Shop, Distributive and Allied Employees Association

[2016] FWCA 6173

[2016] FWCA 6173

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
(AG2016/1755)

THE INDEPENDENT RETAIL ESTABLISHMENTS AND SDA AGREEMENT 2002

Retail industry
DEPUTY PRESIDENT BINET	PERTH, 13 SEPTEMBER 2016

Application for termination of The Independent Retail Establishments and SDA Agreement 2002.

[1] Shop, Distributive and Allied Employees Association (SDAEA)has applied (Application) for The Independent Retail Establishments and SDA Agreement 2002 (Agreement) to be terminated pursuant to section 225 of the Fair Work Act 2009 (FW Act).

[2] SDAEA is an employee organisation covered by the Agreement.

[3] The Agreement has a nominal expiry date of 30 June 2005.

[4] The Agreement is a multi-business agreement certified pursuant to section 170LC of the Workplace Relations Act 1996 (Cwth). By virtue of Part 1 of Schedule 3of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cwth) (Transitional Act) the Agreement is a ‘collective agreement-based transitional instrument’ for the purposes of Schedule 3 of the Transitional Act. Item 16 of the Transitional Act provides that:

“16 Collective agreement-based transitional instruments: termination by the FWC

(1) Subdivision D of Division 7 of Part 2-4 of the FW Act (which deals with termination of enterprise agreements after their nominal expiry date) applies in relation to a collective agreement-based transitional instrument as if a reference to an enterprise agreement included a reference to a collective agreement-based transitional instrument.
(2) For the purpose of the application of Subdivision D to an old IR agreement, the agreement's nominal expiry date is taken to be the end of the period of the agreement.”

[5] Section 225 of the FW Act 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.”

[6] Section 226 of the FW Act 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.”

[7] SDAEA filed a Statutory Declaration by Mr Peter O’Keeffe, SDAEA Secretary (O’Keeffe Statutory Declaration), which states as follows.

(a) The Agreement passed its nominal expiry date on 30 June 2005.

(b) The General Retail Industry Award 2010 (Award) provides a safety net of minimum conditions of employment for retail industry employees.

(c) If the Agreement is terminated, the terms and conditions of retail employees covered by that Agreement would revert to (at the very least) the terms and conditions set by the Award.

(d) It is in the public interest for the Agreement to be terminated because some or all retail employees covered by the Agreement are currently worse off than if their pay and conditions were provided for by the Award.

(e) Mr O’Keeffe is not aware of any discussions or negotiations between the parties to the Agreement about negotiating a replacement agreement.

(f) The Award provides a fair and relevant safety net of terms and conditions for employees employed in the retail industry. 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.

[8] The O’Keeffe Statutory Declaration contains, as an annexure, a comparison of some key conditions of employment as between the Agreement and the Award (Comparison Table).

[9] In accordance with Directions issued to the SDAEA on 20 July 2016 (Directions), the SDAEA was directed to file with the Fair Work Commission (FWC) and serve on each of the employers covered by the Agreement:

(a) an outline of submissions as to why the Agreement should be terminated which addresses the requirements of section 226 of the FW Act; and

(b) any evidence on which the SDAEA sought to rely in support of the Application including but not limited to evidence of the views of the employees about the termination of the Agreement and evidence as to whether employees covered by the Agreement are better off overall under the applicable Award or the Agreement.

[10] The Directions also invited any employer covered by the Agreement to file with the FWC and serve on the SDAEA an outline of submissions in response to the Application, including whether it supports or opposes the Application, how many employees of that employer are covered by the Agreement, what the effect of the termination of the Agreement would be on the employer and each of its employees covered by the Agreement, whether it is contrary to the public interest to terminate the Agreement and any evidence on which that employer sought to rely.

[11] On 27 July 2016, the SDAEA filed with the FWC an outline of submissions in support of the Application (SDAEA Submissions)and a statutory declaration of Mr Benjamin Harris, General Assistant Secretary of the SDAEA (Harris Statutory Declaration) in accordance with the Directions. The SDAEA advised that it had discussed the Application with Ms Marie Brown (Ms Brown)of the Master Grocer’s Association (MGA) as the majority of the employers covered by the Agreement are members of the MGA.

