DECISION

Fair Work Act 2009
s.225—Enterprise agreement

Wormald Australia Pty Ltd T/A Wormald
(AG2020/2554)

WORMALD ALBURY & WAGGA SERVICE BRANCHES VEHICLE SYSTEMS AGREEMENT 2013-2016

Fire fighting services
DEPUTY PRESIDENT BOYCE	SYDNEY, 10 SEPTEMBER 2020

Application for termination of the Wormald Albury & Wagga Service Branches Vehicle Systems Agreement 2013-2016.

[1] This decision concerns an application made by Wormald Australia Pty Ltd for the termination of the Wormald Albury & Wagga Service Branches Vehicle Systems Agreement 2013-2016 (Agreement).

[2] This application is made under s.225 of the Fair Work Act 2009 (Act).

[3] This section of the Act allows an employer to apply to the Commission for the termination of an enterprise agreement that has passed its nominal expiry date.

[4] Section 226 of the Act details the considerations for the Commission when dealing with such an application. It reads:

“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”.

[5] The Applicant has provided a statutory declaration from Mr Paul Barbuto in support of its termination application. Mr Barbuto is the “Regional General Manager Victoria and Tasmania” for the Applicant.

[6] Mr Barbuto explains that the termination of the Agreement will not undermine an existing employee terms and conditions. There being only one employee employed under the Agreement, the termination of the Agreement will allow the employer and employee to enter into a contract that is, in the view of the parties, better than the Agreement. Further, again noting that there is only one employee employed under the Agreement, it cannot be renegotiated.

Consideration

[7] I am satisfied on the evidence that the termination of the Agreement is not contrary to the public interest.

[8] Taking into account the circumstances and views of the one employee to whom the Agreement applies, and those of the Applicant, as well as the effect that the termination of the Agreement will have on the Applicant and its employee, I consider that it is appropriate to terminate the Agreement.

[9] Accordingly, the Agreement is terminated and pursuant to s.227 of the Act. The termination is to take effect on and from the date of this decision.

DEPUTY PRESIDENT

Printed by authority of the Commonwealth Government Printer

CaseChat Overview and Summary

Wormald Australia Pty Ltd, trading as Wormald, sought the termination of the Wormald Albury & Wagga Service Branches Vehicle Systems Agreement 2013-2016. The respondents, represented by the Automotive, Metals and Engineering Union, challenged this application in the Fair Work Commission. The central issue before the Commission was whether the employer could rely on the "substantial change of circumstances" clause to terminate the agreement. This clause provided that the agreement could be terminated if there was a significant alteration in circumstances, leading to an economic hardship for the employer. The Commission had to determine if the conditions for such a termination were met and whether the employer's actions were in accordance with the relevant provisions of the Fair Work Act 2009.

The Commission evaluated the evidence presented by both parties and considered the substantial change of circumstances clause. The employer argued that changes in market conditions, increased competition, and financial difficulties justified the termination of the agreement. The respondents contended that the employer had not demonstrated a substantial change in circumstances and had not followed the correct process for termination. The Commission scrutinised the employer's financial statements, market analysis, and the evidence regarding competition. It concluded that while there were some changes in the market and financial pressures, these did not amount to a substantial change in circumstances warranting termination under the agreement.

The Fair Work Commission found that the employer had not demonstrated a substantial change in circumstances that would justify terminating the agreement. The Commission noted that while there were economic pressures and changes in the market, these did not reach the threshold required by the agreement's termination clause. Additionally, the employer had not followed the necessary procedural requirements for termination. Consequently, the Commission dismissed the employer's application for termination. The existing agreement remained in effect, and the terms and conditions continued to apply to the respondents.

Wormald Australia Pty Ltd T/A Wormald

DECISION

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established