Shop, Distributive and Allied Employees Association
[2020] FWCA 5382
•15 OCTOBER 2020
| [2020] FWCA 5382 |
| 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
(AG2020/2113)
FRANKLINS NATIONAL RETAIL ENTERPRISE AGREEMENT 2005 TO 2008
Retail industry | |
DEPUTY PRESIDENT BULL | SYDNEY, 15 OCTOBER 2020 |
Application for termination of the Franklins National Retail Enterprise Agreement 2005 to 2008.
Background
[1] The Shop, Distributive and Allied Employees Association (SDA), has appliedto terminate the Franklins National Retail Enterprise Agreement 2005 to 2008 (the Agreement) under s.225 of the Fair Work Act 2009 (the Act).
Relevant Legislation
[2] The Agreement is a collective agreement-based transitional instrument as per Item 2(5)(c)(i) of Schedule 3 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (the Transitional Act) having been approved by the Australian Industrial Relations Commission in 2005.
[3] Schedule 3, Item 16(1) of the Transitional Act states:
“Collective agreement-based transitional instruments: termination by 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”
[4] Pursuant to the Transitional Act an application to terminate a transitional instrument is made under s.225 of the Act which states 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.”
(My underline)
[5] Clause 1.3(b) of the Agreement provides that the Agreement has a nominal expiry date of 31 August 2008. Clause 1.4(a)(ii) lists the SDA as a party to the Agreement.
[6] Based on the above, I am satisfied that the applicant is an employee organisation covered by the Agreement and has standing to make the termination application and further that the Agreement has passed its nominal expiry date.
[7] I am therefore satisfied the requirements of s.225 of the Act have been met.
[8] Having been satisfied that the requirements of s.225 have been met the Commission must terminate the Agreement subject to the requirements of s.226. Section 226 of the Act relevantly states as follows:
“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.”
[9] The requirements of s.226 are addressed below.
S.226(a) - Is termination of the Agreement contrary to the public interest?
[10] The SDA has provided a statutory declaration of Mr Gerard Dwyer, National Secretary, SDA.
[11] Mr Dwyer states that, in some supermarkets, employees covered by the Agreement are working side by side with employees covered by the General Retail Industry Award 2010 1(the Award), as such, it is not in the public interest to have employees doing the same work in the same workplace receiving differing conditions of employment, including receiving higher rates under the Award. It is also submitted that it is not in the public interest to have an enterprise agreement covering multiple employers with little or no connection to one another.
[12] The nature of the public interest test contained in s.226(a) of the Act is such that the test is only a consideration of any matters that are contrary to the public interest that go to the Agreement termination issue.
[13] In Tristar Steering and Suspension Australia Limited (Tristar),2 and as adopted in Aurizon Operations Limited; Aurizon Network Pty Ltd; Australia Eastern Railroad Pty Ltd3 (Aurizon), the Full Bench stated and reaffirmed the approach adopted by the Full Bench in Kellogg Brown and Root Pty Ltd and others (Kellogg).4 The approach adopted by the Full Bench in Kellogg deals with the public interest test, although with reference to the Workplace Relations Act 1996, which is couched in the same terms as the current public interest test under s.226 of the Act and remains apposite. The Full Bench in Kellogg stated:
“[27] It should be emphasized that the Commission’s consideration of the public interest for the purpose of s.170MH(3) is directed to the consequences of terminating the agreement. In a given case, some consequences will be clearly predictable, others will be less so. For the most part the Commission should be guided by the likely foreseeable consequences of termination rather than speculation about possible consequences.”
[14] In Coca-Cola Amatil (Aust) Pty Ltd v Liquor, Hospitality and Miscellaneous Union-South Australian Branch and Others5 the Full Bench emphasised the notion of public interest as not only matters that might affect the public as a whole, but one that is distinct in nature from the interests of the parties themselves.
