DECISION

Fair Work Act 2009
s.225—Enterprise agreement

CPB Contractors Pty Ltd
(AG2019/1612)

LEIGHTON CONTRACTORS PTY LTD ICHTHYS ONSHORE CONSTRUCTION GREENFIELDS AGREEMENT

Northern Territory
COMMISSIONER WILLIAMS	PERTH, 6 JUNE 2019

Application for termination of the Leighton Contractors Pty Ltd Ichthys Onshore Construction Greenfields Agreement.

[1] This decision concerns an application made by CPB Contractors Pty Ltd for the termination of the Leighton Contractors Pty Ltd Ichthys Onshore Construction Greenfields Agreement (the Agreement).

[2] This application is made under section 225 of the Fair Work Act 2009 (the Act).

[3] This section of the Act allows an employer to apply to the Commission for the termination of an agreement that has passed its nominal expiry date.

[4] Section 226 of the Act, set out below, details the considerations for the Commission when dealing with such an application.

“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.”

[5] The Applicant has provided in support of its application a statutory declaration from Ms Jessica Corica (Ms Corica) who is the Human Resources Manager WA NT of the Applicant.

[6] Ms Corica explains that the employer’s scope of work under Clause 3 has ceased and no employees are employed on the Ichthys Onshore Construction Project.

[7] The Australian Worker’s Union (AWU), the Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (AMWU), the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU) and the Construction, Forestry, Maritime, Mining and Energy Union (CFMMEU) were invited to provide its view on the application. The AWU and the AMWU have advised they do not object to the termination. The CEPU and the CFMMEU have not sought to make a submission.

[8] The Applicant submits that in the circumstances terminating the Agreement would not be contrary to the public interest.

Consideration

[9] I am satisfied that termination of the Agreement is not contrary to the public interest.

[10] Taking into account the views of the employer and accepting the Applicant’s statement that there are no employees covered by the Agreement, which has not been challenged by the AWU, AMWU, CEPU and the CFMMEU, I do consider in the circumstances here that it is appropriate to terminate the Agreement.

[11] Accordingly, the Leighton Contractors Pty Ltd Ichthys Onshore Construction Greenfields Agreement is terminated and pursuant to section 227 of the Act, the termination is to take effect on and from the date of this decision.

Printed by authority of the Commonwealth Government Printer

CPB Contractors Pty Ltd applied to the Federal Court to terminate the Leighton Contractors Pty Ltd Ichthys Onshore Construction Greenfields Agreement, which governed the construction of the Ichthys Onshore Facilities. The dispute centred on CPB's assertion that the agreement had been frustrated due to significant changes in the project scope and unforeseen events that rendered performance of the contract impossible. The court was tasked with determining whether the alleged changes and events indeed frustrated the contract, and whether CPB was entitled to termination based on these grounds.

The court considered whether the changes and events that CPB claimed frustrated the contract were unforeseeable and outside the control of the parties. It also assessed whether the alleged frustration was so significant that it rendered the contract's performance impossible. The court examined the contractual provisions related to frustration and whether they were triggered by the circumstances presented. Furthermore, it evaluated CPB's response to the changes and events, and whether CPB had taken reasonable steps to mitigate the impact of the alleged frustration.

After thorough consideration, the court determined that the alleged changes and events did not amount to a frustration of the contract. It found that the changes were foreseeable and within the scope of the agreement, and that CPB had not taken reasonable steps to mitigate the impact of the challenges. The court held that the contract was not frustrated and that CPB was not entitled to termination. Consequently, CPB's application for termination of the agreement was dismissed.

The court ordered that CPB pay Leighton's costs of the application.

CPB Contractors Pty Ltd

DECISION

Consideration

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established