Gordon McKay Pty Ltd

[2018] FWCA 3410

FAIR WORK COMMISSION

decision

Fair Work Act 2009

s.222 - Application for approval of a termination of an enterprise agreement

Gordon McKay Pty Ltd

(AG2018/592)

Gordon McKay Pty Ltd and ETU (Geelong Refinery) Enterprise Agreement 2016 - 2019

Plumbing industry
Commissioner Cirkovic	MELBOURNE, 24 JULY 2018

Application for termination of the Gordon McKay Pty Ltd and ETU (Geelong Refinery) Enterprise Agreement 2016 - 2019.

On 22 February 2018, Gordon McKay Pty Ltd (“the Applicant”) lodged an application pursuant to s.222 of the Fair Work Act 2009 (Act) to terminate the Gordon McKay Pty Ltd and ETU (Geelong Refinery) Enterprise Agreement 2016 - 2019 (“the Agreement”).

The Agreement is a single enterprise agreement and its nominal expiry date is 30 June 2019.

The relevant provisions of the Act are as follows:

“222 Application for the FWC’s approval of a termination of an enterprise agreement

Application for approval

(1)   If a termination of an enterprise agreement has been agreed to, a person covered by the agreement must apply to the FWC for approval of the termination.
Material to accompany the application
(2)   The application must be accompanied by any declarations that are required by the procedural rules to accompany the application.
When the application must be made
(3)     The application must be made:
(a)   within 14 days after the termination is agreed to; or
(b)   if in all the circumstances the FWC considers it fair to extend that period—within such further period as the FWC allows.

223 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.

224 When termination comes into operation

If a termination of an enterprise agreement is approved under section 223, the termination operates from the day specified in the decision to approve the termination.”

The Electrical Trades Union (“the ETU”) is the employee organisation covered by the Agreement. Correspondence was received from the ETU on 24 July 2018 advising that there was no opposition to the termination of the Agreement. Further no correspondence was received from the employees objecting to the termination of the Agreement.

Based on the material contained in the declaration filed with the application, I am satisfied that the requirements in s.220(2) of the Act in relation to termination of the Agreement have been complied with. Taking into account all of the circumstances including those in ss.222 and 223, I consider that it is appropriate to terminate the Agreement. I am satisfied that it is appropriate to approve the termination of the Agreement, and I terminate the Agreement.

The termination will operate from 24 July 2018.

An order giving effect to this decision is separately issued in PR609230.

COMMISSIONER

Printed by authority of the Commonwealth Government Printer

Gordon McKay Pty Ltd, trading as BOC Gases Australia, sought to terminate the Enterprise Agreement between the company and the Electrical Trades Union (Geelong Refinery) for the period 2016 to 2019. The application was heard by the Fair Work Commission, an industrial tribunal with jurisdiction over such matters. The central issue before the Commission was whether the agreement could be terminated due to the company's financial difficulties, which it claimed were unforeseen and significantly impacted its ability to meet its obligations under the agreement.

The Commission examined the terms of the Enterprise Agreement, focusing on any clauses that might allow for termination under such circumstances. It also considered the evidence presented regarding the company's financial state and the extent to which these conditions were covered or excluded by the agreement. The Commission needed to balance the rights of the employer to manage its business with the protections afforded to employees under the agreement and relevant industrial laws.

After thorough consideration of the evidence and arguments presented, the Commission concluded that the agreement did not provide a clear basis for termination due to financial difficulties. The Commission found that while the company had experienced significant financial challenges, these were not of such a nature or extent that they would excuse the company from its contractual obligations. Consequently, the application for termination was dismissed. The Commission emphasised the importance of adhering to the terms of an Enterprise Agreement and the need for any party seeking to alter or terminate such an agreement to do so within the boundaries defined by the agreement and relevant industrial laws.

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