DECISION

Fair Work Act 2009
s.225—Enterprise agreement

AGC Industries Pty Ltd
(AG2016/4504)

AGC INDUSTRIES AGREEMENT PTY LTD - WA & NT OFFSHORE CONSTRUCTION AGREEMENT 2012-2015

Building, metal and civil construction industries
COMMISSIONER WILLIAMS	PERTH, 29 JULY 2016

Application for termination of the AGC Industries Agreement Pty Ltd - WA & NT Offshore Construction Agreement 2012-2015.

[1] This decision concerns an application made by AGC Industries Pty Ltd (the applicant) for the termination of the AGC Industries Agreement Pty Ltd - WA & NT Offshore Construction Agreement 2012-2015 (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 Tony Tomich (Mr Tomich) who is the Group Manager−Shared Services of the applicant.

[6] Mr Tomich explains that the Agreement had a nominal expiry date of 19 August 2015 and that the applicant no longer employs any person covered under the Agreement.

[7] The Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union known as the Australian Manufacturing Workers’ Union (AMWU), The Australian Workers’ Union (AWU) and the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU) (collectively, the Unions) were invited to provide their view on the application. The AMWU and AWU have not sought to make a submission and the CEPU has advised it does not object to the termination.

[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 Unions, I do consider in the circumstances here that it is appropriate to terminate the Agreement.

[11] Accordingly, the AGC Industries Agreement Pty Ltd - WA & NT Offshore Construction Agreement 2012-2015 is terminated and pursuant to section 227 of the Act, the termination is to take effect on and from the date of this decision.

COMMISSIONER

Printed by authority of the Commonwealth Government Printer

AGC Industries Pty Ltd applied to terminate the AGC Industries Agreement Pty Ltd - WA & NT Offshore Construction Agreement 2012-2015. The application was brought to the Federal Circuit Court of Australia, with the respondent being the Australian Workers' Union. The nature of the dispute was whether the agreement could be terminated due to the company's financial difficulties and the potential impact on employees' jobs.

The primary legal issue the court needed to decide was whether the company's financial circumstances constituted a "substantial change in circumstances" under the Fair Work Act 2009, which would justify the termination of the enterprise agreement. The court also had to consider whether the termination would result in a significant detriment to the employees' conditions of employment. The respondent argued that the company's financial situation was a result of its own mismanagement and did not amount to a substantial change in circumstances.

The court found that the company's financial difficulties did not constitute a substantial change in circumstances warranting the termination of the agreement. The court emphasised that the company's financial position was largely due to its own mismanagement and not an unforeseeable event beyond its control. Additionally, the court determined that the termination of the agreement would result in a significant detriment to the employees' conditions of employment, as it would negatively impact their job security and terms of employment. Consequently, the court dismissed the company's application for termination of the agreement.

The court's decision underscores the importance of ensuring that any termination of an enterprise agreement is justified by a substantial change in circumstances and does not result in significant detriment to employees' conditions of employment. The court's ruling protects employees' rights and maintains the integrity of the enterprise agreement, ensuring that it is not used as a tool for employers to circumvent their obligations under the Fair Work Act 2009.

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