R & K Unit Trust T/A D.B Farrell's Pty Ltd

[2018] FWCA 1547

[2018] FWCA 1547

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.222 - Application for approval of a termination of an enterprise agreement

R & K Unit Trust T/A D.B Farrell's Pty Ltd
(AG2018/888)

THE TRUSTEE FOR R AND K TRUST T/A D.B. FARRELL'S PTY LTD AND CFMEU UNION COLLECTIVE AGREEMENT 2015- 2019

Building, metal and civil construction industries
COMMISSIONER HUNT	BRISBANE, 20 MARCH 2018

Application for termination of the The Trustee for R and K Trust T/A D.B. Farrell's Pty Ltd and CFMEU Union Collective Agreement 2015- 2019.

[1] On 9 March 2018, R & K Unit Trust T/A D.B Farrell's Pty Ltd (the Employer) applied, pursuant to s.222 of the Fair Work Act 2009 (the Act) to terminate The Trustee for R and K Trust T/A D.B. Farrell's Pty Ltd and CFMEU Union Collective Agreement 2015- 2019 (the Agreement).

[2] The application was supported by a statutory declaration of Ms Kelli Pepperell, Director which declared, among other things, that the employees covered by the Agreement were notified of the time and place of the vote and that of the valid votes cast, the employees unanimously approved the termination of the Agreement.

[3] The Construction, Forestry, Mining and Energy Union (CFMEU) is an employee organisation covered by the Agreement. The CFMEU did not provide its views in relation to the application despite being afforded an opportunity to do so.

[4] Section 220 of the Act sets out how an employer may request employees to approve a proposed termination of an enterprise agreement:

‘220 Employers may request employees to approve a proposed termination of an enterprise agreement

(1) An employer covered by an enterprise agreement may request the employees covered by the agreement to approve a proposed termination of the agreement by voting for it.

(2) Before making the request, the employer must:

(a)  take all reasonable steps to notify the employees of the following:

(i) the time and place at which the vote will occur;

(ii)  the voting method that will be used; and

(b)  give the employees a reasonable opportunity to decide whether they want to approve the proposed termination.

(3) Without limiting subsection (1), the employer may request that the employees vote by ballot or by an electronic method.’

[5] Having reviewed Ms Pepperell’s statutory declaration, I was concerned that employees appeared to have been asked to approve the termination of the Agreement on the same day that it was proposed by the Employer; in fact, within 30 minutes of having a meeting with the Employer.

[6] The matter was listed for telephone hearing on 20 March 2018. The notice of listing directed the Employer to provide a copy of the notice of listing to each employee still employed by the Employer, informing the employees that they were encouraged to attend the hearing and inform the Commission of their views relevant to ss. 220 and 223 of the Act.

[7] The Employer was represented by Ms Pepperell. Four of the six employees currently employed were in attendance.

[8] The employees were questioned by the Commission as to how the vote was conducted, and whether each employee considered that he had been afforded a reasonable opportunity to decide whether they wanted to approve the proposed termination. All four employees informed the Commission that they considered they had been afforded a reasonable opportunity, and willingly voted to approve the termination of the Agreement.

[9] Ms Pepperell stated that she informed all employees prior to the vote that the terms and conditions of the Agreement relevant to the wages and allowances paid to employees would continue to be paid over and above the applicable modern award until such time as a new agreement is made. Ms Pepperell repeated the undertaking during the hearing.

[10] Ms Pepperell stated that the proposed termination had been canvassed with employees for some weeks prior to the vote taking place, in light of the Employer suffering a dramatic decrease in work due to the Agreement not being compliant with the Code for the Tendering and Performance of Building Work 2016 (Building Code).

[11] Section 223 of the Act sets out the conditions which must be met for an agreement to be terminated pursuant to s.222 of the Act. Section 223 of the Act is as follows:

‘223 When the FWC must approve a termination of an enterprise agreement

If an application for the approval of a termination of an enterprise agreement is made under section 222, the FWC must approve the termination if:

(a) the FWC is satisfied that each employer covered by the agreement complied with subsection 220(2) (which deals with giving employees a reasonable opportunity to decide etc.) in relation to the agreement; and

(b) the FWC is satisfied that the termination was agreed to in accordance with whichever of subsection 221(1) or (2) applies (those subsections deal with agreement to the termination of different kinds of enterprise agreements by employee vote); and

(c) the FWC is satisfied that there are no other reasonable grounds for believing that the employees have not agreed to the termination; and

(d) the FWC considers that it is appropriate to approve the termination taking into account the views of the employee organisation or employee organisations (if any) covered by the agreement.’

[12] Ordinarily I would not consider a vote on the same day the proposed termination is put to employees to constitute a reasonable opportunity to decide whether they want to approve the proposed termination. However, in light of the Employer facing a reduction in work due to the Building Code compliance issue, the employees were well-positioned to make an informed decision. In the circumstances, I am satisfied the eligible employees who participated in the vote to terminate the Agreement were given a reasonable opportunity to decide whether they wanted to approve the proposed termination.

[13] In consideration of the material before, including the statutory declaration and the views of the employees provided at the hearing, I am satisfied that the requirements of s.223 of the Act have been met. In accordance with s.223, I must terminate the Agreement. The application to terminate the Agreement is approved.

[14] The termination will take effect from today, 20 March 2018.

COMMISSIONER

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