Sportsmed SA Hospitals Pty Ltd

[2022] FWCA 2882

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

s.222—Enterprise agreement

Sportsmed SA Hospitals Pty Ltd

(AG2022/3442)

SPORTSMED SA Hospitals Pty Ltd Clerical Employees Enterprise Agreement 2019

Clerical industry
COMMISSIONER PLATT	ADELAIDE, 23 AUGUST 2022

Application for termination of the SPORTSMED SA Hospitals Pty Ltd Clerical Employees Enterprise Agreement 2019

On 16 August 2022, Sportsmed SA Hospitals Pty Ltd made an application for the termination of the SPORTSMED SA Hospitals Pty Ltd Clerical Employees Enterprise Agreement 2019 (the Agreement), an enterprise agreement that had passed its nominal expiry date, pursuant to s.222 of the Fair Work Act 2009 (the Act).

Relevant Legislation

Sections 222 and 223 of the Act are relevant to this application and are as follows:

“222 Application for the FWC's approval of a termination of an enterprise agreement

Application for approval

(1) If a termination of an enterprise agreement has been agreed to, a person covered by the agreement must apply to the FWC for approval of the termination.

Material to accompany the application

(2) The application must be accompanied by any declarations that are required by the procedural rules to accompany the application.

When the application must be made

(3) The application must be made:

(a) within 14 days after the termination is agreed to; or

(b) if in all the circumstances the FWC considers it fair to extend that period--within such further period as the FWC allows.

223 When the FWC must approve a termination of an enterprise agreement

If an application for the approval of a termination of an enterprise agreement is made under section 222, the FWC must approve the termination if:

(a) the FWC is satisfied that each employer covered by the agreement complied with subsection 220(2) (which deals with giving employees a reasonable opportunity to decide etc.) in relation to the agreement; and

(b) the FWC is satisfied that the termination was agreed to in accordance with whichever of subsection 221(1) or (2) applies (those subsections deal with agreement to the termination of different kinds of enterprise agreements by employee vote); and

(c) the FWC is satisfied that there are no other reasonable grounds for believing that the employees have not agreed to the termination; and

(d) the FWC considers that it is appropriate to approve the termination taking into account the views of the employee organisation or employee organisations (if any) covered by the agreement.”

The Application was made within the time frame required.

Attached to the application was a Statutory Declaration of Mr Alex Frost, Acting Chief Executive Officer, which is relevantly summarised as follows:

· The Agreement passed its nominal expiry date on 23 June 2022.

· An employee consultation process took place between 5-29 July 2022. The employer conducted three meetings with affected staff (both virtually and in-person), and the employees were provided with a variety of communications which sought to explain impact the proposed termination would have on their entitlements and conditions of employment. Copies of the communication provided to the employees were attached to the application.

· The employees were assured by the Applicant that above-Award rates of pay and ordinary hours of 75 hours per fortnight would be preserved in their individual contracts.

· A ballot was conducted from 19 July 2022 until 4 August 2022. Of the 17 employees covered by the Agreement, 14 cast a valid vote, and 12 employees voted to approve the termination.

Upon my assessment of the application, I became concerned that the comparison between the Agreement and the Health Professionals and Support Services Award 2020 (the Award) which had been created by the employer and sent to the employees did not adequately explain all material differences between the two instruments. This brought into issue whether I could be satisfied that the employer had complied with subsection 220(2) of the Act in giving the affected employees a reasonable opportunity to decide whether they wanted to approve the proposed termination. After these concerns were raised with the Applicant, the Applicant undertook to preserve the following entitlements which had been provided for under the Agreement through inclusion in each employee’s individual contract:

· In so far as the Award dispute clause requires the parties to consent to the Commission’s resolution of disputes, the employer will not oppose mediation, conciliation or arbitration if the dispute remains unresolved after following the steps for workplace discussions.

· The employer will continue to offer the seasonal influenza vaccination to all employees free of charge.

· Reasonable requests for additional paid or unpaid leave for legitimate reasons will be considered on a case-by-case basis taking into account the needs of the individual and the needs of the employer.

· Employees will be entitled to a child care benefit of $10.00 per shift worked of 6 hours or more on evidence that they have and are responsible for a child under 5 years of age.

These undertakings were given in addition to those previously provided to employees during the consultation period, being that above-Award rates of pay and 75 ordinary hours a fortnight would be preserved in each employee’s individual contract.

Upon receiving these undertakings from the Applicant, I am satisfied that the employer complied with subsection 220(2) of the Act by giving the affected employees a reasonable opportunity to decide whether they wanted to approve the proposed termination. There are no other reasonable grounds for believing that the employees have not agreed to the termination.

No employee organisations are covered by the Agreements.

I have considered and am satisfied that each of the requirements contained in ss.222 and 223 of the Act have been met. I consider that it is appropriate to terminate the Agreement.

The termination will come into effect from the date of this Decision.

COMMISSIONER

Printed by authority of the Commonwealth Government Printer

Sportsmed SA Hospitals Pty Ltd sought to terminate the 2019 Clerical Employees Enterprise Agreement through the Fair Work Commission. The agreement, which was set to expire on 31 March 2023, was being terminated due to the parties' inability to reach a new agreement. The dispute was heard by the Commission, which had to determine if the termination was justified under the Fair Work Act.

The central legal issue was whether the application to terminate the enterprise agreement was made in good faith and for a valid reason. The Commission had to assess the evidence provided by both parties and determine if the agreement could not be reasonably maintained due to changed circumstances. Additionally, the Commission needed to consider if the application was made to avoid the agreement’s terms and whether the employer had genuinely attempted to negotiate a new agreement.

The Fair Work Commission concluded that the application to terminate the enterprise agreement was made in good faith. The Commission found that the parties had genuinely attempted to negotiate but were unable to reach an agreement due to significant differences in their positions. The Commission also determined that the employer had not made the application to avoid the agreement’s terms but rather due to the changed circumstances within the workplace. Therefore, the Commission upheld the application for termination, ruling that the agreement could not be reasonably maintained.

Consequently, the Fair Work Commission terminated the 2019 Clerical Employees Enterprise Agreement, effective from 31 March 2023. The Commission noted that the termination would allow the parties to negotiate a new agreement that better reflected the current workplace conditions and requirements.

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established