Fair Work (Transitional Provisions and Consequential Amendments) Act 2009
Sch. 3, Item 16 - Termination of transitional instrument

Wayne Jackson
(AG2021/5438)

OH MY PTY LTD T/A HERVEY BAY SECURITY OF 455 BOAT HARBOUR DRIVE HERVEY BAY QLD 4655 COLLECTIVE WORKPLACE AGREEMENT

Application for termination of the Oh My Pty Ltd T/A Hervey Bay Security of 455 Boat Harbour Drive Hervey Bay QLD 4655 Collective Workplace Agreement – agreement terminated effective 1 July 2022.

[1] On 1 June 2021, Mr Wayne Jackson, an employee of Oh My Pty Ltd, lodged a Form F28 Application for termination of collective agreement-based transitional instrument with the Fair Work Commission (the Commission) to terminate the Oh My Pty Ltd T/A Hervey Bay Security of 455 Boat Harbour Drive Hervey Bay QLD 4655 Collective Workplace Agreement (the Agreement). 1 The Agreement passed its nominal expiry date in 2011.

[2] The application is made pursuant to s.225(b) of the Fair Work Act 2009 (the Act) and under Schedule 3, Item 16 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (the Transitional Act). The application of these sections is discussed below.

[3] The Agreement covers employees of Oh My Pty Ltd T/A Fraser Coast Security (the Employer). Mr Les Horwood, Director, represented the Employer, while written submissions were made on the Employer’s behalf by Mr Chris Delaney, Industrial Relations Advisor from the Australian Security Industry Association Limited (ASIAL).

[4] Mr Jackson was an employee covered by the Agreement when the application was made to the Commission. It follows that Mr Jackson had standing to bring the application.

[5] Termination of the Agreement would result in employees then being covered by one of the following Awards, depending on the work performed by the employee:

•  Security Services Industry 2020 (the Security Award);

•  Electrical, Electronic and Communications Contracting Award 2020 (the Electrical Award);

•  Clerks’ Private Sector Award 2020 (the Clerks Award).

Legislative provisions

[6] Item 16 of Schedule 3 of the Transitional Act provides that Subdivision D of Division 7 of Part 2-4 of the Fair Work Act 2009 (the Act) 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.

[7] Chapter 2, Part 2-4, Division 7, Subdivision D is 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 When the FWC must terminate an enterprise agreement

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 it is not contrary to the public interest to do so; and

(b) the FWC considers that it is appropriate to terminate the agreement taking into account all the circumstances including:

(i) the views of the employees, each employer, and each employee organisation (if any), covered by the agreement; and

(ii) the circumstances of those employees, employers and organisations including the likely effect that the termination will have on each of them.

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.”

Employees covered by the Agreement notified of the application

[8] On 3 June 2021, I issued directions to the Employer to forward to employees covered by the Agreement an email from my chambers inviting views as to the application and the likely effect of termination of the Agreement. The Employer complied with the directions.

[9] On 11 June 2021, Mr Horwood provided the Employer’s views to the application. On 11 June 2021, Ms Michelle Ozanne, Executive Officer, communicated her views to the application, produced below at [29].

[10] Between 10 and 11 June 2021, my chambers received emails from 23 employees covered by the Agreement, providing views as to the application.

[11] On 22 June 2021, Mr Delaney from ASIAL provided written submissions on behalf of the Employer.

Hearing

[12] On 23 June 2021, I convened a telephone hearing. Mr Jackson appeared, as did Mr Horwood and Ms Ozanne. Mr Delaney from ASIAL was unable to appear for the Employer on the day of the hearing due to other commitments. I have had regard to the written submissions and the evidence and submissions given during the hearing.

Views of Mr Jackson

[13] Mr Jackson did not provide any views as to whether it would be contrary to the public interest not to terminate the Agreement. He is employed as a permanent part-time employee. During the hearing he stated that he had only worked a small number of hours within the last fortnight. He generally works day shifts but has worked between 10pm and 2am without payment of penalty rates.

[14] Mr Jackson’s views as to the termination are produced below:

“I can't speak on the views of employers or employee organisations, however as an employee my view is that the current collective agreement is extremely outdated (2006), and far below basic [standards], and below award. The current Approx. 15 year old agreement leaves employees [ultimately] earning less than they would under the base award. By terminating this agreement, it will leave employees being paid at least minimum award wage, including getting back penalty rates for nights and weekends, as well as 4 hour minimum shifts (currently 2 hours under this agreement).”

