Kalmar Equipment (Australia) Pty Ltd Summary

[2013] FWCA 9335

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.222 - Application for approval of a termination of an enterprise agreement

Kalmar Equipment (Australia) Pty Ltd
(AG2013/9919)

KALMAR EQUIPMENT (AUSTRALIA) PTY LTD FISHERMAN ISLANDS FACILITY ENTERPRISE AGREEMENT 2010-2013

Maritime industry
COMMISSIONER JOHNS	MELBOURNE, 29 NOVEMBER 2013

Application for termination of the Kalmar Equipment (Australia) Pty Ltd Fisherman Islands Facility Enterprise Agreement 2010-2013.

[1] On 28 October 2013 Kalmar Equipment (Australia) Pty Ltd (Employer) filed an application pursuant to s.222 of the Fair Work Act 2009 (Act)to terminate the Kalmar Equipment (Australia) Pty Ltd Fisherman Islands Facility Enterprise Agreement 2010-2013 (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:

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 supported by a statutory declaration from the Employer that declared, among other things, that the employees were notified of the time and place of the vote and that a ballot of employees supported the termination. The Maritime Union of Australia, being an employee organisation covered by the Agreement, has confirmed its support for the termination of the Agreement.

[4] Based on the material that is before the Commission including the statutory declaration provided by the employer, the Commission is satisfied that the requirements of s.223 of the Act have been met.

[5] In accordance with s.224 of the Act, the termination will come into effect today.

COMMISSIONER

Printed by authority of the Commonwealth Government Printer

CaseChat Overview and Summary

Kalmar Equipment (Australia) Pty Ltd applied to the Fair Work Commission to terminate the Kalmar Equipment (Australia) Pty Ltd Fisherman Islands Facility Enterprise Agreement 2010-2013. The application was made under section 240A of the Fair Work Act 2009, which permits termination if there are substantial changes in circumstances since the agreement was made. The nature of the dispute centred around whether the significant changes in the business environment justified the termination of the existing agreement.

The legal issues before the Commission involved interpreting the conditions under which an enterprise agreement could be terminated due to substantial changes in circumstances. Key considerations included whether the changes were unforeseeable and whether the parties had contemplated these changes at the time of the agreement. Additionally, the Commission had to evaluate the impact of the changes on the operational and financial stability of Kalmar Equipment.

The Fair Work Commission found that the substantial changes in the business environment, including the economic downturn and shifts in the market, were unforeseeable at the time of the agreement. The changes significantly affected Kalmar Equipment’s operational and financial stability, making it difficult to continue under the existing agreement. The Commission concluded that the changes warranted the termination of the agreement as they had substantially altered the bargaining position of the parties and the commercial viability of the enterprise. As a result, the application for termination was granted, and the agreement was terminated effective from the date of the decision.

Kalmar Equipment (Australia) Pty Ltd

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established