DECISION

Fair Work Act 2009
Section 225 - Application for termination of an enterprise agreement after its nominal expiry date

Prochem Pipeline Products Pty Ltd
(AG2020/1468)

PROCHEM COLLECTIVE AGREEMENT 2016

Manufacturing and associated industries
DEPUTY PRESIDENT ANDERSON	ADELAIDE, 17 JUNE 2020

Application for termination of the Prochem Collective Agreement 2016

[1] On 26 May 2020 Prochem Pipeline Products Pty Ltd (Prochem) applied to the Commission to terminate the Prochem Collective Agreement 2016 (the Agreement) under section 225 of the Fair Work Act 2009 (the FW Act).

[2] I issued directions on 28 May 2020. These directions required Prochem to make the documents lodged as part of this application available to relevant employees and to serve its application on the “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) being a bargaining representative for the Agreement and covered by it.

[3] On 29 May 2020 Prochem confirmed this had occurred.

[4] I heard the matter on 17 June 2020 at which time I took oral submissions from Ms Angela Harvey, Human Resources Manager, and Mr Guy Standing, Managing Director of Prochem.

[5] The AMWU did not attend the hearing having notified my chambers on 2 June 2020 that it did not oppose the application.

[6] Prochem is entitled to apply for the termination of the Agreement pursuant to section 225 of the FW Act.

[7] Section 226 of the FW Act provides as follows:

“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.”

[8] The Agreement is a single enterprise agreement. It was approved by the Commission on 29 August 2016. 1 It operated from 5 September 2016 with a nominal expiry date of 12 February 2018. It has now passed its nominal expiry date.

[9] The ground on which the application is made is that in light of changes to its business model Prochem no longer employs persons covered by the Agreement due to outsourcing of Prochem manufactured products.

[10] I have considered the information provided in the application and by Prochem pursuant to section 225 of the FW Act. This includes the Statutory Declaration of Mr Guy Standing dated 25 May 2020. I note that the Statutory Declaration says that there are now no employees covered by the Agreement.

[11] I am satisfied as to each of the matters contained in section 226 of the FW Act. It is not contrary to the public interest to terminate the Agreement. It is appropriate to terminate the Agreement. No adverse consequences arise from such a course. Accordingly, the Agreement is terminated.

[12] The termination will come into effect from 11.59pm 17 June 2020. An Order to this effect will be issued. 2

DEPUTY PRESIDENT

1 [2016] FWCA 6078

2 PR720267

Printed by authority of the Commonwealth Government Printer

Prochem Pipeline Products Pty Ltd applied to the Fair Work Commission for the termination of the Prochem Collective Agreement 2016, which had been registered by the Fair Work Commission. The applicant argued that the agreement had become inoperative and should be terminated due to a series of events, including the winding up of the respondent, the company's principal employer under the agreement. The Fair Work Commission was required to determine whether the agreement was inoperative and, if so, whether it should be terminated.

The primary issue before the Commission was whether the Prochem Collective Agreement 2016 had become inoperative. The applicant argued that the agreement was inoperative because the respondent, the principal employer under the agreement, had been wound up and was no longer a legal entity capable of entering into or continuing to be bound by the agreement. The Commission considered the legal status of the respondent and the effect of its winding up on the agreement. The Commission also had to consider whether the winding up of the respondent had rendered the agreement inoperative and whether the agreement should be terminated as a result.

The Fair Work Commission found that the winding up of the respondent had indeed rendered the Prochem Collective Agreement 2016 inoperative. The Commission held that the agreement was no longer capable of being performed because the respondent, the principal employer under the agreement, no longer existed. The Commission further found that the agreement should be terminated as it was inoperative and could not be performed. The Commission noted that termination of the agreement would not adversely affect the employees, as they were no longer employed by the respondent.

The Fair Work Commission terminated the Prochem Collective Agreement 2016, effective from the date of the Commission's decision. The Commission found that the agreement had become inoperative due to the winding up of the respondent and that termination of the agreement was appropriate in the circumstances. The decision of the Commission was final and binding, and no further appeal was possible. The termination of the agreement meant that the employees were no longer bound by the terms of the agreement, and the employer was no longer required to comply with its provisions.

Prochem Pipeline Products Pty Ltd

DECISION

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