SCOTT Automation & Robotics Pty Ltd

[2019] FWCA 5105

[2019] FWCA 5105

FAIR WORK COMMISSION

DECISION

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

SCOTT Automation & Robotics Pty Ltd
(AG2018/6868)

MACHINERY AUTOMATION & ROBOTICS PTY LIMITED SERVICE AND PROJECT COLLECTIVE AGREEMENT 2009 2014

Scientific services
COMMISSIONER GREGORY	MELBOURNE, 22 JULY 2019

Application for termination of the Machinery Automation & Robotics Pty Limited Service and Project Collective Agreement 2009 2014.

Introduction

[1] An application has been made under s.225 of the Fair Work Act 2009 (Cth) (“the Act”) by SCOTT Automation & Robotics Pty Ltd (“SCOTT Automation & Robotics”) to terminate the Machinery Automation & Robotics Pty Limited Service and Project Collective Agreement 2009 2014 (“the Agreement”). The nominal expiry date of the Agreement is 28 July 2014.

[2] The application was dealt with in a brief hearing on 23 January 2019. Mr Troy Krogh, the Regional Director - Australia at SCOTT Automation & Robotics, appeared on behalf of the Applicant. The business is involved in developing automated solutions for a range of production processes, which extend to materials handling, vision guided robotics, and guided vehicle warehousing. It works in a diverse range of sectors including manufacturing, mining, and meat processing.

[3] Mr Krogh indicated in his submissions that the business employs approximately forty engineers and twenty tradespersons located in Sydney, Melbourne, Brisbane and Perth. The Agreement was originally put in place to simplify and consolidate the coverage of employees that existed through the operation of various State based Awards. However, it now wishes to terminate the Agreement as it is currently of no relevance to the operation of the business. On the one hand it is outdated as the relevant wage rates in the underlying Modern Awards have completely surpassed the rates contained in the Agreement. The business has also now put in place individual employment contracts with its employees that contain terms and conditions that are well in excess of those contained in the underlying Modern Awards. Those individual employment agreements also reference the relevant Modern Awards as minimum standards.

[4] The business accordingly considers that it is now appropriate to simplify its administrative arrangements, given that the Agreement has no ongoing relevance. Mr Krogh also provided a Statutory Declaration in support of the application.

Relevant Legislation

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

“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 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.”

227 When termination comes into operation

If an enterprise agreement is terminated under section 226, the termination operates from the day specified in the decision to terminate the agreement.” 1

Consideration

[6] It is noted at the outset that the Agreement is now almost 5 years past its nominal expiry date of 28 July 2014.

[7] The Commission has also had regard to the wage rates contained in the Agreement, and those now contained in the relevant Modern Awards. The rates in those Awards are now clearly in excess of those contained in the Agreement. For example, the hourly rate for an Electrical Tradesperson in the Agreement is $18.69 or $710.22 per week, whereas the corresponding hourly rate in the current Electrical, Electronic and Communications Contracting Award 2010 is $22.70 or $862.50 per week.

[8] The Level 1 rate in the Agreement for an Electrical and Mechanical Engineer is $802.22 per week, which represents an annual figure of $41,715.00. By contrast the corresponding rate in the current Professional Employees Award 2010 is $990.34 per week, which represents an annual figure of $51,498.00.

[9] I am accordingly satisfied that termination of the Agreement will have no detrimental effect on any employees covered by the Agreement. I am also satisfied that there are no public interest considerations that would make it inappropriate to terminate the Agreement. It is instead sensible to terminate agreements that have long since passed their nominal expiry date and have no continuing relevance.

[10] The Machinery Automation & Robotics Pty Limited Service and Project Collective Agreement 2009 2014 is accordingly terminated pursuant to s.226 of the Act. In accordance with s.227 the termination shall operate from the date of this decision.

COMMISSIONER

 1   Fair Work Act 2009 (Cth) ss 225-7.

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