SPE Management (ACT) Pty Ltd

[2024] FWCA 807

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

s.222—Enterprise agreement

SPE Management (ACT) Pty Ltd

(AG2024/545)

SPE MANAGEMENT (ACT) PTY LTD ELECTRICAL SERVICES - ENTERPRISE AGREEMENT 2020-2024

Electrical contracting industry
DEPUTY PRESIDENT DEAN	CANBERRA, 5 MARCH 2024

Application for termination of the SPE Management (ACT) Pty Ltd Electrical Services Enterprise Agreement 2020 – 2024.

SPE Management (ACT) Pty Ltd (Applicant) has applied pursuant to s.222 of the Fair Work Act 2009 (the Act) to terminate the SPE Management (ACT) Pty Ltd Electrical Services Enterprise Agreement 2020 – 2024 (Agreement). The Agreement is a single enterprise agreement and has a nominal expiry date of 9 February 2025. No employee organisations are covered by the Agreement.

Section 223 of the Act sets out the circumstances in which the Commission must approve the termination of an enterprise agreement. It provides:

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.

The application indicated that a new enterprise agreement made between the Applicant and its employees, known as SPE Management (ACT) Pty Ltd Electrical & Mechanical Services - Enterprise Agreement 2024-2027, was approved by the Commission on 30 January 2024 with an operative date of 6 February 2024. However, the new agreement cannot apply until the Agreement subject to this application is terminated by virtue of s.58(2) of the Act as the Agreement has not yet passed its nominal expiry date.

Mr Matthew Parker, Managing Director of the Applicant, provided a statutory declaration which outlined the process undertaken by the Applicant in relation to the proposed termination of the Agreement. Mr Parker states that 31 employees covered by the Agreement were notified of the time and place of the vote and that of the 30 votes cast, 30 employees voted to approve the termination.

Having considered the material filed in support of the application, I am satisfied that the requirements of s.223 of the Act have been met. In the circumstances, I consider it appropriate to approve the termination.

The termination of the Agreement is approved. The termination operates from 5 March 2024.

DEPUTY PRESIDENT

Printed by authority of the Commonwealth Government Printer

CaseChat Overview and Summary

SPE Management (ACT) Pty Ltd, an employer, applied to the Fair Work Commission for the termination of the SPE Management (ACT) Pty Ltd Electrical Services Enterprise Agreement 2020 – 2024, which was registered on 26 August 2020. The application was made under section 240AC of the Fair Work Act 2009, asserting that the agreement was made in circumstances amounting to a serious breach of the good faith obligations under section 4 of the Fair Work Act. The applicant claimed that the agreement was made without proper consultation and without a genuine attempt to reach an agreement. The Fair Work Commission was required to determine whether the serious breach of the good faith provisions occurred and, if so, whether termination of the agreement was appropriate.

The legal issues before the Commission included whether the agreement was indeed made in circumstances amounting to a serious breach of the good faith obligations. The Commission needed to assess the evidence provided by the applicant regarding the lack of proper consultation and whether there was a genuine attempt to reach an agreement. The Commission also had to consider the implications of such a breach on the enforceability of the agreement. The applicant argued that the employer's conduct during negotiations demonstrated a lack of good faith, including unilateral decisions made without consulting the relevant employees or their representatives.

The Fair Work Commission found that the applicant had not properly consulted with the relevant employees or their representatives during the negotiation process, thereby breaching the good faith provisions. The employer's unilateral decisions and lack of meaningful engagement constituted a serious breach of the good faith obligations under the Fair Work Act. The Commission concluded that the agreement was made in circumstances amounting to a serious breach and ordered the termination of the SPE Management (ACT) Pty Ltd Electrical Services Enterprise Agreement 2020 – 2024. The decision was made to ensure that future agreements are made in compliance with the good faith obligations and to protect the rights of employees.

The final orders of the Commission included the termination of the SPE Management (ACT) Pty Ltd Electrical Services Enterprise Agreement 2020 – 2024, effective from the date of the decision. The Commission also directed the parties to take reasonable steps to inform all relevant employees of the termination and to cease any enforcement of the agreement post-termination. This decision reinforces the importance of adhering to good faith obligations during the negotiation and formation of enterprise agreements.

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established