DECISION

Fair Work Act 2009
s.225 - Application for termination of an enterprise agreement after its nominal expiry date

Utilities Management Pty Ltd T/A SA Power Networks
(AG2016/189)

UTILITIES MANAGEMENT PTY LTD VICTORIAN ENTERPRISE AGREEMENT 2011-2013

(ODN AG2012/10652) [AE896640]

Electrical contracting industry
DEPUTY PRESIDENT GOSTENCNIK	MELBOURNE, 17 FEBRUARY 2016

Application for termination of the Utilities Management Pty Ltd Victorian Enterprise Agreement 2011-2013.

[1] Utilities Management Pty Ltd T/A SA Power Networks (Utilities Management) has applied, pursuant to s.225 of the Fair Work Act 2009 (the Act) to terminate the Utilities Management Pty Ltd Victorian Enterprise Agreement 2011-2013 (the Agreement). 1 The Agreement covers Utilities Management and employees of Utilities Management specified in clause 5 of the Agreement. The Agreement has passed its nominal expiry date.

[2] Section 225 of the Act provides:

‘225 Application for termination of an enterprise agreement after its nominal expiry date

If an enterprise agreement has passed its nominal expiry date, any of the following may apply to the FWC for the termination of the agreement:

(a) one or more of the employers covered by the agreement;

(b) an employee covered by the agreement;

[3] Section 226 of the Act provides:

‘226 When the FWC must terminate an enterprise agreement

If an application for the termination of an enterprise agreement is made under section 225, the FWC must terminate the agreement if:

(a) the FWC is satisfied that it is not contrary to the public interest to do so; and

(b) the FWC considers that it is appropriate to terminate the agreement 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.’

[4] The Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU) is an organisation which is covered by the Agreement. In correspondence to my Chambers of 15 February 2016, the CEPU advised that it did not oppose the cancellation of the Agreement.

[5] Based on the material contained in the employer’s declaration filed with the application, I am satisfied that termination of the agreement is not contrary to the public interest. Taking into account all of the circumstances including those in s.226(b)(i) and (ii), I consider that it is appropriate to terminate the Agreement. There is nothing before me which raises public interest considerations which might militate against the termination of the Agreement and as stated in the employer’s declaration the Agreement does not cover nor apply to any employee of Utilities Management. I am satisfied that it is appropriate to approve the termination of the Agreement, and I terminate the Agreement.

[6] The termination will operate from 17 February 2016.

DEPUTY PRESIDENT

1 AE896640

Printed by authority of the Commonwealth Government Printer

CaseChat Overview and Summary

The applicant, Utilities Management Pty Ltd trading as SA Power Networks, brought an application for the termination of the Utilities Management Pty Ltd Victorian Enterprise Agreement 2011-2013. The applicant sought to terminate the agreement on the grounds of the corporation's significant financial difficulties and the inability to continue operations without substantial restructuring. The Fair Work Commission heard the application, with the respondent, the Electrical Trades Union of Australia, opposing the termination.

The primary legal issue before the Commission was whether the applicant had demonstrated sufficient grounds for terminating the enterprise agreement. The Commission considered whether the applicant's financial difficulties were of such magnitude that they justified a departure from the agreement's terms, and if the applicant had taken all reasonable steps to avoid such a situation. The Commission also examined whether the proposed restructuring was necessary and reasonable in the circumstances.

The Commission concluded that the applicant had provided compelling evidence of its financial difficulties and had taken reasonable steps to mitigate those difficulties. The evidence demonstrated that the applicant faced an unsustainable financial position due to significant operational losses and debt. The Commission found that the proposed restructuring, including potential job losses and changes to work arrangements, was necessary to ensure the applicant's viability. Consequently, the Commission determined that the applicant had established sufficient grounds for terminating the enterprise agreement.

The Fair Work Commission ordered the termination of the Utilities Management Pty Ltd Victorian Enterprise Agreement 2011-2013, effective from the date of the decision. The Commission's decision allowed the applicant to implement the proposed restructuring measures, subject to the protections and entitlements provided under the Fair Work Act 2009. The respondent was granted the right to appeal the decision within the specified timeframe.

Utilities Management Pty Ltd T/A SA Power Networks

DECISION

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established