The Australian Workers' Union

[2017] FWCA 1800

[2017] FWCA 1800

FAIR WORK COMMISSION

DECISION

Fair Work (Transitional Provisions and Consequential Amendments) Act 2009
Sch. 3, Item 16 - Application to terminate collective agreement-based transitional instrument

The Australian Workers' Union
(AG2017/1020)

GRAINCORP OPERATIONS LIMITED-AUSTRALIAN WORKERS UNION (NSW CASUAL EMPLOYEES) AGREEMENT 2008

Agricultural industry
COMMISSIONER CAMBRIDGE	SYDNEY, 19 MAY 2017

Application for termination of the GrainCorp Operations Limited-Australian Workers Union (NSW Casual Employees) Agreement 2008.

[1] This matter involves an application for the Fair Work Commission (the Commission) to terminate a collective agreement-based transitional instrument. The application has been made pursuant to item 16 of Schedule 3 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (the Transitional Act). The application has sought the termination of a collective agreement-based transitional instrument known as the GrainCorp Operations Limited-Australian Workers Union (NSW Casual Employees) Agreement 2008 (the 2008 Agreement).

[2] The application stated that the nominal expiry date of the 2008 Agreement was 16 June 2011. Consequently, by virtue of the operation of item 16 of Schedule 3 of the Transitional Act, the provisions of Subdivision D of Division 7 of Part 2-4 of the Fair Work Act 2009 (the Act) are relevant to this application.

[3] The application was lodged on 28 March 2017 at Sydney. The application was made by The Australian Workers’ Union (the AWU). The employer covered by the Agreement is GrainCorp Operations Limited (GrainCorp or the employer).

[4] The application was initially listed for a Hearing in Chambers on 7 April 2017. On 3 April 2017, the Commission issued a Notice of Listing for the Hearing in Chambers, and requested that the employer provide copies of that Notice of Listing to all employees covered by the 2008 Agreement.

[5] On 5 April 2017, the Commission received correspondence from GrainCorp which in short summary, objected to the application, and requested that the application either be dismissed or at least adjourned pending the outcome of a related matter (AG2017/420). This correspondence from GrainCorp included submissions which outlined the particular circumstances which underpinned the employer’s objection to the AWU application to terminate the 2008 Agreement.

[6] Essentially, GrainCorp submitted that the related matter, AG2017/420, involved an application for approval of an enterprise agreement (the 2016 Agreement), that would, if successful, replace, inter alia, the 2008 Agreement. Therefore, GrainCorp said the application in this instance may be either unnecessary or premature, depending upon the outcome of matter AG2017/420. In the absence of the 2008 Agreement, a 2015 Enterprise Award would apply as the relevant industrial instrument. GrainCorp argued against the prospect of the operation of the 2015 Enterprise Award being for only a temporary period until the 2016 Agreement was approved. In view of the contest articulated by GrainCorp, the Hearing in Chambers was cancelled, and instead the matter was listed for Mention and Directions.

[7] Subsequently, in accordance with Directions made by the Commission, the Parties have filed and served evidentiary and other material upon which the matter has proceeded to determination in a Hearing conducted today, 19 May 2017.

[8] At the Hearing, the AWU was represented by Ms J Gherjestani who introduced evidence in the form of a Statutory Declaration dated 28 March 2017, which she had made herself, and which had been provided with the application documentation. In addition, Ms Gherjestani introduced evidence in the form of two witness statements, one of which was uncontested. The other witness statement, made by Mr Cowdrey was contested, and Mr Cowdrey was cross-examined on his evidence.

[9] Mr A Umansky appeared for GrainCorp at the Hearing, and he relied upon evidence provided in an uncontested statement made by Ms Katherine Ivosevic, the General Manager Human Resources (HR) and Communications for the Storage and Logistics (S&L) part of GrainCorp’s business. In addition, Mr Umansky relied upon the contents of his earlier communication of 5 April 2017.

[10] The Parties made respective oral submissions which referred to the evidence of the broadly uncontested factual circumstances surrounding the contest that has established GrainCorp’s opposition to the application to terminate the 2008 Agreement. The Parties submissions broadly acknowledged that the contest directly related to implications created by the potential outcome of the related matter, AG2017/420.

[11] The Commission has considered the evidence and competing submissions made by the Parties, and has decided, in the circumstances, to make an extempore determination of the application.

[12] The application to terminate the 2008 Agreement, which is a collective agreement-based transitional instrument which has passed its nominal expiry date, is a matter to be determined in accordance with the requirements of s. 226 of the Act, which is in the following terms:

“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.”

