Titan Wheels Australia Pty Ltd

[2020] FWCA 5715

[2020] FWCA 5715

FAIR WORK COMMISSION

DECISION

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

Titan Wheels Australia Pty Ltd
(AG2020/2601)

TITAN WHEELS AUSTRALIA PTY LIMITED AND THE AMWU ENTERPRISE AGREEMENT 2012

Manufacturing and associated industries
COMMISSIONER LEE	MELBOURNE, 30 OCTOBER 2020

Application for termination of the Titan Wheels Australia Pty Limited and the AMWU Enterprise Agreement 2012.

[1] This decision concerns an application made by Titan Wheels Australia Pty Ltd (Applicant) to terminate the Titan Wheels Australia Pty Limited and the AMWU Enterprise Agreement 2012 (Agreement). The application was made under s.222 of the Fair Work Act 2009 (the Act), following a vote of employees covered by the Agreement that agreed to the termination.

[2] The Agreement is a single enterprise agreement. Its nominal expiry date was 30 June 2015.

[3] The “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) is covered by the Agreement. On 10 September 2020, the AMWU advised my chambers that it opposed the application to terminate the Agreement.

[4] 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.”

Submissions

[5] As the AMWU advised that it opposed the Agreement being terminated, the matter was listed for a mention hearing on 17 September 2020. At that hearing, the AMWU asserted that the application made pursuant to s.222 of the Act is not available to the Applicant as the Agreement has surpassed its nominal expiry date, being 30 June 2015. The AMWU submitted that the only recourse available to the Applicant to terminate the Agreement was pursuant to s.225 of the Act.

[6] Directions were issued for the parties to file submissions. The directions provided that:

“it is intended that the application be determined on the papers. Should either party object to this and wish to be heard, please provide a written response by no later than close of business Monday, 19 October 2020.”

Neither party provided a response and so the matter will be determined on the papers.

[7] In summary, the AMWU submits that:

•  Their position is that as a matter of statutory construction, an application to terminate an Agreement pursuant to s.222 of the Act is only available in circumstances where the relevant Agreement has not passed its nominal expiry date. 1

•  In support of that proposition, the AMWU rely on syntactical presumption generalia specialibus non derogant (sometimes also described as lex specialis derogat legi generali). The maxim provides that where there is a conflict between general and specific provisions, the specific provision will prevail. 2

•  The AMWU makes reference to a number of authorities in support of this proposition. 3

•  The AMWU submits that the provisions in subdivision C and D (of Division 7 Part 2-4 of the Act) are inconsistent. The submission on this point is as follows:

“One provision mandates a public interest test and one excludes such as test. In our submission this is a clear inconsistency.

Second, does the reading of the provisions that is proffered give effect to harmonious goals?

In our submission it does. Further, it is only when our reading is accepted that the intentions of Parliament will be given effect to on a harmonious basis.

The alternative reading allows an Applicant to avoid the public interest test and effectively make sec 225 of the Act irrelevant in a vast majority of cases.”

•  As to which section of the Act is general and which is specific, the AMWU states that:

“In our submission, as Section 222 deals with Enterprise Agreements and Section 225 deals with Enterprise Agreements that have passed their nominal expiry date, clearly the former is general, and the latter is specific.” 4

•  Therefore, as a matter of statutory construction, an application to terminate an Agreement pursuant to s.222 of the Act is only available in circumstances where the relevant Agreement has not passed its nominal expiry date. 5

•  The AMWU also submit that the Explanatory Memorandum provides no additional assistance in understanding the Parliament’s decision to include a specific provision for agreements that have passed their nominal expiry date. 6

[8] The Applicant’s submissions are that:

•  Division 7 of the Act provides for the termination of enterprise agreements in two ways, under Subdivision C and Subdivision D. Subdivision C deals with termination by agreement between an employer and employees. Subdivision D deals with an application to terminate by the unilateral application of a party to the enterprise agreement. There is clearly no conflict or inconsistency between these two subdivisions. The Subdivisions are invoked by the different Applications and apply different criteria to be met for approval. 7

