Nortel Pty Ltd

[2018] FWCA 6432

[2018] FWCA 6432

FAIR WORK COMMISSION

DECISION

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

Nortel Pty Ltd
(AG2018/5190)

NORTEL PTY LTD ENTERPRISE AGREEMENT 2013

Retail industry
COMMISSIONER HAMPTON	ADELAIDE, 17 OCTOBER 2018

Application for termination of the Nortel Pty Ltd Enterprise Agreement 2013.

[1] This decision concerns an application by Nortel Pty Ltd (Nortel) pursuant to s.225 of the Fair Work Act 2009 (the Act). The application seeks to terminate the Nortel Pty Ltd Enterprise Agreement 2013 (the Agreement).¹ The Agreement is an enterprise agreement made and approved under the Act with a nominal expiry date of 17 December 2017. There is no employee organisation covered by the Agreement.

[2] The Act relevantly provides 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.”

[3] The Application was accompanied by a Statutory Declaration of Mr Stephen Keens, Director of Nortel, relevantly setting out the grounds for the application to terminate the Agreement. Those grounds included considerations to the effect of the following:

•  The termination of the Agreement would mean that employees would be covered by the General Retail Award 2010 (the Award) which entitles them to minimum rates of pay, penalties, allowances and loadings;

•  The Agreement currently provides an all-inclusive loaded rate with no additional penalties or allowances, which means that employees are rostered to work across seven days of the week in a manner consistent with the assumptions underpinning the loaded rate;

•  A casual conversion clause will be incorporated into the Award which will provide regular casual employees an opportunity to convert to permanent status, which is not reflected in the Agreement; and

•  The Award also provides leave in family and domestic violence situations which is also not provided for under the Agreement.

[4] Given the circumstances, the applicant employer is entitled to apply for the termination of the Agreement pursuant to s.225 of the Act.

[5] The Commission issued directions on 19 September 2018 and the matter was listed for hearing. The directions included the requirement for Nortel to provide a copy of the notice of listing and directions to all employees covered by the Agreement. The directions also explained the nature of the application and invited employees to express a view about the matter including by raising any concerns directly with the Commission. I note that Nortel has confirmed that all employees were emailed a copy of the notice of listing and directions on 25 September 2018 and meetings were also conducted to explain the application.

[6] The Commission did not receive any communication from any employee covered by the Agreement expressing concerns or otherwise wishing to be heard in relation to the application.

[7] A hearing by telephone was subsequently conducted on 16 October 2018 to deal with the matter. Mr Keens attended the hearing on behalf of Nortel and, in addition to confirming the above, contended that:

•  The relevant employees currently work on a 7 day rotating roster and the termination of the Agreement would allow more flexibility so that some staff could opt to work Monday to Friday, and those wishing to benefit from weekend penalty rates could elect to work the weekends;

•  The staff are currently paid rates that are in excess of those required by the Agreement, noting the Agreement rates were based upon a lower classification and the casual rate provided for a 20% casual loading;

•  The Agreement restricts work on public holidays and if terminated, the Award would permit such work to be undertaken with the full payment of public holiday penalty rates to the employees concerned; and

•  The employees had been informed of the impact of the application and no concerns were raised with the employer.

[8] A formal undertaking was also provided on behalf of Nortel, that it will retain any current loaded rates of pay for existing employees which are more beneficial than those rates under the Award unless an employee opts to be paid under the Award with the associated hours arrangements. This means that all existing employees may remain better off, and all present and future employees will be better off, or at least equivalent to the Award conditions.

[9] The termination of the Agreement, supported by the undertaking, would mean that the more comprehensive and contemporary provisions of the Award will apply to the benefit of the employees. In addition, there will be increased capacity to alter operations to reflect changes in opening hours and other developments.

[10] I am satisfied that the termination of the Agreement would not be contrary to the public interest. I am also satisfied that the termination is appropriate having regard to the likely effect of that action and the circumstances and views of the employer and the employees. In that regard I note that the employees either support the application, or at least, do not oppose it. Given these findings and the terms of the Act provided in s.226, the Commission is obliged to terminate the Agreement.

[11] The Agreement is terminated and the termination will take effect on and from 11:59 pm on 20 November 2018.

COMMISSIONER

1 AE405704.

Printed by authority of the Commonwealth Government Printer

<AE405704 PR701431>