Shop, Distributive and Allied Employees Association

[2019] FWCA 316

[2019] FWCA 316

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.225—Enterprise agreement

Shop, Distributive and Allied Employees Association
(AG2017/894)

Ms Venetta Dimopoulos

(AG2018/1694)

SFG NATIONAL RETAIL ENTERPRISE AGREEMENT 2011

Retail industry
DEPUTY PRESIDENT CLANCY	MELBOURNE, 18 JANUARY 2019

Application for termination of the SFG National Retail Enterprise Agreement 2011.

[1] On 20 March 2017, the Shop, Distributive and Allied Employees Association (SDA) filed an application (SDA Application) pursuant to s.225 of the Fair Work Act 2009 (Cth) (the Act) to terminate the SFG National Retail Enterprise Agreement 2011 (the Agreement).

[2] Following the filing of the SDA Application, parties commenced bargaining for a new enterprise agreement. This became the preferred course of action of the SDA and I subsequently convened numerous telephone conferences to receive updates from the parties as to their progress.

[3] On 27 April 2018, Ms Venetta Dimopoulos filed an application (Dimopoulos Application) to terminate the Agreement. At that time, Ms Dimopoulos was an employee of Specialty Fashion Group Ltd (SFG). On 11 May 2018, Ms Dimopoulos also requested her application be paused until 2 September 2018 while bargaining took place.

[4] On 14 June 2018, the SDA and SFG’s representative advised the Fair Work Commission (the Commission) that certain of its brands (Millers, Katies, Crossroads, Autograph and Rivers) had been divested to Noni B Limited (Noni B). It was further noted that bargaining was to resume in late July or early August 2018.

[5] On 10 September 2018, a telephone conference took place regarding the SDA Application and Dimopoulos Application (together, “the Applications”). It was confirmed that Noni B was now covered by the Agreement. It was also noted that the City Chic brand had not been divested to Noni B. Ms Dimopoulos advised she wished to pursue her application.

[6] Accordingly, on 25 September 2018, following a mention/directions hearing, a Statement and Directions was issued. It was noted in the Statement that if the Applications were granted, the General Retail Industry Award 2010 (the Award) would apply to the wages and conditions of employees covered by the Agreement. It was advised that by virtue of s.313 of the Act, the Agreement also covers former employees of SFG who have transferred from SFG to Noni B from 1 July 2018. Consequently, the views and circumstances of the following groups were variously sought:

•  SFG;

•  Employees of SFG;

•  Noni B;

•  Employees of Noni B who transferred from SFG from 1 July 2018; and

•  The SDA.

[7] A copy of the Statement and Directions was required to be provided by SFG and Noni B to all relevant employees by 4.00pm on 12 October 2018.

[8] On 18 and 19 October 2018, submissions in support of the Applications were filed by Ms Dimopoulos and the SDA respectively.

[9] On 15 November 2018, SFG’s representative wrote to the Commission and advised that SFG, Noni B and the SDA had reached a consent position that the Agreement should be terminated with effect from the first full pay period after 1 March 2019. A directions hearing was requested as soon as possible given there was an impending deadline for the filing and circulation of material.

[10] On 16 November 2018, I conducted a directions hearing. It was confirmed that Ms Dimopoulos, the SDA, SFG and Noni B had reached a consent position on the terms outlined above in paragraph [9]. Amended directions were then issued by the Commission which required SFG and Noni B to notify all SFG employees and Noni B transferring employees of the consent position. Employees who wished to do so were given the opportunity to file material which expressed their view regarding the consent position by 4.00pm on 7 December 2018. It was noted that in the absence of any material being filed by any employee, a telephone hearing would take place on 12 December 2018.

[11] As no material was received from any employee, the telephone hearing proceeded on 12 December 2018. It was confirmed that the directions issued on 16 November 2018 had been complied with by Noni B and SFG and proposed, by consent, that the following order be made:

“The SFG National Retail Agreement 2011 be terminated with effect from Monday, 4 March 2019.”

[12] I advised the parties I would consider the consent position and issue my decision in due course.

Legislation

[13] The Act relevantly 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.

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.”

Consideration

Section 225 of the Act

[14] I am satisfied the Agreement has passed its nominal expiry date of 30 June 2014.

[15] I am also satisfied Ms Dimopoulos and the SDA are each eligible to apply to the Commission for the termination of the Agreement. At the time of filing her application, Ms Dimopoulos was an employee of SFG and had standing to bring the application pursuant to s.225(b) of the Act. I note through the transfer of business provisions under the Act, Ms Dimopoulos is still covered by the Agreement. The SDA is eligible to apply for the termination of the Agreement pursuant to s.225(c) of the Act.

Section 226(a) of the Act – Public Interest

[16] As regards s.226(a) of the Act and the manner in which the public interest is to be assessed, the Full Bench in Aurizon Operations Limited; Aurizon Network Pty Ltd; Australian Eastern Railroad Pty Ltd 1(Aurizon)cited various passages from the Full Bench of the Australian Industrial Relations Commission’s decision in Re Kellogg Brown and Root, Bass Strait (Esso) Onshore/Offshore Facilities Certified Agreement 20002(Kellogg) which had concerned the corresponding, but not identical, provision from the Workplace Relations Act 1996. Relevantly, these passages included:

“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.” 3

[17] It is also relevant to highlight the Full Bench in Aurizon concluded that it cannot be expected that the terms and conditions of an agreement will continue unaltered in perpetuity after it has passed its expiry date. This is because the Act contemplates the terms and conditions of an agreement may be altered by making a new agreement or by terminating the existing agreement. 4

[18] As was also recognised in Aurizon, s.226 of the Act is not limited to circumstances in which an agreement no longer applies to any employee. The Act clearly contemplates an agreement that still applies to employees being terminated and prescribes a safety net upon termination in such circumstances. The prescribed safety net is not a prior agreement and nor are undertakings mandatory. Rather, the prescribed safety net is the relevant modern award created during the Award Modernisation process and the National Employment Standards (NES). In this case, the relevant modern award is the General Retail Industry Award 2010 (which I have referred to as the Award).

