Subsea 7 i-Tech Australia Pty Ltd

[2020] FWCA 5653

[2020] FWCA 5653

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.225—Enterprise agreement

Subsea 7 i-Tech Australia Pty Ltd
(AG2020/3005)

SUBSEA 7 I-TECH AUSTRALIA PTY LTD ROV ENTERPRISE AGREEMENT 2016

Oil and gas industry
DEPUTY PRESIDENT BINET	PERTH, 9 NOVEMBER 2020

Application for termination of the Subsea 7 i-Tech Australia Pty Ltd ROV Enterprise Agreement 2016 – Agreement Terminated

[1] Subsea 7 i-Tech Australia Pty Ltd (Subsea) has made an application (Application) to the Fair Work Commission (FWC) to terminate the Subsea 7 i-Tech Australia Pty Ltd ROV Enterprise Agreement (Agreement) pursuant to section 225 of the Fair Work Act 2009 (Cth) (FW Act).

[2] The Agreement was approved by Commissioner Roe pursuant to section 186 of the FW Act, on 23 June 2016 and, commenced operation on 30 June 2016. The Agreement has a nominal expiry date of 23 June 2020.

[3] The parties to the Agreement are Subsea and its casual ROV employees working in Australia’s exclusive economic zone (excluding the Joint Petroleum Development Area) employed in the classifications specified in clause 9 of the Agreement (Employees).

[4] There are no employee organisations party to the Agreement.

[5] In support of the Application, Subsea filed a statutory declaration by Mr Benjamin Tourny, Legal Director of Subsea (Tourny Declaration).

Background

[6] Subsea are an engineering services provider in the oil and gas industry. Prior to 31 July 2020 they provided services to operations primarily based in Western Australia. On or around 31 July 2020, Subsea ceased operating in Australia following a decision by its parent company to exit the Australian market.

[7] From 1 July 2020, Subsea began ending the employment of all its Australian employees, including those covered by the Agreement. Since at least 31 July 2020, all Subsea employees previously covered by the Agreement are no longer employed by Subsea.

[8] As a consequence of the above circumstances, there are no longer any Subsea employees covered by the Agreement.

[9] Subsea does not propose to engage employees under the Agreement in the future.

Legislation

[10] Subdivision D of Division 7 of Part 2-4 of the FW Act sets out the mechanism by which an enterprise agreement may be terminated after the agreement has passed its nominal expiry date.

[11] Section 225 of the FW Act provides that:

“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.”

[12] As the Agreement has passed its nominal expiry date and Subsea is an employer covered by the Agreement, I find that Subsea has standing to make the Application pursuant to section 225(a) of the FW Act.

[13] 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.”

Is it contrary to the public interest to termination the Agreement?

[14] Section 226(a) requires the FWC to be satisfied that it is not contrary to the public interest to terminate the Agreement.

[15] This requires the FWC to consider how the termination of the Agreement might foreseeably affect the public as a whole, such as the impact on the achievement or otherwise of the various objects of the Act, employment levels, inflation, and the maintenance of proper industrial standards. 1

[16] There is no positive onus on the applicant to persuade the FWC that there are positive benefits to the public interest arising from the termination. In Geelong Wool Combing Ltd (AIRC) 5 September 2003, Commissioner Wheelan said:

“… the Commission must be persuaded that termination is contrary to the public interest [and] in the absence of any effect of termination which is contrary to the public interest it is not necessary to persuade the Commission that there are positive benefits to the public interest arising from the termination.”

