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

Boluda Towage (Australia) Pty Ltd (previously Smit Lamnalco Towage (Australia) Pty Ltd)

SMIT LAMNALCO TOWAGE (AUSTRALIA) PTY LTD BUNBURY ENTERPRISE AGREEMENT 2018

Application for termination of the Smit Lamnalco Towage (Australia) Pty Ltd Bunbury Enterprise Agreement 2018

[1] Boluda Towage (Australia) Pty Ltd (formerly Smit Lamnalco Towage (Australia) Pty Ltd) (applicant) has applied under s.225 of the Fair Work Act 2009 (Act) to terminate the Smit Lamnalco Towage (Australia) Pty Ltd Bunbury Enterprise Agreement 2018 (AG2018/6626) (2018 Agreement).

[2] The 2018 Agreement is expressed to apply 'in Bunbury in respect of work performed by employees on pilot boats operating in or about Bunbury.'[1] The 2018 Agreement provides that the Agreement is binding on the applicant, the Maritime Union of Australia (MUA, now Construction, Forestry, Maritime Employees Union (CFMEU))[2] and employees who are engaged by the company in its pilot boat operation in Bunbury who would otherwise be covered by the Ports, Harbours and Enclosed Water Vessels Award 2010.[3]

[3] The nominal expiry date of the 2018 Agreement is 30 June 2021.

[4] On 13 March 2026 I issued directions requiring the CFMEU to provide the Fair Work Commission (Commission) with any submissions it wished to make in relation to the application. On 20 March 2026, the CFMEU advised that it did not oppose the application.

[5] In the circumstances, I have decided to deal with the application on the papers without conducting a hearing.

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

(1) 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.

[7] Section 226 of the Act provides:

226 Terminating an enterprise agreement after its nominal expiry date

(1) 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 the continued operation of the agreement would be unfair for the employees covered by the agreement; or

• (b) the FWC is satisfied that the agreement does not, and is not likely to, cover any employees; or

• (c) all of the following apply:

  • (i) the FWC is satisfied that the continued operation of the enterprise agreement would pose a significant threat to the viability of a business carried on by the employer, or employers, covered by the agreement;

  • (ii) the FWC is satisfied that the termination of the enterprise agreement would be likely to reduce the potential of terminations of employment covered by subsection (2) for the employees covered by the agreement;

  • (iii) if the agreement contains terms providing entitlements relating to the termination of employees' employment - each employer covered by the agreement has given the FWC a guarantee of termination entitlements in relation to the termination of the agreement.

(1A) However, the FWC must terminate the enterprise agreement under subsection (1) only if the FWC is satisfied that it is appropriate in all the circumstances to do so.

(2) This subsection covers a termination of the employment of an employee:

• (a) at the employer's initiative because the employer no longer requires the job done by the employee to be done by anyone, except where this is due to the ordinary and customary turnover of labour; or

• (b) because of the insolvency or bankruptcy of the employer.

(3) In deciding whether to terminate the agreement, the FWC must consider the views of the following covered by the agreement:

• (a) the employees (unless there are no employees covered by the agreement);

• (b) each employer;

• (c) each employee organisation (if any).

Note: The President may be required to direct a Full Bench to perform a function or exercise a power in relation to the matter if any of the employers, employees, or employee organisations, covered by the agreement oppose the termination (see subsection 615A(3)).

(4) In deciding whether to terminate the agreement (the existing agreement), the FWC must have regard to:

• (a) whether the application was made at or after the notification time for a proposed enterprise agreement that will cover the same, or substantially the same, group of employees as the existing agreement; and

• (b) whether bargaining for the proposed enterprise agreement is occurring; and

• (c) whether the termination of the existing agreement would adversely affect the bargaining position of the employees that will be covered by the proposed enterprise agreement.

(5) In deciding whether to terminate the agreement, the FWC may also have regard to any other relevant matter.

[8] The 2018 Agreement has passed its nominal expiry date and the applicant has standing to make the application pursuant to s.225(a) of the Act because it is the employer that is covered by the 2018 Agreement. Accordingly, the jurisdictional prerequisites for the making of an application under s.225 of the Act are satisfied.

[9] The applicant filed a declaration by its authorised representative, Mr. Jared Laughlin, in support of the application. The declaration attested to the fact that there were no employees covered or likely to be covered by the 2018 Agreement. Mr. Laughlin said that the applicant had previously had a contract with Southern Port Authority and held the licence to operate pilot vessels in Bunbury from 2016 to 31 January 2023 but had not held the licence or undertaken work covered by the 2018 Agreement since that date. He said that employment of employees of the applicant who did perform work subject to the contract and who were covered by the 2018 Agreement had ended at or about 31 January 2023 and that the subject work of the contract has since been carried out by businesses unrelated to the applicant. He said there was no foreseeable prospect that the applicant would be in a position to or look to employ persons who could be covered by the 2018 Agreement.

[10] Further, Mr. Laughlin said that the 2018 Agreement had been replaced by a subsequent agreement being the Smit Lamnalco Towage (Australia) Pty Ltd Bunbury Enterprise Agreement 2021 which had the same coverage clause as the 2018 Agreement and its predecessor and which was now itself the subject of an application to terminate_._

[11] On the material filed with the Commission I am satisfied the 2018 Agreement does not and is not likely to cover any employees and that the requirement of s.226(1)(b) is met. I have taken into account the views of the applicant and the CFMEU referred to above in relation to this application. For the purposes of s.226(4), there is no "proposed enterprise agreement" and none of the matters in that subsection are relevant to the application before me. There are no other relevant matters that I should take into account in the determination of this matter of which I am aware. I am satisfied that it is appropriate in all the circumstances to terminate the 2018 Agreement.

Given my findings in respect of ss. 225 and 226 of the Act, I am required to terminate the 2018 Agreement. The termination will operate from 24 March 2026.

[2] Provided the Fair Work Commission notes that that organisation is covered by the Agreement under s.201 of the Act.

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