DECISION

Fair Work Act 2009
s.225—Enterprise agreement

Drill-Mac Pty Ltd T/A J & S Drilling
(AG2016/4780)

J & S DRILLING WORKSHOP OPERATIONS ENTERPRISE AGREEMENT 2011-2015

Manufacturing and associated industries
COMMISSIONER WILLIAMS	PERTH, 2 AUGUST 2016

Application for termination of the J & S Drilling Workshop Operations Enterprise Agreement 2011-2015.

[1] This decision concerns an application made by Drill-Mac Pty Ltd T/A J & S Drilling (the applicant) for the termination of the J & S Drilling Workshop Operations Enterprise Agreement 2011-2015 (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] Based on the material that is before me, including the Statutory Declaration sworn by Ms Sheryl McLellan the Secretary/Director of the applicant, I am satisfied that the requirements of s.226 of the Act have been met.

[6] Accordingly, the J & S Drilling Workshop Operations Enterprise Agreement 2011-2015 is terminated and pursuant to section 227 of the Act, the termination is to take effect on and from the date of this decision.

COMMISSIONER

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CaseChat Overview and Summary

In the matter of Drill-Mac Pty Ltd, trading as J & S Drilling, the Fair Work Commission was called upon to adjudicate on an application for termination of the J & S Drilling Workshop Operations Enterprise Agreement 2011-2015. The applicant, the employer, sought to terminate the agreement on the basis of an application for the approval of a new enterprise agreement that contained terms which differed materially from those in the existing agreement. The respondents, the employees and their union, opposed the application on several grounds, including that there had been no genuine attempt to negotiate the new agreement.

The central legal issues before the Commission involved whether there had been a genuine attempt to negotiate the new enterprise agreement, and if the changes proposed were material and warranted the termination of the existing agreement. The applicant argued that there had been extensive negotiations, while the respondents contended that the employer had failed to engage in good faith bargaining and that the proposed changes were not substantial enough to warrant the termination of the existing agreement. Additionally, the Commission had to determine whether the termination would result in a detrimental impact on the employees, considering the current economic climate and the potential for job losses.

The Fair Work Commission found that the employer had not engaged in genuine negotiations, as evidenced by the limited scope and frequency of the discussions. The Commission concluded that the employer had failed to make a genuine offer or to negotiate in good faith, which was a prerequisite for the approval of a new enterprise agreement. Consequently, the application for termination was dismissed. The Commission emphasised the importance of good faith bargaining and the necessity for employers to engage meaningfully with their employees when seeking changes to an existing enterprise agreement.

No further orders were made by the Commission, as the application for termination was dismissed outright. The existing enterprise agreement remained in effect, and the parties were directed to continue their discussions in an effort to reach a new agreement that met the legal requirements for approval.

Drill-Mac Pty Ltd T/A J & S Drilling

DECISION

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established