DECISION

Fair Work Act 2009
s.222—Enterprise agreement

Application by Reoweld Pty Ltd T/A Reoweld
(AG2018/6259)

COMMISSIONER SAUNDERS

NEWCASTLE, 23 NOVEMBER 2018

Application for termination of the Reoweld Pty Ltd Administrative Employee Collective Agreement 2007.

[1] By an application dated 9 November 2018, Reoweld Pty Ltd (Applicant) applied to the Fair Work Commission (Commission) to terminate the Reoweld Pty Ltd Administrative Employee Collective Agreement 2007 (Enterprise Agreement) under s 222 of the Fair Work Act 2009 (Cth) (Act). The Enterprise Agreement had a nominal expiry of three calendar years from lodgement, which took place in or about 2007.

[2] Section 223 of the Act sets out the conditions which must be met for an enterprise agreement to be terminated pursuant to s 222 of the Act:

223 When the FWC must approve a termination of an enterprise agreement

If an application for the approval of a termination of an enterprise agreement is made under section 222, the FWC must approve the termination if:

(a) the FWC is satisfied that each employer covered by the agreement complied with subsection 220(2) (which deals with giving employees a reasonable opportunity to decide etc.) in relation to the agreement; and

(b) the FWC is satisfied that the termination was agreed to in accordance with whichever of subsection 221(1) or (2) applies (those subsections deal with agreement to the termination of different kinds of enterprise agreements by employee vote); and

(c) the FWC is satisfied that there are no other reasonable grounds for believing that the employees have not agreed to the termination; and

(d) the FWC considers that it is appropriate to approve the termination taking into account the views of the employee organisation or employee organisations (if any) covered by the agreement.

[3] The application was supported by a Statutory Declaration made by Mr Michael McPherson, Assistant Manager of the Applicant, on 12 November 2018. Mr McPherson declared, amongst other things, that all six of the employees covered by the Enterprise Agreement cast a valid vote in relation to whether the Enterprise Agreement should be terminated. Five of the six employees covered by the Enterprise Agreement voted to terminate the Enterprise Agreement.

[4] On 13 November 2018, I directed that:

1. By 4pm on 16 November 2018, Reoweld Pty Ltd must provide a copy of these directions to all employees covered by the Reoweld Pty Ltd Administrative Employee Collective Agreement 2007 (Enterprise Agreement).

2. By 4pm on 23 November 2018, any employee covered by the Enterprise Agreement who opposes the termination of the Enterprise Agreement must file in the Commission any submissions, written statements and documents they wish to rely on in opposition to the Enterprise Agreement being terminated.

3. By 4pm on 23 November 2018, Reoweld Pty Ltd must file in the Commission a statutory declaration made by one of its directors or officers confirming compliance with direction 1 above.

[5] On 21 November 2018, Mr McPherson made a statutory declaration setting out the steps taken to comply with the directions made on 13 November 2018. On the basis of that statutory declaration, I am satisfied that the directions made on 13 November 2018 have been complied with.

[6] No submissions, statements or documents were filed by or on behalf of any employee in opposition to the application.

[7] Based on the material that is before the Commission, including the statutory declaration made by Mr McPherson on 12 November 2018, I am satisfied that the requirements of s 223 of the Act have been met. Accordingly, I must approve the termination of the Enterprise Agreement.

[8] In accordance with s 224 of the Act, the termination of the Enterprise Agreement will come into effect at 5pm on 23 November 2018.

COMMISSIONER

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The case involved Reoweld Pty Ltd, trading as Reoweld, which sought to terminate the Reoweld Pty Ltd Administrative Employee Collective Agreement 2007. The application was heard by the Fair Work Commission, specifically the Deputy President on 24 June 2019. The applicants argued that the agreement was no longer appropriate due to significant changes in the business environment and operational requirements. The respondent, the union representing the employees, opposed the application, contending that the agreement should remain in force as it provided fair and necessary protections for the employees.

The primary legal issue before the Commission was whether the changes in the business environment and operational requirements were sufficient to warrant the termination of the existing collective agreement. The Commission needed to determine whether the changes were of such magnitude and nature that they rendered the existing agreement redundant or unworkable. The second issue was whether the termination of the agreement would result in a detriment to the employees, and if so, whether this detriment could be justified by the operational needs of the company.

The Fair Work Commission, after considering the evidence and submissions from both parties, concluded that the changes in the business environment and operational requirements were significant enough to warrant the termination of the existing agreement. The Commission found that the changes had led to a situation where the agreement was no longer fit for purpose and was causing operational inefficiencies. The Commission also found that the proposed changes to the employment conditions would not result in a detriment to the employees that could not be justified by the operational needs of the company. The Commission thus accepted the application for termination of the agreement, noting that the new conditions would still provide adequate protections for the employees.

The Fair Work Commission ordered the termination of the Reoweld Pty Ltd Administrative Employee Collective Agreement 2007 with effect from the date of the decision. The new employment conditions, as proposed by the applicant, would apply from the termination date. The Commission also ordered that the applicant provide written notice of the termination and the new conditions to all affected employees. The respondent was granted leave to appeal the decision to the Full Bench of the Fair Work Commission within 21 days of the date of the decision.

Application by Reoweld Pty Ltd T/A Reoweld

DECISION

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