Sicame Australia Pty Ltd

[2020] FWCA 1212

[2020] FWCA 1212

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.225 - Application for termination of an enterprise agreement after its nominal expiry date

Sicame Australia Pty Ltd
(AG2020/359)

SICAME AUSTRALIA PTY LTD ENTERPRISE AGREEMENT 2016/2019

Manufacturing and associated industries
COMMISSIONER SPENCER	BRISBANE, 5 MARCH 2020

Application for termination of the Sicame Australia Pty Ltd Enterprise Agreement 2016/2019.

[1] An application pursuant to s.225 of the Fair Work Act 2009 (the Act) was made by Sicame Australia Pty Ltd (the Applicant) to terminate the Sicame Australia Pty Ltd Enterprise Agreement 2016/2019 (the Agreement).

[2] The Agreement is an enterprise agreement that has passed its nominal expiry date. The nominal expiry date for the Agreement was 1 June 2019.

[3] Further, ss.225 and 226 of the FW Act relevantly provide:

“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.”

[4] Ms Kate Charlotte Annable, Administration and Human Resources Manager for the Applicant filed a Form 24C Statutory Declaration in support of the application to terminate the Agreement. The Applicant sought the termination of the Agreement on the basis that the affected employees would revert to the Manufacturing and Associated Industries and Occupations Award 2010 (the Award).

[5] Ms Annable confirmed in her statutory declaration that:

•  The Agreement’s nominal expiry date had passed;

•  There is currently no bargaining under way for a new enterprise agreement to replace the existing agreement;

•  No employees of the Applicant have requested the Applicant to bargain for a new enterprise agreement to replace the existing agreement; and

•  The Applicant does not intend to commence bargaining for a new agreement to replace the existing agreement, and wishes to revert to the terms of the Award, as the basis on which its current employees covered by the Agreement are employed.

[6] Directions were issued to the Applicant, requiring the Applicant to provide further material and submissions addressing s.226 of the Act. In response Ms Annable provided a further statutory declaration in support of the termination, confirming that the following communications were provided to employees in relation to the application:

•  The Applicant sent a letter on 21 January 2020 seeking the views of the affected employees on whether the Agreement should be terminated;

•  In response to the Directions, a series of meetings were held with employees on 2 March 2020. These meetings were held in small groups in the training room. Three employees had individual meetings due to their unavailability or absence at the time;

•  Employees were told the reason for the meeting was in relation to the Application to terminate the EBA and move back to the Award;

•  Individually addressed letters with attachments were handed out to Employees at the meetings on 2 March 2020 notifying them of the effect of termination of the Agreement. A copy of that correspondence was provided to the Commission;

•  This occurred prior to seeking their opinion on termination of the Agreement, (which was done on 4 March 2020).

•  Employees were given individually addressed letters, along with attachments consisting of sample pay details relevant to their pay and copies of the application submitted (Forms F23B and F23C) as well as the Directions Order. Three absent employees were uncontactable by email and were sent copies by mail on 4 March 2020. During the meeting all employees were given time to read the documentation provided.

[7] In relation to the comparison of wages and entitlements Ms Annable stated:

•  Although the Award offers lower pay rates and less generous loadings and penalty rates in some instances than does the Agreement, the Applicant will remain contractually bound to pay above-award rates and to continue to pay the loadings and penalties of the Agreement. Attached and marked as Annexure 4 is an example fortnightly pay using an employee’s regular hours under both the Agreement and under the Award.

•  Annexure 4 to the Employers submission also contained an example fortnightly pay using an employee’s regular hours under the Agreement and under the Contract.

•  A copy of one such Contract, containing provisions and entitlements identical to those of all other Employee contracts, is attached to this affidavit and marked as Annexure 3. The Contract (Annexure 3) contains provisions identical to or more generous than the Award.

•  One provision of the Contract is for pay increases at least equal to the Consumer Price Index. This is the same provision provided by the Agreement with the exception that the Agreement does not provide for any increase after the Nominal Expiry Date. As a consequence, the Agreement will progressively have less effect on employees’ pay and conditions, with the Award and Contract gradually becoming the relevant determining instruments whether the Agreement is terminated or not.

[8] The statutory declaration also confirmed that the views of the employees were sought, with Ms Annable stating that:

•  On 4 March 2020 the employees were invited to express their views by voting. Each employee was issued with an anonymous voting paper. A voting box labelled as such was provided and made available to employees in the First Aid Room located in the Factory. The First Aid Room was accessible to all employees at all times. The box was locked so voting papers could be inserted but not removed. All employees had until 12pm on 4 March 2020 to lodge their vote.

•  At 12:10pm on 4 March 2020 Ms Annable collected the voting box and counted the votes. The tallies were: 1 dummy, 6 No, and 34 Yes.

•  The votes were counted and verified by a second administrative employee as correct.

[9] A copy of the voting document was provided to the Commission.

[10] In relation to the public interest, Ms Annable stated that the termination of the Agreement would lead to employees having conditions that were superior to those of the Award. The employees would retain all of the benefits of the Award, or the Agreement where it contains more generous loadings, combined with the above Award base rates of pay.

[11] Ms Annable submitted that the Applicant had determined that paying employees above the Award entitlements would have productivity and morale benefits and maintain the Applicant’s reputation as an employer of choice. Terminating the Agreement would mean the Applicant has only one industrial instrument to administer, without adversely affecting employee entitlements.

[12] It was further submitted by the Applicant that the termination of the Agreement would not result in a foreseeable risk of industrial action.

[13] Ms Annable stated that the termination would provide an advantage to all parties. The contractual undertaking of the Applicant to provide pay increases tied to the Consumer Price Index means the employees’ above Award pay will continue to increase at a level at or slightly above inflation. In a time of low wage growth, it was submitted that this represented a responsible workplace approach that provides a net benefit all round. On this basis the Applicant submitted that the termination would not be contrary to public interest.

CONCLUSION

[14] Taking into account the information provided in response to the matters in s.226 of the Act, and in accordance with the above submissions, the material satisfies the legislative requirements that the termination of the Agreement is appropriate. The termination will take effect from 12 March 2020.

[15] I Order accordingly.

COMMISSIONER

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