DECISION

Fair Work Act 2009
s.225—Enterprise agreement

Laminex Group Pty Limited T/A The Laminex Group
(AG2019/4004)

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

Application for termination of the Laminex (Wagga Wagga) 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 (Wagga Wagga) 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 13 September 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 the CFMEU to be sent 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, 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 parties involved in this case were Laminex Group Pty Limited, trading as The Laminex Group, and the Construction, Forestry, Maritime, Mining and Energy Union (CFMEU). The dispute centred around the termination of the Laminex (Wagga Wagga) Distribution (CFMEU) Agreement 2016, which governed the employment conditions of workers in the Laminex Wagga Wagga distribution centre. The case was heard in the Fair Work Commission. The primary legal issues before the court were whether the employer had valid grounds to terminate the agreement and whether the termination process complied with the Fair Work Act 2009.

The Laminex Group applied for the termination of the agreement, citing a significant downturn in business and a need to reduce costs. The employer argued that the agreement was no longer appropriate given the changed circumstances and that the termination was necessary for the business's economic survival. The CFMEU, on the other hand, contended that the termination was not justified and that the employer had not followed the correct procedures under the Fair Work Act. The union also argued that the termination would negatively impact the employees' job security and working conditions.

The Fair Work Commission considered the evidence presented by both parties and examined the provisions of the Fair Work Act. The court determined that the employer had valid grounds to apply for the termination of the agreement due to the significant economic downturn. However, the court also found that the employer had not followed the correct process for terminating the agreement, as required by the Fair Work Act. Specifically, the employer had failed to engage in good faith bargaining with the union before applying to the Commission. As a result, the application for termination was dismissed.

The Commission's decision emphasised the importance of good faith bargaining and the correct procedural steps in terminating an enterprise agreement. The Laminex Group was required to engage in further negotiations with the CFMEU before any further application for termination could be made. The final orders of the Commission were that the application for termination of the Laminex (Wagga Wagga) Distribution (CFMEU) Agreement 2016 be dismissed and that the parties must engage in good faith bargaining before any further application could be considered.

Laminex Group Pty Limited T/A The Laminex Group

DECISION

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Background to the litigation

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Reasons for decision

Legal Principle Established