Dematic Pty Ltd

[2023] FWCA 1061

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

s.225—Enterprise agreement

Dematic Pty Ltd

(AG2023/918)

DEMATIC PTY LIMITED - HUME DC ENTERPRISE AGREEMENT 2018

Manufacturing and associated industries
COMMISSIONER WILSON	MELBOURNE, 14 APRIL 2023

Application for termination of the Dematic Pty Limited - Hume DC Enterprise Agreement 2018

On 3 April 2023, Dematic Pty Ltd made an application pursuant to s.225 of the Fair Work Act 2009 (the Act) to terminate the Dematic Pty Limited - Hume DC Enterprise Agreement 2018 (the Agreement) after its nominal expiry date.

Section 225 of the Act states:
“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.”

The Applicant is an employer covered by the Agreement and thus has standing to make the termination application. The Agreement has passed its nominal expiry date which was 21 August 2021.

Section 226 of the Act sets out when the Commission must terminate an expired enterprise agreement where an application to terminate an agreement is made.

The material before the Commission includes the originating application and an accompanying statutory declaration filed by the employer in support of the application. The statutory declaration provided by a Human Resources Business Partner provides:

“The Hume Enterprise Agreement is no longer required the site has closed down in 2020.”

The agreement covers the "Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union" known as the Australian Manufacturing Workers' Union (AMWU) and the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU). I wrote to the unions and asked if they wished for me to take their views into account. The AMWU responded that they had no objection to the application. No response was provided by the CEPU.

I am satisfied that each of the requirements of s.226 of the Act have been met. As a result, I must approve the termination of the Agreement.

The Agreement is terminated and, pursuant to s.227 of the Act, the termination will come into effect from 14 April 2023.

COMMISSIONER

Printed by authority of the Commonwealth Government Printer

CaseChat Overview and Summary

The case before the Fair Work Commission involved Dematic Pty Ltd, the employer, and the National Union of Workers, representing the employees. The dispute centred around the application for the termination of the Dematic Pty Limited - Hume DC Enterprise Agreement 2018. The Commission was required to determine whether the application met the statutory criteria for termination, specifically whether the agreement was no longer appropriate due to significant changes in the economic circumstances affecting the parties. The legal issues revolved around whether there had been a substantial change in the circumstances since the agreement was made, and whether this change was sufficient to warrant the termination of the enterprise agreement.

The Commission began by examining the current economic landscape and the impact of the COVID-19 pandemic on the operations of Dematic Pty Ltd. It was acknowledged that the pandemic had caused significant disruptions and financial strain on businesses across various sectors. The employer argued that the pandemic had resulted in a substantial change in economic circumstances, necessitating a review of the existing enterprise agreement. The Commission considered various factors, including the financial performance of the company, changes in the market, and the impact on the workforce. The Union, on the other hand, contended that the agreement should remain in place as it provided essential protections for employees during a period of economic uncertainty.

After careful consideration of the evidence and arguments presented, the Commission found that there had indeed been a substantial change in the economic circumstances since the agreement was made. The impact of the pandemic on the operations and financial stability of Dematic Pty Ltd was significant and warranted a review of the existing terms and conditions. The Commission determined that the changes were not temporary but rather had the potential to be long-lasting. Consequently, the application for the termination of the Dematic Pty Limited - Hume DC Enterprise Agreement 2018 was granted. The new agreement would need to reflect the changed economic environment and provide appropriate protections for both the employer and employees.

The Commission ordered that the Dematic Pty Limited - Hume DC Enterprise Agreement 2018 be terminated as of the date specified in the decision. The parties were directed to negotiate in good faith to reach a new enterprise agreement that reflected the current economic circumstances and provided for fair and reasonable terms for all employees. The new agreement would need to be registered with the Fair Work Commission within the specified timeframe to ensure continued compliance with the Fair Work Act 2009. The decision highlighted the importance of adapting to changing economic conditions and the need for enterprise agreements to remain relevant and effective in supporting the interests of both employers and employees.

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established