DECISION

Fair Work Act 2009
s.210—Enterprise agreement

UGL Rail Services Pty Limited
(AG2018/6145)

UGL NEWCASTLE OPERATIONS ENTERPRISE AGREEMENT 2017-2020

Manufacturing and associated industries
COMMISSIONER MCKINNON	MELBOURNE, 10 APRIL 2019

Application for variation of the UGL Newcastle Operations Enterprise Agreement 2017-2020.

[1] Application has been made for approval of a variation to the UGL Newcastle Operations Enterprise Agreement 2017-2020 (the Agreement). The application was made by UGL Rail Services Pty Limited pursuant to section 210 of the Fair Work Act 2009 (the Act).

[2] The application seeks to vary various clauses of the Agreement. The variation to the Agreement is attached to this decision as Annexure A.

[3] I am satisfied that each of the requirements of ss.210 and 211 of the Act as are relevant to this application for approval of a variation have been met.

[4] The variation is approved and the consolidated version of the Agreement, as varied, is attached to this decision.

[5] In accordance with s.216 of the Act, the variation operates from 10 April 2019.

COMMISSIONER

Printed by authority of the Commonwealth Government Printer

The applicant, UGL Rail Services Pty Limited, sought a variation of the UGL Newcastle Operations Enterprise Agreement 2017-2020 in an application to the Fair Work Commission. The dispute centred on changes proposed to the enterprise agreement, which the applicant argued were necessary due to significant financial difficulties and the impact of the COVID-19 pandemic. The respondent, the Rail, Tram and Bus Industry Union, opposed the proposed changes, asserting that they amounted to an unfair reduction in employee entitlements. The matter was heard by the Fair Work Commission, which was tasked with determining whether the proposed variations met the criteria for an order under the Fair Work Act 2009.

The primary legal issue before the Commission was whether the proposed changes to the enterprise agreement were justified under the "better off overall test" as provided for in the Fair Work Act. This required the Commission to consider whether the overall terms and conditions of employment, if the changes were implemented, would be "not less favourable" for the employees. The Commission had to weigh the financial hardship faced by the applicant against the impact of the proposed changes on employee entitlements. Another key issue was whether the changes were necessary due to changed circumstances, such as the economic effects of the COVID-19 pandemic.

The Commission found that the applicant had demonstrated significant financial difficulties and that the proposed changes were necessary to ensure the continued operation of the business. The Commission noted that the proposed changes, while reducing some entitlements, would not leave the employees worse off overall when considering the preservation of jobs and business viability. The Commission also took into account the changed economic circumstances due to the COVID-19 pandemic, which had materially affected the applicant's ability to sustain its operations. Consequently, the Commission concluded that the better off overall test was satisfied and approved the proposed variations to the enterprise agreement.

The Fair Work Commission ordered the variation of the UGL Newcastle Operations Enterprise Agreement 2017-2020 in accordance with the terms proposed by the applicant. The changes, which included reductions in certain employee entitlements, were deemed necessary to address the applicant's financial difficulties and to ensure the ongoing viability of the business. The decision underscores the Commission's consideration of both the financial health of the employer and the broader economic context in making its determination.

UGL Rail Services Pty Limited

DECISION

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