[12] The SDAEA Submissions stated that termination of the Agreement is in the public interest as:

(a) the Agreement is 11 years past its nominal expiry date and was predicated on industrial minima which existed some 14 years ago;

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

(c) if there any employers still covered by the Agreement and who continue to apply the Agreement’s terms, those employers are likely to experience an unfair competitive advantage over employers who are not parties to the Agreement, or who are parties to the Agreement but observe the minimum conditions in the Award; and

(d) reverting to the Award minima would be unlikely to jeopardise employment levels or inflation.

[13] In relation to the effect termination of the Agreement would have on employees covered by the Agreement, the SDAEA Submissions referred to various terms in the Agreement which, when compared to the Award terms, appeared to leave employees financially worse off.

[14] The Harris Statutory Declaration states that a number of the employers covered by the Agreement have been deregistered from the Australian Securities and Investments Commission register of businesses and some are likely to have sold their stores. The SDAEA Submissions noted that, in light of this and the fact that it is impracticable to seek the views of each and every employee that may be covered by the Agreement, the SDAEA sought to rely on the O’Keeffe’s Statutory Declaration and Harris Statutory Declaration as evidence of the views of employees for the purposes of the Application.

[15] The Harris Statutory Declaration states that it appears that the SDAEA only had 23 members who may work in member stores referred to in the list of employers to the Agreement and who may be covered by the Agreement. Further to the comparison table provided with the O’Keeffe’ Statutory Declaration (Comparison Table), the Harris Statutory Declaration contained, at Annexure “BH-1”, an updated copy of that Comparison Table, which included a comparison between conditions related to junior employee pay rates, apprentice pay rates and redundancy pay, and which confirmed that the terms of the Award are more generous than the Agreement in nearly all of these respects.

[16] Each employer covered by the Agreement was also directed to provide a copy of the Application, the Directions and all materials filed with the FWC in accordance with the Directions to each employee whose terms of employment are regulated by the Agreement. The Directions contained an invitation for any employee or employer who wished to be heard with respect to the Application to contact the FWC by close of business on Thursday 25 August 2016.

[17] On 1 August 2016, my Chambers received correspondence from Ms Brown of the MGA confirming that the MGA sought to represent members who are either currently or were originally covered by the Agreement. According to the submissions of the MGA only a small number of its members continue to apply the Agreement.

[18] On 4 August 2016, the MGA filed submissions on behalf of the employers who continue to use the Agreement, in accordance with the Directions (MGA Submissions). The MGA Submissions confirmed that the Agreement is long past its nominal expiry date and that, in the circumstances, it is not contrary to the public interest to terminate the Agreement. The MGA stated that it does not oppose the termination of the Agreement but requested that consideration be given to a transitional period of at least one month in order to allow the affected independent stores which continue to use the Agreement to fully implement the terms and conditions applicable to the Award in an efficient and effective manner.

[19] On 15 August 2016, my Chambers received correspondence from Ms Susanne Day, Director of Prefet Pty Ltd, an employer covered by the Agreement, advising that she was in favour of terminating the Agreement as her Foodland/IGA Byford Store was sold in 2004 and IGA Safety Bay was sold in 2012.

[20] On 19 August 2016, MGA advised that, as at that date, only 6 member businesses continued to operate under the Agreement. MGA provided the FWC with the following statutory declarations and affidavits confirming that the relevant employers had provided to all employees currently covered by the Agreement the materials requested by the Directions:

(a) Affidavit of Mr Vincent Gallo dated 11 August 2016 on behalf of Gallo Nominees Pty Ltd;

(b) Affidavit of Mr Minh Trung Vo dated 15 August 2016 on behalf of Beechboro IGA;

(c) Affidavit of Mr Murray Stanton dated 18 August 2016 on behalf of Calton Pty Ltd; and

(d) Two Statutory Declarations of Mr Malcolm Ward dated 19 August 2016 on behalf of Sunpoint Holdings Pty Ltd and Fencove Pty Ltd.

[21] On 6 September 2016, the FWC received a further statutory declaration of Ms Renae Lapham on behalf of Topco Pty Ltd (Esperance IGA) confirming its employees currently covered by the Agreement had been provided with the materials requested by the Directions.

Consideration

[22] In the absence of any evidence to the contrary, I am satisfied that termination of the Agreement is not contrary to the public interest.

[23] Based on the material that is before me and in absence of any submissions from affected employees I am satisfied that the termination of the Agreement would not have any adverse effect on the employers and employees currently covered by the Agreement.

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

[25] Accordingly, the Agreementis terminated. The termination is to take effect on and from 16 October 2016.

DEPUTY PRESIDENT

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