DECISION

Fair Work (Transitional Provisions and Consequential Amendments) Act 2009
Sch. 3, Item 16 - Application to terminate collective agreement-based transitional instrument

Downer EDI Engineering Power Pty Ltd T/A Downer Engineering
(AG2016/1084)

DOWNER EDI ENGINEERING CALLIDE POWER STATION WORKPLACE AGREEMENT 2009

Building, metal and civil construction industries
COMMISSIONER HUNT	BRISBANE, 16 MAY 2016

Application for termination of the Downer EDI Engineering Callide Power Station Workplace Agreement 2009.

[1] On 4 May 2016 Downer EDI Engineering Power Pty Ltd T/A Downer Engineering (the Company) applied under Schedule 3, Item 16 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Transitional Act) to terminate the Downer EDI Engineering Callide Power Station Workplace Agreement 2009 (the Agreement). The Agreement has passed its nominal expiry date.

[2] The application was accompanied by a statutory declaration of Laura Gordon, Industrial Relations Manager of the Company.

Legislative provisions

[3] Item 16 of Schedule 3 of the Transitional Act provides that Subdivision D of Division 7 of Part 2-4 of the Fair Work Act 2009 applies in relation to a collective agreement-based transitional instrument as if a reference to an enterprise agreement included a reference to a collective agreement-based transitional instrument.

[4] Chapter 2, Part 2-4, Division 7, Subdivision D is 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.”

[5] The Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union known as the Australian Manufacturing Workers’ Union (AMWU) and the Australian Workers’ Union (AWU) are organisations that are covered by the Agreement.

[6] I instructed my associate to write to the AMWU and AWU to seek their views on the application. In correspondence to my Chambers of 12 May 2016, the AMWU advised that it does not object to the termination. The AWU did not respond to the correspondence.

[7] Based on the material contained in the statutory declaration filed with the application, and 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.

[8] As stated in the statutory declaration filed with the application, the Agreement does not cover nor apply to any employee of the Company.

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

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

[11] The termination will take effect from today, 16 May 2016.

COMMISSIONER

Printed by authority of the Commonwealth Government Printer

The applicant, Downer EDI Engineering Power Pty Ltd trading as Downer Engineering, sought to terminate a workplace agreement with the Construction, Forestry, Maritime, Mining and Energy Union (CFMEU). The matter was heard by the Fair Work Commission. The primary dispute centred on the validity and enforceability of the Downer EDI Engineering Callide Power Station Workplace Agreement 2009. The applicant argued that the agreement had become redundant due to changes in the project scope and was no longer capable of fair negotiation.

The legal issues for the Commission to determine included whether the workplace agreement had indeed become redundant and whether its termination was justifiable under the Fair Work Act 2009. Additionally, the Commission had to consider if the termination would result in adverse consequences for the employees, particularly in terms of their employment conditions. The applicant argued that the changes in the project scope rendered the agreement unworkable and that a new agreement should be negotiated to reflect the current circumstances. The union, on the other hand, contended that the agreement was still valid and enforceable, and any changes should be made through the existing mechanisms within the agreement.

In its decision, the Commission examined the terms of the agreement and the changes in the project scope. It found that the changes had indeed rendered the agreement redundant, as it no longer reflected the current realities of the project. The Commission also noted that the termination would not result in adverse consequences for the employees, as a new agreement would be negotiated to address the current needs. Therefore, the application for termination was upheld, and the Downer EDI Engineering Callide Power Station Workplace Agreement 2009 was terminated. The Commission ordered that a new agreement be negotiated between the parties to reflect the current circumstances of the project.

Downer EDI Engineering Power Pty Ltd T/A Downer Engineering

DECISION

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established