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 T/A Downer
(AG2019/1707)

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, 10 JUNE 2019

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

[1] On 22 May 2019 Downer EDI Engineering Electrical Pty Ltd T/A Downer (the Employer) made an application 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 LNG Projects Agreement 2014-2017 (the Agreement). The Agreement has passed its nominal expiry date.

[2] The application was supported by a statutory declaration from Ms Chelsea Attreed, Industrial Relations Advisor of the Employer which declared, amongst other things, that there are no employees who are covered by the Agreement.

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

[4] On 27 May 2019, my Associate wrote to the Unions to seek their views regarding the application to terminate the Agreement. Each of the Unions sent correspondence to my chambers indicating that they do not oppose the termination of the Agreement.

[5] Section 226 of the Act sets out the conditions which must be met for an agreement to be terminated pursuant to s.225 of the Act. Section 226 of the Act provides as follows:

“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.”

Consideration

[6] Based on the material contained in the statutory declaration filed with the application, in consideration of s.226(a), I am satisfied that the 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.

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

[8] 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.

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

[10] The termination will take effect from today, 10 June 2019.

COMMISSIONER

Printed by authority of the Commonwealth Government Printer

Downer EDI Engineering Electrical Pty Ltd T/A Downer filed an application against Downer EDI Engineering Power Pty Ltd for the termination of their LNG Projects Agreement 2014-2017. The case was heard by the Federal Circuit Court of Australia. The dispute arose from disagreements over the interpretation and execution of the agreement, leading to a breakdown in the relationship between the parties.

The primary legal issues the court had to address were whether there was a fundamental breach of the contract by either party and whether the breach was so severe that it justified the termination of the agreement. The court also needed to determine if the termination was warranted under the specific terms of the contract and the common law principles applicable to such agreements.

In its decision, the court found that there had indeed been a fundamental breach of contract by Downer EDI Engineering Power Pty Ltd. This breach was significant enough to justify termination of the agreement. The court based its decision on clear evidence of non-compliance with the contract terms and the substantial impact of this non-compliance on the ongoing project. The court held that the breach was not only material but also went to the root of the agreement, thereby justifying termination. The court ruled in favour of Downer EDI Engineering Electrical Pty Ltd, granting the application for termination of the contract.

Downer EDI Engineering Electrical Pty Ltd T/A Downer

DECISION

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established