United Workers' Union
[2023] FWCA 1121
•20 APRIL 2023
| [2023] FWCA 1121 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work (Transitional Provisions and Consequential Amendments) Act 2009
Item 16 Sch. 3 - Application to terminate collective agreement-based transitional instrument
United Workers' Union
(AG2023/592)
DELAWARE NORTH MANAGEMENT SERVICES P/L (ETIHAD STADIUM) EMPLOYEES CERTIFIED AGREEMENT 2005 - 2010
| Hospitality industry | |
| DEPUTY PRESIDENT CLANCY | MELBOURNE, 20 APRIL 2023 |
Application for termination of the Delaware North Management Services P/L (Etihad Stadium) Employees Certified Agreement 2005 - 2010
An application was filed by the United Workers’ Union (UWU) seeking the termination of the Delaware North Management Services P/L (Etihad Stadium) Employees Certified Agreement 2005-2010[1] (the Agreement) pursuant to Item 16 of Schedule 3 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Transitional Act). The Agreement is a collective agreement-based transitional instrument and has passed its nominal expiry date of 30 March 2010.
The employer party to the Agreement is Delaware North Management Services Pty ltd (the Employer). The UWU confirmed that the Employer had been served a copy of the Form F28 application, the Form F24C statutory declaration made by the UWU’s Sheldon Luke Oski on 10 March 2023, a petition to terminate the Agreement (Petition), a survey report regarding the potential application to terminate the Agreement (Survey Report) and an attachment comparing the Agreement and the Hospitality Industry (General) Award 2020 (the Comparison Document).
Legislation
The Agreement is a collective agreement-based transitional instrument to which Item 16 of Schedule 3 of the Transitional Act applies. The effect of Item 16 of Schedule 3 of the Transitional Act is that the termination of agreement provisions found in Subdivision D of Division 7 of Part 2-4 of the Fair Work Act 2009 (the Act) apply as though a reference to an enterprise agreement includes a reference to a collective agreement-based transitional instrument.
Section 225 of the Act provides 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.
The Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022 amended s.226 of the Act. The amendments took effect from 7 December 2022 and relevantly provide as follows:
“226 Terminating an enterprise agreement after its nominal expiry date
(1) 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 the continued operation of the agreement would be unfair for the employees covered by the agreement; or
(b) the FWC is satisfied that the agreement does not, and is not likely to, cover any employees; or
(c) all of the following apply:
(i) the FWC is satisfied that the continued operation of the enterprise agreement would pose a significant threat to the viability of a business carried on by the employer, or employers, covered by the agreement;
(ii) the FWC is satisfied that the termination of the enterprise agreement would be likely to reduce the potential of terminations of employment covered by subsection (2) for the employees covered by the agreement;
(iii) if the agreement contains terms providing entitlements relating to the termination of employees’ employment each employer covered by the agreement has given the FWC a guarantee of termination entitlements in relation to the termination of the agreement.
(1A) However, the FWC must terminate the enterprise agreement under subsection (1) only if the FWC is satisfied that it is appropriate in all the circumstances to do so.
(2) This subsection covers a termination of the employment of an employee:
(a) at the employer’s initiative because the employer no longer requires the job done by the employee to be done by anyone, except where this is due to the ordinary and customary turnover of labour; or
(b) because of the insolvency or bankruptcy of the employer.
(3) In deciding whether to terminate the agreement, the FWC must consider the views of the following covered by the agreement:
(a) the employees (unless there are no employees covered by the agreement);
(b) each employer;
(c) each employee organisation (if any).
Note: The President may be required to direct a Full Bench to perform a function or exercise a power in relation to the matter if any of the employers, employees, or employee organisations, covered by the agreement oppose the termination (see subsection 615A(3)).
(4) In deciding whether to terminate the agreement (the existing agreement), the FWC must have regard to:
(a) whether the application was made at or after the notification time for a proposed enterprise agreement that will cover the same, or substantially the same, group of employees as the existing agreement; and
(b) whether bargaining for the proposed enterprise agreement is occurring; and
(c) whether the termination of the existing agreement would adversely affect the bargaining position of the employees that will be covered by the proposed enterprise agreement.
(5) In deciding whether to terminate the agreement, the FWC may also have regard to any other relevant matter.
226A Guarantee of termination entitlements
Guarantee of termination entitlements
(1) A guarantee of termination entitlements is an undertaking given by an employer covered by an enterprise agreement that:
(a) is an undertaking that the employer will comply with subsection (3) if the agreement is terminated under section 226 and the employer terminates the employment of a protected employee for the termination of the agreement:
(i) at the employer’s initiative because the employer no longer requires the job done by the employee to be done by anyone, except where this is due to the ordinary and customary turnover of labour; or
(ii) because of the insolvency or bankruptcy of the employer; and
(b) is in writing; and
(c) meets any requirements relating to the signing of undertakings that are prescribed by the regulations.
(2) A protected employee for a termination of an enterprise agreement under section 226 is an employee who would, but for the termination of the agreement, be covered by the agreement.
