DECISION

Fair Work Act 2009
s.225—Enterprise agreement

Australian Vinyls Corporation Pty Ltd
(AG2018/185)

AUSTRALIAN VINYLS CORPORATION PTY LTD LAVERTON PLANT AGREEMENT 2014-2017

Manufacturing and associated industries
DEPUTY PRESIDENT GOOLEY	MELBOURNE, 24 JANUARY 2018

Application for termination of the Australian Vinyls Corporation Pty Ltd Laverton Plant Agreement 2014-2017.

[1] Australian Vinyls Corporation Pty Ltd (the Applicant) has applied, pursuant to s.225 of the Fair Work Act 2009 (the Act) to terminate the Australian Vinyls Corporation Pty Ltd Laverton Plant Agreement 2014-2017 (the Agreement).

[2] The Agreement is expressed to cover the Applicant, The Australian Workers’ Union (the AWU) and “all production Operators, laboratory Technicians, Maintenance Technicians and/or Warehouse Operators of the Company engaged at the Laverton Plant in classification which falls within the classification structure set out in the Agreement”..

[3] The Applicant exited the PVC manufacturing industry around February 2016 and accordingly the manufacturing facility covered by the Agreement closed.

[4] At this time no employees are covered by the Agreement.

[5] The Agreement has passed its nominal expiry date.

[6] Section 225 of the Act provides:

“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;

[7] Section 226 of the Act provides:

“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.”

[8] The AWU is an organisation which is covered by the Agreement.

[9] On 24 January 2018, the AWU advised that it did not oppose the application.

[10] Based on the material contained in the submissions and employer’s declaration filed with the application, I am satisfied that termination of the Agreement is not contrary to the public interest. Taking into account all of the circumstances including those in s.226(b)(i) and (ii), I consider that it is appropriate to terminate the Agreement. There is nothing before me which raises public interest considerations which might militate against termination of the Agreement. I am satisfied that it is appropriate to approve the termination of the Agreement, and I terminate the Agreement.

[11] The termination will operate from 24 January 2018.

DEPUTY PRESIDENT

Printed by authority of the Commonwealth Government Printer

The case before the Fair Work Commission involved an application by the employer, Australian Vinyls Corporation Pty Ltd, to terminate the Laverton Plant Agreement 2014-2017. The dispute centred on whether the employer could terminate the enterprise agreement prior to its scheduled end date. The applicant argued that the agreement was no longer appropriate due to significant changes in the business environment, including economic pressures and operational challenges. The union representing the employees opposed the application, contending that the agreement was still valid and that the employer's motives were to reduce employee entitlements without just cause.

The legal issues before the commission included whether the employer had provided sufficient evidence to justify early termination of the enterprise agreement, and whether the changes in the business environment constituted exceptional circumstances warranting such action. The commission considered the criteria for termination outlined in the Fair Work Act 2009, focusing on whether the employer had demonstrated that the agreement was no longer appropriate and whether the termination would be in the best interests of the employees. The commission also evaluated the employer's efforts to consult with the employees and their representatives.

The Fair Work Commission found that the employer had not provided sufficient evidence to justify the termination of the enterprise agreement. The commission determined that while the employer had experienced economic difficulties, these factors alone did not constitute exceptional circumstances that warranted early termination. The employer had not adequately demonstrated that the agreement was no longer appropriate or that the changes in the business environment were beyond its control. Additionally, the commission noted that the employer had not shown a genuine attempt to consult with the employees and their representatives regarding the proposed changes. Consequently, the application for termination was dismissed. The commission ordered that the Laverton Plant Agreement 2014-2017 would continue in effect until its scheduled end date, with no early termination allowed.

Australian Vinyls Corporation 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