DOF Subsea Australia Pty Ltd

[2020] FWCA 5060

[2020] FWCA 5060

The attached document wholly replaces the document previously issued with the code [2020] FWC 4963 on 21 September 2020 to correct document referencing.

Steven Boughton

Associate to Deputy President Binet

Dated 21 September 2020

[2020] FWCA 5060

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.225 - Application for termination of an enterprise agreement after its nominal expiry date

DOF Subsea Australia Pty Ltd
(AG2020/2155)

DOF SUBSEA PTY LTD BASS STRAIT GREENFIELDS AGREEMENT

Oil and gas industry
DEPUTY PRESIDENT BINET	PERTH, 21 SEPTEMBER 2020

Application for termination of the DOF Subsea Pty Ltd Bass Strait Greenfields Agreement.

[1] DOF Subsea Australia Pty Ltd (Subsea) has made an application (Application) to the Fair Work Commission (FWC) to terminate the DOF Subsea Pty Ltd Bass Strait Greenfields Agreement (Agreement) pursuant to section 225 of the Fair Work Act 2009 (Cth) (FW Act).

[2] The Agreement was approved by Commissioner Williams pursuant to section 186 of the FW Act, on 30 January 2012 and, commenced operation on 6 January 2012. The Agreement has a nominal expiry date of 31 December 2012.

[3] The parties to the Agreement are employees of Subsea engaged in classifications specified in clause 29 of the Agreement (Employees).

[4] Australian Workers Union (AWU) and the Australian Manufacturing Workers’ Union (AMWU)were bargaining representatives for the Agreement.

[5] In support of the Application, Subsea filed a statutory declaration by Ms Neisha Clare, Senior HR/IR Business Partner of Subsea (Clare Declaration).

[6] On 27 July 2020, directions were issued with respect to the Application (Directions). Subsea was directed to file an outline of submissions in support of the Application and any evidence on which they relied by 4pm Thursday 6 August 2020. The AWU and AMWU were directed to file an outline of submissions in response to the Application and any evidence on which the AWU and the AMWU sought to rely by 4pm, Thursday 13 August 2020.

[7] On 20 August 2020, the AWU and the AMWU confirmed they did not oppose the termination of the Agreement and they did not wish to be heard in relation to this matter.

Background

[8] The Agreement was created in 2012 for a project being undertaken at Origin Energy site, located in the Bass Strait. The Agreement was only ever intended to apply for the duration of the project. The project was completed in 2012, within the eight (8) month timeframe of the Agreement, and before its expiry on 31 December 2012.

[9] There are no longer any Subsea employees performing work for the Project under the Agreement.

[10] Subsea does not propose to engage employees under this Agreement in the future.

Legislation

[11] Subdivision D of Division 7 of Part 2-4 of the FW Act sets out the mechanism by which an enterprise agreement may be terminated after the agreement has passed its nominal expiry date.

[12] Section 225 of the FW Act provides that:

“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.”

[13] As the Agreement has passed its nominal expiry date and Subsea is an employer covered by the Agreement, I find that Subsea has standing to make the Application pursuant to section 225(a) of the FW Act.

[14] Section 226 of the FW Act states:

“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.”

Is it contrary to the public interest to termination the Agreement?

[15] Section 226(a) requires the FWC to be satisfied that it is not contrary to the public interest to terminate the Agreement.

[16] This requires the FWC to consider how the termination of the Agreement might foreseeably affect the public as a whole, such as the impact on the achievement or otherwise of the various objects of the Act, employment levels, inflation, and the maintenance of proper industrial standards. 1

[17] There is no positive onus on the applicant to persuade the FWC that there are positive benefits to the public interest arising from the termination. In Geelong Wool Combing Ltd (AIRC) 5 September 2003, Commissioner Wheelan said:

“… the Commission must be persuaded that termination is contrary to the public interest [and] in the absence of any effect of termination which is contrary to the public interest it is not necessary to persuade the Commission that there are positive benefits to the public interest arising from the termination.”

