Scope Furniture (Aust) Pty Ltd ATF Milvain No.2 Family Trust T/A Scope Furniture

[2021] FWCA 585

[2021] FWCA 585

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.225—Enterprise agreement

Scope Furniture (Aust) Pty Ltd ATF Milvain No.2 Family Trust T/A Scope Furniture
(AG2020/4058)

SCOPE FURNITURE AND CFMEU - FFPD ENTERPRISE AGREEMENT 2014

Timber and paper products industry
DEPUTY PRESIDENT CLANCY	MELBOURNE, 5 FEBRUARY 2021

Application for termination of the Scope Furniture and CFMEU - FFPD Enterprise Agreement 2014 – Application granted.

[1] On 21 December 2020, Scope Furniture (Aust) Pty Ltd ATF Milvain No.2 Family Trust T/A Scope Furniture (Scope Furniture) filed an application (the Application) pursuant to s.225 of the Fair Work Act 2009 (the Act) to terminate the Scope Furniture and CFMEU - FFPD Enterprise Agreement 2014 (the Agreement). The Agreement is a single enterprise agreement which nominally expired on 1 January 2017. I note that the Agreement covers the then Construction, Forestry, Mining and Energy Union.

[2] Accompanying the Application was a statutory declaration of Mr Drew Milvain, Managing Director/Owner of Scope Furniture.

[3] The Act relevantly provides as follows:

“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 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.

227 When termination comes into operation

If an enterprise agreement is terminated under section 226, the termination operates from the day specified in the decision to terminate the agreement.”

Consideration

Section 225

[4] An employer covered by an agreement may apply under s.225(a) of the Act to the Commission for the termination of the Agreement if it has passed its nominal expiry date. As noted above, the Agreement nominally expired over four years ago. Further, Mr Milvain declared that Scope Furniture is the employer covered by the Agreement. As such, I am satisfied that Scope Furniture has standing to bring the Application under s.225(a) of the Act.

Section 226(a) – Public interest

[5] Having regard to s.226(a) of the Act and the manner in which the public interest is to be assessed, the Full Bench in Aurizon Operations Limited; Aurizon Network Pty Ltd; Australian Eastern Railroad Pty Ltd 1(Aurizon)cited various passages from the Full Bench of the Australian Industrial Relations Commission’s decision in Re Kellogg Brown and Root, Bass Strait (Esso) Onshore/Offshore Facilities Certified Agreement 20002(Kellogg) which had concerned the corresponding, but not identical, provision from the Workplace Relations Act 1996. Relevantly, these passages included:

“The notion of public interest refers to matters that might affect the public as a whole such as the achievement or otherwise of the various objects of the Act, employment levels, inflation, and the maintenance of proper industrial standards. An example of something in the last category may be a case in which there was no applicable award and the termination of the agreement would lead to an absence of award coverage for the employees. While the content of the notion of public interest cannot be precisely defined, it is distinct in nature from the interests of the parties. And although the public interest and the interests of the parties may be simultaneously affected, that fact does not lessen the distinction between them…” 3

[6] It is also relevant to highlight the Full Bench in Aurizon concluded that it cannot be expected that the terms and conditions of an agreement will continue unaltered in perpetuity after it has passed its expiry date. This is because the Act contemplates the terms and conditions of an agreement may be altered by making a new agreement or by terminating the existing agreement. 4

[7] As was also recognised in Aurizon, s.226 of the Act is not limited to circumstances in which an agreement no longer applies to any employee. The Act clearly contemplates an agreement that still applies to employees being terminated and prescribes a safety net upon termination in such circumstances. The prescribed safety net is not a prior agreement and nor are undertakings mandatory. Rather, the prescribed safety net is the relevant modern award created during the Award Modernisation process and the National Employment Standards (NES).

[8] In this Application, the termination of the Agreement would not lead to an absence of award coverage for the employees. A modern award would provide for “proper industrial standards” within the meaning given to that term by Kellogg.

