Servcore Pty Limited T/A Servcore Pty Limited
[2024] FWCA 3371
•25 SEPTEMBER 2024
| [2024] FWCA 3371 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.225 - Application for termination of an enterprise agreement after its nominal expiry date
Servcore Pty Limited T/A Servcore Pty Limited
(AG2024/3678)
LEADER CABLING SYSTEMS PTY LTD ENTERPRISE AGREEMENT 2014-2018
| Electrical contracting industry | |
| DEPUTY PRESIDENT O'KEEFFE | PERTH, 25 SEPTEMBER 2024 |
Application for termination of the Leader Cabling Systems Pty Ltd Enterprise Agreement 2014-2018
An application pursuant to s225 of the Fair Work Act (Cth) (the FW Act) has been made by Servcore Pty Limited T/A Servcore Pty Limited (the Applicant) to terminate the Leader Cabling Systems Pty Ltd Enterprise Agreement 2014-2018 (the Agreement).
By way of background, the business of Leader Cabling Systems Pty Ltd (Leader) was sold to the Applicant on 1 July 2024. At that time, the employees of Leader became employees of the Applicant and are transferring employees for the purposes of the Act. The Agreement was a transferable instrument and thus from 1 July 2024 covered the Applicant.
Section 225 of the Act 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.”
The Agreement has passed its nominal expiry date of 1 September 2018. The Applicant is by virtue of the transfer of business provisions an employer covered by the Agreement and has standing to make the application as per s225(a).
The Applicant has provided a statutory declaration stating that the Agreement applies to 12 employees. All of the employees were advised that the Applicant was applying to terminate the Agreement and offered an opportunity to comment directly to my Chambers. No comments were received.
The Agreement expired six years ago. As a consequence, the base rates it pays are below the rates in the relevant Award, being the Electrical, Electronic and Communications Contracting Award 2020 (the Award).Consistent with section 206 of the Act, employees covered by the Agreement are in practice paid the base rates in the Award. However, there are a number of other conditions of employment, such as casual loading, annual leave loading and numerous allowances where the Award provides a more generous benefit than the Agreement.
I have examined the calculations provided by the Applicant and reviewed the Agreement and the Award. From this examination I am satisfied that employees would be better off under the Award than if they remained covered by the Agreement.
The criteria for termination of an agreement are set out in s226 of the FW Act, the relevant parts of which is as follows:
“226 When the FWC must terminate an enterprise agreement
(1)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 the continued operation of the agreement would be unfair for the employees covered by the agreement; or
(b) the FWC is satisfied that the agreement does not, and is not likely to, cover any employees; or
(c) all of the following apply:
(i) the FWC is satisfied that the continued operation of the enterprise agreement would pose a significant threat to the viability of a business carried on by the employer, or employers, covered by the agreement;
(ii) the FWC is satisfied that the termination of the enterprise agreement would be likely to reduce the potential of terminations of employment covered by subsection (2) for the employees covered by the agreement;
(iii) if the agreement contains terms providing entitlements relating to the termination of employees' employment each employer covered by the agreement has given the FWC a guarantee of termination entitlements in relation to the termination of the agreement
(1A)However, the FWC must terminate the enterprise agreement under subsection (1) only if the FWC is satisfied that it is appropriate in all the circumstances to do so.
(2) This subsection covers a termination of the employment of an employee:
(a) at the employer’s initiative because the employer no longer requires the job done by the employee to be done by anyone, except where this is due to the ordinary and customary turnover of labour; or
(b) because of the insolvency or bankruptcy of the employer.
(3)In deciding whether to terminate the agreement, the FWC must consider the views of the following covered by the agreement:
(a) the employees (unless there are no employees covered by the agreement);
(b) each employer;
(c) each employee organisation (if any).
(4)In deciding whether to terminate the agreement (the existing agreement), the FWC must have regard to:
(a) whether the application was made at or after the notification time for a proposed enterprise agreement that will cover the same, or substantially the same, group of employees as the existing agreement; and
(b) whether bargaining for the proposed enterprise agreement is occurring; and
(c) whether the termination of the existing agreement would adversely affect the bargaining position of the employees that will be covered by the proposed enterprise agreement.
(5)In deciding whether to terminate the agreement, the FWC may also have regard to any other relevant matter.”
The Applicant has provided a declaration that the Award provides superior terms and conditions of employment than the Agreement and I am satisfied that this is the case. The employees covered by the Agreement chose not to express any views about cancelation despite being invited to do so.
However, as I found at paragraph [7] above, it is clear that the employees would be better off if they were covered by the Award. In such circumstances I am satisfied that continued operation of the Agreement would be unfair to those employees. I note that there is no employee organisation covered by the Agreement.
Given my findings above, I am satisfied that it is appropriate in all of the circumstances to terminate the Agreement, and I order that the Agreement be terminated. Such termination shall take effect from 25 September 2024.
DEPUTY PRESIDENT
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