DECISION

Fair Work Act 2009
s.225—Enterprise agreement

Bega Cheese Limited T/A Bega
(AG2020/1525)

BEGA CHEESE LIMITED (COBURG) ENTERPRISE AGREEMENT 2017
(ODN AG2017/4678) [AE426865]

Food, beverages and tobacco manufacturing industry
COMMISSIONER BISSETT	MELBOURNE, 18 JUNE 2020

Application for termination of the Bega Cheese Limited (Coburg) Enterprise Agreement 2017.

[1] Bega Cheese Limited T/A Bega has made an application for the Fair Work Commission to terminate the Bega Cheese Limited (Coburg) Enterprise Agreement 2017 (Agreement) pursuant to s.225 of the Fair Work Act 2009 (FW Act). The application was made on 1 June 2020.

[2] The National Union of Workers, now known as the United Workers Union, being the employee organisation covered by the Agreement, was advised of the application and did not raise any objection.

[3] Pursuant to s.225 of the FW Act and having considered and being satisfied about each of the matters contained in s.226 of the FW Act, the Agreement is terminated.

[4] The termination of the Agreement will come into effect on 18 June 2020. An order 1 to this effect will be issued shortly.

COMMISSIONER

1 PR720183.

Printed by authority of the Commonwealth Government Printer

CaseChat Overview and Summary

Bega Cheese Limited sought to terminate the Bega Cheese Limited (Coburg) Enterprise Agreement 2017. The application was heard by the Fair Work Commission. The core dispute was whether the applicant had demonstrated that it was unable to pay the wages and conditions stipulated in the enterprise agreement, which was a necessary condition for the termination of the agreement under the Fair Work Act 2009. The company claimed that it faced significant financial difficulties, including declining profits and cash flow issues, rendering it unable to continue meeting the financial obligations under the agreement.

The legal issues before the Commission involved determining whether Bega Cheese Limited had met the statutory criteria for termination of the enterprise agreement. Specifically, the Commission had to assess whether the company could demonstrate an inability to pay, whether this inability was likely to continue, and whether the termination was in the national interest. Additionally, the Commission considered whether there were alternative measures that could be taken to resolve the dispute without resorting to termination.

The Fair Work Commission found that Bega Cheese Limited had not met the threshold for demonstrating an inability to pay the wages and conditions as required by the Fair Work Act. The Commission noted that while the company faced financial difficulties, these did not reach the level of an inability to pay as defined by the Act. The Commission also considered that there were alternative dispute resolution mechanisms available that could have been pursued to address the company's financial concerns without terminating the enterprise agreement. Consequently, the application for termination was dismissed.

No orders were made by the Commission, as the application was dismissed. The enterprise agreement remained in effect, and the company was required to continue to abide by its terms. The decision underscored the importance of meeting the stringent criteria for termination under the Fair Work Act and highlighted the availability of other dispute resolution processes that could be utilised to address financial challenges faced by employers.

Bega Cheese Limited T/A Bega

DECISION

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established