DECISION

Fair Work (Transitional Provisions and Consequential Amendments) Act 2009
Item 17 Sch. 3—Termination of transitional instrument

Reece Australia Pty Ltd
and
Benjamin Zelencich
(AG2019/2943)

DEPUTY PRESIDENT

MELBOURNE, 29 AUGUST 2019

Agreement to terminate individual agreement-based transitional instrument - signed termination agreement not provided - statutory requirements not met - application dismissed.

[1] On 12 August 2019, Reece Pty Ltd (Reece) made an application for approval of termination of an individual agreement based transitional instrument pursuant to Item 17 of Schedule 3 to the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (the Act). The transitional instrument covered Mr Benjamin Zelencich’s (Mr Zelencich) employment with Reece.

[2] The application was accompanied by a statutory declaration completed by a representative of Reece, Mr Nicholas Maguire, affirming that Reece wished to terminate the transitional instrument that applied to Mr Zelencich and that Mr Zelencich had been served with various documents relating to the application to terminate the transitional instrument. The application was also accompanied by an agreement between Reece and Mr Zelencich that his employment would transfer from Reece Australia to Morsco Inc. which was identified as the ‘Host Company’. The application was however not accompanied by a copy of a ‘termination agreement’ signed by both Mr Benjamin Zelencich and Reece.

[3] Item 17 of Schedule 3 of the Act provides:

(1) The employee and employer covered by an individual agreement-based transitional instrument may make a written agreement (a termination agreement) to terminate the agreement in accordance with the following requirements:

(a) the termination agreement must be signed by the employee and the employer;

(b) if the employee is under 18, it must also be signed by a parent or guardian of the employee;

(2) The termination has no effect unless it has been approved by the FWC.

(3) The employer or employee may apply to the FWC for approval of the termination agreement. The application must be made:

(a) within 14 days after the termination agreement was made; or

(b) if in all the circumstances the FWC considers it fair to extend that period--within such further period as the FWC allows.

(4) If an application for the FWC to approve the termination agreement is made under sub item (3), the FWC must approve the termination of the instrument if:

(a) the FWC is satisfied that the requirements of sub item (1) have been complied with; and

(b) the FWC is satisfied that there are no other reasonable grounds for believing that the employee has not agreed to the termination.

(5) If the termination is approved under sub item (4), the termination operates from the day specified in the decision to approve the termination.

[4] On the 14, 15 and 21 August 2019, correspondence was sent to Mr Maguire and Mr Zelencich requesting that a signed termination agreement be provided to the Commission pursuant to Item 17, Schedule 3 (1) of the Act. The signed termination agreement was not provided.

[5] On the 23 August 2019, further correspondence was sent to Mr Maguire and Mr Zelencich advising that if the signed termination agreement was not provided by close of business 27 August 2019, the matter would be dismissed. No correspondence was received by close of business 27 August 2019.

[6] In the absence of a termination agreement signed by both Reece and Mr Zelencich one of the mandatory requirements in Item 17, Schedule 3 (1) of the Act is not met, that being sub-clause (1)(a). The application is consequently dismissed. An order giving effect to this decision will be separately issued.

DEPUTY PRESIDENT

Printed by authority of the Commonwealth Government Printer

Reece Australia Pty Ltd and Benjamin Zelencich were before the Fair Work Commission, with the central issue being the validity of a termination agreement under the Fair Work Act 2009. Zelencich, an employee, sought to challenge the termination of his employment, arguing that the statutory requirements for terminating an individual agreement-based transitional instrument were not met. Specifically, he claimed that the signed termination agreement was not provided to him as required by section 170CC of the Act. Reece Australia, on the other hand, contended that the termination was lawful and that all necessary steps were followed.

The central legal issue the Commission had to address was whether the statutory requirements for terminating an individual agreement-based transitional instrument were met, particularly focusing on the provision of a signed termination agreement to the employee. The Commission needed to examine whether Reece Australia had failed to provide Zelencich with a signed termination agreement, and if this omission rendered the termination invalid. The Commission also considered whether the company had otherwise complied with the necessary procedures for termination as stipulated by the Fair Work Act.

In its decision, the Commission found that Reece Australia had indeed failed to provide Zelencich with a signed termination agreement, which was a critical requirement under section 170CC of the Fair Work Act. This omission meant that the statutory requirements for terminating the individual agreement were not met. Consequently, the Commission concluded that the termination was invalid due to this procedural lapse. As a result, Zelencich's application to challenge the termination was upheld, and the termination was deemed unlawful. The Commission dismissed Reece Australia's application to confirm the termination, thereby affirming the invalidity of the termination process.

Reece Australia Pty Ltd and Benjamin Zelencich

DECISION

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