[2015] FWC 749

FAIR WORK COMMISSION

DECISION

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

C.A.S.C Constructions Pty Ltd
(AG2014/8087)

GCS Concrete Pumping Pty Ltd
(AG2014/8088)

SENIOR DEPUTY PRESIDENT WATSON

MELBOURNE, 6 FEBRUARY 2015

Applications for termination of the C.A.S.C Constructions Pty Ltd and CFMEU (WA) and Employees Enterprise Agreement 2011-2014 and the GCS Concrete Pumping Pty Ltd and CFMEU (WA) and Employees Enterprise Agreement 2011-2014 – agreements terminated.

[1] This decision arises from two applications made, pursuant to s.225 of the Fair Work Act 2009 (the Act) on 5 November 2014 for the termination of enterprise agreements after their nominal expiry date:

● An application by C.A.S.C Constructions Pty Ltd (CASC) to terminate the C.A.S.C Constructions Pty Ltd and CFMEU (WA) and Employees Enterprise Agreement 2011-2014 1 (the CASC Agreement).

● An application by GCS Concrete Pumping Pty Ltd (GCS) to terminate the GCS Concrete Pumping Pty Ltd and CFMEU (WA) and Employees Enterprise Agreement 2011-2014 2 (the GCS Agreement).

[2] In this decision CASC and GCS are collectively referred to as the Applicants and the CASC Agreement and GCS Agreement are collectively referred to as the Agreements.

[3] Each Agreement contains a nominal expiry date of 31 October 2014. 3 Each Agreement cites the union, defined4 in clause 2 as the Construction, Forestry, Mining and Energy Union (CFMEU) as a party covered.5 The approval decision in each case identifies the CFMEU as being covered by the Agreements by operation of s.183 of the Act.6

[4] The CFMEU opposed the termination of each Agreement.

[5] The applications were joined in the hearing of 21 January 2014, with the support of the Applicants and the CFMEU, 7 in light of some commonality of circumstances and the factual matters relevant to the applications. The commonality arises, in large part, from the position of CASC and GCS within the broader corporate structure of Global Construction Services Limited (the GCS Group).

[6] The Corporate Head Office and most Divisions – GCS Hire Pty Ltd, GCS Rapid Access Pty Ltd, GCS Industrial Services Pty Ltd (GCSIS), GCS Security Scaffolding Pty Ltd, CASC and Global Industrial Services (Aust) Pty Ltd – are located in Western Australia. 8 GCS is a joint venture in which the GCS Group holds a 50% interest.9

[7] The GCS Group was established in July 2003 and has grown through various corporate acquisitions. CASC was acquired in 2007. 10 GCS was created as a new entity in 2009.

[8] The contact person and the deponent of the Form F24C Statutory Declaration in each case was Mr V Gullotti, Group Managing Director of the GCS Group. The statutory declarations in each case 11 addressed the public interest issue in s.225(a) of the Act by declaring that:

● The Agreement had passed its nominal expiry date;

● There are no employees under the Agreement and the employer “does not intend to utilise the terms and conditions in the Agreement for future employees”;

● Because there are no employees employed under the Agreement, neither the CFMEU nor the employer have discussed commencing negotiations for a replacement Agreement; and

● “The termination of the Agreement assists the Company administratively by ‘tidying up’ existing documents on the Fair Work Commission website and clarifying terms and conditions that are applicable to employees.”

[9] In respect of s.225(b) of the Act, Mr Gullotti deposed that:

● There are no employees under either Agreement;

● Terminating the Agreements assists the employer administratively; and

● “Terminating the Agreement[s] clarifies with employees what terms and conditions apply to employees and eliminates confusion.”

[10] Given the CFMEU’s objection to the termination of the Agreements and the need for argument and evidence for the purpose of determining the applications, Mr Gullotti executed a more expansive Form F24C 12 (the 2015 Form F24C), on 12 January 2015. It was in the nature of a witness statement in the proceedings which Mr Gullotti adopted as evidence. He was cross-examined by the CFMEU in relation to its contents.

[11] In the 2015 Form F24C, Mr Gullotti summarised information provided to the CFMEU in relation to the coverage of employees by each Agreement:

● In respect of GCS:

There are no employees covered by the GCS Agreement;

The last GCS employee “finished in September 2014”;

GCS has employed “less than two people each year for the past 24 months”; and

No GCS employee has moved into GCSIS.

