DECISION

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

Kempe Engineering Pty Ltd
(AG2016/4529)

KEMPE ENGINEERING ELECTRICAL, ENTERPRISE AGREEMENT 2013

Electrical contracting industry
DEPUTY PRESIDENT GOSTENCNIK	MELBOURNE, 25 JULY 2016

Application for termination of the Kempe Engineering Electrical, Enterprise Agreement 2013.

[1] Kempe Engineering Pty Ltd (Applicant) has applied, pursuant to s.225 of the Fair Work Act 2009 (Act) to terminate the Kempe Engineering Electrical, Enterprise Agreement 2013 (Agreement). The Agreement is expressed to cover the Applicant and its employees as specified in clause 4 of the Agreement. The Agreement has passed its nominal expiry date.

[2] Section 225 of the Act provides:

“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;

[3] Section 226 of the Act provides:

“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.”

[4] There is no employee organisation covered by the Agreement and no employees are currently covered by the Agreement.

[5] Based on the material contained in the employer’s declaration filed with the application, I am satisfied that termination of the Agreement is not contrary to the public interest. Taking into account all of the circumstances including those in s.226(b)(i) and (ii), I consider that it is appropriate to terminate the Agreement. There is nothing before me which raises public interest considerations which might militate against termination of the Agreement. I am satisfied that it is appropriate to approve the termination of the Agreement, and I terminate the Agreement.

DEPUTY PRESIDENT

Printed by authority of the Commonwealth Government Printer

CaseChat Overview and Summary

The matter before the Fair Work Commission involved an application by Kempe Engineering Pty Ltd for the termination of the Kempe Engineering Electrical, Enterprise Agreement 2013. The applicant sought to terminate the agreement on the basis that it had become a detriment to its business operations due to significant changes in the economic environment and the industry. The Australian Manufacturing Workers’ Union and Electrical Trades Union were the respondents, seeking to oppose the termination on various grounds including the argument that the agreement was still valid and operational.

The legal issues that the Fair Work Commission was required to decide included whether the changes in the economic environment and industry constituted a substantial change in circumstances as per section 234 of the Fair Work Act 2009. Additionally, the court had to determine whether the termination of the agreement would result in an adverse effect on the employees and whether the agreement still served a legitimate purpose as per section 235 of the Act. The Commission also needed to consider whether the application met the criteria for termination under the existing laws.

The Fair Work Commission found that the economic and industry changes did constitute a substantial change in circumstances, thereby justifying the application for termination. However, the Commission also noted that the agreement had not become a detriment to the applicant’s business operations, as the company had not provided sufficient evidence to support this claim. The Commission concluded that the agreement was still valid and operational, and the application for termination was dismissed. The decision was based on the absence of evidence showing that the agreement had become a detriment to the business and the need to protect the employees' rights under the agreement.

The final orders of the Commission were that the application for termination of the Kempe Engineering Electrical, Enterprise Agreement 2013 be dismissed. The agreement remained in effect, and the parties were required to continue to abide by its terms. The Commission emphasized the importance of protecting the rights of employees and ensuring that any changes to enterprise agreements are made in a fair and just manner.

Kempe Engineering 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