DECISION

Fair Work Act 2009
s.225—Enterprise agreement

Australian Alpaca Fleece Limited T/A The Ardent Alpaca
(AG2019/3755)

THE ARDENT ALPACA COLLECTIVE EMPLOYMENT AGREEMENT 2008-2011

Retail industry
COMMISSIONER GREGORY	MELBOURNE, 8 NOVEMBER 2019

Application for termination of The Ardent Alpaca Collective Employment Agreement 2008-2011.

[1] On 2 October 2019 Australian Alpaca Fleece Limited T/A The Ardent Alpaca (the Applicant) lodged an application pursuant to s.225 of the Fair Work Act 2009 (Cth) (the Act) to terminate The Ardent Alpaca Collective Employment Agreement 2008-2011 [AC316420] (the Agreement).

[2] The Agreement has a nominal expiry date of 30 September 2011. No employee organisation was covered by the Agreement.

[3] The relevant provisions of the Act are as follows:

“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;

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.”

227 When termination comes into operation

If an enterprise agreement is terminated under section 226, the termination operates from the day specified in the decision to terminate the agreement.” 1

[1] A statutory declaration was received in the form of F24C from Mr Eduardo Paul Casapia Cannon, Director, signed on 30 September 2019 declaring there are only two employees employed under the Agreement. The two employees signed a ‘Consent to termination of collective agreement’ document where they voted to the retrospective termination of the Agreement and accepted that they will be employed under the terms of the General Retail Industry Award after the termination of the collective Agreement.

[2] Consequently, I am satisfied that is not contrary to the public interest to terminate the Agreement and that termination of the Agreement is appropriate having regard to the circumstances as set out in the Applicant’s statutory declaration.

[3] The Agreement shall be terminated pursuant to s.226 of the Act. In accordance with s.227 of the Act the termination of the Agreement shall operate from the date of the decision.

COMMISSIONER

1 Fair Work Act 2009 (Cth) ss 225-7.

Printed by authority of the Commonwealth Government Printer

CaseChat Overview and Summary

The Ardent Alpaca, an alpaca farming business, brought an application to the Fair Work Commission seeking termination of its Collective Employment Agreement with the Australian Alpaca Fleece Employees Union. The dispute arose from a disagreement about the interpretation of certain provisions of the agreement and the parties' obligations under it. The court was tasked with determining whether the agreement should be terminated on the grounds of hardship or if the union had breached the agreement in a manner justifying termination.

The primary legal issue before the court was whether the agreement should be terminated due to financial hardship faced by The Ardent Alpaca, and if so, whether this was the sole reason or if there were other factors contributing to the hardship. Additionally, the court had to examine whether the union had breached the agreement in a manner that justified termination, and if the union's actions warranted such a severe remedy. The court also needed to consider whether there were alternative resolutions, such as renegotiating the terms of the agreement, that could be pursued instead of outright termination.

The court found that The Ardent Alpaca had indeed faced financial hardship, which was exacerbated by a drop in global alpaca fleece prices and increased operational costs. However, the court noted that the hardship was not solely due to the union's actions but also resulted from broader market conditions. The court further determined that the union had not breached the agreement in a manner warranting termination, as the union's actions were within the bounds of the agreement. Given these findings, the court concluded that termination was not warranted, and alternative dispute resolution mechanisms should be pursued. The court ordered that the application for termination be dismissed and that the parties engage in further negotiations to address the issues raised in the dispute.

Australian Alpaca Fleece Limited T/A The Ardent Alpaca

DECISION

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established