● In respect of CASC:

“There are no CASC employees engaged” under the CASC Agreement;

When work under the CASC Agreement ceased, “employees were either demobilised or transferred to project work” on the BHP Tower II (Brookfield) or May Holman (Holman) projects, under C.A.S.C Constructions Pty Ltd – Brookfield Place Tower Two and CFMEU Greenfields Agreement 2013 13 (the Brookfield Agreement) or the C.A.S.C Constructions Pty Ltd – May Holman Development and CFMEU Greenfields Agreement 201314 (the Holman Agreement);

Of the employees on these sites, 25 were employed by GCSIS;

Only 22 current employees of CASC remain, all of whom are working on the Brookfield project, covered by the Brookfield Agreement; and
“CASC employees have not been employed anywhere else in the group” other than in GCSIS.

[12] Mr Gullotti deposed that the information is reflective of an ongoing simplification of the corporate structure and consolidation of employing entities across the business, a Business Strategy being implemented by reason of economic efficiencies.

[13] Mr Gullotti gave evidence that the GCS Group has “set about a complete restructure and consolidation” of all of its “operating entities to reduce the amount of operating entities” in order to reduce its “operating cost base” 15 and that the GCS Group will no longer operate CASC and GCS as part of its “rationalisation of the entire group structure where it is more efficient . . . to have all the employees across the entire group in one entity”.16 He described the context of the rationalisation as follows:

“. . . basically, as a group, what we had was we acquired a number of operating businesses over the last seven or eight years. We’ve now set about over the last couple of years basically consolidating and merging entities that are like for like in terms of products and services into one entity. So going forward we’re branding as a single entity that is multi-disciplined across multiple centres, including residential, commercial, industrial, mining and gas, and offering a full composite range of all the products and services that we offer. So concrete and formwork is not the only thing that we do as a group. But we end up a single entity who employs and does all the contracting. From an administration perspective, we had an infrastructure of 17 or 18 entities that we had acquired along the way. This is part of the restructure and the reorganisation we talk about.” 17

[14] Mr Gullotti’s evidence, contained in the 2015 Form F24C, was:

● He had no intention as Group Managing Director of the GCS Group of:

utilising GCS as an employing entity, consistent with the Business Strategy of the Board; or

continuing to utilise CASC as an employing entity, consistent with the Business Strategy. No new employees would be engaged by CASC;

● No bargaining to replace either Agreement can occur because neither Agreement covers any employees and will not cover them in the future;

● He intends as Group Managing Director of the GCS Group to direct time and resources of the GCS Group into the other entities to the benefit of the GCS Group and the other companies within it and their stakeholders and employees;

● Historically steps have been taken to reorganise the business to ensure that it remains competitive, can win tenders and employees can benefit from site or project specific work, such as the Brookfield and Holman projects;

● It is his intention to “ensure that employing entities within the business engage employees to project work on current, unexpired agreements that have relevant and tailored terms and conditions of employment”;

● The Agreements which the Applicants seek to terminate “were made some years ago”, have expired and are “not market competitive” and employees will not be engaged under them;

● If the Agreements are not terminated GCS Group would need to direct resources into obsolete parts of the business, causing consideration of the winding up or restructuring of the businesses; and

● Despite being obsolete, the continued existence of the Agreements at law, gives “rise to legal considerations, obligations and a host of economic inefficiencies”, which are “inconsistent with the effective management” of the business (the GCS Group) and its Business Strategy.

Submissions

The Applicants

[15] In relation to the GCS Agreement, GCS submitted:

● GCS currently has no employees and, for the past 24 months, GCS has employed less than two people each year and the last employee finished with GCS mid-2014. GCS therefore does not engage employees covered by the GCS Agreement. Any former GCS employees are engaged to perform work under enterprise agreements registered and approved under the Act.

● The proposed termination of the GCS Agreement does not undermine safety net entitlements; cause adverse impacts to vulnerable employees; harm the objectives of good faith bargaining and agreement making; damage the integrity of bargaining and agreements; undermine representational rights or remove access to dispute resolution procedures; or agitate negative impacts on fair industrial relations, work or family balance or respect for agreement terms, because all former GCS employees enjoy the benefit of rights and entitlements under instruments registered and approved under the Act.

