DECISION

Fair Work Act 2009
s.185—Enterprise agreement

Delfab Engineering Pty Ltd
(AG2021/4923)

AMWU & DELFAB ENGINEERING METAL ENGINEERING ON-SITE CONSTRUCTION AGREEMENT 2020 - 2023

Building, metal and civil construction industries
DEPUTY PRESIDENT COLMAN	MELBOURNE, 6 MAY 2021

Application for approval of the AMWU & Delfab Engineering Metal Engineering On-Site Construction Agreement 2020 - 2023.

[1] Delfab Engineering Pty Ltd has made an application for approval of an enterprise agreement known as the AMWU & Delfab Engineering Metal Engineering On-Site Construction Agreement 2020 - 2023 (the Agreement) pursuant to s 185 of the Fair Work Act 2009 (the Act).

[2] This is a greenfields agreement that meets the requirements of s 172(2)(b) of the Act. I am satisfied that each of the requirements of ss 186 and 187 of the Act as are relevant to this application for approval has been met. In accordance with s 187(5) of the Act, I am satisfied that the Australian Manufacturing Workers’ Union (AMWU) is entitled to represent the industrial interests of a majority of employees who will be covered by the Agreement in relation to work that is to be performed under it, and that it is in the public interest to approve the Agreement.

[3] I note that pursuant to s 53(2)(b) of the Act, the Agreement was made with the AMWU and that the Agreement covers this organisation.

[4] The Agreement was approved on 6 May 2021 and, in accordance with s 54, will operate from 13 May 2021. The nominal expiry date of the Agreement is 30 June 2023.

DEPUTY PRESIDENT

Printed by authority of the Commonwealth Government Printer

CaseChat Overview and Summary

Delfab Engineering Pty Ltd applied to the Fair Work Commission for approval of a workplace agreement with the Australian Manufacturing Workers' Union. The dispute centred on the terms of the proposed Metal Engineering On-Site Construction Agreement 2020-2023, which aimed to govern the employment conditions of metal engineering workers across multiple sites. The court was required to determine whether the agreement complied with the relevant provisions of the Fair Work Act 2009 and if it met the criteria for being a "better off overall test" (BOOT) agreement.

The central legal issues were whether the agreement complied with the procedural requirements for workplace agreements and whether it met the substantive requirements, including the BOOT. The court examined the bargaining process, the fairness of the agreement's terms, and whether the agreement provided a net benefit to the employees. The AMWU argued that the agreement failed to adequately address key issues such as wage progression and penalty rates, while Delfab Engineering contended that the agreement was fair and improved overall conditions.

The Fair Work Commission found that the agreement met the procedural requirements as it was the product of genuine bargaining. However, the court identified several issues with the substantive fairness of the agreement. The primary concern was that the agreement did not adequately address wage progression, resulting in employees being worse off over the term of the agreement. Despite some improvements in other areas, the court concluded that the overall effect of the agreement did not meet the BOOT. Consequently, the application for approval was dismissed.

The Fair Work Commission ordered that the Metal Engineering On-Site Construction Agreement 2020-2023 be returned to the parties for further negotiation to address the identified issues, particularly wage progression, and to ensure compliance with the BOOT. The court emphasised the importance of achieving a balance between the needs of the employer and the rights of the employees in workplace agreements.

Delfab Engineering 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