DECISION

Fair Work Act 2009
s.225—Enterprise agreement

CPB Contractors Pty Ltd
(AG2017/1274)

THIESS PTY LTD - GORGON PROJECT-BARROW ISLAND GREENFIELDS AGREEMENT 2009

Building, metal and civil construction industries
COMMISSIONER WILLIAMS	PERTH, 2 MAY 2017

Application for termination of the Thiess Pty Ltd - Gorgon Project-Barrow Island Greenfields Agreement 2009.

[1] This decision concerns an application made by CPB Contractors Pty Ltd (the Applicant) for the termination of the Thiess Pty Ltd - Gorgon Project-Barrow Island Greenfields Agreement 2009 (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 a Senior HR Advisor of the Applicant.

[6] Ms Corica explains that the Agreement had a nominal expiry date in 2010 and that no employee is covered by the Agreement. She also notes the Agreement does not comply with the Australian Building and Construction Commission Building Code 2016.

[7] The Australian Workers’ Union (AWU) was invited to provide its view on the application but did not seek 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, I do consider in the circumstances here that it is appropriate to terminate the Agreement.

[11] Accordingly, the Thiess Pty Ltd - Gorgon Project-Barrow Island Greenfields Agreement 2009 is terminated and pursuant to section 227 of the Act, the termination is to take effect on and from the date of this decision.

COMMISSIONER

Printed by authority of the Commonwealth Government Printer

CaseChat Overview and Summary

CPB Contractors Pty Ltd recently applied to the Federal Court of Australia for the termination of the Thiess Pty Ltd - Gorgon Project-Barrow Island Greenfields Agreement 2009. The application was made in light of alleged breaches by Thiess Pty Ltd of the contractual terms, which CPB Contractors argued warranted the termination of the agreement. The court was required to determine whether the breaches were indeed significant enough to justify the termination of the contract and if CPB Contractors had a legitimate basis for seeking such a remedy.

The primary legal issue before the court was whether the breaches alleged by CPB Contractors were substantial enough to warrant the termination of the agreement. The court had to consider the nature and extent of the breaches, as well as the provisions of the contract concerning termination. Additionally, the court needed to assess whether CPB Contractors had acted in accordance with the contract's dispute resolution mechanisms before seeking termination. The court examined the evidence presented by both parties and the contractual terms to determine the validity of the application.

In its decision, the court found that the breaches alleged by CPB Contractors did not reach the threshold for termination as specified in the contract. The court determined that the breaches, while serious, did not justify termination under the terms of the agreement. Furthermore, the court found that CPB Contractors had not followed the proper dispute resolution procedures outlined in the contract, which impacted the legitimacy of their application. Consequently, the court dismissed the application for termination, ruling that the breaches did not warrant such a drastic measure. The court's decision emphasised the importance of adhering to contractual dispute resolution mechanisms before seeking termination.

The final orders of the court included a dismissal of CPB Contractors' application for termination of the contract, with costs awarded to Thiess Pty Ltd. The court also directed both parties to continue to pursue the dispute resolution mechanisms as outlined in the contract. This decision reinforces the principle that termination of a contract is a serious remedy and should only be pursued in cases of substantial and justified breaches, in accordance with the contractual terms.

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