DECISION

Fair Work Act 2009
s.222—Enterprise agreement

New Edge Group (Australia) Pty Ltd
(AG2021/5760)

NEW EDGE GROUP AUSTRALIA PTY LTD & ETU SYDNEY CONSTRUCTION ENTERPRISE AGREEMENT 2020

Electrical contracting industry
DEPUTY PRESIDENT COLMAN	MELBOURNE, 2 JULY 2021

Application for termination of the New Edge Group Australia Pty Ltd & ETU Sydney Construction Enterprise Agreement 2020.

[1] This decision concerns an application made by New Edge Group (Australia) Pty Ltd (company) to terminate the New Edge Group Australia Pty Ltd & ETU Sydney Construction Enterprise Agreement 2020 (Agreement). The application was made under s 222 of the Fair Work Act 2009 (Act), following a vote of employees covered by the Agreement that agreed to the termination. The Agreement is a single enterprise agreement. Its nominal expiry date is 31 October 2022.

[2] The application to terminate the Agreement arises in circumstances where the wrong version of the Agreement was submitted to the Commission and approved under s 185. The Commission has no power to revoke a decision to approve an enterprise agreement (see s 603(3)(b)). A new enterprise agreement, reflecting the correct text of the Agreement, has recently been approved by vote of the employees in question, and an application has now been made for its approval by the Commission. That application has been allocated to my chambers.

[3] The Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU) is covered by the Agreement. On 1 July 2021, the CEPU advised my chambers that it did not wish to be heard in relation to the application to terminate the Agreement. It requested however that the Commission align the commencement of operation of the termination of the Agreement with the commencement of operation of the new agreement. This is a sensible course.

[4] The relevant provisions of the Act are as follows:

“222 Application for the FWC’s approval of a termination of an enterprise agreement

Application for approval

(1) If a termination of an enterprise agreement has been agreed to, a person covered by the agreement must apply to the FWC for approval of the termination.

Material to accompany the application

(2) The application must be accompanied by any declarations that are required by the procedural rules to accompany the application.

When the application must be made

(3) The application must be made:

(a) within 14 days after the termination is agreed to; or

(b) if in all the circumstances the FWC considers it fair to extend that period—within such further period as the FWC allows.

223 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.

224 When termination comes into operation

If a termination of an enterprise agreement is approved under section 223, the termination operates from the day specified in the decision to approve the termination.”

[5] Based on the material provided to the Commission by the company, including the declaration of Mr David Dusevic, I am satisfied that each of the requirements in s 223 of the Act has been met. I am satisfied that the company complied with s 220(2) by giving employees a reasonable opportunity to decide whether they wanted to approve the termination, and that the termination was agreed to in accordance with s 221(1), as all employees who cast a valid vote approved the termination. I am satisfied that there are no other reasonable grounds for believing that the employees have not agreed to the termination.

[6] Taking into account all of the circumstances, I consider that it is appropriate to terminate the Agreement. Pursuant to s 224, the day specified for the commencement of operation of the termination will be 9 July 2021. In this regard, I note that the company’s application for approval of the new agreement will be approved separately today, and will therefore come into operation seven days later, on 9 July 2021 (see s 54(1)(a).

[7] An order giving effect to this decision will be issued separately in PR731250.

DEPUTY PRESIDENT

Printed by authority of the Commonwealth Government Printer

The case before the Fair Work Commission was an application by New Edge Group (Australia) Pty Ltd to terminate the New Edge Group Australia Pty Ltd & ETU Sydney Construction Enterprise Agreement 2020. The company sought to end the agreement citing significant changes in the industry and operational difficulties that rendered the existing terms unworkable. The ETU Sydney Construction Union contested the application, arguing that the changes were foreseeable and that the company had not made a genuine attempt to negotiate in good faith.

The central legal issues that the Commission had to address were whether the changes in the industry and operational conditions constituted a fundamental change in the circumstances that justified the termination of the enterprise agreement, and whether the company had discharged the onus of proving that it had genuinely attempted to negotiate in good faith before seeking to terminate the agreement. The Commission had to balance the need for flexibility in employment conditions against the protection of employees' rights under the Fair Work Act 2009.

The Fair Work Commission found that while there had been significant changes in the construction industry, these changes were largely foreseeable and did not constitute a fundamental change in circumstances warranting termination of the enterprise agreement. The Commission also determined that the company had not made a genuine attempt to negotiate with the union before lodging the application for termination. Consequently, the application was dismissed. The Commission emphasised the importance of good faith negotiations and the need for employers to explore all avenues of negotiation before seeking to terminate an enterprise agreement. The Commission's decision underscored the principle that enterprise agreements should be honoured unless there is a clear and fundamental change in circumstances that could not have been reasonably anticipated at the time of their creation.

New Edge Group (Australia) Pty Ltd

DECISION

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