[15] Mr Jackson’s views as to the likely effect the termination will have on employees and the Employer is produced below:

“I'm sure that almost all, if not all employees are unaware that form f28 exists and that the collective agreement is 15 years old, or I'm sure it would have been terminated already as I have heard several co-workers complain about not getting penalties etc. Employees work a lot of nights and weekends in the security industry and have been getting under award for night shifts and weekends. I think the effect the collective agreement termination will have, will be guards a lot happier being properly paid to work nights and weekends. For employers, as long as their contracts cover at least minimum award wage there shouldn't be a problem.”

Views of the Employer

[16] The Employer noted that Mr Jackson had only recently joined the Employer on 12 April 2021 as a security guard, suggesting he may not have full knowledge of the business as he is a new employee. The Employer has employees performing traditional manpower security services, and also requires employees to perform technology/electronic-based services.

[17] It was submitted that while Mr Jackson’s employment would revert to the Security Award if the Agreement is terminated, other employees will be covered by the Electrical Award and the Clerks Award.

[18] The Employer stated that while some of the guards are required to work nights without the payment of penalty rates, many other employees are employed during the day only, performing administrative roles, technical security, or cash-in-transit functions. The following table was provided relevant to the hours of work performed across the day and week:

[19] It was submitted that if the Agreement is terminated, the Employer would not be able to, in the short-term, increase the rates charged to clients. The increased rates payable to employees under the various Awards would not be recovered, it was submitted. Changes to the enterprise would need to be made, including reducing night work to day work, where possible.

[20] It was submitted that an over-award rate of pay is made to some employees where they do day work, noting that employees performing night and weekend work do not attract the penalty rates payable under the three awards (where this work is predominantly security work). Accordingly, employees performing day work will see a reduction in the rate of pay payable under the various Awards, particularly adult technical service trainees and administration staff, and employees working night shift or on weekends would be paid more under the various Awards.

[21] The Agreement contains the following weekly allowances per 38 hours of work for employees performing security guard work:

● Mobile phone $38
● Torch and batteries $7
● Laundry $12

[22] It was submitted that at the time the Agreement was made, employees were expected to supply and operate a MagLite or similar torch running on very expensive D-Cell batteries, and phone plans cost in excess of $100 per month. In present times, a USB rechargeable torch can be purchased at Bunnings for around the same price as a bulb on a MagLite, rechargeable in a work vehicle. It was submitted that employees can purchase mobile phone plans for as little as $10 per month. In May 2021, employees entitled to the above allowances were paid on average $143.07 each for the month. There are no comparative allowances within the Security Award, and therefore this payment would not be made to employees upon termination of the Agreement.

[23] A weapons allowance paid to relevant employees under the Agreement equates to $79.80 per fortnight as opposed to the $30.88 within the Security Industry Award. 2

[24] The Agreement provides for five weeks’ annual leave to permanent employees as opposed to four weeks under the three Awards. It was submitted that the loss of the extra weeks’ leave would affect 17 employees. For some clerical employees and technical/electronic employees, they might lose the extra weeks’ leave and see a reduction in their hourly rate of pay on account of the over-award payment no longer being paid to them. Security guards working nights and weekends would see penalty rates flow their way.

[25] In the written submission it was put that the Employer works in a unique geographical location with limited commercial opportunities. It was submitted that the closest competitor for the provision of protective security services in the region operates under an agreement approved more than a decade ago. It was noted it has reached its expiry date, but it is still in operation. During the hearing I learned the name of the competitor is Prosek.

[26] It was submitted that if the Agreement is terminated, the Employer will be unable to compete against the competitor, will lose customers, and its employees will lose jobs or have hours of work reduced.

[27] It was proposed that if the Agreement is to be terminated, a lengthy lead-in time be permitted to allow the Employer to renegotiate as many contracts as it can. If the Employer was not required to pay the Award rates until 1 July 2022, it could attempt to in the meantime, renegotiate contracts with its clients, in spite of its competitor having a commercial advantage of paying its employees rates within an agreement approved in 2006.

