Pacific Energy (KPS) Pty Ltd T/A Kalgoorlie Power Systems

[2017] FWCA 6155

[2017] FWCA 6155

FAIR WORK COMMISSION

DECISION

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

Pacific Energy (KPS) Pty Ltd T/A Kalgoorlie Power Systems
(AG2017/4620)

KALGOORLIE POWER SYSTEMS COLLECTIVE AGREEMENT 2009

Oil and gas industry
DEPUTY PRESIDENT BINET	PERTH, 5 DECEMBER 2017

Application for termination of the Kalgoorlie Power Systems Collective Agreement 2009.

[1] Pacific Energy (KPS) Pty Ltd T/A Kalgoorlie Power Systems (Pacific Energy) has made an application (Application) to the Fair Work Commission (FWC) pursuant to Schedule 3, Item 16 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Transitional Act) to terminate the Kalgoorlie Power Systems Collective Agreement 2009 (Agreement).

[2] The parties to the Agreement are Pacific Energy and all employees of Pacific Energy employed in the classifications prescribed in clause 5 of the Agreement (Employees).

[3] There are no employee organisations covered by the Agreement.

[4] The Agreement has a nominal expiry date seven (7) days and five (5) years after the date of issue of the notice of the Workplace Authority that the Agreement meets the No Disadvantage Test. As this notice was issued before the Agreement’s commencement in 2009, the Agreement reached its nominal expiry date in 2014.

[5] In support of the Application, Pacific Energy has filed a Statutory Declaration by Ms Mandy Macaskill, Executive Assistant at Pacific Energy (Macaskill Statutory Declaration). On 6 October 2017, directions were issued to Pacific Energy (Directions) requiring it to file submissions in support of the Application (Submissions).

[6] In the Macaskill Statutory Declaration and in the Submissions, Pacific Energy asserts that termination of the Agreement would not be contrary to the public interest because the Agreement contains terms and conditions inconsistent with the National Employment Standards. Further, Pacific Energy asserts that the Agreement would not pass the ‘better off overall’ test when compared to the relevant Award.

[7] In the Application and the Submissions, Pacific Energy variously identified the relevant award as the Building and Construction General On-Site Award 2010 or the Manufacturing and Associated Industries and Occupations Award 2010. Pacific Energy provided submissions setting out a comparison between those Awards and the Agreement, demonstrating that the Agreement would not pass a better off overall test. Given Pacific Energy’s submission that its primary activity is power station installation and operation, FWC staff also conducted a better off overall analysis between the Agreement and the Electrical Power Industry Award 2010. This analysis indicated that Employees are unlikely to be better off overall under the Agreement as compared to the Electrical Power Industry Award 2010.

[8] Pacific Energy issued each Employee with a letter explaining the agreement termination process and the impact of that process on Employees. According to Pacific Energy, it did not receive any objections to the proposed termination from any Employee.

[9] The Directions required Pacific Energy to provide a copy of the Application, Pacific Energy’s submissions, the Macaskill Statutory Declaration and the Directions to all Employees.

[10] The Directions invited any Employee who wished to be heard in relation to the Application to contact Chambers by 2 November 2017. No correspondence from received from any Employee by this date.

[11] For the purposes of Schedule 3, Item 16 of the Transitional Act,the Agreement is a Collective Agreement-Based Transitional Instrument. By virtue of Item 16 of the Transitional Act, the Agreement may be terminated pursuant to sections 225 and 226 of the Fair Work Act 2009 (FW Act).

[12] Section 226 of the FW Act states:

“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.”

[13] Section 225 of the FW Act states:

“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 the 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;

(c) an employee organisation covered by the agreement.”

[14] The leading authority with respect to applications made pursuant to section 225 is a decision of a Full Bench of the FWC in Aurizon Operations Limited; Aurizon Network Pty Ltd; Australia Eastern Railroad Pty Ltd (Aurizon) [2015] FWCFB 540. The Full Bench remarked at [126]:

“The legislative scheme therefore enables and facilitates good faith bargaining for an enterprise agreement. It also facilitates the making of enterprise agreements but does not mandate that result. Once an enterprise agreement is made and approved by the Commission, it seems clear that the legislative scheme does not intend that such agreements operate in perpetuity. Agreements have a finite nominal life. At the end of the nominal life of an agreement, bargaining parties may bargain for a new agreement utilising all of the tools available under the Act; or a person to whom an agreement applies may take steps to bring the agreement to an end in accordance with the provisions of the Act; or both may occur.”

[15] As the Agreement has passed its nominal expiry date and the Applicant is an employer covered by the Agreement, I find that the Applicant has standing to make the Application pursuant to section 225(a) of the FW Act.

[16] Based on the materials filed by Pacific Energy, in consideration of section 226(a), and having regard to the decision in Aurizon, there is nothing before me which raises public interest considerations which might weigh against the termination of the Agreement. I am therefore satisfied that it is not contrary to the public interest to terminate the agreement.

[17] Pursuant to section 225 of the Act, and having considered the material before me relevant to each of the matters contained in subsections 226(b)(i) and (ii) of the Act, I am satisfied that it is appropriate to terminate the Agreement.

[18] The termination will come into effect from 5 December 2017.

DEPUTY PRESIDENT

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