•  That the fact that the Act provides for only one method of termination if the agreement is within its nominal expiry date and an alternative method if it is beyond that date does not cause any conflict at all. To quote the AMWU’s own authority, in considering if there is any interference or inconsistency effectively between Subdivision C & D:

“Each enactment must be construed in that respect according to its own subject

matter and its own terms.” 8

•  is clearly no inconsistency, and each applies its own terms depending on the Application made. 9

•  That the AMWU rely upon a maxim in an attempt to introduce an ambiguity. However, as they have also set out in paragraph 29 of the AMWU’s Submissions:

“The maxim only applies where there are two inconsistent provisions which cannot be reconciled as a matter of ordinary construction.” 10

•  is not the case here. Subdivisions C & D are not inconsistent and can easily be reconciled in their application. 11

•  That relevantly, in respect of s.222 the Explanatory Memorandum provides:

“This clause provides that employers and employees may agree to terminate an enterprise agreement at any time while the agreement is in operation.” 12

•  In addition, the Applicant notes that such an approach to s.222 has been adopted by the Commission on numerous occasions. 13

Consideration of statutory construction point

[9] The question is whether, as a matter of statutory construction, an application to terminate an Agreement pursuant to Part 2-4, Division 7, Subdivision C of the Act can be utilised in circumstances where the relevant agreement has passed its nominal expiry date. The short answer to that question is yes.

[10] Firstly, the maxim relied on by the AMWU only applies where there is an inconsistency. Subdivision C and Subdivision D of Division 7 are not inconsistent. The clear inconsistency claimed by the AMWU is that one subdivision contains a public interest test and one does not. This is not an inconsistency. It is simply a reflection of the determination of the legislature to provide a different requirement for approval in each of the subdivisions.

[11] Secondly, there is no express or implied limitation such that s.222 can only be utilised prior to the agreement reaching its nominal expiry date.

[12] Thirdly, while there is no inconsistency, or for that matter, ambiguity, if there was, this could be resolved when consideration is given to the Explanatory Memorandum which provides:

“This clause provides that employers and employees may agree to terminate an enterprise agreement at any time while the agreement is in operation.” 14 (emphasis added)

[13] For these reasons, the AMWU’s submissions that an enterprise agreement cannot be terminated after it has passed its nominal expiry date pursuant to Subdivision C of Division 7 Part 2-4 of the Act is rejected.

Other considerations

[14] Ms Diane Wilkins, the Manager of People, Culture and Safety provided a statutory declaration (the declaration) which was filed with the application.

[15] The declaration states that Applicant complied with s.220(2) by giving employees a reasonable opportunity to decide whether they wanted to approve the termination by taking the following steps:

“•  Manager liaised with the Unions re attendance at site for discussion re termination of EBA with staff

•  Union confirmed site visit on the 5/8/2020

•  Notification placed on the notice boards and union notification board and staff read letter in special toolbox meeting

•  Union meeting changed to 4/8/2020

•  David Fox holds talks with Mildura staff on the position of the AMWU re the termination of the EBA

•  Titan GM holds Skype meeting with Mildura staff for questions on the pending vote and again reminding staff to either contact himself of the Union AMWU to ask any questions prior to Mondays vote.”

[16] The declaration attests that the termination was agreed to in accordance with s.221(1), as a majority of employees who cast a valid vote approved the termination, with all 25 employees covered by the agreement casting a valid vote, and 19 of those employees voted to approve the termination of the Agreement.

[17] Section 223(d) of the Act states that the Fair Work Commission must approve the termination if “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.”

[18] The AMWU made the following submissions:

“We strongly oppose the application on the basis that it has the real and material potential to erode the wages and conditions of the employees bound by the Agreement.

The termination of the Agreement is not in the public interest, and we would seek to make detailed submissions on this point if an appropriate application were made.

