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…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2020] FWCA 5653
Decision Date: 9 NOVEMBER 2020

CaseChat Overview and Summary

In this case, Subsea 7 i-Tech Australia Pty Ltd applied to terminate the ROV Enterprise Agreement 2016. The matter was heard by the Fair Work Commission (FWC). The dispute centred around the terms of the Enterprise Agreement and whether it could be terminated under the provisions of the Fair Work Act 2009. The primary issue before the FWC was whether the applicant had demonstrated sufficient grounds for termination of the agreement. Specifically, the court needed to determine if the changes in the workplace environment and business operations of Subsea 7 i-Tech justified the termination of the existing agreement.

The FWC considered whether the applicant had met the legal criteria for termination under section 242 of the Fair Work Act. The applicant argued that significant changes in the business environment and workforce composition warranted the termination of the agreement. The FWC evaluated the evidence presented, including the economic and operational changes experienced by the company, and assessed whether these changes were substantial enough to justify the termination. The Commission concluded that the changes presented by Subsea 7 i-Tech were indeed significant and warranted the termination of the existing agreement.

Following its evaluation, the FWC determined that the application for termination was well-founded. The changes in the business environment and the resultant need for flexibility in workforce management provided a valid basis for terminating the existing Enterprise Agreement. The FWC thus terminated the ROV Enterprise Agreement 2016, effective from the date of the decision. This ruling allows Subsea 7 i-Tech to negotiate new terms that better reflect the current operational realities of the company.

Orders