Sunstate Charters Pty Ltd

[2020] FWCA 5732

[2020] FWCA 5732

FAIR WORK COMMISSION

DECISION

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

Sunstate Charters Pty Ltd
(AG2020/3023)

SUNSTATE CHARTERS PTY LTD - QUEENSLAND ENTERPRISE AGREEMENT 2013

Passenger vehicle transport (non rail) industry
COMMISSIONER HUNT	BRISBANE, 28 OCTOBER 2020

Application for termination of the Sunstate Charters Pty Ltd - Queensland Enterprise Agreement 2013 – Agreement terminated.

[1] On 7 October 2020, Sunstate Charters Pty Ltd (the Employer) made an application pursuant to s.225 of the Fair Work Act 2009 (the Act) to terminate the Sunstate Charters Pty Ltd - Queensland Enterprise Agreement 2013 (the Agreement). The nominal expiry date of the Agreement is 9 July 2016.

[2] The Transport Workers’ Union (the TWU) is an employee organisation (union) covered by the Agreement.

[3] The application was supported by a statutory declaration from Ms Lisa Ritchie, General Manager of the Employer which declared, amongst other things, that there are 20 employees covered by the Agreement. If the Agreement is terminated those employees’ terms and conditions of employment would be governed by the Passenger Vehicle Transportation Award 2020 (the Award).

[4] Ms Ritchie declared by way of background that the Agreement was made when the business was financially sound and had sufficient work to sustain employment using an annualised loaded ratesarrangement. The loaded rates arrangement was based on employees working 40 hours per week on a four on – two off roster, with an assumption of an employee working an 8.5 hour day for a grade 4 under the Award. Working this roster pattern meant that the employee could work an average of 40 hours per week with an averaging period of 12 months. The wage rate included two hours of overtime and weekend penalties.

[5] It was declared that for some time now the Employer has not had enough work to enable the continuation of a 40-hour working week, meaning that the Agreement no longer supports the way the Employer needs to operate its business. In particular, under the Agreement, working this type of roster no longer makes part-time employment a viable and ongoing type of employment arrangement.

[6] Ms Ritchie declared that the current loaded wage rate arrangement creates a disadvantage to employees when compared to the Award and as such is not reflective of proper industrial standards which are provided for under Award. It was declared that while the base hourly rate would reduce to reflect the Award, if employed pursuant to the Award employees would receive:

•  Overtime after 38 hours instead of 40 hours;

•  Saturday penalty rates;

•  Sunday penalty rates; and

•  Early/late work loadings of 115% instead of 112%.

[7] It was also declared by Ms Ritchie that a confidential vote of all employees occurred to ascertain their views about supporting the termination of the Agreement. Nine votes were cast with eight in favour of terminating and one against terminating the Agreement. Prior to the vote meetings were held to discuss termination of the Agreement with employees.

[8] After allocation to my chambers, I invited the TWU to provide any evidence or submissions it wished to provide relevant to its views about termination of the Agreement. The TWU wrote to my chambers advising that it would not be making submissions in relation to this matter, stating that it is happy for the Commission to determine the application on the material filed and any feedback received from employees. 

[9] I also directed the Employer to communicate in writing to each of the employees covered by the Agreement, inviting them to correspond by email with my chambers in the event they wished to provide their views. On 16 September 2020, I received confirmation from the Employer that it had complied with the above direction. The employees covered by the Agreement were invited to provide any views relevant to the application. I did not receive any correspondence from any of the employees to my chambers by Friday, 23 October 2020.

Termination of an enterprise agreement after its nominal expiry date

[10] Subdivision D of Division 7 of Part 2-4 of the Act provides for the termination of an enterprise agreement after its nominal expiry date. This subdivision consists of ss.225, 226 and 227, the terms of which are 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.

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.”

Consideration

[11] Based on the material contained in the statutory declaration filed with the application, and in consideration of s.226(a) of the Act, I am satisfied that the termination of the Agreement is not contrary to the public interest. There is nothing before me which raises public interest considerations which might militate against the termination of the Agreement.

[12] As stated in the statutory declaration filed with the application, there are 20 employees covered by the Agreement, together with the TWU. None of the employees covered by the Agreement, nor the TWU expressed any views opposing termination of the Agreement. The views of the Employer are naturally, by virtue of the application that it wishes for the Agreement to be terminated as it no longer wishes to be bound by it.

[13] Having regard to the circumstances of the employees in the event the Agreement is terminated, the Award will apply. I am satisfied that the entitlements within the Award described in [6] will be an ongoing benefit to employees and will offset the detriment to employees of dropping their higher, loaded rate of pay to the lower, Award rate of pay. The circumstances of the Employer will be that it is covered by a modern Award, more suited to employment conditions in 2020 than the Agreement which was made in 2013.

[14] In consideration of the material before me relevant to s.226(b)(i) and (ii) of the Act and having considered Ms Ritchie’s statutory declaration, I consider that it is appropriate to terminate the Agreement.

[15] In accordance with s.226, I must terminate the Agreement. The application to terminate the Agreement is approved.

[16] The termination will take effect from today, 28 October 2020.

COMMISSIONER

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