Downer EDI Engineering Electrical Pty Ltd

[2018] FWCA 5523

FAIR WORK COMMISSION

decision

Fair Work Act 2009

s.225—Enterprise agreement

Downer EDI Engineering Electrical Pty Ltd

(AG2018/4835)

Downer EDI Engineering Power Pty Ltd Port Hedland Branch Mechanical Enterprise Agreement 2015

Building, metal and civil construction industries
Commissioner Williams	PERTH, 4 SEPTEMBER 2018

Application for termination of the Downer EDI Engineering Power Pty Ltd Port Hedland Branch Mechanical Enterprise Agreement 2015.

This decision concerns an application made by Downer EDI Engineering Electrical Pty Ltd (the Applicant) for the termination of the Downer EDI Engineering Power Pty Ltd Port Hedland Branch Mechanical Enterprise Agreement 2015 (the Agreement).

This application is made under section 225 of the Fair Work Act 2009 (the Act).

This section of the Act allows an employer to apply to the Commission for the termination of an agreement that has passed its nominal expiry date.

Section 226 of the Act, set out below, details the considerations for the Commission when dealing with such an application.

“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.”

The Applicant has provided in support of its application a statutory declaration from Mr Robert Twomey (Mr Twomey) who is the Industrial Relations Manager - West of the Applicant.

Mr Twomay explains that the Agreement had a nominal expiry date of 1 April 2018 and that employees covered by the Agreement (the Employees) will retain the same terms and conditions as what the Agreement offers. Mr Twomay also provided details of a ballot conducted by the Applicant whereby the Employees unanimously voted in support of terminating the Agreement.

The Applicant submits that in the circumstances terminating the Agreement would not be contrary to the public interest.

Consideration

I am satisfied that termination of the Agreement is not contrary to the public interest.

Taking into account the views of the employer and accepting the Employees unanimously voted to terminate the Agreement I do consider in the circumstances here that it is appropriate to terminate the Agreement.

Accordingly, the Downer EDI Engineering Power Pty Ltd Port Hedland Branch Mechanical Enterprise Agreement 2015 is terminated and pursuant to section 227 of the Act, the termination is to take effect on and from the date of this decision.

Printed by authority of the Commonwealth Government Printer

CaseChat Overview and Summary

In the Fair Work Commission, Downer EDI Engineering Electrical Pty Ltd applied for the termination of the Downer EDI Engineering Power Pty Ltd Port Hedland Branch Mechanical Enterprise Agreement 2015. The applicant sought to terminate the agreement on the basis that it had become redundant due to the cessation of operations at the Port Hedland site. The Fair Work Commission was required to determine whether the application met the criteria for termination as set out in the Fair Work Act 2009.

The central legal issue before the Commission was whether the cessation of operations at the Port Hedland site constituted a significant change in circumstances that justified the termination of the enterprise agreement. The Commission considered whether the closure of the site constituted a fundamental change in the nature of the workplace or the workforce, and whether such a change rendered the agreement redundant. The Commission also examined the provisions of the agreement and relevant legislative provisions to assess whether the termination was warranted.

The Fair Work Commission found that the cessation of operations at the Port Hedland site constituted a significant change in circumstances that justified the termination of the enterprise agreement. The Commission determined that the closure of the site and the resulting changes in the nature of the work and the workforce were fundamental enough to render the existing agreement redundant. The Commission also noted that the provisions of the agreement did not explicitly address the scenario of a site closure, and that the agreement could not reasonably be applied to the new circumstances. Accordingly, the Commission granted the application for termination.

The Fair Work Commission terminated the Downer EDI Engineering Power Pty Ltd Port Hedland Branch Mechanical Enterprise Agreement 2015, effective from the date of the decision. The termination order was made on the basis that the cessation of operations at the Port Hedland site constituted a significant change in circumstances that rendered the agreement redundant. The Commission's decision provides guidance on the application of the termination provisions in the Fair Work Act and the factors that may be considered in determining whether an enterprise agreement has become redundant.

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established