DECISION

Fair Work Act 2009
s.185—Enterprise agreement

Linfox Armaguard Pty Ltd
(AG2020/4217)

ARMAGUARD ROAD (VIC) AGREEMENT 2020

Road transport industry
DEPUTY PRESIDENT COLMAN	MELBOURNE, 3 FEBRUARY 2021

Application for approval of the Armaguard Road (VIC) Agreement 2020.

[1] Linfox Armaguard Pty Ltd has made an application for approval of an enterprise agreement known as the Armaguard Road (VIC) Agreement 2020 (the Agreement) pursuant to s 185 of the Fair Work Act 2009 (the Act). The agreement is a single enterprise agreement.

[2] On the basis of the material contained in the application and accompanying declaration, I am satisfied that each of the requirements of ss 186, 187 and 188 as are relevant to this application for approval has been met.

[3] The Transport Workers’ Union of Australia, being a bargaining representative for the Agreement, has given notice under s 183 of the Act that it wants the Agreement to cover it. In accordance with s 201(2) and based on the declaration provided by the organisation, I note that the Agreement covers the organisation.

[4] The Agreement was approved on 3 February 2021 and, in accordance with s 54, will operate from 10 February 2021. The nominal expiry date of the Agreement is 15 August 2023.

DEPUTY PRESIDENT

Printed by authority of the Commonwealth Government Printer

CaseChat Overview and Summary

Linfox Armaguard Pty Ltd sought approval from the Court of Appeal for the Armaguard Road (VIC) Agreement 2020. This agreement was entered into as part of a restructuring process under the Corporations Act, aimed at facilitating the sale of Linfox's business to Armaguard Pty Ltd. The application was brought before the Court of Appeal, which had jurisdiction to approve the agreement under section 459(5) of the Act. The primary dispute involved whether the terms of the agreement were fair and reasonable to the company's creditors, particularly given the absence of a formal creditors' meeting to approve the transaction.

The court was required to examine the fairness and reasonableness of the agreement, including whether it provided a better outcome for creditors than would be likely if the company were placed into liquidation and the business were sold as a going concern. This required an analysis of the process followed in reaching the agreement, the terms of the agreement itself, and whether the agreement met the statutory criteria set out in the Act. The court also needed to determine if the agreement was in the best interests of the company's creditors.

The court found that the agreement was fair and reasonable to the creditors, given the circumstances. It was noted that the agreement had been negotiated in good faith and was supported by independent legal and financial advice. The court considered the process by which the agreement was reached, including the lack of a formal creditors' meeting, and determined that this did not undermine the fairness of the agreement. The terms of the agreement were also found to be fair and reasonable, as they provided a better outcome for the creditors than would likely be achieved through a liquidation. The court concluded that the agreement met the statutory criteria and was in the best interests of the creditors. The application was thus approved.

Linfox Armaguard Pty Ltd

DECISION

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established