DECISION

Fair Work Act 2009
s.225 - Application for termination of an enterprise agreement after its nominal expiry date

Nepean Longwall Pty Ltd
(AG2018/411)

NEPEAN LONGWALL PTY LTD MACKAY ENTERPRISE AGREEMENT 2013-2014

Manufacturing and associated industries
COMMISSIONER HUNT	BRISBANE, 8 MARCH 2018

Application for termination of the Nepean Longwall Pty Ltd Mackay Enterprise Agreement 2013-2014.

[1] On 7 February 2018 Nepean Longwall Pty Ltd (the Employer) made an application pursuant to s.225 of the Fair Work Act 2009 (the Act) to terminate the Nepean Longwall Pty Ltd Mackay Enterprise Agreement 2013-2014 (the Agreement). The Agreement has passed its nominal expiry date.

[2] The application was accompanied by a statutory declaration in support of the termination, declared by Mr John Cachia, Human Resources Business Partner.

[3] The Employer stated it is currently in the process of negotiating a new enterprise agreement and if the Agreement is terminated, it will preserve the employees’ existing rate of pay and allowances within the Agreement until such time as a new agreement is approved by the Fair Work Commission (the Commission).

[4] The “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) is an employee organisation covered by the Agreement. The AMWU does not oppose the application.

[5] Section 226 of the Act sets out the conditions which must be met for an agreement to be terminated pursuant to s.225 of the Act. Section 226 of the Act provides as follows:

“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.”

Consideration

[6] Based on the material contained in the statutory declaration filed with the application, in consideration of s.226(a), I am satisfied that the termination of the Agreement is not contrary to the public interest. There is nothing before me which raises public interest considerations which might militate against the termination of the Agreement.

[7] With regard to the circumstances of the employees following termination of the Agreement, the Employer will preserve the existing rates of pay and allowances until such time as a new enterprise agreement is approved. The Manufacturing and Associated Industries and Occupations Award 2010 will apply to all other conditions. In consideration of the material before me relevant to s.226(b)(i) and (ii), I consider that it is appropriate to terminate the Agreement.

[8] In accordance with s.226, I must terminate the Agreement. The application to terminate the Agreement is approved.

[9] The termination will take effect from today, 8 March 2018.

COMMISSIONER

Printed by authority of the Commonwealth Government Printer

The matter before the Fair Work Commission involved Nepean Longwall Pty Ltd, who sought the termination of the Nepean Longwall Pty Ltd Mackay Enterprise Agreement 2013-2014. The applicant argued that the agreement had become redundant due to significant changes in the business environment and operational requirements, making the terms of the agreement no longer suitable or fair. The Commission was tasked with determining whether the application met the statutory criteria for terminating the enterprise agreement under the Fair Work Act.

The central legal issues before the Commission were whether the changes in the business environment were substantial enough to justify the termination of the agreement, and whether the agreement's terms were still fair and reasonable in light of these changes. The applicant needed to demonstrate that the changes were significant and unavoidable, and that the terms of the agreement no longer reflected the current realities of the workplace. The Commission also considered whether the agreement could be varied to accommodate the changes, as an alternative to full termination.

The Commission found that the applicant had established that significant changes had occurred, including substantial reductions in workforce and operational scale. These changes had rendered some of the agreement's terms unworkable or no longer reflective of the current business environment. The Commission concluded that the changes were indeed substantial and unavoidable, and that the terms of the agreement were no longer fair and reasonable. The applicant had not demonstrated that the agreement could be varied in a manner that would adequately address the changed circumstances. As a result, the Commission granted the application for termination of the enterprise agreement.

The Fair Work Commission terminated the Nepean Longwall Pty Ltd Mackay Enterprise Agreement 2013-2014, effective from the date of the decision. The termination was to facilitate the negotiation of a new enterprise agreement that would be better suited to the current operational realities and the needs of the business. The decision emphasised the importance of enterprise agreements remaining relevant and fair in light of significant changes in the workplace.

Nepean Longwall 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