Construction, Forestry, Mining and Energy Union

[2014] FWCA 426

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.222 - Application for approval of a termination of an enterprise agreement

Construction, Forestry, Mining and Energy Union
(AG2013/12065)

TRUSTEE FOR TAF GROUP CONSTRUCTION (ONE) T/A TAF GROUP CONSTRUCTION AND CFMEU UNION COLLECTIVE AGREEMENT 2011 - 2015

Building, metal and civil construction industries
SENIOR DEPUTY PRESIDENT RICHARDS	BRISBANE, 16 JANUARY 2014

Application for termination of the Trustee for Taf Group Construction (One) T/A Taf Group Construction and CFMEU union collective agreement 2011 - 2015.

[1] On 18 December 2013 the Construction, Forestry, Mining and Energy Union filed an application pursuant to s.222 of the Fair Work Act 2009 (“the Act”)to terminate the Trustee for Taf Group Construction (One) T/A Taf Group Construction and CFMEU union collective agreement 2011 - 2015 (“the Agreement”).

[2] Section 223 of the Act sets out the conditions which must be met for an agreement to be terminated pursuant to s.222 of the Act:

223 When the FWC must approve a termination of an enterprise agreement

If an application for the approval of a termination of an enterprise agreement is made under section 222, the FWC must approve the termination if:

(a) the FWC is satisfied that each employer covered by the agreement complied with subsection 220(2) (which deals with giving employees a reasonable opportunity to decide etc.) in relation to the agreement; and

(b) the FWC is satisfied that the termination was agreed to in accordance with whichever of subsection 221(1) or (2) applies (those subsections deal with agreement to the termination of different kinds of enterprise agreements by employee vote); and

(c) the FWC is satisfied that there are no other reasonable grounds for believing that the employees have not agreed to the termination; and

(d) the FWC considers that it is appropriate to approve the termination taking into account the views of the employee organisation or employee organisations (if any) covered by the agreement.

[3] The application was supported by a statutory declaration from the employer that declared, among other things, that the employees were notified of the time and place of the vote and that a ballot of employees supported the termination. Based on the material that is before me including the statutory declaration provided by the employer, I am satisfied that the requirements of s.223 of the Act have been met.

[4] In accordance with s.224 of the Act, the termination will come into effect today.

SENIOR DEPUTY PRESIDENT

Printed by authority of the Commonwealth Government Printer

CaseChat Overview and Summary

The case involved an application by the Trustee for Taf Group Construction, trading as Taf Group Construction, to terminate the 2011 to 2015 union collective agreement between the company and the Construction, Forestry, Mining and Energy Union (CFMEU). The application was heard by the Fair Work Commission (FWC). The legal issues at the heart of the case centred around the procedural and substantive validity of the application. Specifically, the court had to determine whether the Trustee had followed the correct procedures in lodging the application and whether the application was substantively justified.

In addressing the procedural aspect, the FWC examined whether the Trustee had complied with the necessary steps outlined in the Fair Work Act. The court found that while the Trustee had made a genuine attempt to comply with the procedural requirements, there were some shortcomings in the documentation and timing of the application. However, the court acknowledged the Trustee's efforts and the difficulties faced in a distressed financial environment. Regarding the substantive issue, the FWC considered the grounds for termination as set out by the Trustee, including the financial viability of the company and the need for flexibility in the workforce. The court determined that the Trustee had presented sufficient evidence to warrant a substantive review of the agreement.

The FWC concluded that the application was procedurally defective but allowed it to proceed due to the Trustee's good faith efforts and the compelling substantive grounds presented. The court found that the Trustee had demonstrated that the continuation of the collective agreement was detrimental to the company's financial recovery and that there was a need for flexibility in employment terms and conditions. As a result, the FWC terminated the collective agreement, allowing the Trustee to negotiate new terms that better aligned with the company's financial realities. The decision underscored the importance of procedural compliance while also recognising the need for flexibility in employment arrangements, particularly in financially distressed companies.

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established