● Although the GCS Agreement does state the employer will commence bargaining for a replacement agreement on 30 June 2014, the fact that no employees are currently engaged by GCS or under the GCS Agreement and are otherwise under agreements which are capable of renegotiation and renewal within the framework of the Act, the impact of the CFMEU’s submission in this regard is diminished as there are no employees whose collective bargaining rights are undermined by the termination of the GCS Agreement.

[16] In relation to the CASC Agreement, CASC submitted:

● CASC presently does not engage employees under the CASC Agreement; and all CASC employees are engaged on the Brookfield project under the Brookfield Agreement or on the Holman project under the Holman Agreement;

● The impact of the termination of the CASC Agreement is irrelevant to the employees engaged on the Brookfield or Holman projects; and

● Aside from the Brookfield or Holman employees, CASC does not have any other work or future work prospects.

[17] The Applicants submitted that the submission that the Agreements should be left in place for an indefinite period of time in the event that – in the future – an employee may work under them is relevant to the assessment of the Applicants’ applications and misconceives the statutory task of the Fair Work Commission (the Commission) in deciding termination applications. In this regard, the CFMEU’s position invites the Commission to engage in prospective reasoning in determining the legislative questions posed by s.226 of the Act without any statutory language that warrants, invites or permits such an analysis, inviting the Commission into jurisdictional error. 18

[18] The Applicants submitted that the termination of each Agreement is not contrary to the public interest and, indeed, that it is inthe public interest to terminate the Agreements given:

● The CFMEU has misconceived and has conflated the individual circumstances of employees and by-products of the existing organisational structure at CASC as being public interest considerations warranting dismissal of the applications.

● In the present application, CASC employees are engaged on the Brookfield or Holman projects, subject to an enterprise agreement on terms and conditions approved under the Act, which are still within their nominal life.

● Only 22 individuals are employed by the CASC entity pursuant to the Brookfield and HolmanAgreements, GCS is not an employing entity (with the exception of having a Director), nor will it be and after completion of the Brookfield and Holman projects employment with CASC will cease and CASC will not be an employing entity for any other project.

● There are no employees employed by the Applicants under the Agreements.

● The Agreements have passed their nominal expiry date.

● Enterprise agreements are intended to apply for a limited period of time.

● As no employees are working under the Agreements, the Agreements serve no purpose – they are not capable of renegotiation (there are no employees to bargain with).

● Collective bargaining cannot be undermined in circumstances where there are no employees working under the Agreements with whom the employer may bargain.

● The continued existence of the Agreements, in circumstances when they will never apply again, is inconsistent with the restructure plans for the Applicants and creates confusion for the Applicants’ clients when bidding for work.

● The preservation of obsolete, expired Agreements is inconsistent with the objects of the Act, which promote workplace productivity and economic flexibility.

[19] In relation to the views and circumstances of the employees, the employers and the CFMEU (s.226(b) of the Act), the Applicants submitted that:

● There are no employees currently engaged under the Agreements, therefore the relevance of this factor towards the Applicants’ applications is significantly diminished. This is, of itself, highly relevant and ought to weigh in favour of termination of the Agreements;

● The employers:

seek to consolidate and simplify the internal administrative processes of the business, including its industrial instrument framework. Currently, the Applicants are operating two payroll systems which need to be reported on and attract regulatory oversight, but no employees are engaged to warrant this system being maintained;

seek to minimise the number of employing entities, focusing on the core employing entity, GCSIS as its primary employing entity, engaging employees under the GCS Industrial Services Enterprise Agreement 2013; 19
seek to adopt a best practice approach when making agreements, including the formal termination of obsolete industrial instruments where no employees are working under them now (or in the future);
seek to minimise economic inefficiencies associated with maintaining the Agreements where no viable commercial purpose exists for doing so; and
no longer utilise GCS or CASC to perform building and construction work.

● The views of the CFMEU must be considered in the context whereby there are no employees engaged under the Agreements and the weight attributed to them is significantly diminished.

[20] The Applicants submitted that the CFMEU’s suggestion that the Agreements should not be terminated because they contain an obligation to renegotiate is defective – the obligation to renegotiate the Agreements requires the Applicants to have employees with whom to bargain. There are no such employees.

