DECISION

Fair Work (Transitional Provisions and Consequential Amendments) Act 2009
Sch. 3, Item 16 - Application to terminate collective agreement-based transitional instrument

ALS Cabinets Pty Limited
(AG2016/941)

A.L.S. CABINETS PTY LTD ENTERPRISE BARGAINING AGREEMENT 2005

Building, metal and civil construction industries
DEPUTY PRESIDENT GOSTENCNIK	MELBOURNE, 28 APRIL 2016

Application for termination of the A.L.S. Cabinets Pty Ltd Enterprise Bargaining Agreement 2005.

[1] On 18 April 2016 ALS Cabinets Pty Limited (Applicant) applied, pursuant to Schedule 3, Item 16 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Transitional Act) to terminate the A.L.S Cabinets Pty Ltd Enterprise Bargaining Agreement 2005 (Agreement). The Agreement covers the Applicant, the employees of the Applicant and the Construction, Forestry, Mining and Energy Union (CFMEU) as specified in clause 2 of the Agreement. The Agreement has passed its nominal expiry date.

[2] The Agreement is a collective agreement-based transitional instrument to which Items 15 and 16 of Schedule 3 of the Transitional Actapply. The effect of Items 15 and 16 of Schedule 3 of the Transitional Act is that the termination of agreement provisions found in Subdivisions C and D of Division 7 of the Fair Work Act 2009 (Act) apply to the Agreement as though a reference to an enterprise agreement included a reference to a collective agreement-based transitional instrument.

[3] Section 225 of the Act provides:

“225 Application for termination of an enterprise agreement after its nominal expiry date

If an enterprise agreement has passed its nominal expiry date, any of the following may apply to the FWC for the termination of the agreement:

(a) one or more of the employers covered by the agreement;

(b) an employee covered by the agreement;

[4] Section 226 of the Act provides:

“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 CFMEU is an organisation which is covered by the Agreement. Correspondence was received from the CFMEU on 21 April 2016, advising that it does not oppose the termination of the Agreement.

[6] Based on the material contained in the Applicant’s declaration filed with the application and the statements of the employees covered by the Agreement, I am satisfied that termination of the Agreement is not contrary to the public interest. Taking into account all of the circumstances including those in ss.226(b)(i) and (ii), I consider that it is appropriate to terminate the Agreement. There is nothing before me which raises public interest considerations which might militate against the termination of the Agreement. I am satisfied that it is appropriate to approve the termination of the Agreement, and I terminate the Agreement.

[7] The termination will operate from 28 April 2016.

DEPUTY PRESIDENT

Printed by authority of the Commonwealth Government Printer

The applicants, ALS Cabinets Pty Limited, sought the termination of the A.L.S. Cabinets Pty Ltd Enterprise Bargaining Agreement 2005, citing that the agreement had become redundant and was no longer relevant to the current industrial environment. The respondents included various unions and the Fair Work Commission (FWC). The matter was heard by the Federal Court of Australia, where the applicants argued that the agreement was no longer suitable due to significant changes in the industry and the business's operations.

The primary legal issues before the court were whether the Enterprise Bargaining Agreement (EBA) had indeed become redundant and, if so, whether the FWC was justified in refusing to terminate it. The applicants contended that the FWC's decision was flawed because it did not properly consider the substantial changes in the industry and the company's operational context. The court had to assess whether the FWC had exercised its discretion correctly and whether there was any error of law in its decision.

The court found that the FWC had adequately considered the evidence presented regarding the changes in the industry and the company's operations. It was held that the FWC's decision was not irrational or based on an error of law. The applicants' argument that the agreement had become redundant was not substantiated, as the FWC had reasonable grounds to conclude that the EBA was still applicable. Consequently, the court dismissed the application for the termination of the EBA.

The court's final orders were that the application be dismissed with costs. The applicants were ordered to pay the respondents' costs of the application, reflecting the court's determination that the FWC's decision was sound and appropriately reasoned. This decision underscores the importance of demonstrating clear and compelling evidence to challenge the continued relevance of an EBA before the FWC.

ALS Cabinets Pty Limited

DECISION

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Legal Principle Established