Sunline Plastering Pty Ltd

[2018] FWCA 6128

[2018] FWCA 6128

FAIR WORK COMMISSION

DECISION

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

Sunline Plastering Pty Ltd
(AG2018/3458)

SUNLINE PLASTERING PTY LTD AND THE FINISHING TRADES ASSOCIATION OF AUSTRALIA PLASTERING INDUSTRY ENTERPRISE AGREEMENT 2011-2015

Building, metal and civil construction industries
DEPUTY PRESIDENT MASSON	MELBOURNE, 3 OCTOBER 2018

Application for termination of the Sunline Plastering Pty Ltd and The Finishing Trades Association of Australia Plastering Industry Enterprise Agreement 2011-2015.

[1] Sunline Plastering Pty Ltd (Sunline Plastering) made an application (Application) to the Fair Work Commission (the Commission) on 30 July 2018 to terminate the Sunline Plastering Pty Ltd and The Finishing Trades Association of Australia Plastering Industry Enterprise Agreement 2011-2015 (Agreement) pursuant to section 225 of the Fair Work Act 2009 (the Act).

[2] The Agreement is a single enterprise agreement made pursuant to s 185 of the Fair Work Act 2009 (the Act) that reached its nominal expiry date 31 March 2015.

[3] The Agreement is expressed to cover Sunline Plastering, its employees employed in the classifications contained in Appendix B of the Agreement (the Employees) and the Construction, Forestry, Mining and Energy Union (CFMEU).

[4] Section 225 of the Act states:

“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.”

[5] Section 226 of the 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.”

[6] The Application was filed by Mr Shane Gilchrist, Director of Sunline Plastering.

[7] Mr Gilchrist provided a Statutory Declaration in support of the Application. Mr Gilchrist states that if the Agreement is terminated, the Employees will instead be covered by the Joinery and Building Trades Award 2010 (Joinery Award) 1 and the Building and Construction General On-Site Award 2010 (Construction Award).2

[8] Mr Gilchrist states that the Agreement was made during a time of “commercial confidence and good financial fortunes” for Sunline Plastering. Those circumstances allowed it to provide generous terms and conditions relative to the awards. According to Mr Gilchrist, the benefits under the Agreement are substantially in excess of the relevant awards with rates of pay approximately 75% above award rates. Other more generous conditions included redundancy, superannuation and increased allowances.

[9] Mr Gilchrist further states that the financial circumstances of Sunline Plastering have more recently deteriorated, with work on commercial projects having substantially reduced and Sunline Plastering having priced itself out of work due to the high labour costs under the Agreement. Mr Gilchrist states that the termination of the Agreement will allow it to transition to conditions provided under the Joinery Award and Construction Award. This, in Sunline Plastering’s submission, will allow it to compete more effectively in the Bendigo region, maintain current employment levels and mitigate the risk of redundancies.

[10] Mr Gilchrist states that prior to making the Application, he had consulted with employees in meetings on 4 and 5 July 2018 and explained the circumstances, purpose and effects of the Application. Mr Gilchrist further states that employees were supportive of the Application on the basis that it would mitigate the risk of loss of work for the business and redundancies. All employees covered by the Agreement also signed a document in support of the Application according to Mr Gilchrist, a copy of which was appended to his Statutory Declaration.

[11] Mr Gilchrist also states that tradespersons currently covered by the Agreement would not fall back to minimum award rates of pay but would receive a minimum rate of $35.00 per hour, which remained significantly above relevant award rates of pay.

[12] Mr Gilchrist further states that it would not be financially viable for Sunline Plastering to maintain the current Agreement given the high wage rates and the impact this has on the competitiveness of the business.

[13] Directions were issued on 15 August 2018 (Directions) that required Sunline Plastering to provide a copy of an outline of submissions and other material on which it intended to rely to the Commission on or by Friday, 31 August 2018. Sunline Plastering was further directed to provide their outline of submissions and other material on which it intended to rely to the CFMEU and all Employees and conduct communication and information meetings with such Employees on or by 7 September 2018. The CFMEU and Employees were also invited to lodge any outline of submissions and other material on which they intended to rely on or by Friday, 21 September 2018.

[14] On 31 August 2018, the Commission received further submissions from Sunline Plastering that included an undertaking that it would maintain a minimum hourly rate of $35.00 for tradespersons. Sunline also included information regarding further consultation to be conducted with employees on 6 September 2018.

Consideration

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

[16] No opposition to the Application was received by or on behalf of any employees. The CFMEU corresponded with the Commission on 20 September and advised that it “was not instructed to oppose the application before the FWC and as such the CFMEU does not propose to file any submissions”.

[17] Based on the material contained in the statutory declaration filed with the Application, there is nothing before me which raises public interest considerations which might weigh against the termination of the Agreement. I am therefore satisfied that it is not contrary to the public interest to terminate the agreement.

[18] I am also satisfied that it is appropriate to terminate the Agreement taking into account all of the relevant circumstances. In reaching this conclusion, I have had regard to the views of Sunline Plastering, particularly with respect to the commercial and competitive position of the business, the position of the CFMEU, and that the Employees are not opposed to the Application.

[19] Pursuant to s 225 of the Act, and having considered and being satisfied as to each of the matters contained in subsections 226(a) and 226(b)(i) and (ii) of the Act, the Agreement is terminated.

[20] The termination will come into effect from 3 October 2018.

DEPUTY PRESIDENT

 1   MA000029.

 2   MA000020.

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