Shop, Distributive and Allied Employees Association
[2018] FWCA 176
•9 JANUARY 2018
| [2018] FWCA 176 |
| FAIR WORK COMMISSION |
| decision |
Fair Work Act 2009
s.225—Enterprise agreement
Shop, Distributive and Allied Employees Association
(AG2017/5493)
Independent Supermarkets ACT Certified Agreement 2010
| Retail industry | |
| Deputy President Kovacic | CANBERRA, 9 JANUARY 2018 |
Application for termination of the Independent Supermarkets ACT Certified Agreement 2010.
The Shop, Distributive and Allied Employees Association (the SDAEA – the Applicant) made an application under s.225 of the Fair Work Act 2009 (Cth) (the Act) to terminate the Independent Supermarkets ACT Certified Agreement 2010[1] (the Agreement). The application was received by the Fair Work Commission (the Commission) on 14 November 2017.
The Agreement has a nominal expiry date of 28 February 2013.
The relevant employers covered by the Agreement include: Sofia Pty Limited T/A IGA Supermarket Deakin; MGA Independent Retailers; Macinly Pty Ltd T/A IGA Supermarket Ainslie; Thet Pty Limited T/A IGA Fraser; Cavo Pty Ltd T/A IGA Supermarket Kaleen; Prodos Investments Pty Ltd T/A IGA Supermarket Kingston; Johanna Pty Limited T/A IGA Supermarket Richardson; Marianthy Pty Limited T/A IGA Supermarket Watson; and Yarra DMX Pty Ltd T/A IGA Supermarket Yarralumla.
The Master Grocers Association (MGA) lodged a notice of representation for each employer, with the exception of Prodos Investments Pty Ltd T/A IGA Supermarket Kingston who have entered into voluntary administration and Thet Pty Limited T/A IGA Fraser who had been deregistered (the employers represented by the MGA are referred to the Employers in this Decision).
The relevant provisions of the Act are as follows:
“225Application 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 of the issues
With regard to the requirements of s.225, as mentioned above the Agreement has passed its nominal expiry date. As the SDAEA is covered by the Agreement, I am therefore satisfied that it is entitled to make an application to the Commission for termination of the Agreement.
I turn now to deal with the considerations set out in s.226 of the Act.
s.226(a) – Public Interest
The SDAEA and the Employers submitted that it was not contrary to the public interest to terminate the Agreement.
A Statutory Declaration was filed by Ms Julia Fox, National Assistant Secretary of the SDAEA, in support of the SDAEA’s application. Ms Fox declared inter alia that the terms and conditions provided in the Agreement had fallen below the minimum terms and conditions of the General Retail Industry Award 2010[2] (the Award). Ms Fox further contended that increases in the rates of pay provided for in the Agreement had not kept up with the increases in the Award such that over time the buy-out of penalty rates provided for in the Agreement had been absorbed and the Agreement’s base rates of pay no longer compensated employees for the lower penalty rates in the Agreement. This, according to Ms Fox, resulted in employees working evenings and on weekends being worse off than under the Award. Attached to Ms Fox’s Statutory Declaration was a summary of a comparison of the Agreement against the Award. Among other things that comparison indicated that:
· the Award provided for an additional loading of 25 per cent for work on a Saturday, whilst the Agreement provided no such entitlement (I note that the Agreement actually provides for payment of a 25% loading for ordinary hours of work performed between 9:00 pm and midnight on a Saturday – see clause 18.1.2 of the Agreement);
· the Award provided for an additional loading of 95 per cent for work on a Sunday, whilst the Agreement provided an additional payment of 50 per cent for work performed between the hours of 7:00 am and 9:00 pm and 75 per cent for work performed between 9:00 pm and midnight; and
· the Award provided for a casual loading of 25 per cent, whilst the Agreement provided for a casual loading of 17.5 per cent.
Taken together, the above considerations support a finding that it is not contrary to the public interest to terminate the Agreement.
s.226(b)(i) – the views of the employees, each employer, and each employee organisation (if any), covered by the agreement
On 17 November 2017 the Commission issued Directions instructing those employers party to the Agreement to provide a copy of the Directions and the Statutory Declaration filed by the SDAEA to all employees covered by the Agreement by close of business on 24 November 2017. The Directions stated that any party, including any employee and employer covered by the Agreement, who wanted to provide their views on the application could do so by providing a written statement to my chambers. Any written statements were to be provided by close of business on 8 December 2017.
On 8 December 2017 Ms Marie Brown, National Legal Counsel with the MGA, filed a statement on behalf of the Employers advising that they do not oppose termination of the Agreement. The MGA stated that some 250 employees were covered by the Agreement and advised that no employees had expressed any views, positive or negative, in regard the termination of the Agreement.
No other written statements were received by the Commission.
In short, the views received by the Commission either support or do not oppose termination of the Agreement.
s.226(b)(ii) – the circumstances of those employees, employers and organisations including the likely effect that the termination will have on each of them
In her Statutory Declaration Ms Fox declared that termination of the Agreement would have a beneficial impact on the terms and conditions of employees covered by the Agreement.
The MGA submitted that the effect of the termination on the Employers would be significant in that a great financial burden would result in moving from the Agreement to the Award, highlighting in particular the higher penalty rates that would apply should the Agreement be terminated and the Award apply. The MGA stated that the Employers may therefore be required to undertake business restructures and reduce the hours of employees as a result of the impact of moving to the Award. The MGA further submitted that the Employers would also be required to undertake significant administrative tasks such as updating all wage rates, rosters, policies and other workplace arrangements to ensure compliance with the Award. Given that the Employers were small business enterprises with limited resources to introduce the change quickly, the MGA requested that the Commission consider a transitional period of four months in order to allow the Employers to fully implement the terms and conditions applicable to the Award in an efficient and effective manner.
The Commission subsequently sought the views of the SDAEA regarding the MGA’s proposal for a four month transitional period. The SDAEA responded on 4 January 2018 submitting that while termination should be effected in as timely a manner as possible, the exact date was a matter for the Commission. The SDAEA also noted that the Award provided for a 7 or 14 day notification period for a permanent change of roster.
Based on the above, termination of the Agreement will impact on those employees and employers covered by the Agreement, with employers likely to be negatively affected by higher costs. Termination of the Agreement may also potentially result in some employees being negatively affected as a result of changes to their hours of work. Overall, however, I consider it likely that employees will benefit from termination of the Agreement. Further, I note that it was not disputed that the Agreement results in terms and condition which are less than the Award safety net. Taken together these considerations support a finding that the Agreement should be terminated despite the potential negative impacts.
As to the MGA’s suggestion regard a transition period, having regard to the MGA’s and SDAEA’s submissions on this issue, I consider a transitional period of 4 months too long in circumstances where employees are potentially disadvantaged by the Agreement relative to the Award. However, I do consider that some transition period is warranted given the consequences of termination of the Agreement and the changes entailed in moving to the Award. To that end, I consider a period of six weeks should provide an adequate period for the employers covered by the Agreement to make the necessary arrangements to successfully transition to the Award.
Summary
Having regard to the requirements of s.226 of the Act and based on the material that is before the Commission, I am satisfied that it is not contrary to the public interest to terminate the Agreement and that it is appropriate to do so having regard to all the circumstances. As such, consistent with s.226 of the Act the Commission must terminate the Agreement.
Conclusion
Pursuant to s.226 of the Act, the Agreement is terminated. The termination of the Agreement shall operate from 20 February 2018. An Order to that effect will be issued in conjunction with this Decision.
[1] AE882315
[2] MA000004
Printed by authority of the Commonwealth Government Printer
<AE882315, PR599392>
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