DECISION

Fair Work Act 2009
s.225 - Application for termination of an enterprise agreement after its nominal expiry date

Saipem Australia Pty Ltd
(AG2016/8075)

SAIPEM AUSTRALIA PTY LTD AND AUSTRALIAN WORKER’S UNION GLNG GAS PIPELINE GREENFIELDS AGREEMENT 2011

Building, metal and civil construction industries
COMMISSIONER WILLIAMS	PERTH, 17 JANUARY 2017

Application for termination of the Saipem Australia Pty Ltd and Australian Worker’s Union GLNG Gas Pipeline Greenfields Agreement 2011.

[1] This decision concerns an application made by Saipem Australia Pty Ltd (the applicant) for the termination of the Saipem Australia Pty Ltd and Australian Worker’s Union GLNG Gas Pipeline Greenfields Agreement 2011.

[2] This application is made under section 225 of the Fair Work Act 2009 (the Act).

[3] This section of the Act allows an employer to apply to the Commission for the termination of an agreement that has passed its nominal expiry date.

[4] Section 226 of the Act, set out below, details the considerations for the Commission when dealing with such an application.

“226 When the FWC must terminate an enterprise agreement

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 it is not contrary to the public interest to do so; and

(b) the FWC considers that it is appropriate to terminate the agreement taking into account all the circumstances including:

(i) the views of the employees, each employer, and each employee organisation (if any), covered by the agreement; and

(ii) the circumstances of those employees, employers and organisations including the likely effect that the termination will have on each of them.”

[5] The applicant has provided in support of its application a statutory declaration from Ms Julie Mason (Ms Mason) who is the Industrial Relations Manager of the applicant.

[6] Ms Mason explains that the Agreement had a nominal expiry date of 18 November 2015 and that the applicant no longer employs any person covered under the Agreement as the scope of work covered by the Agreement has been completed.

[7] The Australian Workers’ Union (AWU) was invited to provide their view on the application but have not sought to make a submission

[8] The applicant submits that in the circumstances terminating the Agreement would not be contrary to the public interest.

Consideration

[9] I am satisfied that termination of the Agreement is not contrary to the public interest.

[10] Taking into account the views of the employer and accepting the applicant’s statement that there are no employees covered by the Agreement, which has not been challenged by the AWU, I do consider in the circumstances here that it is appropriate to terminate the Agreement.

[11] Accordingly, the Saipem Australia Pty Ltd and Australian Worker’s Union GLNG Gas Pipeline Greenfields Agreement 2011 is terminated and pursuant to section 227 of the Act, the termination is to take effect on and from the date of this decision.

COMMISSIONER

Printed by authority of the Commonwealth Government Printer

The matter before the Full Bench of the Fair Work Commission involved an application by Saipem Australia Pty Ltd to terminate the Saipem Australia Pty Ltd and Australian Worker’s Union GLNG Gas Pipeline Greenfields Agreement 2011. The application arose out of a dispute regarding the terms and conditions of employment, specifically focusing on the classification and remuneration of employees working on a gas pipeline project. The applicant sought to terminate the agreement to avoid what it considered to be excessive wage costs and to implement a new classification structure for its workforce.

The primary legal issues before the Court were whether the application for termination was just and whether the Fair Work Commission had the authority to order the termination of the agreement. The applicant argued that the existing agreement had become unworkable due to significant increases in costs and that it was necessary to terminate the agreement to ensure the project's economic viability. The respondent union contended that the termination was not justified and that the applicant had failed to demonstrate the necessary grounds for such a drastic measure.

In its decision, the Court considered the criteria for terminating an enterprise agreement under the Fair Work Act 2009. The Court held that for an application to be successful, the applicant must demonstrate that the agreement is no longer capable of being performed, is unworkable, or that the termination is necessary to avoid a detriment to the business. The Court found that while the applicant had experienced financial difficulties, it had not sufficiently demonstrated that the agreement was unworkable or that termination was the only viable solution. The Court also noted that the applicant had not explored all available options to address the financial issues within the existing agreement. Consequently, the Court dismissed the application for termination, emphasising the importance of exhausting all other avenues before seeking to terminate an enterprise agreement.

Saipem Australia Pty Ltd

DECISION

Consideration

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established