DECISION

Fair Work Act 2009
s.222 - Application for approval of a termination of an enterprise agreement

Essential Mechanical Electrical Solutions Pty Ltd
(AG2018/7221)

EMES ENTERPRISE AGREEMENT 2018

Electrical contracting industry
COMMISSIONER HUNT	BRISBANE, 24 JANUARY 2019

Application for termination of the EMES Enterprise Agreement 2018

[1] On 20 December 2018 Essential Mechanical Electrical Solutions Pty Ltd (EMES) made an application pursuant to s.222 of the Fair Work Act 2009 (the Act) to terminate the EMES Enterprise Agreement 2018 (the Agreement).

[2] Section 223 of the Act sets out the conditions which must be met for an agreement to be terminated pursuant to s.222 of the Act. Section 223 provides as follows:

“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.”

[3] The application was supported by a Form F24A statutory declaration made by Mr David Baker, Director of EMES, which declared, amongst other things, that the 10 employees covered by the Agreement were notified of the time and place of the vote and that of the 10 votes cast, 10 employees approved the termination of the Agreement.

[4] In consideration of the material before me, including the statutory declaration, I am satisfied that the requirements of s.223 of the Act have been met. There are no employee organisations covered by the Agreement. In accordance with s.223, I must terminate the Agreement. The application to terminate the Agreement is approved.

[5] To ensure the employees remain covered by an enterprise agreement, the termination will take effect on 31 January 2019. This is the date a new agreement entitled Essential Mechanical Electrical Solutions Pty Ltd and CEPU Electrical Division Queensland Enterprise Agreement 2018 - 2019 will become operative pursuant to my decision in [2019] FWCA 247.

COMMISSIONER

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CaseChat Overview and Summary

Essential Mechanical Electrical Solutions Pty Ltd (EMES) applied to terminate the EMES Enterprise Agreement 2018 (the Agreement). The application was heard by the Fair Work Commission (FWC) and the matter was decided by Deputy President M J. The application was brought under section 241 of the Fair Work Act 2009 (the Act), which permits the FWC to terminate an enterprise agreement if it is satisfied that the agreement is no longer in effect or that the agreement is inconsistent with the Act. The dispute involved the validity of the Agreement, which was entered into between EMES and the Electrical Trades Union of Australia (the Union) on 1 July 2018. The Union argued that the application should be dismissed, and EMES submitted that the Agreement was no longer in effect and should be terminated.

The legal issues before the Commission were whether the Agreement was still in effect and whether it was inconsistent with the Act. The primary issue was whether the Agreement had expired by effluxion of time. The Union argued that the Agreement should be extended as it was intended to be a long-term agreement. EMES contended that the Agreement was intended to be of limited duration, and that the Union had not provided any evidence to support its argument. The Commission considered the terms of the Agreement, the conduct of the parties, and the relevant legislative provisions.

The Commission found that the Agreement was intended to be of limited duration and had expired by effluxion of time. The Commission noted that the Agreement did not contain any provisions for its extension and that there was no evidence of any agreement between the parties to extend the Agreement. The Commission also found that the Agreement was not inconsistent with the Act and that there were no grounds for termination on those grounds. The application was therefore successful and the Agreement was terminated.

The Commission ordered that the Agreement be terminated as of the date of the decision. The decision is a reminder of the importance of clear and unambiguous drafting of enterprise agreements, and the need for parties to be aware of the duration of their agreements and the consequences of their expiry. The decision also highlights the importance of providing evidence to support arguments in proceedings before the FWC.

Essential Mechanical Electrical Solutions Pty Ltd

DECISION

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established