1
Fair Work Act 2009
s.225 - Application for termination of an enterprise agreement after its nominal expiry date
Penelope Vickers
(AG2016/3797)
VICE PRESIDENT HATCHER SYDNEY, 12 MAY 2017
Referral to a Full Bench - Fair Work Act 2009 (Cth) – ss. 582, 615 and 615A.
Introduction
[1] Ms Penelope Vickers, who is an employee of Coles Supermarkets Australia Pty Ltd
(Coles), made an application on 5 July 2016 pursuant to s.225 of the Fair Work Act 2009 (FW
Act) for the termination of the Coles Supermarkets Australia Pty Ltd and Bi-Lo Pty Limited
Retail Agreement 2011 (2011 Agreement). One important aspect of the application
(termination application) is that Ms Vickers seeks that the termination of the 2011 Agreement
take effect retrospectively, from 31 May 2014. The termination application is opposed by
Coles, and by two unions covered by the 2011 Agreement, the Shop, Distributive and Allied
Employees Association (SDA) and the Australian Workers’ Union (AWU).
[2] Ms Vickers’ termination application is currently before Commissioner Spencer, who
to this point has dealt with a number of complex interlocutory issues raised by the parties.
[3] On 31 March 2017 Ms Vickers applied for the termination application to be referred to
a Full Bench of the Commission for determination pursuant to ss.582, 615 and 615A of the
FW Act. This application (referral application) is opposed by Coles, the SDA and the AWU.
[4] Sections 582, 615 and 615A of the FW Act provide:
582 Directions by the President
The President may give directions
(1) The President may give directions under subsection (2) as to the manner in which
the FWC is to perform its functions, exercise its powers or deal with matters.
(2) The President may give a direction that is of a general nature, or that relates to a
particular matter, to one or more of the following persons:
(a) an FWC Member;
(b) a Full Bench;
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(c) an Expert Panel;
(d) the General Manager.
(3) The direction must not relate to a decision by the FWC.
(4) Without limiting subsection (2), the direction may be a direction of the following
kind:
(a) a direction about the conduct of 4 yearly reviews of modern awards under
Division 4 of Part 2-3;
(aa) a direction about the conduct of 4 yearly reviews of default fund terms of
modern awards under Division 4A of Part 2-3;
(b) a direction about the conduct of annual wage reviews;
(c) a direction that 2 or more matters be dealt with jointly by one or more
single FWC Members or one or more Full Benches;
(d) a direction about the transfer between FWC Members (including a transfer
between Full Benches) of one or more matters being dealt with by the FWC.
Persons must comply with the President's directions
(5) A person to whom a direction is given must comply with the direction.
Note: For directions to the General Manager, see section 658.
Direction is not a legislative instrument
(6) If a direction is in writing, the direction is not a legislative instrument.
615 The President may direct a Full Bench to perform function etc.
(1) A function or power of the FWC may be performed or exercised by a Full Bench if
the President so directs.
Note: The President gives directions under section 582.
(2) The President may direct that the function or power be exercised by a Full Bench
generally, or in relation to a particular matter or class of matters.
(3) To avoid doubt, a reference in this section to a Full Bench includes a reference to
more than one Full Bench.
615A When the President must direct a Full Bench to perform function etc.
(1) The President must direct a Full Bench to perform a function or exercise a power
in relation to a matter if:
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(a) an application is made under subsection (2); and
(b) the President is satisfied that it is in the public interest to do so.
Note: The President gives directions under section 582.
(2) The following persons may apply to the FWC to have a Full Bench perform a
function or exercise a power in relation to a matter:
(a) a person who has made, or will make, submissions for consideration in the
matter;
(b) the Minister.
[5] On 5 April 2017 the President of the Commission, Ross J, delegated his functions and
powers under ss.582, 615 and 615A of the FW Act in respect of the referral application to me
pursuant to s.584 of the FW Act.
