Queensland Blow Moulders Pty Ltd

[2016] FWCA 3065

[2016] FWCA 3065

The attached document replaces the document previously issued with the above code on 1 June 2016.

The date referred to in paragraph [24] is amended to 13 October 2016.

Nahum Moreau

Associate to Commissioner Hunt

1 June 2016

[2016] FWCA 3065

FAIR WORK COMMISSION

DECISION

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

Queensland Blow Moulders Pty Ltd
(AG2016/906)

Manufacturing and associated industries
COMMISSIONER HUNT	BRISBANE, 1 JUNE 2016

Application for termination of the Queensland Blow Moulders Enterprise Agreement 2010.

[1] On 14 April 2016 Queensland Blow Moulders Pty Ltd (the Company) applied pursuant to s.225 of the Fair Work Act 2009 (the Act) to terminate the Queensland Blow Moulders Enterprise Agreement 2010 (the Agreement). The Agreement has passed its nominal expiry date.

[2] The application was accompanied by a statutory declaration of Rob Evans, General Manager of the Company.

[3] The matter was listed for hearing on the afternoon of 13 May 2016 in order to allow interested employees of the Company to attend the hearing and give evidence to the Commission, if they so wished.

[4] On 5 May 2016, the Australian Workers’ Union (AWU) sought leave to be heard at the hearing on the basis that it is a bargaining representative for a number of employees at the Company. Negotiations for a new enterprise bargaining agreement have commenced but to-date, have not been successful.

[5] The Company opposed the request for the AWU to be heard on the basis that the AWU is not covered by the Agreement. Leave was granted for the AWU to be heard on the basis that they are a representative of the employees covered by the Agreement, and by virtue of s.226(b)(i) of the Act, can inform the Commission of the views of the employees they represent relevant to the application.

[6] At the hearing, leave was granted for Ms Theresa Moltoni of IRIQ Pty Ltd to appear on behalf of the Company. The AWU was represented by Troy McKernan, Industrial Relations Officer.

[7] Evidence was provided at the hearing by Mr Rob Evans on behalf of the Company. The AWU provided oral submissions to support its objections to the Commission approving the termination of the Agreement. No employees of the Company attended the hearing to give evidence.

Evidence of Mr Evans

[8] Mr Evans’ evidence was that the Company is currently uncompetitive, with its cost rising without a proportionate increase in productivity or efficiency. Mr Evans stated that the Company is currently running at a loss.

[9] Mr Evans’ evidence was that the Agreement was restrictive with respect to shift roster changes to improve productivity. The Company consulted with employees to make a change to working hours, but because one employee did not want to change, the Agreement prohibited the change. There was significant delay before an appropriate arrangement was entered into with the employees.

[10] If the Agreement is terminated, the modern award governing the work performed by the employees is the Manufacturing and Associated Industries and Occupations Award 2010.

[11] The Company has communicated in writing to employees to confirm various conditions within the Agreement that will continue to exist (temporarily or permanently) if the Agreement is terminated. Mr Evans confirmed these items at the hearing and they are recorded on transcript. The on-going terms are reproduced below:

• The Company guarantees that it will not reduce current wages rates; the wage rates will never fall below those contained in the Manufacturing and Associated Industries and Occupations Award 2010 (Manufacturing Award);



• The Company guarantees that redundancy entitlements contained within the Agreement would be maintained for a period of 6 months from the date of the application to terminate [that date being 14 April 2016];





• The hours of work will be in accordance with the Manufacturing Award. In particular, the Company guarantees that hours of work will not exceed an average of 38 hours per week which may be spread over a period of two, three of four weeks, and in the case of continuous shift such longer period as may be required to meet the rotation of all shifts;



• Long service leave accrued at a more generous rate will be honoured up until the date of termination of the Agreement. Service of employees following the termination of the Agreement will be accrued in accordance with the Industrial Relations Act 1999 (Qld);



• Overtime rates under the Manufacturing Award are time and a half for the first three hours and double time thereafter. This is less generous than the Agreement. The Company confirms that overtime has not been worked over the last few years and it is not anticipated that this will change;



• The Company will continue to supply tools required to be used at work;



• The Company will continue to provide all necessary sanitary accommodation, change rooms and dining rooms. Further, the Company will also continue to provide boiling water, white tea, coffee and milk at meal times and rest pauses;



• The Company would continue to provide all [weekly] employees who have been employed prior to the termination of the Agreement with 4 weeks’ notice of termination.

[12] While it was not canvassed at hearing, it is expected that the reference to termination by the Company of weekly employees by the giving of four weeks’ notice would not be required in a scenario of misconduct warranting summary dismissal.

Public interest test

[13] Ms Moltoni submitted that it would be contrary to the public interest not to terminate the agreement because of the risk to jobs of the employees in the business as a result of the Company not being is a position to be able to restructure as necessary to try to stem its losses. 1

[14] The Company relied on authorities in Aurizon 2 and AWX3 in support of its application to terminate the Agreement.

Views of the employees

[15] Ms Moltoni contended that with regard to the views of the employees, the Company had surveyed the employees, with only 3 out of 14 employees completing the survey.

[16] Steps had been taken to ensure that employees were aware of the hearing to enable the employees to directly express their views to the Commission. Ms Moltoni also contended that in consideration of any detriment to employees by termination of the Agreement, as demonstrated in paragraph [11], the Company has, to the fullest extent that it is capable in its current financial situation, given undertakings to give assurance to employees in regards to any of those detriments.  4

The AWU’s submission

[17] The AWU submitted that the Company and the AWU have been bargaining for a new agreement. The bargaining had been occurring in 2015, and a proposed replacement agreement had been voted on and knocked back by employees on two occasions.

[18] The AWU further submitted that the decision to make application to terminate the Agreement followed the two failed votes. Mr McKernan claimed this cause of action constituted “capricious or unfair conduct, undermining freedom of association and collective bargaining.” 5 No evidence was put by the AWU to support this assertion.

Legislative provisions

[19] Chapter 2, Part 2-4, Division 7, Subdivision D 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.

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.

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

[20] Based on the material contained in the statutory declaration filed with the application, the evidence provided by the Company, and in consideration of s.226(a), I am satisfied that termination of the Agreement is not contrary to the public interest. There is nothing before me which raises public interest considerations which might militate against the termination of the Agreement.

[21] In consideration of the views contained in the material before me relevant to s.226(b)(i) and (ii), I consider that it is appropriate to terminate the Agreement.

[22] I do not accept the submission made by the AWU referred to in paragraph [18] of this decision.

[23] With regard to the circumstances of the employees following termination of the Agreement, the relevant modern award will have application to the workplace. In addition, a number of substantial, continuing entitlements greater than the modern award will continue to apply.

[24] Most importantly, the above-award rate of pay will continue to be paid, and the more generous redundancy entitlements will exist up until 13 October 2016, after which time the National Employment Standards (NES) will apply.

[25] Having satisfied myself in accordance with s.226(a) and (b), I must terminate the Agreement. The application to terminate the Agreement is approved.

[26] The termination will take effect from today, 1 June 2016.

COMMISSIONER

 1   PN144

 2   Aurizon Operations Limited [2015] FCAFC 126

 3   AWX Pty Ltd trading as AWX [2013] FWCFB 8726

 4   PN145-PN146

 5   PN149

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<Price code A, AE884575  PR580388 >