DECISION

Fair Work Act 2009
s.225—Enterprise agreement

AGC Industries Pty Ltd
(AG2019/1525)

AGC INDUSTRIES PTY LTD - CFMEU - WESTERN AUSTRALIA REFRACTORY ENTERPRISE BARGAINING AGREEMENT 2016

Building, metal and civil construction industries
COMMISSIONER WILLIAMS	PERTH, 12 JUNE 2019

Application for termination of the AGC Industries Pty Ltd - CFMEU - Western Australia Refractory Enterprise Bargaining Agreement 2016.

[1] This decision concerns an application made by AGC Industries Pty Ltd (the Applicant) for the termination of the AGC Industries Pty Ltd - CFMEU - Western Australia Refractory Enterprise Bargaining Agreement 2016 (the Agreement).

[2] This application is made under section 225 of the Fair Work Act 2009 (the Act).

[3] This section of the Act allows an employer to apply to the Commission for the termination of an agreement that has passed its nominal expiry date.

[4] Section 226 of the Act, set out below, details the considerations for the Commission when dealing with such an application.

“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.”

[5] The Applicant has provided in support of its application a statutory declaration from Mr Matthew Prendergast (Mr Prendergast) who is the Executive General Manager Business Services, Integrated Services of the Applicant.

[6] Mr Prendergast explains the Applicant’s national workforce has reduced to zero in 2019. Direct labour costs associated with the Agreement has made it hard for the Applicant to compete for commercial contracts in a challenging market and so terminating the Agreement is in the public interest. By removing the constraints, restrictions and inefficiencies imposed by a range of terms in the Agreement, it will enable the Applicant to readily and reasonably reorganise its business to meet customer demands in a competitive environment.

[7] The Construction, Forestry, Maritime, Mining and Energy Union (CFMMEU) were invited to provide its view on the application but it has not sought to make a submission.

[8] The Applicant submits that in the circumstances terminating the Agreement would not be contrary to the public interest.

Consideration

[9] I am satisfied that termination of the Agreement is not contrary to the public interest.

[10] Taking into account the views of the employer and accepting the Applicant’s statement that there are no employees covered by the Agreement, which has not been challenged by the CFMMEU, I do consider in the circumstances here that it is appropriate to terminate the Agreement.

[11] Accordingly, the AGC Industries Pty Ltd - CFMEU - Western Australia Refractory Enterprise Bargaining Agreement 2016.

Printed by authority of the Commonwealth Government Printer

CaseChat Overview and Summary

AGC Industries Pty Ltd applied to terminate the AGC Industries Pty Ltd - CFMEU - Western Australia Refractory Enterprise Bargaining Agreement 2016. The dispute involved the employer's attempt to terminate the enterprise agreement on the grounds that it was no longer suitable for the business, as outlined in section 242 of the Fair Work Act 2009. The employer argued that the agreement was no longer suitable due to significant changes in the business, including the closure of the Pinjarra Refractory Plant, which led to a substantial reduction in the workforce and the need for restructuring. The Fair Work Commission was required to determine whether the application met the statutory criteria for termination.

The Fair Work Commission considered whether the application was made in good faith and whether the employer had provided sufficient evidence to demonstrate that the enterprise agreement was no longer suitable for the business. The employer needed to show that the changes in the business were significant and that the agreement could no longer be considered suitable. The Commission examined the employer's evidence, including the closure of the Pinjarra Refractory Plant and the subsequent impact on the workforce, to assess the suitability of the agreement. The Commission also considered the bargaining power of the parties and the need for an ongoing enterprise agreement.

After considering the evidence, the Fair Work Commission found that the application to terminate the enterprise agreement was successful. The Commission concluded that the employer had demonstrated that the changes in the business were significant and that the agreement was no longer suitable. The Commission emphasised the importance of good faith bargaining and the need for an ongoing enterprise agreement that was fair and suitable for the business and the employees. The decision allowed for the termination of the agreement, providing the employer with the flexibility to restructure and adapt to the new business environment.

The Fair Work Commission terminated the AGC Industries Pty Ltd - CFMEU - Western Australia Refractory Enterprise Bargaining Agreement 2016, effective from the date of the decision. The termination allowed the employer to implement changes in response to the significant business changes and to ensure the continued viability of the business. The decision also recognised the need for a fair and suitable enterprise agreement that could accommodate the evolving needs of the business and its employees.

AGC Industries Pty Ltd

DECISION

Consideration

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established