Epiroc Australia Pty Ltd
[2024] FWCA 1969
•30 MAY 2024
| [2024] FWCA 1969 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.225—Enterprise agreement
Epiroc Australia Pty Ltd
(AG2024/1698)
ATLAS COPCO AUSTRALIA PTY LIMITED, O’CONNOR WESTERN AUSTRALIA ENTERPRISE AGREEMENT 2017
| Manufacturing and associated industries | |
| DEPUTY PRESIDENT BEAUMONT | PERTH, 30 MAY 2024 |
Application for termination of the Atlas Copco Australia Pty Limited, O'Connor Western Australia Enterprise Agreement 2017
Issue
This decision concerns an application made by Epiroc Australia Pty Ltd (the Applicant) on 20 May 2024 for the termination of the Atlas Copco Australia Pty Limited, O’Connor Western Australia Enterprise Agreement 2017[1] (the Agreement) made under s 225 of the Fair Work Act 2009 (Cth) (the Act). The Agreement passed its nominal expiry date on 30 September 2019.
Section 225 of the Act provides that an employer covered by an enterprise agreement can apply to the Commission for the termination of an agreement if the agreement has passed its nominal expiry date. Evidently, given the nominal expiry date of the Agreement and that the Applicant is, in my view, the employer covered by the Agreement, the Applicant has standing.
Thereafter, the Commission is obliged to terminate the enterprise agreement if satisfied that the subsections of s 226 have been met.
226 Terminating an enterprise agreement after its nominal expiry date
(1) 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 the continued operation of the agreement would be unfair for the employees covered by the agreement; or
(b) the FWC is satisfied that the agreement does not, and is not likely to, cover any employees; or
(c) all of the following apply:
(i) the FWC is satisfied that the continued operation of the enterprise agreement would pose a significant threat to the viability of a business carried on by the employer, or employers, covered by the agreement;
(ii) the FWC is satisfied that the termination of the enterprise agreement would be likely to reduce the potential of terminations of employment covered by subsection (2) for the employees covered by the agreement;
(iii) if the agreement contains terms providing entitlements relating to the termination of employees’ employment—each employer covered by the agreement has given the FWC a guarantee of termination entitlements in relation to the termination of the agreement.
(1A) However, the FWC must terminate the enterprise agreement under subsection (1) only if the FWC is satisfied that it is appropriate in all the circumstances to do so.
(2) This subsection covers a termination of the employment of an employee:
(a) at the employer’s initiative because the employer no longer requires the job done by the employee to be done by anyone, except where this is due to the ordinary and customary turnover of labour; or
(b) because of the insolvency or bankruptcy of the employer.
(3) In deciding whether to terminate the agreement, the FWC must consider the views of the following covered by the agreement:
(a) the employees (unless there are no employees covered by the agreement);
(b) each employer;
(c) each employee organisation (if any).
Note: The President may be required to direct a Full Bench to perform a function or exercise a power in relation to the matter if any of the employers, employees, or employee organisations, covered by the agreement oppose the termination (see subsection 615A(3)).
(4) In deciding whether to terminate the agreement (the existing agreement), the FWC must have regard to:
(a) whether the application was made at or after the notification time for a proposed enterprise agreement that will cover the same, or substantially the same, group of employees as the existing agreement; and
(b) whether bargaining for the proposed enterprise agreement is occurring; and
(c) whether the termination of the existing agreement would adversely affect the bargaining position of the employees that will be covered by the proposed enterprise agreement.
(5) In deciding whether to terminate the agreement, the FWC may also have regard to any other relevant matter.
Background
In support of its application, the Applicant has provided Ms Katherine Biagi’s declaration in addition to Ms Biagi’s affidavit. Ms Biagi is the Country HR and SHEQ Manager of the Respondent.
