Wareatt Pty Ltd T/A Snooze Townsville
[2023] FWCA 498
•17 FEBRUARY 2023
| [2023] FWCA 498 |
| 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
Wareatt Pty Ltd T/A Snooze Townsville
(AG2023/90)
Wareatt Pty Ltd Collective Workplace Agreement
| Retail industry | |
| COMMISSIONER HUNT | BRISBANE, 17 FEBRUARY 2023 |
Application for termination of the Wareatt Pty Ltd Collective Workplace Agreement
On 16 January 2023, Wareatt Pty Ltd T/A Snooze Townsville (the Employer) made an application under Schedule 3, Item 16 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (the Transitional Act) to terminate the Wareatt Pty Ltd Collective Workplace Agreement (the Agreement). The Agreement has passed its nominal expiry date on 26 June 2014.
The Agreement is a zombie agreement. As a result of the passing of the Fair Work Legislation Amendment (Secure Jobs, Better Pay) Bill 2022, the Agreement will naturally cease to exist on 7 December 2023.
The application was supported by a Form F24C statutory declaration of Ms Jacqueline Ware, Franchisee of the Employer, which declared, amongst other things, that the Employer seeks to terminate the Agreement earlier than the legislative termination date of 7 December 2023 and apply the relevant modern award.
In its application, the Employer identified it as operating in the retail industry. Accordingly, the relevant modern award for employees covered by the Agreement is the General Retail Industry Award 2020 (the Award) in the event the Agreement is terminated.
The Agreement does not cover any employee organisations (unions).
I directed the Employer to communicate in writing to each of the employees covered by the Agreement, inviting them to correspond by email with my chambers in the event they wished to provide their views. I received confirmation from the Employer that it had applied with the above direction. I did not receive any correspondence from any of the relevant employees.
Legislative Provisions
The relevant provision of the Transitional Act is as follows:
“Schedule 3…
16Collective agreement-based transitional instruments: termination by the 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.
(2) For the purpose of the application of Subdivision D to an old IR agreement, the agreement’s nominal expiry date is taken to be the end of the period of the agreement.”
The relevant provisions of the Fair Work Act 2009 (the Act), as of 7 December 2022, are 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 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.
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.”
Consideration
As the Agreement has passed its nominal expiry date, and the Employer is an employer covered by the Agreement, I find that the Employer has standing to make the application pursuant to s.225(a) of the Act.
In consideration of s.226(1)(a) of the Act, and whether it would be unfair for the employees covered by the Agreement to continue to be covered by the Agreement, I note that the Agreement contains the following provisions:
- Clause 2 – partial exemption to various entitlements;
- Clause 10 – an employee election to work outside or a span of ordinary hours without the payment of penalty rates;
- Clause 20 – a span of ordinary hours of 6:00am to midnight, Monday to Sunday;
- Clause 81 and on – allowances fixed in time and not indexed;
- Clause 90 – removal of a large number of allowances; and
- Clause 96 – settlement of disputes by way of opinion only, as opposed to consent arbitration within the Award.
It is noted that the Agreement contains better entitlements than the Award with respect to redundancy payments and some weekend and public holidays penalties.
There is no evidence before me as to whether the Employer has provided greater entitlements to employees than those contained in the Agreement. If it has, it has been at its benevolence. The test before the Commission is strictly relevant to the terms contained within the Agreement.
Having regard to the deficiency of terms within the Agreement when compared with the Award, even taking into account some greater entitlements at [11], I consider employees will likely be entitled to greater conditions if covered by the Award than they would be if continued to be covered by the Agreement. I am satisfied that the continued operation of the Agreement would be unfair to the employees covered by it.
Having regard to s.226(3)(b), the views of the Employer are naturally, by virtue of the application, that it wishes for the Agreement to be terminated as it no longer wishes to be bound by it. None of the employees covered by the Agreement provided their views for the Commission’s consideration.
The considerations at ss.226(2) and (4) are not relevant and I am satisfied that there are no other relevant matters to take into account in deciding whether to terminate the Agreement.
Having regard to s.226(1A) of the Act, I am satisfied that it is appropriate in all the circumstances to do so. Accordingly, I must terminate the Agreement. The application to terminate the Agreement is approved.
As per s.227 of the Act, if an enterprise agreement is terminated under s.226, the termination operates from the day specified in the decision to terminate the Agreement. The Employer has advised that the pay cycle for these employees is from Monday to Sunday. Accordingly, I consider it appropriate for the termination to take effect from Monday, 20 February 2023 such that the Award will apply from that day.
The termination will take effect from 20 February 2023.
COMMISSIONER
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