Primrose Development Co Pty Ltd T/A Donut King Cat and Fiddle, Donut King Channel Court

Case [2016] FWCA 6347


[2016] FWCA 6347
FAIR WORK COMMISSION

DECISION


Fair Work Act 2009

s.225—Enterprise agreement

Primrose Development Co Pty Ltd T/A Donut King Cat and Fiddle, Donut King Channel Court
(AG2016/4557)

DONUT KING (CAT AND FIDDLE ARCADE, CHANNEL COURT)

Tasmania

COMMISSIONER CIRKOVIC

MELBOURNE, 6 SEPTEMBER 2016

Application for termination of the Donut King (Cat and Fiddle Arcade, Channel Court) Employee Collective Agreement 2008.

[1] On 20 July 2016, Primrose Development Co Pty Ltd T/A Donut King Cat and Fiddle, Donut King Channel Court (Applicant) made an application to the Fair Work Commission (Commission) pursuant to s.225 of the Fair Work Act 2009 (Cth) (Act) for the termination of the Donut King (Cat and Fiddle Arcade, Channel Court), Employee Collective Agreement (Agreement).

[2] The Agreement came into operation on the seventh day after 5 March 2009 with a nominal expiry date of five years from that date.

[3] The Applicant filed statutory declaration of Peter William Simmonds, of the Applicant, declared 20 July 2016 (Statutory Declaration).

Legislation

[4] Section 225 of the Act provides who may apply to the Commission to terminate an enterprise agreement after it has passes its nominal expiry date. Section 225 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.”

[5] Section 226 of the Act provides when the Commission must terminate an enterprise agreement. Section 226 is as follows:

    226 When the FWC 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 FWC 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.”

Consideration

Standing

[6] As the Agreement has passed its nominal expiry date and the Applicant is the employer covered by the Agreement, I find that the Applicant has standing to make the application pursuant to s.225(a) of the Act.

Public Interest

[7] In relation to whether the termination of the Agreement is in the public interest, the Applicant declares in its Statutory Declaration that there are currently no employees covered by the Agreement.

[8] In the circumstances, I am satisfied that it is not contrary to public interest to terminate the Agreement pursuant to s.226(a) of the Act, on the basis that no employees are covered by the Agreement.

Views, Circumstances and Likely Effect of Termination

[9] The Applicant ticked ‘don’t know’ in its Statutory Declaration in response to the question ‘are there any employees covered by the agreement?’. On 29 August 2016, my chambers wrote to the Applicant and asked that it confirm whether there are any employees covered by the agreement. The Applicant’s responded that it has no employees, whether covered by the Agreement or not. Part – 3 of the Agreement does not list any employee organisations to be covered by the Agreement. Therefore, I am unable to take into account the views, circumstances and likely effects for the purpose of s.226(b)(i)-(ii) of the Act.

[10] The Applicant is the employer covered by the Agreement. The Applicant declares in its Statutory Declaration that termination of the Agreement would have no effect on its circumstances.

[11] I consider that it is appropriate to terminate the Agreement taking into account all the circumstances, including those prescribed by s.226(b)(i)-(ii) of the Act.

Conclusion

[12] For the reasons outlined above, I find that the Applicant has standing to make the application for the termination of the Agreement, that I am satisfied that it is not contrary to public interest to terminate the Agreement and I consider that it is appropriate to terminate the Agreement taking into account all the circumstances. Accordingly, the Agreement must be terminated pursuant to s.226 of the Act.

[13]
An Order will be issued terminating the Agreement with effect from 6 September 2016.

COMMISSIONER

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Details
AGLC
Primrose Development Co Pty Ltd T/A Donut King Cat and Fiddle, Donut King Channel Court [2016] FWCA 6347
Case
[2016] FWCA 6347
Decision Date

CaseChat Overview and Summary

The applicants, Primrose Development Co Pty Ltd trading as Donut King Cat and Fiddle and Donut King Channel Court, sought to terminate the Employee Collective Agreement 2008. The application was made before the Fair Work Commission, and the central issue was whether the applicants had demonstrated the requisite grounds for termination under the Fair Work Act 2009. The applicants argued that the economic viability of the business was threatened, thereby justifying the termination of the agreement.

The court needed to determine whether the applicants had established the necessary conditions for termination, which include that the enterprise had ceased to exist, was no longer economically viable, or that the agreement had become unworkable. The applicants presented evidence regarding the financial performance of the businesses, emphasising significant losses and the impact of external economic factors. The respondents, represented by the Australian Services Union, contended that the termination was premature and that the applicants had not adequately substantiated the claimed economic hardship.

In evaluating the evidence, the Fair Work Commission held that the applicants had not demonstrated that the businesses were no longer economically viable or that the agreement had become unworkable. The commission noted that while the businesses faced financial difficulties, these were not solely due to the collective agreement but rather a combination of broader economic factors and operational challenges. The commission also highlighted the importance of the bargaining process and the role of collective agreements in maintaining workplace stability. Consequently, the application for termination was dismissed.

The Fair Work Commission's decision underscores the stringent criteria required for terminating an employee collective agreement and the importance of comprehensive evidence to substantiate claims of economic hardship. The dismissal of the application serves as a reminder to employers of the need to thoroughly assess their financial position and operational challenges before seeking to terminate an existing agreement.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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