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

PROTECH MANAGED PROJECT SERVICES PTY LTD & THE AUSTRALIAN WORKERS' UNION AGREEMENT 2021

Application for termination of the Protech Managed Project Services Pty Ltd & The Australian Workers' Union Agreement 2021

• [1] On 20 March 2024, Protech Managed Project Services Pty Ltd (Protech) applied under s 225 of the Fair Work Act 2009 (Cth) (Act) to terminate the Protech Managed Project Services Pty Ltd & The Australian Workers' Union Agreement 2021[1] (Agreement). The Agreement is a single-enterprise agreement,[2] which nominally expired on 28 February 2023.[3]

• [2] For the reasons that follow, I am satisfied that the Commission must terminate the Agreement because the Agreement does not, and is not likely to, cover any employees. Accordingly, the Agreement is terminated.

• [3] The Agreement covers Protech, The Australian Workers Union (AWU) and "[a]ll persons employed by the Company who are engaged in classifications prescribed in this Agreement on the Project, and within the scope set out in clause 5 of the Agreement (the "Employees")".[4] By clause 5.1, the Agreement applies to work performed by employees of Protech who are engaged in the classifications set out in Appendix A in the State of Victoria.[5]

• [4] On 25 March 2024, my Chambers emailed Protech and the AWU attaching directions. The directions set out the relevant legislation (ss 225, 226 and 615A of the Act) and stated as follows:

• there are no employees covered, or likely to be covered by the Agreement;
• bargaining had commenced for a proposed new enterprise agreement but that it has since ceased;
• it no longer "provides employees" in Victoria.

• [5] Protech was directed to file in the Commission and serve on the AWU a witness statement explaining the circumstances which led to Protech ceasing to employ persons who were, or would have been, covered by the Agreement. A statement was filed accordingly by Natalie Stewart, Group People Director for Protech Group (AUST) Pty Ltd, the parent company of Protech, on 27 March 2024.

• [6] The directions also required the AWU to provide responsive views addressing whether it disagrees with any part of Protech's evidence, and whether it opposes the application. On 3 April 2024, the AWU advised the Commission that it does not disagree with the content of Ms Stewart's statement and does not oppose the application.

• [7] Section 225 of the Act provides as follows:

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.

• [8] Section 226 of the Act provides:

(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);

(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.

• [9] Section 615A of the Act provides that the President must direct a Full Bench to perform a function or exercise a power in relation to a matter arising under s 226 if an employee, employer or employee organisation opposes the application.

• [10] By s 225(a) of the Act, and relevant to this application, an employer covered by the Agreement may apply to the Commission for its termination if the Agreement has passed its nominal expiry date. As earlier noted, clause 4.1 of the Agreement provides that the Agreement nominally expired on 28 February 2023 and clause 3.1 provides that the Agreement covers Protech. I am satisfied that Protech has standing to bring the application under s 225(a) of the Act.

• [11] I turn to consider the primary basis for the application, being that the Agreement does not, and is not likely to, cover any employees such that s 226(1)(b) of the Act applies.

• [12] In her statement, Ms Stewart gave the following evidence:[6]

(a) Protech is a labour hire provider, which specialises in providing temporary workforce and project labour for clients on major projects.

(b) On or around 7 March 2024, Protech made a commercial decision to cease supply into the Victorian market through this entity. The reasons for this decision included limited turnover, financial performance, and the cost of business including licencing.

(c) All Protech employees have either finalised their assignment given the project needs or commenced a permanent role with the host client directly. The last employee placed under the Agreement concluded their employment with Protech on 15 March 2024.

(d) Accordingly, Protech does not have any employees covered by the Agreement.

• [13] Having regard to Ms Stewart's evidence, which is not contested, I am satisfied that the Agreement does not, and is not likely to, cover any employees.

• [14] Section 226(1A) of the Act provides that the Commission must terminate the Agreement only if it is satisfied that it is appropriate in all the circumstances to do so. Further, by s 226(5), the Commission may have regard to any relevant matters in deciding whether to terminate the Agreement. In the circumstances described, I take into account the following:

(a) there is no opposition to the termination of the Agreement, which is also relevant to the consideration in s 226(3) of the Act;

(b) there are no employees covered by the Agreement; and

(c) Protech has made the decision to cease operating in the Victorian market and the Agreement applies to work performed by Protech employees only in the State of Victoria.

• [15] On the material before the Commission, s 226(4) has no relevant application.

• [16] As I am satisfied that the Agreement does not, and is not likely to, cover any employees, s 226(1)(b) of the Act is engaged. Taking into account all of the circumstances, including the matters at [14] of this decision, I consider that it is appropriate to terminate the Agreement. Accordingly, I must terminate the Agreement.

• [17] The Agreement is terminated. In accordance with s 227 of the Act, the termination will operate from 11 April 2024.

[2] Protech Managed Project Services Pty Ltd [2022] FWCA 1528 at [1]

[6] Witness statement of Natalie Stewart dated 27 March 2024 at [2]-[4]

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