Target Australia Pty Ltd

[2021] FWCA 4232

[2021] FWCA 4232

FAIR WORK COMMISSION

DECISION

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

Target Australia Pty Ltd
(AG2021/6078)

TARGET AUSTRALIA NSW DISTRIBUTION CENTRE AGREEMENT 2017

Retail industry
DEPUTY PRESIDENT BULL	SYDNEY, 29 JULY 2021

Application for termination of the Target Australia NSW Distribution Centre Agreement 2017.

[1] An application has been made by Target Australia Pty Ltd (Target) pursuant to s.225 of the Fair Work Act 2009 (the Act) for the termination of the Target Australia NSW Distribution Centre Agreement 2017 1 (the Agreement).

[2] The Agreement was approved by the Fair Work Commission (the Commission) on 2 May 2017 and has now passed its nominal expiry date of 28 February 2021. The Agreement as per clause 2 - Coverage of this Agreement has application to employees working at the employer’s NSW Distribution Centres.

[3] Section 225 of the Act applies to the termination of enterprise agreements that have passed their nominal expiry date and is set out below:

“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.”

[4] Clause 2.1 of the Agreement names Target as the “Company” covered by the Agreement, and as stated above, the application to terminate the Agreement is made by Target. As Target is the named employer covered by the Agreement, it has standing to make the termination application as per s.225(a) set out above.

[5] Section 226 of the Act sets out when the Commission must terminate a nominally expired enterprise agreement where an application to terminate is made:

“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.”

Public Interest

[6] The application was accompanied by a Form 24C – Declaration in relation to termination of an enterprise agreement after the nominal expiry date declared by Ms Vicky Hessell, Head of Supply Chain, Target, who submitted that:

“The termination of the Agreement is not contrary to public interest as it is our view that there are currently no employees covered by the Agreement.

The Employees who were once covered by the Agreement have since either taken up alternative employment opportunities, or have been redeployed and in our view, are now covered by the Kmart Eastern Creek (NUW) Distribution Centre Enterprise Agreement 2019 (Kmart Agreement). The redeployed employees are significantly better off under the Kmart Agreement than they were under the Agreement.

Further, I understand that the redeployed employees wish to be covered by the Kmart Agreement as they all readily agreed to the transfer to Kmart following being provided with information which detailed the differences between both their role and their entitlements under the Kmart Agreement as compared to the Agreement.

In the interests of clarity as to which instrument applies to the redeployed employees, the Agreement should be terminated.”

[7] Ms Hessell also provided a witness statement that was attached to the Form 24C. In her witness statement, Ms Hessell stated that she has been employed by Target or other Wesfarmers Limited subsidiaries in various roles for approximately 20 years. As part of her current role as Head of Supply Chain, she is responsible for overseeing Target’s distribution centre facilities and organising international and domestic product flow. 2

[8] Ms Hessell stated that the Agreement applied to Target employees who worked at its New South Wales Distribution Centre located at Moorebank Logistics Park (Moorebank Distribution Centre).

[9] Ms Hessell stated that following the restructure of Wesfarmers’ Target and Kmart businesses, a decision was made to close the Moorebank Distribution Centre. 3

[10] Ms Hessell stated that while the proposal to close the Moorebank Distribution Centre was announced in October 2020, the actual closure of the centre did not occur until March 2021. During this time, Target consulted with the employees and provided them with opportunities for skills development and redeployment. 4

[11] It was submitted by Ms Hessell that one on one conversations were held with employees where they were offered the opportunity to accept either a transfer to the Kmart New South Wales distribution centre in Eastern Creek, or redundancy. 5

[12] All Target team members previously employed at the Moorebank Distribution Centre have since accepted offers of employment with Kmart at the Kmart Distribution Centre, resigned or have accepted a redundancy. 6

[13] Of the nine employees at Moorebank Distribution Centre, six accepted a transfer to the Kmart Distribution Centre (where they are better off under the relevant Kmart enterprise agreement), two terminated their employment with Target in approximately November 2020 after securing opportunities elsewhere, and one chose to take redundancy. 7

[14] Ms Hessell submitted that to avoid any doubt about which agreement now applies, Target seeks the termination of the Agreement. 8

[15] Based on the material contained in the employer’s statutory declaration filed with the application, I am satisfied that termination of the Agreement is not contrary to the public interest. There is nothing before the Commission which raises public interest considerations which might weigh against termination of the Agreement.

Employer Views

[16] The applicant employer having made the application clearly supports termination of the Agreement.

Employee Views

[17] As submitted by the applicant, there are no employees covered by the Agreement.

Employee Organisation Views

[18] The Shop, Distributive and Allied Employees' Association (SDA) is covered by the Agreement, after having given notice under s.183 of the Act that it wants the Agreement to cover it. 9

[19] Ms Hessell states that she was informed by Claire Slattery, Employee Relations Manager, that the SDA was advised that Target was going to make this application before it was filed. 10

[20] On 8 July 2021, the Commission wrote to the SDA advising of the application and requesting that the SDA provide its position in relation to the proposed termination by no later than 4pm, 15 July 2021.

[21] On 28 July 2021, Mr Bernard Govind, Senior Industrial Officer from the SDA provided a response to the Commission, noting that the SDA does not object to the application to terminate the Agreement.

Effects of the termination

[22] It is accepted that the termination of the Agreement will have no detriment or disadvantage as there are no employees covered by the Agreement and the NSW Moorebank Distribution Centre has now closed.

[23] It is also accepted that the termination of the Agreement would remove any doubt as to which agreement applies to the redeployed employees.

Consideration

[24] The application having been made pursuant to s.225 of the Act and having considered and being satisfied that it is not contrary to the public interest to terminate the Agreement and taking into account all of the required criteria, including the likely effect the termination will have, the Commission considers it appropriate to terminate the Agreement.

[25] Pursuant to s.227 of the Act the termination will operate from the date of this Decision.

[26] An order to terminate the Agreement [PR731805] will issue with this Decision.

DEPUTY PRESIDENT

Printed by authority of the Commonwealth Government Printer

<AE424185  PR731802>

 1   AE424185

 2   Statement of V. Hessell of 6 July 2021 at [1-3]

 3   Ibid at [15-24]

 4   Ibid at [25]

 5   Ibid at [26]

 6   Ibid at [7-8]

 7   Ibid at [13]; Ibid at [27-28]

 8   Ibid at [10]

 9   [2017] FWCA 2373 at [4]

 10   Statement of V. Hessell of 6 July 2021 at [33]