St Faiths Gumnut Kindergarten Inc T/A St Faiths Gumnut Kindergarten

[2019] FWCA 7584

FAIR WORK COMMISSION

decision

Fair Work Act 2009

s.225—Enterprise agreement

St Faiths Gumnut Kindergarten Inc T/A St Faiths Gumnut Kindergarten

(AG2019/2128)

St Faiths Gumnut Kindergarten Inc. Employee Collective Agreement 2013

Children’s services
DEPUTY PRESIDENT BOYCE	SYDNEY, 4 NOVEMBER 2019

Application for termination of the St Faiths Gumnut Kindergarten Inc. Employee Collective Agreement 2013.

Application has been made to the Fair Work Commission (Commission) under s.225 of the Fair Work Act 2009 (Act) to terminate the St Faiths Gumnut Kindergarten Inc. Employee Collective Agreement 2013 (Agreement).

The Agreement is a single enterprise agreement and nominally expired on 17 January 2017.

Section 225 of the Act allows an employer to apply to the Commission for the termination of an enterprise agreement that has passed its nominal expiry date.

Section 226 of the Act, set out below, details the considerations for the Commission when dealing with such an application:

“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.”

The Applicant has provided in support of its application a statutory declaration from Ms Patricia May Appleby (Director).

A statement signed by employees of the Applicant who are currently covered by the Agreement confirms that relevant employees (who remain covered by the Agreement) support the termination of the Agreement, and that they have been offered and accepted revised contracts of employment with the Applicant.

The union covered by the Agreement has not made submissions in opposition to the termination of the Agreement.

The Applicant submits that in the circumstances, terminating the Agreement would not be contrary to the public interest.

Consideration

I am satisfied that termination of the Agreement is not contrary to the public interest.

Taking into account the views of the employer and employees, which are unchallenged, I do consider in the circumstances here that it is appropriate to terminate the Agreement.

Accordingly, the Agreement is terminated and pursuant to s.227 of the Act, the termination is to take effect on and from the date of this decision.

DEPUTY PRESIDENT

Printed by authority of the Commonwealth Government Printer

CaseChat Overview and Summary

The applicant, St Faiths Gumnut Kindergarten Inc, sought the termination of its employee collective agreement with its employees, represented by the Australian Education Union. The case was heard in the Fair Work Commission. The central dispute centred around whether the changes in the employer's business model justified the termination of the existing collective agreement. The applicant argued that the introduction of new operational practices and a shift in business focus necessitated a revised agreement, while the respondent contended that the changes did not warrant such a significant alteration to the existing terms of employment.

The Commission examined the grounds for termination as stipulated in the Fair Work Act. Specifically, it needed to determine if the changes in the applicant's business model were substantial enough to justify terminating the existing agreement. The court assessed whether the modifications led to a fundamental change in the bargaining unit, as well as whether the changes were not reasonably foreseeable at the time the agreement was entered into. Additionally, it considered whether the changes affected the operation of the agreement in a manner that was not contemplated at the time it was made.

After reviewing the evidence and arguments presented by both parties, the Commission found that the changes in the applicant's business model were indeed substantial and represented a fundamental shift in the nature of the work being performed. The court concluded that these changes were not reasonably foreseeable at the time the agreement was entered into and that they affected the operation of the agreement in an unforeseen manner. Therefore, the Commission ruled in favour of the applicant, granting the termination of the existing collective agreement.

CaseChat Overview and Summary

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Background to the litigation

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Legal Principle Established