Sustainable Energy Infrastructure Pty Ltd as trustee for Sustainable Energy Infrastructure Trust

[2019] FWCA 4966

[2019] FWCA 4966

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.222 - Application for approval of a termination of an enterprise agreement

Sustainable Energy Infrastructure Pty Ltd as trustee for Sustainable Energy Infrastructure Trust
(AG2019/2072)

AGL BUSINESS ENERGY SERVICES TECHNICIANS ENTERPRISE AGREEMENT 2015 - 2018

Oil and gas industry
COMMISSIONER HAMPTON	ADELAIDE, 18 JULY 2019

Application for termination of the AGL Business Energy Services Technicians Enterprise Agreement 2015 - 2018.

[1] This decision concerns an application made by Sustainable Energy Infrastructure Pty Ltd as trustee for Sustainable Energy Infrastructure Trust (SEI) on 18 June 2019 pursuant to s.222 of the Fair Work Act 2009 (the FW Act) to terminate the AGL Business Energy Services Technicians Enterprise Agreement 2015 - 2018 (the Agreement).

[2] The Agreement has a nominal expiry date of 31 August 2018 but remains in force under the terms of the FW Act. When approved by the Commission, the Agreement covered and applied to (Service Technician) employees of AGL Energy Ltd and “any successor, assignee or transmitee business as defined by Chapter 2, Part 2-8 1 of the [FW Act]” and to “the Union” (being the Australian Workers’ Union (AWU)).2 When approval of the Agreement was initially sought, 27 employees were to be covered.3 In practical terms, the Agreement applied to part of the business of AGL Energy Pty Ltd involved with the service of gas plant for commercial and industrial clients and was operationally distinct from AGL’s other activities.

[3] During the nominal life of the Agreement, the relevant part of AGL’s business was transferred to SEI, and the coverage of the instrument also transferred under the terms of the FW Act. 4 As a result, SEI and the transferring employees (as well as the AWU), are now covered by the Agreement. Because of subsequent changes in the business model of SEI, only two such employees remain covered by the Agreement.

[4] Sections 219 to 222 of the FW Act provide as follows:

“219 Employers and employees may agree to terminate an enterprise agreement

Termination by employers and employees

(1) The following may jointly agree to terminate an enterprise agreement:

(a) if the agreement covers a single employer—the employer and the employees covered by the agreement; or

(b) if the agreement covers 2 or more employers—all of the employers and the employees covered by the agreement.

Note: For when a termination of an enterprise agreement is agreed to, see section 221.

Termination has no effect unless approved by the FWC

(2) A termination of an enterprise agreement has no effect unless it is approved by the FWC under section 223.

Limitation—greenfields agreement

(2) Subsection (1) applies to a greenfields agreement only if one or more of the persons who will be necessary for the normal conduct of the enterprise concerned and are covered by the agreement have been employed.

220 Employers may request employees to approve a proposed termination of an enterprise agreement

(1) An employer covered by an enterprise agreement may request the employees covered by the agreement to approve a proposed termination of the agreement by voting for it.

(3) Before making the request, the employer must:

(a) take all reasonable steps to notify the employees of the following:

(i) the time and place at which the vote will occur;

(ii) the voting method that will be used; and

(b) give the employees a reasonable opportunity to decide whether they want to approve the proposed termination.

(3) Without limiting subsection (1), the employer may request that the employees vote by ballot or by an electronic method.

221 When termination of an enterprise agreement is agreed to

Single-enterprise agreement

(1) If the employees of an employer, or each employer, covered by a single-enterprise agreement have been asked to approve a proposed termination of the agreement under subsection 220(1), the termination is agreed to when a majority of the employees who cast a valid vote approve the termination.

Multi-enterprise agreement

(4) If the employees of each employer covered by a multi-enterprise agreement have been asked to approve a proposed termination of the agreement under subsection 220(1), the termination is agreed to when a majority of the employees of each individual employer who cast a valid vote have approved the termination.

222 Application for the FWC’s approval of a termination of an enterprise agreement

Application for approval

(1) If a termination of an enterprise agreement has been agreed to, a person covered by the agreement must apply to the FWC for approval of the termination.

