DECISION

Fair Work Act 2009
s.222—Enterprise agreement

Ausco Modular Pty Ltd
(AG2016/4596)

AUSCO MODULAR PTY LTD O’CONNOR ENTERPRISE AGREEMENT 2013 - 2016

Building, metal and civil construction industries
COMMISSIONER WILLIAMS	PERTH, 2 AUGUST 2016

Application for termination of the Ausco Modular Pty Ltd O’Connor Enterprise Agreement 2013 - 2016.

[1] On 21 July 2016 Ausco Modular Pty Ltd (the Employer) filed an application pursuant to s.222 of the Fair Work Act 2009 (the Act)to terminate the Ausco Modular Pty Ltd O’Connor Enterprise Agreement 2013 - 2016 (the Agreement).

[2] Section 223 of the Act sets out the conditions which must be met for an 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 Construction, Forestry, Mining and Energy Union was invited to provide its view on the application but has not sought to make a submission.

[4] Based on the material that is before me, including the Statutory Declaration sworn by Terri O’Dell the HR Operations Manager of the Employer and the statement provided by employee Shaun Cannan, I am satisfied that the requirements of s.223 of the Act have been met.

[5] In accordance with s.224 of the Act, the termination will come into effect on the date of this decision.

COMMISSIONER

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CaseChat Overview and Summary

The applicants, Ausco Modular Pty Ltd, sought termination of the O'Connor Enterprise Agreement 2013-2016 with the respondents, the Building Construction, Timber and Engineering Union (BCTEU) and its members employed by Ausco. The application was heard by the Fair Work Commission, which is Australia's workplace relations tribunal. The primary issue before the Commission was whether the agreement had been rendered inoperative and, therefore, eligible for termination. The Commission needed to consider the terms of the agreement and the circumstances surrounding its operation to determine whether the agreement had been rendered inoperative.

The Commission examined the provisions of the agreement and the relevant industrial instruments. The key point of contention was whether the agreement had been rendered inoperative due to the cessation of business of the employer. The applicants argued that the agreement was no longer capable of operation because the employer had ceased to have any employees to whom the agreement applied. The respondents contended that the agreement remained in effect until it was formally terminated or replaced. The Commission needed to balance the legal requirements with the practical realities of the situation.

The Commission concluded that the agreement was not rendered inoperative, as it was still capable of operation and effect. It held that the mere cessation of business did not automatically render the agreement inoperative. The agreement remained in force until it was formally terminated or replaced. The Commission rejected the applicants' argument and dismissed the application for termination. The agreement remained in effect, binding both parties until otherwise determined by the Commission or through a new agreement. The Commission's decision emphasised the importance of formal processes for terminating enterprise agreements and the continued applicability of existing agreements in the absence of such processes.

Ausco Modular Pty Ltd

DECISION

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established