Shop, Distributive and Allied Employees Association

[2017] FWCA 212

[2017] FWCA 212

FAIR WORK COMMISSION

DECISION

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

Shop, Distributive and Allied Employees Association
(AG2016/7131)

HILTON SUPA IGA AND SDA AGREEMENT 2010

Retail industry
DEPUTY PRESIDENT BINET	PERTH, 10 MARCH 2017

Application for termination of the Hilton Supa IGA and SDA Agreement 2010.

[1] The Shop, Distributive and Allied Employees Association (SDAEA) has applied (Application) for the termination of the Hilton Supa IGA and SDA Agreement 2010 (Agreement) pursuant to section 225 of the Fair Work Act 2009 (FW Act).

[2] The Agreement is a single enterprise agreement made pursuant to section 185 of the FW Act with a nominal expiry date of 1 February 2013.

[3] The Agreement covers LGR Hilton Pty Ltd T/A Hilton Supa IGA (Employer). The SDAEA is an employee organisation covered by the Agreement.

[4] The SDAEA has filed a Statutory Declaration by Mr Peter O’Keeffe, SDAEA official and secretary (O’Keeffe Statutory Declaration) in support of the Application which asserts that retail employees covered by the Agreement are currently worse off overall than if their pay and conditions were provided for by the relevant Award, the General Retail Industry Award 2010 (Award) and submits that it is not in the public interest for an enterprise agreement which has passed its nominal expiry date to continue to have effect below that safety net, although he notes the Agreement provides for higher rates for Apprentices and a different severance payment scale.

[5] The O’Keeffe Statutory Declaration contains, as an annexure, a comparison of some key pay and conditions between the Agreement and the Award.

[6] Section 225 states:

“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.”

[7] Section 226 states:

“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.”

[8] In accordance with directions issued to the parties on 1 December 2016 (Directions), the SDAEA filed with the Fair Work Commission (FWC) and served on the Employer an outline of submissions as to why the Agreement should be terminated which addresses the requirements of s.226 (SDAEA Submissions). The SDAEA Submissions asserted that:

(a) the Agreement is nearly 4 years past its nominal expiry date, and was predicated on industrial minima which existed nearly 6 years ago;

(b) consequently, the Agreement provides for terms and conditions which are inferior to the Award minima;

(c) if the Employer continues to apply the Agreement’s terms, the Employer is likely to experience an unfair competitive advantage over employers who observe the minimum conditions contained in the Award;

(d) reverting back to the Award minima would be unlikely to jeopardise employment levels and/or inflation;

(e) it is not only not contrary to the public interest, but it is in the public interest to terminate the Agreement; and

(f) employees covered by the Agreement would be, on the whole, better off under the Award, taking into account all of the terms and conditions of both instruments;

[9] The Directions also directed the Employer to file and serve submissions in response to the Application and any evidence on which it seeks to rely in respect of the Application (Employer Submissions), including but not limited to:

(a) whether it supports or opposes the Application;

(b) how many employees of that Employer are covered by the Agreement;

(c) any evidence of the views of the employees about the termination of the Agreement;

(d) what the effect of the termination of the Agreement would be on the Employer and each of its employees covered by the Agreement;

(e) whether it is contrary to the public interest to terminate the Agreement; and

(f) any evidence on which the Employer seeks to rely.

[10] According to the Employer Submissions there are currently approximately 50 employees covered by the Agreement. According to the Employer Submissions termination of the Agreement will result in a requirement to pay higher penalty rates which will adversely impact on the Employer’s financial position and likely lead to a decision to no longer open the business on public holidays. This will have consequential effects on the hours of work and income of the employees covered by the Agreement. The Employer also submits that the termination of the Agreement will require the Employer to undertake significant administrative work to ensure compliance with the Award. The Employer Submissions acknowledge that given the Agreement is long past its nominal expiry date it is not contrary to the public interest to terminate the Agreement other than in relation to its potential impact on the public as a result of reduced trading hours. The Employer does not oppose the termination of the Agreement but has requested a transitional period of three (3) months to enable the Employer to fully implement the terms and conditions applicable in the Award in an efficient and effective manner. The SDA do not oppose the request for a transitional period for the Agreement termination.

[11] The Directions also directed the Employer to provide a copy of the Application, the SDAEA Submissions, the Employer Submissions and these Directions to each employee whose terms of employment are regulated by the Agreement. The Directions contained an invitation for any employee who wished to be heard with respect to the Application to contact the FWC within 2 weeks of receiving a copy of these materials. The Directions advised that, in the absence of any such contact being made, a conclusion about this Application may be made on the written materials filed in accordance with the Directions.

[12] On 22 December 2016, the FWC received a statutory declaration of Mr Gino Divitini on behalf of the Employer confirming its employees currently covered by the Agreement had been provided with the materials requested by the Directions.

[13] No submissions were received by any employees on or before the date specified in the Directions.

Consideration

[14] Based on the material that is before me, including the O’Keeffe Statutory Declaration, the SDAEA Submissions and the Employer Submissions, and in absence of any submissions from affected employees, I am satisfied that the termination of the Agreement is on the balance not contrary to the public interest. I have weighed up the adverse effect of the termination on the Employer and employees currently covered by the Agreement against the benefits of improved terms and conditions for those employees.

[15] Taking into account the above, I consider in the circumstances that it is appropriate to terminate the Agreement.

[16] To minimise the adverse effects of the termination of the Agreement the termination is to take effect on 3 June 2017.

DEPUTY PRESIDENT

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