[18] The public interest is distinct in nature from the interests of those covered by the Agreement. The views of those covered by an agreement may be relevant to the exercise of the discretion if they shed light on the effect of the termination on public interest but those views should not be given any independent weight. 2

[19] The object of the FW Act is set out in section 3 of the FW Act, as follows:

“3. Object of this Act

The object of this Act is to provide a balanced framework for cooperative and productive workplace relations that promotes national economic prosperity and social inclusion for all Australians by:

…

(b) ensuring a guaranteed safety net of fair, relevant and enforceable minimum terms and conditions through the National Employment Standards, modern awards and national minimum wage orders;

…

(f) achieving productivity and fairness through an emphasis on enterprise level collective bargaining underpinned by simple good faith bargaining obligations and clear rules governing industrial action;

…”

[20] The specific objects in section 171 of the FW Act inform how the general object in section 3 of the FW Act is to be satisfied in the context of matters dealt with in Part 2-4 of the FW Act:

“171. Objects of this Part

The objects of this Part are:

(a)  to provide a simple, flexible and fair framework that enables collective bargaining in good faith, particularly at the enterprise level, for enterprise agreements that deliver productivity benefits; and

(b)  to enable the FWC to facilitate good faith bargaining and the making of enterprise agreements, including through:

(i) making bargaining orders; and

(ii) dealing with disputes where the bargaining representatives request assistance; and

(iii) ensuring that applications to the FWC for approval of enterprise agreements are dealt with without delay.”

[21] The ascertainment of what is not in the public interest does not involve the mere identification of a consequence of the termination of the agreement that is arguably contrary to the public interest. The ascertainment of the public interest may involve balancing countervailing public interests. 3

[22] Subsea submits that there are no matters contrary to the public interest in terminating the Agreement, as the site at which the Agreement applied has closed, there are no employees covered by the Agreement and no plans to engage employees covered by the Agreement.

[23] According to Subsea the employees who were covered by the Agreement were paid all their entitlements pursuant to the terms of the Agreement including termination bonus, redundancy and job termination payments associated with the completion of the project.

[24] Furthermore, Subsea points out that the Agreement does not provide any precedent for other employment arrangements elsewhere in industry because clause 4.3 of the Agreement states:

“The Agreement shall not be used in any manner whatsoever by a union party to the Agreement to obtain similar arrangements or benefits in any other Agreement covering an Origin Energy site. The wages and conditions set out in the Agreement only apply to the Project and will not be used as precedent for any claims elsewhere.”

[25] The AWU and the AMWU have not submitted any evidence to suggest that the termination of the Agreement is contrary to the public interest.

[26] Based on the submissions of the parties and the evidence before me, I am satisfied that it is not contrary to the public interest to terminate the Agreement.

What are the views of the Employees covered by the Agreement?

[27] Subsea submits that there are no longer employees performing work on the Project under the Agreement.

What are the views of the Employee Organisation covered by the Agreement?

[28] The AMU and the AMWU do not oppose the Application.

What are the views of the Employer covered by the Agreement?

[29] Subsea has made an application to terminate the Agreement as there are no longer any Subsea employees performing work for the Project under the Agreement.

What are the circumstances of the Employee Organisation covered by the Agreement?

[30] The AWU and the AMWU have no members covered by the Agreement and does not anticipate that Subsea will engage any employee eligible to be AWU or AMWU members and covered by the Agreement in the future.

What are the circumstances of the Employer covered by the Agreement?

[31] Subsea wish to have the Agreement terminated because the Agreement was only valid for approximately eight (8) months and only applied to the Project for that specific period of time.

Is it appropriate to terminate the Agreement taking into all the circumstances?

[32] In assessing the views and circumstances of the parties it is important to remember that:

“Taking into account the views and circumstances of the parties involves far more than an expression of their views in support or opposition to termination. It should involve a reason for their views and the validity of their concerns.” 4

[33] I am satisfied that the views of Subsea, the AWU, and the AMWU, that the Agreement should be terminated are valid. The Agreement has past its nominal expiry date. The site at which the Agreement applied has closed. Subsea does not propose to engage employees covered by the Agreement in the future.

Conclusion

[34] For the reasons enunciated above, I am satisfied that it is not contrary to the public interest to terminate the Agreement.  On the contrary, based on the submissions of the Subsea, the Agreement is no longer relevant. 

[35] Taking into account all the circumstances, including the views and circumstances of Subsea, the AWU and AMWU I am satisfied that it is appropriate to terminate the Agreement.

[36] Accordingly, the Agreementis terminated. The termination is to take effect on and from the date of this Decision. An Order to this effect will be issued in conjunction with this Decision.

DEPUTY PRESIDENT

 1   Re Kellogg Brown and Root, Bass Strait (Esso) Onshore/Offshore Facilities Certified Agreement 2000 (2005) 139 IR 34, 40 – 41.

 2   Ibid.

 3   Kellogg Brown & Root Pty Ltd & Ors and Esso Australia Ltd (2005) 139 IR 34 referred to the decision of the High Court of Australia in Queensland Electricity Commission; Ex parte Electrical Trades Union of Australia (1987) 61 ALJR 393.

 4   Energy Resources Australia Ltd v Liquor, Hospitality and Miscellaneous Union[2010] FWA 2434, [16].

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