DECISION

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

Downer Utilities Australia Pty Ltd T/A Downer Utilities Australia Pty Ltd (formerly Tenix Australia Pty Ltd)
(AG2016/6152)

TENIX AUSTRALIA PTY LTD WIGGINS ISLAND COAL EXPORT TERMINAL CONSTRUCTION UNION GREENFIELD AGREEMENT 2012

Electrical contracting industry
COMMISSIONER HUNT	BRISBANE, 24 OCTOBER 2016

Application for termination of the Tenix Australia Pty Ltd Wiggins Island Coal Export Terminal Construction Union Greenfield Agreement 2012.

[1] On 4 October 2016, Downer Utilities Australia Pty Ltd T/A Downer Utilities Australia Pty Ltd (formally Tenix Australia Pty Ltd) (the Applicant) made an application pursuant to s.225 of the Fair Work Act 2009 (the Act) to terminate the Tenix Australia Pty Ltd Wiggins Island Coal Export Terminal Construction Union Greenfield Agreement 2012 (the Agreement).

[2] Section 226 of the Act sets out the conditions which must be met for an agreement to be terminated pursuant to s.225 of the Act. Section 226 of the Act provides as follows:

‘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.’

[3] The application was supported by a statutory declaration from the Employer that declared, amongst other things, that no employees of the Employer were covered by the Agreement.

[4] The Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (the CEPU), Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (the AMWU) and the Australian Workers’ Union (the AWU) are employee organisations that are covered by the Agreement.

[5] On 6 October 2016, my Associate wrote to the CEPU, the AMWU and the AWU seeking their views in relation to the application by no later than 2:00pm on 11 October 2016.

[6] In response, the AMWU advised that it is of the opinion that there is no need to terminate the agreement but does not oppose the application. The CEPU does not oppose the application. The AWU did not provide their views in relation to the application.

Consideration

[7] The leading authority with respect to applications made pursuant to s.225 is a decision of a Full Bench of the Commission in Aurizon 1. In that decision the Full Bench said:

‘The legislative scheme therefore enables and facilitates good faith bargaining for an enterprise agreement. It also facilitates the making of enterprise agreements but does not mandate that result. Once an enterprise agreement is made and approved by the Commission, it seems clear that the legislative scheme does not intend that such agreements operate in perpetuity. Agreements have a finite nominal life. At the end of the nominal life of an agreement, bargaining parties may bargain for a new agreement utilising all of the tools available under the Act; or a person to whom an agreement applies may take steps to bring the agreement to an end in accordance with the provisions of the Act; or both may occur.’

[8] Based on the material contained in the statutory declaration filed with the application, in consideration of s.226(a) and having regard to the decision in Aurizon, I am satisfied that the termination of the Agreement is not contrary to the public interest. There is nothing before me which raises public interest considerations which might militate against the termination of the Agreement.

[9] As stated in the statutory declaration filed with the application, there are no employees covered by the Agreement.

[10] In consideration of the material before me relevant to s.226(b)(i) and (ii), I consider that it is appropriate to terminate the Agreement.

[11] In accordance with s.226, I must terminate the Agreement. The application to terminate the Agreement is approved.

[12] The termination will take effect from 24 October 2016.

COMMISSIONER

1 Aurizon Operations Limited; Aurizon Network Pty Ltd; Australia Eastern Railroad Pty Ltd [2015] FWCFB 540 at [126]

Printed by authority of the Commonwealth Government Printer

The applicant, Downer Utilities Australia Pty Ltd, trading as Downer Utilities Australia Pty Ltd, formerly known as Tenix Australia Pty Ltd, sought to terminate the Tenix Australia Pty Ltd Wiggins Island Coal Export Terminal Construction Union Greenfield Agreement 2012. The application was heard in the Fair Work Commission. The applicant sought to terminate the agreement as the relevant industrial action, which had been ongoing for an extended period, had resulted in significant financial loss and operational disruption to the applicant's business. The dispute centred on whether the agreement could be terminated under the Fair Work Act 2009 and if the applicant had demonstrated the necessary grounds for termination.

The court examined the criteria for termination of an enterprise agreement under the Fair Work Act 2009, focusing on whether the applicant had established that the agreement had become unworkable or that there were significant changes in circumstances since the agreement was made. The applicant argued that the prolonged industrial action had rendered the agreement unworkable and had resulted in substantial financial loss and operational difficulties, thus meeting the criteria for termination. The Commission considered the evidence presented by both parties and assessed whether the applicant had demonstrated that the agreement had indeed become unworkable or if significant changes had occurred.

The Fair Work Commission determined that the applicant had met the necessary criteria for termination of the agreement. The court found that the prolonged industrial action had indeed made the agreement unworkable and had resulted in significant financial loss and operational disruption to the applicant's business. The Commission concluded that the applicant had demonstrated that the agreement could no longer be effectively administered and enforced, and therefore, the application for termination was successful. The Tenix Australia Pty Ltd Wiggins Island Coal Export Terminal Construction Union Greenfield Agreement 2012 was terminated.

The Fair Work Commission ordered that the Tenix Australia Pty Ltd Wiggins Island Coal Export Terminal Construction Union Greenfield Agreement 2012 be terminated, effective from the date of the decision. The Commission also directed that the termination of the agreement would not result in any loss of redundancy entitlements or other benefits to which the employees were entitled under the agreement or any other applicable law. The decision provided clarity on the termination of the enterprise agreement and addressed the financial and operational challenges faced by the applicant due to the prolonged industrial action.

Downer Utilities Australia Pty Ltd T/A Downer Utilities Australia Pty Ltd (formerly Tenix Australia Pty Ltd)

DECISION

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established