Shop, Distributive and Allied Employees Association

[2020] FWCA 5393

[2020] FWCA 5393

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.225 - Application for termination of an enterprise agreement after its nominal expiry dateShop, Distributive and Allied Employees Association

(AG2020/2786)

COOLOONGUP SUPA IGA AND SDA AGREEMENT 2012

Retail industry
DEPUTY PRESIDENT BINET	PERTH, 5 NOVEMBER 2020

Application for termination of the Cooloongup Supa IGA and SDA Agreement 2012.

[1] The Shop, Distributive and Allied Employees Association (SDA) has made an application (Application) to the Fair Work Commission (FWC) to terminate the Cooloongup Supa IGA and SDA Agreement 2012 (Agreement) pursuant to section 225 of the Fair Work Act 2009 (Cth) (FW Act).

[2] The Agreement was approved by Commissioner Williams pursuant to section 186 of the FW Act, on 8 February 2013 and, commenced operation on 15 February 2013. The Agreement has a nominal expiry date of 15 February 2016.

[3] The parties to the Agreement are the SDA, Grant Trading Pty Ltd as Trustee for The Garrett Family Trust No. 4 trading as Cooloongup Supa IGA (IGA) and the employees employed by IGA in the classifications specified in clause 6 of the Agreement (Employees).

[4] The SDA are a party to the Agreement and covered by Agreement.

[5] In support of the Application, SDA filed a statutory declaration by Mr Benjamin Harris, Assistant Secretary of the SDA (Harris Declaration).

[6] On 22 September 2020, directions were issued with respect to the Application (Directions). SDA was directed to file an outline of submissions in support of the Application and any evidence on which they relied by 4pm Thursday 1 October 2020. IGA were directed to file an outline of submissions in response to the Application and any evidence on which IGA sought to rely by 4pm Thursday 8 October 2020.

[7] The Directions also required IGA to provide a copy of the materials filed by the parties in accordance with the Directions and a copy of the Directions to each of the Employees. The Directions contained an invitation for any of the Employees who wished to be heard in relation to the Application to contact Chambers by 4pm, Thursday 15 October 2020. None of the Employees contacted Chambers by this date or by the date of this decision.

[8] On 8 October 2020 IGA confirmed it supported the termination of the Agreement.

Background

[9] IGA operates in the retail grocery industry, within Western Australia.

[10] If the Agreement is terminated, the terms and condition of the employees would revert to the General Retail Industry Award MA000004 (Award).

Legislation

[11] Subdivision D of Division 7 of Part 2-4 of the FW Act sets out the mechanism by which an enterprise agreement may be terminated after the agreement has passed its nominal expiry date.

[12] Section 225 of the FW Act provides that:

“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.”

[13] The Agreement has passed its nominal expiry date.

[14] The SDA is an employee organisation covered by the Agreement.

[15] I therefore find that the SDA has standing to make the Application pursuant to section 225(c) of the FW Act.

[16] Section 226 of the FW Act states that:

“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.”

Is it contrary to the public interest to termination the Agreement?

[17] Section 226(a) of the FW Act requires the FWC to be satisfied that it is not contrary to the public interest to terminate the Agreement. This requires the FWC to consider how the termination of the Agreement might foreseeably affect the public as a whole, such as the impact on the achievement or otherwise of the various objects of the Act, employment levels, inflation and the maintenance of proper industrial standard. 1

[18] There is no positive onus on the applicant to persuade the FWC that there are positive benefits to the public interest arising from the termination. In Geelong Wool Combing Ltd (AIRC) 5 September 2003, Commissioner Wheelan said:

“… the Commission must be persuaded that termination is contrary to the public interest [and] in the absence of any effect of termination which is contrary to the public interest it is not necessary to persuade the Commission that there are positive benefits to the public interest arising from the termination.”

[19] The public interest is distinct in nature from the interests of those covered by the Agreement. The views of those covered by an agreement may be relevant to the exercise of the discretion if they shed light on the effect of the termination on public interest but those views should not be given any independent weight. 2

[20] The objects of the FW Act are set out in section 3 of the FW Act, as follows:

“3. Object of this Act

The object of this Act is to provide a balanced framework for cooperative and productive workplace relations that promotes national economic prosperity and social inclusion for all Australians by:

…

(b) ensuring a guaranteed safety net of fair, relevant and enforceable minimum terms and conditions through the National Employment Standards, modern awards and national minimum wage orders;

…

(f) achieving productivity and fairness through an emphasis on enterprise level collective bargaining underpinned by simple good faith bargaining obligations and clear rules governing industrial action;

…”

[21] The specific objects in section 171 of the FW Act inform how the general object in section 3 of the FW Act is to be satisfied in the context of matters dealt with in Part 2-4 of the FW Act:

“171. Objects of this Part

The objects of this Part are:

(a)  to provide a simple, flexible and fair framework that enables collective bargaining in good faith, particularly at the enterprise level, for enterprise agreements that deliver productivity benefits; and

(b)  to enable the FWC to facilitate good faith bargaining and the making of enterprise agreements, including through:

(i) making bargaining orders; and

(ii) dealing with disputes where the bargaining representatives request assistance; and

(iii) ensuring that applications to the FWC for approval of enterprise agreements are dealt with without delay.”