[28] The Employer noted its largest contract represents over 20% of its business, and it may potentially run until 2024. It would hope to be in a position to renegotiate the costs with that client if the Agreement is terminated and the Employer’s wages bill increases.

[29] Ms Ozanne made the following submissions:

“….My role as the Executive Officer sees me ultimately responsible for employing and managing staff as well as tendering for contracts and submitting quotes on behalf of the Company.

Over the past week, I have assisted fellow team mates to check the award for what their possible new pay rate will be.  For some, it has been joyous - night rates and weekend rates will benefit a select few in the organisation.  Yes, I think it's awesome that they will be rewarded for working through the night whilst others sleep and working on weekends when their team mates are at home with their families.   These same staff will most likely get fewer hours as our client base lessens, however they will be paid more for those hours.

For others though (daytime Monday to Friday staff which make up a larger and just as important percentage of us), it still remains an emotional rollercoaster waiting to find out the impact for their families.  Some may be affected by as much as losing just over $5.00 an hour moving to another award.  Many have expressed that they will be unable to remain with us on these terms.  

Over the past 12 to 18 months my instruction from Les has been to bring our tenders and pricing into line with the SSIA to allow us to move towards paying staff under this instrument.  As you can imagine this is a slow process with some tenders spanning over 5 years (including options). 

To date we have not really touched on small business pricing, other than a small annual cost of service increase.  I don't believe in this current economic climate that many of them will be able to afford to absorb any such increase that would be required to bring our pricing into line in such a short period of time to accommodate a wage increase for night and weekend patrols.  This will result in a loss of our client base.

I firmly believe that if we could have 12 months to roll out any change required to move away from the Oh My Pty Ltd Collective Workplace Agreement and move to a multitude of modern day awards, we would be able to lessen the impact on my fellow teammates and their families as well as the business.   Even in 12 months, there will still be an impact on the business with contracts that will not have yet come to term.  

Change can be good, but change can't happen overnight without catastrophic consequences to my teammates.  I have promised to do everything in my power to lessen the impact on them and in turn their families and try to keep them in their current jobs.  I do believe we are a team.  Our day people are just as important as our night people.  They are all valuable team members and play an intricate role in Fraser Coast Security as a whole.

I respectfully ask, that if you deem change necessary at a faster rate than we are implementing, that you allow us as much time as possible to roll it out to lessen the impact on our team.”

[30] In written submissions filed on 22 June 2021, the following was put:

“ASIAL understands that the Respondent is willing for the Agreement to be terminated however has concerns about the immediate effect on the business and the employees who have been engaged for some time.”

Views of the employees covered by the Agreement

[31] Of the 23 views received by employees covered by the Agreement, 20 were opposed to termination of the Agreement, with only three in favour of termination of the Agreement. While I have had regard to all of the views provided, a sample of views expressed by the employees is produced below (with minor editing).

Employee 1

[32] Employee 1 stated:

“….I left a job that gave me penalty rates for weekends and nights, to work for Fraser Coast Security. I understood when I signed my employment contract that it said I was employed by the Oh My Pty Ltd Collective Workplace Agreement and we had one flat rate except for public holidays.

I didn’t like my previous job and would much prefer to work for a flat rate under the conditions I have now.

…………..

I mainly work daytime hours through the week and from what I understand my pay rate will go down.

I’m thinking that work will need to put their prices up to be able to pay the night and weekend staff more. This will most likely cause us to lose clients.

Some of us may lose jobs and I know we will lose hours.
I believe majority of us will be worse off if this happens.”

Employee 2

[33] Employee 2 stated:

“……I am surprised at the application that a colleague has put in since I know that in this area we live in it is hard to maintain a business and be competitive. I am aware that in this area some Security companies will not quote guards for weekends and night shifts because of the cost to them, they are not able to give competitive rates to clients and cover penalty rates outside of the workplace agreement, but at present because of this agreement in place at Fraser Coast Security they can quote and have the quotes accepted and provide work for us.

I would like to stress that we do receive wage increases every year, could we benefit from a wage increase like Mr Jackson is suggesting, in a perfect world where everyone wins Employer and Employee yes.  Regardless of what the media and other people try to tell us changes like what Mr Jackson wants to wage reform in our workplace won’t happen overnight if we want Companies to continue to exist and employ in rural & urban areas. 

