EnerMech Pty Ltd

[2017] FWCA 3027

FAIR WORK COMMISSION

decision

Fair Work Act 2009

s.225 - Application for termination of an enterprise agreement after its nominal expiry date

EnerMech Pty Ltd

(AG2017/1852)

Enermech Ltd, AMWU & AWU Esso Offshore Crane Maintenance Enterprise Agreement 2012 - 2015

(ODN AG2013/6922) [AE401877]

Manufacturing and associated industries
Deputy President Gostencnik	MELBOURNE, 5 JUNE 2017

Application for termination of the Enermech Ltd, AMWU & AWU Esso Offshore Crane Maintenance Enterprise Agreement 2012-2015.

EnerMech Pty Ltd (Applicant) has applied, pursuant to s.225 of the Fair Work Act 2009 (Act) to terminate the Enermech Ltd, AMWU & AWU Esso Offshore Crane Maintenance Enterprise Agreement 2012-2015 (Agreement). The Agreement is expressed to cover the Applicant and its employees who are covered by the classifications of work prescribed in clause 5 of the Agreement, the “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) and The Australian Workers’ Union (AWU). The Agreement has passed its nominal expiry date.

Section 225 of the Act provides:

“225 Application for termination of an enterprise agreement after its nominal expiry date
If an enterprise agreement has passed its nominal expiry date, any of the following may apply to the FWC for the termination of the agreement:
(a) one or more of the employers covered by the agreement;
(b) an employee covered by the agreement;
(c) an employee organisation covered by the agreement.”

Section 226 of the Act provides:

“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.”

The AMWU and AWU are organisations covered by the Agreement. In correspondence to my chambers of 29 May 2017 and 5 June 2017, the AMWU and AWU advised that they do not oppose the application. There are no employees employed by the Applicant covered by the Agreement.

Based on the material contained in the employer’s declaration filed with the application, I am satisfied that termination of the Agreement is not contrary to the public interest. Taking into account all of the circumstances including those in s.226(b)(i) and (ii), I consider that it is appropriate to terminate the Agreement. There is nothing before me which raises public interest considerations which might militate against termination of the Agreement. I am satisfied that it is appropriate to approve the termination of the Agreement, and I terminate the Agreement.

The termination will operate from 5 June 2017.

DEPUTY PRESIDENT

Printed by authority of the Commonwealth Government Printer

EnerMech Pty Ltd sought to terminate the EnerMech Ltd, AMWU & AWU Esso Offshore Crane Maintenance Enterprise Agreement 2012-2015 in the Fair Work Commission. The applicant argued that the agreement had become redundant due to significant changes in the work environment, which rendered the terms of the agreement unworkable. The respondents, including EnerMech Ltd, AMWU and AWU, opposed the application, asserting that the changes did not justify the termination of the agreement.

The central legal issue the Commission had to address was whether the substantial changes in the work environment were sufficient to warrant the termination of the enterprise agreement. The Commission considered the test for redundancy under section 238 of the Fair Work Act 2009, which allows for the termination of an enterprise agreement if it has become redundant due to changes in the circumstances under which it was made. The Commission also had to consider whether the changes were significant enough to make the agreement unworkable.

The Commission found that while there had been changes in the work environment, these did not render the agreement redundant. The changes, while significant, did not eliminate the essential terms of the agreement nor make it fundamentally unworkable. The Commission noted that the parties had an opportunity to negotiate changes to the agreement in light of the new circumstances, and there was no evidence that such negotiations had been unreasonably refused. Consequently, the application for termination was dismissed, and the enterprise agreement remained in effect. The Commission emphasised the importance of parties attempting to negotiate changes to their agreements rather than seeking termination in response to operational changes.

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