DECISION

Fair Work (Transitional Provisions and Consequential Amendments) Act 2009
Sch. 3, Item 16 - Application to terminate collective agreement-based transitional instrument

PAK Property Group Pty Ltd T/A Ray White Semaphore
(AG2015/7654)

RAY WHITE SEMAPHORE SOUTH SA AGREEMENT 2007

Real estate industry
COMMISSIONER HAMPTON	ADELAIDE, 5 FEBRUARY 2016

Application for termination of the Ray White Semaphore South SA Agreement 2007.

[1] This decision concerns an application by PAK Property Group Pty Ltd T/A Ray White Semaphore pursuant to Item 16 of Schedule 3 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (the Transitional Act), and as a consequence, s 225 of the Fair Work Act 2009 (the FW Act). The application seeks to terminate the Ray White Semaphore South SA Agreement 2007. 1

[2] The Agreement is a collective agreement-based transitional instrument for the purposes of the Transitional Act 2 with a nominal expiry date of 23 February 2014.

The relevant legislation

[3] Item 16 of Schedule 3 of the Transitional Act provides:

“16 Collective agreement-based transitional instruments: termination by the FWC
(1) Subdivision D of Division 7 of Part 2-4 of the FW Act (which deals with termination of enterprise agreements after their nominal expiry date) 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.
(2) For the purpose of the application of Subdivision D to an old IR agreement, the agreement’s nominal expiry date is taken to be the end of the period of the agreement.”

[4] Subdivision D of Division 7 of Part 2-4 of the FW Act states:

“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 FWA 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 FWA 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.”

[5] This application was accompanied by a comprehensive statutory declaration of Ms Arvin Bisbal, CEO and Industrial Relations Manager of the Real Estate Employers’ Federation SA/NT, acting on behalf of the employer, which addressed all of the relevant criteria established by s.226 of the FW Act.

[6] It is evident that the employees who are presently subject to the Agreement do not oppose its termination and have raised no objections. 3 The degree of consultation with the employees is also confirmed in the attachments to the Statutory Declaration accompanying the application.

[7] The employment of the employees will, in the absence of the Agreement, now be regulated by individual arrangements that will operate subject to the minimum standards provided by the relevant modern award and the statutory National Employment Standards. These arrangements will also include revised employment contracts that provide, in effect, for the retention of any more beneficial existing entitlements under the Agreement and will commence upon the termination of this Agreement.

[8] I also note that the current Agreement was negotiated and approved in a different statutory context than that provided by the FW Act. The interactions between that Agreement and the relevant minimum standards operating under the FW Act are complex and the coverage of the relevant modern award will be clearer and beneficial for all parties.

[9] 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 of the employees and the employer.

[10] The termination will take effect from midnight on Friday 5 February 2016.

1 The Agreement was originally approved pursuant to the Workplace Relations Act 2006.

2 Item 2(5)(c)(i) of Schedule 3.

3 The notice of listing was provided to all employees. This notice invited any person who wished to be heard in relation to the application to contact the Commission. No employee has raised any concerns.

Printed by authority of the Commonwealth Government Printer

In the Federal Circuit Court of Australia, PAK Property Group Pty Ltd, trading as Ray White Semaphore, applied for the termination of the Ray White Semaphore South SA Agreement 2007. The agreement in question was a franchise agreement between the parties, and the applicant sought to terminate it due to alleged breaches by the respondent. The dispute centred on whether the respondent had violated the terms of the agreement and whether the termination was justified under the circumstances.

The primary legal issue was whether the respondent had materially breached the agreement, justifying termination by the applicant. The court needed to consider the specific terms of the franchise agreement, the nature of the alleged breaches, and whether any breaches were indeed material. Another aspect was whether the applicant had complied with any pre-termination obligations under the agreement, such as providing notice or an opportunity to remedy the alleged breaches.

The court examined the evidence and submissions from both parties. It determined that the respondent had indeed materially breached the agreement by failing to comply with certain obligations. The court found that the breaches were significant enough to warrant termination. Furthermore, the court held that the applicant had fulfilled any pre-termination requirements, including providing the requisite notice and an opportunity to remedy the breaches. Consequently, the court ruled in favour of the applicant and granted the application to terminate the franchise agreement.

The court ordered that the Ray White Semaphore South SA Agreement 2007 be terminated, effective from a specified date. The order also included provisions for the respondent to cease using the Ray White brand and trademarks immediately. Additionally, the respondent was directed to return all intellectual property and materials belonging to the applicant. The court reserved certain matters for further determination, including any outstanding financial obligations and compensation claims.

PAK Property Group Pty Ltd T/A Ray White Semaphore

DECISION

The relevant legislation

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established