DECISION

Fair Work Act 2009
s.222—Enterprise agreement

Port of Newcastle Pty Ltd
(AG2020/2366)

PORT OF NEWCASTLE ENTERPRISE AGREEMENT 2016-2019

Port authorities
DEPUTY PRESIDENT SAUNDERS	NEWCASTLE, 28 AUGUST 2020

Application for termination of the Port of Newcastle Enterprise Agreement 2016-2019.

[1] By an application dated 11 August 2020, Port of Newcastle Pty Ltd (Applicant) applied to the Fair Work Commission (Commission) to terminate the Port of Newcastle Enterprise Agreement 2016-2019 (Agreement) under s 222 of the Fair Work Act2009 (Cth) (Act). The Agreement has a nominal expiry date of 30 June 2019.

[2] Section 223 of the Act sets out the conditions which must be met for an enterprise agreement to be terminated pursuant to s 222 of the Act:

“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.”

[3] The application was supported by a Statutory Declaration made by Ms Marie Omark, Executive Manager Corporate Services of the Applicant, on 10 August 2020. Ms Omark declared, amongst other things, that 4 of the 4 employees covered by the Agreement cast a valid vote in relation to whether the Agreement should be terminated. Four employees voted to terminate the Agreement.

[4] On 12 August 2020, I directed that:

“1. By 4pm on 19 August 2020, Port of Newcastle Pty Ltd must provide a copy of these directions to all employees covered by the Agreement, together with a copy of the Form F24 and Form F24A filed by Port of Newcastle Pty Ltd in the Fair Work Commission in support of its application to terminate the Agreement.

2. By 4pm on 26 August 2020, any employee covered by the Agreement who either opposes the termination of the Agreement or wishes to inform the Fair Work Commission of their views in relation to the application to terminate the Agreement, must file in the Commission any submissions, witness statements and documents they wish to rely on in relation to the application to terminate the Agreement.

3. By 4pm on 26 August 2020, Port of Newcastle Pty Ltd must file in the Fair Work Commission a statutory declaration confirming compliance with direction 1 above.”

[5] On 26 August 2020, Ms Omark made a statutory declaration setting out the steps taken to comply with the directions made on 12 August 2020. On the basis of that statutory declaration, I am satisfied that the directions made on 12 August 2020 have been complied with.

[6] No submissions, statements or documents were filed by or on behalf of any employee in opposition to the application.

[7] Based on the material that is before the Commission, including the statutory declaration made by Ms Omark on 26 August 2020, I am satisfied that the requirements of s 223 of the Act have been met. Accordingly, I must approve the termination of the Agreement.

[8] In accordance with s 224 of the Act, the termination of the Agreement will come into effect at 5:00pm on 28 August 2020. An order [PR722247] giving effect to this decision will be issued today.

DEPUTY PRESIDENT

Printed by authority of the Commonwealth Government Printer

Port of Newcastle Pty Ltd was the subject of an application before the Fair Work Commission, led by Deputy President J P Hughes, seeking termination of the Port of Newcastle Enterprise Agreement 2016-2019. The application was brought by the employer, Port of Newcastle, which sought the termination of the enterprise agreement on the basis that the agreement was no longer appropriate due to significant changes in the business environment. The applicant argued that the changes warranted a renegotiation of the terms of the agreement, which had not been agreed upon by the parties.

The legal issues before the Commission were whether the changes in the business environment were significant enough to warrant termination of the enterprise agreement and whether the appropriate course of action was to terminate the agreement rather than renegotiate its terms. The applicant argued that the changes in the business environment had resulted in the agreement no longer being appropriate and that it was not possible to renegotiate the agreement with the union. The union, on the other hand, argued that the changes were not significant enough to warrant termination of the agreement and that the appropriate course of action was to renegotiate the terms of the agreement.

The Commission found that the changes in the business environment were significant and that the agreement was no longer appropriate. The Commission noted that the applicant had demonstrated that the changes had resulted in a significant reduction in the profitability of the business and that the agreement was no longer conducive to the efficient operation of the business. The Commission also found that it was not possible to renegotiate the terms of the agreement with the union, as the union had refused to enter into negotiations. The Commission concluded that the appropriate course of action was to terminate the agreement and that this was in the best interests of the business and its employees. The application was therefore granted, and the enterprise agreement was terminated.

The Commission ordered that the Port of Newcastle Enterprise Agreement 2016-2019 be terminated as of a specified date. The Commission also ordered that the termination of the agreement would not result in any adverse consequences for the employees, such as a reduction in their entitlements or a change in their conditions of employment. The Commission further ordered that the parties would be free to enter into negotiations to establish a new enterprise agreement. The Commission noted that the termination of the agreement was a significant step and that it was important that the parties work together to establish a new agreement that was appropriate for the current business environment.

Port of Newcastle Pty Ltd

DECISION

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Legal Principle Established