[17] The public interest is distinct in nature from the interests of those covered by the Agreement. The views of those covered by an agreement may be relevant to the exercise of the discretion if they shed light on the effect of the termination on public interest but those views should not be given any independent weight. 2

[18] The object of the FW Act is set out in section 3 of the FW Act, as follows:

“3. Object of this Act

The object of this Act is to provide a balanced framework for cooperative and productive workplace relations that promotes national economic prosperity and social inclusion for all Australians by:

…

(b) ensuring a guaranteed safety net of fair, relevant and enforceable minimum terms and conditions through the National Employment Standards, modern awards and national minimum wage orders;

…

(f) achieving productivity and fairness through an emphasis on enterprise level collective bargaining underpinned by simple good faith bargaining obligations and clear rules governing industrial action;

…”

[19] The specific objects in section 171 of the FW Act inform how the general object in section 3 of the FW Act is to be satisfied in the context of matters dealt with in Part 2-4 of the FW Act:

“171. Objects of this Part

The objects of this Part are:

(a)  to provide a simple, flexible and fair framework that enables collective bargaining in good faith, particularly at the enterprise level, for enterprise agreements that deliver productivity benefits; and

(b)  to enable the FWC to facilitate good faith bargaining and the making of enterprise agreements, including through:

(i) making bargaining orders; and

(ii) dealing with disputes where the bargaining representatives request assistance; and

(iii) ensuring that applications to the FWC for approval of enterprise agreements are dealt with without delay.”

[20] The ascertainment of what is not in the public interest does not involve the mere identification of a consequence of the termination of the agreement that is arguably contrary to the public interest. The ascertainment of the public interest may involve balancing countervailing public interests. 3

[21] Subsea submits that there are no matters contrary to the public interest in terminating the Agreement, as the company has ceased operations in Australia, there are no employees covered by the Agreement and no plans to engage employees covered by the Agreement.

[22] Based on the submissions of the Subsea I am satisfied that it is not contrary to the public interest to terminate the Agreement.

What are the views of the Employees covered by the Agreement?

[23] The employment of all Employees covered by the Agreement ceased by 31 July 2020.

What are the views of the Employee Organisation covered by the Agreement?

[24] There are no employee organisations covered by the Agreement.

What are the views of the Employer covered by the Agreement?

[25] Subsea has made an application to terminate the Agreement and therefore support the termination of the Agreement.

What are the circumstances of the Employees covered by the Agreement?

[26] There are no Employees covered by the Agreement and, as Subsea has ceased operations in Australia, no prospect that Employees will be covered by the Agreement in the future.

What are the circumstances of the Employee Organisation covered by the Agreement?

[27] There are no employee organisations covered by the Agreement.

What are the circumstances of the Employer covered by the Agreement?

[28] Subsea wish to have the Agreement terminated because the Agreement has passed its nominal expiry date and they no longer operate with Australia.

Is it appropriate to terminate the Agreement taking into all the circumstances?

[29] In assessing the views and circumstances of the parties it is important to remember that:

“Taking into account the views and circumstances of the parties involves far more than an expression of their views in support or opposition to termination. It should involve a reason for their views and the validity of their concerns.” 4

[30] I am satisfied that the views of Subsea, that the Agreement should be terminated, are valid. The Agreement has passed its nominal expiry date and Subsea no longer operate within Australia. Subsea does not propose to engage Employees covered by the Agreement in the future.

Conclusion

[31] For the reasons enunciated above, I am satisfied that it is not contrary to the public interest to terminate the Agreement.  On the contrary, based on the submissions of the Subsea, the Agreement is no longer relevant. 

[32] Taking into account all the circumstances, including the views and circumstances of Subsea, I am satisfied that it is appropriate to terminate the Agreement.

[33] Accordingly, the Agreementis terminated. The termination is to take effect on and from the date of this Decision. An Order to this effect will be issued in conjunction with this Decision.

DEPUTY PRESIDENT

 1   Re Kellogg Brown and Root, Bass Strait (Esso) Onshore/Offshore Facilities Certified Agreement 2000 (2005) 139 IR 34, 40 – 41.

 2   Ibid.

 3   Kellogg Brown & Root Pty Ltd & Ors and Esso Australia Ltd (2005) 139 IR 34 referred to the decision of the High Court of Australia in Queensland Electricity Commission; Ex parte Electrical Trades Union of Australia (1987) 61 ALJR 393.

 4   Energy Resources Australia Ltd v Liquor, Hospitality and Miscellaneous Union[2010] FWA 2434, [16].

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