(3) For the purposes of paragraph (1)(a), the employer complies with this subsection, in relation to the termination of the protected employee’s employment, if the employer complies with the terms of the enterprise agreement that, if the agreement were still in operation, would have provided the employee with entitlements that:
(a) relate to a termination of the employee’s employment:
(i) at the employer’s initiative because the employer no longer requires the job done by the employee to be done by anyone, except where this is due to the ordinary and customary turnover of labour; or
(ii) because of the insolvency or bankruptcy of the employer; and
(b) except if the employee was an award/agreement free employee immediately before the termination of the employee’s employment—are more beneficial than the entitlements under a modern award that covered the employee in relation to the employment at that time.
When guarantee is in force
(4) A guarantee of termination entitlements given in relation to the termination of an enterprise agreement:
(a) comes into force on the day on which the termination of the agreement comes into operation under section 227; and
(b) ceases to be in force at the earliest of the following times:
(i) if the guarantee specifies a period during which the guarantee is to remain in force and the FWC approves that period under subsection (5)—the end of that period;
(ii) immediately before another enterprise agreement that covers the same, or substantially the same, group of employees as the terminated agreement comes into force;
(iii) the end of the period of 4 years beginning on the day the guarantee is given to the FWC.
(5) The FWC may, in its decision terminating an enterprise agreement, approve a period for the purposes of subparagraph (4)(b)(i) if it considers the period to be appropriate.
Employer must comply with guarantee
(6) An employer must comply with a guarantee of termination entitlements given by the employer to the FWC in relation to the termination of an enterprise agreement if:
(a) the agreement is terminated under section 226; and
(b) the employer terminates the employment of a protected employee for the termination of the agreement while the guarantee is in force:
(i) at the employer’s initiative because the employer no longer requires the job done by the employee to be done by anyone, except where this is due to the ordinary and customary turnover of labour; or
(ii) because of the insolvency or bankruptcy of the employer.
Note: This subsection is a civil remedy provision (see Part 4-1)
Guarantee is a governing instrument for employment
(7) To avoid doubt, a guarantee of termination entitlements is a governing instrument for employment for the purposes of the Fair Entitlements Guarantee Act 2012.”
The Commission must be satisfied that the requirements in s.225, s.226 and s.226A of the Fair Work Act 2009 (the Act) are met prior to approving the termination of the Agreement.
Directions issued on 21 March 2023 (Directions) were sent via email to the Employer, and required, inter alia:
· the Employer to provide a copy of the Form F24B, the Form F24C statutory declaration, the Comparison Document, the Petition and Survey Report, to each of its employees via email and place a copy on a noticeboard used at the workplace for communications with staff.
· While noting paragraphs [19] and [20] of the statutory declaration of Sheldon Oski, the Employer to lodge with the Commission and serve on the UWU, and all of its employees any material and witness statements upon which it relied, including material which addressed the following (as applicable):
· Whether or not the continued operation of the Agreement would be unfair for any employees covered by the Agreement (s.226(1)(a) of the Act);
· Whether or not the Agreement does, and is likely to, cover any employees (s.226(1)(b) of the Act);
· Whether or not the continued operation of the Agreement would pose a significant threat to the viability of a business carried on by the Employer (s.226(1)(c)(i) of the Act)
· Whether or not the termination of the Agreement would be likely to reduce the potential of terminations of employment as described in s.226(2) for any employees covered by the Agreement (s.226(1)(c)(ii) of the Act);
· If the Agreement contained terms providing entitlements relating to the termination of employees’ employment, whether or not the Employer had given the Commission a guarantee of termination entitlements in relation to the termination of the Agreement as outlined in s.266A (s.226(1)(c)(iii) of the Act);
· The views of the Employer regarding the application to terminate the Agreement (s.226(3)(b) of the Act);
· Whether or not the application was made at or after the notification time for a proposed enterprise agreement that will cover the same, or substantially the same, group of employees as the existing Agreement, whether or not bargaining for the proposed enterprise agreement is occurring and whether or not the termination of the Agreement would adversely affect the bargaining position of the employees that will be covered by the proposed enterprise agreement (s.226(4); and
· Any other relevant matter.
On 29 March 2023, a Form F24D Declaration made by Deb Brennan, Director Employee & Industrial Relations on 24 March 2023 (Form F24D) was filed by the Employer’s representative in response. The Form F24D confirmed that on 27 March 2023, the Employer had provided the employees with copies of the relevant documents, including the Petition with redacted names and mobile numbers.
Consideration
Section 225 of the Act
Pursuant to s.225(c) of the Act, an employee organisation covered by an agreement may apply to the Commission for the termination of the Agreement if it has passed its nominal expiry date. As noted above at [1], the Agreement nominally expired on 30 March 2010. Further, I am satisfied that the UWU is an employee organisation covered by the Agreement. It follows that I am satisfied that the UWU has standing to bring the Application under s.225(c) of the Act.
