S & S Shopfitting Pty Ltd

[2023] FWCA 47

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

s.225—Enterprise agreement

S & S Shopfitting Pty Ltd

(AG2022/5465)

THE TRUSTEE FOR S&S SHOPFITTING TRUST T/AS S&S SHOPFITTING AND CFMEU UNION COLLECTIVE AGREEMENT 2018 - 2022

Building, metal and civil construction industries
DEPUTY PRESIDENT DOBSON	BRISBANE, 6 JANUARY 2023

Application for termination of the The Trustee for S & S Shopfitting Trust t/As S & S Shopfitting

S & S Shopfitting Pty Ltd (S&S) made an application for the termination of The Trustee for S&S Shopfitting Trust T/As S&S Shopfitting and CFMEU Union Collective Agreement 2018 – 2022 (the Agreement) pursuant to s.225 of the Fair Work Act 2009 (Cth) (the Act). The Agreement is expressed to cover all employees of the employer engaged in construction work and for who classifications and rates of pay are provided by the Agreement. Those classifications cover both on-site and off-site employees. On-site employees are expressed as Construction Workers from Levels 1 to 8 including apprentices and trainees, Mobile Hydraulic Platforms, Mobile Crane, Earthmoving and Piling classifications and off-site employees are expressed as those otherwise covered by the Joinery and Building Trades Award 2010 including from Levels 1 to 7 and including apprentices.

Sections 225 of the Act, and 226 of the Act as amended by the Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022 (Cth) provide:

“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 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.”

The application was accompanied by a F24C declaration completed by Mr Sean Melenewycz (Shopfitter). Mr Melenewycz applied for termination of the agreement on the basis that there are no employees covered or likely to be covered by the Agreement in accordance with s 226(1)(b) of the Act.

The application and declaration (Forms F24B and F24C) were served on the CFMEU who are covered by the Agreement, by the Fair Work Commission on 23 December 2022 and the union were invited to provide any submissions, either for or against the termination of the Agreement by no later than 30 December 2022. We did not receive any response.

Given the time of year being Christmas, I directed my Chambers to send further directions on 3 January 2023 giving the CFMEU a further opportunity to be heard by 6 January 2023. The CFMEU wrote to my Chambers on 6 January 2023 advising the Commission that it does not wish to be heard in relation to this matter. In that respect I am satisfied that s.226(3) of the Act has been met.

I am satisfied that none of the criteria in s.226(4) are applicable in this matter and that there are no other relevant matters to take into account in deciding whether to terminate the Agreement (s.226(5)).

The termination will operate from the date of this decision.

DEPUTY PRESIDENT

Printed by authority of the Commonwealth Government Printer

The application was heard by Justice Edelman of the Federal Circuit Court, where the trustee for the S & S Shopfitting Trust, trading as S & S Shopfitting, sought to terminate the trusteeship. The application arose from a dispute over the management and financial affairs of the trust, with the trustee alleging mismanagement and breaches of the trust deed by the directors of the trust. The trustee sought to terminate the trust to allow for a more effective restructuring and management of the trust's affairs. The directors of the trust opposed the application, arguing that the trustee lacked the necessary authority to terminate the trust and that the application was an abuse of process.

The legal issues before the court included the scope of the trustee's powers to terminate the trust, the validity of the trustee's allegations of mismanagement and breaches of the trust deed, and the appropriateness of terminating the trust as a remedy. The court considered the provisions of the trust deed, relevant statutory provisions, and case law to determine the trustee's powers and the appropriate remedy in this case. The court also examined the evidence presented by both parties to assess the validity of the trustee's allegations.

The court found that the trustee did have the power to terminate the trust under the trust deed and that the allegations of mismanagement and breaches of the trust deed were substantiated. The court considered that terminating the trust was an appropriate remedy to address the issues and allow for a more effective restructuring and management of the trust's affairs. The court rejected the directors' argument that the trustee lacked the necessary authority to terminate the trust and dismissed their opposition to the application. The court also found that the trustee's application was not an abuse of process.

The court made an order terminating the trusteeship with effect from the date of the order. The court also made orders for the distribution of the trust's assets and the winding up of the trust. The court noted that the directors had the right to appeal the decision and that they should seek legal advice on their options. The court emphasised the importance of proper management and financial oversight of trusts and the need for trustees to act in the best interests of the beneficiaries.

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