Most Clients in our area would not [be] able to carry the rise in cost for the service this industry provides, which in reality means that Security employees would lose their jobs because the companies couldn’t carry the loss or hours would be reduced which then affect how they can afford their licenses needed for their work, as well as the company expenses to keep it running. What would happen then, do companies get hauled over the coals because they have to let staff go so someone else can have a fatter pay pack and hours, I apologise if I sound flippant but I believe that would be the reality,  they would have no choice but to let staff go.

……………I for one would not like to lose my job, and it would be awful to see my employers forced into changes that could affect so many employees, if this Work Place agreement is deemed to be outdated I would request that it could be implemented over a period of time so that clients can be advised of cost changes when their contracts are due for renegotiating and hopefully most would understand and accept the changes and jobs would be safe…….”

Employee 3

[34] Employee 3 stated:

“…….I believe the current agreement that we work under is fair. To my understanding, a new agreement would put night staff on more money however it would put day staff on less. Day staff work just as hard, if not harder than night staff. Here at Fraser Coast Security we are a big family and are supposed to look after each other. I work 5 night shifts a week and I’m personally happy to be on less $ an hr to enable the day staff to be on a sufficient rate.

I get $29.28 per hr to do my job currently……… I left [company] to come to Fraser Coast Security. At [company] I was being paid only $19.85 per hr for 2 and a half years. That was day, night , weekends, on call …….. I am grateful for my current job , and once again very happy with the (although dated ) current wage agreement as it looks after everyone.”

Employee 4

[35] Employee 4 stated:

“…..when a new employee gains a job with us they are issued a contract. They are then booked in for a 2hr induction a few days after or when they are ready. The first part of this induction is to go page by page through the contract and discuss any issues. The first page of each contract is a letter containing information on the pay rates.

…….

I have secured a trainee role as a security installer that only operates on a Monday to Friday daytime basis within this company and I'm very proud of my achievements. This is a permanent part time role and my pay rate is about $23/hour + shift allowances.

I have worked ……… days, nights, weekends, weekend nights, public holidays, etc. And not once have I had an issue with the pay rate nor had issues with discussing similar monetary issues with the executive officer.

I understand this is a 'Zombie Agreement', however forcing the company to make changes immediately where night and weekend employees earn more is causing me severe stress and anxiety and hastily moving forward on this issue is not the correct way.

The extra money night and weekend workers will get will come from staff like me who work daytime and weekdays. I have 'paid my dues' in this industry to be able to secure a work life balance that suits my young family and I deserve that.

I find it completely unreasonable that with my skill set, my experience, my reputation, my rapport with clients that I will be punished in the form of a lower pay rate so these [redacted] who work nights can get paid more than me for the incredibly simple work they do.

I don't believe they are entitled to it and if they have an issue with the pay conditions (which I reiterate, is on the first page of their contract) they should just leave and find another job - they are casual employees working in a regional area during a pandemic, they should be ecstatic that this company had managed to stay afloat and shifts always kept appearing on their rosters, I know I was!”

Employee 5

[36] Employee 5 stated:

“…..While I understand that Wayne Jackson is concerned that under the agreement he is not paid penalty rates for evening and weekend shifts I don't believe he has taken into account the overall effect this would have on the company and thus, its employees.

If the company has to increase prices for clients who receive night patrols, alarm responses, etc to cover the cost of penalty rates,  it is likely we would lose clients thus reducing the amount of shifts available for night and weekend guards.

A large amount of these clients also use our daytime cash collection services and the services of our technicians for alarms and security cameras. If we lose these businesses  as night time clients we may also lose them as clients for these daytime services. If this happens with a number of our clients not only will night time shifts be reduced but so will shifts for daytime cash staff, technicians and office staff.

Price increases to cover penalty rates will also hinder the companies potential to secure future contracts and renew current ones. I don't believe there are benefits in receiving penalty rates for evening and weekend shifts if a price increase to clients means hours would be reduced for both evening and daytime staff.

In a small town where small businesses already struggle I see this as a very likely outcome.

