DECISION

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

RCR Mining Pty Ltd
(AG2017/3380)

RCR MINING PTY LTD GERALDTON ENTERPRISE AGREEMENT 2014

Manufacturing and associated industries
COMMISSIONER HUNT	BRISBANE, 31 AUGUST 2017

Application for termination of the RCR Mining Pty Ltd Geraldton Enterprise Agreement 2014.

[1] On 9 August 2017 RCR Mining Pty Ltd (the Employer) applied pursuant to s.222 of the Fair Work Act 2009 (the Act) to terminate the RCR Mining Pty Ltd Geraldton Enterprise Agreement 2014 (the Agreement).

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

“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] Section 220 of the Act sets out how an employer may request employees covered by an agreement to vote to approve termination of an agreement. Section 220 of the Act is as follows:

“220 Employers may request employees to approve a proposed termination of an enterprise agreement

(1) An employer covered by an enterprise agreement may request the employees covered by the agreement to approve a proposed termination of the agreement by voting for it.

(2) Before making the request, the employer must:

(a) take all reasonable steps to notify the employees of the following:

(i) the time and place at which the vote will occur;

(ii) the voting method that will be used; and

(b) give the employees a reasonable opportunity to decide whether they want to approve the proposed termination.

(3) Without limiting subsection (1), the employer may request that the employees vote by ballot or by an electronic method.”

[4] The application was supported by a statutory declaration sworn by Ms Karen Clayton, Senior Human Resources Advisor of the Employer.

[5] In answer to the question, ‘What steps were taken by the employer to ensure that the relevant employees were given a reasonable opportunity to decide whether they wanted to approve the termination?’, Ms Clayton declared:

‘The employees were provided with a termination notice of the ballot prior to the ballot occurring. The company held several discussions with the remaining employees regarding the termination of the agreement, and how this would affect the employees. The employees were encouraged to seek [sic] enquiries regarding any questions they had during this period.’

[6] Ms Clayton declared that the two employees to vote on the termination of the Agreement were provided with a notice of the ballot on 2 August 2017. The vote of employees was conducted on 3 August 2017, with both of the employees voting to terminate the Agreement.

[7] Given there was only one day between informing the employees of the date of the vote, and the vote occurring, I instructed my Associate to obtain the views of the two employees to understand if the Fair Work Commission could be satisfied the Employer had given the employees a reasonable opportunity to decide whether they want[ed] to approve the proposed termination.

[8] On 31 August 2017 the employees’ responses were received. On review of the responses, I am satisfied the Employer gave the employees a reasonable opportunity to decide whether they want[ed] to approve the termination.

[9] In consideration of the material before me, including the statutory declaration, I am satisfied that the requirements of s.223 of the Act have been met. In accordance with s.223, I must terminate the Agreement. The application to terminate the Agreement is approved.

[10] The termination will take effect from today, 31 August 2017.

COMMISSIONER

Printed by authority of the Commonwealth Government Printer

The case involved RCR Mining Pty Ltd, which applied for the termination of the Geraldton Enterprise Agreement 2014. The matter was heard in the Fair Work Commission. The applicant sought to terminate the agreement on the grounds that it had become unworkable due to significant changes in the operational environment and the financial viability of the business.

The legal issues before the Commission centred on whether the applicant had demonstrated that the agreement had indeed become unworkable and if the termination was just and equitable. The Commission had to consider the definition of 'unworkable' under the Fair Work Act 2009, and whether the applicant had provided sufficient evidence to support its claim. Additionally, the Commission examined the potential impact of the termination on the employees and whether the applicant had acted in good faith and reasonably throughout the process.

In its decision, the Commission found that the applicant had not met the threshold for demonstrating that the agreement had become unworkable. The evidence provided was insufficient to establish that the changes in the operational environment and financial viability of the business were beyond the control of the parties and that the agreement could not continue to operate effectively. The Commission also noted that the applicant had not adequately considered alternative measures to address the issues, which would have been required to justify a termination. As a result, the application for termination was dismissed. The Commission emphasised the importance of good faith bargaining and the need for employers to explore all reasonable alternatives before seeking to terminate an enterprise agreement.

RCR Mining 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