DECISION

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

TESA Resources Pty Ltd
(AG2017/4357)

TESA RESOURCES (ALTONA AREA) CERTIFIED AGREEMENT 2003-2006

Building, metal and civil construction industries
COMMISSIONER CIRKOVIC	MELBOURNE, 20 NOVEMBER 2017

Application for termination of the TESA Resources (Altona Area) Certified Agreement 2003-2006.

[1] On 22 September 2017, TESA Resources Pty Ltd (Applicant) applied, pursuant to Schedule 3, Item 16 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Transitional Act) to terminate the TESA Resources (Altona Area) Certified Agreement 2003-2006 (Agreement). The Agreement has passed its nominal expiry date of 31 March 2006 as specified in clause 5.

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

[3] The Agreement is a collective agreement-based transitional instrument to which Items 15 and 16 of Schedule 3 of the Transitional Actapply. The effect of Items 15 and 16 of Schedule 3 of the Transitional Act is that the termination of agreement provisions found in Subdivisions C and D of Division 7 of the Fair Work Act 2009 (Act) apply to the Agreement as though a reference to an enterprise agreement included a reference to a collective agreement-based transitional instrument.

[4] 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;

[5] 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.”

Sub - sections 226(a) and (b)

[6] The AMWU is an organisation which is covered by the Agreement. Correspondence was received from the AMWU on 4 October 2017, advising that it did not oppose the termination of the Agreement.

[7] Since there are no employees to whom the Agreement currently applies, there are no adverse effects on those employees. The Applicant will be freed of such administrative burden that might be associated with the continued operation of the Agreement in such circumstances where no employees are engaged by it that are covered by the Agreement.

[8] Based on the material contained in the Applicant’s declaration filed with this 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 ss.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. I am satisfied that it is appropriate to approve the termination of the Agreement, and I terminate the Agreement.

[9] The termination will operate from 20 November 2017.

COMMISSIONER

Printed by authority of the Commonwealth Government Printer

In the Fair Work Commission, the applicant TESA Resources Pty Ltd sought the termination of the TESA Resources (Altona Area) Certified Agreement 2003-2006. The applicant argued that the agreement had become redundant due to significant changes in the business operations and workforce composition since the agreement was certified. The Commission was tasked with determining whether the application met the statutory criteria for termination and if so, whether it was just and equitable to terminate the agreement.

The central legal issue was whether the changes in the business operations and workforce were substantial enough to warrant the termination of the certified agreement. The Commission examined whether the agreement no longer represented the interests of the majority of the workforce and whether the changes were such that it was no longer appropriate for the agreement to remain in force. The applicant needed to demonstrate that the changes were not merely incremental but transformative, leading to a fundamentally different employment context.

The Commission found that the changes in the business operations and workforce composition were indeed substantial. The applicant presented evidence showing a significant reduction in workforce numbers, changes in job roles, and alterations in the operational structure of the business. The Commission concluded that these changes had rendered the certified agreement redundant, as it no longer accurately reflected the current employment conditions and workforce composition. Given these findings, the Commission determined that it was just and equitable to terminate the agreement.

The Commission ordered the termination of the TESA Resources (Altona Area) Certified Agreement 2003-2006, effective from the date of the decision. This termination meant that the terms and conditions of employment would revert to the applicable modern awards and general law, unless otherwise agreed upon by the parties involved.

TESA Resources Pty Ltd

DECISION

Sub - sections 226(a) and (b)

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established