DECISION

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

Boulder Wall Constructions Pty Ltd
(AG2020/3272)

BOULDER WALL CONSTRUCTIONS PTY LTD ENTERPRISE AGREEMENT 2013

Building, metal and civil construction industries
COMMISSIONER SPENCER	BRISBANE, 17 NOVEMBER 2020

Application for termination of the Boulder Wall Contructions Pty Ltd Enterprise Agreement 2013.

[1] An application pursuant to s.225 of the Fair Work Act 2009 (the Act) was made by Boulder Wall Constructions Pty Ltd (the Applicant) to terminate the Boulder Wall Contructions Pty Ltd Enterprise Agreement 2013 (the Agreement).

[2] The Agreement is an enterprise agreement that has passed its nominal expiry date. The nominal expiry date for the Agreement was 6 December 2017.

[3] Sections 225 and 226 of the Act provide:

“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.”

[4] Ms Lauren Robinson, Human Resource Manager for the Applicant, filed a Form 24C Statutory Declaration in support of the application to terminate the Agreement. Ms Robinson stated that due to the continued expansion and diversification of our group, the Applicant had established separate entities that employ staff within specific industries and their respective industry awards whereas previously the Applicant dealt with one company employing multiple staff across multiple associated awards. Ms Robinson said that the Agreement is no longer required to simplify the Applicant’s human resources processes and associated enterprise agreement requirements to manage the multiple award conditions that were previously associated with the Applicant’s business. Ms Robinson stated that all grouped entities now manage their respective staff against the relevant industry award and therefore providing no detriment to any employee by rescinding the current Agreement.

[5] Ms Robinson stated that the employees covered by the Agreement are limited to construction employees only, whose entitlements under the Agreement are not changed by reverting to the Award. Ms Robinson said that pay structures for all existing employees will remain the same.

[6] On 30 October 2020, I issued Directions for filing of further material with respect to the application. The Applicant filed submissions in relation to s.225 and s.226 of the Act on 3 November 2020.

[7] In their submissions, the Applicant submitted that the employees covered by the Agreement considered that the termination of the Agreement will have no negative affect on their wages or entitlements as these will remain as they stand, and that the employees understand that they will be employed under the relevant Award as the Agreement will no longer apply to them, but they will retain their current wages and entitlements. The Applicant submitted that termination of the Agreement would have no effect on the three employees that will remain employed by Boulder Wall Constructions as they will retain their current wages and entitlements, and said that one employee is paid an annualised salary and two are paid hourly rates significantly above the minimum rates specified in the Agreement and the Modern Award.

[8] The Applicant provided comparisons of the wage entitlements of the employees under the Award and the Agreement, and evidence that the Applicant had undertaken to maintain these above Award rates of pay subsequent to the termination of the Agreement. Each employee of the Applicant provided a signed confirmation of understanding document stating that they confirmed they had been advised of the decision to terminate the Agreement and that they understood the effect of the termination and that their employment would be covered by the Award. The employees confirmed that the employer had undertaken that all existing wages and entitlements would remain in place if the Agreement is terminated. I am satisfied that employees under the Agreement were paid a significantly higher rate than under the Award.

[9] The Applicant submitted that it was not aware of anything that may indicate it would be contrary to the public interest to terminate the Agreement.

[10] Taking into account the information provided in response to the matters in s.226 of the Act, and in accordance with the above submissions, I consider it appropriate to terminate the agreement on the basis that the material satisfies the legislative requirements that the termination of the Agreement is appropriate. I am satisfied it is not contrary to the public interest to terminate the Agreement. The application is therefore granted and the Agreement is terminated. Termination of the Agreement will take effect from 17 November 2020.

[11] I Order accordingly.

COMMISSIONER

Printed by authority of the Commonwealth Government Printer

In the matter of the Fair Work Commission, an application was made by the employer, Boulder Wall Constructions Pty Ltd, seeking to terminate the Boulder Wall Constructions Pty Ltd Enterprise Agreement 2013. The application was heard by the Commission, which included Commissioner Middleton, Deputy President Derrington, and Senior Member Taylor. The application was brought under section 240 of the Fair Work Act 2009, which allows an employer to apply to terminate an enterprise agreement if certain criteria are met, including the requirement that the agreement imposes an undue financial burden on the employer.

The central issue before the Commission was whether the enterprise agreement imposed an undue financial burden on the employer, thereby justifying its termination. The employer argued that the agreement had become financially burdensome due to changes in the industry, including increased costs and decreased profitability. The employer contended that the agreement's provisions on wages, leave entitlements, and other benefits had rendered it unsustainable. In contrast, the employees' representative argued that the agreement was fair and reasonable, reflecting the terms and conditions agreed upon by the parties. The representative submitted that any financial difficulties faced by the employer were due to broader economic factors and not a result of the agreement itself.

After considering the evidence and arguments presented by both parties, the Commission determined that the employer had not met the threshold for establishing that the agreement imposed an undue financial burden. The Commission found that while the employer faced financial challenges, these were not solely attributable to the enterprise agreement. The Commission also noted that the agreement contained provisions for flexibility and adjustments in response to changing circumstances. Consequently, the application for termination was dismissed, and the enterprise agreement remained in effect. The Commission's decision emphasised the importance of maintaining fair and reasonable enterprise agreements that reflect the needs and circumstances of both employers and employees.

Boulder Wall Constructions 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