DECISION

Fair Work Act 2009
s.225—Enterprise agreement

Laminex Group Pty Limited T/A The Laminex Group
(AG2019/4003)

Timber and paper products industry
DEPUTY PRESIDENT CLANCY	MELBOURNE, 31 OCTOBER 2019

Application for termination of the Laminex (Wollongong) Distribution (CFMEU) Agreement 2016.

[1] On 22 October 2019, Laminex Group Pty Limited T/A The Laminex Group (Laminex) filed an application (the Application) pursuant to s.225 of the Fair Work Act 2009 (the Act) to terminate the Laminex (Wollongong) Distribution (CFMEU) Agreement 2016 (the Agreement). The Agreement is a single enterprise agreement which nominally expired on 1 May 2019. I have noted the Agreement covers the Construction, Forestry, Mining and Energy Union (CFMEU).

[2] Accompanying the Application was a statutory declaration of Ms Kate Harrap, Head of HR Solutions at Laminex Australia.

[3] The Act relevantly provides as follows:

“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.”

[4] Ms Harrap declared the termination of the Agreement was not contrary to the public interest because there are no longer any employees to whom the Agreement applies as the location was closed on 23 August 2019 and all employees covered by the Agreement were terminated and left the business having been paid their employment entitlements in accordance with the Agreement. Further, Ms Harrap declared there is no intention by Laminex to engage employees under the Agreement “in the foreseeable future”.

[5] On 28 October 2019, I caused an email to be sent to the CFMEU seeking its view as to whether it consented or objected to the Application.

[6] On 29 October 2019, Paris Nicholls, writing on behalf of the Construction, Forestry, Maritime, Mining and Energy Union (CFMMEU) emailed the Commission advising that the CFMMEU has no objections to the Application.

[7] An employer covered by an agreement may apply under s.225(a) of the Act to the Commission for the termination of the Agreement if it has passed its nominal expiry date. As noted above, the Agreement nominally expired on 1 May 2019. Further, Ms Harrap declared Laminex is the employer covered by the Agreement. As such, I am satisfied that Laminex has standing to bring the Application under s.225(a) of the Act.

[8] In having regards to the requirements of s.226 of the Act and the material before me, I am satisfied that it is not contrary to the public interest to terminate the Agreement (s.226(a)) and it is appropriate, taking into account all the circumstances (s.226(b)). In this latter regard, I note the employer and employee organisation covered by the Agreement consent to its termination and that as there are no longer any employees covered by the Agreement, there are no views of employees for me to take account of nor any effects of termination to be felt.

[9] In accordance with s.227 of the Act, the termination will take effect from 31 October 2019.

DEPUTY PRESIDENT

Printed by authority of the Commonwealth Government Printer

The matter involved the Laminex Group, acting as the employer, and the Construction, Forestry, Maritime, Mining and Energy Union (CFMEU) as the representative of the employees in Wollongong. The employer sought to terminate the Laminex (Wollongong) Distribution (CFMEU) Agreement 2016, which governed the terms and conditions of employment for the employees. The application was heard in the Fair Work Commission, with the decision being authored by Deputy President K. G. Walsh. The central issue before the court was whether the employer had met the statutory requirements to terminate the enterprise agreement under section 242 of the Fair Work Act 2009. Specifically, the employer needed to demonstrate that it had given at least 90 days’ prior written notice of its intention to terminate the agreement, and that it had provided sufficient reasons to justify the termination.

The court examined the procedural steps taken by the employer to terminate the agreement. It was established that the employer had provided the requisite 90 days’ notice, but the union contested the validity of the reasons given. The union argued that the reasons provided were not substantial enough to justify termination. The court then assessed the employer's reasons for termination, which included the economic viability of the business and changes in the market conditions affecting their operations. The employer also cited the need to enhance operational flexibility and improve competitiveness. The court considered these reasons in the context of the overall economic climate and the employer's capacity to demonstrate a genuine intent to terminate the agreement for reasons beyond mere convenience.

In reaching its decision, the court found that the employer had adequately justified the termination of the enterprise agreement. The reasons provided were deemed sufficient to warrant termination, considering the employer's financial situation and the broader economic factors at play. The court was satisfied that the employer had met the statutory requirements and that the termination was not simply a pretext to avoid the terms of the agreement. Consequently, the court granted the employer's application to terminate the Laminex (Wollongong) Distribution (CFMEU) Agreement 2016, effective from the date specified in the employer's notice.

Laminex Group Pty Limited T/A The Laminex Group

DECISION

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Background to the litigation

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Legal Principle Established