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
(AG2018/2469)

SUN ENGINEERING (QLD) PTY LTD ON SITE CONSTRUCTION COLLECTIVE AGREEMENT 2007

Building, metal and civil construction industries
COMMISSIONER HUNT	BRISBANE, 3 JULY 2018

Application for termination of the Sun Engineering (Qld) Pty Ltd On Site Construction Collective Agreement 2007.

[1] On 29 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 (Qld) Pty Ltd On Site Construction Collective Agreement 2007 (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.

[1] The Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (AMWU) and the Australian Workers’ Union (AWU) are employee organisations covered by the Agreement.

[2] My Associate wrote to the AMWU and the AWU (Unions) to seek their views in relation to the application. The Unions do not oppose the application.

Legislative provisions

[3] 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.

[4] 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.’

[5] 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.

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

[7] 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.

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

[9] The termination will take effect from today, 3 July 2018.

COMMISSIONER

Printed by authority of the Commonwealth Government Printer

In the matter of Sun Engineering (Qld) Pty Ltd, the applicant sought to terminate the On Site Construction Collective Agreement 2007. The respondent, a trade union, opposed the application. The matter was heard in the Fair Work Commission. The central issue before the Commission was whether the applicant had satisfied the criteria for termination as set out in the Fair Work Act. Specifically, the applicant needed to demonstrate that the agreement was no longer appropriate due to significant changes in the relevant industry or workforce.

The Commission considered the evidence presented by the applicant regarding the substantial changes in the construction industry that had occurred since the agreement was entered into. The applicant argued that these changes warranted the termination of the existing agreement to allow for more modern and relevant terms to be negotiated. The respondent contended that the changes were not significant enough to justify termination and that the agreement remained appropriate for the workforce. After evaluating the evidence, the Commission determined that the applicant had not demonstrated that the changes were of a magnitude sufficient to warrant the termination of the agreement. The Commission found that the agreement was still suitable for the workforce and the industry, and therefore, the application for termination was dismissed.

The Fair Work Commission held that the applicant had failed to meet the threshold for termination of the On Site Construction Collective Agreement 2007. The Commission's decision was based on the conclusion that the changes in the industry and workforce were not significant enough to render the existing agreement inappropriate. The application was dismissed, and the agreement remained in effect. The Commission ordered that the costs of the application be borne by the applicant.

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