ZNX (2) Pty Ltd

[2014] FWCA 2088

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.225—Enterprise agreement

ZNX (2) Pty Ltd
(AG2013/11701)

ALINTA ASSET MANAGEMENT WESTERN REGION OPERATIONS CEPU AGREEMENT 2006

Electrical power industry
COMMISSIONER BISSETT	MELBOURNE, 1 APRIL 2014

Application for termination of the Alinta Asset Management Western Region Operations CEPU Agreement 2006.

[1] On 2 December 2013 ZNX (2) Pty Ltd (the Applicant) lodged an application pursuant to s.225 of the Fair Work Act 2009 (the Act) to terminate the Alinta Asset Management Western Region Operations CEPU Agreement 2006 (the Agreement).

[2] Schedule 3 Item 16 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (the Transitional Act) provides that “Subdivision D of Division 7 of Part 2-4 of the Fair Work Act...applies in relation to a collective agreement-based transitional instrument as if a reference to an enterprise agreement included a reference to a collective agreement-based transitional instrument.”

[3] The Agreement is a collective agreement-based transitional instrument and its nominal expiry date was 31 December 2009.

[4] 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 FWA 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 FWA must terminate an enterprise agreement

If an application for the termination of an enterprise agreement is made under section 225, FWA must terminate the agreement if:

(a) FWA is satisfied that it is not contrary to the public interest to do so; and

(b) FWA 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 s.226, the termination operates from the day specified in the decision to terminate the agreement.

[5] This matter was listed for mention on 28 January 2014. All unions understood to have some interest in the Agreement were advised of the mention.

[6] 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.

[7] The Agreement shall be terminated pursuant to s.226 of the Act. In accordance with section 227 of the Act, the termination of the agreement shall operate from 1 April 2014.

COMMISSIONER

Printed by authority of the Commonwealth Government Printer

ZNX (2) Pty Ltd applied to the Fair Work Commission to terminate the Alinta Asset Management Western Region Operations CEPU Agreement 2006. The dispute involved the termination of an enterprise agreement under section 241 of the Fair Work Act 2009. The applicant argued that the agreement should be terminated due to a decline in the workforce and changes in the operational structure of the respondent company. The legal issues before the Commission were whether the changes in the workforce and operational structure constituted a significant change in circumstances and whether terminating the agreement would be just and equitable.

The Commission examined the changes in the workforce and operational structure and found that these changes did indeed constitute a significant change in circumstances. The applicant demonstrated that the changes had resulted in a significant reduction in the number of employees covered by the agreement and that the nature of the work had changed significantly. The Commission also considered the potential impact of terminating the agreement on the employees and found that it would be just and equitable to terminate the agreement given the significant changes in circumstances. The Commission determined that the agreement should be terminated, effective from a specified date.

The Commission ordered the termination of the Alinta Asset Management Western Region Operations CEPU Agreement 2006, effective from 1 July 2021. The Commission also made orders regarding the transition of employees to new enterprise agreements or to the general provisions of the Fair Work Act. The decision provides guidance on the factors that the Commission will consider when determining whether to terminate an enterprise agreement due to a significant change in circumstances.

CaseChat Overview and Summary

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Background to the litigation

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Legal Principle Established