SDV (Australia) Pty Ltd

[2013] FWCA 4681

[2013] FWCA 4681

FAIR WORK COMMISSION

DECISION

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

SDV (Australia) Pty Ltd
(AG2013/6196)

SDV AUSTRALIA PTY LTD - WAREHOUSE COLLECTIVE AGREEMENT 2008 - NSW

Road transport industry
DEPUTY PRESIDENT SAMS	SYDNEY, 22 JULY 2013

Application to terminate expired Agreement - two Agreements covering the same employees - opposition of Union - other employees’ signed approval to terminate Agreement - negotiations for a new Agreement - legal effect of expiry of second Agreement - views of Union delegate not disputed - lack of cogent evidence supporting application - employees given wrong information - principles of enterprise bargaining - limitations on terminating expired agreements - termination of Agreement would be contrary to the public interest and it would not be appropriate to do so - application dismissed.

BACKGROUND

[1] This decision will determine an application, filed by SDV (Australia) Pty Ltd, (‘SDV’ or the ‘applicant’) to terminate the SDV Australia Pty Ltd - Warehouse Collective Agreement, 2008 [AC326805] (the ‘TWU Agreement’). The TWU Agreement passed its nominal expiry date on 7 August 2012 and continues in force unless or until it ceases to operate by virtue of the circumstances prescribed in s 54(2) of the Fair Work Act 2009 (the ‘Act’).

[2] The applicant’s core business is the movement of intercontinental air and ocean freight. For reasons which are not entirely clear, the applicant has two collective agreements in place, the TWU Agreement and another agreement SDV Australia Pty Ltd - Warehouse Collective Agreement 2008 [AC324566] (the ‘other Agreement’) which cover the same categories of employees at three sites in New South Wales - Arndell Park, Smithfield and Banksmeadow.

[3] As might be obvious, the TWU Agreement expressly covers the Transport Workers’ Union (the TWU or the ‘Union’) at Clause 2. Two Awards are referred to in the Definitions clause the Transport Industry (State) Award [AN120594] as relevant to forklift duties and the Warehouse Employees - General (State) Award [AN120633] as relevant to storemen/packer duties. It may be assumed that these Awards are Notional Agreements Preserving State Awards (NAPSAs). Both the Agreements have the same title and the same classifications at Clause 5. These are:

● Warehouse Floor Manager;
● Warehouse Administration Manager;
● Warehouse Operator; and
● Administration Officer.

[4] The coverage clause of both Agreements is expressed as follows:

‘This agreement shall apply to SDV Australia Pty Ltd and employees employed in New South Wales in the classifications in Clause 5 - Rates of Pay.’

THE EVIDENCE

[5] The applicant’s case rested primarily on its view that the Union represented one group of Warehouse Operators at one site, Arndell Park, which comprised only 8% of its workforce. It claimed the remaining 92% of employees supported the application to terminate the TWU Agreement. This submission was said to be grounded on the views of eight signatories to Toolbox meetings and eight responses to emails from a number of employees (notably Managers and Supervisors). No other evidence was offered in support of SDV’s application.

The Union’s Evidence

[6] In strongly opposing the termination of the Agreement, Mr T Warnes for the Union, relied on the uncontested evidence of Union Organiser, Mr Grahame Hastings and the Union Delegate at Arndell Park, Ms Jennifer Fryer.

[7] Mr Hastings had been involved in representing TWU members at SDV for a number of years and was personally involved in the negotiations for the TWU Agreement in 2008/9. Mr Hastings said the Union had always had a good working relationship with SDV’s managers. Since the passing of the TWU Agreement’s nominal term, he has had ‘periodic discussions’ with Management about negotiations for a new enterprise agreement. However, Mr Hastings now claimed that the Management had been stalling the talks and had sought to thwart negotiations in one way or another.

[8] In May 2013, the Unions were advised that SDV would be seeking to terminate the TWU Agreement. Mr Hastings said that when he informed his members of the applicant’s position, they had instructed him to oppose the application and to seek to renegotiate a new agreement based on the TWU Agreement.

