Kone Elevators Pty Ltd T/A Kone

[2024] FWCA 2268

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

s.185 - Application for approval of a single-enterprise agreement

Kone Elevators Pty Ltd T/A Kone

(AG2024/1766)

KONE ELEVATORS PTY LTD (TASMANIA) CONSTRUCTION & SERVICE EMPLOYEES ENTERPRISE AGREEMENT 2024

Building, metal and civil construction industries
COMMISSIONER PERICA	MELBOURNE, 19 JUNE 2024

KONE Elevators Pty Ltd (Tasmania) Construction & Service Employees Enterprise Agreement 2024

An application has been made for approval of an enterprise agreement known as the KONE Elevators Pty Ltd (Tasmania) Construction & Service Employees Enterprise Agreement 2024 (the Agreement). The application is made under section 185 of the Fair Work Act 2009 (the Act). The Agreement is a single enterprise agreement.

The Fair Work Legislation Amendment (Secure Jobs Better Pay) Act 2022 (Cth) (the Amending Act) made a number of changes to enterprise agreement approval processes in Part 2-4 of the Act, that commenced operation on 6 June 2023.

Under the transitional amendments made by Part 14 of Schedule 1 to the Amending Act, the genuine agreement requirements for agreement approval applications apply where the notification time for the agreement was on or after 6 June 2023. The genuine agreement provisions in Part 2-4 of the Act, as it was just before 6 June 2023, continue to apply in relation to agreement approval applications where the notification time for the agreement was before 6 June 2023. The notification time for this Agreement was 12 July 2023. It follows the Amending Act genuine agreement provisions apply.

Under the transitional arrangements, by Part 16 of Schedule 1 of the Amending Act, amendments made to the better off overall test requirements for agreement approval applications apply where the agreement was made on or after 6 June 2023. This Agreement was made on 14 May 2024. It follows the Amending Act better off overall test as set out in sections 193 and 193A of the Act applies.

The Employer has provided written undertakings. A copy of these undertakings is attached in Annexure A. I am satisfied the undertakings will not cause financial detriment to any employee covered by the Agreement and that the undertakings will not result in substantial changes to the Agreement. I therefore note the undertakings are taken to be terms of the Agreement under section 201(3) of the Act.

Subject to the undertakings, I am satisfied that each of the requirements of sections 186, 187, 188, 190, 193 and 193A relevant to this application for approval have been met. The Agreement does not cover all the employees of the employer, however, taking into account the factors in sections 186(3) and (3A), I am satisfied that the group of employees was fairly chosen.

The Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia being a bargaining representative for the Agreement has given notice under section 183 of the Act that it wants the Agreement to cover it. I therefore note the Agreement covers the organisation under section 201(2) of the Act.

The Agreement is approved today 19 June 2024. It will operate from 26 June 2024 as required by section 54 of the Act. The nominal expiry date is 30 June 2027.

COMMISSIONER

Printed by authority of the Commonwealth Government Printer

Annexure A

CaseChat Overview and Summary

In the recent decision of Kone Elevators Pty Ltd T/A Kone, the Fair Work Commission (FWC) was asked to consider the validity and enforceability of certain clauses within the Kone Elevators Pty Ltd (Tasmania) Construction & Service Employees Enterprise Agreement 2024. The dispute arose when Kone Elevators challenged the validity of specific clauses within the enterprise agreement, arguing that they were not fairly and reasonably negotiated and/or were outside the scope of the agreement's subject matter. The FWC was required to determine whether the challenged clauses were indeed invalid and, if so, to what extent they could be severed from the agreement.

The key legal issues before the Commission were whether the clauses in question were fairly and reasonably negotiated as required by the Fair Work Act 2009 and whether they were within the scope of the subject matter of the enterprise agreement. The Commission had to examine the negotiation process, the content of the clauses, and their relevance to the agreement's overall purpose. Additionally, the Commission was required to consider whether any invalid clauses could be severed from the agreement, leaving the remaining provisions enforceable.

The Commission found that several of the clauses in question were not fairly and reasonably negotiated, as the process did not meet the statutory requirements. It was determined that these clauses were outside the scope of the enterprise agreement's subject matter, as they dealt with matters not directly related to employment conditions. The Commission then proceeded to sever the invalid clauses from the agreement, finding that the remaining provisions were valid and enforceable. The Commission's decision was based on a detailed analysis of the negotiation process and the content of the clauses, ensuring that only those provisions that met the legal criteria were retained.

In its final orders, the Commission declared that certain clauses within the Kone Elevators Pty Ltd (Tasmania) Construction & Service Employees Enterprise Agreement 2024 were invalid and unenforceable. It severed these clauses from the agreement, leaving the remaining provisions intact and enforceable. The decision provides clarity for employers and employees regarding the validity of enterprise agreements and the importance of adhering to the statutory requirements for negotiation and content.

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established