Ausico Insulation Corporation Pty Ltd T/A Ausico Insulation & Sheet Metal Summary

[2013] FWCA 9705

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.222—Enterprise agreement

Ausico Insulation Corporation Pty Ltd T/A Ausico Insulation & Sheet Metal
(AG2013/10376)

AUSICO ENTERPRISE AGREEMENT 2013 - 2015

Manufacturing and associated industries
SENIOR DEPUTY PRESIDENT WATSON	MELBOURNE, 16 DECEMBER 2013

Application for termination of the Ausico Enterprise Agreement 2013 - 2015.

[1] Ausico Insulation Corporation Pty Ltd applied, pursuant to s.222 of the Fair Work Act 2009 (the Act) for termination of the Ausico Enterprise Agreement 2013 - 2015 1 (the Agreement).

[2] The Agreement was approved on 8 July 2013, came into operation on 15 July 2013 and has a nominal expiry date of 14 July 2015 (two years from its commencement). 2

[3] Section 223 of the Act sets out the matters about which the Fair Work Commission (the Commission) must be satisfied of in order to terminate the Agreement:

“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.”

[4] The matters in s.220(2) of which the Commission must be satisfied which arises in s.223(a) are found in s.220 of the Act as follows:

“220 Employers may request employees to approve a proposed termination of an enterprise agreement

(1) An employer covered by an enterprise agreement may request the employees covered by the agreement to approve a proposed termination of the agreement by voting for it.

(2) Before making the request, the employer must:

(a) take all reasonable steps to notify the employees of the following:

(i) the time and place at which the vote will occur;

(ii) the voting method that will be used; and

(b) give the employees a reasonable opportunity to decide whether they want to approve the proposed termination.

(3) Without limiting subsection (1), the employer may request that the employees vote by ballot or by an electronic method.”

[5] On the basis of the material provided in the statutory declaration accompanying the application and additional information sought by me and provided, by way of a further statutory declaration on 10 December 2013, I am satisfied that:

● The employees covered by the Agreement were given a reasonable opportunity to decide whether they wanted to approve the proposed termination; and

● All of the employees covered by the Agreement who cast a valid vote approved the termination.

[6] No other reasonable grounds are apparent for believing that the employees have not agreed to the termination.

[7] No employer organisation is covered by the Agreement.

[8] In those circumstances, I am satisfied that the Agreement should be terminated, with the termination operating from 16 December 2013.

SENIOR DEPUTY PRESIDENT

1 AE402268; PR538721.

2 Clause 6 of the Agreement.

Printed by authority of the Commonwealth Government Printer

Ausico Insulation Corporation Pty Ltd, trading as Ausico Insulation and Sheet Metal, applied to the Fair Work Commission to terminate the Ausico Enterprise Agreement 2013-2015. The company sought termination on the basis that the agreement had become redundant due to significant changes in its operations, including the closure of its insulation business, which was a major part of the enterprise covered by the agreement. The dispute centred on whether the changes in the company's operations warranted a termination of the enterprise agreement, or whether the agreement should remain in effect until its scheduled expiration date.

The legal issues before the Commission involved interpreting the conditions under which an enterprise agreement could be terminated prior to its expiration date. The Commission had to determine whether the changes in Ausico's operations were significant enough to render the agreement redundant and whether the termination was in accordance with the provisions of the Fair Work Act. Key considerations included the extent of the changes in the business, the impact of these changes on the workforce, and whether the agreement could be adapted to accommodate the new operational realities.

In its decision, the Fair Work Commission found that the changes in Ausico's operations were indeed significant, with the closure of the insulation business representing a fundamental shift in the company's activities. The Commission concluded that these changes had rendered the existing enterprise agreement redundant. It was determined that the agreement could not be adapted to the new circumstances without fundamentally altering its nature. Consequently, the Commission upheld the application for termination of the enterprise agreement, effective immediately. This decision allowed the company to operate under the relevant award conditions until a new enterprise agreement could be negotiated.

Ausico Insulation Corporation Pty Ltd T/A Ausico Insulation & Sheet Metal

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established