[9] Mr Hastings believed that new managers, recently employed by SDV, had a close relationship with the National Union of Workers (NUW); a Union with which the TWU had been having a ‘tumultuous relationship’ with at that time. Mr Hastings suspected that the real purpose of this application was to allow the NUW the opportunity to negotiate on behalf of the employees, in exchange for it making membership gains. Mr Hastings also feared that the termination of the TWU Agreement would result in a reduction in industrial standards.

[10] Mr Hastings did not dispute SDV’s complaints as to the number of times he had sought to exercise his right of entry. He was legally entitled to talk to the employees about the terms of a new enterprise agreement. He observed that even if the TWU Agreement was terminated, it would not prevent him from entering SDV’s premises. Mr Hastings also believed the termination of the TWU Agreement would result in a reduction in pay and conditions. He believed it was necessary to maintain the ‘status quo’ as this would make it more likely that the parties would reach an acceptable negotiated outcome for a new enterprise agreement.

[11] Ms Fryer deposed that the TWU membership was suspicious that if the TWU Agreement was terminated, their employment would revert to the State award. As a result, incentives would be lost and morale lowered. The members wanted the TWU Agreement to remain in force until a new agreement was renegotiated. Ms Fryer said that the members had held a few meetings between March and May 2013 to discuss the terms of a new agreement. During this time, she had been made aware of approaches to TWU members from the NUW.

[12] Ms Fryer referred to a number of emails and text messages between herself, Union Official, Ms Jelena Cindric and SDV Manager Mr Stephen Livesey. On 1 May 2013, Ms Cindric and Ms Fryer attended the Arndell Park site and had a meeting with Management. She had advised Management that the Union wished to discuss amendments to the TWU Agreement. However, Mr Grove, SDV Human Resources Manager replied:

‘The Agreement expired last year and because we have so many SDV employees with different job descriptions, SDV management feel that it is best to terminate the existing Warehouse Collective Agreement.’

SUBMISSIONS

For the applicant

[13] In written submissions, the applicant gave assurances that all workers would be no worse off if the TWU Agreement was terminated and that it was willing to discuss amending the TWU Agreement with the Union and continue to provide coverage for the Union at the Arndell Park site.

[14] The applicant’s submissions sought to contest the evidence of Mr Hastings by putting that:

(a) the totality of recent discussions with the Union consisted of only one phone call from Mr Hastings to the Site Manager and one meeting with Ms Cindric on site - hardly ‘periodic discussions’;
(b) it denied any preference for the NUW over the TWU; and

(c) there was no intention to reduce base rates of pay.

For the Union

[15] Mr Warnes submitted that s 58 of the Act mandated that only one enterprise agreement can apply to any employee at a particular time. The applicant had acknoweldged that the two agreements applied to all the employees. The other Agreement had expired before the TWU Agreement and consequently, the TWU Agreement was now the only Agreement to cover all employees. The other Agreement was effectively terminated and of no legal force or effect. This was a factor the Commission would have regard to in considering whether to terminate the TWU Agreement.

[16] As to the public interest, Mr Warnes put that it would not be in the public interest to terminate an operative agreement, especially in circumstances where the TWU Agreement provided for higher rates of pay and where there was no evidence of any financial hardship being experienced by the applicant; See: Tahmoor Coal Pty Ltd re Tahmoor Colliery Enterprise Agreement 2006; Tahmoor Washery Workplace Agreement 2006 [2010] FWA 6468 (‘Tahmoor Coal’) and Catalina Country Club Ltd re Catalina Country Club Enterprise Agreement 2009 [2013] FWCA 2005 (‘Catalina Country Club’).

[17] Mr Warnes said that the views of eight unspecified employees in a Toolbox meeting should not be accepted when determining whether the termination of the TWU Agreement was in the public interest. In addition, the proposed termination would be contrary to the objects of the Act, and would result in a decrease in wages for employees during an economic slowdown. Such an outcome could not possibly be in the public interest.

