Employee X [2023] FWCFB 155 (6 September 2023)

s.225 - Enterprise agreement

AIG SECURITY PTY LTD ENTERPRISE AGREEMENT 2012-2014

Application for termination of the AIG Security Pty Ltd Enterprise Agreement 2012-2014 - agreement terminated.

[1] An application has been made to terminate the AIG Security Pty Ltd Enterprise Agreement 2012-2014 (the Agreement) pursuant to s.225 of the Fair Work Act 2009 (Cth) (the FW Act).

[2] The applicant is an employee who is covered by the Agreement, and who has requested that their personal details are kept confidential. The applicant is referred to in this Decision as "Employee X".

[3] The Respondent, AIG Security Pty Ltd, initially opposed the application. Pursuant to s.582 and s.615 of the Act, the President directed that the matter be dealt with by this Full Bench.

[4] The following facts are agreed.[1]

[5] Employee X is a member of and is represented by the United Workers' Union (UWU). The UWU is a registered industrial association with membership coverage of, inter alia, employees in the security services industry. It is not a party to the Agreement, however, a number of the Respondent's employees are UWU members.

[6] The Respondent is a medium-sized provider of security services across Australia. It currently holds the contracts to provide security services to various clients and/or worksites, including for major ongoing construction projects. The Respondent employs approximately 46 employees across Australia, most of whom are covered by the Agreement and who work across a range of roster types.

[7] The Agreement reached its nominal expiry date on 1 June 2014.

[8] The Respondent, its employees, and UWU are not currently engaged in bargaining for a new agreement to replace the Agreement.

[9] The application was filed in the Fair Work Commission on 3 May 2023.

[10] While the Respondent initially opposed the application, it sought orders with respect to Employee X, UWU and the Respondent engaging in a Member-Assisted Conciliation ('MAC') with the view to coming to a consent position as to how the matter should proceed.

[11] On 19 June 2023, Employee X, the UWU, and the Respondent participated in a MAC before Commissioner Perica. As an outcome of the MAC, the Respondent now consents to termination of the Agreement, subject to termination of the Agreement operating from Tuesday, 31 October 2023. On that basis, the Respondent no longer opposes the s.225 application for termination of the Agreement.

[12] The Applicant and the UWU also consent to the termination of the Agreement operating from Tuesday, 31 October 2023.

[13] We are satisfied that the Agreement has passed its nominal expiry date.

[14] The Commission is required to terminate the Agreement if satisfied that its continued operation would be unfair for the employees covered by it and that it is appropriate in all the circumstances to do so.[2] In deciding whether to terminate the Agreement, the Commission is required to consider the views of any employees who are covered by it, each employer, and each employee organisation (if any).[3]

[15] The termination of the Agreement will result in the approximately 46 employees covered by it, having their terms and conditions set by the Security Services Industry Award 2020 and the National Employment Standards (the minimum safety net).

[16] Employee X and the UWU submit that the continued operation of the Agreement would be unfair because the Agreement provides less beneficial terms and conditions than the minimum safety net. Further, that the need to ensure employees receive fair minimum safety net conditions is an important factor in favour of terminating an agreement and there is a need to not create or continue a 'downward wages spiral' in the industry.[4]

[17] Employee X and the UWU provided 14 examples of terms and conditions in the Agreement that are less beneficial than provided by the minimum safety net. These include a lower casual loading, lesser consultation obligations, shorter minimum shifts for part time and casual employees, the absence of entitlements to a minimum break of 8 hours between shifts worked as ordinary hours, and the absence of various allowances.[5] Unlike the Award the Agreement does not provide for shift or weekend penalties or loadings. However, it does provide for higher rates for working rotating rosters and night shifts. Employee X and the UWU submit that it is unlikely the higher rates for some shifts are sufficient to compensate the employees for what they would earn under the Award. For example, calculations based on the roster Employee X was working at the time the application was made, indicate that Employee X would have been at least $707.88 better off for the same period under the Award compared to the Agreement.

[18] The Respondent, whilst not endorsing all the examples provided by Employee X and the UWU, accepts that each employee covered by the Agreement may, depending on their roster and work arrangements, have lesser entitlements under the Agreement than under the minimum safety net, and that the Commission can be satisfied that the continued operation of the Agreement would be unfair for the employees covered by it.[6]

[19] We are satisfied that the Agreement provides less beneficial terms and conditions than the minimum safety net and that the continued operation of the Agreement would therefore be unfair to the employees covered by it. We are also satisfied that it is appropriate to do so, having regard to this conclusion together with the UWU's support of the application and the consent of the Respondent (subject to the operative date). Whilst the UWU is not covered by the Agreement, we consider it appropriate to take into account its support for the termination of the Agreement given it is the employee organisation with membership coverage for the contracted security industry.

[20] The Respondent's consent to the application is conditional on the Agreement not being terminated before 31 October 2023. It submits that this timing affords it a necessary opportunity to negotiate new or varied contracts for its services to safeguard its ongoing viability, and to enable it to implement new payroll systems and other administrative matters to accommodate the transition to different industrial instruments. Neither Employee X nor the UWU oppose such an operative date.

[21] Although provided with an opportunity to do so, none of the employees covered by the Agreement provided their view on the application to the Commission.

[22] The Commission is also to have regard to whether circumstances exist involving notification for a proposed agreement that will cover the same, or substantially the same, group of employees, and where bargaining for the proposed agreement is occurring, and whether the termination of the agreement would adversely affect the bargaining position of the employees that would be covered by the proposed agreement.[7] As no bargaining for a proposed agreement is occurring, this consideration has no bearing on the application.

[23] The Commission may also have regard to any other relevant matter.[8] All parties contended, and we accept, that the existence of a consent position to terminate the Agreement is a relevant consideration for the purposes of s.226(5) of the Act in support of granting the application.

[24] We are satisfied that the requirements of s.226 of the Act as are relevant, have been met, and in all the circumstances, we consider that it is appropriate to terminate the Agreement with effect from 31 October 2023. The Respondent's primary position was that the determination should not be made until 31 October 2023 or, alternatively, if the determination was made before that date, that it should specify that the termination should come into effect on that date. We consider it preferable for the determination to be made at an earlier date, specifying that the termination of the Agreement will operate from 31 October 2023, so as to provide the parties and the affected employees certainty and clarity about the outcome of the Application.

[25] An Order will be issued separately.

[4] Applicant & UWU's Joint Outline of Submissions, p.10-11.

[5] Applicant & UWU's Outline of Submissions, pp.7-10.

[6] Employer Outline of Submissions, at [12]-[14].

Printed by authority of the Commonwealth Government Printer