Ms Biagi explained that at the time of the application for the approval of the Agreement, Atlas Copco Australia Pty Ltd operated a facility in O’Connor in Western Australia for the production of rock drilling tools (the RDT Production Facility).[2] By the time the Agreement was made, Atlas Copco Australia Pty Ltd had changed its name to the Applicant.[3] The scope of the Agreement was for work at the RDT Production Facility, which focused on the manufacturing and production of rotary blasthole consumables for the Applicant.[4] The RDT Production Facility would also assist with the local manufacturing of other related consumables for the Applicant’s departments, as required.[5]
Ms Biagi said that on the approval of the Agreement, there were approximately seven employees who were covered by the Agreement.[6] However, there were, as at the time the application was made, approximately 1,000 employees within the Applicant business, and 18,000 employees within the Epiroc AB Group headquartered in Sweden, of which the Applicant formed a part.[7]
According to Ms Biagi, after the application for the approval of the Agreement, all of the employees engaged at the RDT Production Facility who were previously employed by Atlas Copco Australia Pty Ltd were then employed by the Applicant. The RDT Production Facility was said to have been different from all the other divisions and teams of the Applicant, because it was the only Epiroc facility based in Australia. Instead of production, the Applicant focused on servicing Epiroc equipment, and all other production facilities associated with the Epiroc AB Group were based outside of Australia.[8]
The RDT Production Facility moved from O’Connor, Western Australia to the Perth Airport in December 2018.[9]
After 2018, the work performed at the RDT Production Facility declined, and as of September 2023, Ms Biagi reported that there were six employees of the Applicant that were engaged at the RDT Production Facility who were covered by the Agreement.[10] The business decided that the RDT Production Facility was financially unsustainable and instead focused on servicing Epiroc equipment, leaving the production and manufacturing of consumables to Epiroc divisions outside of Australia. Ms Biagi said that it was for those reasons that the Applicant closed the RDT Production Facility and the six positions were made redundant on 14 December 2023,.[11] Three of the six employees were successfully redeployed and three were dismissed.[12]
Ms Biagi said that the Applicant intends that local manufacturing and production of consumables will not be part of the Applicant’s business at any stage in the future and that the RDT Production Facility has been vacated by the Applicant – the machines and equipment used at the Facility having been sold.[13]
Ms Biagi expressed that the Agreement did not, and was unlikely to, cover any employees and that there was no proposed enterprise agreement that would cover the same, or substantially the same, group of employees as the existing Agreement.[14]
Consideration
The Applicant did not object to the Commission determining the application on the papers, and as such I considered that to be the appropriate course.
Regarding the point as to whether the Applicant is an employer covered by the Agreement and my finding at paragraph [2], Ms Biagi gave evidence that the although the Agreement references Atlas Copco Australia Pty Ltd, the only employer covered by the Agreement is the Applicant - Epiroc Australia Pty Ltd.[15] In early November 2017, Atlas Copco Australia Pty Limited (ACN 000 086 706) changed its name to Epiroc Australia Pty Ltd (ACN 000 086 706).[16]
The views of the Applicant have been considered and I accept the evidence of Ms Biagi which is set out in the declaration and her affidavit. I am satisfied that there are no employees covered by the Agreement and that the Applicant does not intend to employ any future employees who would be covered by the Agreement.
The “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union was asked for its views regarding the application and expressed that it had no issues and no comments to add.
There is no evidence before me suggestive that there is bargaining for a new enterprise agreement. It follows that the termination of the Agreement would not have any detrimental impact or result in a shift in bargaining power, in relation to enterprise bargaining, for the Applicant or other relevant party. Further, there does not appear to be any other relevant matter that warrants consideration.
I am satisfied that the Agreement does not, and is not likely to, cover any employees, and that it is appropriate in all the circumstances to terminate the Agreement.
Conclusion
Accordingly, the Agreement is terminated and pursuant to s 227 of the Act, the termination is to take effect on and from the date of this decision. An Order[17] to this effect is issued concurrently with this decision.
DEPUTY PRESIDENT
[1] [2017] FWCA 6447 AE426354; PR598360.
[2] Form F24C – Declaration in relation to termination of an enterprise agreement after the nominal expiry date, [4(3)].
[3] Ibid.
[4] Ibid.
[5] Ibid.
[6] Ibid [4(4)].
[7] Ibid [4(5)].
[8] Ibid [4(6)].
[9] Ibid [4(7)].
[10] Ibid [4(8)].
[11] Ibid [4(9)].
[12] Ibid.
[13] Ibid [4(10)].
[14] Ibid [4(10)]-[4(11)].
[15] Ibid [1.2(3)].
[16] Affidavit of Katherine Lisa Biagi, Exhibits KLB-02 and KLB-03.
[17] PR775489.
Printed by authority of the Commonwealth Government Printer
<AE426354 PR775488>
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