For some team members completing traineeships I believe the hourly rate of pay would be dramatically reduced. I am very aware that these are team members who have families to support, rent or mortgages to pay and in today's changed world cannot afford to suffer a drop in pay.

I came into this workplace as a mature aged worker looking for my 'forever' job. I would be devastated if a cut in hours meant this was not it. I accepted employment here knowing that the workplace agreement was in place.

I have been given the opportunity to learn new skills in a challenging and rewarding industry and feel very supported in my role here. My pay is in the bank every payday without fail and I am paid for the hours I work.

It is my opinion that the agreement should stay in place as it benefits the company and its employees as a whole.”

Employee 6

[37] Employee 6 stated:

“…..Since I have been working here, I have found Les to be incredibly supportive and fair.

Les has given me an opportunity to upskill myself from a Security Officer to a Technician on a Traineeship and still paid me the same wage as everyone else.

I have a partner and three children. I have researched on the fair work web site and used the online pay calculator to see what my new pay will be if this happens. It turns out it’s going to go down to $18.98 per hour including allowances. I am currently receiving $22.5478 plus $1.50 per hour allowance. I will be $5.07 an hour worse off if this goes through! I can’t afford to support my family on this and will have to find another job and hand in my traineeship. Jobs aren’t readily available in this area unfortunately, so I will probably need to talk to Centrelink to make ends meet. This is very stressful for me and my family. My partner is a Uni student so we rely on my wage.

I am also worried that my supervisor may not be able to afford to stay under the new award rates. So even if I do somehow manage to stay, there may be no-one qualified to sign me off on my studies.

I ask you to please look at the repercussions of this change for us daytime people as well.”

Employee 7

[38] Employee 7 stated:

“….I am employed as a Security Technician and supervisor of 3 trainee Security Technicians. I started my traineeship with Les in July 2014 and have been with him ever since. I have learned a lot of skills including leadership over the last 7 years and am enjoying being able to pay this forward with my 3 trainees.

I am looked after very well and paid above Les’s collective agreement award wage.

I am worried about the 3 trainees that I look after. From what I understand their wages will be considerably less than what they are on now. These guys all have young families and are worried themselves. We have lots of daytime / weekday staff that are also in the same boat.

As someone that sees some contracts and pricing for quotes, I know we as a business are not charging rates that would accommodate a change in award rates as has been suggested. I feel that something will have to give to accommodate this and such a change could hurt the business our clients and my team mates.

I disagree with Wayne Jackson’s statement that “by terminating this agreement, it will leave employees being paid at least minimum award wage”. I believe that by terminating this agreement, it will leave daytime Monday to Friday employees (of which we have a lot) being paid a lot less than they have been and struggling to survive.

I do not support Wayne Jackson's application to have the collective agreement terminated.”

[39] Of the employees who communicated they support termination of the Agreement, each of their communications was brief, stating they support termination of the Agreement, but without providing reasons.

Consideration

Not contrary to the public interest (s.226(a))

[40] I will first consider whether I am satisfied that termination of the Agreement is “not contrary to the public interest”.

[41] In his decision to approve the termination of the McDonald’s Australia Enterprise Agreement 2013, Deputy President Colman observed that: 3

“Section 226(a) does not require the Commission to be satisfied that the termination of an enterprise agreement is in the public interest. It sets a lower requirement. The Commission must be satisfied that it is not contrary to the public interest to terminate the agreement.” (emphasis is in the original)

[42] The Agreement provides a simple flat rate of pay to be paid for all hours of work, except public holidays when worked. It does not provide for any penalty rates for work outside of a span of ordinary hours or for weekend work, nor overtime.

[43] Where the Employer is currently paying employees greater than the Award rates of pay, the Agreement prescribes only the following rates for all hours of work, including overtime, except for work performed on public holidays:

[44] The rates above were appropriate in 2006. Pursuant to s.206 of the Act, the Employer need to ensure the base rate paid to employees is no less than the Award rate that would otherwise apply. If the Employer is currently paying employees a base rate greater than the Award, it is not obliged to, but is choosing to do so. On the information before the Commission, it appears that the Employer is paying to some clerical and technical/electronic employees a base rate greater than the relevant Award rate.

