Prime Group Services Pty Ltd

[2023] FWCA 191

[2023] FWCA 191

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

s.225—Enterprise agreement

Prime Group Services Pty Ltd

(AG2022/5046)

PRIME GROUP SERVICES PTY LTD EMPLOYER GREENFIELD COLLECTIVE AGREEMENT 2007

Pharmacy operations
COMMISSIONER CIRKOVIC	MELBOURNE, 25 JANUARY 2023

Application for termination of the Prime Group Services Pty Ltd Employer Greenfield Collective Agreement 2007

1. Prime Group Services Pty Ltd has applied, pursuant to s.225 of the Fair Work Act 2009 (the Act) to terminate the Prime Group Services Pty Ltd Employer Greenfield Collective Agreement 2007 (the Agreement). The Agreement has passed its nominal expiry date in 2008 and the Applicant is the employer covered by the Agreement.

1. Section 225 of the Act provides 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.”

1. Section 226 of the Act, as of 7 December 2022, provides as follows:

“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.”

1. The Application was accompanied by a Form 24C declaration by Ms Sharone Fernandesz, Human Resources Business Partner, dated 30 November 2022. Ms Fernandesz submitted that the effect of the termination of the Agreement on the 24 employees covered by the Agreement would be that they would be paid under the same Pharmacy Industry Award terms and conditions as the employer’s other employees, and that the Award provided benefits including more favourable penalty rates, uniform allowance, and leave loading.

1. On 6 December 2022, my Chambers issued Directions to the Applicant to serve a copy of the F24B Application, F24C Declaration, any other material provided to the Commission, and the Directions, on any employee covered by the Agreement. Employees were then given until 5:00PM Tuesday 20 December 2022 to respond to the application. The employees did not provide any submissions in relation to the termination.

1. On 30 December 2022, my Chambers issued a further Direction on the Applicant to file submissions specifically addressing the requirements of the newly amended section 226 of the Act in relation to the termination of the Agreement.

1. On 10 January 2023, the Applicant filed submissions to the effect that:

• The employment of the majority of the Applicant’s employees was governed by the Pharmacy Award 2020 (the Award);

• There were 24 employees of the Applicant currently employed under the Agreement;

• The 24 employees currently employed under the Agreement are not entitled to the same overtime rates, Saturday rates, leave loading, garment allowance and other provisions which they would be, if they were employed under the Award;

• The benefits including penalty rates, uniform allowance, leave loading and other provisions had been discussed with the affected employees, and they were in favour of moving across to the Award;

• For these reasons, the continued operation of the Agreement would be unfair to the employees covered.

1. There is no employee organisation covered by the Agreement whose views or circumstances I can take into account.

1. Based on the material contained in the declaration of Ms Fernandesz and the Applicant’s submissions, I am satisfied that the continued operation of the Agreement would be unfair to the employees covered by it. Taking into account all of the circumstances including those in section 226(3), (4) and (5), I consider that it is appropriate to terminate the Agreement.

1. The termination is effective from today.

COMMISSIONER

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