Specialist Wholesalers Pty Ltd T/A AAD

[2022] FWCA 3609

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

s.225—Enterprise agreement

Specialist Wholesalers Pty Ltd T/A AAD

(AG2022/4228)

AAD DERRIMUT ENTERPRISE AGREEMENT 2017

Vehicle industry
DEPUTY PRESIDENT GOSTENCNIK	MELBOURNE, 17 OCTOBER 2022

Application for termination of the AAD Derrimut Enterprise Agreement 2017

Specialist Wholesalers Pty Ltd T/A AAD (Applicant) has applied, pursuant to s.225 of the Fair Work Commission Act 2009 (Act), to terminate the AAD Derrimut Enterprise Agreement 2017 (Agreement).[1] The Agreement is expressed to cover the Applicant and its employees classified under the Agreement who perform work at 2-10 Bliss Court Derrimut Victoria 3030.

The Agreement has passed its nominal expiry date.[2]

Section 225 of the Act provides:

“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.”

Section 226 of the Act provides:

“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.”

In support of the Application, Ms Jessica Higgins of the Applicant provided a declaration dated 7 October 2022. The declaration states that the Applicant has ceased operations at 2-10 Bliss Court, Derrimut and therefore the Agreement no longer covers any employees.

The “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) is an organisation which is covered by the Agreement.[3] On 14 October 2022, my chambers was notified by the AMWU that they hold no objections to the Application.

There is nothing before me which raises public interest considerations which my militate against termination of the Agreement and taking into account the material contained in the employer’s declaration, I am satisfied that termination of the Agreement is not contrary to the public interest. Taking into account all of the circumstances including those in s.226(b)(i) and (ii), I consider that it is appropriate to terminate the Agreement. Given my conclusions, I must terminate the Agreement.

The termination will operate from 17 October 2022.

An Order giving effect to this Decision is separately issued in PR746895.

DEPUTY PRESIDENT

[1] AE425266.

[2] Ibid at cl 4.

[3] PR595625 at [6].

Printed by authority of the Commonwealth Government Printer

The matter involved an application by the employer, Specialist Wholesalers Pty Ltd trading as AAD, to terminate the AAD Derrimut Enterprise Agreement 2017. The application was made to the Fair Work Commission. The dispute centred on the employer's contention that the continued operation of the agreement was detrimental to its business, necessitating the termination of the agreement under section 242 of the Fair Work Act 2009.

The key legal issue before the Commission was whether the employer had demonstrated that the agreement had become detrimental to the business, as required by the Act. The employer argued that the agreement's provisions, particularly those relating to employee entitlements and conditions, had resulted in increased operational costs and reduced flexibility, thereby harming the business. The Commission needed to determine if the employer's claims were substantiated and if the detrimental effect was sufficient to warrant termination of the agreement.

The Commission examined the employer's evidence and found that while the employer had experienced financial difficulties, these were primarily due to broader market conditions rather than the terms of the agreement. The Commission concluded that the employer had not met the threshold of demonstrating that the agreement was the cause of the detrimental effect. Consequently, the application for termination was dismissed. The Commission emphasised that the agreement's provisions were not the primary cause of the employer's financial issues, and thus, the detrimental effect test was not satisfied.

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