Shop, Distributive and Allied Employees Association
[2022] FWCA 3035
•9 SEPTEMBER 2022
| [2022] FWCA 3035 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work (Transitional Provisions and Consequential Amendments) Act 2009
Item 16 Sch. 3—Termination of transitional instrument
Shop, Distributive and Allied Employees Association
(AG2022/1373)
Master Grocers’ Association and the Shop, Distributive and Allied Employees Association Award 2005
| Retail industry | |
| DEPUTY PRESIDENT BELL | MELBOURNE, 9 SEPTEMBER 2022 |
Application for termination of the Master Grocers Association of Victoria and Shop, Distributive and Allied Employees’ Association Enterprise Agreement 2005.
On 6 May 2022, the Shop, Distributive and Allied Employees Association (the SDA) made an application to the Fair Work Commission (the Commission) for termination of the Master Grocers Association of Victoria and Shop, Distributive and Allied Employees’ Association Enterprise Agreement 2005[1] (the Agreement).
The Agreement was certified in accordance with s.170LT of the Workplace Relations Act 1996 (WR Act). Section 170LT was within Division 4 of Part VIB of the WR Act. By s.4 of the WR Act, an agreement certified under Division 4 of Part VIB of the WR Act was defined as a “certified agreement”.
The Agreement is a “collective agreement-based transitional instrument” for the purposes of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth) (FW (TPCA) Act).
The SDA has made an application under item 16 of Schedule 3 of the FW (TPCA) Act. Item 16(1) is as follows:
“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.”
Subdivision D of Division 7 of Part 2-4 of the Fair Work Act 2009 (FW Act) is 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.
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.
227 When termination comes into operation
If an enterprise agreement is terminated under section 226, the termination operates from the day specified in the decision to terminate the agreement.”
Upon certification, the Agreement came into force on 27 July 2005. It was expressed to operate until 2 May 2008. The Agreement was expressed to “bind” the SDA and, as such, I am satisfied that the Agreement “covers” the SDA by reason of item 3 of Schedule 3 of the FW (TPCA) Act. The Agreement has passed – by approximately 14 years no less – its nominal expiry date. The SDA is accordingly entitled to apply to the Commission under s.225(c) of the FW Act for the Agreement to be terminated.
The Agreement as certified was a “multiple-business agreement” made in accordance with s.170LC of the WR Act. The list of employers in Schedule C of the Agreement contained a list of slightly fewer than 100 employers. The number of employers bound by the Agreement today is much fewer, totalling only 17 based upon the material provided by the SDA (which I accept).
The SDA filed the following documents, in support of its application to terminate the Agreement:
· Form F28 – Application for termination of collective agreement-based transitional instrument;
· Form F24C – Declaration of Mr Gerard Dwyer in relation to termination of an enterprise agreement after the nominal expiry date;
· A list of employers covered by the Agreement;
· Copies of undertakings signed by 10 of the 17 employers covered by the Agreement; and
· A comparison document, prepared by the SDA, that is said to show various differences between the Agreement and the Award.
The SDA’s application indicated that it expected undertakings for the remaining 7 employers would be filed.
On 3 June 2022, I issued directions with a view to obtaining the views of affected employees and all 17 employers. Those directions required the employers to take steps to notify affected employees of: the application; the proposed termination; a copy of my directions; and as well as inviting the views of any such employee. The directions also provided for an opportunity for the views of the remaining 7 employers to be supplied.
The undertakings proffered by the employers were in materially the same form. They each stated that no employee would be disadvantaged and that the savings provisions in cl 11.3 of the Agreement would continue to apply. In the directions I issued, I expressed a preliminary view that those undertakings were not capable of being accepted by the Commission. I noted that while the undertakings appeared to reflect positive support to terminate the Agreement from the 10 employers who had provided them, it was unclear how they might be relied upon by any employees currently covered by the Agreement. I invited any affected party to address this question in any submissions if they wished to do so. The undertakings provided by employers can best be described as undertakings by the relevant employer to the SDA. It is my view that, whatever might be the status of those undertakings, I have not relied upon them in my consideration as to whether the Agreement should be terminated, save that I do rely upon them as demonstrating positive support by those employers of the SDA’s substantive application.
