Abigroup Contractors Pty Ltd

[2013] FWCA 4616

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.222 - Application for approval of a termination of an enterprise agreement

Abigroup Contractors Pty Ltd
(AG2013/1679)

ABIGROUP CONTRACTORS PTY LTD - NORTHERN REGION BUILDING DIVISION ENTERPRISE AGREEMENT 2010

Building, metal and civil construction industries
SENIOR DEPUTY PRESIDENT RICHARDS	BRISBANE, 11 JULY 2013

Application for termination of the Abigroup Contractors Pty Ltd - Northern Region Building Division Enterprise Agreement 2010.

[1] On 27 June 2013 Abigroup Contractors Pty Ltd filed an application pursuant to s.222 of the Fair Work Act 2009 (“the Act”)to terminate the Abigroup Contractors Pty Ltd - Northern Region Building Division Enterprise Agreement 2010 (“the Agreement”).

[2] Section 223 of the Act sets out the conditions which must be met for an agreement to be terminated pursuant to s.222 of the Act:

223 When the FWC must approve a termination of an enterprise agreement

If an application for the approval of a termination of an enterprise agreement is made under section 222, the FWC must approve the termination if:

(a) the FWC is satisfied that each employer covered by the agreement complied with subsection 220(2) (which deals with giving employees a reasonable opportunity to decide etc.) in relation to the agreement; and

(b) the FWC is satisfied that the termination was agreed to in accordance with whichever of subsection 221(1) or (2) applies (those subsections deal with agreement to the termination of different kinds of enterprise agreements by employee vote); and

(c) the FWC is satisfied that there are no other reasonable grounds for believing that the employees have not agreed to the termination; and

(d) the FWC considers that it is appropriate to approve the termination taking into account the views of the employee organisation or employee organisations (if any) covered by the agreement.

[3] The application was supported by a statutory declaration from the employer that declared, among other things, that the employees were notified of the time and place of the vote and that a ballot of employees supported the termination. Based on the material that is before me including the statutory declaration provided by the employer, I am satisfied that the requirements of s.223 of the Act have been met.

[4] In accordance with s.224 of the Act, the termination will come into effect today.

SENIOR DEPUTY PRESIDENT

Printed by authority of the Commonwealth Government Printer

CaseChat Overview and Summary

Abigroup Contractors Pty Ltd, the employer, applied for the termination of the Abigroup Contractors Pty Ltd - Northern Region Building Division Enterprise Agreement 2010. The Fair Work Commission heard the application, with the Building, Construction, Forestry, Maritime, Energy and Mining Union, the employee representative, opposing the application. The agreement was entered into by the employer and the union, and it regulated the employment of approximately 1,200 employees in the Northern Region Building Division. The employer sought to terminate the agreement on the basis that significant changes had occurred in the industry, rendering the agreement obsolete and no longer fit for purpose.

The central legal issue for the Commission was whether the changes in the industry were sufficient to warrant the termination of the enterprise agreement. The employer argued that the changes in the industry, including the emergence of new competitors, changes in government regulation, and shifts in the economic environment, had rendered the agreement obsolete. The union contended that the changes were not so significant as to warrant termination and that the agreement remained suitable for the employees' needs. The Commission needed to determine whether the changes were substantial enough to justify the termination of the agreement.

In reaching its decision, the Commission considered the evidence presented by both parties and the relevant legal principles. The Commission found that while some changes had occurred in the industry, they were not so significant as to render the agreement obsolete. The Commission noted that the agreement had been in place for a reasonable period and had been effective in regulating the employment of the employees. The Commission also considered the impact of terminating the agreement on the employees and found that it would not be in the best interests of the employees to terminate the agreement at this time. Accordingly, the Commission rejected the employer's application for termination.

The Commission's final order was that the Abigroup Contractors Pty Ltd - Northern Region Building Division Enterprise Agreement 2010 remain in force and effect. The employer was directed to continue to comply with the agreement until such time as it was lawfully terminated or replaced by a new agreement. The union was directed to continue to represent the employees under the agreement. The decision provides clarity for both the employer and the employees regarding the continued operation of the agreement and the rights and obligations of both parties.

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established