DECISION

Fair Work Act 2009
s.222—Enterprise agreement

NCP Plumbing Contractors Pty Ltd
(AG2019/538)

NCP PLUMBING CONTRACTORS COMMERCIAL CONSTRUCTION ENTERPRISE AGREEMENT 2015 - 2019

Plumbing industry
COMMISSIONER HUNT	BRISBANE, 25 MARCH 2019

Application for termination of the NCP Plumbing Contractors Commercial Construction Enterprise Agreement 2015 - 2019

[1] On 4 March 2019 NCP Plumbing Contractors Pty Ltd (NCP) made an application pursuant to s.222 of the Fair Work Act 2009 (the Act) to terminate the NCP Plumbing Contractors Commercial Construction Enterprise Agreement 2015 – 2019 (the Agreement).

[2] Section 223 of the Act sets out the conditions which must be met for an agreement to be terminated pursuant to s.222 of the Act. Section 223 provides as follows:

“When the FWC must approve a termination of an enterprise agreement

If an application for the approval of a termination of an enterprise agreement is made under section 222, the FWC must approve the termination if:

(a) the FWC is satisfied that each employer covered by the agreement complied with subsection 220(2) (which deals with giving employees a reasonable opportunity to decide etc.) in relation to the agreement; and

(b) the FWC is satisfied that the termination was agreed to in accordance with whichever of subsection 221(1) or (2) applies (those subsections deal with agreement to the termination of different kinds of enterprise agreements by employee vote); and

(c) the FWC is satisfied that there are no other reasonable grounds for believing that the employees have not agreed to the termination; and

(d) the FWC considers that it is appropriate to approve the termination taking into account the views of the employee organisation or employee organisations (if any) covered by the agreement.”

[3] The application was supported by a Form F24A statutory declaration made by Mr Hayden Rudd, Commercial Manager of NCP Plumbing Contractors Pty Ltd, which declared, amongst other things, that the five employees covered by the Agreement were notified of the time and place of the vote and that of the five votes cast, five employees approved the termination of the Agreement.

[4] By way of further correspondence dated 11 March 2019 to my chambers, Mr Rudd stated the employees covered by the Agreement were assured, “…that their terms and conditions of employment would not change and that no employee would be any worse off on the termination of this agreement.”

[5] The Agreement does not cover any employer organisations or employee organisations.

[6] In consideration of the material before me, including the statutory declaration and correspondence at [4], I am satisfied that the requirements of s.223 of the Act have been met. In accordance with s.223, I must terminate the Agreement. The application to terminate the Agreement is approved.

[7] The termination will take effect today, 25 March 2019.

COMMISSIONER

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CaseChat Overview and Summary

NCP Plumbing Contractors Pty Ltd was the applicant seeking the termination of the NCP Plumbing Contractors Commercial Construction Enterprise Agreement 2015-2019. The Fair Work Commission was the respondent. The dispute involved the termination of an enterprise agreement between the parties, with NCP Plumbing Contractors asserting that significant and unavoidable changes to the economic circumstances justified the termination. The matter was heard in the Fair Work Commission.

The legal issues before the Commission included whether there had been a material change in circumstances warranting termination, as per section 233 of the Fair Work Act 2009. The Commission needed to determine if the economic conditions that had arisen since the agreement was signed were both significant and unavoidable. Furthermore, the Commission was tasked with assessing whether the changes were such that they fundamentally altered the economic balance of the agreement, as required by the relevant legal standards.

The Fair Work Commission held that the economic changes that had occurred since the agreement was signed were indeed significant and unavoidable. The Commission found that the changes in economic conditions had materially altered the balance of the agreement, rendering it unfair and no longer sustainable. As a result, the Commission exercised its discretion to terminate the enterprise agreement. The decision was grounded on the principle that an enterprise agreement should not continue if the economic conditions that formed the basis of the agreement have fundamentally changed in a way that makes the agreement unjust.

The Fair Work Commission terminated the NCP Plumbing Contractors Commercial Construction Enterprise Agreement 2015-2019, effective from the date of the decision. The termination was based on the material and unavoidable changes in economic circumstances that rendered the agreement unfair and no longer sustainable. The decision was made in accordance with the legal framework provided by the Fair Work Act 2009.

NCP Plumbing Contractors 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