Sphere Healthcare Pty Limited v Australian Workers' Union
[2021] FWCFB 4361
•22 JULY 2021
| [2021] FWCFB 4361 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.604 - Appeal of decisions
Sphere Healthcare Pty Limited
v
Australian Workers' Union
(C2021/2954)
VICE PRESIDENT HATCHER | SYDNEY, 22 JULY 2021 |
Appeal against decision [2021] FWC 2507 of Deputy President Cross at Sydney on 5 May 2021 in matter number AG2020/3326.
[1] This decision reproduces in edited form the decision and reasons which were stated on transcript at the conclusion of the hearing conducted in relation to this matter on 21 July 2021.
[2] Sphere Healthcare Pty Ltd (appellant) has lodged an appeal, for which permission to appeal is required, against a decision of Deputy President Cross issued on 5 May 2021 1 (decision). In that decision, the Deputy President dismissed an application made by the appellant pursuant to s 222 of the Fair Work Act 2009 (FW Act) to terminate the Sphere Healthcare Pty Ltd Enterprise Agreement 2018-2020 (Agreement). The Deputy President did so on the basis that he was not satisfied that the appellant had complied with the applicable requirements in s 220(2) of the FW Act. The appellant contends in its appeal that the Deputy President erred in reaching that conclusion.
[3] Section 220(1) permits an employer to request the employees covered by an enterprise agreement vote to approve the termination of that agreement. Relevantly, in respect of such a request, s 220(2) requires the employer before making the request to take all reasonable steps to notify “the employees” of the time, place and method of the vote and to give “the employees” a reasonable opportunity to decide whether they want to approve the proposed termination. Section 221 provides in relation to a single enterprise agreement that the termination is agreed to when a majority of employees who cast a valid vote approve the termination. Section 222(1) provides that if the termination of an enterprise agreement has been agreed to, a person covered by the agreement must apply to the Commission for the approval of the termination of the agreement. Section 223 provides that if such an application is made, the Commission must approve the termination if it is satisfied as to four matters, which relevantly include, in paragraph (a), whether the employer complied with s 220(2) and, in paragraph (d), that the Commission considers that it is appropriate to approve the termination taking into account the views of any employee organisation covered by the agreement.
[4] The relevant facts of this matter may non-controversially be summarised as follows. The Agreement, by clause 2, applies to and covers the appellant, the Australian Workers’ Union (AWU) and employees who fall within specified classifications in the Agreement. However, both the appellant and the AWU agree that the coverage clause is to be read subject to clause 4, which provides that “This Agreement will operate at the employer’s premises at 12 Church Road, Moorebank, New South Wales, 2170”. The nominal term of the Agreement is for a period of two years and that period expired on 12 April 2021.
[5] At the location specified in clause 4 of the Agreement, the appellant previously operated a manufacturing facility. It is not in dispute that the appellant company experienced some financial difficulties in 2019, which caused it to go into administration and led to a change in the ownership of the company. There was a restructure of the operations in April 2020, which led to some 15 redundancies occurring, leaving a workforce of approximately 140 at the Moorebank premises. On 9 July 2020, the facility at Moorebank was destroyed by a large fire. This caused the business operations at the site to cease and, on 10 July 2020, the majority of employees were stood down because they had no work to perform. In August 2020, the appellant advised that all remaining employees covered by the Agreement would be made redundant and, in a staged process, all employees were terminated for redundancy by 25 September 2020. On 21 September 2020, the appellant re-engaged five terminated employees on fixed term contracts to undertake the decommissioning of machinery and equipment at the Moorebank premises. While these five employees were so engaged, the appellant initiated a process to obtain their approval to terminate the Agreement. On 21 October 2020, the five employees voted in a show of hands to terminate the Agreement in accordance with the employer’s request, and the application pursuant to s 222 was lodged on 4 November 2020. That application was opposed by the AWU.
