Southcorp Wines Pty Ltd T/A Treasury Wine Estates
[2023] FWC 711
•24 MARCH 2023
| [2023] FWC 711 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.225—Enterprise agreement
Southcorp Wines Pty Ltd T/A Treasury Wine Estates
(AG2023/397)
TREASURY WINE ESTATES VINTNERS LTD - GREAT WESTERN WINERY ENTERPRISE AGREEMENT 2014
| Wine industry | |
| COMMISSIONER LEE | MELBOURNE, 24 MARCH 2023 |
Application for termination of the Treasury Wine Estates Vintners Ltd - Great Western Winery Enterprise Agreement 2014
On 22 February 2023, Southcorp Wines Pty Ltd T/A Treasury Wine Estates (Applicant) lodged an application pursuant to s.225 of the Fair Work Act 2009 (Act) to terminate the Treasury Wine Estates Vintners Ltd - Great Western Winey Enterprise Agreement 2014 (Agreement). The Agreement has passed its nominal expiry date of 30 June 2017.
The Agreement covers the Employer and the Australian Workers' Union (AWU).
Legislation
Section 225 of the Act 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.”
Section 226 of the Act sets out the conditions which must be met for an agreement to be terminated pursuant to s. 225 of the Act as follows:
“226 Terminating an enterprise agreement after its nominal expiry date
(1) 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 the continued operation of the agreement would be unfair for the employees covered by the agreement; or
(b) the FWC is satisfied that the agreement does not, and is not likely to, cover any employees; or
(c) all of the following apply:
(i)the FWC is satisfied that the continued operation of the enterprise agreement would pose a significant threat to the viability of a business carried on by the employer, or employers, covered by the agreement;
(ii)the FWC is satisfied that the termination of the enterprise agreement would be likely to reduce the potential of terminations of employment covered by subsection (2) for the employees covered by the agreement;
(iii)if the agreement contains terms providing entitlements relating to the termination of employees’ employment--each employer covered by the agreement has given the FWC a guarantee of termination entitlements in relation to the termination of the agreement.
(1A) However, the FWC must terminate the enterprise agreement under subsection (1) only if the FWC is satisfied that it is appropriate in all the circumstances to do so.
(2) This subsection covers a termination of the employment of an employee:
(a) at the employer’s initiative because the employer no longer requires the job done by the employee to be done by anyone, except where this is due to the ordinary and customary turnover of labour; or
(b) because of the insolvency or bankruptcy of the employer.
(3) In deciding whether to terminate the agreement, the FWC must consider the views of the following covered by the agreement:
(a) the employees (unless there are no employees covered by the agreement);
(b) each employer;
(c) each employee organisation (if any).
Note: The President may be required to direct a Full Bench to perform a function or exercise a power in relation to the matter if any of the employers, employees, or employee organisations, covered by the agreement oppose the termination (see subsection 615A(3)).
(4) In deciding whether to terminate the agreement (the existing agreement), the FWC must have regard to:
(a) whether the application was made at or after the notification time for a proposed enterprise agreement that will cover the same, or substantially the same, group of employees as the existing agreement; and
(b) whether bargaining for the proposed enterprise agreement is occurring; and
(c) whether the termination of the existing agreement would adversely affect the bargaining position of the employees that will be covered by the proposed enterprise agreement.
(5) In deciding whether to terminate the agreement, the FWC may also have regard to any other relevant matter.”
Consideration
As the enterprise agreement has passed its nominal expiry date then, consistent with s.225 of the Act the employer covered by the Agreement can apply to the Commission for termination of the Agreement. Clause 5 of the Agreement provides that the Agreement has a nominal expiry date of 30 June 2017. I am satisfied that the Employer has standing to bring the application under s.225(a) of the Act.
Question 2.1 of the Form F24C outlines why the employer believe that the continued operation of the Agreement would be unfair for the employees covered by the Agreement. Question 2.1 indicates:
“The Fair Work Commission can be satisfied that the continued operation of the Treasury Wine Estates Vintners Pty Ltd - Great Western Winery Enterprise Agreement 2014 (Winery Agreement), would be unfair to employees covered by the Winery Agreement, given that:
a)the Winery Agreement applies at the Moyston Road, Great Western site (Site) of TWE;
b)there are currently two permanent employees who perform work covered by the Winery Agreement on a single day shift operation (one is classified as Grade 4 and one is classified as Grade 3), as well as four casual employees (one who is classified as Grade 4 and three who are classified as Grade 1) who are assisting with the 2023 vintage period; and
c)the last wage increase under the Winery Agreement came into effect from the first full pay period commencing on or after 1 July 2016; and
d)notwithstanding this, from the first full pay period on or after 1 October 2021, TWE agreed to apply a 2.5% increase to the rates of pay under the Winery Agreement, i.e. the employees are currently being paid rates of pay which are higher than those provided for in the Winery Agreement.”
