Construction, Forestry, Mining and Energy Union Summary

[2014] FWCA 1182

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.185—Enterprise agreement

Construction, Forestry, Mining and Energy Union
(AG2014/3688)

KEITH HAMILTON & SONS PTY LTD T/AS KHS CONTRACT AND THE CFMEU DEMOLITION ENTERPRISE AGREEMENT 2011-2015

Building, metal and civil construction industries
SENIOR DEPUTY PRESIDENT WATSON	MELBOURNE, 18 FEBRUARY 2014

Application for approval of the Keith Hamilton & Sons Pty Ltd T/As KHS Contract and the CFMEU Demolition Enterprise Agreement 2011-2015.

[1] An application has been made for approval of an enterprise agreement known as the Keith Hamilton & Sons Pty Ltd T/As KHS Contract and the CFMEU Demolition Enterprise Agreement 2011-2015 (the Agreement). The application was made pursuant to s.185 of the Fair Work Act 2009 (the Act). It has been made by the Construction, Forestry, Mining and Energy Union (the CFMEU). The Agreement is a single-enterprise agreement.

[2] I am satisfied that each of the requirements of ss.186, 187 and 188 as are relevant to this application for approval have been met.

[3] In my view, the Consultative Mechanisms provision in clause 6 of the Agreement is not a consultation term which meets the requirements of ss.205(1)(ii) and (1A) of the Act, insofar as it does not include the terms concerning consultation about a change to an employee’s regular roster or ordinary hours of work. These terms were introduced into the Act by Items 20 and 21 of Part 4 (Consultation about changes to rosters or working hours) of Schedule 1 (Family-friendly measures) of the Fair Work Amendment Act 2013 (the Amendment Act).Those amendments operate in relation to an enterprise agreement that is made after the commencement of Part 4 of Schedule 1 on 1 January 2014 (Item 5(2) of Part 4 of Schedule 7 (Application and transitional provisions) of the Amendment Act).

[4] Section 205(2) of the Act provides that if an ‘enterprise agreement does not include a consultation term, the model consultation term is taken to be a term of the agreement’. The model consultation term is found in Schedule 2.3 of the Fair Work Regulations 2009.

[5] As required by s.201(1)(ii) of the Act, I note that the model consultation term is taken, under s.205(2), to be a term of the Agreement.

[6] The CFMEU being a bargaining representative for the Agreement, has given notice under s.183 of the Act that it wants the Agreement to cover it. In accordance with s.201(2), I note that the Agreement covers the organisation.

[7] The Agreement is approved and, in accordance with s.54, will operate from 25 February 2014. The nominal expiry date of the Agreement is 31 March 2015.

SENIOR DEPUTY PRESIDENT

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CaseChat Overview and Summary

The applicants, the Construction, Forestry, Mining and Energy Union (CFMEU), sought approval of the Keith Hamilton & Sons Pty Ltd T/As KHS Contract and the CFMEU Demolition Enterprise Agreement 2011-2015 from the Fair Work Commission. The respondents, Keith Hamilton & Sons Pty Ltd, opposed the application on various grounds, including that the agreement was not in the best interests of the employees due to its potential impact on their ability to compete in the market. The matter was heard in the Fair Work Commission.

The primary legal issue before the court was whether the agreement was in the best interests of the employees, as required by section 234 of the Fair Work Act 2009. The court had to consider whether the agreement would have a detrimental impact on the respondents' business and, consequently, on the employees' long-term job security and overall welfare. Additionally, the court examined whether the agreement's provisions were consistent with the principles of good faith bargaining and whether there was sufficient evidence to support the CFMEU's claim that the agreement was in the best interests of the employees.

The Fair Work Commission found that the agreement was not in the best interests of the employees. The court reasoned that the agreement's provisions, particularly those related to wage increases and penalties for breaches, could negatively impact the respondents' ability to compete in the market, potentially leading to job losses. The court emphasised the importance of considering the broader economic implications of enterprise agreements and their potential impact on employees' long-term job security. Consequently, the court rejected the CFMEU's application for approval of the agreement.

The Fair Work Commission did not approve the Keith Hamilton & Sons Pty Ltd T/As KHS Contract and the CFMEU Demolition Enterprise Agreement 2011-2015. The court's decision highlights the importance of considering the broader economic implications of enterprise agreements and their potential impact on employees' long-term job security when determining whether an agreement is in the best interests of the employees.

Construction, Forestry, Mining and Energy Union

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established