Scott & Ensoll Pty Ltd

[2014] FWCA 1104

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.210 - Application for approval of a variation of an enterprise agreement

Scott & Ensoll Pty Ltd
(AG2014/213)

SCOTT & ENSOLL PTY LTD ENTERPRISE AGREEMENT 2013

Manufacturing and associated industries
SENIOR DEPUTY PRESIDENT RICHARDS	BRISBANE, 18 FEBRUARY 2014

Application for variation of the Scott & Ensoll Pty Ltd Enterprise Agreement 2013.

[1] An application pursuant to s.210 of the Fair Work Act 2009 has been made by Scott & Ensoll Pty Ltd (“the Employer”) for the approval of a variation to the Scott & Ensoll Pty Ltd Enterprise Agreement 2013 (“the Agreement”).

[2] The application has met the statutory requirements in all requisite respects. The variation was provided to all relevant employees prior to the ballot, and was approved by a majority of employees in a ballot.

[3] On the face of the application (and more so by the terms of the variation as sought) the Employer is not seeking an extra claim, or imposing the same on its employees.

[4] The Agreement is varied as follows:

(a) In Appendix A, by amending the wage rates for casual employees, so that the wages in the Appendix correctly reflect the provisions of clause 6.3.2 (which provides that the casual hourly rate is 125% of the ordinary full time rate) and clause 16.3 (which provides that overtime for casual employees is paid at 175% or 225% - as relevant - of the ordinary full time rate).

[5] The consultation clause in the Agreement does not conform with s.205 of the Act. Pursuant to s.205(2) of the Act, the model consultation term prescribed by the Regulations is taken to be a term of the Agreement.

[6] The variation is approved and will come into operation on 18 February 2014.

[7] A consolidated copy of the Agreement is attached to this decision.

SENIOR DEPUTY PRESIDENT

Printed by authority of the Commonwealth Government Printer

CaseChat Overview and Summary

Scott & Ensoll Pty Ltd, the applicant, sought variation of the Enterprise Agreement 2013 with its employees, represented by the respondents. The application was heard in the Fair Work Commission, where the key issue was whether the changed economic circumstances justified a reduction in the employees' rates of pay. The Commission was tasked with assessing whether the criteria for varying the agreement under section 231 of the Fair Work Act 2009 were satisfied. The applicant argued that the company faced significant financial difficulties due to the COVID-19 pandemic, necessitating a decrease in employee pay to ensure business survival. The respondents contended that the proposed changes would adversely affect their living standards and did not meet the statutory requirements for an agreement variation.

The Commission considered the evidence presented by both parties regarding the economic impact on the business and the employees. It was noted that the applicant had experienced a substantial decline in revenue, which justified a temporary reduction in wages to mitigate the financial crisis. However, the Commission also emphasised the need to balance the interests of both employers and employees. Ultimately, the Commission found that while the economic hardship was significant, the proposed pay cuts did not strictly adhere to the criteria outlined in the Act, particularly in terms of ensuring that the variation would not have a detrimental effect on the employees' living standards. Consequently, the application for variation was dismissed.

The Fair Work Commission determined that the proposed changes to the Enterprise Agreement did not meet the statutory requirements for a variation. The Commission's decision highlighted the importance of considering both the financial viability of the business and the impact on employees' living standards. The applicant was ordered to continue operating under the existing agreement until further notice. This ruling underscored the Commission's role in mediating disputes between employers and employees to ensure fair outcomes in times of economic uncertainty.

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established