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

VLI BERESFIELD (NSW) UNION ENTERPRISE AGREEMENT 2021

Application for termination of the VLI Beresfield (NSW) Union Enterprise Agreement 2021

[1] On 2 May 2025, Vli Conveyors Pty Limited (Applicant/Employer) filed an application (Application) with the Fair Work Commission (Commission) seeking termination of the VLI Beresfield (NSW) Union Enterprise Agreement 2021 (Agreement) pursuant to s.225 of the Fair Work Act 2009 (Act).[1] The Agreement is a single enterprise agreement which nominally expired on 14 December 2022.

[2] The Agreement currently applies to one employee.

[3] The Australian Workers' Union (AWU) is an employee organisation covered by the Agreement.

[4] Subdivision D of Division 7 of Part 2-4 of the Act sets out the mechanism by which an enterprise agreement may be terminated after it has passed its nominal expiry date.

[5] Sections 225 and 226 of the Act read:

"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;

(c) an employee organisation covered by the agreement."

"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

(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."

[6] I am satisfied that the two threshold requirements set out in s.225 of the Act have been met. Firstly, the Agreement has passed its nominal expiry date. Secondly, the Applicant was an employer covered by the Agreement at the time the Application was made.

[7] The Applicant seeks termination of the Agreement on the basis that its continued operation is unfair to the remaining employee covered by it (s.226(1)(a) of the Act). Only one employee is currently covered by the Agreement, and he does not oppose its termination. Further, the Applicant has given an Undertaking dated 2 May 2025 (see Annexure A) to continue providing entitlements (as shown in the Agreement) to the one employee covered by the Agreement, should the Agreement be terminated (s.226A of the Act).

[8] In support of its termination application, the Applicant filed its Form F24C - Declaration in relation to termination of an enterprise agreement after the nominal expiry date from Ms Lisa O'Connor, Human Resources Manager. Given that only one employee is currently covered by the Agreement, the Applicant submits that it would be unfair for the one remaining employee to remain covered by the Agreement (mainly due to unequal bargaining power).

[9] The Application is supported by the AWU.

[10] There is no evidence of any of the matters under s.226(4) of the Act applying. Nor am I aware of any other relevant matters for the purposes of s.226(5).

[11] Taking into account the provisions of ss.226 and 226A of the Act, as are relevant to this application for termination, I am satisfied that the continued operation of the Agreement would be unfair for the employee still covered by the Agreement. I therefore consider it appropriate to terminate the Agreement, and am required by s.226(1) to do so.

[12] Section 227 of the Act reads:

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

[13] I terminate the Agreement effective on and from Monday, 12 May 2025.

[1] The application is made pursuant to Item 16, Schedule 3 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (TPCA Act). Item 16, Schedule 3 of the TPCA Act provides that Subdivision D of Division 7 of Part 2-4 of the Fair Work Act 2009 (including s 226) applies to applications to terminate collective agreement-based transitional instruments which have passed their nominal expiry date.

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