[18] Mr Warnes contended that the applicant had not properly understood, and therefore had not informed its employees of the consequences of terminating the TWU Agreement. There was an absence of the views of warehouse employees in the applicant’s evidence. This was the group most likely to be adversely affected by the TWU Agreement’s termination. Ms Fryer’s evidence was the only employee evidence which was relevant.

[19] Mr Warnes put that the circumstances here were analogous to those in Tahmoor Coal, in that the termination of the TWU Agreement would alter the ‘status quo’ in a fundamental way. It would place the applicant at a major advantage and act as a disincentive to bargain for improved wages or conditions. The termination of the TWU Agreement would put the parties in a position as if there had never been an enterprise agreement in existence. Mr Warnes also warned that employees would lose the benefit of a higher wage than that provided for under the Modern Award and would also lose access to annual pay increases.

[20] Mr Warnes submitted that far from improving the industrial environment, the termination of the TWU Agreement would create division and discontent in the workplace. There would be no incentive for the applicant to bargain. Mr Warnes concluded by submitting the application was without merit. It was neither in the public interest nor appropriate to terminate the TWU Agreement.

[21] At a hearing of the application on 24 June 2013, Mr Grove appeared for the applicant and Mr Warnes with Mr Maroney appeared for the Union.

[22] In further oral submissions, Mr Grove acknowledged Mr Warnes’ submission as to the application of s 58 of the Act to this matter. Nevertheless, Mr Grove maintained that SDV could not negotiate with the TWU for the other 92% of its employees.

[23] Mr Warnes, in supplementing the Union’s written submissions, opposed the tender of the minutes of the Toolbox meeting and the eight emails from employees on the basis that the Union was unable to test this evidence.

[24] Mr Warnes could see no reason why the applicant would want to terminate the TWU Agreement where there was a commitment not to alter any wages or conditions. If the Company wished to negotiate with different groups, and even have four separate agreements, there was nothing to stop it from seeking to do so. Even if the applicant had concerns about union demarcation or right of entry, such concerns would not be addressed by terminating the TWU Agreement. Further, the evidence was that the Union was ready to commence negotiations for a new agreement. Accordingly, there was no reason why the existing TWU Agreement should not stay in place until the new agreement is approved.

[25] Mr Warnes noted the Act’s strong emphasis on parties negotiating enterprise agreements and referred to the Act’s objects in this respect. He submitted that the Commission also had a significant role to play in creating and approving enterprise agreements. Mr Warnes observed the legislative intention to make it more difficult to terminate Agreements, by adding to the public interest test, the limb in s 226(b); that it is appropriate to do so. Further, Mr Warnes put that it would be contrary to the public interest if groups of employees could potentially suffer financial detriment, without any justification by the applicant for this eventuality.

[26] Mr Warnes said if the applicant was successful, it would have gained everything it could wish from enterprise negotiations, namely the employees reverting to the Award as a starting point. The incentive to make concessions would be severely limited. This went to the question of the public interest. In addition, Mr Warnes submitted that the evidence of Ms Fryer demonstrated that the Unions’ members would not be seeking many changes, in any event. What was clear, he said, was that the TWU members were more than willing to commence negotiations.

[27] Mr Warnes agreed that it was in the public interest to have industrial harmony in the workplace. He claimed the applicant’s argument about improved industrial harmony was ‘absurd’ and the very opposite, discontent and a drop in morale would be more likely if the TWU Agreement was terminated. There might even be the prospect of prolonged industrial action if employees had to bargain from a much lower base. The best way to achieve industrial harmony would be to continue negotiations against a backdrop of the rates and conditions which have operated successfully for at least four years.

[28] Mr Warnes submitted that, although the Union had not conducted a comprehensive survey of the views of all its members, the consensus from various yard meetings was that the employees were:

● opposed to the termination of the TWU Agreement; and
● worried about losing their entitlements if they revert to the terms of the Modern Award.

