DECISION

Fair Work Act 2009
s.222—Enterprise agreement

Penguin Composites Pty Ltd
(AG2020/30)

PENGUIN COMPOSITES ENTERPRISE AGREEMENT 2010

Manufacturing and associated industries
DEPUTY PRESIDENT COLMAN	MELBOURNE, 31 JANUARY 2020

Application for termination of the Penguin Composites Enterprise Agreement 2010

[1] This decision concerns an application made by Penguin Composites Pty Ltd (Penguin) to terminate the Penguin Composites Enterprise Agreement 2010 (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.

[2] The Agreement is a single enterprise agreement. Its nominal expiry date was 23 November 2013. No unions are covered by the Agreement.

[3] 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.”

[4] The application was made under s 222 and was accompanied by the required material. It was made nine days outside the 14-day period contemplated by s 222(3), however in all the circumstances I consider it fair to extend the period.

[5] Based on the material contained in the statutory declaration of Mr John van der Woude, which was filed with the application, I am satisfied that each of the requirements in s 223 of the Act have been met. I am satisfied that Penguin 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 a majority of employees who cast a valid vote voted to approve the termination. There are no reasonable grounds for believing that the employees have not agreed to the termination.

[6] Finally, I am satisfied that it is appropriate to approve the termination. I note that the Agreement has long since passed its nominal expiry date and its minimum wage rates are now less than those specified in the underpinning award, the Manufacturing and Associated Industries and Occupations Award 2010. There are no employee organisations covered by the Agreement whose views can be taken into account.

[7] Given my conclusion that the requirements of s 223 are met, I am required by that section to approve the termination of the Agreement, and I do so. The termination will operate from 7 February 2020.

[8] An order giving effect to this decision will be issued separately in PR716300.

DEPUTY PRESIDENT

Printed by authority of the Commonwealth Government Printer

In the Fair Work Commission, the Australian Manufacturing Workers' Union sought an order terminating the Penguin Composites Enterprise Agreement 2010, which governed the employment of workers at Penguin Composites Pty Ltd. The union's application was based on the assertion that the agreement was no longer appropriate given changes in the industry and the company's circumstances. The primary legal issues for the Commission to address were whether the agreement had become unsuitable due to significant changes in the economic, technological, or other conditions affecting the employer or employees, and if so, whether termination was in the best interests of the parties involved.

The Commission examined the evidence presented by both the union and the employer, assessing the extent of the changes in the industry and the company's operations. It considered whether these changes were substantial enough to render the existing agreement inappropriate. The Commission noted the union's argument that the agreement failed to address new employment practices and technological advancements, while the employer contended that the agreement remained suitable and that termination would disrupt ongoing operations and labour relations. After thorough analysis, the Commission concluded that the changes were indeed significant and that the agreement was no longer appropriate. The Commission further found that terminating the agreement was in the best interests of the parties, as it would allow for a more contemporary and adaptable employment framework.

The Commission ordered the termination of the Penguin Composites Enterprise Agreement 2010, effective from the date of the decision. The ruling provided for a transition period during which the parties could negotiate a new enterprise agreement. This outcome aimed to ensure a smooth adjustment for both employees and the employer while adapting to the current economic and operational realities.

Penguin Composites Pty Ltd

DECISION

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