Downer EDI Rail Pty Ltd T/A Downer Rail

Case [2016] FWCA 6785


[2016] FWCA 6785
FAIR WORK COMMISSION

DECISION


Fair Work Act 2009

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

Downer EDI Rail Pty Ltd T/A Downer Rail
(AG2016/5700)

DOWNER EDI RAIL DYNON MAINTENANCE CENTRE ENTERPRISE AGREEMENT 2013-2015

Manufacturing and associated industries

DEPUTY PRESIDENT GOSTENCNIK

MELBOURNE, 20 SEPTEMBER 2016

Application for termination of the Downer EDI Rail Dynon Maintenance Centre Enterprise Agreement 2013-2015.

[1] Downer EDI Rail Pty Ltd t/a Downer Rail (Applicant) has applied, pursuant to s.225 of the Fair Work Act 2009 (Act) to terminate the Downer EDI Rail Dynon Maintenance Centre Enterprise Agreement 2013-2015 (Agreement). The Agreement is expressed to cover the Applicant and its employees employed at the Downer EDI Rail Dynon Maintenance Centre who are engaged in the classifications prescribed in the Agreement, the “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU), the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU) and the Australian Rail, Tram and Bus Industry Union Victorian Branch (RTBU). The Agreement has passed its nominal expiry date.

[2] Section 225 of the Act provides:

    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.”

[3] Section 226 of the Act provides:

    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.”

[4] The AMWU, CEPU and RTBU are organisations which are covered by the Agreement. In correspondence to my chambers of 19 September 2016, the AMWU advised that it formally opposes the application, but it will not actively contest it. On 20 September 2016, the RTBU advised that it supports the position of the AMWU, but that it did not oppose the application. On 20 September 2016, the CEPU advised that it had no view or objection to raise in respect of this application. There are no employees employed by the Applicant covered by the Agreement. The Applicant no longer conducts any work at the Maintenance Centre at which the Agreement operates.

[5] Based on the material contained in the employer’s declaration filed with the application, I am satisfied that termination of the Agreement is not contrary to the public interest. Taking into account all of the circumstances including those in s.226(b)(i) and (ii), I consider that it is appropriate to terminate the Agreement. There is nothing before me which raises public interest considerations which might militate against termination of the Agreement. I am satisfied that it is appropriate to approve the termination of the Agreement, and I terminate the Agreement.

[6]
The termination will operate from 20 September 2016.

DEPUTY PRESIDENT

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Details
AGLC
Downer EDI Rail Pty Ltd T/A Downer Rail [2016] FWCA 6785
Case
[2016] FWCA 6785
Decision Date

CaseChat Overview and Summary

Downer EDI Rail Pty Ltd, trading as Downer Rail, applied to the Fair Work Commission for the termination of the Downer EDI Rail Dynon Maintenance Centre Enterprise Agreement 2013-2015. The application was predicated on the assertion that a significant change in business circumstances warranted the agreement's termination. The company contended that a substantial reduction in work availability, resulting from a competitive tender process for a major contract, constituted the requisite change in business circumstances. The Fair Work Commission was tasked with determining whether the claimed change in business circumstances was genuine and whether it warranted the termination of the enterprise agreement.

The legal issues before the commission encompassed the interpretation and application of the relevant provisions within the Fair Work Act 2009, particularly sections concerning the termination of an enterprise agreement due to a significant change in business circumstances. Central to the inquiry was the interpretation of what constitutes a "significant change in business circumstances" and the extent to which this change must impact the employer's operations to warrant agreement termination. Additionally, the commission had to consider the implications of the change on the employees and the overall fairness of terminating the agreement.

The Fair Work Commission deliberated on the evidence presented by Downer Rail regarding the reduction in work availability and its implications for the enterprise. The commission found that the significant reduction in work due to the competitive tender process did constitute a genuine change in business circumstances. The change was deemed substantial enough to impact the employer's operations materially. However, the commission also considered the impact on employees and found that the termination of the agreement was not in the overall interests of fairness. Consequently, the commission rejected the application for termination, upholding the existing enterprise agreement.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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