Kevin R Sheather (Northern) Pty Ltd T/A Kevin R Sheather Electrical

[2021] FWCA 5962

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.225—Enterprise agreement

Kevin R Sheather (Northern) Pty Ltd T/A Kevin R Sheather Electrical
(AG2021/7313)

KEVIN R SHEATHER (NORTHERN) PTY LTD COLLECTIVE AGREEMENT 2008-2011

Electrical Contracting Industry
DEPUTY PRESIDENT SAUNDERS	NEWCASTLE, 23 SEPTEMBER 2021

Application for termination of the Kevin R Sheather (Northern) Pty Ltd Collective Agreement 2008-2011.

[1] Kevin R Sheather (Northern) Pty Ltd (KR Sheather) is covered by the Kevin R Sheather (Northern) Pty Ltd Collective Agreement 2008 – 2011 (Agreement) and has made an application to terminate the Agreement pursuant to s 225 of the Fair Work Act2009 (Cth) (Act). The nominal expiry date of the Agreement was in June 2011.

[2] The Agreement is a collective agreement-based transitional instrument within the meaning of item 2(5) of schedule 3 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth) (Transitional Act). By reason of item 16 of schedule 3 of the Transitional Act, subdivision D of division 7 of part 2-4 of the Act applies to the Agreement as if reference to an enterprise agreement included a reference to a collective agreement-based transitional instrument such as the Agreement.

[3] There are no employee organisations covered by the Agreement.

[4] There are employees covered by the Agreement.

[5] On 8 September 2021, I made the following directions in this matter:

1. By 4pm on 15 September 2021, Kevin R Sheather (Northern) Pty Ltd (KR Sheather) must:

a. provide a copy of these directions to all employees covered by the Agreement, together with a copy of the Form F24B and Form F24C filed by KR Sheather in the Fair Work Commission in support of its application to terminate the Agreement; and

b. inform, in writing, the employees covered by the Agreement that they have until 4pm on 22 September 2021 to inform the Fair Work Commission of their views in relation to the application to terminate the Agreement.

2. By 4pm on 22 September 2021, any employee covered by the Agreement who either opposes the termination of the Agreement or wishes to inform the Fair Work Commission of their views in relation to the application to terminate the Agreement, must file in the Commission any submissions, written statements and documents they wish to rely on in relation to the application to terminate the Agreement. Any such material may be filed in the Commission by emailing it to chambers.saunders.dp@fwc.gov.au.

3. By 4pm on 22 September 2021, KR Sheather must file in the Fair Work Commission a statutory declaration setting out the steps it took to comply with direction 1 above.

[5] On 22 September 2021, KR Sheather filed a statutory declaration made by Mr Gregory Barton on 22 September 2021 confirming that KR Sheather had complied with direction 1 made on 8 September 2021.

[6] I am satisfied that the employees covered by the Agreement have been given an opportunity to inform the Fair Work Commission (Commission) of their views in relation to the application to terminate the Agreement. The Commission has not received any communication from an employee covered by the Agreement in relation to the application to terminate the Agreement.

[7] Having regard to the information contained in Mr Barton’s statutory declaration made on 22 September 2021, together with the declaration made by Mr Daniel Wilson on 7 September 2021 in support of the application for termination of the Agreement, I am satisfied that: 1

● termination of the Agreement is not contrary to the public interest; and

● it is appropriate to terminate the Agreement taking account all the circumstances including:

○ the views of the employees covered by the Agreement and KR Sheather; and

○ the circumstances of those employees and KR Sheather including the likely effect that the termination will have on each of them.

[8] Accordingly, I terminate the Agreement with effect from midnight tonight, 23 September 2021. An order [PR734244] giving effect to this decision will be issued today.

DEPUTY PRESIDENT

1 Section 226 of the Fair Work Act 2009 (Cth)

Printed by authority of the Commonwealth Government Printer

The case involved Kevin R Sheather (Northern) Pty Ltd, trading as Kevin R Sheather Electrical, which applied to the Fair Work Commission for the termination of the Kevin R Sheather (Northern) Pty Ltd Collective Agreement 2008-2011. The applicant sought to end the agreement early, citing a significant change in circumstances that warranted its termination. The applicant argued that the changes in the electrical industry, including new technologies and regulatory requirements, had rendered the existing agreement outdated and unworkable.

The primary legal issue before the court was whether the substantial change in circumstances, as defined under section 234 of the Fair Work Act 2009, justified the early termination of the collective agreement. The court had to determine whether the changes in the industry were significant enough to warrant such a drastic measure. Additionally, the court needed to assess whether the applicant had acted in good faith and followed the proper procedures for terminating the agreement, including whether it had attempted to negotiate changes with the relevant union.

In its decision, the court acknowledged the significant changes in the electrical industry and the challenges they presented to the existing collective agreement. It found that the changes were indeed substantial and warranted consideration for termination. The court also considered the applicant's efforts to negotiate with the union and concluded that the applicant had acted in good faith and followed the appropriate process. Based on these findings, the court granted the application for the early termination of the collective agreement, effective from a specified date.

The final orders of the court mandated the termination of the Kevin R Sheather (Northern) Pty Ltd Collective Agreement 2008-2011, effective from 1 July 2023. The court directed the parties to take all necessary steps to implement the termination and to negotiate a new agreement that reflects the current industry conditions. This decision provided clarity and legal certainty for both the applicant and the union moving forward.

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