[22] The ascertainment of what is not in the public interest does not involve the mere identification of a consequence of the termination of the agreement that is arguably contrary to the public interest. The ascertainment of the public interest may involve balancing countervailing public interests. 3

[23] SDA submit that there are no matters contrary to the public interest in terminating the Agreement and that, rather, there are factors that are in the public interest in terminating the Agreement that may be considered by the Commission.

[24] SDA note that the Agreement is four years past its nominal expiry date and that the terms and conditions are now inferior to the relevant Award. SDA submit that there is a public interest in terminating the Agreement so that Employee terms and conditions revert to the safety net provided to other workers in the retail industry.

[25] SDA say that if the Agreement is not terminated, IGA will retain an unfair competitive advantage over other like businesses who engage workers under the terms and conditions set out in the Award. SDA submit that terminating the Agreement is in the public interest because it will ensure that IGA does not have a competitive advantage over competitors who observe the minimum conditions contained in the Award.

[26] IGA submit that there is no reason to believe that terminating the Agreement would be contrary to the public interest.

[27] Based on the submissions of the parties and the evidence before me, I am satisfied that it is not contrary to the public interest to terminate the Agreement.

What are the views of the Employees covered by the Agreement?

[28] The Directions required IGA to provide a copy of the materials filed by the parties in accordance with the Directions and a copy of the Directions to each of the Employees. The Directions contained an invitation for any of the Employees who wished to be heard in relation to the Application to contact Chambers. None of the Employees contacted Chambers by the date of this decision.

What are the views of the Employee Organisation covered by the Agreement?

[29] The SDA have made the Application and support the termination of the Agreement.

What are the views of the Employer covered by the Agreement?

[30] IGA supports the termination of the Agreement.

What are the circumstances of the Employees covered by the Agreement?

[31] SDA say that the wage rates, casual loadings and penalty rates are more generous overall under the Award than under the Agreement. The SDA submit the termination of the Agreement will have an overall positive financial effect on the terms and conditions of employees.

What are the circumstances of the Employee Organisation covered by the Agreement?

[32] The SDA have made the Application as a party to the Agreement. SDA submit that by terminating the Agreement employees will overall be better off financially and IGA will be placed on a level playing field with like businesses.

What are the circumstances of the Employer covered by the Agreement?

[33] IGA submit that they support the termination of the Agreement and that the termination will have minimal impact on the operation of the business.

Is it appropriate to terminate the Agreement taking into account all the circumstances?

[34] In assessing the views and circumstances of the parties it is important to remember that:

“Taking into account the views and circumstances of the parties involves far more than an expression of their views in support or opposition to termination. It should involve a reason for their views and the validity of their concerns.” 4

[35] The Agreement came into effect over 7 years ago and is now more than 4 years past its nominal expiry date. The terms and conditions set out in the Agreement are no longer adequate in comparison to the relevant Award. This has been recognised by IGA in their decision not to oppose the Application.

Conclusion

[36] For the reasons enunciated above, I am satisfied that it is not contrary to the public interest to terminate the Agreement.

[37] Taking into account all the circumstances, including the views and circumstances of IGA, its employees and the SDA, I am satisfied that it is appropriate to terminate the Agreement.

[38] Accordingly, the Agreementis terminated. The termination is to take effect on and from Sunday 8 November 2020. An Order to this effect will be issued in conjunction with this Decision.

DEPUTY PRESIDENT

 1   Re Kellogg Brown and Root, Bass Strait (Esso) Onshore/Offshore Facilities Certified Agreement 2000 (2005) 139 IR 34, 40 – 41.

 2   Ibid.

 3   Kellogg Brown & Root Pty Ltd & Ors and Esso Australia Ltd (2005) 139 IR 34 referred to the decision of the High Court of Australia in Queensland Electricity Commission; Ex parte Electrical Trades Union of Australia (1987) 61 ALJR 393.

 4   Energy Resources Australia Ltd v Liquor, Hospitality and Miscellaneous Union[2010] FWA 2434, [16].

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