St Vincent de Paul Society Victoria Inc.
[2023] FWCA 806
•16 MARCH 2023
| [2023] FWCA 806 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.225—Enterprise agreement
St Vincent de Paul Society Victoria Inc.
(AG2023/540)
St Vincent de Paul Aged Care & Community Services Collective Agreement 2009
| Aged care industry | |
| COMMISSIONER MIRABELLA | MELBOURNE, 16 MARCH 2023 |
Application for termination of the St Vincent de Paul Aged Care & Community Services Collective Agreement 2009.
An application was filed by St Vincent de Paul Society Victoria Inc. (the Employer) seeking the termination of the St Vincent de Paul Aged Care & Community Services Collective Agreement 2009[1] (the Agreement) pursuant to s.225 of the Fair Work Act 2009 (the Act). The Agreement has passed its nominal expiry date of 30 June 2013.
The Health Services Union (the HSU) is covered by the Agreement. On 9 March 2023, my Chambers served on the HSU copies of the Form F24B application and the Form F24C statutory declaration made by Ms Shaista Dharmaratnam, HR Partner with the Employer.
I listed the matter for conference on 14 March 2023. Following receipt of the notice of listing, a representative from the HSU advised that the organisation does not oppose the application for termination of the Agreement and that it does not wish to participate in the conference.
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.
The Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022 amended s.226 of the Act. The amendments took effect from 7 December 2022 and relevantly provide 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.
226A Guarantee of termination entitlements
Guarantee of termination entitlements
(1) A guarantee of termination entitlements is an undertaking given by an employer covered by an enterprise agreement that:
(a) is an undertaking that the employer will comply with subsection (3) if the agreement is terminated under section 226 and the employer terminates the employment of a protected employee for the termination of the agreement:
(i) 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
(ii) because of the insolvency or bankruptcy of the employer; and
(b) is in writing; and
(c) meets any requirements relating to the signing of undertakings that are prescribed by the regulations.
(2) A protected employee for a termination of an enterprise agreement under section 226 is an employee who would, but for the termination of the agreement, be covered by the agreement.
(3) For the purposes of paragraph (1)(a), the employer complies with this subsection, in relation to the termination of the protected employee’s employment, if the employer complies with the terms of the enterprise agreement that, if the agreement were still in operation, would have provided the employee with entitlements that:
(a) relate to a termination of the employee’s employment:
(i) 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
(ii) because of the insolvency or bankruptcy of the employer; and
(b) except if the employee was an award/agreement free employee immediately before the termination of the employee’s employment—are more beneficial than the entitlements under a modern award that covered the employee in relation to the employment at that time.
(4) A guarantee of termination entitlements given in relation to the termination of an enterprise agreement:
(a) comes into force on the day on which the termination of the agreement comes into operation under section 227; and
(b) ceases to be in force at the earliest of the following times:
(i) if the guarantee specifies a period during which the guarantee is to remain in force and the FWC approves that period under subsection (5)—the end of that period;
(ii) immediately before another enterprise agreement that covers the same, or substantially the same, group of employees as the terminated agreement comes into force;
(iii) the end of the period of 4 years beginning on the day the guarantee is given to the FWC.
(5) The FWC may, in its decision terminating an enterprise agreement, approve a period for the purposes of subparagraph (4)(b)(i) if it considers the period to be appropriate.
(6) An employer must comply with a guarantee of termination entitlements given by the employer to the FWC in relation to the termination of an enterprise agreement if:
(a) the agreement is terminated under section 226; and
(b) the employer terminates the employment of a protected employee for the termination of the agreement while the guarantee is in force:
(i) 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
(ii) because of the insolvency or bankruptcy of the employer.
Note: This subsection is a civil remedy provision (see Part 4-1)
(7) To avoid doubt, a guarantee of termination entitlements is a governing instrument for employment for the purposes of the Fair Entitlements Guarantee Act 2012.”
The Commission must be satisfied that the requirements in s.225, s.226 and s.226A of the Act are met prior to approving the termination of the Agreement.
