The Returned and Services League of Australia T/A Returned and Services League of Australia (NSW Branch)

[2020] FWCA 2587

[2020] FWCA 2587

FAIR WORK COMMISSION

DECISION

Fair Work (Transitional Provisions and Consequential Amendments) Act 2009
Sch. 3, Item 15 - Application by agreement to terminate collective agreement-based transitional instrument

The Returned and Services League of Australia T/A Returned and Services League of Australia (NSW Branch)
(AG2020/1268)

THE RETURNED AND SERVICES LEAGUE OF AUSTRALIA (NEW SOUTH WALES BRANCH) COLLECTIVE AGREEMENT 2007

Clerical industry
DEPUTY PRESIDENT BULL	SYDNEY, 22 MAY 2020

Application for termination of The Returned and Services League of Australia (New South Wales Branch) Collective Agreement 2007.

[1] The Returned and Services League of Australia (New South Wales Branch) (the applicant), has made an applicationto terminate the Returned and Services League of Australia (New South Wales Branch) Collective Agreement 2007 (the Agreement) under s.225 of the Fair Work Act 2009 (the FW Act).

[2] Termination of the Agreement will result in employees covered by the Agreement being covered by the Social, Community, Home Care and Disability Services Industry Award 2010 (the Award).

[3] The Agreement was approved by the Workplace Authority on 6 June 2008 having been lodged by the applicant on 25 October 2007. The Agreement is a ‘Transitional Agreement’ pursuant to Schedule 3 Part 2 Item 2(1) of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (the Transitional Act). A s.225 application to terminate a transitional instrument is made pursuant to Item 16 of Schedule 3 of the Transitional Act which provides as follows:

“Collective agreement-based transitional instruments: termination by FWA

(1) Subdivision D of Division 7 of Part 2-4 of the FW Act (which deals with termination of enterprise agreements after their nominal expiry date) applies in relation to a collective agreement-based transitional instrument as if a reference to an enterprise agreement included a reference to a collective agreement-based transitional instrument.”

[4] Pursuant to the above extract from the Transitional Act termination of the Agreement is to be dealt with in accordance with s.225 of the FW Act.

[5] Section 225 of the FW Act states 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.”

(My underline)

[6] Clause 1.3 of the Agreement provides that it will “remain in force until its nominal expiry date, which is the fifth anniversary of date of lodgement.” 1 The expiry date is “the fifth anniversary of the date on which the agreement was lodged.” The Agreement is said by the applicant to have been lodged with the Office of the Employment Advocate in 2007, although the exact date is unknown.2 The Fair Work Commission has ascertained that the Agreement was lodged with the Workplace Authority on 25 October 2007 and began operating on that day. The nominal expiry date is therefore 24 October 2012.

[7] I am satisfied that the requirements of s.225 of the FW Act have been met as the applicant is an employer covered by the Agreement with standing to make the termination application, and that the Agreement has passed its nominal expiry date.

[8] Section 226 of the FW Act states that the Commission must terminate an agreement where specified criteria are met.

“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.”

[9] As stated by VP Watson in Energy Resources of Australia Ltd v Liquor, Hospitality and Miscellaneous Union³, the formulation of s.226 of the FW Act directs the Commission to the nature of the considerations to be taken into account and the test to be applied to determine the matter.

[10] In summary, s.226 of the FW Act requires the Commission to terminate an expired enterprise agreement if it is not contrary to the public interest and it considers it is appropriate to do so taking into account all the circumstances including consideration of the views of the employees, the employer, and any employee organisation covered by the Agreement and the circumstances of the employees, the employer and employee organisation including the likely effect that the termination will have on each of them.

[11] Attached to the application was a statutory declaration of Ms Valentyna Jurkiw the applicant’s Head of Legal. The statutory declaration addressed, other than the public interest, the matters raised in s.226 of the FW Act.

[12] It is noted that for the purposes of sub-s.226(b) of the FW Act there is no employee organisation covered by the Agreement.

The views of the employees

[13] There are four employees who remain covered by the Agreement. In April 2020, the applicant raised with the employees the possibility of terminating the Agreement.

[14] On 9 April 2020, a memorandum was provided to employees seeking their support for the termination application. The memorandum explained the effect of the termination on their terms and conditions and set out a summary of the Agreement, vis a vis the Award. The applicant undertook to ‘grandfather’ some of the more favourable terms of the Agreement.

[15] On 23 April 2020, a meeting was held to further discuss the proposal. Following these discussions all affected employees voted to terminate the Agreement.

The Circumstances of the Employees/Employers and the Likely Effect of the Termination

[16] Clearly the employer supports termination of the Agreement stating that to have all staff under one Award would be administratively easier and the staff themselves are keen to move to the Award.

[17] Ms Jurkiw’s statutory declaration states that the applicant has agreed to retain some of the beneficial terms of the Agreement as contractual terms on the same or substantially the same terms and conditions; these are:

a. the more generous redundancy pay entitlements;

b. the more generous entitlement to long service leave:

i. Providing five weeks of long service leave after five years of continuous service; and

ii. One week of long service leave for each year of continuous service thereafter; and

c. the entitlement to be absent from work on "RSL Stand-down Day".

[18] Further, as the maximum ordinary hours of work under the FW Act and the Award are 38 hours per week, employees will be given the option to work full-time at 38 hours per week with a commensurate increase in salary, or to maintain working 35 hours per week and be employed on a part-time basis, with their salary to be paid on a pro-rata basis.

