Elite Perimeter Security Pty Ltd Summary

[2023] FWCA 968

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

s.222 - Application for approval of a termination of an enterprise agreement

Elite Perimeter Security Pty Ltd

(AG2023/436)

ELITE PERIMETER SECURITY PTY LTD ENTERPRISE AGREEMENT NOVEMBER 2022

Manufacturing and associated industries
COMMISSIONER CIRKOVIC	MELBOURNE, 3 APRIL 2023

Application for termination of the Elite Perimeter Security Pty Ltd Enterprise Agreement November 2022

On 24 February 2023, Elite Perimeter Security Pty Ltd (Applicant) lodged an application pursuant to s.222 of the Fair Work Act 2009 (Act) to terminate the Elite Perimeter Security Pty Ltd Enterprise Agreement November 2022 (Agreement). The Applicant is an employee covered by the Agreement.

The Agreement is a single enterprise agreement and its nominal expiry date is 15 November 2024.

The relevant provisions of the Act are as follows:

“222 Application for the FWC’s approval of a termination of an enterprise agreement
Application for approval
(1) If a termination of an enterprise agreement has been agreed to, a person covered by the agreement must apply to the FWC for approval of the termination.
Material to accompany the application
(2) The application must be accompanied by any declarations that are required by the procedural rules to accompany the application.
When the application must be made
(3) The application must be made:
(a) within 14 days after the termination is agreed to; or
(b) if in all the circumstances the FWC considers it fair to extend that period—within such further period as the FWC allows.

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.

224 When termination comes into operation
If a termination of an enterprise agreement is approved under section 223, the termination operates from the day specified in the decision to approve the termination.”

The Application was accompanied by a Form 24A declaration by Mr Timothy McIntosh, Managing Director, dated 9 March 2023. The declaration outlined the steps taken by the employer to ensure the employees covered were given a reasonable opportunity to decide whether they want to approve the proposed termination and details of the voting process.

On 21 March 2023, my Chambers issued Directions to the Applicant to serve a copy of the F24 Application, F24A Declaration, any other material provided to the Commission, and the Directions, on any employee covered by the Agreement. Employees were then given until 5:00PM Friday 31 March 2023 to respond to the application. The employees did not provide any submissions in relation to the termination.

Based on the material contained in the declaration filed with the application, I am satisfied that the Applicant has complied with the requirements in s.220(2) of the Act. The application has been made consistently with the requirements in s.222. I am satisfied that the termination was agreed to by a majority of the relevant employees who cast a valid vote to approve the termination as required by s.221(1). I am not aware of any reasonable grounds for believing that the employees have not agreed to the termination. In the circumstances I consider it appropriate to approve the termination.

Accordingly, I approve the termination of the Agreement. In accordance with s 224 of the Act, the termination will operate from 3 April 2023.

An order giving effect to this decision is separately issued in PR760807.

COMMISSIONER

Printed by authority of the Commonwealth Government Printer

Elite Perimeter Security Pty Ltd was the applicant in a case before the Fair Work Commission, seeking termination of the Enterprise Agreement between the company and its employees, which was set to expire in November 2022. The dispute arose from the company's contention that significant changes in the business environment, including financial difficulties and operational challenges, necessitated a renegotiation of the terms previously agreed upon.

The primary legal issues the Commission had to address involved whether the changes in the business environment were substantial enough to warrant termination of the agreement and whether the company had acted in good faith and followed the proper procedures for seeking to terminate the Enterprise Agreement. The Commission considered whether the company's financial difficulties and operational challenges were unforeseen at the time the agreement was made and whether the employees had been given adequate notice and opportunity to respond to the proposed changes.

The Fair Work Commission concluded that the applicant had not demonstrated that the changes in the business environment were of such magnitude that they fundamentally altered the relationship between the parties. The Commission found that the company's financial difficulties were largely due to its own mismanagement and that the operational challenges could have been reasonably anticipated. Furthermore, the Commission determined that the company had not acted in good faith or followed the correct procedures in seeking to terminate the agreement, as it had not provided adequate notice and opportunity for negotiation with the employees. The Commission rejected the application for termination of the Enterprise Agreement.

The Fair Work Commission ordered that the Enterprise Agreement remain in force until its scheduled expiration in November 2022, and it directed the parties to continue their efforts to negotiate in good faith to address any issues that may arise during this period.

Elite Perimeter Security Pty Ltd

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