Shop, Distributive and Allied Employees Association

[2014] FWCA 4057

[2014] FWCA 4057

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.225—Enterprise agreement

Shop, Distributive and Allied Employees Association
(AG2014/6231)

ERINA FRESH FOODS ENTERPRISE AGREEMENT 2003

Retail industry
COMMISSIONER GREGORY	MELBOURNE, 20 JUNE 2014

Application for termination of an enterprise agreement after its nominal expiry date.

[1] The Shop, Distributive and Allied Employees’ Association (SDA) have made an application under section 225 of the Fair Work Act 2009 (Cth), to terminate the Erina Fresh Foods Enterprise Agreement 2003 1.

[2] Section 225 of the Act states:

“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.”

[3] I am satisfied that this application has been properly made under s.225. In this case it is made by an employee organisation covered by the agreement.

[4] When such an application is made s.226 of the Act provides:

“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.”

[5] The submissions indicate that the enterprise agreement has long since passed its nominal expiry date. The SDA also submits the termination of the enterprise agreement is proposed to allow the General Retail Industry Award 2010 2 to govern the terms and conditions of employment of the employees. In its submission this will generally provide a better outcome for the employees and it has provided comparisons in a statutory declaration attached to the application of the entitlements contained in the Award, compared with those contained in the enterprise agreement it seeks to have terminated.

[6] The submissions of the SDA also indicate that a memorandum of understanding has been entered into with the employer confirming that certain conditions now contained in the enterprise agreement, which are in advance of those contained in the existing Award, will continue to be preserved through these arrangements which are, in effect, savings provisions designed to maintain the benefit of those entitlements.

[7] I am satisfied, firstly, that the enterprise agreement has passed its nominal expiry date.

[8] Secondly, as I am required to do under s.226 of the Act, I have had regard to whether termination of the agreement would be in any way contrary to the public interest.

[9] Previous decisions of this tribunal have considered how the public interest is to be assessed. Those decisions have determined that the notion of the public interest is not easily or precisely defined. However, it generally refers to matters that might affect the public as a whole, such as the achievement or otherwise of the various objects of the Act, and other matters such as employment levels, inflation and the maintenance of proper industrial standards.

[10] Reference to the public interest might involve something distinct from the interests of the parties although they might also in particular cases be similarly affected.

[11] I am satisfied based on the submissions and evidence in this matter that it would not be contrary to the public interest to terminate the agreement as I am satisfied the public interest would not be impacted in any way by this outcome. There is nothing involved in the circumstances of this matter to suggest the way the employment arrangements are structured, or what instrument applies to regulate those arrangements, is going to have any impact on any broader considerations. While the outcome of these proceedings might be of significance to the business of the employer and its employees, I cannot conceive of any wider public interest considerations that would be similarly impacted, or indeed any considerations that would be contrary to the public interest.

[12] I have also had regard to the views of the employees, the employer and the employee organisation covered by the agreement, in this case being the Shop, Distributive and Allied Employees’ Association and to the particular circumstances in each case and the likely effect that the termination will have on each of them.

[13] In terms of the views of the employees I am satisfied based on the submissions and evidence that both the employer and the union has provided opportunities to the employees to understand why termination of the existing enterprise agreement is being proposed. I understand that those opportunities were first provided by information given to the employees by store managers and followed up in meetings that were scheduled to enable as many of those employees to attend as possible.

[14] I also understand the SDA was then provided with an opportunity to meet with the employees in the various stores to also provide its views about the proposal to terminate the enterprise agreement, and to deal with any issues or other considerations employees wanted to raise in response.

[15] Based on the submissions before the Commission I am not aware of any evidence of any objection or any adverse reaction from the employees to what is being proposed by way of termination of the agreement and, indeed, based on the submissions and material contained in the statutory declarations it would appear that in many cases the employees are actually going to be better off under the new arrangements that are intended to be put in place and apply once the enterprise agreement has been terminated.

[16] I also understand from the submissions that have been made by the employer that the changes will enable a simple, uniform and consistent framework of terms and conditions to be put in place which will be easier for the employer to manage and administer in place of the diverse arrangements that now exist.

[17] Based on the submissions and the evidence I have referred to I am also satisfied that the various requirements in s.226(b) of the Act have been taken into account, and that it is appropriate to terminate the agreement having taking into account all of those relevant circumstances.

[18] The only other matter the Commission needs to address is when the termination should come into operation. I understand from the submissions that have been made by the SDA that it is their clear and preferred position that the termination of the agreement should take place on 30 June 2014. However, I have also had regard to the submissions made by the employer in regards to certain difficulties that will emerge if that is the operative date.

[19] The employer has made particular reference to a range of circumstances it is dealing with including the flow on of the Annual Wage Review decision, changes to superannuation arrangements and changes to junior rates. It also intends to carry out a thorough internal audit in conjunction with these changes to ensure that all employees are being paid correctly and that appropriate financial statements for all employees are provided to ensure this is occurring.

[20] It is acknowledged that there is a significant task associated with these matters and given those circumstances I determine that termination of this agreement will take effect on 31 August 2014.

COMMISSIONER

Appearances:

Mr A Burke appeared on behalf of the Shop, Distributive and Allied Employees’ Association.

Ms M Brown appeared on behalf of the Master Grocers Australia.

Hearing details:

2014.

Melbourne:

16 June.

 1   AG826375

 2   MA000004

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