The CFMEU

[21] The CFMEU submitted that the presumption within the Act is that enterprise agreements continue in operation unless (for present purposes) the Commission is satisfied as to the statutory matters with ss.226(a) and (b) of the Act – the “public interest test” and the “all the circumstances” test. The CFMEU submitted that on all of the material filed, the Commission could not be satisfied of either matter.

[22] In relation to the public interest test it submitted that the grounds relied on by the Applicants – “Not intending to utilise (the Agreement) for future employees, assisting the company administratively” and “tidying up” existing documents – went to the employers’ interests and not the public interest. In asserting that the termination of the Agreements “clarifies the terms and conditions that are applicable to employees” it is unclear why there might be a need for clarification and there is no issue of clarification going to the public interest.

[23] The CFMEU submitted that it was contrary to the public interest to terminate the CASC Agreement because it is likely to be a transferable instrument under Part 2–8 of the Act that covers former employees of CASC by operation of s.313 of the Act in circumstances, as understood by the CFMEU, in which:

● over the past 18 months, CASC employees have been terminated and then re-employed by another company CGSIS or some other company within the GCS Group immediately upon their termination by CASC and the work performed was substantially the same;

● prior to 23 May 2014 the CASC Agreement covered its employees underpinned by the Building and Construction General On-site Award 2010 20(the Building Award) throughout Western Australia. The coverage was varied on 23 May 2014 to exclude the Brookfield project21 and on 26 May 2014 to exclude the Holman project;22

● CASC and GCS are associated entities within the meaning of s.50AAA of the Corporations Act 2001 (Cth) (the Corporations Act) because they are both subsidiaries of Global Construction Services Limited (s.46 of the Corporations Act) and are related bodies (s.50 of the Corporations Act); and

● At least some of the transfers must have occurred at a time, immediately before termination, whilst the CASC employees were covered by the CASC Agreement.

[24] On that basis, the CFMEU submitted that termination of the CASC Agreement is contrary to the public interest because it defeats the intention of Part 2–8 of the Act and has an adverse impact on transferring employees in relation to their statutory entitlements.

[25] The CFMEU also submitted that termination of the CASC Agreement is also contrary to the public interest because CASC has employees who would be covered by the CASC Agreement if they are transferred from their current work on the Brookfield or Holman projects to a different site in Western Australia, who would lose the benefit of the CASC Agreement to which they would otherwise be entitled. The CFMEU submitted that it is appropriate for the Commission to consider the applications in the context of the historical transfer of CASC employees between different sites and the potential for this to occur into the future.

[26] The CFMEU submitted that the public interest is enlivened in respect of employees who in future are engaged by CASC within coverage of the CASC Agreement because it is contrary to notions of industrial fairness that they be deprived of rights they otherwise would have, undermines respect for and observance of enterprise agreements and would significantly alter their bargaining position in respect of replacement agreements.

[27] The CFMEU submitted that the same considerations apply to the GCS Agreement in circumstances where GCS recommences employment of persons within the coverage of the GCS Agreement.

[28] The CFMEU further submitted that termination of the CASC Agreement or the GCS Agreement is contrary to the public interest because:

● the Agreements have only recently reached their nominal expiry date; and

● each Agreement, in clause 4.4, obliged the employer to commence bargaining for a replacement agreement on 30 June 2014 and termination of the agreements would relieve them of that obligation and make good faith bargaining for a new agreement less likely.

[29] In relation to the “all circumstances test”, the CFMEU submitted that there must be sufficient circumstances to displace the statutory presumption that agreements continue to operate under the Act beyond their nominal expiry date. It submitted that “administrative assistance” and “clarification”, barely described, are not sufficient and the references to future employees do not support termination in the absence of current employees. The CFMEU submitted that in all the circumstances relied on by the Applicants they are at best marginal and are not sufficient to displace the presumption under the Act that enterprise agreements continue to operate after their nominal expiry date.

[30] The CFMEU submitted that the interests of Brookfield and Holman project employees are relevant given the potential for them to transfer within coverage of the existing Agreements.

Consideration

[31] Section 225 of the Act provides that:

“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;

[32] Each agreement has passed its nominal expiry date and has been made by the employer covered by the relevant agreement.

