DECISION

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

Elec-Air Pty Ltd
(AG2021/2)

RCR HADEN PTY LTD SOUTH AUSTRALIA ENTERPRISE AGREEMENT 2017 - 2019

Manufacturing and associated industries
DEPUTY PRESIDENT ANDERSON	ADELAIDE, 11 FEBRUARY 2021

Application for termination of the RCR Haden Pty Ltd South Australia Enterprise Agreement 2017 - 2019

[1] On 4 January 2021 Elec-Air Pty Ltd (Elec-Air) applied to the Commission to terminate the RCR Haden Pty Ltd South Australia Enterprise Agreement 2017 - 2019 (the Agreement) under section 225 of the Fair Work Act 2009 (the FW Act). 1

[2] I issued directions on 7 January 2021. These directions required Elec-Air to make the documents lodged as part of this application available to employees with an interest in the application for inspection, such as by electronic means or on a relevant noticeboard accessible to all employees, and serve the application on the Australian Workers’ Union (AWU).

[3] On 14 January 2021 Elec-Air confirmed this had occurred. Elec-Air confirmed it had provided the Form F24B and F24C to employees Ellis, Harding and Koop.

[4] The AWU is covered by the Agreement.

[5] My directions required in the event that an affected employee or the AWU sought to oppose the application, or otherwise be heard on it, that advice must have been provided to the Commission and Elec-Air by close of business on Friday 29 January 2021.

[6] The AWU advised the Commission that it did not object to the application and confirmed that it does not have any members covered by this Agreement. 2

[7] Elec-Air is entitled to apply for the termination of the Agreement pursuant to section 225 of the FW Act.

[8] Section 226 of the FW 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.”

[9] The Agreement is a single enterprise agreement. It was approved by the Commission on 28 September 2017. 3 It has operated since 27 December 2014 with a nominal expiry date of 31 May 2019. It has now passed its nominal expiry date.

[10] RCR Haden entered administration in November 2018, during the life of the Agreement. During the administration the Mount Gambier operation of RCR Haden was sold to Elec-Air Pty Ltd, with the three (3) employees of that site transferring to Elec-Air also. At the time Elec-Air had four (4) other employees whose employment was covered by the Manufacturing and Associated Industries and Occupations Award 2020 (the Award).

[11] Elec-Air submit that termination of the agreement is in the public interest because its other employees are covered by the Award, the Award would cover all its employees should the Agreement be terminated and because the Agreement has severance entitlements that are unrealistic and out of step with market conditions. It also submits that the Agreement allows ordinary hours of work of 40 hours per week in some circumstances, while the Award sets a maximum of 38 ordinary hours per week plus reasonable overtime.

[12] I have considered the information provided in the application and by Elec-Air pursuant to section 225 of the FW Act. This includes the Statutory Declaration of Cheryl Ann Guthrie (Business Services Manager) dated 4 January 2021. I also take into account there was no opposition to the application voiced by the affected employees or the Australian Workers’ Union.

[13] I am satisfied as to each of the matters contained in section 226 of the FW Act. Whilst some conditions of employment of the affected employees will vary, it is not contrary to the public interest to terminate the Agreement. It is appropriate to terminate the Agreement given the circumstances. Accordingly, the Agreement is terminated.

[14] The termination will come into effect from 11.59pm 11 February 2021. An Order to this effect will be issued in conjunction with this Decision. 4

DEPUTY PRESIDENT

1 RCR Haden Pty Ltd’s Mount Gambier operation was sold to Elec-Air during the life of this Agreement.

2 Email from Australian Workers’ Union 11 February 2021

3 [2017] FWCA 5067

4 PR726799

Printed by authority of the Commonwealth Government Printer

In the Federal Circuit Court of Australia, Elec-Air Pty Ltd applied for the termination of the RCR Haden Pty Ltd South Australia Enterprise Agreement 2017 - 2019. Elec-Air is a company that operates in the electrical and air conditioning industry. The dispute arose from the application of the enterprise agreement between the applicant and RCR Haden Pty Ltd, a company in the same industry. The applicant contended that the agreement was no longer appropriate due to changes in the industry and financial difficulties experienced by the company. The court was required to determine whether the application met the criteria for termination under the Fair Work Act 2009.

The court considered the legal issues of whether there had been a significant change in circumstances since the agreement was made, and whether the termination of the agreement was in the best interests of the parties. The applicant argued that there had been significant changes in the industry, including the introduction of new technologies, that made the agreement unworkable. Additionally, the applicant argued that the financial difficulties experienced by the company made it impossible to meet the obligations under the agreement. The court had to assess the evidence presented by both parties and determine whether the changes were significant enough to warrant termination of the agreement.

After considering the evidence, the court found that there had been a significant change in circumstances since the agreement was made. The introduction of new technologies had significantly altered the industry, and the financial difficulties experienced by the applicant made it impossible to meet the obligations under the agreement. The court also found that the termination of the agreement was in the best interests of both parties. The court concluded that the applicant had met the criteria for termination under the Fair Work Act 2009. Therefore, the court granted the application for termination of the RCR Haden Pty Ltd South Australia Enterprise Agreement 2017 - 2019.

Elec-Air Pty Ltd

DECISION

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