Submissions
[6] Ms Vickers contends that the referral of the termination application would be in the
public interest having regard to the following matters:
(1) The Commission’s initial approval of the Coles Store Team Enterprise
Agreement 2014-2017 (2014 Agreement), and the subsequent quashing of that
approval on appeal1, as well as its approval of other enterprise agreements in
the retail industry, has been the subject of substantial public discussion,
concern, media attention and Parliamentary debates.
(2) Coles is engaged in considerable “ongoing underpayment of wages”, and more
generally “[r]eports suggest that approximately 250,000 retail and fast food
sector workers governed by EBAs are paid less than the Award”. The relevant
award is the General Retail Industry Award 2010 (Award).
(3) There had been calls for a Senate Inquiry into the Commission’s approvals of
enterprise agreements due to their effect on competing small business.
(4) The 2011 Agreement, which covered some 74,000 employees, is the largest
enterprise agreement for which termination orders have been sought, and the
first of numerous enterprise agreements liable to be terminated against the
wishes of the employer and main union.
(5) The termination application, insofar as it sought a retrospective date of
termination, would be a practical and cost-effective way to compensate
underpaid employees. This was a novel feature of the termination application.
1 [2016] FWCFB 2887
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(6) The termination application also raised the novel issue as to whether the costs
incurred by employees associated with the loss of choice concerning
superannuation imposed by the 2011 Agreement should be taken into account
when comparing benefits under the 2011 Agreement to those provided by the
Award.
(7) The “deliberate breaches” of the FW Act committed by Coles “warrants
sanctioning from the highest level of the Commission so as to indicate the
seriousness with which it is viewed and to deter similar behaviour”.
[7] Ms Vickers submitted that the matters referred to above justified the termination
application being dealt with at the most authoritative level of the Commission. She also said
that because she did not have legal representation, but was opposed by parties with high-level
legal representation, the referral was justified because the Full Bench was inherently better
equipped to deal with this imbalance.
[8] Coles submitted that:
the termination application did not involve any contest about the interpretation of the
relevant statutory provisions, but merely concerned their application to a particular
factual scenario;
the termination application was factually complex and would involve expert evidence,
a substantial number of lay witnesses and a protracted hearing, and for that reason it
would be inefficient to deal with it at the Full Bench level;
media interest or public curiosity was not to be conflated with the public interest;
the fact that a significant number of employees will be affected did not enliven the
public interest; and
the Commissioner had in the process of dealing with the application acquired a good
deal of knowledge about the termination application, which would be thrown away if
the referral application was granted.
[9] The SDA submitted that:
the likely duration and evidentiary nature of the proceedings were such that the
termination application was more suited to be determined by a single member;
the fact that the matter was of public interest did not mean that referral would be in the
public interest;
there was nothing novel about the termination application, and the legal issues it raised
had been dealt with in earlier decision of the Commission;
there was no controversy or doubt about the power of the Commission to backdate an
order for termination under s.227 of the FW Act;
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a single member of the Commission was as well-equipped to deal with the asserted
imbalance in representation as a Full Bench, and the Commissioner had satisfactorily
dealt with this issues to date;
Ms Vickers’ assertions about the extent to which employees of Coles were allegedly
being paid less than the Award were factually in contest, and it was premature to rely
on these matters in support of the termination application; and
Ms Vickers had earlier in the proceedings resisted an invitation from the
Commissioner to indicate support for a referral of the termination application, and
nothing had changed such as to justify Ms Vickers’ change of position.
[10] The AWU made submissions to similar effect to those of the SDA.
Consideration
[11] The principles relevant to the determination of an application under s.615A were set
out in Collinsville Coal Operations Pty Limited as follows (footnote omitted)2:
“[5] The issue for determination is whether I am satisfied that it is in the public interest
to refer the agreement approval application to a Full Bench. The expression 'in the
public interest', when used in a statute, imports a discretionary value judgment to be
made by reference to undefined factual matters and confined only by the subject
matter, scope and purpose of the relevant statute. [O'Sullivan v Farrer [1989] HCA
61; (1989) 168 CLR 210 at 216 per Mason CJ, Brennan, Dawson and Gaudron JJ]
[6] Sections 577 and 578 of the FW Act are relevant to the exercise of the President’s
powers under s 615A.
