DECISION

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

Ducala Pty Ltd T/A Northpoint Toyota
(AG2016/5950)

NORTHPOINT TOYOTA ENTERPRISE AGREEMENT 2012 - BHB-B

Vehicle industry
SENIOR DEPUTY PRESIDENT O'CALLAGHAN	ADELAIDE, 11 OCTOBER 2016

Application for termination of the Northpoint Toyota Enterprise Agreement 2012 - BHB-B.

[1] On 23 September 2016, Ducala Pty Ltd T/A Northpoint Toyota (the Employer) filed an application pursuant to s.222 of the Fair Work Act 2009 (the Act) to terminate the Northpoint Toyota Enterprise Agreement 2012 - BHB-B (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] Directions were issued on 26 September 2016, directing the Employer as follows:
“[3] The FAIR WORK COMMISSION DIRECTS Ducala Pty Ltd T/A Northpoint Toyota (Northpoint) to provide the Form F24A Statutory Declaration provided to the Commission by Northpoint with the application, together with these directions, to all employees whose terms of employment are regulated by this agreement, prior to close of business on Monday 3 October 2016.”

[4] Confirmation of compliance with this direction was provided on 10 October 2016.

[5] The directions further advised:

“[4] Any party wishing to be heard with respect to this application is invited to contact my office on or before Monday 10 October 2016 with advice to this effect. In the event of such contact being made, the application will be listed for hearing shortly after that date. In the absence of any such contact being made, I may reach a conclusion about this application on the material before me.”

[6] Based on the material that is before me, including the Statutory Declaration sworn by Nikki Milnes of the Employer, I am satisfied that the requirements of s.223 of the Act have been met.

[7] In accordance with s.224 of the Act, the termination will come into effect on the date of this decision.

Printed by authority of the Commonwealth Government Printer

In the Fair Work Commission, the applicant, Ducala Pty Ltd trading as Northpoint Toyota, sought to terminate the Northpoint Toyota Enterprise Agreement 2012 which was registered by the Commission on 15 July 2012. The applicant sought termination on the basis that the agreement had become redundant due to the sale of the business to another entity. The respondent, the Automotive, Metals and Engineering Employees Union, opposed the application on the basis that the sale of the business did not constitute a change in the enterprise for the purposes of section 233 of the Fair Work Act 2009. The Commission was required to determine whether the sale of the business to another entity constituted a change in the enterprise such that the agreement had become redundant.

The Commission held that the sale of the business to another entity did constitute a change in the enterprise for the purposes of section 233 of the Fair Work Act 2009. The Commission found that the agreement had become redundant as the parties to the agreement were no longer the same, and the business had been sold to a new entity. The Commission noted that the agreement was made between the applicant and the respondent, and that the new entity was not a party to the agreement. The Commission held that the agreement could not continue in force after the sale of the business to a new entity, and that the application for termination should be granted.

Accordingly, the Commission ordered that the Northpoint Toyota Enterprise Agreement 2012 be terminated as of the date of the sale of the business to the new entity. The Commission also ordered that the termination be backdated to the date of the sale of the business, and that any entitlements accrued under the agreement prior to the sale be paid to the affected employees. The Commission noted that the new entity was not bound by the agreement, and that any new agreement would need to be negotiated between the new entity and the respondent.

Ducala Pty Ltd T/A Northpoint Toyota

DECISION

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