Fletcher Insulation PTY LTD

Case •

[2023] FWCA 610

•

24 FEBRUARY 2023
[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.

  1. 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.

  1. 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.

  1. 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.

  1. 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.

  1. 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.

  1. 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

  1. 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.

  1. 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 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.

226A   Guarantee of termination entitlements

Guarantee of termination entitlements

(1) A guarantee of termination entitlements is an undertaking given by an employer covered by an enterprise agreement that:

(a) is an undertaking that the employer will comply with subsection (3) if the agreement is terminated under section 226 and the employer terminates the employment of a protected employee for the termination of the agreement:

(i) 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

(ii) because of the insolvency or bankruptcy of the employer; and

(b) is in writing; and

(c) meets any requirements relating to the signing of undertakings that are prescribed by the regulations.

(2) A protected employee for a termination of an enterprise agreement under section 226 is an employee who would, but for the termination of the agreement, be covered by the agreement.

(3) For the purposes of paragraph (1)(a), the employer complies with this subsection, in relation to the termination of the protected employee’s employment, if the employer complies with the terms of the enterprise agreement that, if the agreement were still in operation, would have provided the employee with entitlements that:

(a) relate to a termination of the employee’s employment:

(i) 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

(ii) because of the insolvency or bankruptcy of the employer; and

(b) except if the employee was an award/agreement free employee immediately before the termination of the employee’s employment—are more beneficial than the entitlements under a modern award that covered the employee in relation to the employment at that time.

(4) A guarantee of termination entitlements given in relation to the termination of an enterprise agreement:

(a) comes into force on the day on which the termination of the agreement comes into operation under section 227; and

(b) ceases to be in force at the earliest of the following times:

(i) if the guarantee specifies a period during which the guarantee is to remain in force and the FWC approves that period under subsection (5)—the end of that period;

(ii) immediately before another enterprise agreement that covers the same, or substantially the same, group of employees as the terminated agreement comes into force;

(iii) the end of the period of 4 years beginning on the day the guarantee is given to the FWC.

(5) The FWC may, in its decision terminating an enterprise agreement, approve a period for the purposes of subparagraph (4)(b)(i) if it considers the period to be appropriate.

(6) An employer must comply with a guarantee of termination entitlements given by the employer to the FWC in relation to the termination of an enterprise agreement if:

(a) the agreement is terminated under section 226; and

(b) the employer terminates the employment of a protected employee for the termination of the agreement while the guarantee is in force:

(i) 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

(ii) because of the insolvency or bankruptcy of the employer.

Note: This subsection is a civil remedy provision (see Part 4-1)

(7) To avoid doubt, a guarantee of termination entitlements is a governing instrument for employment for the purposes of the Fair Entitlements Guarantee Act 2012.”

  1. The Commission must be satisfied that the requirements in s.225, s.226 and s.226A of the Fair Work Act 2009 (the Act) are met prior to approving the termination of the Agreement.

Consideration

Section 225 of the Act

  1. An employer covered by the Agreement may apply to the Commission under s.225(a) of the Act for its termination if it has passed its nominal expiry date. As noted above, the Agreement nominally expired on 10 November 2022. Further, I am satisfied that the Employer is an employer covered by the Agreement.[2] As such, I am satisfied that the Employer has standing to bring the Application under s.225(a) of the Act.

Section 226 of the Act

  1. Section 226(1)(b) of the Act states if an application for the termination of an enterprise agreement is made under section 225, the Commission must terminate the agreement if it is satisfied that the agreement does not, and is not likely to, cover any employees. Ms Edwards has declared there are no employees covered by the Agreement and further, that the work site has been closed.

  1. However, s.226((1A) provides that the Commission must terminate the Agreement only if it is satisfied that it is appropriate in all the circumstances to do so, while s.226(5) outlines that the Commission may also have regard to any other relevant matters.

  1. I consider the approach to assessing appropriateness laid out by the Full Bench in Aurizon Operations Limited; Aurizon Network Pty Ltd; Australian Eastern Railroad Pty Ltd[3] (Aurizon), while addressing the termination of  agreements prior to the Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022, remains apposite for applications to terminate agreements under the newly amended section 226 of the Act:

“All of the circumstances also need to be taken into account in considering whether termination of the agreements is appropriate. In particular the views of employers and employees covered by the agreement, their circumstances, and the impact of termination need to be taken into account. The requirement in s. 226(b) to take into account all of the circumstances including those set out in s. 226(b)(i) and (ii) is a requirement to take the matters into account and to give them due weight in assessing whether it is appropriate to terminate an enterprise agreement. In assessing appropriateness by taking into account all of the circumstances, we approached the task by reference to the construction of s. 226 and the contextual matters that bear upon that construction dealt with earlier as well as giving specific consideration to the matters identified in s. 226(b)(i) and (ii).”[4] (reference omitted)

  1. Further to what is outlined above in [11] Ms Edwards has made the following uncontested declarations:

    (a) Fletcher Insulations Rooty Hill site closed on 10 December 2021;

    (b) Since then, the Agreement has remained in place without there being any employees working at the site;

    (c) The coverage of the Agreement specifies a geographic location which is no longer applicable;

    (d) The Agreement no longer applies to any employees nor does the Employer have any operating business at the Rooty Hill site;

    (e) The application is simply an administrative task because the Agreement is no longer “in effect”.

  2. Section 226(2) of the Act does not fall for consideration on the facts of this case and as regards s.226(3), the circumstances are such that the Employer supports the termination of the Agreement, there are no employees covered by the Agreement and the UWU has not taken up the opportunity to express a view either way.

  1. The circumstances are also such that as there are no parties engaged in bargaining for a new enterprise agreement, s.226(4) is not a relevant factor and I do not consider there are any other relevant matters that require consideration (s.226(5)). For completeness, s.226A of the Act is irrelevant in the circumstances of this case.

Conclusion

  1. Having regard to the matters and conclusions outlined above, I consider it is appropriate in all the circumstances of this case to terminate the Agreement (s.226(1A)).

  1. Having made these findings, s.226 of the Act requires that I terminate the Agreement.

Operative Date of Termination

  1. Section 227 of the Act affords the Commission a discretion as to the operative date of a termination of an agreement.

  1. Noting that the Agreement reached its nominal expiry date on 22 November 2022 and that there is an absence of material before me suggesting there is any reason to delay the termination of the Agreement, I consider the termination of the Agreement should operate forthwith.

  1. The termination will therefore operate from 24 February 2023. An order to this effect will be issued with this decision.

DEPUTY PRESIDENT


[1] AE508159.

[2] Ibid at clause 2.1.

[3] [2015] FWCFB 540.

[4] Ibid at [167].

Printed by authority of the Commonwealth Government Printer

<AE508159  PR751160>

Actions
Download as PDF Download as Word Document
Cases Citing This Decision

0

Cases Cited

0

Statutory Material Cited

0