Did you know. . . that the Commission has the power to terminate a nominally expired enterprise agreement which may result in employment conditions reverting to applicable awards.

In the recent case of Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union v Griffin Coal Mining Company Pty Ltd [2016] FWCFB 4620, despite opposition from many employees and their union, the Full Bench of the Fair Work Commission (FWC) has upheld the termination of Griffin Coal Mining Company's collective agreement, which reached its nominal expiry date on 26 April 2016 (Agreement).

After a year of failed negotiations involving 24 bargaining meetings and 15 FWC facilitated conferences, Griffin Coal applied to the FWC under section 225 of the Fair Work Act 2009 (Cth) (Act) to terminate the Agreement.

At first instance, Commissioner Cloghan approved Griffin's application to terminate the Agreement and revert to award conditions. In applying for section 226 of the Act, the Commissioner held that terminating the Agreement was appropriate and not contrary to the public interest because the mine had lost nearly AU$300 million since 2011 and the parties had engaged in a year of failed negotiations.

Unsurprisingly, given the effect this will have on its members (a significant reduction in their take home pay) the union lodged an appeal. The Full Bench dismissed the appeal finding that the Commissioner had examined all of the relevant factors and exercised his discretion to terminate the Agreement in an equitable and fair manner. In reaching their decision, the Full Bench emphasised that this case involved a number of unique circumstances, including the financial and trading position of Griffin and the extensive bargaining and conciliation process.

Despite the unique circumstances in this case, this decision provides further support for the Full Bench decision in Aurizon (discussed in the January 2016 Workplace View) and the capacity for employers to terminate expired enterprise agreements while bargaining is underway.