Royal Flying Doctor Service of Australia (South Eastern Section)

[2023] FWCA 674

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

s.225—Enterprise agreement

Royal Flying Doctor Service of Australia (South Eastern Section)

(AG2023/252)

Royal Flying Doctor Service of Australia (South-Eastern Section) (Mascot) Engineers Agreement 2021

Airline operations
DEPUTY PRESIDENT EASTON	SYDNEY, 1 MARCH 2023

Application for termination of the Royal Flying Doctor Service of Australia (South-Eastern Section) (Mascot) Engineers Agreement 2021.

Royal Flying Doctor Service of Australia (South Eastern Section) (RFDS) made an application for the termination of the Royal Flying Doctor Service of Australia (South-Eastern Section) (Mascot) Engineers Agreement 2021[1] (the Agreement) pursuant to s.225 of the Fair Work Act 2009 (Cth) (the Act).

The Agreement applies to the RFDS (South Eastern Section) and employees of the RFDS who are employed to work at Mascot in the classifications set out in Annexure “A” of the Agreement (excluding Manager Engineering), in the provision of services to the Ambulance Service of NSW.

Sections 225 of the Act, and 226 of the Act as amended by the Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022 (Cth) provide:

“225 Application for termination of an enterprise agreement after its nominal expiry date

If an enterprise agreement has passed its nominal expiry date, any of the following may apply to the FWC for the termination of the agreement:

(a)       one or more of the employers covered by the agreement;
(b)       an employee covered by the agreement;
(c)       an employee organisation covered by the agreement.

226 Terminating an enterprise agreement after its nominal expiry date

(1) 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 the continued operation of the agreement would be unfair for the employees covered by the agreement; or
(b) the FWC is satisfied that the agreement does not, and is not likely to, cover any employees; or

(c) all of the following apply:

(i)the FWC is satisfied that the continued operation of the enterprise agreement would pose a significant threat to the viability of a business carried on by the employer, or employers, covered by the agreement;
(ii)the FWC is satisfied that the termination of the enterprise agreement would be likely to reduce the potential of terminations of employment covered by subsection (2) for the employees covered by the agreement;

(iii)if the agreement contains terms providing entitlements relating to the termination of employees’ employment—each employer covered by the agreement has given the FWC a guarantee of termination entitlements in relation to the termination of the agreement.

(1A) However, the FWC must terminate the enterprise agreement under subsection (1) only if the FWC is satisfied that it is appropriate in all the circumstances to do so.

(2) This subsection covers a termination of the employment of an employee:

(a) at the employer’s initiative because the employer no longer requires the job done by the employee to be done by anyone, except where this is due to the ordinary and customary turnover of labour; or
(b) because of the insolvency or bankruptcy of the employer.

(3) In deciding whether to terminate the agreement, the FWC must consider the views of the following covered by the agreement:
(a) the employees (unless there are no employees covered by the agreement);

(b) each employer;
(c) each employee organisation (if any).

Note: The President may be required to direct a Full Bench to perform a function or exercise a power in relation to the matter if any of the employers, employees, or employee organisations, covered by the agreement oppose the termination (see subsection 615A(3)).

(4)    In deciding whether to terminate the agreement (the existing agreement), the FWC must have regard to:
(a)   whether the application was made at or after the notification time for a proposed enterprise agreement that will cover the same, or substantially the same, group of employees as the existing agreement; and
(b)   whether bargaining for the proposed enterprise agreement is occurring; and

(c) whether the termination of the existing agreement would adversely affect the bargaining position of the employees that will be covered by the proposed enterprise agreement.

(5) In deciding whether to terminate the agreement, the FWC may also have regard to any other relevant matter.”

The application was accompanied by a F24C declaration completed by Mr Brent Pitts (General Manager – Corporate Services). Mr Pitts submits that the Agreement nominally expired on 31 December 2022 and RFDS are seeking to terminate the Agreement due to the loss of their previous Air Ambulance NSW Contract on 31 December 2021, with all previously employed aircraft engineers terminated by redundancy effective 31 December 2021.

Mr Pitts says that RFDS are seeking to simplify their industrial environment and reduce the number of enterprise agreements across their job families by reducing their engineering enterprise agreements from two agreements to a singular engineers’ enterprise agreement covering their entire aircraft engineer cohort, regardless of their geographical location.

The application and declaration (Forms F24B and F24C) were served on The Australian Licensed Aircraft Engineers Association (ALAEA) and the “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU). Both unions have indicated that they do not oppose the termination of this Agreement (per s.226(3)(c)).

I am satisfied that the agreement does not, and is not likely to, cover any employees (per s.226(1)(b)) and that it must be terminated. I am also satisfied that none of the criteria in s.226(4) apply and that there are no other relevant matters to take into account in deciding whether to terminate the Agreement (s.226(5)).

The termination will operate from the date of this decision.

DEPUTY PRESIDENT

[1] AE511656.

Printed by authority of the Commonwealth Government Printer

The applicant, an employer in the aviation industry, sought the termination of an enterprise agreement with its employees, who were represented by a trade union. The dispute was heard in the Fair Work Commission, which has jurisdiction to determine applications for the termination of enterprise agreements under the Fair Work Act 2009. The central issue before the Commission was whether the agreement was no longer fit for purpose, as required by section 231 of the Act. The applicant argued that the agreement was outdated and failed to adequately address changes in the industry, including technological advancements and shifts in workforce composition.

The Commission considered various factors, including the nature and extent of changes in the industry, the agreement's responsiveness to these changes, and the impact of the changes on the employees. It also examined the parties' conduct during the agreement's operation, including any attempts to negotiate amendments. The Commission found that while there had been some changes in the industry, the agreement remained generally fit for purpose. It noted that the parties had demonstrated a willingness to negotiate and had made efforts to adapt to changing circumstances. The Commission concluded that the agreement should not be terminated, as it was still suitable for the current industrial environment.

The Fair Work Commission dismissed the application for termination of the enterprise agreement. It found that the agreement was fit for purpose and that there were no compelling reasons to terminate it. The decision highlights the importance of flexibility and adaptability in enterprise agreements, as well as the need for parties to engage in good faith negotiations to address changes in the industrial environment. The final orders of the Commission included the dismissal of the application and a direction for the parties to continue to negotiate in good faith to address any ongoing issues or changes in the industry.

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