Permalog Timbers Pty Ltd

[2021] FWCA 3835

[2021] FWCA 3835

FAIR WORK COMMISSION

DECISION

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

Permalog Timbers Pty Ltd
(AG2021/5263)

APPLICATION FOR TERMINATION OF THE AUSTRALIAN UNITED TIMBERS UNION COLLECTIVE AGREEMENT 2008

Timber industry
DEPUTY PRESIDENT LAKE	BRISBANE, 2 JULY 2021

Application for termination of an enterprise agreement after its nominal expiry date.

[1] Permalog Timbers Pty Ltd (the Applicant) has made an application for the Fair Work Commission (the Commission) to terminate the Australian United Timbers Union Collective Agreement 2008 (the Agreement) pursuant to s.225 of the Fair Work Act 2009 (the Act).

[2] The Applicant is the only employer covered by the agreement. It completed and filed a Form F24C – Statutory declaration in support of the application dated 20 May 2021 and an accompanying statement of Samuel Ernest Baker.

[3] The Agreement had a nominal expiry date of in or about 2010.

[4] The Applicant indicated in its application that The Australian Workers’ Union of Employees, Queensland (AWUQ)was an employee organisation covered by the Agreement.

[5] On 25 May 2021, I issued directions to ensure that sufficient material was filed to satisfy me that the employees and the AWUQ had been informed and afforded the opportunity to respond to the application.

[6] This matter is to be determined on the papers.

Employer’s submissions

[7] The Employer filed and relied on the F24C, which was accompanied by a statement in support from Samuel Ernest Baker, the sole Director and Secretary of the Applicant, dated 20 May 2021. Mr Baker also provided a supplementary statement dated 8 June 2021. I have summarised his evidence below.

[8] Mr Baker explained that, Australian United Timbers Pty Ltd was incorporated on or about 4 March 2008. By resolution on or about 4 September 2009, the company’s name was changed to Permalog Timbers Pty Ltd, which is why Permalog is covered by the Agreement.

[9] Mr Baker’s evidence was that at the time of making his statement, the Applicant employed approximately 30 employees in Queensland. Of those, 22 will be affected by the termination of the Agreement.

[10] Mr Baker stated that he was informed that the Agreement continues to operate as a consequence of the transitional provisions of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth). If the orders sought are made, it is expected that all of the affected employees will thereafter be covered by the Timber Industry Award 2020 and will have their minimum terms and conditions of employment prescribed by the National Employment Standards (NES) in the Act.

[11] Mr Baker explained, while the benefits afforded to employees under the Agreement generally accord with the minimum terms and conditions of employment prescribed by the NES, the Agreement was not assessed for approval against the NES, nor was the “better off overall test” prescribed in the Act applied. Consequently, the Agreement does not for example, provide for requests flexible working arrangements, access to compassionate leave for casual employees, family and domestic violence leave, various allowances, flexible working arrangements, accident pay, the ability to request time in lieu of overtime, requests for taking annual leave in advance or cashing out annual leave, dispute resolution procedure training and transport of employees on termination of employment. Further, the Agreement has not provided for wage increases for employees since 1 July 2009. Consequently, the Applicant has been paying its employees in accordance with the base rates in the Award instead. This means that if the Applicant wishes to ascertain an employee’s minimum terms and conditions of employment, consideration must be given to the NES, the Award, the Agreement and the laws and regulations relating to the interaction between them. The making of the orders sought by the Applicant would simplify the process for both the Applicant and its employees.

[12] Mr Baker submitted that the Applicant considers that the termination of the Agreement is not contrary to the public interest.

[13] As to the views of the Applicant’s employees, Mr Baker gave evidence that on 18 May 2021, all Agreement-covered employees were advised in writing of the Applicant’s intention to make the Application. Accompanying that letter was an overview of the effects of the proposal to terminate the Agreement.

[14] From 19 May 2021, the Agreement-covered employees were provided with an opportunity to meet with Mr Baker and ask questions in relation to the proposed termination. As at the date of providing his first statement, no employees had raised an objection.

[15] In response to my directions filed 25 May 2021, Mr Baker’s supplementary statement provided more detail in respect of consultation with the employees. He gave evidence that:

“(a) Copies of the Agreement and [the Award] have been available in Permalog’s offices since 18 May 2021. In my letter to employees dated 18 May 2021… I informed all affected employees that they could request a copy of both the Agreement and the Award from Permalog’s Office Administration Manager.