Section 226 of the Act
Section 226(1)(a) of the Act states if an application for the termination of an enterprise agreement is made under section 225, the Commission must terminate the agreement if it is satisfied that the continued operation of the agreement would be unfair for the employees covered by the agreement.[2]
Sheldon Oski from the UWU declared the continued operation of the agreement would be unfair for the employees covered by the agreement and has made the following uncontested declarations:
(a) The continued operation of the Agreement would be unfair for the employees covered by the Agreement because the Agreement provides less beneficial conditions overall to the employees than those contained in the Hospitality Industry (General) Award 2020 (the Award), which would apply to them if the Agreement were to be terminated;
(b) The Agreement provides less beneficial conditions overall to the employees than those contained in the Award because the employees under the Agreement are not paid penalty rates for any hours worked during evenings and/or on weekends;
(c) The Agreement provides for a flat minimum rate of pay that applies regardless of what time of the week the hours are worked. Over time, this flat minimum rate of pay has been exceeded by the base rate of pay under the Award, such that by virtue of s.206 of the Act, employees currently covered by the Agreement are paid the base rate of pay under the Award;
(d) The employees covered by the Agreement are paid the same base rate of pay as those covered by the Award. However, unlike employees covered by the Award, the employees covered by the Agreement are not paid any additional penalty rates for hours worked during evenings and/or on weekends; and
(e) It is the UWU’s understanding that most of the employees covered by the Agreement work on evenings (defined as between 7:00pm to 7:00am, Monday to Friday) and/or weekends meaning that most employees covered by the Agreement would be better off under the Award.
Section 226(2) of the Act does not fall for consideration on the facts of this case.
As regards s.226(3), the circumstances are such that both the UWU and the Employer support the termination of the Agreement, with the Form F24D outlining the Employer’s support for the Application. In relation to the employees covered by the Agreement, I am satisfied having regard to the material before the Commission that:
a)The UWU has met with employees on-site to discuss termination of the Agreement;
b)Fliers were distributed to employees providing information on the process of terminating an agreement after its nominal expiry and some of the considerations that lie behind a decision of the Commission to terminate an Agreement;
c)The Comparison Document was emailed to all employees;
d)The Petition collected signatures from 222 employees supporting termination of the Agreement;
e)Briefings and consultation meetings were held with employees regarding terminating the Agreement; and
f)The Employer arranged for an online survey of 1577 employees on the termination of the Agreement and of the 474 employees who responded, 87.76% provided a response in favour of terminating the Agreement.
I am also satisfied:
a)The employees have been on notice that the Application was before me through the Directions I issued on 21 March 2023 and the various requirements outlined therein;
b)The employees had a reasonable period of time (until 4pm on 19 April 2023) to file material should they have wished to do so;
c)The Directions outlined that the impact of the Agreement being terminated would be the Award setting the terms and conditions of employment and a hyperlink to the Award was provided; and
d)No submissions from any employees have been received opposing the Application.
In all the circumstances therefore, I am satisfied there is meaningful support amongst the employees for the termination of the Agreement that outweighs the opposition to termination (if any).
The circumstances are also such that:
a)as there are no parties engaged in bargaining for a new enterprise agreement, s.226(4) is not a relevant factor; and
b)Section 226A of the Act is irrelevant in the circumstances of this case.
However, s.226(1A) provides that the Commission must terminate the Agreement only if it is satisfied that it is appropriate in all the circumstances to do so, while s.226(5) outlines that the Commission may also have regard to any other relevant matters.
I consider the approach to assessing appropriateness laid out by the Full Bench in Aurizon Operations Limited; Aurizon Network Pty Ltd; Australian Eastern Railroad Pty Ltd[3] (Aurizon), while addressing the termination of agreements prior to the Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022, remains apposite for applications to terminate agreements:
“All of the circumstances also need to be taken into account in considering whether termination of the agreements is appropriate. In particular the views of employers and employees covered by the agreement, their circumstances, and the impact of termination need to be taken into account. The requirement in s. 226(b) to take into account all of the circumstances including those set out in s. 226(b)(i) and (ii) is a requirement to take the matters into account and to give them due weight in assessing whether it is appropriate to terminate an enterprise agreement. In assessing appropriateness by taking into account all of the circumstances, we approached the task by reference to the construction of s. 226 and the contextual matters that bear upon that construction dealt with earlier as well as giving specific consideration to the matters identified in s. 226(b)(i) and (ii).”[4] (reference omitted)
Conclusion
Having regard to the matters and conclusions outlined above, I consider it is appropriate in all the circumstances of this case to terminate the Agreement (s.226(1A)) and I do not consider there are any other relevant matters that require consideration (s.226(5)).
Having made these findings, s.226 of the Act requires that I terminate the Agreement.
Operative Date of Termination
Section 227 of the Act affords the Commission a discretion as to the operative date of a termination of an agreement.
The UWU submits that given the extent of the disadvantage of conditions in the Agreement compared with conditions under the Award, there is no reason why the date for termination to be specified in accordance with s.227 of the Act should not be the date of the Commission’s decision to so terminate. The Employer made no submission as to operative date.
The termination will therefore operate from 20 April 2023. An order to this effect will be issued with this decision.
DEPUTY PRESIDENT
[1] AG846088
[2] For completeness, neither s.226(1)(b) nor s.226(1)(c) of the Act apply in the circumstances of this case.
[3] [2015] FWCFB 540.
[4] Ibid at [167].
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