[29] As to the applicant’s representation of the employees’ views, Mr Warnes put that no weight should be attributed to the signatures to the Toolbox meeting or emails. This was so because:

● the Union could not cross examine the signatories;
● there was no evidence the signatories represented or spoke for the larger body of employees;
● the most affected group - the warehouse employees - were not even asked their opinion; and
● the applicant had failed to explain to the signatories that the true legal position was that there would be no legal protection against them being reverted to the terms and conditions of the Modern Award, at any time.

[30] Mr Warnes submitted that the Commission would rely on the comments of His Honour Lawler VP in Tahmoor Coal as to the skewing of parties’ bargaining positions, where the ‘status quo’ is not maintained. This was the situation proposed by the applicant and which should be rejected by the Commission.

CONSIDERATION

Applicable legislation and authorities

[31] At the outset, it is appropriate to set out below the terms of ss 225 to 227 of the Act and make some procedural findings thereto:

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.’

[32] In my view, the application is competently before the Commission in that the TWU Agreement has passed its nominal expiry date, the employer is entitled to make the application as the employer covered by the Agreement (s 225(a)) and the TWU is an employee organisation covered by the Agreement (s 225(c)).

Public Interest Considerations

[33] I turn now to consider the notion of the public interest in the context of s 226(a) of the Act. Boulton J in Re Mount Thorley Operations Enterprise Agreement 1996 (1999) 94 IR 57 (‘Mt Thorley’)summarised the concept of the public interest as follows: ‘the public interest is a broad concept and embraces considerations beyond the interests of the immediate parties before the Commission.’ This conclusion accords with numerous other Court and Tribunal decisions on the subject; See: Re Queensland Electricity Commission and Re Australian Insurance Employee Union; Ex parte Academy Insurance Pty Ltd (1988) 28 IR 214.

[34] In Kellogg Brown & Root Pty Ltd and others v Esso Australia Pty ltd [2005] AIRC 72 (‘Kellogg Brown’), the Full Bench of the Australian Industrial Relations Commission (AIRC) said:

‘[23] 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.’

[35] In addition to being satisfied that the termination of an agreement would not be contrary to the public interest, subsection (b) of s 226 of the Act requires a determination of another discretionary consideration as to whether it would be ‘appropriate’ to terminate the agreement. The Commission must be satisfied on both legs of s 226 before terminating an Agreement. In this respect, His Honour, Lawler VP observed in Tahmoor Coal at para [33]:

‘[33] While there is a history of provisions empowering the AIRC to terminate statutory collective agreements, prior to the enactment of s.226 of the FW Act the focus on when that power should be exercised has been on “the public interest”. Section 226 of the FW Act is the first time that this power has been made subject to a criterion of “appropriateness”. The inclusion of that criterion is of particular significance and means that some of the earlier authorities are of limited assistance in determining whether the termination of an expired agreement is “appropriate”.’

[36] After discussing the meaning of ‘appropriate’ His Honour posed these questions:

‘[38] How, then, is the tribunal to determine when a termination will be appropriate? What are the criteria by which appropriateness is to be determined?

[39] It goes without saying that what is effectively a discretion conferred by s.226 must be exercised judicially, that is, in accordance with the intent of the legislation and any principles emerging from the authorities, and not on the basis of any personal whim or ideological predisposition. The problem as things presently stand is that there is little by way of developed principle to guide the exercise of the effective discretion conferred by s.226.’

Intersection of the public interest and the views of the parties

[37] The views of the employees are not the only matters which the Commission must take into account in these applications. Indeed, in this case there appear to be conflicting views between employees. On the face of the clear statutory provisions, no one single factor has primacy over the others, which includes all of the circumstances, such as the views of the employer, employees and the Union and the effect of the termination of the agreement on the employees, the employer and the Union. In this respect, I refer to the views of Munro J in Joy Manufacturing Co Pty Ltd - re Joy Mining Machinery (Moss Vale Site) Certified Agreement 1998 [2000] AIRC 335 (‘Joy Manufacturing’) at paras [33]-[34]:

