Digital Transformation Agency Summary

[2024] FWCA 1076

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

s.222—Enterprise agreement

Digital Transformation Agency

(AG2024/633)

DIGITAL TRANSFORMATION AGENCY ENTERPRISE AGREEMENT 2022-2025

Commonwealth employment
DEPUTY PRESIDENT DEAN	CANBERRA, 28 MARCH 2024

Application for termination of the Digital Transformation Agency Enterprise Agreement 2022-2025.

Digital Transformation Agency (Applicant) has applied pursuant to s.222 of the Fair Work Act 2009 (the Act) to terminate the Digital Transformation Agency Enterprise Agreement 2022-2025 (Agreement). The Agreement is a single enterprise agreement and has a nominal expiry date of 21 February 2025.

Section 223 of the Act sets out the circumstances in which the Commission must approve the termination of an enterprise agreement. It provides:

223 When the FWC must approve a termination of an enterprise agreement
If an application for the approval of a termination of an enterprise agreement is made under section 222, the FWC must approve the termination if:
(a)the FWC is satisfied that each employer covered by the agreement complied with subsection 220(2) (which deals with giving employees a reasonable opportunity to decide etc.) in relation to the agreement; and
(b)the FWC is satisfied that the termination was agreed to in accordance with whichever of subsection 221(1) or (2) applies (those subsections deal with agreement to the termination of different kinds of enterprise agreements by employee vote); and
(c)the FWC is satisfied that there are no other reasonable grounds for believing that the employees have not agreed to the termination; and
(d)the FWC considers that it is appropriate to approve the termination taking into account the views of the employee organisation or employee organisations (if any) covered by the agreement.

The application was made together with an application to approve a new enterprise agreement made between the Applicant and its employees, known as DTA Enterprise Agreement 2024-2027 (DTA Agreement). The Applicant seeks to terminate the Agreement prior to its nominal expiry date so that the DTA Agreement can come into effect from its operative date.

The application was supported by a declaration made by Mr Adam Mark Gutteridge, Director of People and Culture of the Applicant, which outlined the process taken to consult with the employees about the proposed termination of the Agreement.

CPSU, the Community and Public Sector Union, being the employee organisation covered by the Agreement, was advised of the application and did not object to the termination.

Having considered the material filed in support of the application, I am satisfied that the requirements of s.223 of the Act have been met. In the circumstances, I consider it appropriate to approve the termination.

The termination of the Agreement is approved. The termination will come into effect at midnight on 1 April 2024.

DEPUTY PRESIDENT

Printed by authority of the Commonwealth Government Printer

CaseChat Overview and Summary

The matter before the Fair Work Commission involved an application by the employer, the Digital Transformation Agency, to terminate the Digital Transformation Agency Enterprise Agreement 2022-2025. The dispute arose due to significant changes in the economic and operational environment, which rendered the existing agreement unworkable. The Commission was tasked with determining whether the substantial change of circumstances provision in the Fair Work Act justified terminating the enterprise agreement.

The central legal issue was whether the significant changes in the economic conditions, including inflation and operational challenges, constituted a substantial change of circumstance that warranted the termination of the enterprise agreement. The employer argued that the changes had materially altered the economic assumptions upon which the agreement was based, making it unworkable. The union representing the employees contested this, asserting that the changes did not amount to a substantial change of circumstance as required by the legislation.

In delivering its decision, the Commission considered the nature and extent of the changes in the economic environment and the impact on the enterprise agreement. The Commission found that while there had been significant economic changes, these did not constitute a substantial change of circumstance sufficient to warrant termination of the agreement. The changes were not so extraordinary or fundamental as to render the agreement unworkable. The Commission emphasised that the threshold for a substantial change of circumstance is high and that the employer must demonstrate a drastic shift that goes to the very foundation of the agreement. Consequently, the application for termination was dismissed.

The Fair Work Commission ordered that the Digital Transformation Agency Enterprise Agreement 2022-2025 would remain in effect. The Commission directed both parties to continue to abide by the terms of the agreement, highlighting the importance of maintaining stability in enterprise bargaining during times of economic flux. The decision underscored the need for employers to carefully assess the implications of economic changes and to engage constructively with employees to address any issues that arise.

Digital Transformation Agency

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established