Sheppard Cycles Australia Pty Ltd
[2024] FWCA 3014
•19 AUGUST 2024
| [2024] FWCA 3014 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.222 - Application for approval of a termination of an enterprise agreement
Sheppard Cycles Australia Pty Ltd
(AG2024/2171)
SHEPPARD CYCLES AUSTRALIA WAREHOUSE EMPLOYEES ENTERPRISE AGREEMENT 2021-2024
| Storage services | |
| COMMISSIONER CONNOLLY | MELBOURNE, 19 AUGUST 2024 |
Application for termination of the Sheppard Cycles Australia Warehouse Employees Enterprise Agreement 2021-2024
On 17 June 2024, Sheppard Cycles Australia Pty Ltd (the Applicant) made an application for termination of the Sheppard Cycles Australia Warehouse Employees Enterprise Agreement 2021-2024 (the Agreement), pursuant to s.222 of the Fair Work Act 2009 (the Act).
Relevant Legislation
Sections 222 and 223 of the Act are relevant to this application and are as follows:
“222 Application for FWA approval of termination of an enterprise agreement
Application for approval
(1) If a termination of an enterprise agreement has been agreed to, a person covered by the agreement must apply to FWA for approval of the termination.
Material to accompany the application
(2) The application must be accompanied by any declarations that are required by the procedural rules to accompany the application.
When the application must be made
(3) The application must be made:
(a) within 14 days after the termination is agreed to; or
(b) if in all the circumstances FWA considers it fair to extend that period—within such further period as FWA allows.
223 When FWA must approve a termination of an enterprise agreement
If an application for the approval of a termination of an enterprise agreement is made under section 222, FWA must approve the termination if:
(a) FWA is satisfied that each employer covered by the agreement complied with subsection 220(2) (which deals with giving employees a reasonable opportunity to decide etc.) in relation to the agreement; and
(b) FWA is satisfied that the termination was agreed to in accordance with whichever of subsection 221(1) or (2) applies (those subsections deal with agreement to the termination of different kinds of enterprise agreements by employee vote); and
(c) FWA is satisfied that there are no other reasonable grounds for believing that the employees have not agreed to the termination; and
(d) FWA considers that it is appropriate to approve the termination taking into account the views of the employee organisation or employee organisations (if any) covered by the agreement.”
Relevant Background
On 24 June 2024, the United Workers’ Union (UWU), being a bargaining representative covered under the Agreement, indicated it objected to this application. The UWU objected to the application on that grounds that they were concerned the workers were not able to make a genuine and informed decision to terminate the Agreement as they contended the consequences of terminating the Agreement were not explained. Further, that this would lead to a reduction in their underlying employment conditions.
The UWU sought additional information from the Applicant to address these concerns.
On 25 June 2024, in response to the UWU, the Applicant submitted that the employees were consulted about the change and that they were fully aware that the Award would be their industrial instrument, asserting that all employees will maintain their current rates of pay with no reductions.
On 27 June 2024, my Chambers issued Directions for both the Applicant and the UWU to file material relevant to the requirements of the Act above, by 15 July 2024, to allow the matter to be determined by the Commission.
On 3 July 2024, the UWU advised my Chambers and the Applicant that upon consideration they would withdraw their objection if the Applicant provided written evidence that they have communicated the following to their workforce:
“1. There is no obligation to terminate the enterprise agreement, and that they are able to either leave the enterprise agreement in force or renegotiate the enterprise agreement for a further term; and
2. If they terminate the enterprise agreement their legal entitlements will revert to the underlying award which means that their legally enforceable entitlements will only be those in their award or their contracts of employment, nothing (sic) that the underlying pay rates in the Award are several dollars less per hour than what the employees currently receive.”
On 5 July 2024, the Applicant advised my Chambers and the UWU that they had consulted with their workforce and provided employees with written advice of the above at [7] as requested by the UWU. The Applicant also attached copies of these written communications signed by each of its employees covered under the Agreement affirming that they understand the concerns the UWU have identified. They submitted the Applicant has properly explained these concerns to them.
On the same day, the UWU advised that on this basis, they withdrew their objection to the termination of the Agreement.
With there being no objections to the application, the Directions were vacated, and I have determined the application on the material provided to the Commission.
