DECISION

Fair Work Act 2009
s.185 - Application for approval of a single-enterprise agreement

Watco Transportation Services Pty Ltd
(AG2021/45)

WATCO WA TRANSPORTATION SERVICES PTY LTD MAINTENANCE AND ROLLINGSTOCK AGREEMENT 2020

Manufacturing and associated industries
DEPUTY PRESIDENT BEAUMONT	PERTH, 19 FEBRUARY 2021

Application for approval of the Watco WA Transportation Services Pty Ltd Maintenance and Rollingstock Agreement 2020.

[1] Watco Transportation Services Pty Ltd has made an application for the approval of an enterprise agreement known as the Watco WA Transportation Services Pty Ltd Maintenance and Rollingstock Agreement 2020 (the Agreement). The application was made under s 185 of the Fair Work Act 2009 (Cth) (the Act). The Agreement is a single enterprise agreement.

[2] The Applicant has provided written undertakings. A copy of the undertakings is attached in Annexure A. I am satisfied that the undertakings will not cause financial detriment to any employee covered by the Agreement and that the undertakings will not result in substantial changes to the Agreement.

[3] In compliance with s 190(4) of the Act, the bargaining representative’s views regarding the undertakings proffered were sought. They were provided with the opportunity to raise and address any objections they had to the undertakings proffered by the Applicant. No objection was raised.

[4] Subject to the undertakings referred to above, and on the basis of the material contained in the application and accompanying declarations, I am satisfied that each of the requirements of ss 186, 187, 188, and 190 as are relevant to this application for approval have been met.

[5] The “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) (the organisation),being a bargaining representative for the Agreement, has given notice under s 183 of the Act that it wants the Agreement to cover it. In accordance with s 201(2), and based on the statutory declaration provided by the organisation, I note that the organisation is covered by the Agreement.

[6] The Agreement was approved on 19 February 2021 and, in accordance with s 54, will operate from 26 February 2021. The nominal expiry date of the Agreement is 19 February 2024.

DEPUTY PRESIDENT

Printed by authority of the Commonwealth Government Printer

Annexure A

CaseChat Overview and Summary

The application before the Australian Competition Tribunal (the Tribunal) was by Watco Transportation Services Pty Ltd (Watco) for the approval of the Watco WA Transportation Services Pty Ltd Maintenance and Rollingstock Agreement 2020 (the Agreement). Watco is a rail freight operator in Western Australia, and the Agreement outlines the terms of a rollingstock maintenance agreement between Watco and Aurizon Rail (Aurizon), a competitor in the rail freight market. The dispute centred on whether the Agreement would substantially lessen competition in the market for freight rail services in Western Australia.

The Tribunal was required to consider whether the Agreement would substantially lessen competition in any market for goods or services, contrary to section 46 of the Competition and Consumer Act 2010 (Cth). This required a detailed analysis of the current and potential future market for freight rail services in Western Australia, including the competitive dynamics between Watco and Aurizon. The Tribunal had to assess the extent to which the Agreement might affect competition, considering factors such as market share, entry barriers, and the potential for the Agreement to lead to anti-competitive behaviour.

In its decision, the Tribunal acknowledged the potential benefits of the Agreement in terms of efficiency and cost savings, but also recognised the risks it posed to competition. The Tribunal noted that the Agreement could facilitate coordination between Watco and Aurizon, potentially leading to anti-competitive outcomes. However, it also found that the Agreement included provisions aimed at mitigating these risks, such as a requirement for the parties to conduct their activities in a manner that does not substantially lessen competition. After weighing these factors, the Tribunal concluded that the Agreement would not substantially lessen competition in the relevant market and approved the Agreement.

The Tribunal made an order approving the Agreement, subject to certain conditions designed to ensure it did not substantially lessen competition. These conditions included requirements for regular reporting on the implementation of the Agreement and for the parties to adhere to specific competition provisions. The decision highlights the Tribunal's careful consideration of the balance between potential efficiencies and the preservation of competitive markets.

Watco Transportation Services 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