[7] Section 577 provides as follows:
The FWC must perform its functions and exercise its powers in a manner that:
(a) is fair and just; and
(b) is quick, informal and avoids unnecessary technicalities; and
(c) is open and transparent; and
(d) promotes harmonious and cooperative workplace relations.
Note: The President also is responsible for ensuring that the FWC performs its
functions and exercises its powers efficiently etc. (see section 581).
[8] Section 578 directs the Commission to take into account, among other things, the
objects of the FW Act and ‘equity, good conscience and the merits of the matter’.
[9] Section 581 is also apposite. It provides, relevantly, that the President is
responsible for ensuring that the Commission performs its functions and exercises its
powers in an efficient manner.”
2 [2014] FWC 3129
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[12] In relation to the matters raised by Ms Vickers as set out above, I do not consider that
matters 1, 2, 3 and 7 raise any issue that would justify the grant of the referral application in
the public interest or on general discretionary grounds. The proposition that Coles is, while
the 2011 Agreement remains in force, paying any of its workforce an amount of remuneration
which is less than that which would be payable if the Award applied is at this stage merely
asserted, and is contested by Coles. The submissions of Ms Vickers proceed substantially on
the basis that these assertions are self-evidently correct and for that reason attract the public
interest. I accept the submissions of the SDA that it would be premature to grant the referral
application on the basis of these assertions, which will need to be proven at the hearing by Ms
Vickers. The mere fact that there is some degree of public controversy arising from these
assertions does not weigh in favour of the grant of the application, and the further untested
allegations about other enterprise agreements in the retail sector and effects on small business
seem to me to be of marginal relevance to the proper consideration of the referral application.
[13] That Ms Vickers is not legally represented, unlike Coles, the SDA and the AWU, does
not weigh in favour of the grant of the referral application. Members of the Commission are
well versed in dealing with the circumstances of self-represented litigants, and there is no
reason to consider that the determination of the matter by a Full Bench would place Ms
Vickers in any more favourable position.
[14] However I consider that, in respect of two of the matters raised by Ms Vickers, the
grant of the referral application would be in the public interest. First, I consider that the
number of employees to which the 2011 Agreement applies is so large as to make the
question of the termination of the 2011 Agreement a matter of public significance because of
its potentially broad economic and commercial effects. Second, although there appears to be
no dispute that the Commission has the power under s.227 to terminate an enterprise
agreement with a retrospective date of operation, nonetheless applications under the FW Act
to terminate enterprise agreements with retrospective effect have been rare, and have only
been granted where the backdating has been for a short period only and the agreement has
limited application.3 There has not been any authoritative pronouncement or consideration of
the principles to be taken into account in deciding such a significant matter. The effect of a
backdated termination of an enterprise agreement and the concomitant retrospective reversion
to the application of the relevant modern award raises complex legal and practical issues,
particularly in relation to any employees who have been paid above-award rates and other
benefits. The circumstances of this matter are likely to give these issues particular emphasis.
[15] It may be accepted that, in a case involving contested issues of fact and a large number
of witnesses, is it usually more appropriate for the hearing to be conducted by a single
member. However, cases of particular significance are from time to time heard by Full
Benches even where they involve the receipt of extensive evidence, and there is no reason
why the allocation of such a matter to a Full Bench should result in delay in the conduct of the
hearing.
[16] Accordingly I direct that the termination application (AG2016/3797) be referred to a
Full Bench for hearing and determination.
3 See Catalina Country Club Ltd [2013] FWCA 2005
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VICE PRESIDENT
Appearances:
Ms P. Vickers on her own behalf with Dr A Truslove.
Mr A. Harding of Counsel for the Shop, Distributive and Allied Employees Association.
Mr J. Harding for the Australian Workers Union.
Mr C. Buckley for Australian Meat Industry Employees Union.
Mr S Woods QC with Mr N. Burmeister of Counsel for Coles Supermarkets Australia
Pty Ltd.
Hearing details:
2017.
Melbourne:
11 May.
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OF THE FAIR WORK MISSION THE
