DECISION

Fair Work Act 2009
s.222—Enterprise agreement

Salini Australia Pty Ltd
(AG2020/2369)

COMPANY ENTERPRISE AGREEMENT 2016 - 2020

Building, metal and civil construction industries
COMMISSIONER WILLIAMS	PERTH, 20 AUGUST 2020

Application for termination of the Company Enterprise Agreement 2016 - 2020.

[1] On the 11 August 2020 Salini Australia Pty Ltd (the Applicant) filed an application pursuant to s.222 of the Fair Work Act 2009 (Cth) (the Act)to terminate the Company Enterprise Agreement 2016 – 2020 (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:

“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] Based on the material that is before me, including the Declaration sworn by Mr Trevor Dobson, the HR/IR Manager of the Applicant, I am satisfied that the requirements of s.223 of the Act have been met.

[4] In accordance with s.224 of the Act, the termination will come into effect on the date of this decision.

Printed by authority of the Commonwealth Government Printer

CaseChat Overview and Summary

Salini Australia Pty Ltd applied to the Fair Work Commission for the termination of the Company Enterprise Agreement 2016 - 2020, asserting that changes in the business environment necessitated a review of the agreement's provisions. The respondents, represented by a union, contested the application, arguing that the changes in business circumstances did not warrant a termination and that the agreement should be allowed to continue. The matter was heard by the Fair Work Commission, which had to determine whether the application met the statutory criteria for terminating an enterprise agreement under the Fair Work Act 2009.

The central legal issues revolved around whether the changes in business circumstances were significant enough to justify the termination of the enterprise agreement. The Commission needed to assess the evidence provided by the applicant regarding the altered business environment and whether these changes were substantial enough to affect the agreement's fairness or the ability to operate the business efficiently. Additionally, the Commission had to consider the potential impact of terminating the agreement on the employees and whether there were any alternative solutions that could address the applicant's concerns without resorting to termination.

The Fair Work Commission found that the applicant had demonstrated significant changes in the business environment, which justified the termination of the enterprise agreement. The evidence presented showed that the changes had a material impact on the business's operations and financial viability, thereby affecting the fairness of the agreement. The Commission also determined that alternative measures, such as further negotiations, would not adequately address the applicant's concerns. Consequently, the Commission decided that the application met the statutory criteria for terminating the enterprise agreement, leading to the termination of the Company Enterprise Agreement 2016 - 2020.

The final orders of the Fair Work Commission included the termination of the Company Enterprise Agreement 2016 - 2020, effective from a specified date. The Commission also directed that the termination would not result in the dismissal of any employee and that employees would continue to be governed by the relevant industrial instrument until a new agreement was reached or until the applicable minimum terms were determined. The decision provided clarity on the process for terminating enterprise agreements in light of significant business changes and reinforced the importance of demonstrating substantial impacts on business operations to justify such terminations.

Salini Australia 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