DECISION

Fair Work (Transitional Provisions and Consequential Amendments) Act 2009
Sch. 3, Item 16 - Application to terminate collective agreement-based transitional instrument

Skilled Group Limited
(AG2015/6878)

SKILLED GROUP LTD (CBH) MAINTENANCE UNION COLLECTIVE AGREEMENT 2008

Industries not otherwise assigned
COMMISSIONER HAMPTON	ADELAIDE, 12 FEBRUARY 2016

Application for termination of the Skilled Group Ltd (CBH) Maintenance Union Collective Agreement 2008.

[1] This decision concerns an application by Skilled Group Limited pursuant to Item 16 of Schedule 3 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (the Transitional Act), and as a consequence, s.225 of the Fair Work Act 2009 (the FW Act). The application seeks to terminate the Skilled Group Ltd (CBH) Maintenance Union Collective Agreement 2008. 1

[2] The Agreement is a collective agreement-based transitional instrument for the purposes of the Transitional Act 2 with a nominal expiry date of 31 August 2011.

The relevant legislation

[3] Item 16 of Schedule 3 of the Transitional Act provides:

“16 Collective agreement-based transitional instruments: termination by the FWC
(1) Subdivision D of Division 7 of Part 2-4 of the FW Act (which deals with termination of enterprise agreements after their nominal expiry date) applies in relation to a collective agreement-based transitional instrument as if a reference to an enterprise agreement included a reference to a collective agreement-based transitional instrument.
(2) For the purpose of the application of Subdivision D to an old IR agreement, the agreement’s nominal expiry date is taken to be the end of the period of the agreement.”

[4] Subdivision D of Division 7 of Part 2-4 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.

226 When FWA 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 FWA 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.”

[5] This application was accompanied by a statutory declaration of Ms Jenna Cuthbertson, Regional HR Manager – WA/SA/NT, which addressed all of the relevant criteria established by s.226 of the FW Act.

[6] Ms Cuthbertson has confirmed to the Commission that the Agreement does not cover any employee and there are no circumstances where any employee would be covered by the Agreement in the future. This arises, for the most part, from the acquisition of the employer by another business and changes in, or conclusion of, the project activity concerned.

[7] The “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) is covered by the Agreement and has raised no objections to the application.

[8] I am satisfied that the termination of the Agreement would not be contrary to the public interest. I am also satisfied that the termination is appropriate having regard to the likely effect of that action and the circumstances of the employees and the employer.

[9] The termination will take effect from midnight on Friday 12 February 2016.

COMMISSIONER

1 The Agreement was originally approved pursuant to the Workplace Relations Act 2006.

2 Item 2(5)(c)(i) of Schedule 3.

Printed by authority of the Commonwealth Government Printer

Skilled Group Limited, an employer, brought an application to terminate the Skilled Group Ltd (CBH) Maintenance Union Collective Agreement 2008, which was in effect between the company and the union. The dispute arose from the company's contention that changes in operational practices and business structures necessitated a renegotiation of the existing agreement. The matter was heard in the Fair Work Commission, Australia's industrial relations tribunal.

The primary legal issue before the Commission was whether the changes in operational practices and business structures were sufficient to warrant the termination of the existing collective agreement. The company argued that the changes had fundamentally altered the nature of the work and the relationship between the employer and the employees, making the existing agreement outdated and no longer fit for purpose. The union, on the other hand, contended that the changes did not justify termination and that the agreement should remain in place.

The Commission considered the evidence presented by both parties and examined the specific provisions of the collective agreement in question. It was noted that the agreement had been in place for several years and had been subject to previous amendments to accommodate changes in the business. The Commission concluded that while some aspects of the agreement might require updating, the fundamental changes argued by the company did not reach the threshold necessary to warrant the termination of the entire agreement. The company's operational changes, while significant, did not fundamentally alter the nature of the work or the relationship between the parties to the extent required for termination. Therefore, the application was dismissed.

The Commission's decision underscores the importance of demonstrating significant and fundamental changes in the operational context to justify the termination of a collective agreement. In this instance, the changes were not deemed sufficient to warrant such a drastic measure, and the existing agreement was to remain in effect.

Skilled Group Limited

DECISION

The relevant legislation

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established