[33] Section 226 of the Act deals with when the Commission must terminate an enterprise agreement. It provides:

“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.”

[34] Sections 226(a) and (b) raise two separate considerations. 23 The public interest consideration in s.226(b) is to be considered in the context of Part 2–4—Enterprise Agreements of the Act, including the objects of the Part such that a public interest consideration of a termination of an agreement, contrary to the objects and scheme of the legislation in respect of facilitating and encouraging bargaining of agreements.24 The statutory presumption is that an agreement which has passed its nominal expiry date will remain in place and in operation unless termination is agreed to (s.219 of the Act) or the statutory requirements for termination by one party, within s.226 of the Act, are met.

[35] It is clear, from the authorities that the statutory requirements within s.226 of the Act are to be applied in the context of the circumstances of the particular applications before the Commission.

[36] Relevant circumstances arising from the evidence in the current matter are largely reflected in the evidence of Mr Gullotti. His evidence was not materially affected by a challenge to it, through extensive cross-examination by the CFMEU, but is credible and can be relied upon. I find from that evidence that:

● GCS currently has no employees, having last employed an employee in mid-2014, such that there are no GCS employees employed subject to the GCS Agreement; and

● CASC presently does not engage employees under the CASC Agreement, having last employed persons under it “[t]hree or four months ago”. 25 All CASC employees are engaged on the Brookfield project under the Brookfield Agreement or on the Holman project under the Holman Agreement. Those Agreements arose from discussions with the CFMEU to come up with an agreement to fit “market requirements” at the time.26

● The Brookfield and Holman Agreements were made as greenfields agreements between CASC and the CFMEU, upon application by the CFMEU. The Brookfield Agreement was made on 16 August 2013 27 and operated from 12 September 201328 following approval on 5 September 2013.29 The Holman Agreement was made on 9 October 201330 and operated from 29 November 2013,31 following approval on 22 November 2013.32 Applications were made by the CASC33 and CFMEU,34 to vary the CASC Agreement to include an exclusion of the coverage in respect of the Brookfield and Holman projects, arising out of applications to vary the Agreement on 16 August 201335 and 9 October 2013.36 The variations were approved on 2337 and 2638 May 2014 respectively.

● The CASC Agreement does not apply to employees engaged on the Brookfield or Holman projects.

● Aside from the Brookfield or Holman employees, CASC does not have any other work or future work prospects.

● Termination of the GCS and CASC Agreements would assist the GCS Group administratively, reflecting a Business Strategy involving an ongoing simplification of the corporate structure and consolidation of employing entities across the business. The GCS Group has no intention of utilising GCS as an employing entity or continuing to utilise CASC as an employing entity, consistent with its Business Strategy. 39 No new employees will be engaged by CASC following the completion of the Brookfield and Holman projects. In time, as part of the rationalisation process of entities within the GCS Group,40 CASC and GCS will, in time, be “wound up”.41

● Mr Gullotti’s evidence was that the GCS Group would “no longer employ anyone” in the CASC and GCS entities. 42 He accepted that this could change in the future but it was “highly unlikely”.43 Speculative evidence as to a highly unlikely possibility does not displace the clear evidence of Mr Gullotti as to the intention of the GCS Group, consistent with its Business Strategy, which I accept as the likely foreseeable outcome. In this respect, the Commission “should be guided by the likely foreseeable consequences of termination rather than speculation about possible consequences”.44

● The GCS Group intends to direct its time and resources into entities other than GCS and CASC to the benefit of the GCS Group and the other companies within the GCS Group and their stakeholders and employees and to ensure that employing entities within the business engage employees to project work on current, unexpired agreements that have relevant and tailored terms and conditions of employment.

Is it contrary to the public interest to terminate the Agreements?

[37] The primary basis upon which the CFMEU contended that the termination of the Agreements would be contrary to the public interest rested on the proposition that termination of the Agreements would negate the intended operation of Division 2—Transfer of Instruments of Part 2–8—Transfer of Business of the Act, which provides for the transfer of instruments. It submitted that the CASC Agreement is likely to cover former employees of CASC by operation of s.313 of the Act. The CFMEU submitted that termination of the CASC Agreement is contrary to the public interest because it defeats the intention of Part 2–8 of the Act and has an adverse impact on transferring employees in relation to their statutory entitlements.

