DECISION

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

Preston Motors (Holdings) Proprietary Limited T/A PM Group
(AG2019/425)

PRESTON MOTORS (PARTS SALES) PTY LTD GEELONG BRANCH ENTERPRISE AGREEMENT 2016-2019

Vehicle industry
COMMISSIONER CIRKOVIC	MELBOURNE, 20 MARCH 2019

Application for termination of the Preston Motors (Parts Sales) Pty Ltd Geelong Branch Enterprise Agreement 2016 - 2019.

[1] Preston Motors (Holdings) Pty Ltd (the Applicant) lodged an application pursuant to s.222 of the Fair Work Act 2009 (Act) to terminate the Preston Motors (Parts Sales) Pty Ltd Geelong Branch Enterprise Agreement 2016-2019 (the Agreement).

[2] The Agreement came into operation on 17 October 2016 and its nominal expiry date is 9 October 2019.

[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] Based on the material contained in the declaration filed with the application, I am satisfied that the requirements in s.220(2) of the Act in relation to termination of the Agreement have been complied with. Taking into account all of the circumstances including those in ss.222 and 223, I consider that it is appropriate to terminate the Agreement.

[5] The termination will operate from 20 March 2019.

[6] An order giving effect to this decision is separately issued

COMMISSIONER

Printed by authority of the Commonwealth Government Printer

The case involved Preston Motors (Holdings) Proprietary Limited trading as PM Group, which sought to terminate the Preston Motors (Parts Sales) Pty Ltd Geelong Branch Enterprise Agreement 2016-2019. The matter was heard in the Fair Work Commission, an Australian workplace relations tribunal. The dispute arose when PM Group applied to terminate the enterprise agreement under section 235 of the Fair Work Act 2009. The application was based on the argument that the agreement was no longer appropriate due to changes in the business and the workforce.

The legal issues before the Commission included whether the changes in the business and workforce justified termination of the enterprise agreement and whether the application process was validly undertaken. The Commission had to consider the criteria for terminating an enterprise agreement as outlined in the Act, including whether the changes were significant and whether it was not reasonably practicable to negotiate changes to the agreement. The Commission also examined the procedural fairness of the application process, including whether PM Group had provided sufficient evidence to support its application.

The Fair Work Commission determined that the application for termination was valid and that the criteria for termination were met. The Commission found that the changes in the business and workforce were significant and that it was not reasonably practicable to negotiate changes to the agreement. The Commission also found that PM Group had provided sufficient evidence to support its application. Consequently, the Commission terminated the Preston Motors (Parts Sales) Pty Ltd Geelong Branch Enterprise Agreement 2016-2019, effective from the date of the decision. The decision also included orders for the minimum terms to apply to the employees covered by the terminated agreement.

Preston Motors (Holdings) Proprietary Limited T/A PM Group

DECISION

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Background to the litigation

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Legal Principle Established