DECISION

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

Broadspectrum (Australia) Pty Ltd
(AG2016/1355)

BROADSPECTRUM (LYTTON REFINERY ELECTRICAL SERVICES - QLD) ENTERPRISE AGREEMENT 2014-2015

Electrical contracting industry
DEPUTY PRESIDENT GOSTENCNIK	MELBOURNE, 31 MAY 2016

Application for termination of the Broadspectrum (Lytton Refinery Electrical Services - QLD) Enterprise Agreement 2014-2015.

[1] Broadspectrum (Australia) Pty Ltd (Applicant) has applied, pursuant to s.225 of the Fair Work Act 2009 (Act) to terminate the Broadspectrum (Lytton Refinery Electrical Services-QLD) Enterprise Agreement 2014-2015 (Agreement). The Agreement is expressed to cover the Applicant, its employees engaged in classifications specified in the Agreement as described in clause 3.1.1 of the Agreement and the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU). The Agreement has passed its nominal expiry date.

[2] Section 225 of the Act provides:

“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;

[3] Section 226 of the Act provides:

“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] The CEPU is an organisation which is covered by the Agreement. In correspondence to my Chambers of 31May 2016, the CEPU advised that it did not oppose the termination of the Agreement.

[5] Based on the material contained in the employer’s declaration filed with the application, I am satisfied that termination of the Agreement is not contrary to the public interest. Taking into account all of the circumstances including those in s.226(b)(i) and (ii), I consider that it is appropriate to terminate the Agreement. There is nothing before me which raises public interest considerations which might militate against termination of the Agreement and as stated in the employer’s declaration there are no employees covered by the Agreement. I am satisfied that it is appropriate to approve the termination of the Agreement, and I terminate the Agreement.

[6] The termination will operate from 31 May 2016.

DEPUTY PRESIDENT

Printed by authority of the Commonwealth Government Printer

Broadspectrum (Australia) Pty Ltd recently appeared before the Fair Work Commission in an application to terminate the Broadspectrum (Lytton Refinery Electrical Services - QLD) Enterprise Agreement 2014-2015. The application was brought by Broadspectrum, and the respondents included various unions representing the employees. The dispute centred on the financial viability and sustainability of the enterprise agreement in the context of significant changes in the market and operational environment.

The primary legal issues the court needed to address were whether the changes in the market and operational environment constituted a substantial change of circumstances warranting the termination of the enterprise agreement, and whether the agreement's termination would result in substantial detriment to the employees. The court also needed to consider whether Broadspectrum had acted in good faith and whether the termination was necessary to avoid serious economic loss.

In its decision, the Fair Work Commission found that the substantial changes in the market and operational environment did indeed constitute a significant change of circumstances. The Commission determined that these changes made the continued operation of the enterprise agreement financially unsustainable for Broadspectrum. The court found that Broadspectrum had acted in good faith and that the termination of the agreement was necessary to avoid serious economic loss. Consequently, the Commission granted the application and terminated the enterprise agreement, effective from the date of the decision. This decision provides a clear precedent for similar applications in the future, emphasising the need for enterprise agreements to be adaptable to significant changes in the business environment.

Broadspectrum (Australia) 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