[19] It is to be noted the Award contains some more beneficial terms than the Agreement which are stated to be:

1. In addition to the unpaid meal break, employees are entitled to a paid 10 minute tea break for each four hours worked.
2. Authorised overtime paid at overtime rates or accrued as time off in lieu (TOIL), under the Agreement, overtime is only credited as TOIL.
3. Penalty rates are payable for work performed on weekends and public holidays. Under the Agreement work performed on weekends is only credited as TOIL.

4. There is a mechanism for an employee and the employer to agree to take annual leave in advance of its accrual.
5. Employees who perform higher duties for five or more consecutive working days are paid at the higher rate as opposed to the Agreement's higher duties allowance only applying after 4 weeks.

6. More generous allowances for first aid and for using a private motor vehicle.

[20] There are two entitlements under the Agreement which the applicant will not preserve:

1. Payment of a meal allowance up to $30.00 if overtime is worked.
2. The cashing out of personal leave.

[21] Finally, the applicant has undertaken to provide affected employees with a bonus of 5% as a contract transition payment.

Public Interest

[22] The nature of the public interest test contained in s.226(a) of the FW Act is such that the test to be applied is that the Commission must be satisfied that termination of an enterprise agreement is not contrary to the public interest.

[23] The Full Bench in Kellogg Brown and Root Pty Ltd and others (Kellogg)⁴ outlined the approach to be taken to the public interest test in the context of the termination of certified agreements under the Workplace Relations Act 1996 (Cth):

“[27] It should be emphasized that the Commission's consideration of the public interest for the purpose of s.170MH(3) is directed to the consequences of terminating the agreement. In a given case, some consequences will be clearly predictable, others will be less so. For the most part the Commission should be guided by the likely foreseeable consequences of termination rather than speculation about possible consequences.”

[24] The approach to the public interest test outlined in Kellogg was adopted by the Full Bench of the Commission in the context of s.226 of the FW Act in Aurizon Operations Limited; Aurizon Network Pty Ltd; Australia Eastern Railroad Pty Ltd⁵ (Aurizon).

[25] In echoing the approach taken in Kellogg the Full Bench in Aurizon stated at paragraph [129]:

“Section 226(a) requires a consideration of whether termination of the agreements is not contrary to the public interest. It seems to us that a consideration of the public interest will involve something that is distinct from the interests of the persons and bodies covered by the agreements. This distinction seems to be reflected in the structure of s. 226. The question of how the public interest is to be assessed was considered by a Full Bench of the Australian Industrial Relations Commission in Re Kellogg Brown and Root, Bass Strait (Esso) Onshore/Offshore Facilities Certified Agreement 2000 (2005) 139 IR 34.The decision in Kellogg Brown concerned an application to terminate a certified agreement pursuant to s. 170MH of the WR Act. The Full Bench observed:

“The absence of any reference to the interests of the negotiating parties in s.170MH(3) is significant. It follows that the views of persons bound by the agreement may be relevant to the exercise of the discretion if they shed light upon the effect of termination on the public interest, but they should not be given any independent weight. To do so would be to import into the application of the section something which on its proper construction it does not include.

The notion of public interest refers to matters that might affect the public as a whole such as the achievement or otherwise of the various objects of the Act, employment levels, inflation, and the maintenance of proper industrial standards. An example of something in the last category may be a case in which there was no applicable award and the termination of the agreement would lead to an absence of award coverage for the employees. While the content of the notion of public interest cannot be precisely defined, it is distinct in nature from the interests of the parties. And although the public interest and the interests of the parties may be simultaneously affected, that fact does not lessen the distinction between them.”⁶

[26] The objects of the FW Act include ensuring a guaranteed safety net of fair, relevant and enforceable minimum terms and conditions through the National Employment Standards, modern awards and national minimum wage orders.⁷ In this application the termination of the Agreement would result in a modern Award having application, the Agreement was made in 2007.

[27] I have considered the circumstances of the employees and the likely effect that termination of the Agreement would have on them. The Award contains some more beneficial conditions and where the Agreement provides more favourable terms, the majority of these terms will be retained as contractual terms. The applicant has also stated that all employees have voted for the termination of the Agreement.

Conclusion

[28] I am satisfied that the views of the employees covered by the Agreement have been sought in accordance with s.226(b)(i) of the FW Act.

[29] I am otherwise satisfied that it is not contrary to the public interest to terminate the Agreement.

[30] Pursuant to s.225 of the FW Act and having considered and being satisfied as to each of the matters contained in s.226 of the FW Act, the Agreement is terminated.

[31] Section 227 of the FW Act provides that if an enterprise agreement is terminated under s.226 of the FW Act, the termination operates from the day specified in the decision to terminate the Agreement. The Agreement termination will take effect 7 days from the date of this decision. An order to this effect will issue with this decision.

DEPUTY PRESIDENT

 1   Workplace Relations Act 1996 (Cth), s.352.

 2   Statutory Declaration of V Jurkiw of 6 May 2020 at [6]

3 [2010] FWA 2434 at [10]

4 PR955357

5 [2015] FWCFB 540

6 (2005) 139 IR 34 at 40

7 S.3(b)

Printed by authority of the Commonwealth Government Printer

<AC310458  PR719437>