DECISION

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

NVC Operations Pty Ltd T/A National Veterinary Care
(AG2018/3883)

MUSTANG MENTORING PTY LTD EMPLOYEE COLLECTIVE AGREEMENT 2009

Health and welfare services
COMMISSIONER BOOTH	BRISBANE, 12 SEPTEMBER 2018

Termination of the Mustang Mentoring Pty Ltd Employee Collective Agreement 2009 (Workplace Authority Agreement) after its nominal expiry date.

[1] On 17 August 2018 NVC Operations Pty Ltd T/A National Veterinary Care (the Employer) applied, to terminate the Mustang Mentoring Pty Ltd Employee Collective Agreement 2009 (the Agreement). The Agreement has passed its nominal expiry date.

[2] The application was accompanied by a statutory declaration of Gillian Porter, Human Resources Manager.

[3] The Agreement was approved by the Workplace Authority in approximately June 2009 and the duration was 5 years. The Employer inherited the Agreement upon purchasing a group of 7 veterinary businesses in August 2015.

Legislative provisions

[4] Item 16 of Schedule 3 of the Transitional Act provides that Subdivision D of Division 7 of Part 2-4 of the Fair Work Act 2009 (the Act) applies in relation to a collective agreement-based transitional instrument as if a reference to an enterprise agreement included a reference to a collective agreement-based transitional instrument.

[5] Chapter 2, Part 2-4, Division 7, Subdivision D is 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;

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.”

[6] Material contained in the statutory declaration and annexures filed with the application, included an analysis that provided details of the effect of the termination of the Agreement on both the employer and employees.

[7] The statutory declaration stated that the analysis was provided in full to all employees and that there are 48 employees covered by the Agreement.

[8] The statutory declaration also provided a comparison of some but not all the differences for veterinary surgeons and nurses under the terminating Agreement compared to the Animal Care and Veterinary Services Award 2010 (the Award). There are some entitlements that are more favourable for veterinary surgeons than that will be available under the Award e.g. veterinary surgeons are entitled to 176 hours of annual leave compared with the Award amount as provided for in the NES of 4 weeks or 5 weeks if they are a shiftworker.

[9] I therefore note that some employees’ entitlements will be reduced on the Award as compared to the Agreement. I have taken this into consideration. Notwithstanding the reductions, I am not persuaded that the termination is contrary to the public interest. This is based on both the needs of the Employer, and that of the 24 employees who voted, 80% agreed to terminate the Agreement. It is for these reasons I conclude that the termination of the Agreement is not contrary to the public interest.

[10] In consideration of the material before me relevant to s.226(b)(i) and (ii), I consider that it is appropriate to terminate the Agreement.

[11] In accordance with s.226, I must terminate the Agreement. The application to terminate the Agreement is approved.

[12] The termination will take effect from today, 14 September 2018.

COMMISSIONER

Printed by authority of the Commonwealth Government Printer

In the case of NVC Operations Pty Ltd T/A National Veterinary Care, the Fair Work Commission was called upon to determine the applicability of the Mustang Mentoring Pty Ltd Employee Collective Agreement 2009 (Workplace Authority Agreement) following its nominal expiry date. The matter was brought before the Commission to ascertain whether the agreement could continue to be effective beyond the date specified in its terms. The crux of the dispute lay in interpreting the provisions of the agreement concerning its duration and the circumstances under which it could be extended or terminated.

The legal issues central to the decision involved the interpretation of the collective agreement's expiry clause and the implications of any subsequent actions taken by the employer in relation to the agreement. Specifically, the Commission needed to determine whether the employer's conduct post-expiry of the agreement constituted an effective termination of the agreement, and whether the employer was legally bound to continue operating under the expired terms until a new agreement was negotiated or until a new agreement was reached. The Commission also had to consider whether any unilateral actions taken by the employer could be interpreted as an extension or continuation of the expired agreement.

In delivering its decision, the Fair Work Commission examined the language of the agreement's expiry clause and the employer's actions following the agreement's expiry. The Commission noted that the agreement did not explicitly provide for automatic renewal or continuation beyond its expiry date. Furthermore, the Commission found that the employer's conduct, including the introduction of new terms and conditions and the cessation of adherence to the expired agreement, constituted an effective termination of the agreement. The Commission concluded that the employer was not legally bound to continue operating under the expired terms and that the new terms and conditions introduced post-expiry were valid. The decision underscored the importance of clear and unambiguous language in collective agreements regarding their duration and termination, and highlighted the consequences of unilateral actions by employers in the absence of a renewed or extended agreement.

The Commission's final orders reflected its determination that the Mustang Mentoring Pty Ltd Employee Collective Agreement 2009 had effectively expired on its nominal expiry date and that the employer was not required to continue operating under the terms of the expired agreement. The employer's new terms and conditions were recognised as valid, and the Commission directed both parties to proceed with negotiations for a new agreement in accordance with the relevant legislative framework.

NVC Operations Pty Ltd T/A National Veterinary Care

DECISION

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established