‘[33] The Act does not require determinative weight to be given to the views of persons bound by the relevant agreement. Rather it would appear that such views merely create the framework within which to assess the determinative consideration, contrariety with the public interest. Presumably, if all persons bound support the termination of the Agreement, no need exists for a close scrutiny of public interest considerations. Where some persons bound seek in effect to have the Act operate to continue the relevant agreement in force, the issue that is thereby raised is to be resolved by a determination as to whether termination of the relevant agreement would be against the public interest. In that determination, the factors and considerations most likely to be relevant to the assessment of the public interest are those advanced by persons bound by the agreement who oppose the application for termination of it.

Identifying the Public Interest and Considerations Relevant to It:

[34] However, it does not follow, in my view, that all considerations that may appear to be relevant to the merits of terminating an agreement from the parties point of view are considerations relevant to establishing public interest in the effect of terminating an agreement. The public interest is, or should be treated as a term of art. The public interest may be different to that of the parties. The concept of public interest is often difficult to apply. That is because it depends upon an assessment of considerations and values often of an abstract character, that are taken to constitute it. The concept of public interest does not in my view embrace considerations which are essentially derivative from the individual interest of the employer, or employees. That is not to deny an individual interest may have an overlapping public interest dimension. The individual interest in freedom of association, or in freedom from certain kinds of discrimination, is an instance. However, in my view, it is necessary to examine whether a consideration does go in any material or substantive way to the public interest as distinct from the interests of the protagonists before the Commission.’

[38] Lawler VP, in Tahmoor Coal, stressed the relevance of the objects of the Act in the present context. His Honour said at paras [49]-[51]:

‘[49] The objects in s.3(f) and s.171(a) are particularly relevant. They indicate that collective bargaining in good faith for an enterprise agreement is the central way in which, in the framework that has been established by the FW Act, productivity benefits are to be achieved.

[50] The object in s.171(b) is also clearly relevant. It emphasises that a key role of FWA is to facilitate good faith bargaining and the making of enterprise agreements. This suggests that that one of the effects of termination which should be considered is whether termination will enhance or reduce the prospects of the parties concluding a new agreement through bargaining.

[51] The object in s.3(a) is advanced by a termination of an agreement where this would promote productivity. However, the object in s.3(a) is expressed in general terms whereas the objects in s.3(f) and s.171(a) are more specific. Given that principle of construction that the specific overrides the general, this suggests that the emphasis on promoting productivity (part of the object in s.3(a)) is primarily to be achieved through collective bargaining in good faith (the objects in s.3(f) and s.171) rather than by other means, such as termination of an expired agreement.’

It is worth recording the terms of Object (f) as follows:

‘(f) achieving productivity and fairness through an emphasis on enterprise-level collective bargaining underpinned by simple good faith bargaining obligations and clear rules governing industrial action;’

[39] Section 171 of the Act, introducing Part 2-4, is as follows:

‘171 Objects of this Part

The objects of this Part are:

(a) to provide a simple, flexible and fair framework that enables collective bargaining in good faith, particularly at the enterprise level, for enterprise agreements that deliver productivity benefits; and

(b) to enable the FWC to facilitate good faith bargaining and the making of enterprise agreements, including through:

(i) making bargaining orders; and

(ii) dealing with disputes where the bargaining representatives request assistance; and

(iii) ensuring that applications to the FWC for approval of enterprise agreements are dealt with without delay.’

[40] In Tahmoor Coal His Honour went on to further consider the effect of terminating an agreement on the bargaining process and said at paras [54]-[55]:

‘[54] I respectfully agree with his Honour that it is not intended by the legislation that agreements should remain in place indefinitely and that it is unreasonable to lock an expired agreement in place indefinitely. On the other hand, this does not mean that a party to an agreement has a prima facie right to have the agreement terminated merely because the agreement has passed its nominal expiry date.

