Pat Thomas House Inc T/A Ovis Community Services
[2024] FWCA 4032
•28 NOVEMBER 2024
| [2024] FWCA 4032 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.225—Enterprise agreement
Pat Thomas House Inc T/A Ovis Community Services
(AG2024/4260)
PAT THOMAS HOUSE COLLECTIVE AGREEMENT
| Health and welfare services | |
| COMMISSIONER SCHNEIDER | PERTH, 28 NOVEMBER 2024 |
Application for termination of the Pat Thomas House Collective Agreement (AE404578)
On 28 October 2024, Pat Thomas House Inc T/A Ovis Community Services (the Applicant) made an application pursuant to section 225 of the Fair Work Act 2009 (Cth) (the Act) to terminate the Pat Thomas House Collective Agreement (the Agreement). The Agreement passed its nominal expiry date on 1 June 2016.
Background
The application was supported by a Form F24C Statutory Declaration of Ms Anne Janet Yates (Ms Yates), People and Culture Lead of the Employer, which declared the following:
· The Applicant seeks the Agreement’s termination due to its assertion that it is not a National System Employer.
· The Applicant submits that the Agreement does not cover and is not likely to cover any employees as it is not a National System Employer.
· Although, the declaration notes employees are covered by the Agreement, but again, the Applicant submits that these are not National System Employees.
· The Applicant intends to commence bargaining for an industrial agreement with the Western Australian branch of the Australian Municipal, Administrative, Clerical and Services Union in the Western Australian Industrial Relations Commission (the WAIRC).
· The Applicant is a named party to an award of the WAIRC and, in late 2023, was served with a related application in the WAIRC. After this occurred, the Applicant sought legal advice regarding whether it was an employer within the national or state system. The Applicant received advice that it does not fall within the national system.
· The Applicant notes that it is a not-for-profit charity association with the large majority of its funding coming from government sources and only a minimal portion from other sources and not trading activities.
· The Applicant also notes the comparable terms and conditions afforded to its employees under state system instruments.
The Australian Municipal, Administrative, Clerical and Services Union (the Union) is covered by the Agreement.
Directions and a Statement were issued to the parties. The Applicant was required to serve the documents on any employees subject to the Agreement. Any such employees were afforded opportunity to advise the Commission of their views on the application and whether they opposed termination. No such views were received. The Union raised concerns over the method of notification to employees used by the Applicant. In light of these concerns, the Applicant was directed to provide the Commission with a copy of the notification sent to employees. Having reviewed the correspondence provided by the Applicant, I am satisfied the notification suffices.
The Union filed its views on the application. The Union disagrees with several assertions and conclusions put forth by the Applicant, but confirms it supports the termination of the Agreement. The Union filed a response to the application alongside a copy of the Applicant’s audited financial statements of 2023. The response filed by the Union states the following:
· The application turns entirely on the assertion that the Applicant is not a National System Employer. The Commission cannot be satisfied that the continued operation of the Agreement is unfair on the Applicant’s assertion alone regarding its status as a state system employer.
· The Applicant has not provided explanation regarding its status as an employer in the national or state system at the time of the Agreement being approved.
· The Applicant has also not provided direct evidence regarding its business activities and revenue for the Commission to assess its claims.
· The Applicant’s contention that the Agreement does not and is not likely to cover any employees is incorrect due to the continued validity of the approval decision. Despite the Applicant’s submissions, the Agreement and decision approving it from the Commission is valid until set aside.
· Despite the issues raised, and having conferred with the Applicant, the Union agrees it is likely that the Applicant is not a National System Employer at the present time. The Union cites the Applicant’s minimal revenue from trading activities as support and references the audited financial statement.
· In the likely event that the Applicant is not a National System Employer, the Union agrees that the continued operation of the Agreement would be unfair as employees would be subject to the incorrect jurisdiction and should instead be subject to the correct laws. The Union believes further evidence could be adduced to assist in the determination of the Applicant’s status in the national or state system.
· The Union similarly highlights the comparable protections afforded to employees in the event of the Agreement’s termination.
· The Union submits that, if satisfied the Applicant is not a National System Employer, the Agreement could be terminated in accordance with section 226(1)(a) of the Act.
Legislative provisions
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;
(c) an employee organisation covered by the agreement.
226 Terminating an enterprise agreement after its nominal expiry date
(1) 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 the continued operation of the agreement would be unfair for the employees covered by the agreement; or
(b) the FWC is satisfied that the agreement does not, and is not likely to, cover any employees; or
(c) all of the following apply:
(i) the FWC is satisfied that the continued operation of the enterprise agreement would pose a significant threat to the viability of a business carried on by the employer, or employers, covered by the agreement;
(ii) the FWC is satisfied that the termination of the enterprise agreement would be likely to reduce the potential of terminations of employment covered by subsection (2) for the employees covered by the agreement;
(iii) if the agreement contains terms providing entitlements relating to the termination of employees’ employment—each employer covered by the agreement has given the FWC a guarantee of termination entitlements in relation to the termination of the agreement.
(1A) However, the FWC must terminate the enterprise agreement under subsection (1) only if the FWC is satisfied that it is appropriate in all the circumstances to do so.
(2) This subsection covers a termination of the employment of an employee:
(a) at the employer’s initiative because the employer no longer requires the job done by the employee to be done by anyone, except where this is due to the ordinary and customary turnover of labour; or
(b) because of the insolvency or bankruptcy of the employer.
(3) In deciding whether to terminate the agreement, the FWC must consider the views of the following covered by the agreement:
(a) the employees (unless there are no employees covered by the agreement);
(b) each employer;
(c) each employee organisation (if any).
Note: The President may be required to direct a Full Bench to perform a function or exercise a power in relation to the matter if any of the employers, employees, or employee organisations, covered by the agreement oppose the termination (see subsection 615A(3)).
(4) In deciding whether to terminate the agreement (the existing agreement), the FWC must have regard to:
(a) whether the application was made at or after the notification time for a proposed enterprise agreement that will cover the same, or substantially the same, group of employees as the existing agreement; and
(b) whether bargaining for the proposed enterprise agreement is occurring; and
(c) whether the termination of the existing agreement would adversely affect the bargaining position of the employees that will be covered by the proposed enterprise agreement.
(5) In deciding whether to terminate the agreement, the FWC may also have regard to any other relevant matter.
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.”
Consideration
I note the materials and submissions provided by the parties in relation to this termination application. I agree with the submission of the Union regarding the coverage of the Agreement, being that it does and likely will cover employees, unless the original approval decision were set aside, despite the Applicant’s contentions. I also agree with the Union’s assessment of the application having potential to be granted in reliance on section 226(1)(a) of the Act, in the event the Commission is first satisfied the Applicant is not a National System Employer.
Having reviewed the materials before the Commission regarding the Applicant’s funding, revenue, and other related information I am satisfied that the Applicant is not a National System Employer at this time. Accordingly, I agree with the parties’ position regarding section 226(1)(a) of Act, being that the continued operation of the Agreement would be unfair to the employees subject to it.
Having regard to section 226(3)(b), the views of the Employer are naturally, by virtue of the application, that it wishes for the Agreement to be terminated as it no longer wishes to be bound by it.
Having regard to section 226(4) of the Act, I have considered the views of the Union in response to the application and note that no views were raise by employees when afforded opportunity to comment.
Having regard to section 226(1A) of the Act, I am satisfied that it is appropriate in all the circumstances to terminate the Agreement. Accordingly, I must do so. The application to terminate the Agreement is approved.
The termination will take effect from today, 28 November 2024.
COMMISSIONER
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