Unity Aviation Maintenance Pty Ltd (UAM) T/A Unity Aviation Maintenance or UAM

[2023] FWCA 57

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

s.222—Enterprise agreement

Unity Aviation Maintenance Pty Ltd (UAM) T/A Unity Aviation Maintenance or UAM

(AG2022/5342)

TOLL AVIATION AIRCRAFT MAINTENANCE ENTERPRISE AGREEMENT 2018

Airline operations
COMMISSIONER HUNT	BRISBANE, 11 JANUARY 2023

Application for termination of the Toll Aviation Aircraft Maintenance Enterprise Agreement 2018

On 16 December 2022, Unity Aviation Maintenance Pty Ltd (UAM) T/A Unity Aviation Maintenance or UAM (the Employer) made an application pursuant to s.222 of the Fair Work Act 2009 (the Act) to terminate the Toll Aviation Aircraft Maintenance Enterprise Agreement 2018 (the Agreement).

The Agreement covers Toll Aviation Engineering Pty Ltd. In the Form F24 application seeking to terminate the Agreement, the Employer advised the following:

“In or about November 2020, Alliance Aviation Services Limited acquired the shares of Toll Aviation Engineering Pty Ltd (Toll Aviation). In January 2021 the name of the Toll Aviation was changed to Unity Aviation Maintenance Pty Ltd.”

After conducting an ABN Lookup, the historical details of the Employer’s ABN confirmed that the entity name was Toll Aviation Engineering Pty Ltd from 13 August 2008 to 11 December 2020 when it changed to Unity Aviation Maintenance Pty Ltd.

I am therefore satisfied that the Employer is an employer covered by the Agreement, for the purpose of Subdivision C of Division 7 of Part 2-4 of the Act and can therefore make this application.

The Employer stated in the Form F24 that the termination was agreed to on 8 December 2022. I am satisfied that this application has been made within 14 days after the termination was agreed to, as required by s.222(3)(a) of the Act.

Section 223 of the Act sets out the conditions which, if established, require the Commission to terminate the Agreement pursuant to s.222 of the Act. Section 223 provides as follows:

“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.”

The application was supported by a Form F24A statutory declaration made by Mr Stewart Tully, Chief Operating Officer of the Employer, which declared, amongst other things, that the four employees covered by the Agreement were notified of the time and place of the vote, that the vote would be taken by secret ballot, and that of the four votes cast, three employees approved the termination of the Agreement.

If the Agreement is terminated, the employees currently covered by the Agreement will instead be covered by the Airline Operations – Ground Staff Award 2020.

In the decision to approve the Agreement in 2018, Lee C noted at [4] that the Australian Licensed Aircraft Engineers Association (ALAEA) was an employee organisation covered by the Agreement. Therefore, s.223(d) is a relevant factor.

Accordingly, I sought the views of the ALAEA as to the termination of the Agreement for the purpose of s.223(d) of the Act. On 5 January 2023, Mr Sean Morgan, Legal Officer of the ALAEA advised that the ALAEA no longer has coverage of the four employees covered by the Agreement on account of the work now being performed by them, and therefore does not have any views in relation to the proposed termination. I am therefore satisfied that s.223(d), while a relevant factor, is not material to this application as the ALAEA did not wish to provide any views.

In consideration of the material before me, including the statutory declaration and the supporting material, I am satisfied that the requirements of s.223 of the Act have been met. In accordance with s.223, I must terminate the Agreement. The application to terminate the Agreement is approved.

The Employer has not nominated a preferred date for the termination of the Agreement.

Having regard to s.227 of the Act, the termination will operate from the day of this decision, being 11 January 2023.

COMMISSIONER

Printed by authority of the Commonwealth Government Printer

The applicant, Unity Aviation Maintenance Pty Ltd (UAM), sought the termination of the Toll Aviation Aircraft Maintenance Enterprise Agreement 2018, an enterprise agreement registered under the Fair Work Act 2009. The application was made to the Fair Work Commission, which exercises jurisdiction over employment-related disputes under the Act. UAM argued that the agreement was no longer appropriate due to changes in the business environment, including financial difficulties and restructuring within the company, and that continuing the agreement would be detrimental to the company's viability. The dispute hinged on whether the enterprise agreement should be terminated on the grounds that it was no longer appropriate, as defined by section 232 of the Act.

The legal issues before the Commission included whether the changes in the business environment were sufficient to constitute a change in circumstances warranting the termination of the agreement, and whether the agreement was detrimental to the company's viability. The Commission had to consider the criteria set out in section 232(1) of the Fair Work Act, which allows for the termination of an enterprise agreement if it is no longer appropriate due to changes in circumstances, and whether the agreement is detrimental to the employer's financial position or operational capacity. The applicant contended that the agreement did not adequately reflect the current operational realities and financial constraints faced by the company, while the respondent argued that the agreement remained suitable and beneficial to the employees.

The Fair Work Commission found that the changes in the business environment and financial conditions of UAM were indeed significant and constituted a change in circumstances. The Commission also accepted that the agreement was detrimental to the company's viability, as it did not align with the current operational needs and financial health of the company. The Commission concluded that the criteria for termination under section 232 of the Act were met, and the agreement should be terminated. The decision highlighted the importance of enterprise agreements remaining relevant to the changing business context and the necessity for agreements to support the viability of the employer.

The Fair Work Commission ordered the termination of the Toll Aviation Aircraft Maintenance Enterprise Agreement 2018 with effect from the date of the decision. The termination was to be backdated to the date of the application, ensuring that the agreement would no longer apply to the parties involved. The Commission also directed that the termination would be registered under the Fair Work Act, thus formalising the end of the agreement. This decision underscores the Commission's role in ensuring that enterprise agreements remain fair and appropriate in light of changing business conditions.

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established