Alinta Gas wins right to terminate 'restrictive' agreement

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Alinta Gas wins right to terminate 'restrictive' agreement

The AIRC has upheld an application by Alinta Gas to terminate a certified agreement after the company successfully argued that this would allow for comparable terms and conditions for all employees.

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The AIRC has upheld an application by Alinta Gas to terminate a certified agreement after the company successfully argued that this would allow for comparable terms and conditions for all employees.

Background

Alinta Gas Networks Pty Ltd, a wholly owned subsidiary of Alinta Gas Limited, applied under s170MH to terminate an agreement made with the Australian Municipal, Administrative, Clerical and Services Union (ASU) in January 2002.

The ASU opposed the application saying it wished to maintain the agreement until a new agreement was made.

The agreement was made under s170LO of the federal  Workplace Relations Act 1996 to settle an industrial dispute between Alinta Gas and the ASU. While having a nominal expiry date of October 2002, it also stipulated that it should remain in force until it was replaced by a new agreement.

The agreement covered 14 employees. The AIRC interviewed ten of these employees who all opposed terminating the agreement because they feared a loss of entitlements. Alinta argued the agreement was no longer relevant.

It said the agreement was made during a period of structural change in the WA gas industry. The company had merged with two other energy providers which resulted in a new employing entity.

All employees of Alinta Gas, other than the 14 covered by the agreement, agreed to transfer their employment to the new entity and are now covered by a s170LK agreement.

The company said that terminating the agreement would complete the structural transition and lead to co-ordination of comparable terms and conditions of employment for all employees based on individual or collective agreements.

Findings

Senior Deputy President Lacy said that two substantive issues arose for determination in the case. The first was the weight to be attributed to the views of those bound by the agreement about whether it should be terminated.

The second issue was whether terminating the agreement was contrary to the public interest.

The senior deputy president began by saying that he felt Parliament must have intended that the views of the employees, as well as those of the employer, be accorded priority over the public interest considerations that are to be taken into account under s170MH(3).

He went on to find that the balance between the competing views of the ASU and Alinta Gas over the future of the agreement was 'clearly in favour of its termination'.

He said the evidence suggested that the employees would keep their entitlements and that the claims of Alinta Gas about the agreement’s restrictive nature added weight to the contention that the agreement should be terminated.

On the question of public interest, the ASU argued that when the agreement was made the parties were of the one mind that it should exist until a new agreement was substituted, as outlined in clause 5.

The union argued the clause was identical to a provision in the Saraji Mine Enterprise Agreement and that Commissioner Bacon had determined that it was contrary to the public interest to allow BHP Coal’s application to terminate the agreement.

Alinta Gas argued that the Alinta agreement was different because it had qualifications to the continuation clause which allowed for the possibilities of replacement, renewal or otherwise.

Senior Deputy President Lacy said that in his view there was no mutual intention between the parties that the agreement would continue to operate indefinitely. He said that the part of the agreement that specified it would remain in force until replaced reflected the terms of s170LX(2) of the Workplace Relations Act 1996.

He went on to say that the scheme of Part VIB shows an intention to allow for the termination of a certified agreement by any of the alternative means for which the Act provides, irrespective of the intention of the parties when the agreement was made.

'In the circumstances it cannot be said to be contrary to public interest for an agreement to be terminated in accordance with one of the means for which the Act expressly provides and which is consistent with its own objects,' he said.

See: Application by Alinta Gas Networks Pty Ltd re Alinta Gas- ASU Certified Agreement 2001 AG812962 PR948246, AIRC , 23 June 2004.

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