Parnall Pty Ltd
[2012] FWA 8291
•26 SEPTEMBER 2012
[2012] FWA 8291 |
|
DECISION |
Fair Work Act 2009
s.225—Enterprise agreement
Parnall Pty Ltd
(AG2012/10621)
Building, metal and civil construction industries | |
COMMISSIONER GOOLEY | MELBOURNE, 26 SEPTEMBER 2012 |
[1] Parnall Pty Ltd (the Applicant) applied to terminate the CFMEU and W Parnall Constructions P/L Riverina and Murray Regional Area Collective Bargaining Agreement 2002-2005 (the Agreement).
[2] The nominal expiry date of the Agreement was 31 October 2005.
[3] I issued directions that a copy of the application and notice of listing be provided to the employees.
[4] The application was listed for hearing on 14 September 2012 but the Applicant did not attend. My associate contacted the Applicant who advised that he did not understand that he was required to attend. The Applicant advised my associate that he was happy to have the application dealt with on the papers.
[5] Mr Raoul Wainwright from the Construction, Forestry, Mining and Energy Union (the CFMEU) attended the hearing. The CFMEU forwarded an email to chambers advising that the CFMEU opposed the application as there were still employees engaged under the Agreement and if the Agreement were terminated their hourly rate of pay would be reduced. It was further submitted that the terms and conditions of the Agreement were superior to the modern award.
The Legislative Framework
[6] By virtue of item 2(5)(c)(v) of Schedule 3 to the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 the Agreement is a “collective agreement-based transitional instrument” for the purposes of that Act. Pursuant to item 16 of Schedule 3 of that Act, the application is properly brought under s.225 of the Fair Work Act 2009 (the FW Act).
[7] Sections 225, 226 and 227 of the FW Act provide 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 FWA 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, FWA must terminate the agreement if:
(a) FWA is satisfied that it is not contrary to the public interest to do so; and
(b) 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.”
Considerations
[8] The Applicant made no submissions in support of its application.
[9] No employees appeared at the hearing of the application.
[10] The CFMEU which is a party to the Agreement submitted that employees would be employed under inferior conditions if the Agreement were terminated. There is no doubt that rates which were last increased on 1 March 2005 are superior to the rates payable under the Building and Construction General On-Site Award 2010 (the Award).
[11] Further the Agreement provides for a 36 hour week compared to a 38 hour week under the Award which has a flow on effect to overtime.
[12] In Royal Automotive Club of Victoria 1 Commissioner Roe discussed the agreement termination provisions of the FW Act:
“[19] The FW Act is significantly different in two major respects from the WR Act in respect to the termination of agreements after their nominal expiry date where there is not agreement of all the parties covered by the agreement.
[20] Firstly, the WR Act provided that the Tribunal must terminate an agreement in these circumstances unless it was contrary to the public interest. The FW Act retains the public interest requirement in s226(a) and it is expressed in similar terms to the previous s170MH(3) of the WR Act. However, the FW Act provides that, in addition to the public interest requirement, the Tribunal must only terminate the agreement if it considers it appropriate after considering all the circumstances, including the views of the parties and the likely effect of the termination on each of them (s226(b)). This is significant since it is precisely these considerations which the AIRC previously found were distinguishable from the public interest. The AIRC previously found that evidence that termination of an agreement was opposed by employees and or would be likely to have an adverse impact on employees was not necessarily sufficient to activate the public interest. However, it is clear that the legislators have now decided that such matters are relevant considerations in their own right and may lead to a decision to refuse to terminate an agreement.
[21] Secondly, Section 226 concerning the termination of agreements is found in Part 2-4 of the FW Act which deals with Enterprise Agreements. The legislative scheme and objects of the Act and the objects of Part 2-4 in particular in this respect are quite different from the WR Act. Part 8 of the WR Act which dealt with Workplace Agreements did not have separate objects. The FW Act places a strong emphasis on the objective of facilitating and enabling collective bargaining, bargaining in good faith and the making of enterprise agreements. The termination of an agreement without the agreement of all parties covered by the agreement must now be considered in this context. It is clearly a public interest consideration under s 226(a) if the termination of an agreement would be contrary to the objectives and scheme of the legislation in respect to facilitating and encouraging bargaining and agreements. It is also a context within which the interests of and effects on the parties should be considered as required by Section 226(b).
[22] The legislative context created by the FW Act is consistent with the approach taken by Justice Boulton in the Mount Thorley Operations Enterprise Agreement matter 2. Justice Boulton found that:
“It is preferable that the parties negotiate a new agreement to replace the 1996 Agreement rather than having that Agreement terminated by the Commission under Section 170MH. In most cases certified agreements remain in place and the terms and conditions of employment provided thereunder continue to apply until a new certified agreement is negotiated by the parties to replace the agreement (see s 170LX(2)).” 3
[23] It has certainly been the case since the introduction of a legislative scheme for collective bargaining in Australia that the platform for bargaining replacement agreements has been with very few exceptions the old agreement. That is, the terms and conditions provided by the old agreement remain in place until a new agreement is negotiated by the parties. There has never been a drop dead date for agreements. The FW Act reinforces this by making the unilateral termination of agreements more difficult including by the introduction of s 226(b) and by the removal of any equivalent to Section 393 of the WR Act. The FW Act also reinforces this by removing the option of statutory individual contracts and by encouraging and facilitating bargaining in good faith.
[24] The termination of an agreement in many cases will result in a significant shift in the balance of forces in bargaining. The legislature has deemed it fair to restrict the unilateral termination of agreements and to preserve a situation where in most cases collective agreements remain in place until a new agreement is negotiated to replace it. There is nothing in the legislation that suggests that there should be bias towards terminating an agreement because there is a long period since its nominal expiry date or because it is only relevant to a small number of employees.”
[13] I endorse these views.
The Public Interest
[14] No submissions were made about the public interest in this matter. I note that the Agreement committed the parties to negotiating an extension or renewal of the Agreement in the three month period prior to the nominal expiry date. No evidence was given that this occurred or why it did not occur.
[15] Without more I am unable to find it would be contrary to the public interest to terminate the Agreement.
The views of employer, employees and the CFMEU and the circumstances of those employees, employers and organisations including the likely effect that the termination will have on each of them.
[16] The Applicant supported the termination of the Agreement but made no submissions to support the application nor did it make any submissions about its circumstances or the circumstances of its employees and the likely effect that the termination will have on each of them.
[17] The employees did not appear at the hearing and made no submissions. However the CFMEU as a representative of its members and as party principle to the Agreement opposed the application for the reasons set out above.
[18] I accept the submissions of the CFMEU that the employees will be disadvantaged by the termination of the Agreement.
Conclusion
[19] In all the circumstances given the opposition to the termination of the Agreement and without any submissions or evidence in support of the termination I do not consider it appropriate to terminate the Agreement and therefore the application is dismissed.
COMMISSIONER
1 [2010] FWA 3483
2 Print R7850
3 Ibid at 13
Printed by authority of the Commonwealth Government Printer
<Price code C, AG830678 PR529576 >
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