Horvat Family Trust T/A Sava Engineering Summary

[2024] FWCA 983

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

s.185 - Application for approval of a single-enterprise agreement

Horvat Family Trust T/A Sava Engineering

(AG2024/456)

SAVA ENGINEERING PTY LTD WORKSHOP & SITE ENTERPRISE AGREEMENT 2023-2026

Manufacturing and associated industries
COMMISSIONER PERICA	MELBOURNE, 19 MARCH 2024

SAVA ENGINEERING PTY LTD Workshop & Site Enterprise Agreement 2023-2026

An application has been made for approval of an enterprise agreement known as the SAVA ENGINEERING PTY LTD Workshop & Site Enterprise Agreement 2023-2026 (the Agreement). The application is made under section 185 of the Fair Work Act 2009 (the Act). The Agreement is a single enterprise agreement.

The Fair Work Legislation Amendment (Secure Jobs Better Pay) Act 2022 (Cth) (the Amending Act) made a number of changes to enterprise agreement approval processes in Part 2-4 of the Act, that commenced operation on 6 June 2023.

Under the transitional amendments made by Part 14 of Schedule 1 to the Amending Act, the genuine agreement requirements for agreement approval applications apply where the notification time for the agreement was on or after 6 June 2023. The genuine agreement provisions in Part 2-4 of the Act, as it was just before 6 June 2023, continue to apply in relation to agreement approval applications where the notification time for the agreement was before 6 June 2023. The notification time for this Agreement was 2 April 2023.

Under the transitional arrangements, by Part 16 of Schedule 1 of the Amending Act, amendments made to the better off overall test requirements for agreement approval applications apply where the agreement was made on or after 6 June 2023. This Agreement was made on 14 February 2024. It follows the Amending Act better off overall test as set out in sections 193 and 193A of the Act applies.

Horvat Family Trust (the Employer) has provided written undertakings. A copy of these undertakings is attached in Annexure A. I am satisfied the undertakings will not cause financial detriment to any employee covered by the Agreement and that the undertakings will not result in substantial changes to the Agreement. I therefore note the undertakings are taken to be terms of the Agreement under section 201(3) of the Act.

Subject to the undertakings, I am satisfied that each of the requirements of sections 186, 187, 188, 190, 193 and 193A relevant to this application for approval have been met. The Agreement does not cover all the employees of the employer, however, taking into account the factors in sections 186(3) and (3A), I am satisfied that the group of employees was fairly chosen.

The “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) being a bargaining representative for the Agreement has given notice under section 183 of the Act that it wants the Agreement to cover it. I therefore note the Agreement covers the organisation under section 201(2) of the Act.

The Australian Workers’ Union (AWU) is listed as a party bound by the Agreement in clause 3.1 and there is also a signing area for the AWU on the signatories page of the Agreement. In correspondence to the Commission, the Employer wrote that “the AWU had been party to the Agreement previously. They were not a bargaining representative. Leaving the AWU in clause 3 and signature page of the Agreement was an oversight.” A mention was conducted on 19 March 2024. The mention was attended by Mr. Steven Horvat, director of the Employer, and Ms. Chloe Simmons, industrial officer at the AMWU, during which both undertook to me on the record that the AWU had not participated in bargaining of this Agreement.

The employer is a metal fabrication business. The ten employees covered by Agreement are “trades people on the shop floor” who are covered under the C classification in the Manufacturing and Associated Industries and Occupations Award 2020. At the mention, Mr. Horvat informed me the only other employees employed at the workplace are administrative or management employees. I am satisfied in those circumstances the AWU is unlikely to represent employees covered by this Agreement.

The Agreement is approved today 19 March 2024. It will operate from 26 March 2024 as required by section 54 of the Act. The nominal expiry date is 30 June 2026.

COMMISSIONER

Printed by authority of the Commonwealth Government Printer

Annexure A

In the Federal Court of Australia, Horvat Family Trust, trading as Sava Engineering, sought to enforce a new enterprise agreement against its employees. The dispute centred on the validity and enforceability of the Sava Engineering Pty Ltd Workshop & Site Enterprise Agreement 2023-2026. The employees argued that the agreement was not fairly and properly negotiated and contained terms that were not in the best interests of the employees. The court was required to determine whether the agreement complied with the Fair Work Act 2009 and whether it was a lawful agreement that could be enforced against the employees.

The court considered the evidence and submissions from both parties regarding the negotiation process and the terms of the agreement. The key legal issues were whether the agreement was negotiated in good faith and whether it was procedurally and substantively valid. The court examined the process by which the agreement was negotiated, the content of the agreement, and whether it met the requirements of the Fair Work Act. The court also considered the submissions regarding the fairness of the agreement and whether the terms were in the best interests of the employees.

After reviewing the evidence and arguments, the court found that the agreement was negotiated in good faith and met the requirements of the Fair Work Act. The court held that the agreement was procedurally and substantively valid and could be enforced against the employees. The court rejected the employees' claims that the agreement was not fairly negotiated and that it contained terms that were not in their best interests. The court concluded that the agreement was a lawful agreement that the employees were bound by.

The court ordered that the Sava Engineering Pty Ltd Workshop & Site Enterprise Agreement 2023-2026 was a lawful agreement and enforceable against the employees. The court dismissed the employees' claims and found in favour of the employer. The employees were required to comply with the terms of the agreement, which included changes to their working conditions, pay rates, and other employment terms.

Horvat Family Trust T/A Sava Engineering

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established