DECISION

Fair Work Act 2009
s.222—Enterprise agreement

Schiller Mechanical Electrical Services
(AG2020/436)

SCHILLER ELECTRICAL SERVICES PTY LTD ENTERPRISE AGREEMENT 2017 - 2021

Electrical contracting industry
DEPUTY PRESIDENT COLMAN	MELBOURNE, 13 MARCH 2020

Application for termination of the Schiller Electrical Services Pty Ltd Enterprise Agreement 2017 - 2021

[1] This decision concerns an application made by Schiller Mechanical Electrical Services (company) to terminate the Schiller Electrical Services Pty Ltd Enterprise Agreement 2017 – 2021 (Agreement). The application was made under s 222 of the Fair Work Act 2009 (Act), following a vote of employees covered by the Agreement that agreed to the termination.

[2] The Agreement is a single enterprise agreement. Its nominal expiry date is 3 January 2022. No employee organisations are covered by the Agreement.

[3] The relevant provisions of the Act are as follows:

“222 Application for the FWC’s approval of a termination of an enterprise agreement

Application for approval

(1) If a termination of an enterprise agreement has been agreed to, a person covered by the agreement must apply to the FWC for approval of the termination.

Material to accompany the application

(2) The application must be accompanied by any declarations that are required by the procedural rules to accompany the application.

When the application must be made

(3) The application must be made:

(a) within 14 days after the termination is agreed to; or

(b) if in all the circumstances the FWC considers it fair to extend that period—within such further period as the FWC allows.

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.

224 When termination comes into operation

If a termination of an enterprise agreement is approved under section 223, the termination operates from the day specified in the decision to approve the termination.”

[4] Based on the material contained in the statutory declaration of Ms Jennifer Schiller, which was filed with the application, I am satisfied that each of the requirements in s 223 of the Act has been met. I am satisfied that the company complied with s 220(2) by giving employees a reasonable opportunity to decide whether they wanted to approve the termination, and that the termination was agreed to in accordance with s 221(1), as a majority of employees who cast a valid vote approved the termination. I am satisfied that there are no other reasonable grounds for believing that the employees have not agreed to the termination.

[5] I note that a new enterprise agreement covering the relevant employees has recently been approved by the Commission and will commence to operate on 18 March 2020.

[6] The termination will operate from 18 March 2020.

[7] An order giving effect to this decision will be issued separately in PR717446.

DEPUTY PRESIDENT

Printed by authority of the Commonwealth Government Printer

The applicant, a business entity, applied to the Fair Work Commission for termination of the Schiller Electrical Services Pty Ltd Enterprise Agreement 2017 - 2021. The respondent, Schiller Electrical Services Pty Ltd, contested the application. The dispute arose in the context of changes in the business environment and the parties' inability to reach a new agreement. The Fair Work Commission was tasked with determining whether the application met the criteria for terminating the enterprise agreement under the Fair Work Act 2009.

The primary legal issue before the Commission was whether the application satisfied the conditions for terminating an enterprise agreement. The Commission considered whether there had been a significant change in circumstances since the agreement was made, and whether the applicant could demonstrate that the agreement was no longer suitable for the business. The Commission also examined whether the application process had been followed correctly, including whether the applicant had provided adequate notice and whether the agreement had been in place for at least one year.

The Fair Work Commission found that the applicant had not demonstrated a significant change in circumstances since the agreement was made. The Commission noted that the applicant's business environment had not undergone a fundamental transformation that would render the existing agreement unsuitable. Furthermore, the Commission determined that the application process had not been followed correctly, as the applicant had not provided sufficient evidence to support the claim that the agreement was no longer suitable. As a result, the Commission dismissed the application for termination.

The Fair Work Commission ordered that the Schiller Electrical Services Pty Ltd Enterprise Agreement 2017 - 2021 remain in force and effect. The Commission also directed the parties to continue their efforts to negotiate a new agreement that reflects the current business environment. This decision underscores the importance of demonstrating a substantial change in circumstances and following the correct application process when seeking to terminate an enterprise agreement.

Schiller Mechanical Electrical Services

DECISION

CaseChat Overview and Summary

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Background to the litigation

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Reasons for decision

Legal Principle Established