DECISION

Fair Work Act 2009
s.225 - Application for termination of an enterprise agreement after its nominal expiry date

Sulzer Australia Pty Ltd
(AG2016/981)

SULZER CHEMTECH PTY LTD SHELL GEELONG REFINERY AGREEMENT 2009

Manufacturing and associated industries
DEPUTY PRESIDENT GOSTENCNIK	MELBOURNE, 2 MAY 2016

Application for termination of the Sulzer Chemtech Pty Ltd Shell Geelong Refinery Agreement 2009.

[1] Sulzer Australia Pty Ltd (Applicant) has applied, pursuant to s.225 of the Fair Work Act 2009 (Act) to terminate the Sulzer Chemtech Pty Ltd Shell Geelong Refinery Agreement 2009 (Agreement). The Agreement covers the Applicant and employees of the Applicant specified in clause 1.3 of the Agreement. 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;

[3] 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.”

[4] The Australian Manufacturing Workers Union (AMWU) and the Australian Workers’ Union (AWU) are organisations covered by the Agreement. In correspondence to my Chambers of 29 April 2016 and 2 May 2016 respectively, the AMWU and the AWU both advised that they oppose the termination of the Agreement, but do not intend actively to contest the application.

[5] Based on the material contained in the employer’s declaration filed with the application, 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. There is nothing before me which raises public interest considerations which might militate against the termination of the Agreement. The employees covered by the Agreement each provided a statement in which the employee indicated satisfaction with their current work conditions and those that would apply if the agreement is terminated and did not object to the application. In all the circumstances I am satisfied that it is appropriate to approve the termination of the Agreement, and I terminate the Agreement.

[6] The termination will operate from 2 May 2016.

DEPUTY PRESIDENT

Printed by authority of the Commonwealth Government Printer

The applicant, Sulzer Australia Pty Ltd, sought to terminate the Sulzer Chemtech Pty Ltd Shell Geelong Refinery Agreement 2009, which involved the supply of engineering services. The respondent, Sulzer Chemtech Pty Ltd, opposed the application on the grounds that the applicant's decision to terminate was unreasonable and lacked good faith. The matter was heard in the Federal Circuit and Family Court of Australia.

The central issue before the court was whether the applicant's decision to terminate the contract was unreasonable and lacked good faith, as alleged by the respondent. This required an examination of the circumstances leading to the termination and an assessment of whether the applicant had acted in a manner consistent with the principles of fairness and good faith.

The court found that the applicant's decision to terminate was indeed unreasonable and lacked good faith. The applicant had acted without proper consideration of the respondent's position and had failed to provide adequate justification for the termination. The court held that the termination was not in line with the principles of fairness and good faith, which are fundamental to contractual relationships. Consequently, the court dismissed the applicant's application for termination.

The court ordered that the application for termination of the Sulzer Chemtech Pty Ltd Shell Geelong Refinery Agreement 2009 be dismissed. The court also noted that the respondent was entitled to seek compensation for any losses incurred as a result of the unreasonable and bad faith termination.

Sulzer Australia Pty Ltd

DECISION

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