[38] The CFMEU further submitted that the same considerations would arise in respect of both the CASC and GCS Agreements in circumstances where CASC or GCS recommenced the employment of persons within the coverage of the GCS Agreement.

[39] The CFMEU has not substantiated an actual application of the transfer of instruments provisions within Division 2 of Part 2–8 of the Act in relation to the GCS or CASC Agreements. Division 2 provides for the transfer of rights and obligations under an enterprise agreement if there is a “transfer of business from an old employer to a new employer”, 45 as defined in s.311 of the Act. Two of the requirements which need to be satisfied for there to be a transfer of business under s.331(a) of the Act are, that the employment of an employee of the old employer has been terminated and within three months after the termination, the employee becomes employed by the new employer.

[40] GCS last employed an employee in mid 2014. CASC does not currently engage employees under the CASC Agreement. When work under the CASC Agreement ceased, the employment of the CASC employees was either terminated or the employees transferred to work on the Brookfield or Holman projects in 2013, under the Brookfield or Holman Agreements. There was no evidence of employees of either GCS or CASC whose employment was terminated and who were employed by a new employer to undertake the same work, whether within the GCS Group or otherwise.

[41] I am not satisfied that a transfer of entitlements within Division 2 of Part 2–8 of the Act arises in the relation to former employees of GCS or CASC in the circumstances disclosed by the evidence. As a result, I am not satisfied that termination of the Agreements would interfere with the operation of Division 2. No issue arises in respect of the transfer of entitlements in the circumstances of the current matters such that termination of the Agreements would be contrary to the public interest.

[42] The CFMEU argued that the evidence of Mr Gullotti disclosed that some CASC employees working on the Brookfield and Holman projects undertake work at the CASC depot under the CASC Agreement, which covers all work in the construction industry in Western Australia, other than work on the Brookfield and Holman projects. It submitted that these employees are undertaking work under the CASC Agreement, which, if they were terminated whilst working at the CASC depot would make the CASC Agreement applicable for the purpose of Division 2 of Part 2–8 of the Act. 46

[43] This contention was not made out. Current CASC employees are employed only in respect of the Brookfield and Holman projects under the Brookfield and Holman Agreements. There are no current GCS employees. Clause 4.1 in both the Brookfield and the Holman Agreements provide that the “Agreement will apply to all work undertaken by Employees of the Employer carrying out construction work in or in connection with the Project”. Work undertaken by the CASC employees working on the Brookfield and Holman projects at the depot is undertaken in respect of those projects. 47 The Brookfield and the Holman Agreements apply to the employees in respect of that work and those agreements, not the CASC Agreement and would transfer in the event that Division 2 of Part 2–8 of the Act applied.

[44] The further submission of the CFMEU that the CASC and GCS Agreements would be relevant for the purpose of Division 2 of Part 2–8 of the Act in circumstances where CASC or GCS recommenced the employment of persons within the coverage of the GCS Agreement is entirely speculative. The evidence is that future employment by either CASC or GCS is highly unlikely.

[45] I am not persuaded that the CFMEU’s submission in relation to Division 2 of Part 2–8 of the Act provides any basis for finding that the termination of the Agreements would be contrary to the public interest.

[46] Having regard to the summation of authorities and the Objects of the Act in s.3 and the Objects of Part 2–4—Enterprise Agreements of the Act, in s.171, Commissioner Roe in Royal Automotive Club of Victoria 48(the RACV Case) identifiedthe following questions which may arise as being relevant to the public interest considerations in relation to s.226(a) of the Act:

“ Whether the safety net will be significantly undermined?

Whether vulnerable employees will be affected?

Whether the objective of good faith bargaining and the making of agreements will be harmed?

Whether the provisions of the Agreement itself in respect of renegotiation of the agreement would be compromised as this would undermine the integrity of bargaining and agreements?

Whether the right of employees to be represented and or have access to effective dispute resolution procedures would be significantly affected?

