[2021] FWCA 587

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.222—Enterprise agreement

Virgin Tech Pty Ltd T/A Virgin Tech
(AG2020/4038)

VIRGIN TECH ENTERPRISE AGREEMENT 2017

Airline operations
COMMISSIONER JOHNS	SYDNEY, 5 FEBRUARY 2021

Application for termination of the Virgin Tech Enterprise Agreement 2017.

[1] On 18 December 2020, Virgin Tech Pty Ltd T/A Virgin Tech (the Applicant) made an application (the Application) pursuant to s.222 of the Fair Work Act 2009 (Cth) (the Act) for the Fair Work Commission (Commission) to terminate the Virgin Tech Enterprise Agreement 2017 (the Agreement).

[2] The Agreement was approved by Commissioner Lee on 10 July 2018. 1 It is a single enterprise agreement. The Agreement has a nominal expiry date of 30 April 2021.

Legislation

[3] The relevant provisions of the Act are as follows:

“220 Employers may request employees to approve a proposed termination of an enterprise agreement

(1) An employer covered by an enterprise agreement may request the employees covered by the agreement to approve a proposed termination of the agreement by voting for it.

(2) Before making the request, the employer must:

(a) take all reasonable steps to notify the employees of the following:

(i) the time and place at which the vote will occur;

(ii) the voting method that will be used; and

(b) give the employees a reasonable opportunity to decide whether they want to approve the proposed termination.

(3) Without limiting subsection (1), the employer may request that the employees vote by ballot or by an electronic method.

221 When termination of an enterprise agreement is agreed to

Single-enterprise agreement

(1) If the employees of an employer, or each employer, covered by a single-enterprise agreement have been asked to approve a proposed termination of the agreement under subsection 220(1), the termination is agreed to when a majority of the employees who cast a valid vote approve the termination.

Multi-enterprise agreement

(2) If the employees of each employer covered by a multi-enterprise agreement have been asked to approve a proposed termination of the agreement under subsection 220(1), the termination is agreed to when a majority of the employees of each individual employer who cast a valid vote have approved the termination.

222 Application for the FWC’s approval of a termination of an enterprise agreement

Application for approval

(1) If a termination of an enterprise agreement has been agreed to, a person covered by the agreement must apply to the FWC for approval of the termination.

Material to accompany the application

(2) The application must be accompanied by any declarations that are required by the procedural rules to accompany the application.

When the application must be made

(3) The application must be made:

(a) within 14 days after the termination is agreed to; or

(b) if in all the circumstances the FWC considers it fair to extend that period—within such further period as the FWC allows.

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.

224 When termination comes into operation

If a termination of an enterprise agreement is approved under section 223, the termination operates from the day specified in the decision to approve the termination.”

Consideration:

[4] The documents lodged in support of the application include a Form F24 – Application for termination of an enterprise agreement and a Form F24A – Declaration in support of termination of an enterprise agreement. The Form F24A declaration was made by Job Vandenheavel, Head of Aircraft Maintenance Services for the Applicant.

[5] I am satisfied that the Application was made by an employer covered by the Agreement and that the Applicant has standing to make the Application. I am satisfied that before making the request, the employer took all reasonable steps to notify the employees of the time, place and voting method that would be used. I am further satisfied that the employer has afforded the employees a reasonable opportunity to decide whether they want to approve the proposed termination.

[6] The termination was agreed to on 15 December 2020. There were 381 employees covered by the Agreement at the time of the vote. There were 359 valid votes cast with respect to the termination, with 254 votes in favour of terminating the agreement. The Application was made within 14 days of the termination being agreed and was accompanied by the appropriate declaration.

[7] Section 223 of the Act provides that the Commission must approve the termination of an Agreement ss.223(a)-223(d) of the Act are satisfied. In the present matter, I find that each of the requirements has been satisfied.

[8] I note that the Applicant in this matter has also made an application 2 for approval of the Virgin Tech Enterprise Agreement 2020. As a result, the date that the termination comes into operation will be set so as to allow a direct transition from the Virgin Tech Enterprise Agreement 2017 to the Virgin Tech Enterprise Agreement 2020.

Conclusion:

[9] The Agreement is terminated. Pursuant to s.224 of the Act, I note that the termination will take effect from 12 February 2021. An Order to this effect [PR826712] has been issued with this decision.

COMMISSIONER

1 [2018] FWCA 3866

2 AG2020/4039

Printed by authority of the Commonwealth Government Printer

In the case of Virgin Tech Pty Ltd T/A Virgin Tech, the Fair Work Commission was asked to consider an application for the termination of the Virgin Tech Enterprise Agreement 2017. The applicant argued that changes in the company's business model and market conditions necessitated a termination of the existing agreement. The respondent, who was represented by a union, opposed the application on the grounds that the changes were not substantial enough to warrant a termination and that the agreement should be allowed to continue.

The legal issues that the commission needed to address were whether the changes in the business environment were significant enough to justify the termination of the enterprise agreement and whether the agreement had become redundant or unworkable. The commission had to assess whether the changes were of such a nature that they fundamentally altered the relationship between the employer and employees in a way that the agreement could no longer be considered fair and reasonable.

In delivering the decision, the commission noted that while there were indeed changes in the company's business model, these changes did not amount to a fundamental alteration of the relationship between the parties. The commission found that the existing agreement was still capable of being applied to the current circumstances and did not become redundant or unworkable. As a result, the application for termination was dismissed. The commission concluded that the changes, while impactful, did not necessitate a termination of the agreement as they did not fundamentally alter the employment relationship in a manner that rendered the agreement unfair or unreasonable.

Virgin Tech Pty Ltd T/A Virgin Tech

DECISION

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established