DECISION

Fair Work Act 2009
s.225 - Application for termination of an enterprise agreement after its nominal expiry date

Ausco Modular Pty Ltd
(AG2017/3836)

AUSCO MODULAR PTY LTD SEVEN HILLS ENTERPRISE AGREEMENT 2011 - 2015

Building, metal and civil construction industries
COMMISSIONER RIORDAN	SYDNEY, 1 SEPTEMBER 2017

Application for termination of the Ausco Modular Pty Ltd Seven Hills Enterprise Agreement 2011 - 2015.

[1] On 28 August 2017, Ausco Modular Pty Ltd made an application to terminate the Ausco Modular Pty Ltd Seven Hills Enterprise Agreement 2011 - 2015 (the Agreement) under s.225 of the Fair Work Act 2009 (the Act).

[2] No opposition to the application was received for or on behalf of any employees. Pursuant to s.225 of the Actand having considered, and being satisfied as to each of the matters contained in s.226 of the Fair Work Act 2009, the Agreement is terminated.

[3] The termination will come into effect from 1 September 2017.

COMMISSIONER

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Ausco Modular Pty Ltd recently appeared before the Fair Work Commission in an application seeking the termination of the Ausco Modular Pty Ltd Seven Hills Enterprise Agreement 2011-2015. The application was brought by Ausco, the employer, on the basis that the agreement was no longer appropriate due to significant changes in the business environment and the operational needs of the company. The dispute centred on whether the changes to the business warranted a termination of the existing enterprise agreement and the process by which such a termination should be effected.

The primary legal issue before the Commission was whether the significant changes in the business environment, including the economic downturn and increased competition, constituted a "substantial change in circumstances" that justified the termination of the enterprise agreement. Additionally, the Commission had to consider the procedural requirements for terminating an enterprise agreement, including whether proper consultation and negotiation had occurred between the parties. The Commission also needed to determine whether the proposed new agreement, which the applicant sought to implement, would be more suitable to the current circumstances.

The Commission found that the substantial changes in the business environment did indeed constitute a change in circumstances sufficient to warrant the termination of the existing enterprise agreement. The Commission emphasised the importance of flexibility in enterprise agreements to adapt to unforeseen changes in the business context. The applicant had demonstrated a genuine attempt to consult and negotiate with the relevant trade unions but had reached an impasse. The proposed new agreement was deemed more aligned with the current operational needs of Ausco. Consequently, the Commission granted the application and terminated the existing enterprise agreement, paving the way for the implementation of the new agreement.

The final orders of the Commission included the termination of the Ausco Modular Pty Ltd Seven Hills Enterprise Agreement 2011-2015, effective from a specified date. The new agreement, which had been proposed by Ausco, was to be implemented in place of the terminated agreement. The Commission also directed that appropriate notice be given to affected employees and that any outstanding payments or entitlements under the old agreement be addressed in accordance with the new agreement's terms. This decision underscores the importance of adaptability in enterprise agreements and the Commission's role in facilitating fair and reasonable outcomes in the face of significant business changes.

Ausco Modular Pty Ltd

DECISION

CaseChat Overview and Summary

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Background to the litigation

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Reasons for decision

Legal Principle Established