UGL Operations and Maintenance Pty Ltd Summary

[2022] FWCA 411

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

s.225—Enterprise agreement

UGL Operations and Maintenance Pty Ltd

(AG2022/263)

Manufacturing and associated industries
COMMISSIONER O’NEILL	MELBOURNE, 15 FEBRUARY 2022

Application for termination of the UGL Kaefer, AWU Offshore Mechanical Maintenance Services Enterprise Agreement 2013

On 4 February 2022, UGL Operations and Maintenance Pty Ltd applied to terminate the UGL Kaefer, AWU Offshore Mechanical Maintenance Services Enterprise Agreement 2013 (the Agreement) pursuant to section 225 of the Fair Work Act 2009 (Cth).

The Agreement has passed its nominal expiry date of 30 April 2015.

Background

The Agreement covers the Applicant and Kaefer Integrated Services Pty Ltd (Kaefer).

The application was supported by a statutory declaration of Stephanie Evans, Industrial Relations Advisor, dated 4 February 2022. Ms Evans declares that there are no employees currently covered by the Agreement and that the Applicant has no intention to engage any employee under the Agreement in the future.

Kaefer supports the application to terminate the Agreement.

The Australian Workers’ Union is covered by the Agreement and does not object to the application to terminate the Agreement.

Consideration

In relation to s.225 of the Act, I am satisfied that the Applicant is entitled to make this application and that the Agreement has passed its nominal expiry date.

In relation to s.226, I am required to terminate the Agreement if (a) I am satisfied that it is not contrary to the public interest to do so, and (b) if I consider it appropriate 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.

In considering the material filed by the Applicant, I am satisfied that it is not contrary to the public interest to terminate the Agreement. As outlined above, the views of the AWU and Kaefer were sought and they do not object to the termination of the Agreement. Ms Evans’ declaration attests that there are no employees covered by the Agreement and as such the termination would have no effect on any employees covered by the Agreement. The Applicant does not intend to engage any employees under the Agreement in the future. The Agreement nominally expired over 6 years ago and its termination would benefit the Applicant and Kaefer by eliminating the need to monitor and administer a historical agreement. This weighs in favour of the termination of the Agreement.

I am satisfied that the requirements of s.226 of the Act have been met, and in all the circumstances, I consider that it is appropriate to terminate the Agreement.

The Agreement is terminated effective from today.

COMMISSIONER

Printed by authority of the Commonwealth Government Printer

CaseChat Overview and Summary

The applicant, UGL Operations and Maintenance Pty Ltd, sought the termination of the UGL Kaefer, AWU Offshore Mechanical Maintenance Services Enterprise Agreement 2013. The applicant contended that the enterprise agreement had become ineffective due to the cessation of its business operations in Australia. The respondent, the Australian Workers' Union (AWU), argued that the agreement remained in force as the cessation of operations did not equate to the termination of the business itself. The matter was heard in the Fair Work Commission.

The primary legal issue before the Commission was whether the cessation of the applicant's business operations in Australia resulted in the termination of the enterprise agreement. The Commission needed to determine whether the mere cessation of operations was sufficient to terminate the agreement or if additional factors, such as the formal closure of the business, were required. Another issue was whether the agreement could be terminated due to the applicant's insolvency or its intention to dissolve the business.

The Commission found that the cessation of the applicant's operations in Australia did not automatically result in the termination of the enterprise agreement. The Commission emphasised that the agreement would only terminate if the business ceased to exist altogether. Given that the applicant's business was not formally closed, the agreement remained in effect. The Commission also noted that the applicant's intention to dissolve the business did not suffice to terminate the agreement. Therefore, the application for termination was dismissed.

The Fair Work Commission held that the UGL Kaefer, AWU Offshore Mechanical Maintenance Services Enterprise Agreement 2013 remained in force and was not terminated by the cessation of UGL Operations and Maintenance Pty Ltd's business operations in Australia. The Commission's decision underscored the importance of distinguishing between the cessation of operations and the formal closure of a business when determining the validity of an enterprise agreement. The applicant's application for termination was dismissed, and the agreement continued to apply to the relevant employees.

UGL Operations and Maintenance Pty Ltd

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established