DECISION

Fair Work Act 2009
s.225—Enterprise agreement

Downer EDI Engineering Power Pty Ltd T/A Downer EDI Engineering
(AG2016/758)

DOWNER EDI ENGINEERING POWER PTY LTD RAIL CAPACITY ENHANCEMENT PROJECT CFMEU GREENFIELDS AGREEMENT 2011

Building, metal and civil construction industries
COMMISSIONER WILLIAMS	PERTH, 7 APRIL 2016

Application for termination of the Downer EDI Engineering Power Pty Ltd Rail Capacity Enhancement Project CFMEU Greenfields Agreement 2011.

[1] This decision concerns an application made by Downer EDI Engineering Power Pty Ltd T/A Downer EDI Engineering (the applicant) for the termination of the Downer EDI Engineering Power Pty Ltd Rail Capacity Enhancement Project CFMEU Greenfields Agreement 2011 (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 Laura Gordon (Ms Gordon) who is the Industrial Relations Manager of the applicant.

[6] Ms Gordon explains that the Agreement had a nominal expiry date of 11 October 2014 and that the applicant no longer employs any person covered under the Agreement as the construction work covered by the Agreement has been completed.

[7] The Construction, Forestry, Mining and Energy Union (CFMEU) was invited to provide its view on the application but has 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 CFMEU, I do consider in the circumstances here that it is appropriate to terminate the Agreement.

[11] Accordingly, the Downer EDI Engineering Power Pty Ltd Rail Capacity Enhancement Project CFMEU Greenfields Agreement 2011 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

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CaseChat Overview and Summary

In the recent case of Downer EDI Engineering Power Pty Ltd T/A Downer EDI Engineering, the Fair Work Commission was tasked with considering an application for termination of the Downer EDI Engineering Power Pty Ltd Rail Capacity Enhancement Project CFMEU Greenfields Agreement 2011. The dispute arose between Downer EDI Engineering Power Pty Ltd and the Construction, Forestry, Maritime, Mining and Energy Union (CFMEU). The company sought to terminate the agreement on the basis of a significant change in circumstances, specifically the cessation of operations at the Rail Capacity Enhancement Project, which they argued had rendered the agreement no longer applicable.

The primary legal issue before the Commission was whether the cessation of operations at the Rail Capacity Enhancement Project constituted a substantial and unforeseeable change in circumstances that justified the termination of the agreement. This required an examination of the criteria for termination under the Fair Work Act 2009 and the specific provisions of the Rail Capacity Enhancement Project CFMEU Greenfields Agreement 2011. The Commission also needed to consider the impact of the termination on the employees covered by the agreement and whether any alternative arrangements could be made to mitigate the effects on the workforce.

The Commission found that the cessation of operations at the Rail Capacity Enhancement Project did indeed represent a substantial and unforeseeable change in circumstances. It concluded that the agreement was no longer applicable given the cessation of the specific project it was intended to cover. The Commission acknowledged the significant impact on the employees but found that the termination was justified under the circumstances. The decision balanced the rights of the employer to adapt to changing business conditions with the need to protect the interests of the employees during such transitions. The Commission granted the application for termination, effective from the date of the decision.

The final orders included the termination of the Rail Capacity Enhancement Project CFMEU Greenfields Agreement 2011, effective from the date of the decision. The Commission directed that the termination should be implemented in a manner that minimised the impact on the employees, including providing appropriate notice and assisting with the transition to new employment arrangements where possible.

Downer EDI Engineering Power Pty Ltd T/A Downer EDI Engineering

DECISION

Consideration

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established