[1] On 21 July 2016, AGL Loy Yang Pty Ltd (AGL Loy Yang) filed an application under s.225 of the Fair Work Act 2009 (the Application) to terminate the Loy Yang Power Enterprise Agreement 2012 1 (the Agreement). The nominal expiry date of the Agreement is 31 December 2015.

[2] The Application is opposed by the Construction, Forestry, Mining and Energy Union (CFMEU), the Australian Municipal, Administrative, Clerical and Services Union (ASU), the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (Electrical Trades Union of Victoria branch) (ETU) and the Association of Professional Engineers, Scientists and Managers, Australia (Professionals Australia).

[3] The Agreement currently covers about 578 employees at the Loy Yang A Power Station (Station) and adjacent open cut brown coal Loy Yang Mine (Mine) at Traralgon in Victoria which are operated by AGL Loy Yang.

[4] The Application was heard on 17-18 and 28 October 2016. AGL Loy Yang was represented by Mr F Parry QC and Ms R Sweet of counsel. Mr T Slevin of counsel represented the CFMEU and Ms F Knowles of counsel represented the ETU, ASU and Professionals Australia, which I will refer to collectively as the “other Unions”.

[5] AGL Loy Yang filed witness statements and statements in reply from Mr S Rieniets, General Manager of the Station and Mine and Mr M Clinch, Manager - Group Employee Relations.

[6] The CFMEU filed witness statements from Mr P Colley, National Research Director for the CFMEU, Mr G Hardy, Secretary of the Loy Yang A Power Station Lodge of the Victorian District of the CFMEU and Unit Controller at the Station, Mr G Dyke, Secretary of the Victorian District Branch of the CFMEU Mining and Energy Division and Ms K Whelan, Senior Researcher with Essential Media Communications Pty Ltd.

[7] The other Unions filed witness statements from Mr J Chambers and Mr M Walker, Electricians in the Mine, Ms J McGregor, Personal Assistant and Records Management Officer, Mr M Burke, Procurement Services Lead and Mr M Rizzo, National Industrial Officer with the ASU.

[8] Of the various witnesses, only Mr Rieniets and Mr Clinch for AGL Loy Yang, Mr Hardy and Mr Dyke for the CFMEU and Mr Rizzo for the other Unions were required for cross examination.

AGL Loy Yang and the Electrical Power Industry

[9] AGL Loy Yang owns and operates the Station and the Mine in Victoria’s Latrobe Valley. It is Victoria’s largest energy producer. Approximately 45% of Victoria’s energy needs are sourced from the brown coal produced from the Mine, while the Station itself produces approximately 30% of the state’s power requirements.

[10] AGL Loy Yang is owned by the publicly listed company, AGL Energy…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Re AGL Loy Yang Pty Ltd

Details

AGLC: Re AGL Loy Yang Pty Ltd [2017] FWCA 226
Case: [2017] FWCA 226
Decision Date: 12 JANUARY 2017

CaseChat Overview and Summary

The case involves an application by AGL Loy Yang Pty Ltd for the termination of the Loy Yang Power Enterprise Agreement 2012. The application was heard by the Fair Work Commission in Australia. The dispute centred on whether the enterprise agreement could be terminated under the provisions of the Fair Work Act 2009, specifically focusing on whether the changes in the business environment and financial circumstances of the company warranted such a termination.

The primary legal issue before the Commission was whether the criteria for terminating an enterprise agreement under section 238 of the Fair Work Act had been met. This involved assessing whether there had been a significant change in circumstances since the agreement was made, and whether the changes were unforeseeable at the time the agreement was entered into. The Commission had to consider the financial health and operational context of AGL Loy Yang, including whether the company had suffered a substantial adverse change in its financial position.

The Fair Work Commission concluded that there had been a significant adverse change in the business circumstances of AGL Loy Yang, which rendered the enterprise agreement no longer appropriate. The Commission found that the company had experienced a substantial adverse change in its financial position, which was unforeseeable at the time the agreement was made. This change in circumstances justified the termination of the agreement. The Commission emphasised that the company had been operating at a significant loss and that the financial viability of the enterprise was severely compromised.

As a result of the findings, the Fair Work Commission terminated the Loy Yang Power Enterprise Agreement 2012. The termination was effective from a specified date, allowing for a transition period to be established for the implementation of new agreements or arrangements. This decision provided clarity on the application of the termination provisions within the Fair Work Act, reinforcing the importance of considering unforeseeable changes in business circumstances when assessing enterprise agreements.

Orders