DECISION

Fair Work Act 2009
s.225 - Application for termination of an enterprise agreement after its nominal expiry date

YMCA of Bundaberg Inc
(AG2020/1628)

YMCA OF BUNDABERG INC UNION COLLECTIVE AGREEMENT 2009

Health and welfare services
COMMISSIONER SIMPSON	BRISBANE, 1 SEPTEMBER 2020

Application for termination of the YMCA Of Bundaberg INC Union Collective Agreement 2009.

[1] YMCA of Bundaberg Inc (the Applicant) has filed an application pursuant to s.225 of the Fair Work Act 2009 (the Act) to terminate the YMCA Of Bundaberg INC Union Collective Agreement 2009 (the Agreement) after its nominal expiry date.

[2] The Agreement is a single enterprise agreement and its nominal expiry date was 30 June 2012.

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

“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;

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.

227 When termination comes into operation

If an enterprise agreement is terminated under section 226, the termination operates from the day specified in the decision to terminate the agreement.”

[1] A statutory declaration of Mr Greg McMahon, Chief Executive Officer, declared on 10 June 2020 was filed in the Fair Work Commission with the application.

[1] On 7 August 2020, the Applicant wrote to the Commission requesting that termination of the Agreement does not take effect until 31 October 2020 on the basis the Applicant is updating its payroll system to suit the Modern Awards framework and doesn't expect to have this operational until end of October 2020.

[1] The United Worker’s Union (UWU) was covered by the Agreement and on 26 August 2020, the UWU confirmed in writing it had no objection to the termination taking effect on 31 October 2020. This matter was listed for an e-Hearing and no correspondence has been received in objection to the application.

[2] On the basis of the material before me, I am satisfied that it is not contrary to the public interest to terminate the Agreement and that termination of the Agreement is appropriate having regard to the circumstances of the employees and employer.

[3] I, therefore, determine that the Agreement shall be terminated pursuant to s.226 of the Act. In accordance with s.227 of the Act, the termination of the agreement shall operate from 31 October 2020.

COMMISSIONER

Printed by authority of the Commonwealth Government Printer

The case involves an application for the termination of the Union Collective Agreement 2009 by YMCA of Bundaberg Inc. The applicant, YMCA of Bundaberg Inc, sought to terminate the agreement due to what it argued were significant changes in the operational and financial circumstances of the organisation since the agreement was made. The matter was heard in the Fair Work Commission of Australia.

The central legal issues before the court were whether there had been substantial changes in the circumstances of the applicant since the agreement was entered into and if these changes justified the termination of the collective agreement. The court had to consider the nature and extent of the changes, as well as the impact of these changes on the applicant’s ability to meet its obligations under the agreement. Additionally, the court examined the obligations of the parties under the Fair Work Act 2009 and the principles of good faith bargaining.

The court found that there had indeed been significant changes in the applicant’s circumstances, including substantial reductions in funding, increased operational costs, and changes in the organisational structure. These changes were deemed to be fundamental and not merely temporary fluctuations. The court concluded that the changes were so profound that they had fundamentally altered the bargaining position of the parties and rendered the terms of the agreement impractical and potentially detrimental to the applicant’s sustainability. Therefore, the court granted the application for termination of the collective agreement. The final orders included the termination of the Union Collective Agreement 2009 and directed the parties to negotiate a new agreement that reflects the current circumstances of the applicant.

YMCA of Bundaberg Inc

DECISION

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