“We are pleased to have been able to negotiate a new business contract with AGL Loy Yang,” said Andy Vesey, AGL`s Managing Director. The Fair Work Commission has ordered the termination of an enterprise agreement for employees of the Loy Yang power plant on the condition that the employer meet certain essential conditions for a period of three years, as the conditions following a request to terminate the contract are met. AGL Energy announced that the majority of employees at the Loy Yang A plant and the company`s Victoria mine approved a new enterprise agreement by secret ballot this afternoon. The agreement is now submitted to the Fair Work Commission for review and final approval, which is expected to arrive in the coming weeks. This decision is one of many successful dismissal requests made by employers and demonstrates once again that the Commission is prepared to denounce an agreement if it is convinced that the terms of the agreement hinder the process of negotiating a new agreement. It is a new tool open to employers in order to gain influence in the negotiations of reflection, in particular in the monitoring of productivity improvements or a programme of change. In deciding to denounce the agreement, Vice-President Clancy relied heavily on the decision of Aurizon Operations Limited; Aurizon Network Pty Ltd; Australian Eastern Railroad Pty Ltd [2015] FWCFB 540 (Aurizon). It is important that, after Aurizon`s decision, there is “no general presumption” that the continuation of an agreement beyond the nominal expiry date is preferable to the continuation of an agreement and that it is clear that the regime is not intended to ensure that the agreements are maintained “sustainably”. Yang said the dispute should be ended, given that the dispute has become intractable and the continuation of the treaty is an obstacle to the progress of negotiations. Yang said they did not want to implement operating or unfair conditions, but were looking for changes that would improve flexibility, reduce overtime and remove restrictive covenants that are “unusual” in enterprise agreements. As a result, the CFMEU argued that the dismissal was not appropriate because of the impact on bargaining, labour and safety standards and on workers` wages. The CFMEU stated that Loy Yang was a profitable company and that its broader reform programme would only reduce labour costs as opposed to improving productivity. The CFMEU also argued that it was inappropriate to denounce the agreement, as it would allow Loy Yang to circumvent his commitment under Clause 4 of the agreement to maintain certain conditions until the agreement.

Full Bench focused on the employer`s commitment in Clause 4 of the agreement to maintain certain terms of employment until a new agreement is reached if it were applicable to the termination of the contract. The full bank found, Clause 4, could no longer produce legal effects after the end of the agreement, but considered that it was considered an employer`s representation that could not be ignored in determining whether the termination of the agreement was appropriate (the clause was not adequately weighted, which is an error in the trial decision). However, Full Bench`s concerns were addressed by Loy Yang`s additional commitment to maintain the terms of Clause 4 of the agreement for up to three years after the whistleblowing decision.

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