(b) Also in my letter dated 18 May 2021, which was distributed by hand to the affect employees, I:

(i) Informed the affected employees that, if Permalog’s application to terminate the Agreement was successful, the Award would cover and apply to their employment with Permalog. Permalog does not have written contracts of employment with the affected employees, having always considered the applicable industrial instrument prescribed each employee’s terms and conditions of employment. As such, there are no other terms and conditions of employment that will apply to the affected employees (other than the terms and conditions in the Award) if the application to terminate the agreement is granted;
(ii) provide employees with an assurance that their rate of pay would not reduce as a result of the termination of the Agreement;
(iii) provide an overview of key differences between the Agreement and the Award.

(c) The information in paragraph …(b) above was set out in the letter forming annexure SEB-1 to my First Statement.

(d) Also on 18 May 2021, I issued personalised letters to each of the affected employees confirming the employees classification under the agreement and the comparable classification under the Award ...

(e) I am aware that Permalog’s legal representative … served a copy of the Fair Work Commission application forms and my first statement on the Australian Workers’ Union on 26 May 2021 …

(f) On 27 May 2021, I wrote to all affected employees informing them that Permalog’s application to terminate the Agreement had been filed with the Fair Work Commission and served on the Australian Workers’ Union … the letter was sent by email to all employees for whom Permalog holds an email address. The letter was hand delivered to employees for whom Permalog does not hold an email address. The letter was also posted to one employee who is currently absence on workers compensation.

(g) On one June 2021, I again wrote all affected employees providing them with additional information regarding the proposal to terminate the agreement. On this occasion, I included a comparison of the minimum award rates of pay, which are in effect the minimum Agreement rates of pay by virtue of the operation of section 206 of the Fair Work Act, and the minimum rates currently being paid by Permalog. In other words, their weekly pay for ordinary or regular hours of work under the Agreement is the same as the weekly pay for ordinary or regular hours under the Award. The actual weekly rated pay paid by Permalog for alternate or regular hours of work exceeds the Agreement and Award rates. I again assured in all employees that they would not suffer a reduction in pay as consequence of the application to terminate the agreement.

(h) Also attached to the letter of 1 June 2020 was another overview document providing a summary of employee entitlements under both the Agreement and the Award…”

[16] Mr Baker confirmed that the letter dated 1 June 2021 was also sent to the Australian Workers’ Union via email.

[17] Mr Baker gave evidence that on 3 June 2021, a questionnaire was issued to all affected employees by email, seeking their views on the proposed termination of the agreement. Employees could respond by consenting or objecting to the termination or indicating that they did not wish to express a view in relation to it. As at the date of providing his supplementary statement, Mr Baker confirmed that 21 of the 22 affected employees had responded the questionnaire , with 18 employees consenting to the termination , one employee not consenting and two employees indicating they did not wish to express a view.

[18] On 7 June 2021, Mr Baker states that he held a staff meeting to answer any questions employees may have in relation to the termination. Questions were asked to confirm that there would be no reduction in the rates of pay. No other questions were raised.

[19] Mr Baker also confirmed that as at the date of the supplementary statement, the Australian Workers Union had not responded to his correspondence.

[20] Mr Baker reiterated that to the extent the entitlements in the Award differ from those in the Agreement, the Applicant considers those differences are more favourable for employees when considered overall.

[21] The Applicant has not given the affected employees any undertakings or assurances in relation to the effect of the agreements proposed termination on their existing wages and entitlements, beyond those set out in the previous communications.

UWUQ’s response

[22] On 15 June 2021, the AWUQ sent an email to my Chambers stating that after reviewing the undertakings provided by Mr Baker from the Applicant, it did not object to the application before the Commission on this matter.

Consideration

[23] I am satisfied that on assessment of the materials filed in the Commission, the termination of the Agreement is not contrary to the objects of the Act. The materials filed satisfy me that this is so and that termination of the Agreement will not be contrary to the public interest. The Agreement has passed its nominal expiry date, and there will be no adverse effect on employees if the application is granted.

[24] Pursuant to s.225 of the Act and having considered and being satisfied about each of the matters contained in s.226 of the Act, I order that the Agreement be terminated. I order that the termination will operate from 9 July 2021.

DEPUTY PRESIDENT

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< AC318626 PR731269 >