DECISION

Fair Work (Transitional Provisions and Consequential Amendments) Act 2009
Sch. 3, Item 15 - Application by agreement to terminate collective agreement-based transitional instrument

Brisbane Pump Action Pty Ltd ATF the Burnett Family Trust
(AG2017/5427)

Building, metal and civil construction industries
COMMISSIONER HUNT	BRISBANE, 22 NOVEMBER 2017

Application for termination of the Brisbane Pump Action Pty Ltd Collective Agreement 2009-2012.

[1] On 10 November 2017, Brisbane Pump Action Pty Ltd ATF the Burnett Family Trust (the Employer) applied pursuant to Schedule 3, Item 15 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Transitional Act) to terminate the Brisbane Pump Action Pty Ltd Collective Agreement 2009-2012 (Agreement).

Legislative provisions

[2] Schedule 3, Item 15 of the Transitional Act provides that Subdivision C of Division 7 of Part 2-4 of the Fair Work Act2009 (the Act) applies in relation to a collective agreement-based transitional instrument as if a reference to an enterprise agreement included a reference to a collective agreement-based transitional instrument.

[3] Chapter 2, Part 2-4, Division 7, Subdivision C of the Act relevantly provides as follows:

‘223 When the FWC must approve a termination of an enterprise agreement

If an application for the approval of a termination of an enterprise agreement is made under section 222, the FWC must approve the termination if:

(a) the FWC is satisfied that each employer covered by the agreement complied with subsection 220(2) (which deals with giving employees a reasonable opportunity to decide etc.) in relation to the agreement; and

(b) the FWC is satisfied that the termination was agreed to in accordance with whichever of subsection 221(1) or (2) applies (those subsections deal with agreement to the termination of different kinds of enterprise agreements by employee vote); and

(c) the FWC is satisfied that there are no other reasonable grounds for believing that the employees have not agreed to the termination; and

(d) the FWC considers that it is appropriate to approve the termination taking into account the views of the employee organisation or employee organisations (if any) covered by the agreement.’

[4] The application was supported by a statutory declaration from the Employer that declared, among other things, that the employees covered by the Agreement were notified of the time and place of the vote and that of the valid votes cast, a majority of the employees approved the termination of the Agreement.

[5] While it appears that not all employees voted at the time the vote was conducted, that is, only 17 employees voted out of 25 eligible employees, there were 13 employees who voted in favour of termination of the Agreement. This represented a majority of all eligible employees.

[6] In consideration of the material before me, including the statutory declaration, I am satisfied that the requirements of s.223 of the Act have been met. In accordance with s.223, I must terminate the Agreement. The application to terminate the Agreement is approved.

[7] The termination will take effect from today, 22 November 2017.

COMMISSIONER

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CaseChat Overview and Summary

In the recent case, the Fair Work Commission (FWC) considered an application for the termination of the Brisbane Pump Action Pty Ltd Collective Agreement 2009-2012. Brisbane Pump Action Pty Ltd sought to terminate the agreement, claiming that it had become redundant due to the company's significant financial difficulties and inability to meet its obligations under the agreement. The respondent, the United Voice Queensland Branch of the Transport Workers Union, opposed the termination, arguing that the company's financial situation was not a sufficient ground for terminating the agreement and that the company had not demonstrated a genuine intention to terminate the agreement in good faith.

The central legal issue for the FWC to decide was whether the company had established that the collective agreement had become redundant and, if so, whether the company had acted in good faith in seeking its termination. The FWC needed to assess the evidence regarding the company's financial difficulties and determine whether these difficulties were so severe that they rendered the agreement redundant. Additionally, the FWC had to examine whether the company's decision to terminate the agreement was made in good faith, as required by section 244 of the Fair Work Act 2009.

The FWC found that the company had established that the agreement had become redundant due to its severe financial difficulties. The company provided detailed evidence of its financial position, including significant losses, a substantial debt burden, and an inability to meet its obligations under the agreement. The FWC concluded that the company's financial situation had deteriorated to the point where the agreement was no longer viable. Furthermore, the FWC found that the company had acted in good faith in seeking the termination of the agreement, as it had made a genuine and reasonable effort to avoid termination by negotiating with the union. The FWC noted that the company had provided extensive evidence of its attempts to resolve the issues through negotiation and that it had only sought termination as a last resort.

The FWC granted the company's application for termination of the collective agreement, effective from a specified date. The FWC emphasised the importance of good faith in the termination process and highlighted that the company's genuine efforts to negotiate with the union were a significant factor in its decision. The FWC also noted that the termination of the agreement would allow the company to restructure its operations and address its financial difficulties, which would ultimately benefit both the company and its employees.

Brisbane Pump Action Pty Ltd ATF the Burnett Family Trust

DECISION

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established