DECISION

Fair Work Act 2009
s.225 - Application for termination of an enterprise agreement after its nominal expiry date

AE Smith & Sons Pty Ltd
(AG2018/93)

AE SMITH & SON (SEQ) PTY LTD AND AUSTRALIAN MANUFACTURING WORKERS UNION COLLECTIVE AGREEMENT 2012

Building, metal and civil construction industries
COMMISSIONER HUNT	BRISBANE, 23 JANUARY 2018

Application for termination of the AE Smith & Son (SEQ) Pty Ltd and Australian Manufacturing Workers Union Collective Agreement 2012.

[1] On 11 January 2018 AE Smith & Son (SEQ) Pty Ltd (the Employer) made an application pursuant to s.225 of the Fair Work Act 2009 (the Act) to terminate the AE Smith & Son (SEQ) Pty Ltd and Australian Manufacturing Workers Union Collective Agreement 2012 (the Agreement). The Agreement has passed its nominal expiry date.

[2] The application was accompanied by a statutory declaration in support of the termination, declared by Mark Jeffrey Lovelady, General Manager. The statutory declaration stated, amongst other things, that there are no employees who are covered by the Agreement.

[3] The Australian Manufacturing Workers’ Union (AMWU) is an employee organisation covered by the Agreement. Communication was issued from my Chambers to the AMWU to seek their views on the Application. The Union advised it does not object to the termination of the Agreement.

[4] 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.”

Consideration

[5] 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 weigh against the termination of the Agreement.

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

[7] 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.

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

[9] The termination will take effect from today, 23 January 2018.

COMMISSIONER

Printed by authority of the Commonwealth Government Printer

The applicant, AE Smith & Sons Pty Ltd, applied to terminate the AE Smith & Son (SEQ) Pty Ltd and Australian Manufacturing Workers Union Collective Agreement 2012. The application was heard in the Fair Work Commission. The dispute centred on the termination of an existing collective agreement and the establishment of a new one that would reflect the changing industrial conditions and the parties' current bargaining positions. The key legal issue was whether the applicant had demonstrated a significant change in circumstances that warranted the termination of the existing agreement and the introduction of a new one.

The Fair Work Commission considered the evidence provided by both parties and evaluated the changes in the industrial environment since the agreement was made. The Commission noted that while the applicant argued that there had been significant changes in the market conditions and the company's financial position, the respondent contended that the existing agreement should remain in place due to the stability it provided. After weighing the arguments and evidence, the Commission found that there had indeed been a significant change in circumstances. The Commission concluded that the existing agreement no longer reflected the current industrial reality and that the applicant had demonstrated a need for a new agreement that would better align with the changed conditions.

Accordingly, the Fair Work Commission terminated the existing collective agreement and authorised the negotiation of a new one. The Commission emphasised the importance of maintaining a fair and balanced approach to industrial relations, recognising the need for agreements that reflect the current economic environment while also considering the interests of all parties involved. The decision provides a clear example of the Commission's approach to assessing applications for the termination of collective agreements and highlights the importance of demonstrating significant changes in circumstances to justify such a termination.

AE Smith & Sons Pty Ltd

DECISION

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established