Application for termination of the Towri MACS Early Childhood Employee Collective Agreement 2021

[1] On 9 September 2025, Towri Aboriginal Corporation (Towri) applied under s.222 of the Fair Work Act 2009 (Act) to terminate the Towri MACS Early Childhood Employee Collective Agreement 2021 (Agreement) by agreement with affected employees. The Agreement nominally expired on 30 June 2023. The Agreement covers the Independent Education Union of Australia (IEU) although it no longer has any members at Towri.

[2] On 12 September 2025, the IEU wrote to the Commission expressing concerns about whether the conditions for termination of the Agreement had been met. The concerns were directed at the information provided to employees before their unanimous vote to approve termination of the Agreement.

[3] The mandatory considerations under s.223 of the Act are considered in turn.

Did employees have a reasonable opportunity to decide whether to terminate the Agreement?

[4] In July 2025, all nine employees covered by the Agreement were sent an email with information about the proposed Agreement termination.

[5] On 2 September 2025, the employees were given notice of a vote on the proposed Agreement termination. The notice included information about the time and place of the vote and the voting method to be used.

[6] Prior to the vote, there were discussions about transitioning to the relevant modern awards (the Children's Services Award 2010 and the Educational Services (Teachers) Award 2020), as well as about position descriptions, individual flexibility agreements (IFAs) and eligibility for wage increases under the Early Childhood Education and Care Worker Retention Payment grant program (Grant Program). Employees were informed that new remuneration packages would be provided to them by 19 September 2025.

[7] Voting on the proposed termination occurred on 8 September 2025 and all employees participated.

[8] On the materials, I am satisfied that employees were given a reasonable opportunity to decide whether to terminate the Agreement.

Was the termination agreed to in accordance with subsection 221(1) or (2)?

[9] Section 221 of the Act describes when the termination of an enterprise agreement is "agreed to". In the case of a single-enterprise agreement, a termination is agreed to when a majority of the employees who cast a valid vote approve the termination.

[10] I am satisfied that the termination of the Agreement was agreed to for the purposes of the Act. All nine affected employees (including two voting by proxy) cast a valid vote approving termination of the Agreement.

Are there any other reasonable grounds for believing that employees have not agreed to the termination?

[11] The IEU submits that if employees were unaware of the matters identified below when they voted to approve the termination of the Agreement, the Commission could not be satisfied that the termination was agreed to.

[12] In summary, the IEU's concerns are that:

1. Towri's commitment to pay 1% above the relevant award rate was made to look like a new entitlement on to the modern awards even though this formed part of the Agreement,

2. Some terms of the Agreement are more favourable to employees than those in the modern awards,

3. Structural disadvantage will accrue to employees because they will no longer be able to bring disputes to the Commission under s.739 of the Act in relation to their above-award entitlements and instead will have to enforce contractual entitlements through the courts, and there is the potential for future employees to suffer disadvantage compared to current employees because they will not have the same assurance that 'no employees will be disadvantaged in relation to this matter', and

4. Employees may have been misled in relation to access to individual flexibility arrangements (IFAs) in connection with the Grant Program. Under the Grant Opportunity Guidelines, IFAs are considered a 'workplace instrument' that could support access to the Grant Program.

[13] Employees had a reasonable opportunity to consider the proposal for themselves and to ask questions throughout the period from July to 8 September 2025, and each voted by show of hands to approve the termination on 8 September 2025. Other than the issues raised by the IEU above, there is no evidence to suggest employees did not have the capacity to make an informed decision and did not do so.

[14] In relation to the IEU concerns, items 1-3 above are not persuasive. The commitment in relation to the 1% over-award payment is not expressed as a new entitlement and could equally have been understood as a commitment to maintain an existing one. I accept that the Agreement is more favourable in some respects than the modern awards that underpin it. This is a necessary consequence of the requirement for the Commission to be satisfied that enterprise agreements will leave employees better off overall before deciding whether the approve them. Towri has sought to mitigate the effect of transition to the modern awards by providing assurances to employees, including in contracts of employment. Employees have been persuaded that this is an acceptable outcome and have voted to support the change. The fact that one avenue for dispute resolution may be lost in the transition is a consequence of the operation of the statute, and one the Act contemplates in allowing for termination of enterprise agreements in appropriate circumstances.

[15] There is some basis for the concern raised by the IEU about the Grants issue, but on the materials, I do not find that employees have been misled. On 2 September 2025, and before employees voted to approve termination of the Agreement, Towri advised employees of its plans. It said that employees would transition to the relevant award, and that educators would be paid 1% above award rate. It also said that "With the transition to the Modern Awards, Towri Aboriginal Corporation will assess eligibility under the NSW Worker's Retention Grant funding and will communicate all progress of this application with employees, should the service and employees be eligible. Towri Aboriginal Corporation will ensure that no employees will be disadvantaged in relation to this matter...". Although referenced incorrectly, I am satisfied that the subject of discussion in relation to grant funding was the funding available under the Grant Program.

[16] In a meeting to vote on the proposed termination on 8 September 2025, there was discussion about these plans. This included discussion of the option of Individual Flexibility Agreements, the effect of the 'NSW Workers Retention Grant' including backpay and higher rates of pay, and a move to the modern award with conditions of contracts to reflect the new classification and new remuneration packages to be drafted and provided by 19 September 2025. To qualify for the grant funding, it seems likely that revised contracts will need to be supplemented by individual flexibility agreements that provide for above-award rates of pay aligned to the grant funding for 10% above award wages in the first year of the Grant Program and 5% above in the second year.

[17] In a covering email to the Commission at the time of application for termination on 9 September 2025, Towri stated that is "eligible for the NSW Workers Retention Grant that pays 10% above award for the first year, and 5% following". The statement does not appear to be correct. At best, Towri is working toward access to the grant funding. It is not eligible under the existing Agreement due to rates of pay that are not sufficiently above-award. It may not succeed in obtaining grant funding, and in that event, rates of pay will be at the levels described before the vote to terminate the Agreement: that is, 1% above award for the relevant award classifications, and on the basis that no employees will be disadvantaged.

[18] However, the incorrect statement could not have influenced the voting outcome, because voting to approve termination of the Agreement concluded on 8 September 2025. In the circumstances, including that employees were told about efforts being made to assess eligibility for the Grant Program before the vote took place, I do not have reasonable grounds for believing that employees have not agreed to the termination.

Is it appropriate to terminate the Agreement taking into account the views of the IEU?

[19] In all of the circumstances, I consider it appropriate to terminate the Agreement to give effect to the consensus of the parties in the absence of any persuasive countervailing factors.

[20] Towri has met the requirements for termination of the Agreement under s.220(2) of the Act and the termination has been 'agreed to' by a majority of employees who cast a valid vote to approve the termination. The application was made in accordance with the Act and I am satisfied that it is appropriate to approve the termination of the Agreement.

[21] Termination of the Agreement is approved. The termination will operate from 14 days after the date of this decision.

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