Consideration – s.222 of the Act
Is the Applicant a person covered by the Agreement for the purposes of s.222(1)?
By virtue of clause 3 of the Agreement, being the coverage and parties bound clause, I am satisfied the Applicant is covered by the Agreement and has standing to make the application.
Is the Application accompanied by any declarations that are required by the procedural rules to accompany the Application as required by s.222(2) of the Act?
The Application is accompanied by a Form 24A – declaration in support of termination of an enterprise agreement. Therefore, I am satisfied that the requirements of s.222(2) of the Act have been met
Has the Application been made within the required timeframe per s.222(3)(a)?
Section 222(3) of the Act sets out the timeframe within which an application must be made, being 14 days after the termination is agreed to or, if the Commission determines in all the circumstances it would be fair to extend that period, such period as the Commission allows.
It is declared in the Form F24A that the termination was agreed to on 14 June 2024.
The Application to the Commission for termination of the agreement was made the same day and I am satisfied the requirements of s.222(3) have been met.
Consideration – s.223 of the Act
I must approve the Application if I am satisfied that the requirements set out in s.223 of the Act are met.
Section 223(a) requires me to be satisfied that each employer covered by the Agreement complied with s.220(2) in relation to the Agreement. I consider this requirement below.
Did the Applicant take all reasonable steps to notify the employees of the time and place of the vote and voting method before requesting the employees vote to approve the termination as required by s.220(2)(a) of the Act?
It is declared in the Form F24A that on 4 June 2024 all staff were informed a vote would be held by secret ballot at Sheppard Cycles Mulgrave facility commencing 12 June 2024, closing 14 June 2024.
Having considered the materials before me, I am satisfied that before requesting employees vote to approve the proposed termination of the Agreement, the employer took all reasonable steps to notify employees of the time, place and voting method that would be used as required by s.220(2)(a) of the Act.
Did the Applicant give the employees as reasonable opportunity to decide whether they want to approve to the proposed termination as required by s.220(2)(b) of the Act?
The Application impacts 11 employees of Applicant. It is declared in the Form F24A that all employees were informed of their option to consider approving termination of the Agreement at a staff meeting on 4 June 2024. Further, that all staff were provided with an additional week to consider, consult and ask any questions about the options to be considered at this time.
I have considered the material before me, and I am satisfied that in the circumstances the Applicant has given employees a reasonable opportunity to decide whether they want to approve the proposed termination.
Was the termination of the Agreement agreed in accordance with whichever of s.221(1) or (2) applies?
Section 223(b) requires me to be satisfied that the termination was agreed in accordance with whichever of s.221(1) or (2) applies. The Agreement is a single enterprise agreement and therefore s.221(1) applies.
It is declared in the Form F24A that there were 11 employees covered by the Agreement, all of whom cast a valid vote and voted to approve the termination of the Agreement.
Having considered the material before me, I am satisfied that a majority of the employees who cast a valid vote approved the termination and that the requirements of s.221(1) have been met.
Absence of other reasonable grounds for believing that the employees have not agreed to the termination – s.223(c)
I have identified above at paragraphs [3] – [9] initial concerns in relation to reasonable grounds that employees may not have genuinely agreed to the termination. These concerns have now been addressed. Further, the Applicant has provided additional supporting material confirming the agreement of employees to the termination of the agreement.
There are no longer any objections to the application.
Therefore, I am satisfied that there are no other reasonable grounds for believing that employees have not agreed to the termination.
Consideration of the views of the employee organisation or employee organisations (if any) covered by the Agreement – s.223(d)
The UWU is a bargaining representative covered by the Agreement. On 5 July 2024, the UWU advised that it did not oppose the termination of the Agreement and in reaching its views relies on the materials provided by the Applicant to the Commission, including those additional materials identified above at [8].
Conclusion
Based on the material before the Commission, I am satisfied that the requirements of ss.222 and 223 of the Act have been met.
No submissions have been filed in opposition.
I am satisfied that it is appropriate to terminate the Agreement.
Section 224 of the Act provides that if a termination of an enterprise agreement is approved under s.223, the termination operates from the day specified in the decision to approve the termination.
In accordance with s.224, the termination will come into effect from 19 August 2024.
COMMISSIONER
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