[55] It seems to me that under the scheme of the FW Act, generally speaking, it will not be appropriate to terminate an agreement that has passed its nominal expiry date if bargaining for a replacement agreement is ongoing such that there remains a reasonable prospect that bargaining (in conjunction with protected industrial action and or employer response action) will result in a new agreement. This will be so even where the bargaining has become protracted because a party is advancing claims for changes that are particularly unpalatable to the other party. While every case will turn on its own circumstances, the precedence assigned to achieving productivity benefits through bargaining, evident in the objects of the FW Act, suggests that it will generally be inappropriate for FWA to interfere in the bargaining process so as to substantially alter the status quo in relation to the balance of bargaining between the parties so as to deliver to one of the bargaining parties effectively all that it seeks from the bargaining.’

[41] In addition, Roe C observed in Royal Automotive Club of Victoria [2010] FWA 3483 at para [23]:

‘It has certainly been the case since the introduction of a legislative scheme for collective bargaining in Australia that the platform for bargaining replacement agreements has been with very few exceptions the old agreement.’

[42] It is pellucidly clear that the legislature has deliberately made it more difficult to terminate an expired agreement than has been the case in the past. This is so, because unlike its predecessor legislation, (Workplace Relations Act, 1996) there is no capacity for the unilateral termination of an expired agreement, simply upon the giving of written notice by an employer. It seems to me that the continued operation of an expired agreement is desirable for the following policy reasons:

● it permits the parties to negotiate from the standpoint of the ‘status quo’ and there is no significant shift in the balance of the forces of bargaining; and
● employees do not suffer an immediate reduction in the terms and conditions of their expired agreement.

[43] Obviously, the practical effect of terminating an agreement is to substantially alter the ‘status quo’ in relation to the bargaining process. I agree with Lawler VP’s comments in Tahmoor Coal that it would generally be inappropriate for the Commission to interfere in the bargaining process by terminating an existing agreement.

[44] In this case, there is no doubt the nominal term of the TWU Agreement has expired, that the Union and its members wish to engage in negotiations with the applicant for a new agreement and have commenced, albeit in a preliminary way, discussions for such an agreement. All these ingredients, reinforce in my mind, the inappropriateness of altering the ‘status quo’ so as to plainly advantage one party’s negotiating starting point over the other. This is a powerful reason why it would be inappropriate to terminate the TWU Agreement at this point in the bargaining cycle. I would wish to emphasise, that to do so would be contrary to the objects of the Act and the principles underpinning the primacy given to enterprise bargaining under the Act.

Two agreements operating at the same time

[45] This case has raised a most novel and unusual issue in the context of s 58 of the Act; the provision which expressly prevents an employee being covered by two Agreements at the same time. I suspect the applicant had no idea it was inadvertently drawing attention to s 58 of the Act by making this application. In addition, I do not apprehend there to be any authorities of the Commission, or its predecessor, in respect to the application and effect of s 58 of the Act. The section is expressed in these terms:

58 Only one enterprise agreement can apply to an employee

(1) Only one enterprise agreement can apply to an employee at a particular time.

General rule—later agreement does not apply until earlier agreement passes its nominal expiry date

(2) If:

(a) an enterprise agreement (the earlier agreement) applies to an employee in relation to particular employment; and

(b) another enterprise agreement (the later agreement) that covers the employee in relation to the same employment comes into operation; and

(c) subsection (3) (which deals with a single-enterprise agreement replacing a multi-enterprise agreement) does not apply;

then:

(d) if the earlier agreement has not passed its nominal expiry date:

(i) the later agreement cannot apply to the employee in relation to that employment until the earlier agreement passes its nominal expiry date; and

(ii) the earlier agreement ceases to apply to the employee in relation to that employment when the earlier agreement passes its nominal expiry date, and can never so apply again; or

(e) if the earlier agreement has passed its nominal expiry date—the earlier agreement ceases to apply to the employee when the later agreement comes into operation, and can never so apply again.

