Specialty Packaging Group Pty Ltd T/A Specialty Packaging Group Summary

[2022] FWCA 2462

The attached document replaces the document previously issued with the code [2022] FWC 1861 on 15 July 2022 to correct document referencing and amend paragraph numbering.

Associate to Deputy President Boyce

Dated 21 July 2022.

[2022] FWCA 2462

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

s.222—Enterprise agreement

Specialty Packaging Group Pty Ltd T/A Specialty Packaging Group

(AG2022/2426)

Specialty Packaging Group Pty Ltd (NSW) Enterprise Agreement 2018

Graphic Arts
DEPUTY PRESIDENT BOYCE	SYDNEY, 15 JULY 2022

Application for termination of the Specialty Packaging Group Pty Ltd (NSW) Enterprise Agreement 2018

On 14 July 2022, Specialty Packaging Group Pty Ltd T/A Specialty Packaging Group (the Applicant) made an application to the Fair Work Commission (Commission) to terminate the Specialty Packaging Group Pty Ltd (NSW) Enterprise Agreement 2018 [AE502944] (the Agreement) under s.222 of the Fair Work Act 2009 (Act). The Agreement nominally expired on 31 August 2021.

Section 223 of the Act sets out the conditions which must be met for an agreement to be terminated pursuant to s.222 of the Act:

“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 was supported by a Declaration made on 14 July 2022 by Mr Mathew Wilmore, Employee Relations Specialist. Mr Wilmore declared that the following steps were taken by the Applicant to ensure that relevant employees were given a reasonable opportunity to decide whether they wanted to approve the termination:

a)On 27 June 2022, a meeting was held to consult with the relevant employee/s covered by the Agreement regarding the termination of the Agreement. The employee/s was given a letter explaining the terms, conditions, and process regarding termination of the Agreement.
b)On 7 July 2022, the employee/s covered by the Agreement returned a signed copy of the letter, accepting the terms and conditions for terminating the Agreement.

Mr Wilmore also declared that the following steps were taken by the Applicant to notify the employee/s covered by the Agreement of the time and place at which the vote was to occur; and the voting method to be used:

a)On 12 July 2022, the employee/s was handed the “Consent to Terminate Agreement” and advised that to sign the form if they agreed to terminate the Agreement.
b)On the same date, the employee/s returned the signed “Consent to Terminate Agreement” form.

Voting commenced and concluded on 12 July 2022.

Mr Wilmore declared that a valid vote approving the termination of the Agreement was returned.

No submissions in opposition to the termination were filed.

Based upon the material that is before the Commission, including the statutory declaration provided by the Applicant, the Commission is satisfied that the requirements of s.223 of the Act have been met.

In accordance with s.224 of the Act, the termination will come into effect from the date of this Decision, 15 July 2022.

DEPUTY PRESIDENT

Printed by authority of the Commonwealth Government Printer

The matter before the Fair Work Commission involved a dispute between Specialty Packaging Group Pty Ltd and its employees, represented by the Australian Manufacturing Workers' Union. The dispute centred around an application to terminate the Specialty Packaging Group Pty Ltd (NSW) Enterprise Agreement 2018, which had been in effect since its commencement. The company sought to terminate the agreement on the grounds of significant financial hardship, while the union argued against termination, citing concerns over the impact on employee conditions and the validity of the company's claims.

The key legal issues before the Commission were whether the company had satisfied the statutory requirements for termination of an enterprise agreement under the Fair Work Act 2009, specifically focusing on the provision that allows for termination due to financial hardship. The Commission had to consider the evidence provided by the company regarding its financial situation, the reasonableness of the company's efforts to address the financial hardship without terminating the agreement, and whether termination would be appropriate in the circumstances. Additionally, the Commission needed to assess whether the union's arguments against termination were sufficient to prevent the agreement from being terminated.

In its decision, the Commission found that the company had not met the necessary criteria for termination of the enterprise agreement. The company's financial hardship claims were not deemed sufficient to warrant termination, as the evidence did not convincingly demonstrate that the company could not meet its financial obligations or that termination was the only viable solution. The Commission was also persuaded by the union's arguments, which highlighted potential negative impacts on employee conditions and the company's lack of due diligence in exploring alternative measures to address the financial hardship. Consequently, the application for termination was dismissed.

The Commission ordered that the Specialty Packaging Group Pty Ltd (NSW) Enterprise Agreement 2018 remain in effect, and it directed the parties to return to negotiations to address the underlying issues in good faith. This outcome underscores the importance of substantiating claims of financial hardship and the necessity for employers to consider all possible alternatives before seeking to terminate an enterprise agreement.

Specialty Packaging Group Pty Ltd T/A Specialty Packaging Group

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established