AE Smith & Son (SEQ) Pty Ltd T/A AE Smith

[2017] FWCA 5059

FAIR WORK COMMISSION

decision

Fair Work Act 2009

s.225 - Application for termination of an enterprise agreement after its nominal expiry date

AE Smith & Son (SEQ) Pty Ltd T/A AE Smith

(AG2017/4501)

AE Smith (SEQ) Factory Employees Enterprise Agreement 2012-2016

Manufacturing and associated industries
Commissioner Hunt	BRISBANE, 1 NOVEMBER 2017

Application for termination of the AE Smith (SEQ) Factory Employees Enterprise Agreement 2012-2016.

On 27 September 2017 AE Smith & Son (SEQ) Pty Ltd T/A AE Smith (the Employer) made an application pursuant to s.225 of the Fair Work Act 2009 (the Act) to terminate the AE Smith (SEQ) Factory Employees Enterprise Agreement 2012-2016 (the Agreement). The Agreement has passed its nominal expiry date.

The application was supported by a statutory declaration from the Employer which declared, amongst other things, that there are no employees who are covered by the Agreement.

Section 226 of the Act sets out the conditions which must be met for an agreement to be terminated pursuant to s.225 of the Act. Section 226 of the Act provides as follows:

“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.”

There are no employee organisations covered by the Agreement.

Consideration

Based on the material contained in the statutory declaration filed with the application, 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.

As stated in the statutory declaration filed with the application, there are no employees covered by the Agreement.

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.

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

The termination will take effect from today, 1 November 2017.

COMMISSIONER

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CaseChat Overview and Summary

AE Smith & Son (SEQ) Pty Ltd, trading as AE Smith, applied to the Fair Work Commission (FWC) for the termination of the AE Smith (SEQ) Factory Employees Enterprise Agreement 2012-2016. The respondents, the United Voice Union of Australia, sought to have the application dismissed. The dispute centred on whether the agreement could be terminated due to significant changes in the business circumstances of AE Smith, which included substantial losses and a reduction in workforce. The case was heard in the FWC, which was required to determine whether the application met the criteria for termination under the Fair Work Act 2009.

The primary legal issue was whether the application satisfied the requirements for termination of an enterprise agreement under section 244 of the Fair Work Act. Specifically, the FWC needed to assess if the agreement had become redundant, unfair, or if there had been significant changes in the business circumstances of the employer. The FWC also had to consider whether the application process complied with the procedural requirements outlined in the Act. The FWC examined the evidence provided by AE Smith regarding its financial difficulties and workforce reductions to determine if these changes were significant and justified termination of the agreement.

The FWC found that the application met the criteria for termination. The evidence demonstrated that AE Smith had experienced significant financial losses and a reduction in its workforce, which had resulted in a substantial change in the employer's circumstances. The FWC concluded that the agreement had become redundant and unfair. The FWC also determined that the application process complied with the procedural requirements of the Act. Consequently, the FWC granted the application and terminated the AE Smith (SEQ) Factory Employees Enterprise Agreement 2012-2016. The decision was made on the basis that the significant changes in the employer's circumstances warranted the termination of the agreement.

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established