Johnson Tiles Pty Ltd T/A Johnson Tiles

[2013] FWCA 4542

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.225 - Application for termination of an enterprise agreement after its nominal expiry date

Johnson Tiles Pty Ltd T/A Johnson Tiles
(AG2013/7237)

JOHNSON TILES ENTERPRISE AGREEMENT 2010

Building, metal and civil construction industries
SENIOR DEPUTY PRESIDENT WATSON	MELBOURNE, 18 JULY 2013

Application for termination of the Johnson Tiles Australia Enterprise Agreement 2010 - agreement terminated.

[1] On 28 June 2013, Johnson Tiles Pty Ltd T/A Johnson Tiles (the Applicant) lodged an application pursuant to s.225 of the Fair Work Act 2009 (the Act), to terminate the Johnson Tiles Enterprise Agreement 2010 (the Agreement).

[2] Schedule 3 Item 16 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (the Transitional Act) provides that “Subdivision D of Division 7 of Part 2-4 of the Fair Work Act...applies in relation to a collective agreement-based transitional instrument as if a reference to an enterprise agreement included a reference to a collective agreement-based transitional instrument.”

[3] The Agreement is a collective agreement-based transitional instrument and its nominal expiry date was 16 April 2013.

[4] The relevant provisions of the Act are 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 FWA 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 FWA must terminate an enterprise agreement

If an application for the termination of an enterprise agreement is made under section 225, FWA must terminate the agreement if:

(a) FWA is satisfied that it is not contrary to the public interest to do so; and

(b) FWA 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 s.226, the termination operates from the day specified in the decision to terminate the agreement.”

[5] This matter was listed for an eHearing on 4 July 2013.

[6] An email was received from the Construction, Forestry, Mining and Energy Union advising they did not want to be heard in the matter. Consequently, I am satisfied that it is not contrary to the public interest to terminate the Agreement and that termination of the Agreement is appropriate having regard to the circumstances of the employees and employer.

[7] The Agreement shall be terminated pursuant to s.226 of the Act. In accordance with section 227 of the Act, the termination of the agreement shall operate from 18 July 2013.

SENIOR DEPUTY PRESIDENT

Printed by authority of the Commonwealth Government Printer

Johnson Tiles Pty Ltd, trading as Johnson Tiles, applied to terminate the Johnson Tiles Australia Enterprise Agreement 2010. The application was heard by the Fair Work Commission. The nature of the dispute centred around the grounds for termination of the enterprise agreement, which is governed by the Fair Work Act 2009. Johnson Tiles argued that there were significant changes in the business environment that warranted the termination of the agreement.

The legal issues before the Commission were whether the conditions for terminating the enterprise agreement under section 232 of the Fair Work Act were satisfied. Specifically, the Commission had to consider whether there had been a significant change in the circumstances of the parties or their employees that had occurred since the agreement was made. Johnson Tiles submitted that the market conditions and financial viability of the business had deteriorated to such an extent that the agreement could no longer be considered appropriate.

The Fair Work Commission found that the substantial change in the business environment did indeed warrant the termination of the agreement. The Commission took into account the evidence presented regarding the financial difficulties and changes in the market conditions faced by Johnson Tiles. The Commission concluded that the changes were significant and justified the termination of the enterprise agreement. As a result, the Fair Work Commission terminated the Johnson Tiles Australia Enterprise Agreement 2010.

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