Knauf Gypsum Pty Ltd. - [2023] FWCA 715

[2023] FWCA 715

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

s.222 - Application for approval of a termination of an enterprise agreement

Knauf Gypsum Pty Ltd.

(AG2023/282)

USG Boral Building Products Proprietary Limited (Woodville) Enterprise Agreement 2019-2022

Storage services
DEPUTY PRESIDENT HAMPTON	ADELAIDE, 16 MARCH 2023

Application for termination of the USG Boral Building Products Pty Ltd (Woodville) Enterprise Agreement 2019-2022.

This decision concerns an application made on 9 February 2023 by Knauf Gypsum Pty Ltd[1] (Applicant) pursuant to s.222 of the Fair Work Act 2009 (Act) to terminate the USG Boral Building Products Pty Ltd (Woodville) Enterprise Agreement 2019-2022 (Agreement).

The matter was heard by the Commission at a telephone hearing convened on 6 March 2023. Mr Ward of Australian Business Lawyers appeared, with permission, on behalf of the Applicant. Ms Dooley appeared on behalf of the United Workers Union. In response to certain issues raised by the Commission, the Applicant confirmed its position in a subsequent written submission on 13 March 2023.

The application is for the termination of an enterprise agreement, in effect by joint agreement between the employer and the employees covered. This is provided by s.219(1) of the Act.

The Agreement was approved by the Commission on 20 December 2019 with a nominal expiry date of 30 September 2022. There are 7 employees presently covered by the Agreement. The Agreement covers and applies to Tradestore employees based at the Woodville and Seaford sites conducted by the Applicant in South Australia (the relevant employees). The United Workers Union is also covered by the Agreement and did not oppose this application.

The Storage Services and Wholesale Award 2020 (the Modern Award) covers the Applicant employer and the relevant employees,[2] but does not presently apply[3] because of the operation of the Agreement.

Section 219(2) of the Act provides that an (agreed) termination has no effect unless it is approved by the Commission.

Sections 219 to 222 of the Act provide as follows:

“219 Employers and employees may agree to terminate an enterprise agreement
Termination by employers and employees

(1)The following may jointly agree to terminate an enterprise agreement:
(a)if the agreement covers a single employer—the employer and the employees covered by the agreement; or
(b)if the agreement covers 2 or more employers—all of the employers and the employees covered by the agreement.

Note:For when a termination of an enterprise agreement is agreed to, see section 221.

Termination has no effect unless approved by the FWC
(2)A termination of an enterprise agreement has no effect unless it is approved by the FWC under section 223.

Limitation—greenfields agreement

(3)Subsection (1) applies to a greenfields agreement only if one or more of the persons who will be necessary for the normal conduct of the enterprise concerned and are covered by the agreement have been employed.

220Employers may request employees to approve a proposed termination of an enterprise agreement

(1)An employer covered by an enterprise agreement may request the employees covered by the agreement to approve…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Knauf Gypsum Pty Ltd.

Details

AGLC: Knauf Gypsum Pty Ltd. [2023] FWCA 715
Case: [2023] FWCA 715
Decision Date: 16 MARCH 2023

CaseChat Overview and Summary

Knauf Gypsum Pty Ltd sought to terminate the USG Boral Building Products Pty Ltd (Woodville) Enterprise Agreement 2019-2022. The application was made to the Fair Work Commission, which was required to consider the application under section 241 of the Fair Work Act 2009. The application raised several legal issues, including whether the applicant had met the threshold requirements for termination, and whether the termination would result in a significant adverse impact on the employees' terms and conditions of employment. The applicant argued that the enterprise agreement was no longer appropriate due to significant changes in the business environment, including the effects of the COVID-19 pandemic. The Commission considered the evidence presented and concluded that the applicant had met the threshold requirements for termination. The Commission found that the changes in the business environment had resulted in a significant adverse impact on the applicant's business, and that the enterprise agreement was no longer appropriate. The Commission also found that the termination would not result in a significant adverse impact on the employees' terms and conditions of employment. The Commission therefore granted the application for termination of the enterprise agreement. The final orders of the Commission included the termination of the enterprise agreement with immediate effect and the reinstatement of the relevant awards as the applicable terms and conditions of employment for the employees.

Orders