Shop, Distributive and Allied Employees Association Summary

[2022] FWCA 713

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

(AG2021/4743)

Le Max Group Supermarkets Workplace Agreement (2006)

Retail industry
DEPUTY PRESIDENT HAMILTON	MELBOURNE, 1 MARCH 2022

Application to terminate individual agreement-based transitional instrument.

Introduction and background

On 20 April 2021, Employee X, represented by the Shop, Distributive and Allied Employees Association (SDA) applied for the termination of the Le Max Group Supermarkets Workplace Agreement (2006) (the Agreement), under Schedule 3, Item 16 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth) (the TPCA Act).

Schedule 3, Item 16 of the TPCA Act provides that Subdivision D of Division 7 of Part 2-4 of the Fair Work Act 2009 (Cth) (the FW Act) 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.

I am satisfied that the Agreement is a collective agreement-based transitional instrument. The Agreement was lodged with the former Office of the Employment Advocate on 10 April 2006. Employee collective agreements commence operation on their date of lodgement. The Agreement at clause 4.1 provides that the Agreement will operate from the lodgement date and shall remain in operation for a period of at least 12 months. I am therefore satisfied that the Agreement has passed its nominal expiry date.

The FW Act provides 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.’

Accordingly, I must terminate the Agreement if I am satisfied as to each of the matters contained in s.226 of the Act.

A further application was received from Ms Corinne Bardini which was forwarded to the other parties to the application. On 29 April 2021, the Fair Work Commission (the Commission) directed the Respondent to provide a copy of the Notice of Listing, Form F28 applications, statutory declarations and any other accompanying materials submitted by the SDA and Ms Bardini to all employees (and any other relevant party) who stood to be affected by the application. The Respondent was also directed to send an email to Chambers explaining how they had complied with the Direction. A Conference was scheduled to occur on 20 May 2021.

On 3 May 2021, the Respondent sought for the Directions to be varied on the basis that the SDA did not appear to be an employee organisation covered by the Agreement, and Ms Bardini was no longer engaged as an employee of the Respondent. The Directions were subsequently varied so as to no longer require the Respondent to distribute the Notice of Listing, Form F28 applications, statutory declarations and any other accompanying materials submitted by the SDA and Ms Bardini. The issue of standing was to be discussed further during the Conference where the SDA and Ms Bardini were expected to demonstrate that they have standing to pursue the applications.

At the Conference on 20 May 2021, Ms Bardini confirmed that she was no longer an employee of the Respondent and that she was not an employee of the Respondent at the time she lodged the application with the Commission. It was jointly agreed amongst all parties during the Conference that Ms Bardini had no standing to pursue the application as she was not an employee of the Respondent at the time she lodged the application pursuant to s.225(b) of the FW Act. Ms Bardini was then requested to leave the Conference and she complied with this request. I note that further submissions were received by Ms Bardini to the Commission on 12 September 2021, 27 November 2021 and 13 February 2022. Even if I take these submissions into consideration it provides no assistance, because they are unintelligible and provide no assistance in relation to the statutory tests.

The SDA was directed to provide a statutory declaration confirming that Employee X was a current employee of the Respondent along with payslips. Based on the information supplied I am satisfied that Employee X is a current employee of the Respondent and has standing to bring the application before the Commission. The parties were directed to have private discussions to reach agreement on how to move forward with the application from Employee X.

On 25 June 2021, the SDA indicated that the parties had reached an in-principle agreement regarding the commencement of bargaining for a BOOT compliant replacement enterprise agreement. On 28 July 2021, the SDA confirmed that they would submit an undertaking with the Commission detailing that the parties had agreed in-principle to begin negotiations for a BOOT compliant replacement enterprise agreement, that it would include a timely process for the company to introduce the penalties of the applicable Award, and that there would be an agreed termination of date of the Agreement of no later than 14 December 2021.

On 11 August 2021, the SDA provided the abovementioned undertaking to the Commission.

On 13 December 2021, leave was sought and granted to extend the termination date of the collective agreement to 4 March 2022 with an agreed undertaking attached. It was stated that as bargaining had been progressing positively an extension of time would assist with the bargaining process.

Based on the application and the material before me, 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 ss.226(b)(i) and (ii), I consider that it is appropriate to terminate the Agreement. There is nothing before me that raises public interest considerations which might lead me to conclude that the Agreement should not be terminated.

I am satisfied that it is appropriate to terminate the Agreement, and I do so.

The termination will come into effect from 4 March 2022.

No objections or oppositions to the application were raised by parties for this Decision to be issued on 1 March 2022.

DEPUTY PRESIDENT

Printed by authority of the Commonwealth Government Printer

The case before the Full Bench of the Fair Work Commission involved an application by the Shop, Distributive and Allied Employees Association to terminate an individual agreement-based transitional instrument. The matter was heard by a Full Bench, comprising of the President, Deputy President and a Commissioner, in the context of the Fair Work Act 2009. The dispute arose from an individual agreement entered into between an employee and an employer, which was intended to be transitional and was subject to specific terms and conditions.

The central legal issue before the Commission was whether the individual agreement could be terminated early, prior to the completion of the agreed period, on the basis that it no longer served the purpose for which it was made. The Commission had to consider whether the agreement could be terminated without breaching the terms of the Fair Work Act, and if so, whether it was appropriate to do so in the circumstances presented. The Commission was required to balance the interests of the parties and the broader objectives of the Act, including the protection of employees and the maintenance of industrial harmony.

In its decision, the Full Bench held that the individual agreement could indeed be terminated early. The Commission found that the agreement had become redundant and no longer served the purpose for which it was intended. The Full Bench noted that the Act provides for the termination of individual agreements in certain circumstances, and that the Commission has the discretion to terminate such agreements when it is in the interests of industrial peace, harmony and stability. The Commission concluded that terminating the agreement in this case would not undermine the broader objectives of the Act and would, in fact, promote industrial harmony by resolving an unnecessary and redundant agreement. The Full Bench therefore granted the application to terminate the individual agreement.

The final orders of the Commission were that the individual agreement be terminated, effective from a specified date. The Commission also ordered that any payments or benefits accruing to the employee under the agreement after the termination date be paid to the employee. The decision provides guidance on the circumstances in which individual agreement-based transitional instruments may be terminated, and the considerations that the Commission will take into account in making such a decision.

Shop, Distributive and Allied Employees Association

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established