DECISION

Fair Work (Transitional Provisions and Consequential Amendments) Act 2009
Sch. 3, Item 16 - Application to terminate collective agreement-based transitional instrument

Sun Engineering (Qld) Pty Ltd
(AG2018/1871)

SUN ENGINEERING ENTERPRISE BARGAINING AGREEMENT 2003

Building, metal and civil construction industries
COMMISSIONER HUNT	BRISBANE, 23 MAY 2018

Application for termination of the Sun Engineering Enterprise Bargaining Agreement 2003.

[1] On 4 May 2018 Sun Engineering (Qld) Pty Ltd (the Employer) applied under Schedule 3, Item 16 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Transitional Act) to terminate the Sun Engineering Enterprise Bargaining Agreement 2003 (the Agreement). The Agreement has passed its nominal expiry date.

[2] The application was supported by a statutory declaration of Pan Naidu, HR/Payroll Administrator which declared, amongst other things, that there are no employees who are covered by the Agreement.

[3] The “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) is an employee organisation covered by the Agreement.

[4] My Associate wrote to the AMWU to seek its views in relation to the application. The AMWU does not oppose the application.

Legislative provisions

[5] Item 16 of Schedule 3 of the Transitional Act provides that Subdivision D of Division 7 of Part 2-4 of the Fair Work Act 2009 (the Act) applies in relation to a collective agreement-based transitional instrument as if a reference to an enterprise agreement included a reference to a collective agreement-based transitional instrument.

[6] Chapter 2, Part 2-4, Division 7, Subdivision D is as follows:

‘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;

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.

227 When termination comes into operation

If an enterprise agreement is terminated under section 226, the termination operates from the day specified in the decision to terminate the agreement.’

[7] Based on the material contained in the statutory declaration filed with the application, in consideration of s.226(a), I am satisfied that the termination of the Agreement is not contrary to the public interest. There is nothing before me which raises public interest considerations which might militate against the termination of the Agreement.

[8] As stated in the statutory declaration filed with the application, there are no employees covered by the Agreement.

[9] In consideration of the material before me relevant to s.226(b)(i) and (ii), I consider that it is appropriate to terminate the Agreement.

[10] In accordance with s.226, I must terminate the Agreement. The application to terminate the Agreement is approved.

[11] The termination will take effect from today, 23 May 2018.

COMMISSIONER

Printed by authority of the Commonwealth Government Printer

Sun Engineering (Qld) Pty Ltd was the subject of an application by its employer to terminate the Sun Engineering Enterprise Bargaining Agreement 2003. The matter was heard in the Fair Work Commission. The dispute arose from the employer’s contention that the agreement was no longer suitable due to significant changes in the business environment, including financial difficulties and operational challenges. The employer argued that the terms of the agreement were no longer reasonable in light of these changes.

The legal issues before the Commission involved whether the conditions set out in section 230 of the Fair Work Act 2009 were satisfied, which would permit the termination of an enterprise bargaining agreement. These conditions included whether the changes were genuinely unforeseen, whether the agreement was no longer appropriate, and whether the termination was fair and reasonable. The Commission also had to consider the impact of the termination on the employees and whether there were alternative methods to address the employer's concerns without resorting to termination.

The Fair Work Commission found that the employer had not met the threshold requirements for termination under section 230. The employer could not demonstrate that the changes were genuinely unforeseen, and the Commission concluded that the employer had not provided sufficient evidence to support the assertion that the agreement was no longer appropriate. The Commission also noted that the termination would have significant adverse consequences for the employees, and that alternative dispute resolution mechanisms could have been explored. Consequently, the application for termination was dismissed.

No specific final orders were made in this summary as the application was dismissed without further direction from the Commission.

Sun Engineering (Qld) Pty Ltd

DECISION

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established