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Re Tahmoor Coal Pty Ltd

Re Tahmoor Coal Pty Ltd

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Case Copied 23 August 2010 33 min read

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[2010] FWA 6468

FAIR WORK AUSTRALIA

DECISION

Fair Work Act 2009
s.225—Enterprise agreement

Tahmoor Coal Pty Ltd
(AG2010/6316, AG2010/6220)

Coal industry
VICE PRESIDENT LAWLER	MELBOURNE, 23 AUGUST 2010

Termination of enterprise agreement - when is it “appropriate” to terminate an agreement.

Introduction

[1] Tahmoor Coal Pty Ltd (Tahmoor) has made application pursuant to s.225 of the Fair Work Act 2009 (FW Act) to terminate two agreements:

The Tahmoor Colliery Enterprise Agreement 2006 (Colliery Agreement 1), a pre-reform certified agreement made under the provisions of the Workplace Relations Act 1996 (WR Act) as it existed before the WorkChoices amendments; and

The Tahmoor Washery Workplace Agreement 2006 (Washery Agreement 2), which is a workplace agreement made under the WorkChoices version of the WR Act.

(together, the Agreements).

[2] The Construction, Forestry, Mining and Energy Union (CFMEU) appeared to oppose the applications.

[3] By virtue of item 2(5)(c)(v) of Schedule 3 to the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 the Agreements are “collective agreement-based transitional instruments” for the purposes of that Act. Pursuant to item 16 of Schedule 3 of that Act, the applications are properly brought under s.225 of the FW Act.

[4] I have come to the view that the applications should be dismissed. These are my reasons for reaching that conclusion.

Background facts and circumstances

[5] Both of the Agreements have passed their nominal expiry date. The nominal expiry date of the Colliery Agreement was 3 April 2009 and the nominal expiry date of the Washery Agreement was 1 April 2008.

[6] Tahmoor was acquired by Xstrata during the nominal life of the Agreements. Xstrata is a very large multinational mining business. As a practical matter, Xstrata is “calling the shots” in relation to what can be agreed by Tahmoor for the purposes of a replacement agreement. Of course, there is nothing intrinsically wrong or sinister about that.

[7] Tahmoor has embarked upon a very substantial programme of capital improvements to its mine and associated infrastructure.

[8] Each of the Agreements provided that the parties would commence bargaining for a replacement agreement no later than six months before the nominal expiry date. Bargaining for a replacement agreement(s) commenced as contemplated by the Agreements and has been continuing for more than 18 months (albeit that this period has been punctuated by periods when the parties did not meet or otherwise advance the bargaining, for example while the proceedings before Commissioner Roberts were being pursued and for a period when Tahmoor put a proposed agreement to the employees for their consideration and vote - see below). There been almost 60 bargaining meetings.

[9] The employees have taken protected industrial action in the form of strikes. Tahmoor has taken employer response action in the form of a lockout, albeit that, as at the time of the hearing, that action has been relatively limited.

[10] The CFMEU brought an application against Tahmoor for bargaining orders, alleging that Tahmoor had breached…

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.

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Details

Case: [2010] FWA 6468
Decision Date: 23 AUGUST 2010

CaseChat Overview and Summary

In the case of Re Tahmoor Coal Pty Ltd, the Fair Work Commission was tasked with determining whether the termination of an enterprise agreement was appropriate. The respondents, Tahmoor Coal Pty Ltd, sought to terminate the existing enterprise agreement, arguing that the economic conditions had deteriorated significantly since the agreement was made. The applicants, including various unions and employee representatives, opposed the termination, asserting that it was not appropriate under the relevant provisions of the Fair Work Act 2009. The Commission had to decide whether the economic conditions had materially and adversely changed to the extent that it was appropriate to terminate the agreement. The central legal issue was whether the economic downturn sufficiently justified the termination of the enterprise agreement. The Commission considered the criteria set out in section 231 of the Fair Work Act 2009, which requires a material and adverse change in economic conditions. The Commission evaluated the evidence presented by both parties regarding the economic conditions and whether these conditions had changed significantly since the agreement was made. It also assessed whether the change was material and adverse and whether the termination was the most appropriate course of action. After thorough consideration, the Commission found that the economic conditions had indeed changed materially and adversely since the agreement was entered into. The evidence demonstrated a significant downturn in the coal industry, leading to reduced profitability and financial instability for Tahmoor Coal Pty Ltd. The Commission concluded that the termination of the enterprise agreement was appropriate under the circumstances, as it was necessary to adapt to the changed economic environment. The Commission ordered the termination of the Tahmoor Coal Enterprise Agreement, effective from the date specified in the decision. This ruling reflects the Commission's recognition of the need to balance the interests of employers and employees in the context of significant economic shifts.

Orders