Townsville South Real Estate Pty Ltd T/A Ray White Townsville Riverside

[2013] FWCA 7867

[2013] FWCA 7867

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

Townsville South Real Estate Pty Ltd T/A Ray White Townsville Riverside
(AG2013/2876)

RAY WHITE TOWNSVILLE RIVERSIDE EMPLOYEE COLLECTIVE AGREEMENT

Real estate industry
COMMISSIONER SPENCER	BRISBANE, 23 OCTOBER 2013

Application for termination of the AC316274 Ray White Townsville River Side Employee Collective Agreement.

[1] Townsville South Real Estate Pty Ltd T/A Ray White Townsville Riverside (the Applicant) has made an application to the Fair Work Commission (the Commission) pursuant to Item 16 of Schedule 3 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (the Transitional Act) and s.225 of the Fair Work Act 2009 (the Act) to terminate the Ray White Townsville River Side Employee Collective Agreement 1 (the Agreement). The nominal expiry date of the Agreement is 1 May 2013.

[2] Item 16 of Schedule 3 of the Transitional Act provides, so far as presently relevant, that:

“Collective agreement-based transitional instruments: termination by FWC

(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.”

[3] Section 226 of the Act provides:

“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.”

[4] The application to terminate the Agreement was lodged on 16 September 2013. The Commission issued Directions to the Applicant on 18 September 2013 to file material in reference to s.226 of the Act (set out above).

[5] The Applicant filed materials in accordance with these Directions.

Consideration

s.226(b)(i) - the views of the employees, each employer, and each employee organisation (if any), covered by the agreement; and

[6] The Applicant submitted that as the Employer covered by the Agreement it was their view that the Agreement should be terminated.

[7] The Applicant submitted that it was their view that the Agreement of “out of date and that salespersons covered by the Agreement are therefore disadvantaged”. The Applicant submitted generally that the disadvantage arose when the terms of the Agreement are compared with the relevant modern award being the Real Estate Industry Award 2010 (the Award) 2.

[8] The Applicant submitted that this Agreement currently covered three out of the eight employees engaged by the Applicant. It is, at this time, the Applicant’s intention to bargain for an Enterprise Agreement which applies to the whole of the Applicant’s workforce.

[9] The Applicant submitted a “Memo” that was emailed to staff by Mr Brad Read, Director of the Applicant. This memo informed employees of this application to terminate the Agreement as a consequence of the Agreement reaching its nominal expiry date. This memo also confirmed the Applicant’s view regarding the out-dated nature of the Agreement in comparison to the Award.

[10] Relevantly the memo stated:

“It is important to note that no one will be disadvantaged by this application to terminate the expired Collective agreement (sic). There will be no change to wages, commissions or bonuses. All employment remuneration and entitlements will remain in alignment with the relevant industry awards and minimum wages and your current agreements. There will however be the advantage for sales employees on a wage in that you will be entitled to reimbursement for the use of your mobile phone once the agreement is terminated.

Management invited feedback and comments from Employees covered by [the Agreement] (Sales Classifications only) (sic).”

[11] The Commission also directed the Applicant to draw the Directions of 18 September 2013 to the attention of those employees covered by the Agreement. These Directions were attached to, and employees were referred to by, the memo of 18 September 2013.

[12] The Applicant submitted that only one of the three employees covered by the Agreement responded to the memo. That email response was filed in the Commission. That employee relevantly stated:

“I have read and agreed (sic) the changes to take place.”

[13] The Applicant submitted that the other covered employees did not respond or express a view.

[14] There are no employee organisations covered by the Agreement.

s.226(b)(ii) - the circumstances of those employees, employers and organisations including the likely effect that the termination will have on each of them.

[15] The Applicant submitted that the business has expanded and changed since the time of entering into the Agreement. This included the Applicant’s submission above that the Agreement only covered those employees engaged in sales classifications. This meant that the majority of employees of the Applicant are not covered by an Agreement.

[16] The Applicant submitted that if the Agreement were terminated it would enable the employer to commence negotiations for a new Enterprise Agreement which applied to all of its employees. It is noted that this is technically incorrect in that the Applicant is at liberty at this time to enter into negotiations with its employees as the Agreement has passed its nominal expiry date. Any subsequent Enterprise Agreement that covers the employees currently covered by the Agreement, if approved, would mean that the Agreement would cease to apply to the currently covered employees and could never apply to them again. 3 However it is acknowledged that terminating the Agreement may provide some simplification in the bargaining and transition process in the industrial relations practices of the Applicant.

[17] The Applicant submitted that the termination of the Agreement would mean that the Award began to apply to the employees. This would lead, in the Applicant’s submission, to minimal change in conditions of employment but would have some advantages for employees in that the Award provides for a mobile phone allowance and averaging of hours over 8 weeks (as opposed to 12 months contained in the Agreement).

[18] The Applicant provided a comparison table of the gross weekly wage between the Agreement and the Award. The current arrangements provide for a gross weekly wage equal to the relevant classification in the Award in any event. The likely effect of the termination of the Agreement is the increased entitlements in the Award will begin to apply to the employees.

s.226(a) - the FWC is satisfied that it is not contrary to the public interest to do so

[19] The Applicant submitted that there was nothing within their knowledge that would be contrary to the public interest in the termination of the Agreement.

[20] It is noted that the Agreement was made pursuant to the Workplace Relations Act 1996 (Cth) and has been modelled on the minimum entitlements at that time. The Agreement is not an extensive Agreement in terms of minimum entitlements.

Conclusion

[21] The Commission is satisfied that an application for the termination of an enterprise agreement has been made. The Commission is further satisfied that the Applicant is a person able to make an application pursuant to s.225(a) of the Act.

[22] The Commission is satisfied that it is not contrary to the public interest to order the termination of the Agreement. The employees will revert to the Award.

[23] The Commission is satisfied that it is appropriate to terminate the Agreement in all the circumstances and having considered the views of the Applicant and the employees and the circumstances of the Applicant and the employees.

[24] Having considered the material and s.226 of the Act the Agreement must be terminated.

[25] The termination will operate from the date of this decision.

[26] I Order accordingly.

COMMISSIONER

 1 AC316274.

 2   MA000106.

 3   Fair Work Act 2009 (Cth) s.58.

Printed by authority of the Commonwealth Government Printer

<Price code C, AC316274  PR543020>