Southern Community Justice Centre Inc T/A Southern and Limestone Coast Community Justice Centre and Mediation SA

[2019] FWCA 337

[2019] FWCA 337

FAIR WORK COMMISSION

DECISION

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

Southern Community Justice Centre Inc T/A Southern and Limestone Coast Community Justice Centre and Mediation SA
(AG2018/6834)

SOUTHERN COMMUNITY JUSTICE CENTRE INC ENTERPRISE AGREEMENT 2004

Clerical industry
COMMISSIONER HAMPTON	ADELAIDE, 21 JANUARY 2019

Application for termination of the Southern Community Justice Centre Inc Enterprise Agreement 2004.

[1] This decision concerns an application by the Southern Community Justice Centre Inc T/A Southern and Limestone Coast Community Justice Centre and Mediation SA (the SCJC) pursuant to s.225 of the Fair Work Act 2009 (the FW Act). The application seeks to terminate the Southern Community Justice Centre Inc Enterprise Agreement 2004 (the Agreement). The Agreement was originally approved by the then Industrial Relations Commission of South Australia (IRCSA) in July 2004 under the Industrial and Employee Relations Act 1994 (SA). The Agreement had a nominal life of 24 months under the South Australian legislation but remained in force after that time. 1

[2] The Agreement is a collective agreement-based transitional instrument² for the purposes of the Fair Work (Transitional Provisional and Consequential Amendment) Act 2009 (the Transitional Act). This means, in effect, that the Agreement remained in force under the terms of the FW Act, subject to certain overriding provisions including the National Employment Standards.

[3] Item 16 of Schedule 3 of the Transitional Act provides that an agreement of this kind may be terminated by the Commission under Part 2-4 of the FW Act.

[4] Subdivision D of Division 7 of Part 2-4 of the FW 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;

(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.”

[5] The Application was accompanied by a Statutory Declaration of Mr Michael Donald, Human Resources Manager, relevantly setting out the grounds for the application to terminate the Agreement. Those grounds included considerations to the effect of the following:

•  All current SCJC employees have been given notice of the intention of the employer to apply to terminate the Agreement and all employees have confirmed their agreement to terminate it;

•  The Agreement predates the existence of the current relevant modern award, being the Social, Communities, Home Care and Disabilities Industry Award 2010 (the Modern award);

•  The Modern Award provides for better coverage of entitlements than the Agreement and therefore all employees will be at a disadvantage if the Agreement is not terminated; and

•  The Agreement is no longer considered necessary to ensure employee entitlements are appropriate and reasonable.

[6] Given the circumstances, the SCJC is entitled to apply for the termination of the Agreement pursuant to s.225 of the Act.

[7] The Commission issued directions on 20 December 2018 and the matter was listed for hearing. The directions included the requirement for the SCJC to provide a copy of the notice of listing and directions to all employees covered by the Agreement. The directions also explained the nature of the application and invited employees to express a view about the matter including by raising any concerns directly with the Commission. I note that SCJC has confirmed that all employees were provided a copy of the notice of listing and meetings were also conducted to explain the application prior to its lodgement.

[8] The Commission did not receive any communication from any employee covered by the Agreement expressing concerns or otherwise wishing to be heard in relation to the application. Given this fact, and the evidence provided by Mr Donald, I am satisfied that the employees support the application.

[9] A hearing by telephone was subsequently conducted on 21 January 2019 to deal with the matter. Ms McMorrine, the Executive Director of the SCJC, attended the hearing and in addition to confirming the above, indicated that the SCJC had, in effect, been applying the more beneficial conditions of the relevant modern award (as a minimum) for some years.

[10] The Agreement was designed to be read in conjunction with two (former) awards of the IRCSA then operating and, in effect, confirmed some more beneficial conditions including in relation to hours of work and salary packaging arrangements. The statutory environment in which the Agreement now operates is significantly different and the effect of the Agreement is to retain reference to the former awards and, at least in general terms, prevent the legal application of the Modern Award. 3

[11] Although the SCJC has applied more beneficial arrangements than required by the Agreement, it is appropriate that what is now a very much outdated and largely redundant instrument no longer apply. Employees will not be disadvantaged by the termination of the Agreement and the formal conclusion of the Agreement is clearly supported by the SCJC as the applicant employer.

[12] In all of the circumstances, I am satisfied that the termination of the Agreement would not be contrary to the public interest. I am also satisfied that the termination is appropriate having regard to the likely effect of that action and the circumstances and views of the employer and the employees. Given these findings and the terms of the FW Act provided in s.226, the Commission is obliged to terminate the Agreement.

[13] The Agreement is terminated and the termination will take effect on and from 11:59 pm on 21 January 2019.

COMMISSIONER

 1   Section 83 of the Industrial and Employee Relations Act 1994 (SA).

2 Item 2(2)(e) of Schedule 3 – The Agreement is a Preserved State Agreement within the meaning of the Transitional Act.

 3   Item 41 of Schedule 3A of the Transitional Act – the Agreement prevails over the modern award to the extent of any inconsistency.

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