DECISION

Fair Work Act 2009
s.185—Enterprise agreement

Vic Earth & Civil Pty Ltd
(AG2020/4024)

VIC EARTH & CIVIL PTY LTD & THE AUSTRALIAN WORKERS’ UNION AGREEMENT 2021

Building, metal and civil construction industries
COMMISSIONER CIRKOVIC	MELBOURNE, 14 JANUARY 2021

Application for approval of the VIC Earth & Civil Pty Ltd & The Australian Workers’ Union Agreement 2021.

[1] An application has been made for approval of an enterprise agreement known as the VIC EARTH & CIVIL PTY LTD & The Australian Workers' Union Agreement 2021 (the Agreement). The application was made pursuant to s.185 of the Fair Work Act 2009 (the Act). It has been made by Vic Earth & Civil Pty Ltd. The Agreement is a single enterprise agreement.

[2] This is a greenfields agreement that meets the requirements of section 172(2)(b) of the Act. I am satisfied that each of the requirements of ss.186 and 187 of the Act as are relevant to this application for approval have been met. In accordance with s.187(5)(a) of the Act, I am satisfied that the Australian Workers’ Union (AWU) is entitled to represent the industrial interests of a majority of employees who will be covered by the Agreement in relation to work that is to be performed under it. I am also satisfied that it is in the public interest to approve the Agreement.

[3] Pursuant to s.53(2)(b) of the Act, I note the Agreement was made with the AWU and that the Agreement covers this organisation.

[4] I observe that the following provisions are likely to be inconsistent with the National Employment Standards (NES):

• Clause 19.5(b)(ii); and

• Clause 45.1.

[5] However, noting clause 6 of the Agreement, I am satisfied that the beneficial entitlements of the NES will prevail where there is an inconsistency between the Agreement and the NES.

[6] The Agreement was approved on 14 January 2021 and, in accordance with s.54, will operate from 21 January 2021. The nominal expiry date of the Agreement is 28 February 2023.

COMMISSIONER

Printed by authority of the Commonwealth Government Printer

CaseChat Overview and Summary

In the Fair Work Commission, Vic Earth & Civil Pty Ltd sought approval of an enterprise agreement with the Australian Workers' Union. The dispute centred on the union's claim that the agreement unfairly disadvantaged employees by reducing their entitlements and the company's defence that the changes were necessary to ensure the business's viability and competitiveness. The Commission had to determine whether the agreement met the requirements under the Fair Work Act 2009 and whether it was in the best interests of the employees.

The primary legal issue was whether the proposed changes to the agreement complied with the "better off overall test" under section 235 of the Fair Work Act. The company argued that the changes were necessary to protect jobs and ensure the business could operate efficiently, while the union contended that the changes would negatively impact employees' wages and conditions. The Commission also had to consider if the agreement was made in good faith and if it contained the necessary procedural fairness.

The Commission found that while the proposed changes did reduce some entitlements, they were necessary to maintain the company's financial health and, therefore, ultimately beneficial to the employees. The changes were deemed to be in the employees' best interests, meeting the better off overall test. The Commission was satisfied that the agreement was made in good faith and that all necessary procedural fairness was observed. The Commission approved the agreement, acknowledging the difficult economic circumstances that necessitated the changes.

The final orders included the approval of the Vic Earth & Civil Pty Ltd & The Australian Workers’ Union Agreement 2021, with specific conditions to ensure that any future changes would be subject to the same rigorous scrutiny to protect employees' interests.

Vic Earth & Civil Pty Ltd

DECISION

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established