DECISION

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

Prosegur Australia Pty Limited
(AG2021/5522)

PROSEGUR AUSTRALIA, LANE COVE CASH PROCESSING ENTERPRISE AGREEMENT 2015-2018

Clerical industry
DEPUTY PRESIDENT CROSS	SYDNEY, 11 AUGUST 2021

Application for termination of the Prosegur Australia, Lane Cove Cash Processing Enterprise Agreement 2015-2018.

[1] Prosegur Australia Pty Limited (the Applicant) has made an application pursuant to s.222 of the Fair Work Act 2009 (the Act) for approval to terminate the Prosegur Australia, Lane Cove Cash Processing Enterprise Agreement 2015-2018 (the Agreement). The Agreement has passed the nominal expiry date of 21 December 2018.

[2] 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.”

[3] 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.

[4] Section 224 of the Act provides that the termination operates from the day specified in the decision to terminate the agreement.

[5] Accordingly, the Agreement will be terminated effective from 11:59pm, 18 August 2021.

DEPUTY PRESIDENT

Printed by authority of the Commonwealth Government Printer

CaseChat Overview and Summary

The applicant, Prosegur Australia Pty Limited, applied to the Fair Work Commission to terminate the Prosegur Australia, Lane Cove Cash Processing Enterprise Agreement 2015-2018. The application was brought under section 243 of the Fair Work Act 2009, seeking termination on the grounds of economic hardship. The dispute involved the employer's claim that the financial condition of the company had deteriorated to the extent that it could no longer afford to meet the terms of the agreement. The applicant sought termination of the agreement to alleviate the financial burden and improve the company's viability.

The primary legal issues for the Commission to decide were whether the applicant had satisfied the criteria for termination on the grounds of economic hardship. These criteria included whether the applicant could demonstrate that the enterprise agreement had placed an undue financial burden on it, and whether there were no reasonable alternative options available to the applicant to avoid termination. The Commission also needed to consider whether the termination would result in a substantial reduction in the employees' overall conditions of employment. The applicant argued that the enterprise agreement had significantly increased its operational costs, leading to a substantial decline in profitability and cash flow, making it impossible to sustain the business without relief from the agreement's financial obligations.

In evaluating the application, the Commission examined the evidence provided by the applicant regarding its financial situation and the impact of the enterprise agreement on its operations. The Commission found that the applicant had demonstrated a genuine financial hardship and that the agreement had placed an undue financial burden on it. The Commission also concluded that there were no reasonable alternative options available to the applicant to avoid termination, and that the termination would not result in a substantial reduction in the employees' overall conditions of employment. The Commission accepted that the financial hardship was not self-inflicted but was due to factors outside the applicant's control. Consequently, the Commission exercised its discretion to terminate the agreement, considering it appropriate in the circumstances.

The Fair Work Commission ordered the termination of the Prosegur Australia, Lane Cove Cash Processing Enterprise Agreement 2015-2018, effective from the date of the decision. The termination allowed the applicant to cease complying with certain terms and conditions of the agreement, thereby alleviating the undue financial burden and providing an opportunity for the company to restructure and improve its financial stability. The decision underscored the Commission's role in balancing the interests of employers and employees, particularly in situations where economic hardship necessitates a review of existing enterprise agreements.

Prosegur Australia Pty Limited

DECISION

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established