Sealanes (1985) Pty Ltd

[2016] FWCA 7647

[2016] FWCA 7647

FAIR WORK COMMISSION

DECISION

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

Sealanes (1985) Pty Ltd
(AG2016/5935)

SEALANES (1985) PTY LTD PILBARA ENTERPRISE AGREEMENT 2009

Commercial sales
DEPUTY PRESIDENT BINET	PERTH, 24 OCTOBER 2016

Application for termination of the Sealanes (1985) Pty Ltd Pilbara Enterprise Agreement 2009 – agreement terminated.

[1] Sealanes (1985) Pty Ltd (Sealanes) has applied for the termination of the Sealanes (1985) Pty Ltd Pilbara Enterprise Agreement 2009 (Agreement) pursuant to section 225 of the Fair Work Act 2009 (FW Act) (Application).

[2] The Agreement is a single enterprise agreement made pursuant to section 185 of the FW Act with a nominal expiry date of 25 May 2013.

[3] The Transport Workers’ Union of Australia (TWU) is a party to the Agreement.

[4] On 22 September 2016, Sealanes filed a Statutory Declaration (Sealanes Statutory Declaration) which stated as follows:

(a) Only three employees are currently covered by the Agreement (Employees).

(b) On 12 September 2016 Sealanes advised the Employees that Sealanes proposed to apply to terminate the Agreement and engage the Employees under common law contracts with equivalent conditions as it was not cost effective to negotiate a replacement agreement.

(c) The Employees signed a document confirming that they consent to the Fair Work Commission (FWC) terminating the Agreement. (This document was attached to the Sealanes Statutory Declaration).

(d) On 21 September 2016 Mr Ruri of the TWU indicated that the TWU would not oppose the Application.

[5] Section 225 of the FW Act allows an employer to apply to the FWC for the termination of an agreement that has passed its nominal expiry date. Section 225 of the FW Act states:

“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.”

[6] Section 226 of the FW Act states:

“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.”

[7] On 4 October 2016, in accordance with directions issued on 3 October 2016 (Directions), Sealanes filed with the FWC and served on the TWU an outline of submissions as to why the Agreement should be terminated which addresses the requirements of section 226 of the FW Act (Sealanes Submissions).

[8] In relation to the likely effect that the termination will have on the Employees, Sealanes and the TWU, the Sealanes Submissions noted that the Agreement expired three and a half years ago and many conditions contained in the Agreement are either legislatively prohibited and/or are out of date.

[9] The Sealanes Submissions also noted that Sealanes would need to expend considerable resources to negotiate a new agreement which could be expended elsewhere within its business for greater value and efficiency given that Agreement only applies to three employees.

[10] Attached to the Sealanes Submissions was a comparison table setting out the terms which differ between the applicable Award, the Road Transport and Distribution Award 2010 (Award) and the Agreement. Sealanes conceded that the Award provided for a lower ordinary rate of pay, however Sealanes noted that in all other regards the Employees would be better off overall under the Award as compared to the Agreement.

[11] To address this issue the Sealanes Submissions attached undertakings in support of Sealanes’ Application (Undertakings) which provided as follows.

(a) It is the intention of Sealanes to offer Employees covered by the Agreement common law contracts of employment containing their terms and conditions of employment.

(b) There is no intention on the part of Sealanes to reduce the Employees’ ordinary wage rate as contained in Schedule 1, Item 1 of the Agreement or dramatically change their conditions of employment.

(c) Despite clause 15 of the Award (relating to minimum wages and related matters), Sealanes will maintain the Employees’ ordinary wage rate as at 4 October 2016 until the execution by the Employees of their common law contracts.

(d) A signed copy of the Undertakings will be provided to the Employees covered by the Agreement.

[12] A copy of the Undertakings is annexed to the end of this decision.

[13] The Directions also directed TWU to file and serve submissions in response to the Application and any evidence on which it sought to rely (TWU Submissions). The TWU Submissions filed on 19 October 2016 confirmed that:

● the TWU does not oppose the application by Sealanes to terminate the Agreement;

● the TWU accepts that the Agreement only applies to the three Employees of Sealanes and that those Employees have agreed to terminate the Agreement;

● in light of the Undertakings the termination of the Agreement would not have an adverse effect on either the TWU, or any of the Employees covered by the Agreement; and

● the TWU cannot see why it would be contrary to the public interest for the FWC to terminate the Agreement.

[14] Both Sealanes and the TWU submit that it is not contrary to the public interest to terminate the Agreement. In the absence of any evidence to the contrary I am satisfied that termination of the Agreement is not contrary to the public interest.

[15] Taking into account the views of Sealanes, the Employees and the TWU, and based on the material that is before me, in particular the Undertakings, I consider in the circumstances that it is appropriate to terminate the Agreement.

[16] Accordingly, the Agreement is terminated. Termination of the Agreement is to take effect on and from the date of this decision.

DEPUTY PRESIDENT

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