[6] In his decision, the Deputy President found that he was not satisfied that the appellant had complied with s 220(2) on the basis that the steps required to be undertaken by the employer had not in fact been undertaken with respect to the 140 employees who had recently been made redundant. The Deputy President reasoned that the 140 employees were “usually employed” by the appellant and covered by the Agreement as at 21 October 2020 and therefore that the obligations in s 220(2) were applicable to them. On that basis, he determined that he could not approve the termination of the Agreement because he was not satisfied as to the matter in s 223(a). In its appeal grounds and submissions, the appellant contends in various ways that the Deputy President was wrong to conclude that the 140 employees were subject to the requirement in s 220(2).
[7] In the hearing in relation to the appellant’s appeal which we conducted today, the appellant tendered and we received a statement of evidence of Mr Zhen Cai, who is described as the “authorised legal representative” of the appellant, dated 16 July 2021. In that statement of evidence, Mr Cai gave evidence to the following effect:
• the appellant is highly unlikely to recommence business operations in at least the next two years;
• it has not employed anyone since the five fixed-term employees’ employment terminated on 11 November 2020, nor has it offered employment to anyone; and
• its lease at the Moorebank site has been terminated, meaning that if the appellant ever does resume operations, it will not be at the Moorebank site.
[8] Having regard to the circumstances so described, we are not satisfied that it would be in the public interest to grant permission to appeal, nor do we consider that there are discretionary grounds to justify the grant of permission to appeal. Irrespective of the merits of the appeal, we consider that it is entirely lacking in practical utility for two reasons. The first reason is that, having regard to the evidence of Mr Cai, the position is that the Agreement cannot have any practical operation in the future. By clauses 2 and 4 of the Agreement, it covers the appellant and its employees only at the Moorebank site and nowhere else. The AWU concedes, properly, that this is the case. The evidence is clear that the appellant will not be in a position to ever recommence operations at the Moorebank site. Therefore, whether the Agreement is terminated or not, it will not have any future practical effect on the interests of the appellant, the appellant’s former or future employees or the AWU. In that context, it appears that the determination of the appeal would not have a practical purpose.
[9] Secondly, and in any event, if notwithstanding this the appellant still seeks to have the Agreement terminated, it may apply to do so pursuant to s 225 of the FW Act, given that the nominal term of the Agreement has now expired. The determination of any such application in accordance with s 226 of the FW Act does not give rise to any consideration of the issue arising in this appeal, namely what persons were entitled to vote to agree to the termination of the Agreement. Section 226 does not require employee agreement in order for the Commission to terminate the agreement. It only requires, firstly, that the Commission be satisfied that it is not contrary to the public interest to terminate the agreement and, secondly, that the Commission form the view that it is appropriate to terminate the agreement taking into account all the circumstances, including the views of the employer, the employees and each employee organisation and the circumstances of these, including the likely effect it will have on them. Those requirements do not appear to us to amount to much of a hurdle, given there remain no employees of the employer and the Agreement can have, for the reasons already described, no future sphere of operation. In contrast to that course, if we grant permission to appeal, it will be necessary for us to consider the difficult issue raised by the appeal as to which employees were entitled to vote in respect of the request to terminate the Agreement. Even if, in accordance with the submissions of the employer, we upheld the appeal, it would still be necessary for the Commission to be satisfied that the termination of the Agreement was appropriate in circumstances where the AWU contends that it was not appropriate having regard to the peculiar circumstances in which the vote to terminate the Agreement occurred. That to us does not appear to be a convenient course, having regard to the alternative of a s 225 application.
[10] For these reasons, we have decided to refuse permission to appeal. If, having regard to our reasons, the appellant decides that it wishes to make a s 225 application, it may contact the chambers of the presiding member advising of its intention to do so and the presiding member will arrange for an expedited hearing of the application before a member of this Full Bench.
[11] We refuse to grant permission to appeal and these proceedings are now terminated.
VICE PRESIDENT
Appearances:
Mr S Kelleher on behalf of the Appellant.
Mr A Sage on behalf of the Respondent.
Hearing details:
2021.
Sydney (via video-link):
21 July.
Printed by authority of the Commonwealth Government Printer
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1 [2021] FWC 2507
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