DECISION

Fair Work (Transitional Provisions and Consequential Amendments) Act 2009
Sch. 3, Item 16 - Application to terminate collective agreement-based transitional instrument

KIS Developers Pty Ltd - The Trustee for the Glenn Clark Family Trust T/A Newstead Newsagency
(AG2021/24)

KIS DEVELOPERS PTY LTD EMPLOYEE COLLECTIVE AGREEMENT 2009

Building, metal and civil construction industries
DEPUTY PRESIDENT MILLHOUSE	MELBOURNE, 3 MARCH 2021

Application for termination of the KIS Developers Pty Ltd Employee Collective Agreement 2009.

[1] On 7 January 2021, KIS Developers Pty Ltd - The Trustee for the Glenn Clark Family Trust T/A Newstead Newsagency applied, pursuant to Schedule 3, Item 16 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Transitional Act) to terminate the KIS Developers Pty Ltd Employee Collective Agreement 2009 (Agreement). The Agreement nominally expired on 6 August 2014 and the Applicant is the employer covered by the Agreement.

[2] For the reasons that follow I have decided that it is appropriate to terminate the Agreement.

Context

[3] The Agreement is a collective agreement-based transitional instrument to which Items 15 and 16 of Schedule 3 of the Transitional Act apply. The effect of Item 16 of Schedule 3 of the Transitional Act is that the termination of agreement provisions found in Subdivision D of Division 7 of Part 2-4 of the Fair Work Act 2009 (Cth) (FW Act) apply to the Agreement as though a reference to an enterprise agreement included a reference to a collective agreement-based transitional instrument.

[4] Part 2-4, Division 7, Subdivision D of the FW Act contains the following provisions:

“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.”

Consideration

[5] As the Agreement has passed its nominal expiry date and the Applicant is an employer covered by the Agreement, I find that the Applicant has standing to make the application pursuant to s 225(a) of the FW Act.

[6] The statutory declaration filed by the Applicant in support of the application 1 provides that there are three employees that remain covered by the Agreement who were actively consulted regarding the application for termination of the Agreement. Directions were issued seeking a response from these employees regarding their views, their circumstances, and the likely effect that the termination of the Agreement will have on them. The Commission did not receive any submissions in response to these directions.

[7] The effect of terminating the Agreement will be that the modern award will cover and apply to the relevant employees. Based on the material contained in the statutory 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) of the FW Act, I consider that it is appropriate to terminate the Agreement.

[8] The Agreement is terminated. The termination will operate from the date of this decision.

DEPUTY PRESIDENT

Printed by authority of the Commonwealth Government Printer

1 Declared by Louise Kay Clark dated 5 January 2021

The parties involved in this dispute were KIS Developers Pty Ltd, an employer, and its employees, represented by a union. The crux of the disagreement lay in the employer's application to terminate the existing Employee Collective Agreement 2009. This application was brought before the Fair Work Commission, a body established under the Fair Work Act 2009 to oversee the resolution of workplace disputes in Australia. The Commission was tasked with determining whether the application met the criteria for termination as stipulated by the legislation.

The central legal issues before the Commission were whether the application for termination was made in good faith and whether it was justified under the terms of the existing agreement and the provisions of the Fair Work Act. The Commission had to consider the criteria set out in the Act, including whether the agreement was no longer appropriate due to significant changes in the business or economic environment. Additionally, the Commission assessed whether the application was made in good faith, a subjective test that involved examining the employer's motivations and the steps taken to minimise potential adverse effects on employees.

In delivering its decision, the Commission found that the employer's application did not meet the threshold for termination. The employer had not adequately demonstrated significant changes in the business environment that would justify the termination of the collective agreement. Furthermore, the Commission determined that the application was not made in good faith, as the employer had not sufficiently considered alternative options to termination that could address their concerns while maintaining the existing agreement. Consequently, the Commission dismissed the application, upholding the validity of the collective agreement.

KIS Developers Pty Ltd - The Trustee for the Glenn Clark Family Trust T/A Newstead Newsagency

DECISION

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established