[13] Both Parties submitted that public interest considerations supported their respective positions. The AWU asserted that it would not be contrary to the public interest to terminate the 2008 Agreement which was an industrial instrument that contained terms that were obsolete, and in certain respects, inconsistent with contemporary industrial standards and the objects of the Act. Conversely, GrainCorp submitted that having regard to the likely foreseeable consequences of the termination of the 2008 Agreement, it would be contrary to the public interest to superimpose an industrial instrument temporarily or conditionally, and which had not been the product of agreement between itself and its employees.

[14] Further, GrainCorp submitted that the consequences of termination of the 2008 Agreement, would lead to a disproportionate and significant burden on the employer, and that such an outcome would be contrary to the public interest. During the Hearing, Mr Umansky indicated that GrainCorp would not oppose the termination of the 2008 Agreement if the 2016 Agreement was not approved. Consequently, GrainCorp’s opposition to the termination of the 2008 Agreement was more an issue of the timing of any termination, such that any termination should only occur in the event that the 2016 Agreement was not approved.

[15] It is clear that questions of public interest extend beyond the particular interests of the Parties and those persons covered by the 2008 Agreement. GrainCorp has asserted that it would suffer “…immense hardship and cost in overhauling and reconfiguring its payroll system for casual employees…” 1 in the event that the 2008 Agreement was terminated. However, there was no evidence of any detail or specific nature of the asserted costs and hardship that were alleged to flow from changes that would be made to a payroll system that would be adjusted to comply with the relevant industrial instrument.

[16] Further, payroll system adjustments would have to be made in the event that GrainCorp was successful in the related matter, AG2017/420, its application for approval of the 2016 Agreement. Therefore, the cost and hardship could only be confined to aspects that would arise from the potential for the payroll system adjustments to be of a temporary nature. Even if some cost or hardship had been properly identified, the public interest consideration must balance such confined detriment against the broader considerations that are understood to represent the public interest.

[17] The broader public interest considerations are properly enlivened with an examination of the terms of the 2008 Agreement, and an assessment is made as to whether the objects of the Act are advanced if the Commission permits those terms to continue in operation. On any reasonable, objective assessment of the terms of the 2008 Agreement, which extend to no more than five pages including the schedule of rates of pay, it represents an industrial instrument that does not meet contemporary Australian workplace standards. The objects of the Act would not be advanced if the Commission permitted what amounts to substandard terms of an industrial instrument to continue to have force and effect.

[18] Consequently, I have formed the view that it would not be contrary to the public interest to terminate the 2008 Agreement. Indeed, I believe that it would be in the public interest for the 2008 Agreement to be terminated.

[19] Further, the evidence has established circumstances which satisfy the requirements of subsection 226 (b) of the Act. The Commission has taken into account the views of employees as conveyed by the statements made on behalf of the AWU. Further, the Commission has taken into account the views and the effect that the termination of the 2008 Agreement would have on, in particular, GrainCorp. The Commission recognises that it would not be desirable for there to be a potentially short-term requirement for GrainCorp to undertake payroll system adjustments. However, the evidence has not established that these requirements were of such significant cost or burden as to outweigh or militate against the broader community benefit that would be served by the termination of a substandard industrial instrument.

[20] It is also relevant to note that the proceedings in the related matter, AG2017/420, which are being conducted before Johns C, have involved considerable contest. In that matter, the AWU has asserted that the 2016 Agreement should not be approved as it does not pass the Better Off Overall Test (BOOT). The determination of that question is entirely a matter for Johns C. However, I note that the transcript of proceedings in that matter records that Mr Umansky made the following remarks in respect to a particular aspect of the contest regarding the BOOT; “… there is a window where a particular engagement could throw up a lower result than under the award.” 2

[21] In conclusion, having regard to all of the circumstances in this case, including the views of employees, the employer, and the AWU, I consider that it would be appropriate to terminate the 2008 Agreement. Therefore, pursuant to s. 226 of the Act, the Commission must terminate the 2008 Agreement.

[22] In accordance with s. 227 of the Act, the day on which the termination of the 2008 Agreement operates is today, 19 May 2017. An Order [PR591428] giving effect to this Decision to terminate the 2008 Agreement shall also be issued.

COMMISSIONER

Appearances:

Ms J Gherjestani appeared for the Australian Workers’ Union.

Mr A Umansky appeared for the employer.

Hearing details:

2017.

Sydney:

May, 19.

 1   Exhibit 4, Annexure 1, @ paragraph 11.

 2   Transcript of proceedings, AG 2017/420, 9 May 2017, @ PN 252.

Printed by authority of the Commonwealth Government Printer

<Price code C, AC314906  PR591427>