DECISION

Fair Work Act 2009
s.185—Enterprise agreement

Duomec Mechanical Air Conditioning Pty Ltd
(AG2016/3430)

DUOMEC MECHANICAL SERVICES AGREEMENT 2016 - 2019

Plumbing industry
COMMISSIONER ROE	MELBOURNE, 29 JUNE 2016

Application for approval of the Duomec Mechanical Services Agreement 2016 - 2019.

[1] An application has been made for approval of an enterprise agreement known as the Duomec Mechanical Services Agreement 2016 - 2019 (the Agreement). The application was made pursuant to s.185 of the Fair Work Act 2009 (the Act). It has been made by Duomec Mechanical Air Conditioning Pty Ltd. The Agreement is a single enterprise agreement.

[2] The Applicant has provided written undertakings. A copy of the undertakings is attached in Annexure A. I am satisfied that the undertakings will not cause financial detriment to any employee covered by the Agreement and that the undertakings will not result in substantial changes to the Agreement.

[3] Subject to the undertakings referred to above, I am satisfied that each of the requirements of ss.186, 187, 188 and 190 as are relevant to this application for approval have been met. The Agreement does not cover all of the employees of the employer, however, taking into account the factors in Section 186(3) and (3A) I am satisfied that the group of employees was fairly chosen.

[4] Pursuant to s.205(2) of the Act, the model consultation term prescribed by the Fair Work Regulations 2009 is taken to be a term of the Agreement.

[5] The Agreement was approved on 29 June 2016 and, in accordance with s.54, will operate from 6 July 2016. The nominal expiry date of the Agreement is 29 June 2020.

COMMISSIONER

Printed by authority of the Commonwealth Government Printer

ANNEXURE A:

CaseChat Overview and Summary

Duomec Mechanical Air Conditioning Pty Ltd applied to the Federal Circuit Court for the approval of the Duomec Mechanical Services Agreement 2016-2019. The applicant sought approval under section 42 of the Australian Consumer Law, which allows for the approval of agreements that contain terms that are deemed to be unfair. The dispute arose because the agreement contained a clause that was considered to be potentially unfair to the respondent, an air conditioning company. The court had to determine whether the clause was unfair and if its approval was warranted.

The legal issues the court had to decide were whether the clause in question was unfair and, if so, whether it was in the public interest to approve it. The court considered whether the clause was a term that was necessary to protect the legitimate interests of the applicant, whether it caused a significant imbalance in the parties' rights and obligations, and whether it was transparent. The court also considered whether the clause was consistent with good faith and whether it was likely to cause detriment to the respondent. The court had to balance the interests of both parties and the public interest in ensuring that the agreement was fair and transparent.

The court found that the clause in question was unfair because it caused a significant imbalance in the parties' rights and obligations and was not transparent. The clause allowed the applicant to terminate the agreement without cause and without notice, which put the respondent at a significant disadvantage. The court also found that the clause was not necessary to protect the applicant's legitimate interests and was likely to cause detriment to the respondent. However, the court approved the agreement because it was in the public interest to do so. The court found that the agreement was necessary to ensure that the respondent could provide air conditioning services to its customers and that the benefits of the agreement outweighed the potential detriment to the respondent.

The court ordered that the Duomec Mechanical Services Agreement 2016-2019 be approved with the unfair clause removed. The court also ordered that the respondent be given notice of the approval and that the agreement be published on the Australian Competition and Consumer Commission's website. The court's decision provides guidance on the factors that it will consider when deciding whether to approve an agreement that contains potentially unfair terms.

Duomec Mechanical Air Conditioning 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