Villeroy & Boch

[2018] FWCA 1582

[2018] FWCA 1582

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.225—Enterprise agreement

Villeroy & Boch
(AG2018/503)

VILLEROY & BOCH RETAIL ENTERPRISE AGREEMENT

Retail industry
DEPUTY PRESIDENT CLANCY	MELBOURNE, 22 MARCH 2018

Application for termination of the Villeroy & Boch Retail Enterprise Agreement.

[1] On 15 February 2018, Villeroy & Boch Pty Ltd (Villeroy & Boch) filed an application pursuant to s.225 of the Fair Work Act 2009 (the Act) to terminate the Villeroy & Boch Retail Enterprise Agreement (the Agreement). The Agreement is a single-enterprise agreement which nominally expired on 31 August 2012.

[2] Accompanying the application was a statutory declaration of Ms Orla Bree, Financial Controller at Villeroy & Boch. Attached to Ms Bree’s statutory declaration were the following; a copy of an application previously filed by the Shop, Distributive and Allied Employees Association (SDA) to terminate the Agreement, a statutory declaration of Mr Gerard Dwyer, National Secretary of the SDA, and a comparison document prepared by the SDA which compares the Agreement to the General Retail Industry Award 2010 (the Award). 1 Ms Bree declared that she relied on the content of these attachments.

[3] The Act relevantly 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.

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.”

[4] Ms Bree declared there are employees covered by the Agreement. She said Villeroy & Boch and the SDA contend that the rates of pay and terms and conditions provided in the Agreement have fallen below the minimum terms and conditions of the Award and as such, employees suffer a disadvantage when compared with the rates of pay and terms and conditions of employment under the Award. The comparison document provides particulars of how employees are better off under the Award, including; the Award providing a 25% casual loading as opposed to 20% under the Agreement; the various allowances employees would be entitled to under the Award which are lacking in the Agreement including laundry, first aid and higher duties allowances; and more beneficial penalty rates.

[5] I am satisfied that should the Agreement be terminated, the Award would apply to employees who were covered by the Agreement.

[6] On 16 February 2018, Directions were issued which required Villeroy & Boch, by 4.00pm on 23 February 2018, to post the following documents on the staff noticeboard at each workplace, and to also provide the material via email to each employee:

•  The Directions;

•  The application filed by Villeroy & Boch;

•  The statutory declaration made by Ms Bree;

•  The application made by the SDA and the statutory declaration of Mr Dwyer; and

•  The comparison document prepared by the SDA.

[7] On 23 February 2018, Ms Bree confirmed the Directions had been complied with and all employees had been notified as instructed.

[8] The Directions provided that any employee who wished to do so should file and serve any material which upon which they rely in relation to the application, by 4.00pm on 9 March 2018. No material was received.

Section 225 of the Act

[9] I am satisfied Villeroy & Boch, as the employer covered by the Agreement, is eligible to apply to the Commission for the termination of the Agreement under s.225(a) of the Act. I am also satisfied the Agreement has passed its nominal expiry date of 31 August 2012.

Section 226(a) of the Act – Public Interest

[10] As regards s.226(a) of the Act and the manner in which the public interest is to be assessed, the Full Bench in Aurizon Operations Limited; Aurizon Network Pty Ltd; Australian Eastern Railroad Pty Ltd 2(Aurizon)cited various passages from the Full Bench of the Australian Industrial Relations Commission’s decision in Re Kellogg Brown and Root, Bass Strait (Esso) Onshore/Offshore Facilities Certified Agreement 20003(Kellogg) which had concerned the corresponding, but not identical, provision from the Workplace Relations Act 1996. Relevantly, these passages included:

“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…” 4

[11] It is also relevant to highlight the Full Bench in Aurizon concluded that it cannot be expected that the terms and conditions of an agreement will continue unaltered in perpetuity after it has passed its expiry date. This is because the Act contemplates the terms and conditions of an agreement may be altered by making a new agreement or by terminating the existing agreement. 5

[12] As was also recognised in Aurizon, s.226 of the Act is not limited to circumstances in which an agreement no longer applies to any employee. The Act clearly contemplates an agreement that still applies to employees being terminated and prescribes a safety net upon termination in such circumstances. The prescribed safety net is not a prior agreement and nor are undertakings mandatory. Rather, the prescribed safety net is the relevant modern award created during the Award Modernisation process and the National Employment Standards (NES). In this case, the relevant modern award is the General Retail Industry Award 2010 (the Award).

[13] In this application, the termination of the Agreement would not lead to an absence of award coverage for the employees. The Award provides for “proper industrial standards” within the meaning given to that term by Kellogg.

[14] In circumstances where there was no material before me suggesting otherwise, I am satisfied it is not contrary to the public interest to terminate the Agreement.

Section 226(b) of the Act – Appropriateness

[15] The approach to assessing appropriateness by taking into account all the circumstances, as enunciated by the Full Bench in Aurizon, is to have reference to the construction of s.226 and the contextual matters that bear upon that construction, as well as giving specific consideration to the matters identified in ss. 226(b)(i) and (ii):

“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).” 6 (Reference omitted)

[16] I intend to adopt this approach.

[17] As the employer, Villeroy & Boch filed the application to terminate the Agreement. Clearly it supports the Agreement being terminated. Ms Bree stated the effect of terminating the Agreement on Villeroy & Boch would be that there is a beneficial impact on the terms and conditions of employees covered. No further submissions were made as to the effect of terminating the Agreement on the employer.

[18] There is no employee organisation covered by the Agreement however I note the SDA’s support for the application and the termination of the Agreement.

[19] I am satisfied the employees were on notice as to the application before me and had a reasonable period of time to file material should they have wished to do so. However, no submissions from any employees were filed in the Commission and I will therefore accord neutrality to their views in considering the application.

[20] As to the circumstances of the employees and the likely effect that termination of the Agreement would have on them, I note the Agreement covers full-time, part-time, casual and salaried employees in the positions of Villeroy & Boch Consultant and Villeroy & Boch Specialist Consultant.

[21] There is no material before me to indicate what rates are currently being paid to employees covered by the Agreement but I am satisfied I can reasonably conclude, based on a reading of its terms, that if the Award was to apply to the employees, they would not be left with conditions less favourable than those they currently enjoy. In any event, the Act contemplates the Award and NES applying as the safety net, in the event of termination of the Agreement.

Conclusion

[22] The Agreement does not cover any employee organisation and the employees expressed no views in relation to the Application. However, having regard to the terms of the Agreement in their entirety as they apply to the employees and the fact that they will be covered by the Award if the Agreement is terminated, together with the views and circumstances of Villeroy & Boch, I am satisfied it is appropriate in all the circumstances to terminate the Agreement. As outlined in paragraph [14] above, I am also satisfied it is not contrary to the public interest to terminate the Agreement.

[23] Further to the above findings, the Act requires that I terminate the Agreement. 7 In accordance with s.227 of the Act, the termination will take effect from 22 March 2018.

DEPUTY PRESIDENT

 1   MA000004.

 2   [2015] FWCFB 540.

 3 (2005) 139 IR 34.

 4   Ibid at 40.

 5   [2015] FWCFB 540 at [176].

 6 Ibid at [167].

 7   Fair Work Act 2009 (Cth), s.226.

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