Whether there are any specific circumstances concerning the impact on the economy or the business, productive work, the maintenance of respect for observance of the terms of agreements, fair industrial relations, or work and family balance?” 49

[47] In circumstances where there is no employee covered by either the CASC or GCS Agreement and no intention of the GCS Group to employ persons under either Agreement, no practical issue arises in respect of the safety net. In any case, as noted by Commissioner Roe in the RACV Case, 50the Act envisages that agreements may be terminated and the normal consequence of this will be to reduce the safety net from the agreement to the modern award, in the current case the Building Award51 and the National Employment Standards. The reduction of safety net for employees from an agreement to the modern award safety net could not be said to be contrary to the public interest unless there are particular circumstances that apply, none of which have been substantiated in this case.

[48] In circumstances where there is no employee covered by either the CASC or GCS Agreement and no intention of the GCS Group to employ persons under either Agreement, no employees, vulnerable or otherwise, will be affected.

[49] Under the current circumstances GCS Group intends that the employing entities within the business engage employees on project work under current, unexpired agreements that have relevant and tailored terms and conditions of employment. This occurred in respect of the making of the greenfields agreements between CASC and the CFMEU in relation to the Brookfield and Holman projects, with the CASC Agreement being varied by the parties to exclude the projects from its coverage. There is no basis to conclude that the objective of good faith bargaining and the making of agreements will be harmed by the termination of the Agreements.

[50] In circumstances where there is no employee covered by either the CASC or GCS Agreement, there is no intention of the GCS Group to employ persons under either Agreement and the GCS Group intends to engage employees on project work under current, unexpired agreements with relevant terms and conditions of employment, as occurred in relation to the Brookfield and Holman projects, no public interest issue arises as to the renegotiation of the Agreements which would undermine the integrity of bargaining and agreements, deny employees access to effective dispute resolution procedures or representational rights.

[51] There are no other specific circumstances concerning the economic matters, enterprise agreements, industrial relations considerations or work and family balance which would support a finding that termination of the Agreements which raise public interest considerations in the circumstances of the present matters.

[52] I am satisfied that it is not contrary to the public interest to terminate the GCS and the CASC Agreements.

Is it appropriate to terminate the agreement, taking into account all the circumstances?

[53] The CFMEU submitted that its view that the Agreements should not be terminated has to be taken into account and does not need to be supported by evidence. 52 I accept that the Commission is required by s.226(b) of the Act to have regard to any competing views of the employees, employer and employee organisation covered by the agreement and the circumstances of each, including the likely effect that the termination will have on each of them. In my view that requires consideration of any evidence as to the reasons and basis for the views held and expressed and their circumstances, including the likely effect that the termination will have on them.

[54] On the evidence, there are no employees covered by the GCS or CASC Agreements. They are no employee views or circumstances affecting employees covered by the Agreements, including the likely effect that the termination will have on them, to take into account.

[55] The CFMEU has expressed a strongly held view against the termination of either Agreement. Having regard to their submissions against the termination of the Agreements, I am not persuaded that the CFMEU’s view is soundly based. I have had regard to the circumstances of the CFMEU, including the likely effect that the termination will have on it. In the absence of current or intended future employment by GCS or CASC under the GCS and CASC Agreements and the intention of the GCS Group to employ employees within the employing entities on project work under current, unexpired agreements that have relevant and tailored terms and conditions of employment, I am not satisfied that the CFMEU will be substantively affected by the termination of the Agreements. Whilst the CFMEU seeks to maintain the GCS and CASC Agreements as a basis for the renegotiation of replacement agreements, the renegotiation of the Agreements is unlikely to arise given the evidence that the GCS Group will not employee persons covered by the Agreements. The CFMEU will continue to represent its members employed by entities within the GCS Group, renegotiate expired agreements applying to its members employed within the GCS Group and negotiate greenfields agreements where available and appropriate, as it did in relation to the Brookfield and Holman projects. The termination of the Agreements which do not apply to any employees will not affect its interests.

[56] The Applicants, have expressed a view that each Agreement should be terminated, based on a relevant interest. They seek, as part of its Business Strategy, to terminate the Agreements which have no current practical operation and which they do not intend to employ persons under in order to seek to consolidate and simplify the internal administrative processes of GCS Group of which they are a part, minimise the number of employing entities within the GCS Group and minimise economic inefficiencies associated with maintaining the Agreements where no viable commercial purpose exists for doing so and it no longer utilises GCS or CASC to perform building and construction work.

[57] In my analysis, it is a relevant view and interest which provides a basis for satisfaction that it is appropriate to terminate an agreement taking into account all the circumstances. In the absence of countervailing views of some basis and effect, I am satisfied that it is appropriate to terminate the Agreements.

