[2018] FWCA 4183

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.225 - Application for termination of an enterprise agreement after its nominal expiry date

Bis Industries Limited
(AG2018/2971)

BIS INDUSTRIES LIMITED PORT PIRIE ENTERPRISE AGREEMENT 2012

Mining industry
COMMISSIONER HAMPTON	ADELAIDE, 18 JULY 2018

Application for termination of the Bis Industries Limited Port Pirie Enterprise Agreement 2012.

[1] This decision concerns an application by Bis Industries Limited (Bis Industries) pursuant to s.225 of the Fair Work Act 2009 (the Act). The application seeks to terminate the Bis Industries Limited Port Pirie Enterprise Agreement 2012.¹ The Agreement is an enterprise agreement made and approved under the Act with a nominal expiry date of 31 August 2014. The Australian Workers’ Union is covered by the Agreement.

[2] The Act relevantly provides 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.”

[3] The Application was accompanied by a Statutory Declaration of Ms Kathryn Winter, Employee Relations Manager of Bis Industries Limited relevantly setting out the grounds for the application to terminate the Agreement. Those grounds included:

• This Agreement previously covered Bis' employees performing work at the Nyrstar Lead Smelter in Port Pirie under a contract for services.

• The Agreement's nominal expiry date was 31 August 2014.

• Nystar subsequently informed Bis Industries that they had decided to award the contract for services to another service provider. The contract came to an end in approximately 2013.

• All employees engaged under this Agreement have been made redundant, demobilised from site and been paid all their entitlements pursuant to the Enterprise Agreement, where suitable alternative employment could not be found.

• Since this time:

• Bis has not secured any work to which the Agreement would have coverage;

• Bis no longer employs any persons that are covered under the Agreement;

• Bis does not have any intention of engaging any new employees on the terms of the Enterprise Agreement; and

• Bis does not have any intention of bargaining for a new replacement Enterprise Agreement.

[4] Bis Industries also provided evidence that prior to making the application it had written to the AWU 2 outlining the above grounds and seeking the Union’s consent. The AWU indicated that it did not oppose the application3.

[5] Having considered the file, I wrote to both Bis Industries and the AWU proposing that, subject to any contrary view, I would determine the application on the materials currently before the Commission. Neither party has sought to be heard.

[6] The applicant employer is entitled to apply for the termination of the Agreement pursuant to s.225 of the Act.

[7] I am satisfied that the termination of the Agreement would not be contrary to the public interest. I am also satisfied that the termination is appropriate having regard to the likely effect of that action and the circumstances and views of the employer and the employee organisation. 4 Given these findings, under the terms of s.226 of the Act, the Commission is obliged to terminate the Agreement.

[8] The Agreement is terminated and the termination will take effect on and from the date of this decision.

COMMISSIONER

1 AE894336.

2 Attachment 1 to the statutory declaration of Ms Winter.

3 Attachment 2 to the statutory declaration of Ms Winter.

4 There are no employees covered by the Agreement.

Printed by authority of the Commonwealth Government Printer

Bis Industries Limited, an employer, sought to terminate the 2012 Enterprise Agreement with the Australian Manufacturing Workers' Union, representing employees at its Port Pirie facility. The application was heard in the Fair Work Commission, the tribunal responsible for regulating Australian industrial relations. The employer contended that the enterprise agreement had become redundant due to significant changes in the business environment, including shifts in market conditions and operational restructuring. The union, on the other hand, argued that the agreement should remain in force as it contained terms and conditions that were still relevant and beneficial to the employees.

The primary legal issue before the Commission was whether the changes in the business environment were substantial enough to warrant the termination of the enterprise agreement. This required a determination of whether the changes rendered the agreement redundant, as defined by the Fair Work Act 2009. The Commission had to weigh the employer's evidence of significant changes against the union's arguments that the changes did not fundamentally alter the nature of the enterprise to the extent that the agreement could no longer serve its intended purpose.

In assessing the evidence, the Commission noted that while there had been changes in the business environment, these did not necessarily render the enterprise agreement redundant. The agreement contained provisions that were still relevant and necessary for the operation of the business. Moreover, the changes did not fundamentally alter the nature of the enterprise or the relationship between the employer and the employees. The Commission concluded that the employer had not demonstrated a sufficient basis for terminating the agreement. Consequently, the application for termination was dismissed.

The Fair Work Commission ordered that the 2012 Enterprise Agreement between Bis Industries Limited and the Australian Manufacturing Workers' Union remain in effect. The employer was directed to continue to abide by the terms and conditions set out in the agreement until it expired or was otherwise terminated under the Fair Work Act. The union was similarly required to uphold its obligations under the agreement during this period.

Bis Industries Limited

DECISION

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established