund for the benefit of an employee as will avoid the employer being required to pay the superannuation guarantee charge under superannuation legislation with respect to that employee.

29.3 Voluntary employee contributions

(a) Subject to the governing rules of the relevant superannuation fund, an employee may, in writing, authorise their employer to pay on behalf of the employee a specified amount from the post-taxation wages of the employee into the same superannuation fund as the employer makes the superannuation contributions provided for in clause 29.2.

(b) An employee may adjust the amount the employee has authorised their employer to pay from the wages of the employee from the first of the month following the giving of three months’ written notice to their employer.

(c) The employer must pay the amount authorised under clauses 29.3(a) or (b) no later than 28 days after the end of the month in which the deduction authorised under clauses 29.3(a) or (b) was made.

29.4 Superannuation fund

Unless, to comply with superannuation legislation, the employer is required to make the superannuation contributions provided for in clause 29.2 to another superannuation fund that is chosen by the employee, the employer must make the superannuation contributions provided for in clause 29.2 and pay the amount authorised under clauses 29.3(a) or (b) to one of the following superannuation funds or its successor:

(a) AustSafe Super; or

(b) AustralianSuper; or

(c) CareSuper; or

(d) HOSTPLUS; or

(e) LUCRF Super; or

(f) Statewide Superannuation Trust; or

(g) Sunsuper; or

(h) Tasplan; or

(i) Westscheme; or

(j) any superannuation fund to which the employer was making superannuation contributions for the benefit of its employees before 12 September 2008, provided the superannuation fund is an eligible choice fund.

29.5 Absence from work

Subject to the governing rules of the relevant superannuation fund, the employer must also make the superannuation contributions provided for in clause 29.2 and pay the amount authorised under clauses 29.3(a) or (b):

(a) Paid leave

While the employee is on any paid leave.

(b) Work related injury or illness

For the period of absence from work (subject to a maximum of 52 weeks in total) of the employee due to work related injury or work related illness provided that:

(i) the employee is receiving workers compensation payments or is receiving regular payments directly from the employer in accordance with statutory requirements; and

(ii) the employee remains employed by the employer.”

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.

[13] 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 instrument 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 instruments. There is nothing in the enterprise instruments 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.

[14] The likely impact on any of the persons covered by the enterprise instrument if the enterprise instrument is terminated is negligible if there is any impact at all. The termination of the enterprise instruments 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 instrument.

The views of the persons covered by the enterprise instrument.

[15] I have sought the views of the employer parties to the enterprise instruments but neither employer took the opportunity of providing its views in relation to the application. I consider the views expressed by the union in making these applications also reflects the views of employees (if there are any) covered by this enterprise instrument.

Conclusion and Decision

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

COMMISSIONER

 1   [2013] FWC 2790.

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