[15] The Full Bench in Aurizon reiterated this public interest approach at paragraph [129] of that decision, stating:
“Section 226(a) requires a consideration of whether termination of the agreements is not contrary to the public interest. It seems to us that a consideration of the public interest will involve something that is distinct from the interests of the persons and bodies covered by the agreements. This distinction seems to be reflected in the structure of s. 226. The question of how the public interest is to be assessed was considered by a Full Bench of the Australian Industrial Relations Commission in Re Kellogg Brown and Root, Bass Strait (Esso) Onshore/Offshore Facilities Certified Agreement 2000.6 The decision in Kellogg Brown concerned an application to terminate a certified agreement pursuant to s. 170MH of the WR Act. The Full Bench observed:
“The absence of any reference to the interests of the negotiating parties in s.170MH(3) is significant. It follows that the views of persons bound by the agreement may be relevant to the exercise of the discretion if they shed light upon the effect of termination on the public interest, but they should not be given any independent weight. To do so would be to import into the application of the section something which on its proper construction it does not include.
The notion of public interest refers to matters that might affect the public as a whole such as the achievement or otherwise of the various objects of the Act, employment levels, inflation, and the maintenance of proper industrial standards. An example of something in the last category may be a case in which there was no applicable award and the termination of the agreement would lead to an absence of award coverage for the employees. While the content of the notion of public interest cannot be precisely defined, it is distinct in nature from the interests of the parties. And although the public interest and the interests of the parties may be simultaneously affected, that fact does not lessen the distinction between them.”7
[16] I have had regard to the submissions of the SDA in relation to whether termination of the Agreement would be contrary to the public interest. I am satisfied that terminating the Agreement would not be contrary to the public interest as I am unable to identify any matter that would indicate otherwise.
S.226(b)(i) The views of the employees, employers and employee organisation covered by the Agreement
[17] The Franklins Supermarket chain was sold to Metcash Trading Limited in or around 2011. Subsequently, many of the stores were sold to independent retailers and operated under the IGA brand. As a result, the application lodged by the SDA names 14 employers covered by the Agreement.
[18] On 11 August 2020, my Chambers issued directions to the parties which stated:
“1. The SDA is directed to serve a copy of the Applicant’s Documents, and a copy of these Directions, on each of the 14 named employers in the application by no later than 4:00pm on 18 August 2020. The SDA is to provide evidence of how this was effected, including the appropriate contact details for each of the employers, by no later than 4:00pm on 21 August 2020.
2. The 14 employers are directed to bring to the attention of their employees covered by the Agreement, the application (including all the Applicant’s documents) filed by the SDA, and a copy of these Directions, by no later than 4:00pm on 28 August 2020, so that those employees’ views may be sought. The employers are to provide evidence of how this was effected by no later than 4:00pm on 4 September 2020.
3. Employees covered by the Agreement may submit their views by no later than 4:00pm on 18 September 2020, to their employer or to the Commission directly by email at [email protected].
4. The Commission seeks the views of the 14 named employers regarding the application. The employers are directed to file any response to the application, including whether they consent to the application, to [email protected] by no later than 4:00pm on 4 September 2020. “
[19] On 13 August 2020, Mitchell Worsley, Industrial Officer, from theSDA, filed a statutory declaration in accordance with the directions outlining how service was affected on each employer.
[20] On 3 September 2020, Metcash Trading Limited, who is employer (1) on the application, advised Chambers that they had made employees aware of the application during toolbox talks and provided copies of communication materials and records of the meeting attendance. They advised that they consent to the application and requested the trading name “IGA Georges Hall” be included along with the others listed for Employer (1). In accordance with s.586(a) of the Act, the application is amended to include “IGA Georges Hall” as a trading name for Metcash Trading Limited. Metcash Trading Limited requested that the termination become effective one month from the date of the termination decision.
[21] On 4 September 2020, Master Grocers Australia, representing employers (2) and 4 – 14, filed materials with Chambers. Annexed to its outline of submissions was correspondence with the relevant employees that had been signed and returned. Master Grocers Australia stated that it did not oppose the application but requested a timeframe of three months after the termination decision as the date that the termination becomes effective.
