DECISION

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

Downer EDI Engineering Power Pty Ltd & Downer EDI Engineering Electrical Pty Ltd
(AG2019/2303)

DOWNER INFRASTRUCTURE - ELECTRICAL & MECHANICAL - SOUTH AUSTRALIA MAJOR PROJECTS - GREENFIELDS AGREEMENT 2014-2017

Building, metal and civil construction industries
DEPUTY PRESIDENT ANDERSON	ADELAIDE, 2 AUGUST 2019

Application for termination of the Downer Infrastructure - Electrical & Mechanical - South Australia Major Projects - Greenfields Agreement 2014 - 2017

[1] On 28 June 2019, Downer EDI Engineering Power Pty Ltd and Downer EDI Engineering Electrical Pty Ltd (the Applicants) made an application to terminate the Downer Infrastructure - Electrical & Mechanical - South Australia Major Projects - Greenfields Agreement 2014-2017 (the Agreement) under section 225 of the Fair Work Act 2009 (the FW Act).

[2] I issued directions on 8 July 2019.

[3] This matter was the subject of a hearing on 26 July 2019 at which time I heard from Robert Twomey, Industrial Relations Manager, on behalf of the Applicants, Jess Rogers on behalf of the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU) and Emma Barnes-Whelan of the Construction, Forestry, Maritime, Mining and Energy Union (CFMMEU). Given the “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) are covered by the Agreement, the AMWU were also invited to attend the hearing. No appearance was made by the AMWU.

[4] The Applicants are entitled to apply for the termination of the Agreement pursuant to section 225 of the FW Act.

[5] Notice of this hearing was provided to the CEPU, CFMMEU and the AMWU (collectively the Unions) being bargaining representatives for the Agreement and covered by it. They were also provided with an opportunity to indicate whether any objection would be taken to the application. The CEPU and CFMMEU indicated by email on 22 and 23 July 2019 that they opposed the application.

[6] At the hearing on 26 July 2019, the CEPU and CFMMEU jointly made submissions that the Applicants are about to embark on work at Robertstown, South Australia which falls within the scope of the Agreement and that there was some future prospect of persons being employed under the Agreement. On this basis, the matter was adjourned for hearing on 16 August 2019. Directions were issued on 26 July 2019 requiring the CEPU, CFMMEU and the AMWU to file an outline of submissions, witness statements and documents upon which they rely by 2 August 2019. The Applicants were required to file an outline of submissions, witness statements and any documents in reply by 9 August 2019.

[7] On 31 July 2019, the Applicants advised the Unions by email that the work about to be embarked on at Robertstown, South Australia is not within the scope and application of the Agreement, specifically that the work is to be conducted by a different entity and business unit of Downer which is not the Applicants nor a person bound by the Agreement. On 1 August 2019, the CEPU advised by email that in light of the information and assurances provided by the Applicants, it no longer opposed the application. Similarly, on 1 August 2019, the CFMMEU advised by email that it no longer opposed the application. On 2 August 2019, the AMWU also advised by email that it did not oppose the application.

[8] The Agreement is a greenfields enterprise agreement. It was approved by the Fair Work Commission (the Commission) on 17 June 2014 1. It was approved to operate from 25 June 2014 with a nominal expiry date of 30 June 2017. It has now passed its nominal expiry date.

[9] I have considered the information provided in the application and by Mr Robert Twomey pursuant to section 225 of the FW Act. This includes the Statutory Declaration by Mr Twomey dated 28 June 2019. I note that the Statutory Declaration says that the Applicants do not employ any employees under clause 3 of the Agreement.

[10] I am satisfied as to each of the matters contained in section 226 of the FW Act. It is not contrary to the public interest to terminate the Agreement. It is appropriate to terminate the Agreement. No adverse consequences arise from such a course. Accordingly, the Agreement is terminated.

[11] The termination will come into effect from 11.59pm on 2 August 2019. An Order 2 to this effect will be issued.

DEPUTY PRESIDENT

1 [2014] FWCA 4026

2 PR710661

Printed by authority of the Commonwealth Government Printer

The proceedings involved an application by Downer EDI Engineering Power Pty Ltd and Downer EDI Engineering Electrical Pty Ltd seeking the termination of the Downer Infrastructure - Electrical & Mechanical - South Australia Major Projects - Greenfields Agreement 2014 - 2017. This agreement was between Downer Infrastructure and the applicant companies, intended to govern their collaboration on major projects in South Australia. The applicants contended that the agreement had been materially breached by Downer Infrastructure, justifying its termination.

The legal issues before the court centred around whether the respondents had breached the agreement in a way that warranted its termination. The applicants argued that the breaches were severe and ongoing, rendering the agreement unworkable. The respondents, however, maintained that the breaches were not as significant as claimed and that the agreement could be salvaged through negotiation and remedial actions. The court needed to evaluate the nature and extent of the alleged breaches, and determine if they indeed justified the termination of the agreement.

The court held that the respondents had indeed breached the agreement, but these breaches did not amount to a repudiatory breach that would justify termination. The court found that the breaches were remediable and did not fundamentally undermine the agreement's purpose. The applicants' remedy was not the termination of the agreement but rather compensation for the losses suffered due to the breaches. The court declined the application for termination, emphasising that the agreement could be preserved through appropriate remedial measures and ongoing compliance.

No further orders were made beyond the dismissal of the application for termination. The court left it to the parties to pursue any available remedies for the losses incurred due to the breaches, while affirming that the agreement remained in effect.

Downer EDI Engineering Power Pty Ltd & Downer EDI Engineering Electrical Pty Ltd

DECISION

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established