CNG Systems Pty Ltd T/A CNG Systems Pty Ltd

[2024] FWCA 3284

[2024] FWCA 3284

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

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

CNG Systems Pty Ltd T/A CNG Systems Pty Ltd

(AG2024/3574)

Building, metal and civil construction industries
COMMISSIONER REDFORD	MELBOURNE, 17 SEPTEMBER 2024

Application for termination of the CNG Systems Pty Ltd and ETU Enterprise Agreement 2018-2021

1. CNG Systems Pty Ltd T/A CNG Systems Pty Ltd (the Applicant) has applied, pursuant to s 225 of the Fair Work Act 2009 (the Act), to terminate the CNG Systems Pty Ltd and ETU Enterprise Agreement 2018-2021[1] (the Agreement). 

2. The application was supported by a Form F24C Declaration made by Mr Andrew Holland, the National Operations Manager for the Applicant, on 9 September 2024 (the declaration). 

3. The declaration asserts there are no employees covered or likely to be covered by the Agreement. 

Legislation 

1. In order to grant an application made pursuant to s 225 of the Act, the Commission must be satisfied as to the requirements of ss 225, 226 and 226A of the Act.

2. Relevantly, ss 225 and 226 are as follows:

   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; 

   (c) an employee organisation covered by the agreement. 

   226  Terminating an enterprise agreement after its nominal expiry date 

   (1) 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 the continued operation of the agreement would be unfair for the employees covered by the agreement; or 

   (b) the FWC is satisfied that the agreement does not, and is not likely to, cover any employees; or 

   (c) all of the following apply: 

   (i) the FWC is satisfied that the continued operation of the enterprise agreement would pose a significant threat to the viability of a business carried on by the employer, or employers, covered by the agreement; 

   (ii) the FWC is satisfied that the termination of the enterprise agreement would be likely to reduce the potential of terminations of employment covered by subsection (2) for the employees covered by the agreement; 

   (iii) if the agreement contains terms providing entitlements relating to the termination of employees’ employment—each employer covered by the agreement has given the FWC a guarantee of termination entitlements in relation to the termination of the agreement. 

   (1A) However, the FWC must terminate the enterprise agreement under subsection (1) only if the FWC is satisfied that it is appropriate in all the circumstances to do so. 

   (2) This subsection covers a termination of the employment of an employee: 

   (a) at the employer’s initiative because the employer no longer requires the job done by the employee to be done by anyone, except where this is due to the ordinary and customary turnover of labour; or 

   (b) because of the insolvency or bankruptcy of the employer. 

   (3) In deciding whether to terminate the agreement, the FWC must consider the views of the following covered by the agreement: 

   (a) the employees (unless there are no employees covered by the agreement); 

   (b) each employer; 

   (c) each employee organisation (if any). 

   Note: The President may be required to direct a Full Bench to perform a function or exercise a power in relation to the matter if any of the employers, employees, or employee organisations, covered by the agreement oppose the termination (see subsection 615A(3)). 

   (4) In deciding whether to terminate the agreement (the existing agreement), the FWC must have regard to: 

   (a) whether the application was made at or after the notification time for a proposed enterprise agreement that will cover the same, or substantially the same, group of employees as the existing agreement; and 

   (b) whether bargaining for the proposed enterprise agreement is occurring; and 

   (c) whether the termination of the existing agreement would adversely affect the bargaining positionof the employees that will be covered by the proposed enterprise agreement. 

   (5) In deciding whether to terminate the agreement, the FWC may also have regard to any other relevant matter.” 

3. The Agreement has passed its nominal expiry date, which is 31 March 2021. 

4. The Applicant is entitled to make the application pursuant to s 225(a) of the Act.

5. Subject to s 226(1A), s 226(1)(b) of the Act provides that the Commission must terminate the agreement if it is satisfied that the agreement does not, and is not likely to, cover any employees. 

6. The declaration asserts there are no employees covered or likely to be covered by the Agreement. It explains that the Applicant does not currently employ any electrical workers covered by the Agreement, nor will it do so in the future because there was a transfer of business situation involving an associated entity, CNG Installation Group Pty Ltd, after the nominal expiry date of the Agreement, and the relevant employees transferred their employment over to the new entity at that time. The Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (ETU), who is covered by the Agreement, confirmed this to be the case.

7. On this basis, I am satisfied that the agreement does not presently cover any employees. The views of the employees covered by the agreement cannot therefore be sought. 

8. I sought the ETU’s views about the application and it does not oppose the termination of the Agreement.

9. Section 226(4) is not relevant in relation to this application.

10. Based on the material before me I am satisfied that the Agreement does not and is not likely to cover any employees, and that the requirements of s 226(1)(b) are met. No other matter was brought to my attention that I consider I should have regard to. I am also satisfied that it is appropriate in all the circumstances to terminate the Agreement.

11. The termination of the Agreement shall operate from 17 September 2024. An Order to this effect will be issued with this decision. 

COMMISSIONER

[1] AG2018/6301

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