Material to accompany the application

(2) The application must be accompanied by any declarations that are required by the procedural rules to accompany the application.

When the application must be made

(3) The application must be made:

(a) within 14 days after the termination is agreed to; or

(b) if in all the circumstances the FWC considers it fair to extend that period—within such further period as the FWC allows.”

[5] A hearing was held in relation to this application on 17 July 2019. Mr Parker attended on behalf of SEI. Despite being notified, the AWU did not appear at the hearing, indicate any opposition to the application, or seek to participate in these proceedings generally.

[6] Given that it is now covered by the Agreement, I am satisfied that SEI is able to make this application pursuant to s.222 of the FW Act. I am also satisfied that this is so, despite the fact that the Agreement has passed its nominal expiry date. In that regard, I note that s.225 of the FW Act also enables a relevant party to apply to terminate an enterprise agreement after the nominal expiry date. In that case, the Act contemplates an application by any single party and different considerations apply to the potential termination of the instrument by virtue of s.226. Those considerations include a public interest test, which does not apply in relation to s.222 “agreed” termination applications.

[7] In my view, s.222 remains available in these circumstances and there is no express or implied reason to apply the FW Act in a manner which means that s.226 is the only option available to parties to terminate a nominally expired enterprise agreement. That is, the Agreement continues in operation, 5 SEI and the remaining employees continue to be covered by the instrument, and the termination of the Agreement has been agreed following a process provided in the FW Act. This meets the requirements of s.219 and related provisions of the legislation.

[8] I note that the approach I have adopted is consistent with other decisions of the Commission 6 and with that set out in the relevant Explanatory Memorandum.7

[9] The application was made within 14 days after the termination was agreed to and the required declarations that are to accompany such an application are in order.

[10] I must approve the termination if the conditions set out in s.223 are met.

"223 When the FWC must approve a termination of an enterprise agreement

If an application for the approval of a termination of an enterprise agreement is made under section 222, the FWC must approve the termination if:

(a) the FWC is satisfied that each employer covered by the agreement complied with subsection 220(2) (which deals with giving employees a reasonable opportunity to decide etc.) in relation to the agreement; and

(b) the FWC is satisfied that the termination was agreed to in accordance with whichever of subsection 221(1) or (2) applies (those subsections deal with agreement to the termination of different kinds of enterprise agreements by employee vote); and

(c) the FWC is satisfied that there are no other reasonable grounds for believing that the employees have not agreed to the termination; and

(d) the FWC considers that it is appropriate to approve the termination taking into account the views of the employee organisation or employee organisations (if any) covered by the agreement."

[11] The Statutory Declaration provided by SEI confirms that there are two employees covered by the agreement and that those two employees voted to terminate the agreement following a process required by the FW Act. There were no employees opposed to the termination.

[12] I am also satisfied, based upon the Statutory Declaration and the further submissions made at the hearing, that the employees covered by the Agreement were given reasonable opportunity to decide their position and there are no other reasonable grounds for believing that the employees have not agreed to the termination of the Agreement.

[13] I also consider that it is appropriate to approve the termination taking into account the views of the employee organisation covered by the Agreement. This consideration includes the arrangements made by SEI to maintain the more beneficial substantive terms of the Agreement.

[14] The requirements of s.223 have been met and I must therefore approve the termination.

[15] In accordance with s.224 of the FW Act, I have determined that the termination of the Agreement will operate with effect from 31 July 2019.

COMMISSIONER

 1 Chapter 2, Part 2-8 of the FW Act deals with transfer of business and potential implications for enterprise agreements, certain modern awards and certain other instruments.

 2   The Agreement, cl 4.

 3   Form F17 filed in AG2016/2036.

 4 FW Act s.311 – s.315.

 5 Section 54 of the FW Act.

 6   Including Nowshire Pty Ltd [2010] FWA 2663.

 7   Explanatory Memorandum to the Fair Work Bill 2008 at 924. The Memorandum makes reference to the agreed termination being available at any time whilst the enterprise agreement is in operations. S.54 confirms that a nominally expired enterprise agreement remains in operation, subject to certain caveats that are not applicable here.

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