FWC Rejects Employer’s Attempt to Terminate Expired Enterprise Agreement

A recent Full Bench decision of the Fair Work Commission (‘FWC’) has clarified the operation of the enterprise agreement termination provisions introduced under the Secure Jobs, Better Pay reforms, confirming that an employer cannot terminate an expired agreement merely because employees may receive more favourable conditions under a modern award.

In Warrina Homes Inc [2026] FWCFB 166 (‘the Decision’), the Commission rejected an application by South Australian aged care provider, Warrina Homes (‘Employer’) to terminate its 2017 enterprise agreement (‘Agreement’), which had nominally expired in 2021. The Employer argued that continuing the Agreement was unfair to employees because the Nurses Award 2020 (‘the Award’) contained more beneficial terms and conditions, and because maintaining separate employment instruments created administrative and operational complexity.

The Australian Nursing and Midwifery Federation (‘ANMF’), which had been bargaining with Warrina Homes since October 2025 for a replacement enterprise agreement covering four sites, opposed the application. The union argued that terminating the existing Agreement would undermine employees’ bargaining position and reduce incentives for the Employer to negotiate a replacement agreement.

The Full Bench, comprising Deputy President Peter Hampton and Commissioners, Emma Thornton and Jessica Rogers, examined the amended provisions of the Fair Work Act 2009 (Cth) (‘the Act’) governing the termination of expired enterprise agreements. The Commission noted that legislative changes introduced by the Secure Jobs, Better Pay reforms significantly narrowed the circumstances in which expired agreements may be terminated.

Under section 226 of the Act, the Commission must now be satisfied that the continued operation of an agreement would be unfair to employees before termination can occur. Even where that threshold is met, the Commission must also be satisfied that termination is appropriate in all the circumstances. Importantly, where bargaining is underway for a replacement agreement, the Commission must consider whether terminating the existing agreement would adversely affect employees’ bargaining position.

Warrina Homes contended that its nursing workforce would be better off under the Award and that having all nurses covered by a single industrial instrument would promote consistency and fairness across the organisation. However, the Commission was not persuaded that any meaningful unfairness existed.

A significant factor in the Commission’s reasoning was that the Agreement adopted the Award as the source of minimum wage entitlements. As a result, employees were not disadvantaged by the continued operation of the Agreement. While the Employer indicated that it would continue certain beneficial conditions through workplace policies and established practices, the Commission noted that such arrangements are not legally enforceable in the same manner as enterprise agreement provisions and would not be protected by the Agreement’s dispute resolution procedures.

The Commission further accepted the ANMF’s argument that terminating the agreement could have a detrimental impact on ongoing bargaining. The Full Bench observed that terminating the Agreement would alter the Employer’s incentives to negotiate a new arrangement.

The Commission concluded that termination of the Agreement would have an adverse impact on the position of employees. This was a significant consideration weighing against the Employer’s application.

Ultimately, the Full Bench found that the Employer had failed to establish any basis for termination of the Agreement under section 226 of the Act. The Commission further stated that, even if a relevant ground for termination had been established, the adverse effect on employee bargaining rights would have been a substantial factor against exercising its discretion to terminate the Agreement.

The Decision provides important guidance for employers seeking to terminate an enterprise agreement. It confirms that the Commission will closely scrutinise claims of employee unfairness and will place significant weight on the effect that termination may have on collective bargaining processes. The ruling also reinforces the policy shift introduced by the Secure Jobs, Better Pay reforms, which were designed to reduce the historical use of agreement terminations as a strategic bargaining tool.

For employers, the decision demonstrates that administrative convenience or a preference for award coverage alone will rarely justify terminating a nominally expired enterprise agreement. For employees and unions, it reinforces the Commission’s willingness to protect bargaining rights and preserve the integrity of enterprise bargaining where negotiations for replacement agreements are underway.

Warrina Homes Inc [2026] FWCFB 166 (22 July 2026).

If you have questions about how this decision may affect you as an employee or employer, please contact Nick Stevens, Evelyn Rivera, or Dragana Prtenjak.