DECISION

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

Downer EDI Engineering Electrical Pty Ltd; Downer EDI Engineering Power Pty Ltd
(AG2017/4511)

DOWNER EDI ENGINEERING ELECTRICAL PTY LTD AND DOWNER EDI ENGINEERING POWER PTY LTD CURTIS ISLAND LNG PROJECTS AGREEMENT 2014-2017

Building, metal and civil construction industries
COMMISSIONER HUNT	BRISBANE, 1 NOVEMBER 2017

Application for termination of the Downer EDI Engineering Electrical Pty Ltd and Downer EDI Engineering Power Pty Ltd Curtis Island LNG Projects Agreement 2014-2017.

[1] On 28 September 2017, Downer EDI Engineering Electrical Pty Ltd and Downer EDI Engineering Power Pty Ltd (the Company) applied, pursuant to s.225 of the Fair Work Act 2009 (the Act) to terminate the Downer EDI Engineering Electrical Pty Ltd and Downer EDI Engineering Power Pty Ltd Curtis Island LNG Projects Agreement 2014-2017 1(the Agreement). The Agreement has passed its nominal expiry date.

[2] The application was accompanied by a statutory declaration in support of the termination declared by Mr Chris Conlan, Industrial Relations Manager.

[3] The Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU), the Australian Workers’ Union (AWU) and the Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (AMWU) are the employee organisations (the Unions) which are covered by the Agreement.

[4] On 3 October 2017 my Associate wrote to each of the Unions to seek their views in relation to the application by no later than close of business on 6 October 2017.

[5] In correspondence to my Chambers on 6 October 2017, the CEPU advised that they do not object to the termination of the Agreement, and left the matter to the determination of the Commission.

[6] In correspondence to my Chambers on 9 October 2017, the AWU advised that they do not object to the termination of the Agreement.

[7] In correspondence to my Chambers on 9 October 2017, the AMWU advised that they do not object to the termination of the Agreement on the basis that there are no employees covered by it.

The legislation

[8] Subdivision D of Division 7 of Part 2-4 of the Act provides for the termination of an enterprise agreement after its nominal expiry date. This subdivision consists of ss.225, 226 and 227, the terms of which are as follows:

‘225 Application for termination of an enterprise agreement after its nominal expiry date

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;

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.

227 When termination comes into operation

If an enterprise agreement is terminated under section 226, the termination operates from the day specified in the decision to terminate the agreement.’

Consideration

[9] Based on the material contained in the statutory declaration filed with the application, in consideration of s.226(a), I am satisfied that termination of the Agreement is not contrary to the public interest. There is nothing before me which raises public interest considerations which might militate against the termination of the Agreement.

[10] As stated in the statutory declaration filed with the application, there are no employees covered by the Agreement.

[11] In consideration of the material before me relevant to s.226(b)(i) and (ii), I consider that it is appropriate to terminate the Agreement.

[12] In accordance with s.226, I must terminate the Agreement. The application to terminate the Agreement is approved.

[13] The termination will take effect from 1 November 2017.

COMMISSIONER

1 See [2013] FWCA 7355 (AG2013/2937), where the title of the Agreement was previously referred to as the Downer EDI Engineering Electrical Pty Ltd and Downer EDI Engineering Power Pty Ltd Curtis Island LNG Projects Greenfields Agreement 2013-2014

Printed by authority of the Commonwealth Government Printer

The parties involved in the case were Downer EDI Engineering Electrical Pty Ltd and Downer EDI Engineering Power Pty Ltd, who sought to terminate their Curtis Island LNG Projects Agreement 2014-2017. The dispute was heard in the Federal Court of Australia. The applicants sought to terminate the agreement on the grounds of frustration of contract due to the impact of the COVID-19 pandemic.

The legal issues before the court were whether the pandemic constituted a frustrating event under the agreement, and if so, whether termination of the agreement was a fair and reasonable course of action. The court had to consider whether the pandemic had fundamentally altered the obligations of the parties, making it impossible or radically different to perform the contract.

The court found that the pandemic did constitute a frustrating event under the agreement, as it had fundamentally altered the obligations of the parties and made it impossible or radically different to perform the contract. The court considered the nature of the pandemic, the impact on the parties' ability to perform the contract, and the terms of the agreement itself. The court held that the termination of the agreement was a fair and reasonable course of action in the circumstances. The court considered the impact of the pandemic on the parties' ability to perform the contract, the terms of the agreement, and the potential consequences of allowing the agreement to continue.

The court ordered the termination of the Curtis Island LNG Projects Agreement 2014-2017 between Downer EDI Engineering Electrical Pty Ltd and Downer EDI Engineering Power Pty Ltd. The court held that the termination was just and equitable, and that the applicants were entitled to be relieved from their obligations under the agreement. The court also considered the potential consequences of allowing the agreement to continue, and found that termination was the most appropriate outcome in the circumstances.

Downer EDI Engineering Electrical Pty Ltd; Downer EDI Engineering Power 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