Statutory declarations were provided to me by each of the 17 employers about the steps they had taken to notify the relevant employees. This process took some time although, given the number of entities involved, this was unsurprising. I note the assistance of the SDA in ensuring these steps were completed. I received the final set of statutory declarations on 23 August 2022. I note, however, that employees were notified earlier than this date. Most employers notified their employees in late June and the balance were notified by early July 2022. In short, I am satisfied that employees have been given a reasonable opportunity to express any views they might have had.
The SDA’s declaration (which was served on all relevant parties) states that the SDA considered that the terms and conditions of the Agreement have fallen below that of the General Retail Industry Award 2020 (Award) and that employees would be at a disadvantage staying under the Agreement when compared to the Award. The SDA prepared a comparison document in support of those contentions (which was also served on all relevant parties). They also filed submissions in support of its application on 7 September 2022, which were intended to be filed with its original material but were inadvertently omitted. Nothing turns on the late provision of that material.
I received no material opposing the application from any employee. All employers support it and, evidently, as does the SDA. The Master Grocers Association of Victoria (MGAV), on behalf of the affected employers, is supportive of the application and I also note that it provided assistance in ensuring effective communication with the affected employers and employees occurred.
A consideration of the public interest under s.226 of the FW Act will involve something that is distinct from the interests of the persons and bodies covered by the agreements.[2] Assessment of where the public interest might lie may sometimes require balancing competing public interests.[3]
The Full Bench in Aurizon concluded that there was no “predisposition” against the termination of an enterprise agreement that had passed its expiry date but that s.226 ought operate according to its terms. [4]
In considering whether or not it is “appropriate” to terminate an enterprise agreement that has passed its expiry date, all of the circumstances need to be taken into account. They include the views and circumstances of the employer, employees and any union, and the effect termination will have on them.[5]
Based on the material before me, including that contained in the SDA’s declaration filed with the application and its supporting material, and the submissions filed on 7 September 2022, I am satisfied that termination of the Agreement is not contrary to the public interest.
Taking into account all of the circumstances, including those in s.226(b)(i) and (ii) of the Act, I consider that it is appropriate to terminate the Agreement, noting:
(a)I am satisfied that the relevant employees have had an opportunity to express their views in respect of the proposed termination and to have any queries addressed. No employees covered by the Agreement raised any concern, having regard to the material and information given to them;
(b)the views of the SDA and the 17 remaining employers covered by the Agreement;
(c)the circumstances of the SDA, the employers and employees, including the likely effect that the termination of the agreement will have on them. Noting the SDA’s submissions and the support of employers, I accept that the termination of the Agreement is likely to have a beneficial impact on the terms and conditions applicable to the relevant employees.
Having regard to the above findings, I must terminate the Agreement.
As there are a number of employers involved and the likelihood that they might have disparate payroll systems and pay cycles, I considered it might be appropriate to fix an operative date for the termination of the Agreement at a future point in time to allow any issues arising from the change to be better accommodated. My chambers wrote to the SDA and MGAV indicating I was considering specifying an operative date of six weeks from the date of the decision and requested they provide their views. In response the SDA submitted that an operative date should be as soon as practicable but separately indicated a period of four weeks from the date of the decision be determined. This was on the basis that there was no opposition to the application and, the relevant employers having had ample notice of the impending termination, there had been sufficient time for all employers to prepare their payroll systems for a transition to the Award. The MGAV subsequently advised that they agree with an operative date of four weeks from the date of the decision. I accept that a period of 4 weeks is sufficient to address any payroll transition and, in those circumstances, the longer period I initially proposed is not appropriate.
For the purposes of s.227 of the FW Act, I specify that the termination of the Agreement operates from Friday, 7 October 2022. For avoidance of doubt, this means that the Agreement will operate up to and including 11.59pm on Friday, 7 October 2022.[6]
DEPUTY PRESIDENT
[1] AW839407.
[2] Re Aurizon Operations Ltd (2015) 249 IR 55 (Aurizon) at [129].
[3] Aurizon, [130].
[4] Aurizon, [142].
[5] Aurizon, [167].
[6] Section 36(1) of the Acts Interpretation Act 1901 (Cth) provides that if the period of time is expressed to begin “from” a specified day, then the period of time does not include that day.
Printed by authority of the Commonwealth Government Printer
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