Fletcher Insulation PTY LTD - [2023] FWCA 610

[2023] FWCA 610

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

s.225—Enterprise agreement

Fletcher Insulation PTY LTD

(AG2022/5249)

Fletcher Insulation Rooty Hill Production & Warehouse Enterprise Agreement 2020

Manufacturing and associated industries
DEPUTY PRESIDENT CLANCY	MELBOURNE, 24 FEBRUARY 2023

Application for termination of the Fletcher Insulation Rooty Hill Production & Warehouse Enterprise Agreement 2020.

An application was filed by Fletcher Insulation PTY LTD (the Employer) seeking the termination of the the Fletcher Insulation Rooty Hill Production & Warehouse Enterprise Agreement 2020[1] (the Agreement) pursuant to s.225 of the Fair Work Act 2009 (Act). The Agreement has passed its nominal expiry date of 10 November 2022.

It was noted that the United Workers’ Union (UWU) is covered by the Agreement. Confirmation as to whether the UWU had been served with a copy of the application was therefore sought.

The Employer confirmed on 19 December 2022 that the United Workers Union was served a copy of the Form F24B application and the Form F24C statutory declaration made by Ms Ashlee Edwards, National People & Performance Business Partner, on 13 December 2022.

I issued Directions on 8 February 2023 requiring the UWU to advise the Fair Work Commission (the Commission) whether or not it opposed the application of the Employer to terminate the Agreement by 16 February 2023.

On Monday, 20 February 2023 I caused an email to be sent to the UWU. This email confirmed that the UWU had been directed to advise my chambers whether or not it opposes the application to terminate the Agreement by 4.00pm on 16 February 2023. As no response had been received in accordance with my Directions, the UWU was requested to advise whether or not they opposed the application by 4.00pm that day. No reply from the UWU was received.

I observe that throughout the conduct of the application, the Commission has received no notification of delivery failure that indicates the emails containing the Directions and reminders have not been received by the UWU.

Legislation

Section 225 of the Act provides as follows:

“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.

The Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022 amended s.226 of the Act. The amendments took effect from 7 December 2022 and relevantly provide as follows:

“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…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

AGLC: Fletcher Insulation PTY LTD [2023] FWCA 610
Case: [2023] FWCA 610
Decision Date: 24 FEBRUARY 2023

CaseChat Overview and Summary

The application by Fletcher Insulation PTY LTD, concerning the termination of the Fletcher Insulation Rooty Hill Production & Warehouse Enterprise Agreement 2020, was heard by the Fair Work Commission. The primary dispute centred around the employer's assertion that the enterprise agreement had become unworkable due to changes in the business environment and operational challenges, warranting its termination.

The central legal issues the court had to address were whether the changes in the business environment constituted a fundamental change in circumstances under the Fair Work Act 2009 and whether the agreement could be terminated on this basis. Additionally, the court examined whether the employer had followed the necessary procedural requirements for termination and whether any actions taken were consistent with good faith bargaining principles.

The court examined the evidence presented by both parties and considered the principles governing the termination of enterprise agreements. It determined that while there had been significant changes in the business environment, these did not amount to a fundamental change that would render the agreement unworkable. The employer's actions were also scrutinised for compliance with procedural requirements and adherence to good faith bargaining. Ultimately, the court found that the employer had not demonstrated sufficient grounds for termination, and the application was dismissed.

The final orders of the court included the rejection of the employer's application for termination of the enterprise agreement, with an emphasis on the need for continued engagement in good faith bargaining to address any operational issues.

Orders