We submit that in circumstances of a global health crisis, a global financial crises and significant impacts being felt in the Mildura and Victorian communities, there are reasonable grounds for believing that the employees have not, and could not, give their informed agreement to terminate the agreement.

Specifically, given the widespread decline in job security, it is readily apparent that many employees would feel uncomfortable in opposing a request from their employer.

We seek that the Application be dismissed.” 15

[19] The Applicant submits that there is no evidence at all to support the AMWU submission regarding any potential to erode the wages and conditions and that assertion is strongly denied. The Applicant also submits that there is also “no evidence at all to raise any doubt about the informed agreement of the employees or that they would oppose the request by the Company and that the answer to all the AMWU’s unfounded assertions is in the details of the Application and the Declaration filed by the Respondent.” 16

[20] In any event, the Applicant opposes these views of the AMWU being taken into account as they are inconsistent with the directions issued. However, I consider it appropriate that I take into account the views of the AMWU as an employee organisation covered by the Agreement.

[21] Having taken the AMWU views into account, I agree with the Applicant that there is no evidence to support the assertions made by the AMWU. The Applicant has provided a statutory declaration that makes clear there were extensive steps taken by the Applicant to ensure employees that were covered by the Agreement were given a reasonable opportunity to decide whether they wanted to approve the termination. There is no evidence that wages and conditions will be eroded.

Conclusion

[22] Having regard to the consideration above, I am satisfied that there is no barrier to the Applicant making this application to terminate the agreement pursuant to subdivision C of Division 7 Part 2-4 of the Act.

[23] I am satisfied that, having regard to the declaration, that the company complied with s.220(2) by giving employees a reasonable opportunity to decide whether they wanted to approve the termination, and that the termination was agreed to in accordance with s.221(1) as a majority of employees who cast a valid vote approved the termination.

[24] I am satisfied that there are no other reasonable grounds for believing that the employees have not agreed to the termination.

[25] I have taken into account the views of the AMWU who object to the termination. However, having done, so I consider that it is appropriate to approve the termination.

[26] Taking into account all of the circumstances, I consider that it is appropriate to terminate the Agreement. The termination will operate from 30 October 2020.

[27] An order giving effect to this decision will be issued separately in PR724081.

COMMISSIONER

 1   AMWU Outline of Submissions filed 2 October 2020, at paragraph 2

 2   Ibid at paragraphs 5-6

 3 [2018] WADC 73; [2018] WASCA 98 [31]-[35]; [1923] HCA 25; (1923) 32 CLR 276, 289-290; [1948] HCA 24; (1948) 77 CLR 1, 29; [1985] HCA 54; (1985) 60 ALR 652, 657; (1998) 194 CLR 355;

 4   AMWU Outline of Submissions filed 2 October 2020, at paragraph 45

 5   Ibid at paragraph 2

 6   Ibid at paragraph 35

 7   Applicant’s Outline of Submissions dated 15 October 2020, at paragraph 1

 8   Barker v Edgar, as cited in Bank Officials Association (SA Branch) v Savings Bank of South Australia (1923) 32 CLR 276.

 9   Applicant’s Outline of Submissions dated 15 October 2020, at paragraph 9

 10   Purcell v Electricity Commission of New South Wales (1985) HCA 54

 11   Applicant’s Outline of Submissions dated 15 October 2020, at paragraph 10

 12   Explanatory Memorandum at [924]

 13   Applicant’s Outline of Submissions, at paragraph 13; See Re Sustainable Energy Infrastructure Pty Ltd as trustee for Sustainable Energy Infrastructure Trust [2019] FWCA 4966; Re Nowshire Pty Ltd [2010] FWA 2663; Re Jason Jackson T/A Smart Building Projects [2019] FWCA 943

 14   Explanatory Memorandum at [924]

 15  AMWU Outline of Submissions filed 2 October 2020, at paragraphs 49 - 53

 16   Applicant’s Outline of Submissions dated 15 October 2020, at paragraph 14(d)-(e)

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