Tuggeranong Valley Rugby Union & Sports Club Limited

[2020] FWCA 4455

[2020] FWCA 4455

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.225—Enterprise agreement

Tuggeranong Valley Rugby Union & Sports Club Limited
(AG2020/2278)

TUGGERANONG VALLEY RUGBY UNION AND AMATEUR SPORTS CLUB INC ENTERPRISE AGREEMENT 2003

Licensed and registered clubs
DEPUTY PRESIDENT DEAN	SYDNEY, 31 AUGUST 2020

Application for termination of the Tuggeranong Valley Rugby Union and Amateur Sports Club Inc Enterprise Agreement 2003.

[1] On 4 August 2020, Tuggeranong Valley Rugby Union & Sports Club Limited (the Club) made an application pursuant to s.225 of the Fair Work Act 2009 to terminate the Tuggeranong Valley Rugby Union and Amateur Sports Club Inc Enterprise Agreement 2003 (the Agreement). The Agreement has a nominal expiry date of 10 December 2005.

[2] The Club has a total work force of 180. The Agreement presently covers ten employees who are engaged on a full time basis in bar and gaming classifications (hereafter referred to as ‘the affected employees’). If the Agreement is terminated, the affected employees will be covered by the Registered and Licensed Clubs Award 2010 (Modern Award).

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

[4] On 6 August 2020, the Club was directed to circulate my directions to the affected employees which set out an overview of the application and requested that any persons who wished to oppose the application to advise my chambers by 21 August 2020. No opposition to the application has been received from or on behalf of any employees.

[5] I consider it appropriate to determine the matter on the basis of the material before the Commission.

[6] The provisions of the Act relevant to the application are contained in sections 225, 226 and 227:

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.

[7] The application was supported by a statutory declaration by Ms Joanna Bell, Group HR Manager of the Club. According to Ms Bell, the Agreement was negotiated under the State Award, the Liquor and Allied Industries Hotel, Hostels, Club and Boarding Establishments (ACT) Award 1998. The affected employees are remunerated with a significantly higher base rate of pay than the remaining Club employees who are covered by the Modern Award. This presents issues of fairness for the approximately 100 employees who perform the same work on a part-time or casual basis, in addition to increased payroll administrative burdens in applying two industrial instruments. The termination of the agreement would align the terms of all staff and reduce complexity.

[8] Ms Bell stated that the Agreement imposes significant costs and restrictions on the Club which are not sustainable in the long term. In particular, it contains a number of arrangements which are outdated, restrictive and some that exceed the entitlements under the Modern Award and the National Employment Standards (NES). In this regard, it was pointed out that the Agreement does not contain the mandatory flexibility and consultation terms and allows for cashing out annual leave and sick leave which is in contravention of the NES. Further, the Club has been unable to hire or transfer current employees into full-time roles due to the restrictive rostering provision of the Agreement and the significant wage costs.

[9] Ms Bell further said that due to the impact of COVID-19, maintaining higher wage costs is unfeasible and termination of the Agreement is a preferred option for the Club as opposed to redundancies or restructuring and job losses.

[10] In terms of the likely effect on the affected employees if the Agreement is terminated, Ms Bell deposed that the Club has given an undertaking to the affected employees that if the Agreement is terminated their current rates of pay will be maintained for twelve months before a transition to the Modern Award. Further, the affected employees will become entitled to provisions in the Modern Award that they do not currently receive.

[11] Overall, the Club believes that the termination of agreement will ensure productivity increases, reduced costs and fairness across the business, whilst still maintaining the relevant industrial safety net and temporarily maintaining higher wage rates.

[12] Having considered the material contained in the employer’s statutory declaration set out above, I am satisfied that termination of the Agreement is not contrary to the public interest. I have taken into account all of the circumstances including those specified in s.226(b)(i) and (ii) and consider that it is appropriate to terminate the Agreement. Accordingly, I approve the termination of the Agreement.

[13] The termination will come into effect from 31 August 2020.

DEPUTY PRESIDENT

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