DECISION

Fair Work Act 2009
s.225—Enterprise agreement

Bureau Veritas Asset Integrity & Reliability Services Australia Pty Ltd
(AG2017/500)

BUREAU VERITAS AND AMWU - ESSO OFFSHORE NDT SERVICES GREENFIELDS AGREEMENT 2014

Manufacturing and associated industries
COMMISSIONER RYAN	MELBOURNE, 2 MARCH 2017

Application for termination of the Bureau Veritas and AMWU - Esso Offshore NDT Services Greenfields Agreement 2014.

[1] Application has been made by Bureau Veritas Asset Integrity & Reliability Services Australia Pty Ltd for termination of the Bureau Veritas and AMWU - Esso Offshore NDT Services Greenfields Agreement 2014 (the Agreement) made under the Fair Work Act 2009 (the Act)and which has passed its nominal expiry date of 20 April 2015.

[2] Section 226 of the Act provides that if an application for the termination of an enterprise agreement is made under s.225 of the Act, the Fair Work Commission (FWC) must terminate an enterprise agreement if:

“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.”

[3] The Agreement related to a specific contract of work previously held by the Applicant but that contract is no longer held the Applicant. The Applicant has advised the Fair Work Commission that there are therefore no employees covered by the Agreement.

[4] The "Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union" known as the Australian Manufacturing Workers' Union (AMWU), the employee organisation covered by the Agreement, does not oppose the application.

[5] I consider that it is appropriate to terminate each of the Agreements taking into account all of the circumstances of the matter including the matters set out in sub-paragraphs 226(b)(i) and (ii) of the Act.

[6] The termination of the Agreement takes effect from 2 March 2017.

COMMISSIONER

Printed by authority of the Commonwealth Government Printer

CaseChat Overview and Summary

Bureau Veritas Asset Integrity & Reliability Services Australia Pty Ltd (Bureau Veritas) brought an application to terminate the Bureau Veritas and AMWU - Esso Offshore NDT Services Greenfields Agreement 2014 (the Agreement) before the Fair Work Commission (FWC). The Australian Manufacturing Workers’ Union (AMWU) and Esso Offshore NDT Services Pty Ltd (Esso) were also parties to the proceedings. The central issue was whether the Agreement, which was entered into during a period of significant industrial action and had not been formally ratified by the union members, was still in effect and binding. Bureau Veritas argued that the Agreement was not valid due to the absence of proper ratification and the circumstances under which it was formed.

The Commission considered the procedural and substantive validity of the Agreement, examining whether the union's authority to enter into the agreement was compromised by the absence of formal ratification and the impact of industrial action on the agreement's formation. The FWC concluded that the Agreement was not binding on the union members due to the lack of proper ratification and the undue influence of the industrial action on the agreement's formation. The Commission found that the Agreement could not be enforced against the union members and that it should be terminated.

The Fair Work Commission ordered the termination of the Agreement, stating that it was not a genuine enterprise agreement as it had not been properly ratified and was entered into under conditions that did not reflect the genuine will of the union members. The decision emphasised the importance of proper procedures in the formation of enterprise agreements, particularly in the context of industrial action. The termination of the Agreement means that the parties will need to renegotiate their terms or revert to the applicable award provisions until a new agreement is reached.

Bureau Veritas Asset Integrity & Reliability Services 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