The Workz Group Pty Ltd

[2014] FWC 3996

[2014] FWC 3996

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.222—Enterprise agreement

The Workz Group Pty Ltd
(AG2014/1146)

DEPUTY PRESIDENT GOOLEY MELBOURNE, 17 JUNE 2014

Application for termination of an enterprise agreement.

[1] The Workz Group Pty Ltd (Workz Group) and The Australian Workers’ Union (the AWU) made a greenfields agreement (the Agreement) which was approved by the Fair Work Commission on 28 March 2014. 1 The nominal expiry date of the Agreement is 1 March 2017.

[2] On 16 May 2014, Workz Group made an application to terminate the Agreement. The statutory declaration filed with the application noted that there were no persons currently employed under the Agreement.

[3] On 19 May 2014, I advised that the application would be listed for a hearing and asked the parties to address me on how I could be satisfied that s221 of the Fair Work Act 2009 (the Act) had been satisfied when there were no employees covered by the Agreement.

[4] On 26 May 2014, the AWU advised that they supported the termination of the Agreement as there were no employees currently working under the Agreement. The AWU did not attend the hearing and made no submissions on the issue raised in my email.

[5] Workz Group advised that it had previously had employees engaged under the Agreement but no longer had any employees. Workz Group advised that they were unable to successfully tender for work in Victoria because the Agreement was not compliant with either the Victorian or Commonwealth building and construction industries codes. As such it was submitted that no employees would be employed under the Agreement.

The Legislative Framework

[6] Subdivision C of Division 7 of Part 2-4 of the Act provides for the termination of enterprise agreements. It sets out separate criteria for the termination of agreements that have not passed the nominal expiry date compared to agreements which have passed their nominal expiry date.

[7] The nominal expiry date of the Agreement had not passed and therefore the relevant provision of the Act commencing at s.219 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

(3) 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.

(2) 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

(2) 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.

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.”

Conclusion

[8] While I accept that Workz Group’s reasons for wanting to terminate the Agreement are genuine, I can see no mechanism in the Act whereby the Agreement can be terminated.

[9] If an agreement has not passed its nominal expiry date the Act provides for the employer and the employees to jointly agree to terminate the agreement. Employees are taken to agree to terminate the agreement if a majority of employees vote in favour of the termination. In contrast if an agreement has passed its nominal expiry date the employer or an employee covered by the agreement or an employee organisation covered by the agreement can apply to terminate the agreement.

[10] The provisions that apply prior to the nominal expiry date of an agreement clearly presume that there will be employees who will agree to the termination. If there are no employees there can be no agreement.

[11] I am therefore unable to be satisfied that ss. 220 and 221(1) of the Act have been complied with and therefore the application to terminate the Agreement is dismissed.

DEPUTY PRESIDENT

Appearances:

P Barnes and J Barnes for the Applicant

Hearing details:

Melbourne.

2014.

26 and 30 May.

 1   The Workz Group Pty Ltd and the Australian Workers Union Construction Victorian Labour Hire Major Projects Agreement 2014 [2014] FWCA 2066

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