Fair Work Act 2009

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

Application for termination of the Detection Security Management Pty Ltd Enterprise Agreement 2017 - 2021 after its nominal expiry date - Whether continued operation of agreement would be unfair for employees covered by the agreement - Termination not approved.

• [1] Detection Security Management Pty Ltd has applied under s 225 of the Fair Work Act 2009 (Cth) to terminate the Detection Security Management Pty Ltd Enterprise Agreement 2017 - 2021.

• [2] The Agreement was approved by the Fair Work Commission on 26 September 2017.[1] It commenced operation on 3 October 2017. Its nominal expiry date was 25 September 2021.

• [3] The Agreement does not cover any union. The Agreement does cover employees.

• [4] Under s 226 of the Act, the Commission must terminate an agreement after its nominal expiry date if satisfied of one of 3 alternative grounds in s 226(1) and the Commission is satisfied that it is appropriate in all the circumstances to do so under s 226(1A). I am not satisfied of any of the grounds under s 226(1) and so do not terminate the Agreement. My reasons follow.

• [5] Section 225 provides:

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;

(c) an employee organisation covered by the agreement.

• [6] Section 226 provides:

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

(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);

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.

• [7] I held a case management conference and issued directions in this matter on 5 June 2025. The directions provided Detection Security with the opportunity to make submissions and file materials in support of its application. The directions provided employees with the opportunity to provide their views about the application directly to my chambers. The directions also required Detection Security serve the application and my directions on its employees.

• [8] The employer filed submissions and supporting materials in accordance with my directions.

• [9] Detection Security complied with my directions about serving the application and my directions on employees by emailing all employees and printing out copies to provide to employees. I am satisfied that they did so. I did not receive any views from employees.

• [10] I provided the employer with an opportunity to request that this matter be heard; it did not make a request. I am of the view that this matter can be dealt with on the papers.

• [11] Under s 225(a), Detection Security has standing to make the application as they are the employer covered by the Agreement.

• [12] Detection Security relied on sections 226(1)(a) and (c) of the Act in relation to fairness to employees and business viability. It could not rely on section 226(1)(b) as the Agreement continues to cover employees.

• [13] Detection Security say that they are a small business. Currently, they provide security in the construction industry. Their future business plan includes entering domestic security systems, commercial officers, shopping centres, warehouses, educational institutions, government, retail, defence, and manufacturing. Detection Security also say that they intend to stop working primarily in the construction industry.

That the continued operation of the agreement would be unfair to employees

• [14] The basis for Detection Security saying that the continued operation of the agreement being unfair to employees is that it has been providing wage and allowance increases that are above the prescribed increases contained in the Agreement and that it would like to continue to do so. Relatedly, Detection Security also refer to payment of bonuses, based on individual performance and based on company performance. I am of the view that this factor does not relate to how the continued operation of the agreement is unfair to employees. An enterprise agreement sets the minimum standards, terms, and conditions of employees to whom the agreement applies. The Agreement does not prevent the employer from offering wage increases or bonuses that are greater than that minimum.

• [15] While the legislation does not require that I make an assessment about whether employees are better off under the Award than under the Agreement when considering this ground, that is the relevant point of comparison because of the consequences that flow from terminating an agreement. No submissions were made addressing this point.

• [16] The terms of the Agreement appear broadly consistent with the relevant award (being the Electrical, Electronic and Communications Contracting Award 2020). There do not appear to be any entitlements that are greater than the Award other than the rate of pay. The rate of pay under the Agreement continues to increase due to the operation of clause 5.1.3 which provides that the rates of pay and allowances in the Agreement are adjusted by 2.4% on the anniversary of the approval of the Agreement, without any end point for adjustment.

• [17] There is the possibility that rates of pay and allowance amounts would fall below the Award depending upon the amount that the Award rates are increased from year to year. There is the possibility that employees may not be better off overall under the Agreement than under the Award, but there are other benefits of the Agreement that include that it is a simpler document containing those provisions of the Award that were relevant to the employer at the time the Agreement was made.

• [18] Those matters are only possibilities, and I am not satisfied based on the information provided to me that the continued operation of the Agreement will be unfair for employees who are covered by the Agreement.

That continued operation of the agreement would pose a significant threat to the viability of the business

• [19] In support of this ground, Detection Security say that terminating the Agreement would allow the employer to implement common law contracts to offer more flexibility. Again, the Agreement does not prevent Detection Security implementing common law contracts (provided they offer terms and conditions that are greater than the Agreement).

• [20] Detection Security also say that they wish to employ non-electrical workers as part of their future business growth plan.

• [21] The Agreement does not prevent them from doing so. Clause 3 of the Agreement provides that it applies to the Company (defined as Detection Security in Clause 2) and employees covered by the classifications specified in Schedule A of the Agreement, and that it applies to current and future employees when they perform work for Detection Security anywhere in Australia. The classifications in Schedule A are Electrical Workers Grades 1 through to 10, and apprentices, including adult apprentices. The descriptions for each of the classifications are clear that the work relates to electrical work, except for Electrical Worker Grades 1 and 2, which describe more general labouring work.

• [22] The requirement of this ground is that the continued operation of the Agreement poses a significant threat to the viability of the business. The submissions and material do not satisfy me that there is any threat to the viability of the business. Further, to rely upon s 226(1)(c), all the statutory conditions must apply. Detection Security did not address s 226(1)(c)(i) - that termination would be likely to reduce the potential terminations of employment of employees - or s 226(1)(c)(ii) - that the employer has given a guarantee of employee entitlements.

• [23] I am not satisfied that there are grounds under s 226 of the Act to terminate the Agreement and so I do not. The application is dismissed.

[1] [2017] FWCA 5011, AE425564, PR596388

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