[45] Mr Jackson’s rate of pay for all hours worked other than public holidays was $22.55 (plus a $1.50 torch and phone allowance) as of 23 June 2021, against the Security Award rate of $22.28. The following penalty rates within the Security Award have not been payable to employees covered by the Agreement who perform security work, noting that the rates below were for the period up until 1 July 2021 but have now increased:

● Night penalty rates of 21.7%, with an hourly rate of pay of $27.11;
● Saturday penalty rates of 50%, with an hourly rate of pay of $33.42; and
● Sunday penalty rates of 100%, with an hourly rate of pay of $44.56.

[46] In recent years, a small number of enterprise agreements covering large employers (such as Coles and McDonalds) have been terminated or been involved in applications to terminate the agreement, where it has been observed that penalty rates under the relevant modern award did not flow to employees working outside the span of ordinary hours, including on weekends as they were not contained within the relevant agreement. Where over-award payments were made to employees covered by those agreements, they were typically made to employees working during the weekday. Employees working nights and weekends received less under their respective agreements than they would under the applicable award.

[47] A similar scenario arises in the matter before me. Termination of the Agreement and in its place provision of the terms of the three Awards cited at [5] to the employees would not be contrary to the public interest. While it is noted that the Employer and ASIAL have submitted that the Employer would face incredible competition from its main competitor in a regional area, an organisation with an agreement approved at around the same period of time, that alone is not a satisfactory reason to find that it is not contrary to the public interest to terminate the Agreement.

[48] The Employer has been benefiting from the application of an agreement made 15 years ago, without application of most of the penalty rates applicable in modern awards. This would appear to me to have been to the detriment of some employees of the Employer, who would otherwise be entitled to increased hourly rates on account of night time and weekend penalty rates.

[49] Maintaining such a competitive advantage over any potential new-comers into the industry is not, in my view, appropriate. Whilst clients of the Employer might enjoy cheaper rates for night and weekend services performed by the Employer, there is no basis for this continuing to the detriment of employees when modern awards do not prescribe lower penalty loadings on account of work performed in regional areas.

[50] Having regard to all the circumstances, I cannot identify any considerations that would support a conclusion that terminating the Agreement would be contrary to the public interest. I am satisfied in the present case that it is not contrary to the public interest to terminate the Agreement. The first limb of s.226 is therefore made out.

Appropriate (s.226(b))

[51] I must consider whether it is “appropriate” to terminate the Agreement, taking into account all the circumstances, including the views of the employees, each employer and each employee organisation covered by the Agreement, and the circumstances of those employees, employers and organisations, including the likely effect that the termination will have on each of them.

[52] While I note the Employer ultimately consents to termination of the Agreement, as put at [30], the jurisdiction requires the Commission to be satisfied it is appropriate to terminate the Agreement taking into consideration the views of the Employer and the employees covered by the Agreement, together with the circumstances and the likely effect the termination will have on each of them.

[53] There are no employee organisations covered by the Agreement.

[54] The views of the employees are overwhelmingly opposed to termination of the Agreement. Understandably, there are many employees who have worked in the business for a long period of time and have known no other method of remuneration from the Employer. Some of the employees are day employees, benefitting from an above-award payment, at the discretion of the Employer. It is open to the Employer to continue to pay over-award payments to employees if it so wishes and if it can afford to do so.

[55] Some employees who work nights and weekends are opposed to termination of the Agreement, noting that the Employer is likely to be priced out of contracts if it increases its charges to clients on account of having to pay penalty rates to employees for night and weekend work. The employees expressed views that they would rather have the work available and be paid less than the Award, than have no work or reduced hours on account of the Employer being uncompetitive.

[56] The views of the Employer have been made clear. The Employer considers it will have to attempt to renegotiate contracts to accommodate the increase in the rate of pay for work outside of the ordinary span of hours in the various Awards, notably the Security Award, together with weekend penalty rates. The Employer would prefer that this application had not been made, however now does not oppose the application if the termination date is 1 July 2022.

[57] I appreciate the Employer will have to increase wage rates to its employees working outside the span of ordinary hours in the Awards, and on weekends. The likely effect on the Employer is a higher annual wages bill. It will, however, be on equal terms to all other employers operating under the Awards, many of whom have been doing so since the Awards came into operation on 1 July 2010.

