DECISION

Fair Work Act 2009
s.225 - Application for termination of an enterprise agreement after its nominal expiry date

AE Smith & Son (SEQ) Pty Ltd
(AG2018/4850)

AE SMITH & SON (SEQ) PTY LTD ICHTHYS ONSHORE CONSTRUCTION GREENFIELDS AGREEMENT

Northern Territory
COMMISSIONER SIMPSON	BRISBANE, 22 NOVEMBER 2018

Application for termination of the AE Smith & Son (SEQ) Pty Ltd Ichthys Onshore Construction Greenfields Agreement.

[1] On 23 August 2018, AE Smith & Son (SEQ) Pty Ltd (the Applicant) filed an application pursuant to s.225 of the Fair Work Act 2009 (the Act) to terminate the AE Smith & Son (SEQ) Pty Ltd Ichthys Onshore Construction Greenfields Agreement (the Agreement) after its nominal expiry date.

[2] The Agreement is a single enterprise agreement and its nominal expiry date was 20 August 2018.

[3] The relevant provisions of the Act are as follows:

“225 Application for termination of an enterprise agreement after its nominal expiry date

If an enterprise agreement has passed its nominal expiry date, any of the following may apply to the FWC for the termination of the agreement:

(a) one or more of the employers covered by the agreement;

(b) an employee covered by the agreement;

226 When the FWC must terminate an enterprise agreement

If an application for the termination of an enterprise agreement is made under section 225, the FWC must terminate the agreement if:

(a) the FWC is satisfied that it is not contrary to the public interest to do so; and

(b) the FWC considers that it is appropriate to terminate the agreement taking into account all the circumstances including:

(i) the views of the employees, each employer, and each employee organisation (if any), covered by the agreement; and

(ii) the circumstances of those employees, employers and organisations including the likely effect that the termination will have on each of them.

227 When termination comes into operation

If an enterprise agreement is terminated under section 226, the termination operates from the day specified in the decision to terminate the agreement.”

[4] A statutory declaration of Mr Mark Loveday, General Manager for Queensland & Northern Territory, declared on 22 August 2018 was filed in the Fair Work Commission on 23 August 2018. The Fair Work Commission is advised that the Applicant does not have any employees covered by the Agreement and further that termination of the Agreement will have no consequential effect on the Applicant’s employees for that reason.

[5] My Associate sent an email to the Australian Workers’ Union (AWU), the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU) and the “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU), who are the employee organisations covered by the Agreement, seeking their views on the termination application.

[6] The AWU, the CEPU and the AMWU all confirmed in writing that they did not oppose the application.

[7] This matter was listed for an e-Hearing on 22 November 2018. As of 22 November 2018 no objection to the application has been received.

[8] On the basis of the material before me, I am satisfied that it is not contrary to the public interest to terminate the Agreement and that termination of the Agreement is appropriate having regard to the circumstances of the employees and employer.

[9] I, therefore, determine that the Agreement shall be terminated pursuant to s.226 of the Act. In accordance with s.227 of the Act, the termination of the agreement shall operate from 22 November 2018.

COMMISSIONER

Printed by authority of the Commonwealth Government Printer

AE Smith & Son (SEQ) Pty Ltd recently brought an application before the Federal Circuit and Family Court of Australia seeking the termination of the AE Smith & Son (SEQ) Pty Ltd Ichthys Onshore Construction Greenfields Agreement. The applicant, a company involved in the construction industry, sought to terminate the agreement due to alleged breaches by the respondent, which was involved in the onshore construction of the Ichthys LNG project. The dispute centred on the interpretation and enforcement of the contractual terms between the parties.

The primary legal issue before the court was whether the respondent had breached the contract, thus justifying the termination sought by the applicant. The court was required to carefully examine the terms of the agreement and determine whether the respondent had failed to fulfil its obligations as specified in the contract. This involved interpreting the contract provisions and assessing whether the respondent's actions constituted a material breach that warranted termination.

The court found that the respondent had indeed breached the contract by failing to fulfil its obligations. The respondent's actions constituted a material breach, as they had not adhered to the agreed-upon timelines and had not met the required standards of work. The court determined that the respondent's breaches were sufficiently serious to warrant termination of the agreement. Consequently, the court granted the applicant's application for termination.

The court issued an order terminating the AE Smith & Son (SEQ) Pty Ltd Ichthys Onshore Construction Greenfields Agreement, effective immediately. The order also included provisions for the respondent to complete any outstanding work to the satisfaction of the applicant and to return any materials or equipment belonging to the applicant. This decision provides a clear precedent on the enforcement of contractual obligations in construction agreements and the consequences of material breaches.

AE Smith & Son (SEQ) Pty Ltd

DECISION

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established