Special rule—single-enterprise agreement replaces multi-enterprise agreement

(3) Despite subsection (2), if:

(a) a multi-enterprise agreement applies to an employee in relation to particular employment; and

(b) a single-enterprise agreement that covers the employee in relation to the same employment comes into operation;

the multi-enterprise agreement ceases to apply to the employee in relation to that employment when the single-enterprise agreement comes into operation, and can never so apply again.”

[46] Mr Warnes submitted and Mr Grove agreed, that the effect of s 58 on the current industrial arrangements between the parties is as follows:

(a) Both Agreements are expressed as covering all of the employees at the three sites;
(b) The Agreements are in substantially the same terms and have the same coverage clause and classifications;

(c) The TWU Agreement’s nominal expiry date was 7 August 2012; and
(d) The other Agreement’s nominal expiry date was 1 July 2012.

[47] As the argument was developed, Mr Warnes submitted that once the other Agreement being the first in time, had expired, the TWU Agreement automatically replaced it and the other Agreement ‘can never so apply again’ (s 58(2)(e)). The legal effect of this set of circumstances means the only agreement covering all of the employees at the present time is actually the one which the applicant seeks to terminate by this application.

[48] In my opinion, Mr Warnes’ analysis of the circumstances and effect of s 58 of the Act, is substantially correct. It is entirely consistent with the provisions of s 58. Of course, I accept unreservedly, that the applicant was unaware of the current legal status of the TWU Agreement and the fact that the other Agreement no longer has any legal force or effect. In a strangely perverse irony, the applicant has achieved what it seeks from this application - one Agreement covering all its employees; an outcome achieved without having to initiate any proceedings under the Act, at all.

[49] Nevertheless, the applicant’s claim of 92% employee support for the termination of the TWU Agreement must now be viewed in light of the fact that employees were given wrong information. I impute no improper motive to the actions of the applicant in respect to the Toolbox Meeting and the emails. It made an innocent mistake - a fundamental one, nevertheless. One might reasonably assume that if the signatories to the Toolbox minutes and the emails were aware of the effect this application would have on them if granted, they might not have been so enthusiastically supportive of SDV’s application.

Views of the employees, employer and employee organisation

[50] In any event, I think it incumbent on me to comment on the applicant’s reliance on its claim that 92% of its employees supported the termination of the TWU Agreement. Supporting this claim were eight signatories to the proposition canvassed in a Toolbox meeting and eight email responses to its question seeking support for the TWU Agreement’s termination. None of these employees were called to give evidence and be subject to cross examination. In addition, I do not apprehend that sixteen responses represent the totality, or even the majority of the workforce across three sites. Moreover, I note that all of the email responses came either from Managers or Supervisors, even including the Company Accountant.

[51] In my opinion, there was considerable force to Mr Warne’s submission that this evidence should not be admitted and if it was (which was the case) it should be given very little weight. I accept that this evidence is of limited probative value. It is not persuasive. I can have no level of confidence that the signatures or the emails, either represent the views of others or were, in fact, views genuinely held by them.

[52] If the 16 employees genuinely supported the termination of the Agreement, in one sense, it is hardly surprising that they did so. They were mistakenly led to believe that they were unaffected by the termination of the TWU Agreement, because the other Agreement, in identical terms, would still continue to apply and they would be covered by it. As Mr Grove properly conceded and as the Commission has found, this was not legally correct. Given that the employees had been misinformed, their views were irretrievably tainted by this wrong premise. Therefore, I consider their views are irrelevant to the Commission’s obligation to have regard to the views of the employees covered by the Agreement as required by s 226(1)(b) of the Act.

[53] On the other hand, uncontested evidence was provided by an employee directly affected by the application at Arndell Park - Ms Fryer in her role as the Union delegate. That evidence is referred to at paras [11]-[12] earlier. I have no reason to doubt Ms Fryer’s evidence. In the absence of any contradiction, her evidence is persuasive in the context of considering the views of the employees covered by the TWU Agreement.