Consideration
Section 225 of the Act
An employer covered by the Agreement may apply to the Commission under s.225(a) of the Act for termination of the Agreement if it has passed its nominal expiry date. As noted above, the Agreement nominally expired on 30 June 2013. Further, I am satisfied that the Employer is an employer covered by the Agreement.[2] As such, I am satisfied that the Employer has standing to bring the application under s.225(a) of the Act.
Section 226 of the Act
Section 226(1)(b) of the Act states that if an application for the termination of an enterprise agreement is made under s.225, the Commission must terminate the agreement if it is satisfied that the agreement does not, and is not likely to, cover any employees. The Agreement binds the Employer with respect to aged care facilities operated by St Vincent de Paul Aged Care and Community Services within the State of Victoria. Ms Dharmaratnam has declared there are no employees covered by the Agreement. Ms Dharmaratnam also advised me at the conference listed in this matter that the Employer no longer operates aged care facilities.
However, s.226(1A) of the Act provides that the Commission must terminate the Agreement only if it is satisfied that it is appropriate in all the circumstances to do so, while s.226(5) of the Act outlines that the Commission may also have regard to any other relevant matters.
I consider the approach to assessing appropriateness laid out by the Full Bench in Aurizon Operations Limited; Aurizon Network Pty Ltd; Australian Eastern Railroad Pty Ltd[3] (Aurizon), while addressing the termination of agreements prior to the Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022, remains apposite for applications to terminate agreements under the newly amended s.226 of the Act:
“All of the circumstances also need to be taken into account in considering whether termination of the agreements is appropriate. In particular the views of employers and employees covered by the agreement, their circumstances, and the impact of termination need to be taken into account. The requirement in s. 226(b) to take into account all of the circumstances including those set out in s. 226(b)(i) and (ii) is a requirement to take the matters into account and to give them due weight in assessing whether it is appropriate to terminate an enterprise agreement. In assessing appropriateness by taking into account all of the circumstances, we approached the task by reference to the construction of s. 226 and the contextual matters that bear upon that construction dealt with earlier as well as giving specific consideration to the matters identified in s. 226(b)(i) and (ii).”[4] (reference omitted)
Further to what is outlined in paragraph [8], Ms Dharmaratnam has provided the following:
· The VincentCare Victoria Annual Report 2015/2016 incorporating the Chairman’s report which stated that:
“The residential aged care divestment has been completed, including the successful transfer in February 2016 of all staff and residents to leading not-for-profit residential aged care provider mecwacare.”
· A letter of 26 June 2021 from Mark Jackson, Executive General Manager Client Services, to the Commonwealth Department of Social Services confirming the VincentCare Victoria “Wellbeing Centre” would cease operation in December 2021. The Agreement covered employees engaged in the Wellbeing Centre.
· A letter dated 15 March 2023 from Jack Crawford, Executive General Manager Corporate Services, to me confirming that the Employer no longer has any employees covered by the Agreement.
Section 226(2) of the Act does not fall for consideration on the facts of this case and regarding s.226(3) of the Act, the circumstances are such that the Employer and the HSU support the termination of the Agreement and there are no employees covered by the Agreement.
The circumstances are also such that as there are no parties engaged in bargaining for a new enterprise agreement, s.226(4) is not a relevant factor and I do not consider there are any other relevant matters that require consideration (s.226(5)). For completeness, s.226A of the Act is irrelevant in the circumstances of this case.
Conclusion
Having regard to the matters and conclusions outlined above, I consider it is appropriate in all the circumstances of this case to terminate the Agreement (s.226(1A)).
Having made these findings, s.226 of the Act requires that I terminate the Agreement.
Operative date of termination
Section 227 of the Act affords the Commission a discretion as to the operative date of a termination of an agreement.
Noting that the Agreement reached its nominal expiry date on 30 June 2013 and that there is an absence of material before me suggesting there is any reason to delay the termination of the Agreement, I consider the termination of the Agreement should operate forthwith.
The termination will therefore operate from 16 March 2023. An order to this effect will be issued with this decision.
COMMISSIONER
[1] AE873368.
[2] Ibid, cl 3.
[3] [2015] FWCFB 540.
[4] Ibid at [167].
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