I have taken into account and accept this evidence. With reference to s.226(1)(a) of the Act, I am satisfied that the continued operation of the Agreement would be unfair for the employees covered.
With regard to s.226(1A) of the Act, I am satisfied that it is appropriate in all the circumstances to terminate the enterprise agreement under s.226(1) of the Act. I am not aware of any circumstances that indicate that it is not appropriate to terminate the Agreement.
On the material before the me, s.226(2) of the Act is not relevant to this particular application.
Turning to s.226(3) of the Act, I have considered the views of the employees, each employer and each employee organisation.
Evidence as to the views of employees is provided in question 4 of the Form F24C as follows:
“On or around 18 January 2022, Greg Pearce, General Manager, and I [Mark Kindred] met with the two permanent employees covered by the Winery Agreement.
At that time, they were the only employees performing work covered by the Winery Agreement. At that meeting, I provided them with copies of the Winery Agreement and the Wine Award and discussed the proposed termination application with them. The employees were given an opportunity to go away and consider the materials and subsequently confirmed to me that they did not have any concerns with the proposed termination application.”
The employer as provided in question 4 of the Form F24C indicates:
“TWE desires that the Winery Agreement be terminated given that there are currently only two permanent employees who perform work covered by the Winery Agreement, and TWE pays employees covered by the Winery Agreement at rates of pay which are above the pay rates in the Winery Agreement.
TWE does not intend to employ additional individuals, on a permanent basis, to perform work at the Site and be covered by the Winery Agreement in the future.
TWE intends to continue to:
remunerate the current employees in accordance with the higher rates of pay currently paid by TWE; and
apply the redundancy provisions in Appendix 2 to the Winery Agreement in the event that the employment of either of the permanent employees is terminated on redundancy grounds.TWE includes, at Annexure A to this declaration, an undertaking to this effect. If the Winery Agreement is terminated by the Fair Work Commission, the Wine Award will apply to currently employees covered by the Winery Agreement (save in respect of the entitlements noted above).
The Wine Award includes certain entitlements that are more favourable to the employees. Examples are set out in the table below.”
On 24 February 2023 my Chambers sent an email to the AWU seeking their views in relation to the application to terminate the Agreement. The AWU was given until no later than 4.00pm on Friday, 3 March 2023 to provide their views. No response was received by the AWU.
Further, the views of the employee organisation as provided in question 4 of the Form F24C indicates:
“I [Mark Kindred] am informed by Marissa Panazzolo, Workplace Relations and HR Business Partner that, on 15 November 2022, she spoke with Mick Derrick of the Australian Workers' Union (AWU) regarding TWE's proposal to terminate the Winery Agreement.
Ms Panazzolo advised Mr Derrick that TWE's intention was to continue to pay the employees at their current rates of pay, which are higher than under the Wine Award. Ms Panazzolo said that Mr Derrick did not raise any concerns with TWE's proposed termination application.”
With regard to s.226(3) of the Act, considering the response provided, I am satisfied that there is no opposition to the termination of the Agreement from the employees, each employer and each employee organisation.
On the material before the me, s.226(4) of the Act has no relevant application. There is no evidence that any of the circumstances contemplated in s.226(4) are occurring. Further question 4 of the Form F24C indicates the parties to the Winery Agreement have not sought to renegotiate new terms and conditions since the Winery Agreement passed its nominal expiry date on 30 June 2017.
I am satisfied that it is appropriate, having regard to all the circumstances, including as set out in the Form F24B and the Form F24C to terminate the enterprise agreement under s.226 of the Act.
In accordance with section 227 of the Act the termination of the Agreement shall operate from the date of this decision. An order to that effect will be separately issued.[1]
COMMISSIONER
[1] PR760572
Printed by authority of the Commonwealth Government Printer
<AE409517 PR760567>
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