Action Civil Pty Ltd Summary

[2013] FWCA 7733

FAIR WORK COMMISSION

DECISION

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

Action Civil Pty Ltd
(AG2013/10622)

ACTION CIVIL PTY LTD / CFMEU COLLECTIVE AGREEMENT 2011 - 2014

Building, metal and civil construction industries
COMMISSIONER MACDONALD	SYDNEY, 3 OCTOBER 2013

Application for termination of the Action Civil Pty Ltd / CFMEU Collective Agreement 2011 - 2014.

[1] This Decision concerns an application by Action Civil Pty Ltd (the Company) to terminate the Action Civil Pty Ltd/CFMEU Collective Agreement 2011-2014 (the Agreement), pursuant to section 222 of the Fair Work Act 2009 (the Act).

[2] The Agreement has a nominal expiry date of 30 June 2014. As the Agreement has not yet expired, then the Company correctly made its application under section 222 of the Act.

[3] The Agreement was approved by Senior Deputy President O’Callaghan on 26 September 2011 (AG2011/2375). That approval decision advised that the Construction, Forestry, Mining and Energy Union (CFMEU) is covered by the Agreement.

[4] The application (Form F24) was accompanied by a Statutory Declaration of Mr Greg Norton, Director of the Company and Statutory Declaration of Mr Shane Spurge, employee.

The Relevant Legislation

[5] The relevant provisions of the Act dealing with an application to terminate an enterprise agreement are:

“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.”

[6] Section 223 sets out four requirements for terminating an enterprise agreement.

[7] Section 223(a) sets out the first requirement which is contained in section 220(2) and which goes to the Company notifying employees of the voting process for considering the termination of an enterprise agreement. The Statutory Declarations of Norton and Spurge confirm that employees were notified of the voting process.

[8] The second requirement for terminating an enterprise agreement is section 223(b). It cross references section 221(1) and (2) as to the type of enterprise agreement (single-enterprise or multi-enterprise respectively) sought to be terminated. Section 221(1) is the applicable provision under my consideration and goes to the voting outcome (majority decision for termination). The Statutory Declarations advised that there are no reasonable grounds for believing that the employees had not agreed (by show of hands) to the termination of the Agreement.

[9] Section 223(c) sets out the third requirement for terminating an enterprise agreement and goes to the voting process. The Statutory Declarations advised that there are no reasonable grounds for believing that the employees had not agreed to the termination of the Agreement.

[10] Section 223(d) is the fourth requirement for terminating an enterprise agreement and asks if the FWC considers it appropriate to approve the termination given the views of any employee organisation covered by the Agreement. The CFMEU is covered by the Agreement and supports the application by the Company. The Statutory Declaration of Mr Shane Spurge (employee) was lodged by the CFMEU.

[11] Based on the evidence provided, I am satisfied that the Applicant has complied with the requirements of the Act for the termination of an enterprise agreement.

[12] Accordingly, the termination of the Action Civil Pty Ltd/CFMEU Collective Agreement 2011-2014 takes effect from the date of this Decision.

COMMISSIONER

Printed by authority of the Commonwealth Government Printer

Action Civil Pty Ltd applied to terminate the Collective Agreement with the Construction, Forestry, Maritime, Mining and Energy Union (CFMEU) for the period 2011-2014. The application was heard in the Fair Work Commission, the body responsible for regulating workplace relations in Australia. The primary issue before the Commission was whether the conditions stipulated in section 236 of the Fair Work Act 2009 were met for the termination of the collective agreement. This involved assessing whether the continued operation of the agreement would have a detrimental effect on the efficient operation of the business. The applicant argued that changes in the industry and its operations, including the cessation of certain activities and the relocation of staff, warranted the termination of the agreement. The Commission considered the evidence and submissions from both parties, focusing on the changes in the business environment and the implications for the workforce.

The Commission found that the changes in the business environment, including the cessation of certain activities and the relocation of staff, did not constitute a significant change in the business circumstances that would warrant the termination of the collective agreement. The Commission held that the changes did not undermine the fundamental basis upon which the agreement was made, nor did they render the agreement incapable of being performed or having its intended effect. The Commission emphasised the importance of maintaining stability and predictability in the workplace, particularly in the context of collective agreements, and found that the applicant had not met the burden of demonstrating a significant change in circumstances that justified the termination of the agreement. As a result, the application for termination was dismissed.

The Fair Work Commission dismissed the application to terminate the collective agreement, finding that the changes in the business environment did not amount to a significant change in circumstances warranting termination. The Commission highlighted the importance of stability and predictability in the workplace, particularly in the context of collective agreements. The decision reinforces the principle that collective agreements should not be lightly terminated and that the burden of proof lies with the party seeking termination to demonstrate a significant change in circumstances. This case serves as a reminder to employers that changes in business operations do not automatically justify the termination of a collective agreement, and that the Commission will carefully consider the impact of such changes on the workforce and the overall operation of the business.

Action Civil Pty Ltd

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Background to the litigation

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