[54] Regrettably, I am bound to say that I was singularly unimpressed with the case advanced by SDV to satisfy the Commission that the termination of the TWU Agreement would be in the public interest and it would be appropriate to do so. As I said earlier, the only evidence relied on by the applicant was unconvincing and based on a false premise. Mr Grove acknowledged as much. Accordingly, the only evidence relevant to my determination of the application was that of the Union in opposition to it. This evidence must be preferred and accepted as representing the views of the employees and the employee organisation covered by the TWU Agreement.

[55] That said, the views of SDV are difficult to understand, let alone rationalise. SDV’s case was based, with respect, on rather flimsy grounds. As I apprehend it, three principal grounds were contended for by the applicant. Firstly, that 92% of the employees supported the termination of the TWU Agreement. I have dealt with this proposition earlier.

[56] Secondly, it was said the Union would only be negotiating for 8% of the workforce and it would be less confusing to be negotiating for a new Agreement if only one Agreement applied. In my view, this submission misunderstands the legal basis underpinning the bargaining process. The argument fails to appreciate that even if the Union had one member employed on site, it would still be entitled to be nominated as the employees’ bargaining representative and the applicant would be obliged to negotiate with it. Of course, there is nothing to prevent the applicant seeking to have more than one enterprise agreement for its employees across its three sites.

[57] Thirdly, it was claimed that having only one agreement would be conducive to an improved industrial environment. Putting aside the true legal position, that only one agreement covers all the employees anyway, and that there was no evidence advanced to support the wide assertion of a more cooperative and productive workplace, in my assessment, the termination of the TWU Agreement is likely to have the very opposite effect for which the applicant contends. There are already suspicions as to the motivations of the applicant and there is no legal guarantee that the employees’ rates and conditions would not revert to the Award. Given this uncertainty, it is more likely that a less cooperative workplace and certainly one where morale would be deleteriously affected, would be the result. This is a relevant factor when considering whether the public interest is enlivened in this case.

[58] In addition, given the significant hurdle the applicant must overcome in dissuading the Commission not to apply the principles of the relevant authorities to which I earlier referred, I am well satisfied that the applicant has failed to do so. Indeed, the applicant did not mention any of the relevant authorities in support of its arguments.

[59] Having dismissed the primary grounds in support of the application, are there any grounds for supporting the termination of the TWU Agreement? On one view, it is difficult to see why the applicant seeks such an outcome. It had guaranteed no reduction in wages or conditions. It begs the question, then why is it necessary for the Commission to terminate the TWU Agreement?

[60] Mr Warnes submitted, and Mr Hastings’ gave evidence to the effect that they suspect there may be some underlying and unspoken motivation for the application that is related to the present internecine turf war between the TWU and the NUW. While there was no corroborative evidence that this was the real motivation of the applicant - indeed, Mr Stephen Livesey, Arndell Park Site Manager, expressly disavowed any suggestion of favouring one union over the other - I would be even less inclined to grant it than I am at this point if this was so. In my view, the tactic of terminating an agreement in order to create a set of circumstances to favour one union over another would be utterly inimical to the public interest. In any event, I note the TWU Agreement’s definition clause also refers to a previous Award of the NUW - the Warehouse Employees (General) State Award. As it is unnecessary and unwise to make any findings on this aspect of the Union’s submissions, I do not intend to take this matter any further.

[61] Finally, in my opinion, unless an application seeking the termination of an existing agreement under s 225 of the Act, is based on a sound evidentiary foundation, the application is unlikely to succeed. Making mere assumptions or simply expressing a preferred point of view, is unlikely to meet the evidentiary standards required in a case under s 225 of the Act. This is one such case.

[62] For the reasons herein expressed, I find that it would be contrary to the public interest and it would be inappropriate to terminate the TWU Agreement. That being so, the application must be dismissed. An order to that effect will be issued simultaneously with this decision.

DEPUTY PRESIDENT

Appearances:

D Grove, for the Applicant

T Warnes with L Maroney, for the Respondent Union.

Hearing details:

2013

Sydney

6 May, 21 June

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<Price code C, AC326805  PR538916>