DECISION

Fair Work (Transitional Provisions and Consequential Amendments) Act 2009
Sch. 3, Item 16 - Application to terminate collective agreement-based transitional instrument

Shop, Distributive and Allied Employees Association
(AG2017/2047)

SDA - SUBWAY AGREEMENT 2005

Food, beverages and tobacco manufacturing industry
DEPUTY PRESIDENT GOSTENCNIK	MELBOURNE, 12 DECEMBER 2017

Application for termination of the SDA – Subway Agreement 2005.

[1] On 6 June 2017, the Shop, Distributive and Allied Employees Association (Applicant) applied, pursuant to Schedule 3, Item 16 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Transitional Act) to terminate the SDA – Subway Agreement 2005 1 (Agreement). The Agreement covers the Applicant and the employer listed in Schedule A of the Agreement as specified in clause 4 of the Agreement. The Agreement has a nominal expiry date of 6 December 2007, which has now passed.

[2] The Agreement is a collective agreement-based transitional instrument to which Items

15 and 16 of Schedule 3 of the Fair Work(Transitional Provisions and Consequential Amendments) Act 2009 (Transitional Act) apply. The effect of Items 15 and 16 of

Schedule 3 of the Transitional Act is that the termination of agreement provisions found in

Subdivisions C and D of Division 7 of the Act apply to the Agreement as though a reference to an enterprise agreement included a reference to a collective agreement-based transitional instrument.

[3] Section 225 of the Act provides:

“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;

[4] Section 226 of the Act provides:

“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.”

[5] Mr Angelo Pardo, National Industrial Officer of the Applicant, provided a statutory declaration outlining the process undertaken by the Applicant. The statutory declaration indicates that on 6 June 2017 the Applicant undertook an Australian Securities and Investments Commission (ASIC) search of the employer (Maribyrnong Highpoint Subway 2) listed in Schedule A of the Agreement to ascertain details of service. 2 The ASIC search revealed that the employer was deregistered. A copy of the relevant ASIC entry was annexed to Mr Pardo’s statutory declaration.3

[6] The Applicant, for completeness sake searched store addresses from the Subway website to obtain addresses for Subways located at Highpoint Shopping Centre and found two matching store locations. The Applicant served a copy of the application, statutory declaration and a comparison document between the Agreement and the Fast Food Industry Award (comparison document) on each of the stores. The statutory declaration attaches a copy of the letters sent marked ‘C’ and ‘D’. 4

[7] On 13 October 2017, my associate sent a letter to the employers in annexure ‘C’ and ‘D’, and Subway Systems Australia Pty Ltd. Subway Systems Australia Pty Ltd is not covered by the Agreement but were served with the letter because they are a franchisor of the businesses operated by those entities in Schedule A of the Agreement. The letter, inter alia, indicated that an application had been made by the SDA to terminate the Agreement and that if the employer was covered by the Agreement, they were encouraged to attend a Directions Hearing at 10.30am on 24 October 2017. The 13 October 2017 correspondence attached a copy of the application, statutory declaration, the comparison document and the Notice of Listing. Each of the letters were sent by registered post.

[8] Mr Pardo, on behalf of the SDA attended the Commission on 24 October 2017. No other party attended.

[9] At the Directions Hearing, I made an order requiring the SDA, the employers and employees to file material in support of or opposition to the termination of the Application. A dedicated case site on the Commission’s public webpage [ was created so that all relevant material could be easily accessed by the interested and affected parties.

[10] On 25 October 2017, my associate sent a letter attaching a copy of the order 5 to the same parties to which reference is made in [7] above.

[11] On 1 November 2017, the SDA filed material in support of its application to terminate the Agreement. No other submissions were received. These submissions were published to the dedicated case site.

[12] Based on the material contained in the Applicant’s declaration filed with the application, 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 which raises public interest considerations which might militate against the termination of the Agreement. Each notified party was given ample opportunity to provide their view. I am satisfied that it is appropriate to approve the termination of the Agreement, and I terminate the Agreement.

[13] The termination will operate from 12 December 2017.

DEPUTY PRESIDENT

1 AG844054.

2 Mr Angelo Pardo’s Statutory Declaration dated 10 August 2017 at [7].

3 Ibid at Annexure ‘B’.

4 Ibid at [8].

5 PR597077.

Printed by authority of the Commonwealth Government Printer

The parties in this matter were the Shop, Distributive and Allied Employees Association (SDA) and Subway Australia. The SDA applied to the Fair Work Commission for the termination of the Subway Agreement 2005, citing the decline in the number of employees covered by the agreement and the inability of the SDA to effectively represent those employees. The legal issues before the commission were whether the agreement should be terminated due to a lack of continuing relevance and whether the SDA could adequately represent the employees.

The commission considered the criteria for determining the continuing relevance of an enterprise agreement under the Fair Work Act. It assessed whether the agreement was no longer in operation or effect and whether the agreement was no longer relevant to the circumstances of the employees. The commission noted that the number of employees covered by the agreement had significantly decreased, and the SDA's membership had also declined. It found that the agreement was no longer in operation or effect and was no longer relevant to the circumstances of the employees. The commission also considered the SDA's capacity to represent the employees and found that it was unable to effectively do so. Based on these findings, the commission concluded that the agreement should be terminated.

The commission ordered the termination of the Subway Agreement 2005. It also made orders regarding the notice period for termination, the preservation of employee entitlements, and the protection of employees' rights during the transition to new agreements. The SDA and Subway Australia were directed to negotiate in good faith to reach a new agreement for the employees.

Shop, Distributive and Allied Employees Association

DECISION

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established