Sandvik Mining and Construction Australia Pty Ltd T/A Sandvik Mining and Construction

[2019] FWCA 7235

[2019] FWCA 7235

The attached document wholly replaces the document previously issued with the code [2019] FWC 7108 on 17 October 2019.

Corrected the document reference to [2019] FWCA 7235

Rhys James

Associate to Deputy President Beaumont

Dated 18 October 2019

[2019] FWCA 7235

FAIR WORK COMMISSION

DECISION

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

Sandvik Mining and Construction Australia Pty Ltd T/A Sandvik Mining and Construction
(AG2019/3722)

SANDVIK - PERTH WAREHOUSE HUB ENTERPRISE AGREEMENT 2017

Storage services
DEPUTY PRESIDENT BEAUMONT	PERTH, 17 OCTOBER 2019

Application for termination of the Sandvik - Perth Warehouse Hub Enterprise Agreement 2017.

[1] This decision concerns an application made by Sandvik Mining and Construction Australia Pty Ltd (T/A Sandvik Mining and Construction (the Applicant) on 1 October 2019 for the termination of the Sandvik – Perth Warehouse Hub Enterprise Agreement 2017 1(the Agreement) under s 225 of the Fair Work Act 2009 (Cth) (the Act). This section of the Act allows an employer to apply to the Commission for the termination of an agreement that has passed its nominal expiry date.

[2] Section 226 of the Act details the considerations for the Commission when dealing with such an application.

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.

[3] In support of its application, the Applicant has provided a statutory declaration from Mr Troy Montgomery, Employee Relations Manager of the Applicant (Mr Montgomery).

Background

[4] Mr Montgomery explained that initially the Applicant had commenced bargaining with employees covered by the Agreement for a new enterprise agreement. 2 However, during negotiations there was an interest expressed by both the Applicant and employees to have the Sandvik – Warehousing Operations Enterprise Agreement 2017 (Warehouse Operations Agreement) 3cover and apply to them. Mr Montgomery stated that the Warehouse Operations Agreement allowed coverage of the employees if another enterprise agreement did not apply to their employment – its nominal expiry date was 1 April 2020 and it had national coverage.4

[5] The discussion between the Applicant and the employees thereafter shifted to terminating the Agreement. The termination would allow the Warehouse Operations Agreement to cover and apply to the employees, and when negotiations commenced in 2020 to replace it, the employees – situated in Perth, would have a voice in the national negotiations. 5

[6] The Applicant prepared and distributed a comprehensive briefing note about a meeting held between employee bargaining representatives (who had been representing the employees for a new agreement) and the Applicant (the briefing note). 6 The briefing note covered the content of the discussion about the Agreement termination, and included information on rates of pay, a lump sum payment on the termination of the Agreement and a second payment proposed for March 2020.7 The briefing note explained that employee bargaining representatives would meet with all the employees at the Warehouse on Monday, 16 September 2019, to enable discussion and feedback about the proposed termination.8 That feedback would then be provided to the Applicant with a view to assisting the Applicant to determine if discussions to move to the Warehouse Operations Agreement should proceed further.9

[7] Thereafter, the Applicant and the employee bargaining representatives negotiated conditions to guarantee that the Agreement termination would not result in reduced conditions for the employees. 10 The parties reduced their agreement about guaranteed terms and conditions of employment after the Agreement had been terminated, into a document titled the Perth Warehouse Hub MOU (attached to this decision and marked Attachment A).11

[8] The proposal to terminate the Agreement was presented to the employees at a meeting on or around 24 September 2019. The terms and conditions of the Agreement and the Warehouse Operations Agreement, and the effect of those terms, were explained. 12 The employees were informed that the termination of the Agreement would be put to a vote on 27 September 2019, by ballot.13 The employees received a briefing note titled Communication Three. Communication Three provided a comprehensive update of the progress to date regarding the proposed termination, what was on offer (rates of pay and lump sum payments), the differences between the Agreement and the Warehouse Operations Agreement and information regarding the vote.14

[9] Communication Three stated that ‘if the majority of employee [sic] vote in favour of terminating the Agreement then the Applicant would make an application to the Commission to terminate the Agreement’. 15 It also noted that once the termination was approved by the Commission, the terms of the Warehouse Operations Agreement and the Perth Warehouse Hub MOU would apply.16

[10] As stated in Communication Three, a vote was conducted by ballot on 27 September 2019. Mr Montgomery reports that of the 19 employees covered by the Agreement, 18 employees cast a valid vote with 14 in favour of terminating the Agreement. Three employee bargaining representatives gave evidence aligned to that of Mr Montgomery, confirming the process that had been undertaken, the explanations given and the voting results. 17

Consideration

[11] Having considered all submissions, witness evidence and all the materials filed, I am satisfied that the termination of the Agreement is not contrary to the public interest, and in the circumstances of this case, it is appropriate to terminate the Agreement.

[12] The Applicant has undertaken a comprehensive consultative process with its employee bargaining representatives and employees regarding the proposed termination and the effect that it would have on them. During this process the employee bargaining representatives, employees and the Applicant have negotiated a Perth Warehouse Hub MOU to guarantee the Agreement termination would not result in reduced conditions of employment for the employees. The views of the employees have been taken into account in addition to those of the Applicant.

Conclusion

[13] For the reasons above, the Agreement must be terminated pursuant to s 226 of the Act.

[14] An Order will be issued terminating the Agreement with effect on 17 October 2019.

DEPUTY PRESIDENT

Attachment A

 1   [2017] FWCA 6816; AE426595.

 2   Second Statutory Declaration of Troy Montgomery dated 14 October 2019 (Second Statutory Declaration of Mr Montgomery) [1].

 3   [2018] FWCA 883; AE427292.

 4 Second Statutory Declaration of Mr Montgomery [5].

 5 Second Statutory Declaration of Mr Montgomery [6].

 6   Second Statutory Declaration of Mr Montgomery Appendix D.

 7   Second Statutory Declaration of Mr Montgomery Appendix D.

 8   Second Statutory Declaration of Mr Montgomery Appendix D.

 9   Second Statutory Declaration of Mr Montgomery Appendix D.

 10 Second Statutory Declaration of Mr Montgomery [7].

 11   Second Statutory Declaration of Mr Montgomery Appendix E.

 12 Second Statutory Declaration of Mr Montgomery [10].

 13   Second Statutory Declaration of Mr Montgomery Appendix F.

 14   Second Statutory Declaration of Mr Montgomery Appendix F.

 15   Second Statutory Declaration of Mr Montgomery Appendix F.

 16   Second Statutory Declaration of Mr Montgomery Appendix F.

 17   Statutory Declaration of Michael Brayn dated 14 October 2019; Statutory Declaration of Nicole Bosotin dated 14 October 2019; Statutory Declaration of Ross Thomas dated 14 October 2019.

Printed by authority of the Commonwealth Government Printer

<AE426595  PR713514>