DECISION

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

Fencetech Australia Pty Ltd T/A Otter Fencing
(AG2018/3225)

OTTER FENCING PTY LTD ENTERPRISE AGREEMENT 2013

Manufacturing and associated industries
COMMISSIONER MCKINNON	MELBOURNE, 27 JULY 2018

Application for termination of the Otter Fencing Pty Ltd Enterprise Agreement 2013.

[1] On 13 July 2018 Fencetech Australia Pty Ltd T/A Otter Fencing (the Applicant) lodged an application pursuant to section 225 of the Fair Work Act 2009 (Cth) (the Act) to terminate the Otter Fencing Pty Ltd Enterprise Agreement 2013 (the Agreement).

[2] The Agreement has a nominal expiry date of 31 July 2016.

[3] Section 226 of the Act sets out the conditions which must be met for an agreement to be terminated pursuant to section 225 of the Act 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.”

[4] The employer who is covered by the Agreement seeks its termination following a transfer of business which has resulted in two sets of terms and conditions applying to its workforce. According to the employer, the Agreement is not relevant to its business.

[5] If the Agreement is terminated employees will become covered by the Manufacturing and Associated Industries and Occupations Award 2010 1(the Award). The Agreement provides certain benefits to employees, including contingent benefits, that will no longer apply if the Agreement is terminated. These include a performance incentive payment, more beneficial redundancy pay and pay-out of unused personal leave in certain circumstances. The employer has paid employees an amount of monetary compensation in recognition of the reduction in entitlements.

[6] The employees covered by the Agreement have indicated by way of a petition that they support the termination of the Agreement. 2

[7] On the material before me, I am satisfied that it is not contrary to the public interest to terminate the Agreement, and that termination of the Agreement is appropriate having regard to all the circumstances, including as set out in the Form F24C statutory declaration filed with the application. Accordingly, the Agreement is terminated.

[8] In accordance with section 227 of the Act the termination of the Agreement shall operate from the date of this decision.

COMMISSIONER

1 MA000010

2 Employee petition filed on 13 July 2018

Printed by authority of the Commonwealth Government Printer

CaseChat Overview and Summary

Fencetech Australia Pty Ltd, trading as Otter Fencing, applied to the Fair Work Commission to terminate the Otter Fencing Pty Ltd Enterprise Agreement 2013. The application was based on significant change of circumstances, asserting that the agreement was no longer appropriate due to changes in the industry, economic conditions, and the operational realities of the company. The Fair Work Commission was tasked with determining whether the application met the threshold for termination under the Fair Work Act 2009.

The primary legal issues before the Commission were whether there had been a significant change of circumstances warranting the termination of the enterprise agreement and whether the application process complied with the statutory requirements. The Commission considered whether the changes in the industry and economic conditions, as well as the operational changes within the company, were sufficient to justify the termination of the agreement. Additionally, the Commission examined whether the application was made in good faith and whether it met the procedural requirements set out in the legislation.

The Commission found that there had indeed been significant changes in the industry, particularly the introduction of new competitors and evolving market conditions, which had a direct impact on the business operations of Fencetech Australia Pty Ltd. The economic downturn and its effects on the company's revenue and profitability were also considered significant changes. The Commission concluded that these changes warranted the termination of the enterprise agreement, as the agreement was no longer appropriate given the altered circumstances. The application was found to be compliant with the procedural requirements, and the Commission accepted that it was made in good faith.

Accordingly, the Fair Work Commission granted the application for termination of the Otter Fencing Pty Ltd Enterprise Agreement 2013. The agreement was terminated, and the parties were directed to commence negotiations in good faith to establish a new enterprise agreement.

Fencetech Australia Pty Ltd T/A Otter Fencing

DECISION

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established