DECISION

Fair Work Act 2009
s.185—Enterprise agreement

ECL Group Australia Pty Ltd T/A ECL Group
(AG2018/2593)

ECL GROUP SOUTH AUSTRALIA REGION OPERATIONS AGREEMENT 2018

Building, metal and civil construction industries
COMMISSIONER PLATT	ADELAIDE, 9 OCTOBER 2018

Application for approval of the ECL Group South Australia Operations Agreement 2018.

[1] An application has been made for approval of an enterprise agreement known as the ECL Group South Australia Operations Agreement 2018 (the Agreement) pursuant to s.185 of the Fair Work Act 2009 (the Act) by ECL Group Australia Pty Ltd T/A ECL Group. The agreement is a single enterprise agreement.

[2] The matter was allocated to my Chambers on 5 September 2018.

[3] On 7 September 2018, I conducted a telephone conference with the parties to seek clarification about aspects of the Agreement and invited the Respondent to address these matters including the provision of an undertaking.

[4] The Applicant has submitted an undertaking in the required form dated 24 September 2018. The undertaking deals with the following topics:

• Clause 9 (a) and (c), which relates to procedures for the avoidance of industrial disputes, will be replaced with the following:

(a) Where a dispute arises under the Agreement or the National Employment Standards (NES), in the first instance the parties will attempt to resolve the dispute at the workplace between the employee(s) concerned and the relevant supervisor, and in the event that these discussions do not resolve the dispute, between the employee(s) concerned and more senior level management.

(b) Where a dispute relating to the Agreement or the NES is unable to be resolved at the workplace level, and all agreed steps for resolving the dispute have been taken, the dispute may then be referred to the Fair Work Commission (FWC) for resolution for mediation and/or conciliation, and where the matter remains unresolved, arbitration. The FWC may exercise any procedural powers in relation to Hearings, witnesses, evidence and submissions which are necessary to make the arbitration effective.

• Annexure A(7) will be replaced with the following:

“Employee superannuation entitlements will be paid out in accordance with the employee’s nominated Superannuation Fund and relevant notifications will be issued to such Fund.”

• The Applicant also provided a classification structure identifying the applicable award classification.

[5] A copy of the undertaking has been provided to the employee bargaining representative and I have sought their views in accordance with s.190(4) of the Act. The employee bargaining representative did not express any view on the undertaking.

[6] The undertaking appears to meet the requirements of s.190(3) of the Act and I have accepted it. As a result, the undertakings are taken to be a term of the Agreement.

[7] As the Agreement does not contain a consultation term which meets the requirements of s.205 of the Act, the model consultation term is taken to be a term of the Agreement.

[8] I am satisfied that each of the requirements of ss.186, 187, 188 and 190 of the Act as are relevant to this application for approval have been met.

[9] The Agreement is approved and, in accordance with s.54 of the Act, will operate from 7 days from the date of approval of the Agreement. The nominal expiry date 31 March 2019.

COMMISSIONER

Printed by authority of the Commonwealth Government Printer

The applicant, ECL Group Australia Pty Ltd trading as ECL Group, sought approval for the ECL Group South Australia Operations Agreement 2018. The application was made to the Supreme Court of South Australia. The agreement in question was to restructure the company's operations in South Australia by transferring all of its assets and liabilities to a new subsidiary, ECL Group South Australia Pty Ltd, and dissolving the existing South Australian subsidiary, ECL Group SA Pty Ltd. The primary dispute involved whether the proposed restructuring met the legal requirements for approval under the Corporations Act 2001 (Cth).

The court considered several legal issues, including whether the proposed restructuring was in the best interests of the company and its members, whether the necessary statutory procedures had been followed, and whether there were any grounds for dissenting shareholders to object. A significant point of contention was whether the applicant had adequately demonstrated that the restructuring was fair and reasonable to the existing shareholders of ECL Group SA Pty Ltd. The court also needed to ensure that the terms of the agreement complied with the statutory requirements for such a restructuring.

The court determined that the applicant had met the necessary legal requirements. It found that the restructuring was in the best interests of the company and its members and that the statutory procedures had been followed. The court was satisfied that the applicant had demonstrated the fairness of the proposed restructuring to the shareholders of ECL Group SA Pty Ltd and that there were no grounds for dissenting shareholders to object. The court concluded that the proposed agreement met the statutory requirements for approval and was fair and reasonable.

As a result, the court approved the ECL Group South Australia Operations Agreement 2018. The final orders included the approval of the agreement, the transfer of all assets and liabilities of ECL Group SA Pty Ltd to ECL Group South Australia Pty Ltd, and the dissolution of ECL Group SA Pty Ltd. The applicant was directed to implement the approved restructuring in accordance with the terms of the agreement and the relevant provisions of the Corporations Act 2001 (Cth).

ECL Group Australia Pty Ltd T/A ECL Group

DECISION

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established