A Full Bench of the Fair Work Commission (the "FWC")
in Aurizon Operations Limited: Aurizon Network Pty Ltd
 FWCFB 540 has ordered the termination of 12 enterprise
agreements that had passed their nominal expiry dates.
Aurizon was privatized by the Queensland government in 2010.
During the course of privatization, the government oversaw the
inclusion of generous terms and conditions for employees, and the
imposition of inflexible restrictions on the employer, in
Aurizon's enterprise agreements. This included a prohibition on
forced redundancies and restrictions in relation to rostering and
the tasks employees could be asked to perform, which produced a
significant loss of productivity. The nominal expiry date for the
agreements was December 31, 2013, and in May 2014, Aurizon applied
to have the agreements terminated.
Once an enterprise agreement reaches its nominal expiry date, it
operates indefinitely until it is replaced by another agreement or
is terminated by the FWC. Under section 226 of the FWA, the FWC
must terminate an enterprise agreement after its nominal expiry
date has passed if the FWC is satisfied that:
"It is not contrary to the public interest to do so";
"It is appropriate to terminate the agreement taking into
account all the circumstances," including the views of the
parties covered by the agreement and the "likely effect that
the termination will have on each of them."
The FWC had previously shown a reluctance to terminate
enterprise agreements under section 226 when bargaining was
ongoing, which often left employers with inflexible and restrictive
agreements that were effectively indefinite in operation. However,
in the Aurizon decision, the Full Bench decided to
terminate the enterprise agreements, effective from May 18, 2015,
as both aspects of the statutory test in section 226 were
The Full Bench stated that there is no inherent inconsistency
between "the termination of an enterprise agreement that has
passed its nominal expiry date and the continuation of collective
bargaining in good faith for an agreement." Further, it was
recognized that termination of an unproductive agreement might
actually further the objects of the FWA by incentivizing the
negotiation of a replacement agreement.
Relevant factors included that: (i) bargaining had reached a
stalemate, (ii) Aurizon undertook that the employees' wages and
allowances under the agreements would continue for six months,
(iii) the changes sought by Aurizon were "rationally
based" on a desire to change "clearly inefficient"
work practices, and (iv) many provisions in the agreements were
"not common" and were imposed on Aurizon as a result of
the company's "peculiar history" of privatization.
For those reasons, termination was both appropriate and consistent
with the public interest.
This decision signals a new willingness to terminate expired
enterprise agreements that are particularly restrictive, even if
bargaining is ongoing. It paves the way for employers who are
subject to restrictive expired enterprise agreements to seek
termination of those agreements, where negotiations for a
replacement agreement have failed and they can show that
termination is appropriate and not contrary to the public interest.
While the circumstances in the Aurizon decision were
fairly unusual, the Full Bench's pragmatic recognition that
enterprise agreements are not intended to "continue unaltered
in perpetuity" leaves open the possibility for employers to
apply to have such agreements terminated in the future.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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Australian employees receive certain entitlements (such as annual leave and superannuation) where contractors do not.
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