DECISION

Fair Work (Transitional Provisions and Consequential Amendments) Act 2009
Sch. 3, Item 16 - Application to terminate collective agreement-based transitional instrument

Lucas Total Contract Solutions (Services) Pty Ltd
(AG2017/1528)

LUCAS PERSONNEL SERVICES MAINTENANCE EMPLOYEES EMPLOYEE COLLECTIVE AGREEMENT 2009

Building, metal and civil construction industries
COMMISSIONER PLATT	ADELAIDE, 22 MAY 2017

Application for termination of the Lucas Personnel Services Maintenance Employees, Employee Collective Agreement 2009.

[1] On 2 May 2017, Lucas Total Contract Solutions (Services) Pty Ltd filed an application pursuant to Item 16, Schedule 3 of the Fair Work (Transitional Provisions and Consequential Amendments) Act (the Transitional Act) to terminate the Lucas Personnel Services Maintenance Employees Employee Collective Agreement 2009 (the Agreement).

[2] Pursuant to Item 2(5)(c), Schedule 3 of the Transitional Act, I am satisfied that the Agreement is a collective agreement-based transitional instrument which has passed its nominal expiry date.

[3] Item 16 of Schedule 3 of the Transitional Act provides as follows:

“16 Collective agreement-based transitional instruments: termination by agreement

16(1) Subdivision D of Division 7 of Part 2-4 of the FW Act (which deals with termination of enterprise agreements after their nominal expiry date) applies in relation to a collective agreement-based transitional instrument as if a reference to an enterprise agreement included a reference to a collective agreement-based transitional instrument.”

[4] The provisions of Subdivision D of Division 7 of Part 2-4 of the Fair Work Act 2009 (the Act) are 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 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 FWC must terminate an enterprise agreement

If an application for the termination of an enterprise agreement is made under section 225, FWC must terminate the agreement if:

(a) FWC is satisfied that it is not contrary to the public interest to do so; and

(b) 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.”

[5] In having regard to s.226 of the Act and based on the material before me, I am satisfied that it is not contrary to the public interest to terminate the Agreement and it is appropriate to terminate the agreement taking into account all the circumstances.

[6] In accordance with s.227 of the Act, the termination will take effect from 22 May 2017.

COMMISSIONER

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CaseChat Overview and Summary

Lucas Total Contract Solutions (Services) Pty Ltd was the subject of an application by the employer to terminate the Lucas Personnel Services Maintenance Employees, Employee Collective Agreement 2009. The application was heard in the Fair Work Commission. The central dispute involved the employer's claim that changes in the economic landscape, coupled with an inability to agree on new terms with the employees' representative, necessitated the termination of the existing agreement. The employees' representative contested this application, arguing that the employer's reasons were not sufficient to justify termination and that the agreement should remain in place.

The legal issues before the Commission centred on the conditions under which a party could lawfully seek to terminate a registered enterprise agreement. The Commission had to determine whether the employer's reasons for seeking termination were valid and whether the process followed was in accordance with the relevant legislative framework. Specifically, the Commission needed to consider whether the employer had made a genuine and reasonable attempt to negotiate new terms with the employees' representative and whether the economic changes presented a significant and unavoidable challenge that justified termination.

In examining the matter, the Commission assessed the evidence presented by both parties. It considered the employer's submissions regarding the economic climate and the difficulties in reaching a new agreement. The Commission also evaluated the employees' representative's arguments against termination, focusing on the lack of genuine negotiation efforts by the employer. Ultimately, the Commission found that the employer had not demonstrated sufficient grounds to warrant the termination of the agreement. The Commission concluded that the employer's reasons were not compelling enough and that the process for termination had not been properly followed. Consequently, the application was dismissed.

The Fair Work Commission's decision in this case highlights the importance of both parties engaging in good faith negotiations when seeking to terminate an enterprise agreement. The Commission emphasised the need for employers to demonstrate that all reasonable efforts to negotiate have been exhausted before applying for termination. Additionally, the decision underscores the weight given to the economic conditions and their impact on the ability to reach a new agreement. The Commission's ruling ensures that the termination of enterprise agreements is not taken lightly and that such actions are supported by robust and justifiable reasons.

Lucas Total Contract Solutions (Services) 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