Y40 Steelfixing Pty Ltd

[2020] FWCA 2139

[2020] FWCA 2139

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.225 - Application for approval of a termination of an enterprise agreement

Y40 Steelfixing Pty Ltd
(AG2020/957)

Y40 STEELFIXING PTY LTD AND THE CFMEU (VICTORIAN CONSTRUCTION AND GENERAL DIVISION) ENTERPRISE AGREEMENT 2016-2018

Building, metal and civil construction industries
COMMISSIONER LEE	MELBOURNE, 30 APRIL 2020

Application for termination of the Y40 Steelfixing Pty Ltd and the CFMEU (Victorian Construction and General Division) Enterprise Agreement 2016-2018.

[1] This matter involves an application made by Y40 Steelfixing Pty Ltd(the Applicant) for termination of the Y40 Steelfixing Pty Ltd and the CFMEU (Victorian Construction and General Division) Enterprise Agreement 2016-2018. (the Agreement) pursuant to section 225 of the Fair Work Act 2009 (the Act).

[2] The Agreement is an enterprise agreement made pursuant to s. 185 of the Act and has a nominal expiry date of 30 June 2018.

[3] The matter for determination is whether or not to grant the application to terminate the agreement.

Background to the application

[4] The Agreement commenced operation on 6 December 2016. The nominal expiry date of the Agreement is 30 June 2018. The Construction, Forestry, Maritime, Mining and Energy Union (CFMMEU) is an employee organisation covered by the Agreement.

[5] A Statutory declaration in relation to termination of an enterprise agreement after the nominal expiry date (F24C) was made by Mr Ngatupuna Ngarua, Director of the Applicant, which accompanied the application. The declaration provided only limited information. Relevantly, Mr Ngarua, stated that it is not contrary to the public interest to terminate the agreement as “the agreement has a nominal expiry date of 30/06/2018 and we wish to enter a new agreement with our employees.” As to the effect of the termination of the Agreement, Mr Ngarua submitted that the termination of the Agreement would “enable us to reach a new agreement”. Mr. Ngarua also stated that the primary activity of the Applicant is steel fixing.
[6] The F24 C stated that there were employees covered by the Agreement, three of whom were casual employees.

[7] The matter was listed for a mention hearing on 6 April 2020. Having regard to the fact that the CFMMEU is an employee organisation covered by the Agreement the CFMMEU was included in the Notice of Listing for the mention hearing. My Chambers also forwarded the Applicants Application for termination of an enterprise agreement after the nominal expiry date (F24B) and F24C to the CFMMEU. In response, the CFMMEU indicated that the CFMMEU sought to be heard in relation to the application.

[8] At the mention hearing, Mr Ngarua submitted that the he wanted to terminate the Agreement because the Applicant does not do union jobs anymore; the Applicant is currently not trading and does not have any employees, primarily due to the coronavirus pandemic. Mr Bromberg, representing the CFFMEU, submitted that he was not in a position at that time to indicate to the Commission if they opposed termination of the Agreement until further instructions were obtained. The matter was adjourned for three days in order to provide an opportunity for the CFMMEU to obtain instructions.

[9] The matter was listed for a second mention hearing on 9 April 2020. At this hearing, Mr. Bromberg for the CFMMEU submitted that the union did oppose the termination of the Agreement but that the unions position could change once further information was provided by the Applicant as to the circumstances surrounding the application and a greater understanding was developed of the reasons the applicant was seeking the termination. Directions were subsequently made for the Applicant and CFMMEU to provide an outline of submissions and any witness statements and any other documentary material on which they intend to rely having regard to ss. 225 and 226 of the Act.

[10] Subsequently, on 22 April 2020, I received a witness statement from the Applicant which included the following relevant information:

“I Ngatupuna Ngarua of 93 Wallaroo Way Doreen, swear that the following is true.

Y40 Steelfixing has been operating for 4 years. I signed the EBA with the CFMEU in 2017 which had a nominal expiry of 2018. Most of my regular work is very small projects and not on union sites. I have completed only 3 projects on union sites and on 2 of those projects my sub contractor invoices were not paid by the contractors who both went into liquidation. I lost $180,000. My average turnover per year is $200-$300,000.

With the significant loss and the flow of work, I have only been able to hire staff on a casual basis. This is a significant barrier to me operating my business, as well as not being ideal for the people I hire. I have found casual staff to be less reliable and finding staff when you need them is very stressful.

Currently I have no employees, the last time I hired someone on a casual basis was early March. Once a project is finished or flow of work slows they move on to look for casual work elsewhere.”

[11] On 22 April 2020, I received an email from the CFMMEU stating:

“The CFMMEU’s position has changed in respect of this application. We no longer press our objection to the termination of the Y40 Steelfixing agreement.

Unless Commissioner Lee wishes to hear from us, we do not propose to make further submissions.”

Consideration

[12] In making a decision whether to grant the application, the Fair Work Commission is required to comply with section 225 and section 226 of the Act.

“225 Application for termination of an enterprise agreement after its nominal expiry date

If an enterprise agreement has passed its nominal expiry date, any of the following may apply to the FWC for the termination of the agreement:

(a) one or more of the employers covered by the agreement;

(b) an employee covered by the agreement;

(c) an employee organisation covered by the agreement.

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.”

[13] Consistent with s. 225(a) of the Act, the application to terminate the Agreement was made by the employer, Y40 Steelfixing Pty Ltd, an employer who is covered by the Agreement.

[14] In the event the Agreement is terminated, it is apparent that there would be a reduction in the statutory entitlements of any employees. However, I have been advised by Mr Ngarua in the submissions he has made to me, that whilst it is apparent there were some casual employees at the time the application was made, that there are no employees currently covered by the Agreement nor is there a prospect of work being conducted under the Agreement. I am satisfied that while there would be an impact on employees if the Agreement is terminated, that is not an apparent concern in this situation.

[15] No submissions that the termination of the Agreement would be contrary to the public interest have been received. I have taken into account the changed business environment confronting the Applicant and this weighs in favour of a decision to terminate the Agreement.

[16] The CFMMEU, who are covered by the Agreement and are aware of the application before me, have indicated they do not press their objection in relation to the application to terminate the Agreement.

[17] I am satisfied, in accordance with s. 226 (a) of the Act, that it is not contrary to the public interest to terminate the Agreement. I am also satisfied, in accordance with s. 226 (b) of the Act that it is appropriate to terminate the Agreement having regard to all of the circumstances of the matter as set out above. I am therefore required by s. 226 of the Act to terminate the Agreement.

[18] The termination of the Agreement shall operate from the date of this decision.

COMMISSIONER

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