[19] In this application, the termination of the Agreement would not lead to an absence of award coverage for the employees as the Award provides for “proper industrial standards” within the meaning given to that term by Kellogg.

[20] The SDA submitted it would not be contrary to the public interest to terminate the Agreement as termination would be consistent with the objects of the Act and consistent with the maintenance of proper industrial standards. 5 Mr Gerard Dwyer, National Secretary of the SDA, filed a statutory declaration accompanying the SDA Application and submitted the following matters make termination of the Agreement not contrary to the public interest:

•  The terms and conditions in the Agreement have fallen below the minimum terms and conditions of the Award;

•  The penalty rates prescribed in the Agreement are below those in the Award;

•  Increases in the base rate of pay have not kept up with the rate of increases in the Award so that over time the buy-out of penalty rates has been absorbed and the base rate of pay no longer compensates for lower penalty rates leaving employees working evenings, on Saturdays and Sundays worse off than under the Award;

•  Upon consideration of all the rates of pay and terms and conditions of employment, employees suffer a disadvantage when compared with the rates of pay and terms and conditions of employment under the Award; and

•  The Award provides a fair and relevant safety net of terms and conditions for employees engaged in the retail industry. It is not in the public interest for an enterprise agreement which has passed its nominal expiry date to fall below this safety net.

[21] Having regard to the above matters, and in circumstances where there was no material before me suggesting otherwise, I am satisfied it is not contrary to the public interest to terminate the Agreement.

Section 226(b) of the Act – Appropriateness

[22] The approach to assessing appropriateness by taking into account all the circumstances, as enunciated by the Full Bench in Aurizon, is to have reference to the construction of s.226 and the contextual matters that bear upon that construction, as well as giving specific consideration to the matters identified in ss. 226(b)(i) and (ii):

“All of the circumstances also need to be taken into account in considering whether termination of the agreements is appropriate. In particular the views of employers and employees covered by the agreement, their circumstances, and the impact of termination need to be taken into account. The requirement in s. 226(b) to take into account all of the circumstances including those set out in s. 226(b)(i) and (ii) is a requirement to take the matters into account and to give them due weight in assessing whether it is appropriate to terminate an enterprise agreement. In assessing appropriateness by taking into account all of the circumstances, we approached the task by reference to the construction of s. 226 and the contextual matters that bear upon that construction dealt with earlier as well as giving specific consideration to the matters identified in s. 226(b)(i) and (ii).” 6 (My emphasis, reference omitted)

[23] I intend to adopt this approach.

[24] Ms Dimopoulos, an employee, filed an application to terminate the Agreement. Clearly, she supports the Agreement being terminated. Ms Dimopoulos submitted employees are better off under the Award compared to the Agreement.

[25] I am satisfied the employees were on notice as to the Applications before me and were given a reasonable period of time to file material should they have wished to do so. However, besides Ms Dimopoulos, there were no views expressed by any other employee. In these circumstances, it does not appear that any employees object to the Applications. As to the circumstances of the employees and the likely effect that termination of the Agreement would have on them, I note the Agreement covers full-time, part-time and casual team members, as well as trainees. In the event the Agreement is terminated, the Award or any new agreement approved by the Commission would apply to their employment.

[26] The SDA, an employee organisation covered by the Agreement, also filed an application to terminate the Agreement, which itself evidences its support of termination. In response to the question, “what effect would termination of the agreement have on you or, if you represent a group of employees or employers, those you represent,” Mr Dwyer declared termination of the Agreement would have a beneficial impact on the terms and conditions of employees and they would have better rates of pay under the Award. Mr Dwyer also noted in response to that question that the SDA seeks termination of the Agreement.

[27] Noni B and SFG are employers covered by the Agreement. Neither employer has put substantive material before me in relation to s.226(b) of the Act. However, given the consent position reached, I am of the view the employers do not oppose termination of the Agreement from 4 March 2019 and their circumstances are such that they are content to continue bargaining for a new agreement and/or are otherwise comfortable moving to the Award in March 2019.

Conclusion

[28] As outlined in paragraph [21] above, I am satisfied it is not contrary to the public interest to terminate the Agreement.

[29] Ms Dimopoulos, the SDA, Noni B and SFG have reached a consent position that the Agreement be terminated with effect from Monday, 4 March 2019. Should a new agreement not be made by this time, the Award will apply. Having regard to the terms of the Agreement in their entirety as they apply to the employees and the fact that they will be covered by the Award if the Agreement is terminated and no new agreement is made, I am satisfied it is appropriate in all the circumstances to terminate the Agreement.

[30] Further to the above findings, the Act requires that I terminate the Agreement. In accordance with s.227 of the Act, the Agreement is terminated with effect from Monday, 4 March 2019.

[31] An order to this effect will be issued today.

DEPUTY PRESIDENT

 1   [2015] FWCFB 540.

 2 (2005) 139 IR 34.

 3   Ibid at 40.

 4   [2015] FWCFB 540 at [176].

 5   SDA’s Outline of Submissions dated 19 October 2018.

 6   [2015] FWCFB 540 at [167].

Printed by authority of the Commonwealth Government Printer

<AE886373  PR703979>