[9] In circumstances where there was no material before me suggesting otherwise, I am satisfied it is not contrary to the public interest to terminate the Agreement.

Section 226(b) – Appropriateness

[10] The approach to assessing appropriateness by taking into account all the circumstances, as enunciated by the Full Bench in Aurizon, is to have reference to the construction of s.226 and the contextual matters that bear upon that construction, as well as giving specific consideration to the matters identified in ss.226(b)(i) and (ii):

“All of the circumstances also need to be taken into account in considering whether termination of the agreements is appropriate. In particular the views of employers and employees covered by the agreement, their circumstances, and the impact of termination need to be taken into account. The requirement in s. 226(b) to take into account all of the circumstances including those set out in s. 226(b)(i) and (ii) is a requirement to take the matters into account and to give them due weight in assessing whether it is appropriate to terminate an enterprise agreement. In assessing appropriateness by taking into account all of the circumstances, we approached the task by reference to the construction of s. 226 and the contextual matters that bear upon that construction dealt with earlier as well as giving specific consideration to the matters identified in s . 226(b)(i) and (ii).” 5 (Reference omitted)

[11] I intend to adopt this approach.

[12] As the employer, Scope Furniture filed the Application to terminate the Agreement. Clearly, it supports the Agreement being terminated. Further, Mr Milvain declared that Scope Furniture entered the Agreement “specifically to meet a union-driven requirement from a major client” but that Scope Furniture now have an “extensive list of clients who don’t require us to have an EBA in place”. Mr Milvain further declared that the awards listed in the Agreement “are not relevant to 95% of our staff”.

[13] As to the circumstances of the employees and the likely effect that termination of the Agreement would have on them, I note that the Act contemplates the relevant modern award(s) and NES applying as the safety net, in the event of termination of the Agreement.

[14] On 23 December 2021, I issued Directions requiring Scope Furniture to provide a copy of the Directions, the Application and Mr Milvain’s statutory declaration to all employees by posting them on the staff notice board (if any) or providing copies to or emailing copies to employees covered by the Agreement by no later than 4:00PM on Monday 11 January 2021. Any employees covered by the Agreement, who wished to do so, were directed to file material in response regarding their views, their circumstances and the likely effect that termination of the Agreement would have on them by no later than 4:00PM on Monday 25 January 2021.

[15] In an email to my chambers on 12 January 2021, Mr Milvain confirmed that he had complied with the Directions.

[16] No responses were received from the employees covered by the Agreement, but I am satisfied the employees were on notice as to the Application before me. Further, on 4 February 2021, in an email to my Chambers, Mr Paris Nicholls, National Industrial Officer, Manufacturing Division of the Construction, Forestry, Maritime, Mining and Energy Union (CFMMEU) stated:

“The CFMMEU – Manufacturing Division (“CFMMEU”) has undertaken workplace visits and discussed the Employer’s application with the affected employees. As a result of those discussions, the CFMMEU does not oppose the application and makes no further submissions.”

[17] In addition, Scope Furniture provided to both the CFMMEU and the Commission a signed agreement from 25 of a declared 26 full-time employees agreeing in writing to terminate the Agreement.

Conclusion

[18] In having regard to the requirements of the s.226 of the Act and the material before me, I am satisfied that it is not contrary to the public interest to terminate the Agreement (s.226(a)) and that it is appropriate to do so, taking into account all the circumstances (s.226(b)). In this latter regard, I note the employer covered by the Agreement consents to its termination, the written agreement provided by Scope Furniture indicates that nearly all employees covered by the Agreement support termination and that the CFMMEU does not oppose the Application.

[19] In accordance with s.227 of the Act, the termination will take effect from 5 February 2021.

DEPUTY PRESIDENT

 1   [2015] FWCFB 540.

 2 (2005) 139 IR 34.

 3   Ibid at 40.

 4   [2015] FWCFB 540 at [176].

 5 Ibid at [167].

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