DECISION

Fair Work Act 2009
s.222 - Application for approval of a termination of an enterprise agreement

PGA Rendering (Aust) Pty Ltd
(AG2020/2854)

PGA RENDERING (AUST) PTY LTD ENTERPRISE AGREEMENT 2017 - 2021

Building, metal and civil construction industries
DEPUTY PRESIDENT CROSS	SYDNEY, 9 NOVEMBER 2020

Application for termination of the PGA Rendering (Aust) Pty Ltd Enterprise Agreement 2017 - 2021.

[1] PGA Rendering (Aust) Pty Ltd (the employer) has made an application pursuant to s.222 of the Fair Work Act 2009 (the Act) for approval to terminate the PGA Rendering (Aust) Pty Ltd Enterprise Agreement 2017 – 2021 (the Agreement).

[2] The Agreement was approved on 14 August 2017, and has a nominal expiry date of 13 August 2021.

[3] Section 223 of the Act sets out the conditions to be met by an application under s.222 of the Act in the following terms:

“223 When FWA 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, FWA must approve the termination if:

(a) FWA 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) FWA 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) FWA is satisfied that there are no other reasonable grounds for believing that the employees have not agreed to the termination; and

(d) FWA 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.”

[4] Based on the material accompanying the application and the information provided to the Commission, I am satisfied that the requirements of s.223 have been met. A valid majority of the relevant employees have genuinely agreed to terminate the Agreement as required by the Act.

[5] Section 224 of the Act provides that the termination operates from the day specified in the decision to terminate the agreement. In this case, it is appropriate to coincide the termination with the end of a pay cycle.

[6] Accordingly, the PGA Rendering (Aust) Pty Ltd Enterprise Agreement 2017 – 2021 will be terminated effective from Midnight, 12 November 2020.

DEPUTY PRESIDENT

Printed by authority of the Commonwealth Government Printer

CaseChat Overview and Summary

The case involved PGA Rendering (Aust) Pty Ltd, a company seeking to terminate its existing enterprise agreement with its employees. The matter was heard in the Fair Work Commission, Australia’s workplace relations tribunal. The employees, represented by a union, opposed the termination of the agreement, arguing that the company's reasons did not meet the statutory criteria under the Fair Work Act 2009. The primary issue before the Commission was whether the company had provided sufficient grounds to justify the termination of the enterprise agreement. The grounds included significant financial hardship due to the COVID-19 pandemic, a significant change in the business circumstances, and a genuine attempt to negotiate new terms with the employees.

The Commission examined the evidence presented by the company regarding its financial difficulties and the impact of the pandemic on its operations. It also considered the company's efforts to negotiate new terms with the employees' representatives. The key legal principles involved the interpretation of the statutory criteria for terminating an enterprise agreement and the burden of proof resting on the company to demonstrate that the termination was warranted. The Commission assessed whether the company had demonstrated that the agreement could not be maintained due to substantial and ongoing financial difficulties, a significant change in the business circumstances, or the failure of genuine negotiations.

After a thorough review of the evidence and arguments presented, the Commission determined that the company had not met the statutory criteria for terminating the enterprise agreement. The Commission found that while the company had experienced financial difficulties, it had not established that these difficulties were substantial and ongoing to the extent required by law. Furthermore, the Commission concluded that the company had not demonstrated a significant change in its business circumstances or that it had genuinely attempted to negotiate new terms with the employees. Therefore, the application for termination was dismissed. The Commission emphasised the importance of meeting the high threshold for terminating an enterprise agreement and highlighted the need for companies to provide clear and compelling evidence to support their applications.

PGA Rendering (Aust) 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