Industry News

AWX WorkChoices Agreement Terminated

Background

In March this year, the AMIEU and 28 abattoir workers employed by AWX Pty Ltd applied under s225 of the Fair Work Act 2009 for approval to terminate the AWX Pty Ltd Employee Collective Agreement – Meat Industry Employees, which nominally expired on December 23, 2009.
The argument

The AMIEU argued on behalf of the workers that:

• the agreement had passed its nominal expiry date and a party to an expired agreement should be entitled to withdraw from it;
• it was not intended by the legislation and was unreasonable to lock such an agreement in place indefinitely;
• the longer the time after expiry of the nominal term, the stronger the case for termination;
• the AMIEU had attempted to renegotiate a new enterprise agreement but that invitation was emphatically rejected by AWX;
• termination of the agreement does not prevent further enterprise bargaining;
• employees voted for the termination of the agreement at the secret ballot;
• the safety net would not be undermined as the practical effect of the grant of this application would be to revert the employees’ terms and conditions of employment to those set out in the Meat Industry Award 2010;
• termination of the agreement ensured the principle of equal remuneration for work of equal or comparable value;
• the material factors in favour of considering if termination was appropriate promoted the objects of the FW Act;
• vulnerable employees would not be affected;
• the termination of the agreement would not alter the status quo in a fundamental way and would have no effect on the bargaining power of employees or the company;
• the right of employees to be represented and/or have access to effective dispute resolution procedures would not be affected;
• AWX was already substantially paying Award rates so there would be no financial detriment to the company or its employees in terms of wages, conditions or rights; and
• the likely foreseeable consequences of termination of the agreement on the company would not be a downturn in productivity, and/or lead to a lesser or greater degree of managerial prerogative by company managers, and/or or a loss of security of employment for the employees.

The decision at first instance

Assessing the agreement, Commissioner Simpson found that wages and conditions would be raised to the minimum standard under the Meat Industry Award 2010 if he granted the application. In other words, termination of the old agreement would lift more than 450 refugee workers to the safety net.

On 9 August, the FWC ruled that the termination of the agreement would operate from September 2, rejecting AWX’s argument for a longer delay to give it time to adjust its operations.
Commissioner Simpson cited at paragraph 113 of his reasons for decision, the decision of Watson VP in Energy Resources of Australia Ltd v Liquor, Hospitality and Miscellaneous Union [2010] FWA 2434 he said as follows at paragraphs 29 and 31;

“[29] In my view it is unreasonable to lock such an agreement in place indefinitely. The legislative scheme supports the ending of agreement obligations at or after the nominal period the agreement. Termination of the Agreement does not preclude further enterprise bargaining. Regular revisions and renewal of enterprise arrangements is desirable…”
….
[31] The longer the time after the expiry of the nominal term the stronger the case for termination. This agreement passed its nominal expiry date almost ten years ago. Where the continuation of the Agreement could have detrimental affects on the operation and the level of consistency of terms and conditions of employment the case for preventing termination is further diminished. I find that this circumstance exists in this case.”

The appeal

In response to the decision, AWX lodged an appeal with the FWC on 23 August.

The FWC heard the matter on 3 October by a Full Bench of the Commission.

As submitted at the stay, the AMIEU argued that AWX has poor prospects on appeal; the decision of Commissioner Simpson at first instance involved the exercise of a discretionary value judgement and broad discretionary power, the public interest, which is concerned with the interests and welfare of the community as a whole and an appropriateness test where the decision maker must look at the objects of the Act and the effect termination will have on employers, employees and their ability to bargain.

To be successful on appeal, AWX needed to show that there was some wrong principle applied, that there was some error of law, the taking into account of irrelevant material, failing to take into account relevant material, or that there was no sufficient basis for the findings made by the decision maker.

The AMIEU argued that Commissioner Simpson did in fact ask himself the correct questions, there were no jurisdictional errors and that it was clear from his reasons for his decision that he examined the evidence and the legislative provisions quite thoroughly.

The decision on appeal

The FWC decision was handed down on 11 November 2013.

The Commission was not satisfied that AWX had identified an appealable error in the Commissioner’s exercise of his discretion and did not consider that it was in the public interest or otherwise to grant permission to appeal. The Full Bench set aside the stay order and dismissed the appeal.