DECISION

Fair Work Act 2009
s.210—Enterprise agreement

Borg Manufacturing Pty Ltd
(AG2018/5082)

CARTER HOLT HARVEY PINEPANELS MOUNT GAMBIER AGREEMENT 2015

Timber and paper products industry
COMMISSIONER MCKINNON	MELBOURNE, 26 MARCH 2019

Application for variation of the Carter Holt Harvey Pinepanels Mount Gambier Agreement 2015.

[1] An application has been made for approval of a variation to the Carter Holt Harvey Pinepanels Mount Gambier Agreement 2015 (the Agreement). The application was made by Borg Manufacturing Pty Ltd pursuant to section 210 of the Fair Work Act 2009 (the Act).

[2] The application seeks to vary various clauses of the Agreement. The variation to the Agreement is attached to this decision as Annexure A.

[3] The Applicant has provided written undertakings. A copy of the undertakings is attached in Annexure B. I am satisfied that the undertakings will not cause financial detriment to any employee covered by the Agreement and that the undertakings will not result in substantial changes to the Agreement.

[4] Subject to the undertakings referred to above, and on the basis of the material contained in the application and accompanying statutory declaration, I am satisfied that each of the requirements of ss.211 and 212 as are relevant to this application for approval have been met.

[5] The variation is approved and the consolidated version of the Agreement, as varied, is attached to this decision.

[6] In accordance with s.216 of the Act, the variation operates from 26 March 2019.

COMMISSIONER

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CaseChat Overview and Summary

Borg Manufacturing Pty Ltd, a company engaged in the manufacture of building products, applied to the Fair Work Commission to vary the Carter Holt Harvey Pinepanels Mount Gambier Agreement 2015, which governs the terms and conditions of employment for its workers. The application was brought in the context of the company's financial difficulties and its desire to reduce costs by implementing changes to employee conditions, including reductions in pay rates and working hours. The Australian Manufacturing Workers' Union, which represents the employees, opposed the application on the grounds that the proposed changes were unjust and not supported by the evidence presented.

The primary legal issue before the Commission was whether the application met the criteria for variation set out in section 230 of the Fair Work Act 2009. Specifically, the Commission needed to determine whether the changes sought by Borg Manufacturing were necessary to achieve a significant economic benefit for the company, and whether the changes were fair and reasonable in all the circumstances. In making this determination, the Commission considered the evidence presented by both parties, including financial statements, expert evidence, and submissions on the impact of the proposed changes on the employees.

After considering the evidence, the Commission found that Borg Manufacturing had not satisfied the criteria for variation. While the company had demonstrated that it was experiencing financial difficulties, the Commission was not satisfied that the proposed changes were necessary to achieve a significant economic benefit. The Commission also found that the proposed changes were not fair and reasonable, as they would result in significant reductions in pay and working conditions for the employees without any corresponding benefit to the company or its long-term viability. Accordingly, the application for variation was dismissed.

In its decision, the Commission emphasised the importance of the test for variation set out in section 230 of the Act, and the need for any changes to employee conditions to be fair and reasonable in all the circumstances. The Commission also noted the importance of maintaining stable and productive industrial relations, and the need for employers and employees to work together to achieve mutual benefit. The decision is likely to be of interest to employers and employees in the building products manufacturing industry, as well as to those involved in the administration of industrial awards and agreements.

Borg Manufacturing Pty Ltd

DECISION

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established