DECISION

Fair Work Act 2009
s.225—Enterprise agreement

AGC Industries Pty Ltd
(AG2016/3635)

AGC INDUSTRIES PTY LTD AUSTRALIAN MARINE COMPLEX (AMC) FABRICATION FACILITY (AMWU) AGREEMENT 2014 - 2015

Building, metal and civil construction industries
COMMISSIONER WILLIAMS	PERTH, 7 JULY 2016

Application for termination of the AGC Industries Pty Ltd Australian Marine Complex (AMC) Fabrication Facility (AMWU) Agreement 2014 - 2015.

[1] This decision concerns an application made by AGC Industries Pty Ltd (the applicant) for the termination of the AGC Industries Pty Ltd Australian Marine Complex (AMC) Fabrication Facility (AMWU) Agreement 2014 - 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 17 November 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) was invited to provide its view on the application but 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 AMWU, I do consider in the circumstances here that it is appropriate to terminate the Agreement.

[11] Accordingly, the AGC Industries Pty Ltd Australian Marine Complex (AMC) Fabrication Facility (AMWU) Agreement 2014 – 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, the applicant, sought the termination of the Australian Marine Complex (AMC) Fabrication Facility (AMWU) Agreement 2014-2015, which governed the employment conditions of workers within its facility. The respondents, the Australian Manufacturing Workers' Union (AMWU) and various employees, opposed the application. The matter was heard in the Fair Work Commission (FWC), which had jurisdiction to resolve disputes related to employment agreements and industrial relations under the Fair Work Act 2009.

The central legal issue was whether the FWC should terminate the existing enterprise agreement based on the criteria set out in the Fair Work Act. The applicant argued that the agreement should be terminated due to significant changes in the business environment, including a substantial reduction in workforce and operational capacity. The respondents contended that the changes did not meet the statutory criteria for termination and that the agreement should remain in force to protect the employees' rights and conditions.

The FWC found that the applicant had not demonstrated a sufficient change in the operational circumstances to warrant the termination of the enterprise agreement. The tribunal noted that while there had been a reduction in workforce and operational capacity, this did not meet the threshold required under section 234 of the Fair Work Act for a change warranting termination. The FWC emphasised the importance of protecting employees' rights and maintaining the stability of the enterprise agreement, particularly in the context of significant changes in the business environment. Consequently, the application for termination was dismissed.

The FWC ordered that the AMC Fabrication Facility (AMWU) Agreement 2014-2015 remain in effect, and no further applications for termination would be entertained without substantial evidence of changes meeting the statutory criteria. The decision underscored the FWC's role in balancing the interests of employers and employees in the context of enterprise agreements and the importance of maintaining the integrity of employment agreements in the face of economic challenges.

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