Fair Work Commission

Re Aurizon Operations Limited; Aurizon Network Pty Ltd; Australia Eastern Railroad Pty Ltd [2015] FWCFB 540 (Watson VP, Gostencnik DP, Spencer C, 22 April 2015).

Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Aurizon Operations Ltd [2015] FCAFC 126 (3 September 2015).

Aurizon applied to the Commission to terminate 14 enterprise agreements that had passed their nominal expiry dates. By the time the matter reached hearing, two of the agreements had been replaced by new agreements and the application was only pressed in relation to the remaining 12.

The construction and application of s.226 was considered. Firstly, in relation to s.226(a) the Full Bench held that a consideration of the public interest would involve something distinct from the interests of the persons and bodies covered by the agreement. The Full Bench applied the decision in Kellog Brown.

In this case the parties had been engaged in bargaining for several months without reaching an agreement. The union parties submitted that terminating the agreements would undermine the bargaining process and deliver an advantage to Aurizon in the negotiations. The Full Bench held that there was nothing inherently inconsistent with the termination of an enterprise agreement that had passed its nominal expiry date and the continuation of collective bargaining in good faith.

In considering the requirements of s.226(b) the Full Bench acknowledged that the application had been made in the context of a bargaining stalemate. The agreements subject to the application had a particular history due to directions issued to Aurizon from its previous owner, the Queensland Government. The particular clauses included an employment guarantee which had also expired and other clauses relating to work practices which affected Aurizon’s ability to effectively manage the business. One result of the termination of the agreements would be that 69 employees who did not have a productive role within the organisation would have their employment terminated.

The union parties submitted that the employees covered by the agreements opposed the termination of those agreements because it would result in a reduction in the terms and conditions of their employment. The Full Bench was not persuaded by this submission holding that the Fair Work Act did not guarantee the terms and conditions contained in a nominally expired agreement. Ultimately, the Full Bench held that it could not be expected that an enterprise agreement that had passed its nominal expiry date would continue to apply unaltered in perpetuity.

The Full Bench was satisfied that it was appropriate to terminate each of the 12 enterprise agreements.

The union parties then made an application for judicial review to the Federal Court. A Full Court of the Federal Court found no error in the decision of the Commission and dismissed the application.