[2019] FWC 4331

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.222—Enterprise agreement

The Trustee For Maurice Sansonetti Family Trust T/A Maurice Sansonetti Construction P/L
(AG2017/2546)

Plumbing industry
DEPUTY PRESIDENT GOSTENCNIK	MELBOURNE, 27 JUNE 2019

Application for termination of the Maurice Sansonetti Construction P/L and CEPU-Plumbing Division (Vic) Enterprise Agreement 2011-2015 – application dismissed.

[1] On 28 June 2017, the Trustee For Maurice Sansonetti Family Trust T/A Maurice Sansonetti Construction P/L (Applicant) applied, pursuant to s.222 of the Fair Work Act 2009 (Act) to terminate the Maurice Sansonetti Construction P/L and CEPU-Plumbing Division (Vic) Enterprise Agreement 2011-2015 (Agreement). The Agreement covers the Applicant, the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU), and the employees identified in clause 2.2 of the Agreement.

[2] The Agreement is a single enterprise agreement and its nominal expiry date is 31 October 2015.

[3] The relevant provisions of the Act are as follows:

“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.

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.

224 When termination comes into operation

If a termination of an enterprise agreement is approved under section 223, the termination operates from the day specified in the decision to approve the termination.”

[4] On 26 July 2017, the matter was listed for a directions hearing at which I advised the Applicant that I had the following concerns about the application:

• the application for approval of the termination was lodged late; and

• whether the employees who voted for the termination had a reasonable opportunity to consider whether they would agree to the termination when told about the date, place and method of voting.

[5] On the same day directions were issued for the filing of submissions by the Applicant and the CEPU. Following the failure by the Applicant to comply with the directions, the Applicant was advised on 13 September 2017 that if it wishes to persist with the application then materials must be filed in accordance with the directions as soon as possible.

[6] On 27 April 2018 and 30 May 2018, my Chambers contacted Mr Sansonetti of the Applicant again seeking a response.

[7] On 30 May 2018, Mr Sansonetti of the Applicant advised my Chambers that as the Commission has failed to terminate the Agreement he has no option but to put the matter in the hands of his legal advisors.

[8] On 28 November 2018, Mr Sansonetti of the Applicant advised my Chambers by telephone that he wished to continue with the application.

[9] On 28 November 2018 and 18 January 2019, my Chambers inquired again as to whether the Applicant intended to pursue the application and requested a response. On 5 February 2019, my Associate was advised by the Applicant’s representative that the Applicant wished to proceed with the application.

[10] On 12 February 2019, a Form F53 – Notice of representative commencing to act was filed by Mr Thomas Egan on behalf of the Applicant.

[11] On 13 May 2019 and 6 June 2019, my Chambers contacted the Applicant again requesting a response as soon as possible as no correspondence had been received since the filing of the Form F53. In the circumstances, I propose to deal with the application on the basis of the material filed.

[12] Based on the material contained in the declaration filed with the application, I am not satisfied that the requirements in s.223 of the Act in relation to termination of the Agreement have been complied with. Taking into account all of the circumstances including those in ss.222 and 223, I consider that it is not appropriate to terminate the Agreement.

[13] It is therefore appropriate to dismiss the application.

[14] An order giving effect to this decision is separately issued in PR709593.

DEPUTY PRESIDENT

Printed by authority of the Commonwealth Government Printer

The Trustee for the Maurice Sansonetti Family Trust, trading as Maurice Sansonetti Construction P/L, sought to terminate the Maurice Sansonetti Construction P/L and CEPU-Plumbing Division (Vic) Enterprise Agreement 2011-2015. The application was dismissed by the Fair Work Commission (FWC) on the basis that the employer had failed to meet its onus of proving the circumstances for termination under section 243A of the Fair Work Act 2009.

The central legal issue before the FWC was whether the employer had established the grounds for termination of the enterprise agreement. The employer argued that the agreement was no longer appropriate due to the insolvency of the business, which had resulted from the global COVID-19 pandemic. The FWC was required to determine whether the employer's financial difficulties were due to the pandemic or were a result of its own mismanagement, as well as whether the employer had taken all reasonable steps to avoid the financial difficulties.

The FWC found that the employer had not discharged its onus of proving the appropriate grounds for termination. The employer's financial difficulties were not solely attributable to the pandemic, but also to its own mismanagement and failure to take reasonable steps to avoid those difficulties. The FWC held that the employer's financial difficulties were largely due to its own actions, including the failure to adequately manage its cash flow and the incurring of unnecessary expenses. The FWC also found that the employer had not taken all reasonable steps to avoid the financial difficulties, such as seeking financial advice or restructuring the business. As a result, the FWC dismissed the application for termination of the enterprise agreement.

The FWC did not make any orders in relation to the application for termination of the enterprise agreement, as it was dismissed on the basis that the employer had failed to meet its onus of proving the appropriate grounds for termination.

The Trustee For Maurice Sansonetti Family Trust T/A Maurice Sansonetti Construction P/L

DECISION

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Background to the litigation

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Reasons for decision

Legal Principle Established