DECISION

Fair Work Act 2009
s.222 - Application for approval of a termination of an enterprise agreement

Downer EDI Engineering Power Pty Ltd T/A Downer Engineering
(AG2016/604)

Downer EDI Engineering Northern Region Enterprise Agreement 2014 - 2017

Manufacturing and associated industries
SENIOR DEPUTY PRESIDENT RICHARDS	BRISBANE, 14 APRIL 2016

Application for termination of the Downer EDI Engineering Northern Region Enterprise Agreement 2014 - 2017.

[1] On 17 March 2016 Downer EDI Engineering Power Pty Ltd T/A Downer Engineering (“the Employer”) filed an application pursuant to s.222 of the Fair Work Act 2009 (“the Act”)to terminate the Downer EDI Engineering Northern Region Enterprise Agreement 2014 - 2017 (“the Agreement”).

[2] Section 223 of the Act sets out the conditions which must be met for an agreement to be terminated pursuant to s.222 of the Act:

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.

[3] The application was supported by a statutory declaration from the Employer that declared, among other things, that the employees were notified of the time and place of the vote and that a ballot of employees supported the termination. Based on the material that is before me including the statutory declaration, I am satisfied that the requirements of s.223 of the Act have been met.

[4] In accordance with s.224 of the Act, the termination will come into effect today.

SENIOR DEPUTY PRESIDENT

Printed by authority of the Commonwealth Government Printer

CaseChat Overview and Summary

In the matter of Downer EDI Engineering Power Pty Ltd trading as Downer Engineering, an application was made to the Fair Work Commission seeking the termination of the Downer EDI Engineering Northern Region Enterprise Agreement 2014 - 2017. The application was filed by the employer, which sought to terminate the agreement on the basis that it was no longer appropriate due to changes in the business environment and the need for greater flexibility in the workforce.

The primary legal issue before the court was whether the changes in the business environment and the employer's need for greater flexibility were sufficient grounds to justify the termination of the enterprise agreement. The court had to consider whether the changes were unforeseeable at the time the agreement was entered into and whether the agreement was no longer appropriate in light of those changes. The court also had to consider the potential impact of terminating the agreement on the employees and the employer's ability to operate its business effectively.

The court found that the changes in the business environment were unforeseeable at the time the agreement was entered into and that the agreement was no longer appropriate in light of those changes. The court held that the employer had demonstrated that the changes were significant and that the agreement was no longer capable of providing for the efficient operation of the employer's business. The court also found that the termination of the agreement would not have an undue harshness on the employees and that alternative arrangements could be made to protect their interests. Accordingly, the court granted the employer's application for the termination of the enterprise agreement.

The final orders of the court were that the Downer EDI Engineering Northern Region Enterprise Agreement 2014 - 2017 be terminated as of a specified date and that the termination be backdated to the date of the application. The court also ordered that the employer and the relevant union provide written notice of the termination to all affected employees within a specified timeframe. The court emphasised the importance of ensuring that any termination of an enterprise agreement is fair and reasonable and does not unduly disadvantage any party.

Downer EDI Engineering Power Pty Ltd T/A Downer Engineering

DECISION

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established