Boom Logistics Ltd - [2016] FWCA 82

[2016] FWCA 82

DECISION

Fair Work Act 2009

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

Boom Logistics Ltd

(AG2015/3386)

BOOM LOGISTICS LTD HUNTER VALLEY ENTERPRISE

AGREEMENT 2013

Building, metal and civil construction industries

DEPUTY PRESIDENT LAWRENCE

SYDNEY, 15 JANUARY 2016

Application for termination of the Boom Logistics Ltd Hunter Valley Enterprise Agreement

2013.

[1] On 22 July 2015 Boom Logistics Limited (Boom) lodged an application pursuant to

s.225 of the Fair Work Act 2009 (the Act) to terminate an enterprise agreement after its

nominal expiry date. The relevant agreement is the Boom Logistics Ltd Hunter Valley

Enterprise Agreement 2013 [AE401840] (the Agreement).

[2] The nominal expiry date of the Agreement was 1 September 2013.
[3] The Construction, Forestry, Mining and Energy Union (the CFMEU) is the employee

organisation covered by the Agreement.

[4] Attached to the application was a Statutory Declaration by Boom’s General Manager

NSW, Anthony Raby. Inter alia it noted:

	The Agreement covered 57 employees at Boom’s Singleton depot. Boom hires mobile
cranes and other mechanical equipment to customers in the coal mining industry in the
Hunter Valley.
	The precipitous fall in the coal export price from Newcastle has led to coal industry
employers, Boom’s customers, seeking to reduce costs and increase productivity.
	The level of wages and conditions in the Agreement has led to Boom being under
considerable pressure in seeking to negotiate and maintain contracts. Revenue from
the Singleton depot has dropped 35% between 2012/2013 and 2014/2015.
	Boom and the CFMEU have been seeking to negotiate a replacement Agreement since
October 2013 but have not been successful. In fact, employees voted comprehensively
on 1 July 2015 to reject a replacement agreement.

[2016] FWCA 82

	Boom says that it does not intend to cease trying to get a new agreement but that it is
in the public interest for bargaining to be underpinned by the relevant modern award
and the National Employment Standards in the Act, rather than the Agreement.
	Boom will make certain undertakings to maintain parts of the status quo for the next
six months.

 Direct labour costs of employees covered by the Agreement are the largest cost

component in the business unit. Unless they are addressed, Boom will not be able to
compete in a challenging market.

	Boom’s national workforce has reduced from 952 in 30 June 2013 to 565 on 31 May
2015. At Singleton, the number has dropped from 129 in June 2013 to 87 in June
2015.

 The application is designed to ensure that there are no further reductions in

employment.

Commission Proceedings

[5]        The application was dealt with in conference in Sydney on 13 August 2015.
[6]        It became clear that the matter would not be resolved by agreement.
[7]        Accordingly, directions were issued for the filing of submissions and witness

statements.

[8] The matter was set down for hearing in Newcastle on 14 and 15 October 2015. A

further day was necessary for…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

AGLC: Boom Logistics Ltd [2016] FWCA 82
Case: [2016] FWCA 82
Decision Date: 15 January 2016

CaseChat Overview and Summary

Boom Logistics Limited (Boom) applied to the Fair Work Commission (FWC) to terminate the Boom Logistics Ltd Hunter Valley Enterprise Agreement 2013 (the Agreement) after its nominal expiry date. The Construction, Forestry, Mining and Energy Union (CFMEU) opposed the application. The Deputy President found that the application did not meet the requirements of sections 226(a) and 226(b) of the Fair Work Act 2009 (the Act). The Deputy President noted that the application needed to be judged on its merits without any assumptions about the motive behind it. While the Deputy President accepted Boom's evidence regarding the impact of the decline in the price of coal on its business, he concluded that terminating the Agreement was not an appropriate response to the market difficulties. The Deputy President considered the views of each of the parties and found that the significant reduction in wages and conditions of Agreement-covered employees which would flow from the termination of the Agreement would obviously provide a cost saving to Boom, but this was not necessarily the same as an increase in productivity and efficiency. The substantial reduction in take-home pay and conditions of employment resulting from the termination was not offset in any meaningful way by the undertakings. The effect on the living standards and family circumstances of employees was not outweighed by the efficiency benefit to the employer. Accordingly, the Deputy President decided that the application by Boom Logistics Limited to terminate the Agreement was dismissed.

Orders