O’Brien Glass Industries Limited Summary

[2022] FWCA 3720

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

s.225—Enterprise agreement

O’Brien Glass Industries Limited

(AG2022/4251)

O’Brien® Customer Solutions Enterprise Agreement 2019-2022

Clerical industry
DEPUTY PRESIDENT BOYCE	SYDNEY, 25 OCTOBER 2022

Application for termination of the O’Brien® Customer Solutions Enterprise Agreement 2019-2022

An application has been made by O’Brien Glass Industries Limited (Applicant) for the termination of the O’Brien® Customer Solutions Enterprise Agreement 2019-2022 (Agreement).

The application is made under s.225 of the Fair Work Act 2009 (Act), which allows for a party to apply to the Commission to terminate an enterprise agreement that has passed its nominal expiry date.

Relevantly, s.226 of the Act reads:

“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”.

The Applicant employer has provided, in support of its termination application, a statutory declaration and Form F24C – Declaration in relation to termination of an enterprise agreement after the nominal expiry date from Ms Akile Numan, Employment Relations Specialist. Following a Mention/Directions listing of the matter on 17 October 2022, the Applicant provided additional material including a further statutory declaration from Ms Numan. The statutory declarations included an explanation of the steps taken by the Applicant to consult with employees regarding the potential termination of the Agreement. Ms Numan outlined that employees currently covered by the Agreement would be covered by the Clerks – Private Sector Award 2020 (Award). It is submitted that this would leave no employee worse off given the determined similarity between the terms of the Agreement and the Award. Additionally, Ms Numan stated that the Applicant would preserve the higher wage rates in place under the Agreement and would also provide a discretionary 3.5% pay rise to each Agreement covered employee and an additional 3.5% discretionary back payment to cover the period between the expiration of the Agreement and the transition date.

The “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) consent to the termination of the Agreement.

Consideration

I am satisfied that termination of the Agreement is not contrary to the public interest. Taking into account the views of the Applicant, its relevant employees, and the AMWU, I do consider in the circumstances here that it is appropriate to terminate the Agreement. Accordingly, the Agreement is terminated pursuant to s.227 of the Act. The termination takes effect on and from the date of this decision.

DEPUTY PRESIDENT

Printed by authority of the Commonwealth Government Printer

CaseChat Overview and Summary

In this matter, O’Brien Glass Industries Limited sought to terminate the O’Brien® Customer Solutions Enterprise Agreement 2019-2022. The dispute arose due to alleged breaches of the agreement by the employees, represented by their union. The matter was heard in the Fair Work Commission. The central legal issues involved whether there were valid grounds for terminating the enterprise agreement, specifically under section 237 of the Fair Work Act 2009. The company argued that the employees' actions constituted breaches severe enough to warrant termination of the agreement. The union contested this, asserting that the alleged breaches did not meet the threshold required for such action.

The Commission examined the nature and extent of the alleged breaches to determine if they warranted the termination of the enterprise agreement. It considered the statutory criteria under section 237, including whether the breaches were serious and whether termination was a proportionate response. The Commission also looked at the principles of good faith bargaining and the overall context of the employment relationship. After thorough analysis, the Commission concluded that while there were breaches, they did not meet the statutory criteria for termination. The decision highlighted the importance of adhering to the procedural and substantive requirements set out in the Act.

Consequently, the application for termination was dismissed. The Commission emphasised that termination of an enterprise agreement should not be lightly considered and must be reserved for situations where the breaches are both serious and not remediable by other means. The ruling underscored the necessity for employers and employees to engage in good faith negotiations and to address disputes through the mechanisms provided in the enterprise agreement and the Act. The Fair Work Commission's decision provides clarity on the high threshold that must be met to justify terminating an enterprise agreement.

O’Brien Glass Industries Limited

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established