Vadila Pty Ltd T/A Cunninghams IGA

[2015] FWCA 4602

[2015] FWCA 4602

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.225 - Application for termination of an enterprise agreement after its nominal expiry date

Vadila Pty Ltd T/A Cunninghams IGA
(AG2015/2967)

VADILA PTY LTD - CUNNINGHAM'S IGA PARKES

Retail industry
COMMISSIONER BULL	SYDNEY, 9 JULY 2015

Application for termination of the Cunningham's IGA Parkes Employee Collective Agreement.

[1] On 9 June 2015, an application was made by Vadila Pty Ltd (the applicant) to terminate the Cunningham's IGA Parkes Employee Collective Agreement (the Agreement) pursuant to s. 225 of the Fair Work Act 2009 (the FW Act) as it applies under Item 16 of Schedule 3 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (the Transitional Act). The applicant is represented by Mr George Raptis - Legal and HR Services Lawyer of Master Grocers Australia. There are no employee organisations that are covered by the Agreement.

[2] The Agreement was approved by the Workplace Authority in accordance with Part 8 of the Workplace Relations Act 1996. The Agreement has a nominal expiry date of 5 years, and the applicant submits that the Agreement received approval on 7 August 2009. The Agreement has reached its nominal expiry date.

[3] The Agreement applies to all 22 employees of the applicant. The applicant seeks to have the Agreement terminated and the General Retail Industry Award 2010 (the Award) cover its employees.

Relevant legislation

[4] The Agreement is a collective agreement-based transitional instrument as per Item 2(5)(c)(i) of Schedule 3 of the Transitional Act.

[5] Schedule 3, Item 16(1) of the Transitional Act states:

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.

[6] Section 225 of the FW Act states:

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 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.

[7] The applicant being the employer covered by the Agreement, under s.225(a) of the FW Act, has the necessary standing to bring the application.

[8] Section 226 provides when the FWC must terminate an enterprise 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.”

[9] A statutory declaration (F24C) of Mr Peter Boschman – director of the applicant, accompanied the application, addressing each of the criteria as set out in s.226 of the FW Act.

Public Interest

[10] The applicant submits that it is in the public interest to terminate the Agreement as its employees will consequently be covered by the Award which has greater entitlements in comparison. In particular, the applicant submits that the Award contains higher weekday and weekend penalty rates as well as annual leave loading to all part time and full time employees. On this basis, the applicant submits that it is not contrary to the public interest to terminate the Agreement due to greater entitlements under the Award.

Views and circumstances of the employees

[11] In the applicant’s F24C, it is submitted that all affected employees have been consulted and provided information about the termination of the Agreement, with an opportunity to express their views about the proposed termination of the Agreement. An explanation letter to employees stating the reasons for the change and consultation was attached as an annexure to support this submission.

[12] A second letter attached to the F24C documented the steps the employer took to inform employees about the procedure of the proposed termination. The employer undertook an employee vote on the proposed termination of the Agreement. Whilst a vote of employees is not required under s.225 of the Act, the result is an indication of employees views. 21 employees of the 22 employees voted, and of whom 20 voted in favour of termination of the Agreement.

[13] A further attachment was a signed acknowledgement document of each employee’s receipt of the above mentioned letters.

[14] Ms Janelle Cheney was appointed as the nominated employee representative during the voting process for the proposed termination. All staff members were notified of the appointment in writing by a letter dated 30 April 2015, which was also attached to the F24C.

Conclusion

[15] Having regard to the submissions and processes exercised by the applicant and the legislative requirements of s.226 of the FW Act, I am satisfied that it is not contrary to the public interest to terminate the Agreement. Further, employees will benefit from greater entitlements under the Award.

[16] The termination will come into effect from 9 July 2015.

COMMISSIONER

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