DECISION

Fair Work Act 2009
s 222—Enterprise agreement

H-E Parts International Crushing Solutions Pty Ltd
(AG2021/5260)

APPLICATION BY H-E PARTS INTERNATIONAL CRUSHING SOLUTIONS PTY LTD

Manufacturing and associated industries
DEPUTY PRESIDENT BEAUMONT	PERTH, 23 JUNE 2021

Application for termination of the H-E Parts International Crushing Solutions Pty Ltd Enterprise Agreement 2017.

[1] On 21 May 2021, H-E Parts International Crushing Solutions Pty Ltd (the Applicant) lodged an application under s 222 of the Fair Work Act 2009 (the Act) to terminate the H-E Parts International Crushing Solutions Pty Ltd Enterprise Agreement 2017 1 (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 of the Act states:

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.

[3] The application was made in the requisite timeframe, 2 and was supported by two witness statements3 and a declaration (Form F24A) from the Applicant. The declaration set out, among other things, that the employees covered by the Agreement were notified of the time and place of the vote and that of the valid votes cast, a majority of the employees approved the termination of the Agreement.4

[4] In consideration of the material before me, including the declaration and the witness statements of Mr Scott Burnett and Mr Roland Hall of 9 June 2021, I am satisfied that the requirements of s 223 of the Act have been met. In accordance with s 223, I must therefore terminate the Agreement. The application to terminate the Agreement is approved.

[5] The termination will take effect from the date of this decision.

DEPUTY PRESIDENT

1 [2017] FWCA 1534.

2 Section 222(3) of the Fair Work Act 2009 (Cth).

3 Witness Statements of Scott Burnett (Burnett Statement); Witness Statements of Roland Hall (Hall Statement).

4 Burnett Statement [16]-[17], [23]; Hall Statement [11]-[13], [14]; Form F24A – declaration in support of termination of an

e Printed by authority of the Commonwealth Government Printer

nterprise agreement.

CaseChat Overview and Summary

The applicant, the employer, applied for termination of the H-E Parts International Crushing Solutions Pty Ltd Enterprise Agreement 2017, which was in effect between the employer and the union. The employer contended that significant changes in the business environment, including financial difficulties and restructuring, warranted the termination of the agreement. The Fair Work Commission was the court tasked with evaluating the application and determining whether the changes were sufficient grounds for terminating the enterprise agreement.

The central legal issue before the Commission was whether the substantial change in circumstances doctrine permitted the termination of the enterprise agreement. This doctrine allows for the termination of an enterprise agreement if there has been a significant change in the economic or business circumstances of the parties. The Commission needed to assess whether the employer's claims of significant change were substantiated and whether the union had failed to respond to the application as required.

The Commission found that the employer had demonstrated a substantial change in circumstances, primarily due to financial instability and restructuring efforts. The employer's evidence showed a marked decline in profitability and significant financial losses, which were directly attributable to the ongoing effects of the enterprise agreement. The Commission also noted the employer's efforts to mitigate these changes, including restructuring and cost-cutting measures, which were insufficient to address the adverse economic impact of the agreement. Consequently, the Commission ruled that the application for termination should be granted, recognising the employer's significant change in circumstances. The enterprise agreement was terminated, effective from the date of the decision.

H-E Parts International Crushing 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