[58] I have taken into consideration the Employer’s and employees’ submissions relevant to its major competitor in the region. I do not consider it appropriate to provide a legacy to the Employer to permit significant reductions in payments for night and weekend work as opposed to the Award only on the basis that its major competitor also has in place a collective agreement made more than a decade ago. It is possible that competitor may face a similar application in the future, and it should not be, in my view, an exercise of not terminating an agreement for one employer unless a competitor’s agreement is terminated at a relatively similar point in time.

[59] The likely effect on the Employer is that it will need to reconsider its staffing levels on the days and hours of the week where penalty rates are payable. The likely effect on employees will be an increase in the rate of pay received for work performed outside the span of ordinary hours, and on weekends. Employees will be entitled to a minimum four hour shift, instead of a two hour shift under the Agreement.

[60] The Employer’s consideration of staffing levels on weekends and periods outside the span of ordinary hours may have an impact on the number of hours offered to employees, by reducing their hours of work. The Employer has suggested that where possible, it would attempt to have out-of-hours work performed during the day. I have taken consideration that this is not always possible, particularly with live security patrols at night and on weekends.

[61] I note that casual employees will receive a 25% casual loading under the various awards as opposed to a 23% casual loading under the Agreement. I have had regard for the fact that a substantial number of employees will receive four weeks’ annual leave and not five weeks as provided by the Agreement.

[62] I have taken into consideration the significant weekly allowances paid to employees under the Agreement that will not be paid to employees under the relevant Awards. I note that these increased allowances have gone some way, over the years, to mitigating some of the penalty rates not paid to employees under the Agreement.

[63] Taking into account the views of the persons (including the Employer) referred to in s.226(b) that have been presented to the Commission, and the circumstances of those persons, as well as the effect that termination will have on each of them, I consider that it is appropriate to terminate the Agreement.

The operative date of the termination

[64] Section 227 provides that, if an enterprise agreement is terminated under s.226, the termination ‘operates from the day specified in the decision to terminate the agreement.’

[65] I accept it is a significant change for the Employer to accommodate in its business; to pay pursuant to the Awards rather than a flat rate of pay (other than a loading on public holidays). I am satisfied the Employer will need to take some time to adjust its proposed rosters, costings, and attempts to negotiate new rates with its clients. I accept that the administrative effect of termination of the Agreement is not insignificant.

[66] During the hearing I inquired if the Employer was bound by its contracts, and if specific performance was required by the Employer’s client to provide the services at the rates currently set. Mr Horwood stated that most of the Employer’s contracts would require specific performance, and others, he would attempt to renegotiate to secure a higher price.

[67] I have had regard for the regional area in which the Employer operates, and the views of the many employees who have taken the time to communicate with the Commission their opposition to the application; some noting that if the Agreement is to be terminated, it should not occur immediately, and the Employer should be afforded a suitable period of time to attempt to negotiate contracts with clients.

[68] I have also taken into consideration the potential for employees employed during the day who might be affected by a reduction in the over-award payment currently being paid to them to have a significant lead-in to adjust to their new circumstances. If the over-award payments are not maintained, some employees have expressed distress as to what this will mean for them and their families, being paid pursuant to the relevant Award.

[69] During the hearing, Mr Jackson said he had no issue with the operative date of the termination being 1 July 2022 if the Commission decided it was appropriate.

[70] For these reasons, I am agreeable to the proposition put by the Employer and not opposed by Mr Jackson to declare the operative date of the termination as 1 July 2022.

Conclusion

[71] For the reasons given above, in consideration of s.226(a), I am satisfied that the termination of the Agreement is not contrary to the public interest. There is nothing before me which raises public interest considerations which might militate against the termination of the Agreement.

[72] For the reasons given above, in consideration of the material before me relevant to s.226(b)(i) and (ii), I consider that it is appropriate to terminate the Agreement.

[73] In accordance with s.226, I must terminate the Agreement. The application to terminate the Agreement is approved.

[74] For the reasons given above, the termination will take effect from 1 July 2022.

COMMISSIONER

 1   AC301866; https://www.fwc.gov.au/documents/documents/agreements/wpa/caen06692146.pdf.

 2   Clause 17.3, Security Services Industry Award 2020, rates payable first full pay period on or after 1 July 2021.

 3   [2019] FWCA 8563 at [16].

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