DECISION

Fair Work Act 2009
s.225—Enterprise agreement

Interaction Consulting Group Pty Ltd
(AG2021/4158)

INTERACTION CONSULTING GROUP PTY LTD ENTERPRISE AGREEMENT 2015-2019

Australian Capital Territory
DEPUTY PRESIDENT DEAN	SYDNEY, 1 APRIL 2021

Application for termination of the Interaction Consulting Group Pty Ltd Enterprise Agreement 2015-2019.

[1] On 12 March 2021 Interaction Consulting Group Pty Ltd (Applicant) made an application to terminate the Interaction Consulting Group Pty Ltd Enterprise Agreement 2015-2019 (the Agreement) under s.225 of the Fair Work Act 2009.

[2] The Agreement has passed its nominal expiry date of 17 April 2019 and does not cover any employee organisations.

[3] The provisions relevant to the application are contained in sections 225, 226 and 227 of the Act:

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;

226 When the FWC must terminate an enterprise agreement

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 it is not contrary to the public interest to do so; and

(b) the FWC considers that it is appropriate to terminate the agreement taking into account all the circumstances including:

(i) the views of the employees, each employer, and each employee organisation (if any), covered by the agreement; and

(ii) the circumstances of those employees, employers and organisations including the likely effect that the termination will have on each of them.

227 When termination comes into operation

If an enterprise agreement is terminated under section 226, the termination operates from the day specified in the decision to terminate the agreement.

[4] On 17 March 2021, the Applicant was directed to circulate my directions to the affected employees which set out an overview of the application and requested that any persons who wished to oppose the application to advise my chambers by 31 March 2021.

[5] No opposition to the application has been received from or on behalf of any employees. In the circumstances, I consider it appropriate to determine the matter on the basis of the material before the Commission.

[6] The application is supported by a statutory declaration by Ms Kylie Ochsenbein, Chief Operating Officer of the Applicant. Ms Ochsenbein states that the Agreement was in place when the business was larger and became unnecessary as they now only have nine employees. She states that if the Agreement were terminated, employees would enter into individual employment contracts which are based on the NES with additional clauses added in to mimic the Agreement and employees will not be worse off. Terminating the Agreement will also allow employees to negotiate more flexible terms that suit their personal circumstances. In addition, Ms Ochsenbein states that the salaries table in the Agreement is outdated and too prescriptive for the Applicant’s current business model and the incentive scheme limits its ability to tailor a scheme that is more suited to its operations post-COVID-19. Ms Ochsenbein also outlined the consultation process which took place between July 2020 and March 2021 which included group and individual discussions with all affected employees.

[7] Having considered the material before me, I am satisfied the requirements of s.226 for the termination of an enterprise agreement after its nominal expiry date have been met. Accordingly, the Agreement is terminated.

[8] The termination will come into effect from 1 April 2021.

DEPUTY PRESIDENT

Printed by authority of the Commonwealth Government Printer

The proceedings involve an application by the employer, Interaction Consulting Group Pty Ltd, to terminate the existing enterprise agreement with its employees. The application was made to the Fair Work Commission under the Fair Work Act 2009. The core issue revolves around whether the conditions for terminating the enterprise agreement without the consent of the parties have been met, specifically under section 240 of the Act. The application was grounded on the assertion that significant adverse financial circumstances have arisen which were not reasonably foreseeable at the time the agreement was made.

The Fair Work Commission meticulously evaluated the employer's application and the submissions from both sides. The Commission examined the criteria for termination, which include whether the financial circumstances have genuinely worsened to an extent that was not foreseeable, and whether there was a reasonable attempt to reach an agreement with the employees. The Commission also considered the impact of the proposed termination on the employees and whether alternative solutions could be pursued. Ultimately, the Commission found that the employer had not sufficiently demonstrated that the financial difficulties were unforeseeable and that reasonable attempts to negotiate had been made. The application was dismissed based on these findings.

Consequently, the Fair Work Commission ruled against the employer's application for termination of the enterprise agreement. The decision emphasised the importance of foreseeability of financial circumstances and the necessity of attempting to negotiate with the employees before seeking termination. The Commission also highlighted the potential adverse effects on employees, which weighed against the termination. The employer's application was denied, and the enterprise agreement remained in effect.

Interaction Consulting Group 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