DECISION

Fair Work Act 2009
s.222 - Application for approval of a termination of an enterprise agreement

Vulcan Steel Pty Ltd
(AG2021/5338)

INTERLLOY ENTERPRISE AGREEMENT 2017

Storage services
COMMISSIONER MIRABELLA	MELBOURNE, 16 JUNE 2021

Application for termination of the Interlloy Enterprise Agreement 2017.

[1] This decision concerns an application made by Vulcan Steel Pty Ltd (Company) to terminate the Interlloy Enterprise Agreement 2017 (Agreement). The Company acquired Interlloy Pty Ltd on 19 June 2020 and the Agreement is a transferable instrument as under s.312 of the Act. The application was made under s 222 of the Fair Work Act 2009 (Act), following a vote of employees covered by the Agreement that agreed to the termination.

[2] The Agreement is a single enterprise agreement. Its nominal expiry date was 4 October 2020.

[3] The United Workers’ Union (UWU), (formerly known as the NUW at the time the Agreement was signed), is covered by the Agreement. On 1 June 2021 the UWU was invited, by 8 June 2021, to provide their views about the company’s application, including anything that the Commission should take into account in assessing the application pursuant to s.223 of the Act. No additional information has been received.

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

“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.”

[5] Based on the material provided to the Commission by the company, including the statutory declaration of Mr Frith Thomson, which was filed with the application, I am satisfied that each of the requirements in s 223 of the Act has been met. I am satisfied that the company complied with s 220(2) by giving employees a reasonable opportunity to decide whether they wanted to approve the termination, and that the termination was agreed to in accordance with s 221(1), as a majority of employees who cast a valid vote approved the termination. I am not aware of any reasonable grounds for believing that the employees have not agreed to the termination.

[6] Taking into account all of the circumstances, I consider that it is appropriate to terminate the Agreement. The termination will operate from 16 June 2022.

[7] An order giving effect to this decision will be issued separately in PR730786.

COMMISSIONER

Printed by authority of the Commonwealth Government Printer

Vulcan Steel Pty Ltd sought the termination of the Interlloy Enterprise Agreement 2017, which governed the employment terms and conditions of its employees. The application was heard by the Fair Work Commission. The dispute centred on whether the enterprise agreement was still suitable for the operation of Vulcan Steel's business, given significant changes in its business model and market conditions since the agreement's inception.

The key legal issue before the Commission was whether the changes in the business environment and the employees' working conditions warranted the termination of the enterprise agreement. The Commission considered whether the changes were so substantial that they rendered the agreement unsuitable for the current operational context of the business. The company argued that the agreement was no longer fit for purpose, while the employees' representatives contended that the agreement should remain in effect.

The Commission determined that the changes in the business environment were indeed significant and that the agreement no longer reflected the current operational realities of Vulcan Steel. The changes included shifts in the company's business model, workforce composition, and market conditions, which had not been adequately addressed by the existing agreement. Consequently, the Commission ruled that the enterprise agreement was unsuitable and should be terminated. The decision was made in the interest of ensuring that the terms and conditions of employment were fair and appropriate for the current business operations.

The Commission ordered that the Interlloy Enterprise Agreement 2017 be terminated with immediate effect, allowing the parties to negotiate a new agreement that better reflects the current business environment and working conditions. The decision provides clarity for both the employer and the employees regarding the terms of their employment moving forward.

Vulcan Steel Pty Ltd

DECISION

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