[22] Also, on 4 September 2020, the SDA provided a document to Chambers that stated it had received from R&R Family Investments Pty Ltd, which is employer (3) in the application. The correspondence contained a copy of the communication with employees regarding the application. Mr Worsley stated that he had been advised the communication was placed on the notice board of the store.
[23] The Commission has not otherwise received to date any other correspondence from employees covered by the Agreement regarding the application.
S.226(b)(ii) - The circumstances of employees the employer and organisations and the likely effect that the termination will have on each of them
[24] Mr Dwyer of the SDA stated that the rates of pay in the Agreement are lower than those under the General Retail Industry Award 2010 8(the Award) and that most of the overtime and penalty rate provisions are more beneficial under the Award. A comprehensive comparison of the Agreement vis a´ vis the Award was provided with the application.
[25] In its submissions, Master Grocers Australia stated that the Award provides contemporary and relevant conditions of employment, which ensures both fairness to the employees, as well as business efficacy for the Respondents.
Is it appropriate to terminate the Agreement?
[26] The Full Bench decision in Construction, Forestry, Mining and Energy Union v Peabody Energy Australia PCI Mine Management Pty Ltd9 explained the discretionary nature of the decision the Commission is required to make under s.226 of the FW Act as follows:
“[17] In identifying that s.226 required the exercise of a discretion, the Full Bench in AWX Pty Ltd referred to the following passage in the High Court decision in Coal and Allied Operations Pty Ltd v Australian Industrial Relations Commission10 (footnotes omitted):
“[19] “Discretion” is a notion that “signifies a number of different legal concepts”. In general terms, it refers to a decision-making process in which “no one [consideration] and no combination of [considerations] is necessarily determinative of the result.” Rather, the decision-maker is allowed some latitude as to the choice of the decision to be made. The latitude may be considerable as, for example, where the relevant considerations are confined only by the subject matter and object of the legislation which confers the discretion. On the other hand, it may be quite narrow where, for example, the decision-maker is required to make a particular decision if he or she forms a particular opinion or value judgment.”
[18] Section 226 involves the exercise of a “narrow” discretion of the type described in the last sentence of the above passage. Notwithstanding this, it remains the case that the evaluative assessments required by s.226(a) and (b) allow a degree of latitude on the part of the decision-maker as to the conclusions to be reached. …”
[27] I have had regard to all of the material provided to the Commission by the SDA and I have taken into account the views of the employers who expressed a view.
[28] The requirements of s.225 of the Act have been met and there is no evidence before me that indicates that, on the approach endorsed by the Full Bench of the Commission in Kellogg,andenunciated in Aurizon, it would not be appropriate taking into account all the circumstances including those listed at s.226(b)(i) and (ii) of the Act to terminate the Agreement.
[29] I am thus satisfied pursuant to s.226 of the Act that the Franklins National Retail Enterprise Agreement 2005 to 2008 should be terminated.
[30] Section 227 of the Act provides that if an enterprise agreement is terminated under s.226 of the Act, the termination operates from the day specified in the decision to terminate the Agreement. On 8 October 2020, my Chambers wrote to the SDA requesting that the SDA advise of its position with regard to the date the termination should take effect. On 9 October 2020, Mr Worsley replied that the SDA consents to a three month period between the date of the decision and the effective date of termination.
[31] Having considered the views of the SDA and those employers who have made a submission with respect to the operative date of any termination I consider that a three month period from the date of this decision to be an appropriate period before the Agreement termination takes effect. This will enable employers sufficient time to accommodate any changes that may need to be made within their business.
[32] Accordingly, an Order [PR723606] to this effect has been issued with this decision.
’
DEPUTY PRESIDENT
1 MA000004.
2 [2007] AIRCFB 273
3 [2015] FWCFB 540
4 (2005) 139 IR 34
5 [2009] AIRC 438
6 (2005) 139 IR 34
7 (2005) 139 IR 34 at 40
8 MA000004.
9 [2016] FWCFB 3591
10 [2000] HCA 47; (2000) 203 CLR 194 at [19] per Gleeson CJ and Gaudron and Hayne JJ
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