Sales Team Providers Pty Ltd

[2021] FWCA 2443

[2021] FWCA 2443

FAIR WORK COMMISSION

DECISION

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

Sales Team Providers Pty Ltd
(AG2021/4683)

QNT SERVICES 2 PTY LTD ENTERPRISE AGREEMENT

Retail industry
COMMISSIONER O'NEILL	MELBOURNE, 10 MAY 2021

Application for termination of the QNT Services 2 Pty Ltd Enterprise Agreement.

[1] On 14 April 2021, Sales Team Providers Pty Ltd (the Applicant) made an application pursuant to section 225 of the Fair Work Act 2009 (the Act) to terminate the QNT Services 2 Pty Ltd Enterprise Agreement (the Agreement).

[2] The Agreement has passed its nominal expiry date of 4 March 2014.

Background

[3] The Agreement applies to the Applicant and its employees engaged under Job Classifications specified in Schedules to the Agreement, grouped as:

● Schedule A - Clerical and administrative employees (Queensland)
● Schedule B – Retail employees (Queensland)
● Schedule C – General stores, warehousing and distribution employees (Queensland)
● Schedule D – Commercial traveller employees (New South Wales)
● Schedule E – Commercial sales employees (Victoria)
● Schedule F – Commercial traveller employees (South Australia)
● Schedule G – Retail, wholesale and distributive employees (Northern Territory)
● Schedule H – Shop and warehouse employees (Western Australia)
● Schedule I – Wholesale trades employees (Tasmania)
● Schedule J – Clerical and administrative employees (New South Wales).

[4] The classifications and wage rates in each of the Schedules are based on various specified State awards.

[5] The application was supported by a statutory declaration dated 14 April 2021 made by Mr Freedman, a Director of the Applicant. Following a telephone mention on 27 April 2021, a further statutory declaration dated 30 April 2021 made by Mr Tilyard, the CEO of the Applicant, was provided along with further submissions.

[6] The material filed by the Applicant establishes:

● that the Applicant is covered by the Agreement by virtue of various purchases of businesses;

● the business operated by the Applicant differs substantially from, and is much narrower than, the business which operated when the Agreement was made. The Applicant now operates a retail solutions business which manages the placement of its clients’ products on shelves. This means that there are numerous provisions in the Agreement which are not relevant to the Applicant’s operations;

● the Applicant has 321 employees, of which 301 are employed on a casual basis. Fewer than 2% of its employees were employed at the time the Agreement was made in 2010;

● on 29 March 2021, Mr Tilyard emailed all employees informing them that the company intended to apply to the Commission to terminate the Agreement and invited employees to raise any questions with Mr Tilyard. A small number of responses were received and no negative responses were among them; and

● if the Agreement is terminated, the majority of the Applicant’s employees will be covered by the Commercial Sales Award 2020 and any employees performing administrative duties will be covered by the Clerks – Private Sector Award 2020.

[7] The matter was listed for a mention on 27 April 2021 where I sought additional information from the Applicant. The following information was provided to employees by the Applicant:

“An application has been made by Sales Team Providers Pty Ltd to terminate the QNT Services 2 Pty Ltd Enterprise Agreement.

The application will be decided by Commissioner ONeill of the Fair Work Commission.  In deciding whether to terminate the agreement Commissioner ONeill is required to take into account the views of employees covered by the agreement.

If the application to terminate the QNT Services 2 Pty Ltd Enterprise Agreement is successful, your minimum employment entitlements will be regulated by the applicable modern award.

If you have any views about the application to terminate the agreement, please advise the Commissioner by email at [email protected] or by calling [phone] by no later than 9am on Monday 3 May 2021.”

[8] No employee responses were received by the Commission.

[9] On 5 May 2021, I advised the Applicant they had lodged their application using the incorrect form. The Agreement is a collective agreement-based transitional instrument, having been made during the bridging period as defined in the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009. As such, an application should have been made under Schedule 3 Item 16 of the Fair Work (TPCA) Act 2009 (Form F28) rather than the Form 24 which was lodged.

[10] On the same date, Mr Maher, legal representative for the Applicant, confirmed that the Applicant seeks that the application be amended accordingly.

Consideration

[11] Pursuant to section 586 of the Act, I am prepared to allow the amendment requested by the Applicant given the application should have been made using Form F28 rather than the Form F24 which was lodged. I am satisfied that the amended application is substantially the same in nature as the application initially lodged.

[12] In deciding whether to grant the application, the Commission is required to comply with ss 225 and 226 of the Act.

[13] In relation to section 225 I am satisfied that the Applicant is entitled to make the application and that the Agreement has passed its nominal expiry date.

[14] In relation to section 226, I am required to terminate the Agreement if (a) I am satisfied that it is not contrary to the public interest to do so, and (b) if I consider it appropriate 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.

[15] I am satisfied that it is not contrary to the public interest to terminate the Agreement, taking into account all the material filed by the Applicant, including:

● The Agreement was made more than 11 years ago and was entered into by a company which no longer owns the Applicant. The Applicant’s business differs substantially from the business which operated when the Agreement was made;

● The Agreement is inconsistent with some provisions of the NES and has lower rates of pay than the applicable awards. This means that it is difficult for employees to ascertain their entitlements (and for the Applicant to apply them) as the Agreement has to be read in conjunction with the NES and the applicable awards and is, itself, a complex document;

● Minimum wages in the Agreement are significantly lower than applicable award pay rates;

● The Commercial Sales Award 2020, which will apply to most of the Applicant’s employees if the Agreement is terminated, provides superior benefits compared to the Agreement including:

a. a right for casual employees to convert to ongoing employment;

b. higher rates of pay and allowances;

c. a minimum 2-hour engagement for casual employees;

d. a maximum of 10 ordinary hours; and

e. higher rates for weekend and overtime worked.

● Employees performing administrative duties who are currently covered by the Agreement would be covered by the Clerks – Private Sector Award 2020, are employed on a full-time ongoing basis and are paid annual salaries significantly above any applicable award rates.

[16] I am satisfied that it is not contrary to the public interest to terminate the Agreement even though some terms in the Agreement are superior to those in the applicable awards. The Agreement provides greater prescription for certain employees as to which days of the week ordinary hours can be worked on, provides for a minimum of 4 rather than 3 hours of consecutive work on certain days for certain part-time employees; provides greater prescription of rest breaks, provides an entitlement to payment for a longer period of jury service, and provides a minimum payment of 4 hours rather than 3 hours for work performed on public holidays. The Applicant submits that none of these provisions will have a material or adverse impact on employees’ terms and conditions of employment.

[17] I am satisfied that if the Agreement is terminated, the superior benefits that will apply to the majority of the Applicant’s employees who are engaged on a casual basis outweigh the small number of terms in the Agreement that are superior to those in the applicable award in a small number of circumstances.

[18] As outlined above, the views of employees have been sought on two occasions. No negative views of any employee covered by the Agreement have been received. This weighs in favour of a consideration that it is appropriate to terminate the Agreement. No employee organisation is covered by the Agreement.

[19] I am satisfied that the likely effect that the termination of the Agreement will have on both the Applicant and its employees will be a simpler and more streamlined set of terms and conditions that are easier to identify, apply and enforce.

[20] Based on the materials provided, I am satisfied that the requirements of s 226 of the Act have been met, and in all the circumstances, I am satisfied that it is appropriate to terminate the Agreement.

[21] The Agreement is terminated effective from today.

COMMISSIONER

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