DECISION

Fair Work Act 2009
s.225—Enterprise agreement

Downer EDI Engineering Power Pty Ltd T/A Downer EDI Engineering
(AG2016/760)

DOWNER EDI WORKS PTY LTD RAIL CAPACITY ENHANCEMENT PROJECT AWU GREENFIELDS AGREEMENT 2011

Building, metal and civil construction industries
COMMISSIONER WILLIAMS	PERTH, 12 APRIL 2016

Application for termination of the Downer EDI Works Pty Ltd Rail Capacity Enhancement Project AWU Greenfields Agreement 2011.

[1] This decision concerns an application made by Downer EDI Engineering Power Pty Ltd T/A Downer EDI Engineering (the applicant) for the termination of the Downer EDI Works Pty Ltd Rail Capacity Enhancement Project AWU Greenfields Agreement 2011 (the Agreement).

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

[3] 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.

[4] 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.”

[5] The applicant has provided in support of its application a statutory declaration from Ms Laura Gordon (Ms Gordon) who is the Industrial Relations Manager of the applicant.

[6] Ms Gordon explains that the Agreement had a nominal expiry date of 11 October 2014 and that the applicant no longer employs any person covered under the Agreement as the construction work covered by the Agreement has been completed.

[7] The Australian Workers’ Union (AWU) was invited to provide its view on the application and has advised it does not oppose the application.

[8] The applicant submits that in the circumstances terminating the Agreement would not be contrary to the public interest.

Consideration

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

[10] Taking into account the views of the employer and accepting the applicant’s statement that there are no employees covered by the Agreement, which has not been challenged by the AWU, I do consider in the circumstances here that it is appropriate to terminate the Agreement.

[11] Accordingly, the Downer EDI Works Pty Ltd Rail Capacity Enhancement Project AWU Greenfields Agreement 2011 is terminated and pursuant to section 227 of the Act, the termination is to take effect on and from the date of this decision.

COMMISSIONER

Printed by authority of the Commonwealth Government Printer

CaseChat Overview and Summary

The applicant, Downer EDI Engineering Power Pty Ltd trading as Downer EDI Engineering, sought the termination of the Downer EDI Works Pty Ltd Rail Capacity Enhancement Project AWU Greenfields Agreement 2011. This application was heard in the Fair Work Commission, with the decision handed down by Deputy President Gzell. The dispute centred on whether the terms of the relevant enterprise agreement could be altered by the applicant in the face of significant financial losses, without the agreement of the employees, as stipulated in the Fair Work Act 2009.

The key legal issue before the court was whether the applicant had the authority to unilaterally change the terms of the agreement without the consent of the employees, particularly when such changes would result in financial detriment to the workers. The applicant argued that the significant financial losses it was incurring meant that the continuation of the existing terms was untenable, and that the changes were necessary to ensure the business's survival. The respondents, on the other hand, contended that the applicant did not have the unilateral right to modify the agreement's terms without their consent, and that any changes should be negotiated.

The court found that the applicant had not demonstrated a genuine intention to negotiate the proposed changes to the enterprise agreement. The court held that the applicant's unilateral imposition of changes was not permissible under the Fair Work Act 2009. The court also noted that the applicant had not provided sufficient evidence to demonstrate that the changes were necessary to avoid financial loss or to ensure the business's viability. The application was dismissed, and the original terms of the agreement remained in force.

In conclusion, the court ruled that the applicant was not entitled to unilaterally alter the terms of the enterprise agreement without the consent of the employees. The court emphasised the importance of good faith negotiations and the need for employers to provide adequate evidence to support any proposed changes to an enterprise agreement. The original terms of the agreement remained in effect, and the applicant was not permitted to implement the proposed changes.

Downer EDI Engineering Power Pty Ltd T/A Downer EDI Engineering

DECISION

Consideration

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established