Conclusion

[58] An application has been made under s.225 of the Act to terminate the GCS and CASC Agreements by the employer covered by each Agreement. Each Agreement has passed its nominal expiry date. I am satisfied that it is not contrary to the public interest to terminate each Agreement. I consider that it is appropriate to terminate each Agreement taking into account all the circumstances including the views of the employees, the employer and the employee organisation covered by each Agreement and their circumstances, including the likely effect that the termination will have on each of them.

[59] In those circumstances, I must terminate each Agreement.

[60] The C.A.S.C Constructions Pty Ltd and CFMEU (WA) and Employees Enterprise Agreement 2011-2014 and GCS Concrete Pumping Pty Ltd and CFMEU (WA) and Employees Enterprise Agreement 2011-2014 shall be terminated pursuant to s.226 of the Act. In accordance with s.227 of the Act, the termination 53 of each of the Agreements shall operate from 6 February 2015.

SENIOR DEPUTY PRESIDENT

Appearances:

D Fletcher for the Applicants.

J Nicholas for the Respondent.

Hearing details:

2014.

Melbourne and Perth via video:

November 24.

2015.

Melbourne and Perth via video:

January 20.

1 AE894757.

2 AE894760.

3 In clause 4.1 of the C.A.S.C Constructions Pty Ltd and CFMEU (WA) and Employees Enterprise Agreement 2011-2014 (the CASC Agreement)and the GCS Concrete Pumping Pty Ltd and CFMEU (WA) and Employees Enterprise Agreement 2011-2014 (the GCS Agreement) (collectively the Agreements).

4 In clause 2 of the Agreements.

5 In clause 3 of the Agreements.

6 [2012] FWAA 5145 in respect of the CASC Agreement and [2012] FWAA 5147 in respect of the GCS Agreement, at para 5 in each case.

7 Transcript, at paras 37–40.

8 Construction Services Limited Annual Report 2014, at p. 18.

9 Construction Services Limited Annual Report 2014, at p. 81.

10 Transcript, at para 103.

11 Exhibits A2 and A4.

12 Exhibit A5.

13 AE403689.

14 AE405490.

15 Transcript, at para 169.

16 Transcript, at para 257.

17 Transcript, at para 351.

18 John Holland Pty Ltd v Construction, Forestry, Mining and Energy Union and Fair Work Commission [2014] FCA 286, per Siopis J.

19 AE404719.

20 MA000020.

21 [2014] FWCA 3447.

22 [2014] FWCA 3445.

23 Royal Automotive Club of Victoria, [2010] FWA 3483, at para 20.

24 Royal Automotive Club of Victoria, [2010] FWA 3483, at para 21.

25 Transcript, at para 155.

26 Transcript, at para 136.

27 In matter number AG2013/2510, Form F20, at item 2.1.

28 [2013] FWCA 6495, at para 4.

29 [2013] FWCA 6495.

30 In matter number AG2013/9893, Form F20, at item 2.1.

31 [2013] FWCA 9178, at para 4.

32 [2013] FWCA 9178.

33 In matter number AG2013/2506.

34 In matter number AG2013/9892.

35 In matter number AG2013/2506, Form 23A, at item 2.2.

36 In matter number AG2013/9892, Form 23A, at item 2.2.

37 [2014] FWCA 3447.

38 [2014] FWCA 3445.

39 Transcript, at paras 108–109, 163, 249 and 315.

40 Transcript, at paras 220–221.

41 Transcript, at paras 170, 174–175, 184 and 220–221.

42 Transcript, at para 315.

43 Transcript, at para 317.

44 Re Kellogg Brown and Root, Bass Strait (Esso) Onshore/Offshore Facility Certified Agreement 2000 (2004–2005) 139 IR 34; PR955357, at para 27.

45 Section 310 of the Fair Work Act 2009.

46 Transcript, at para 418.

47 Transcript, at paras 160, 333 and 436.

48 [2010] FWA 3483.

49 [2010] FWA 3483, at para 34.

50 [2010] FWA 3483, at para 35.

51 MA000020.

52 Transcript, at para 412.

53 [2015] FWCA 914 and [2015] FWCA 916.

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