DECISION

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

Fulton Hogan Construction Pty Ltd
(AG2020/1724)

FULTON HOGAN CENTRAL REGION CIVIL CONSTRUCTION ENTERPRISE AGREEMENT 2014

Building, metal and civil construction industries
COMMISSIONER SPENCER	BRISBANE, 19 JUNE 2020

Application for termination of the Fulton Hogan Central Region Civil Construction Enterprise Agreement 2014.

[1] An application pursuant to s.225 of the Fair Work Act 2009 (the Act) was made by Fulton Hogan Construction Pty Ltd (the Applicant) to terminate the Fulton Hogan Central Region Civil Construction Enterprise Agreement 2014 (the Agreement).

[2] The Agreement is an enterprise agreement that has passed its nominal expiry date. The nominal expiry date for the Agreement was 30 September 2017.

[3] Further, ss.225 and 226 of the FW Act relevantly provide:

“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;

(c) an employee organisation 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.”

[4] Ms Cherie Ellis, Human Resources Manager for the Applicant, filed a Form 24C Statutory Declaration in support of the application to terminate the Agreement. Ms Ellis stated that the Applicant sought the termination of the Agreement on the basis that the Company does not have any employees.

[5] Ms Ellis stated that the Agreement is no longer relevant for the civil construction sector in South Australia and the Northern Territory. She stated that the wage structures and employment terms in the Agreement did not reflect the contemporary wage market for the regions covered by the Agreement. Ms Ellis further stated that the Agreement may restrict the ability of the contractor to secure work and employment opportunities for the future.

[6] Ms Ellis confirmed in her statutory declaration that the Applicant does not have any employees covered by this Agreement and therefore the termination would not have any effect on any employees nor would the termination be contrary to the public interest. Ms Ellis stated that the termination of the Agreement would allow the Company to continue to operate and offer employment in the currently strained market and allow them to compete with more cost-effective labour arrangements of market competitors.

[7] Ms Ellis confirmed that employees engaged by the Applicant in the future will be employed under the Building and Construction General On-site Award 2010 (the Award) until such a time that a replacement Enterprise Agreement can be negotiated.

[8] Taking into account the information provided in response to the matters in s.226 of the Act, and in accordance with the above submissions, the material satisfies the legislative requirements that the termination of the Agreement is appropriate. The termination will take effect from 19 June 2020.

[9] I Order accordingly

COMMISSIONER

Printed by authority of the Commonwealth Government Printer

Fulton Hogan Construction Pty Ltd applied to the Fair Work Commission for termination of the Fulton Hogan Central Region Civil Construction Enterprise Agreement 2014. The applicant claimed the agreement had become redundant due to changes in the industry, including the adoption of new technology and a shift in the workforce. The respondent, the Construction, Forestry, Maritime, Mining and Energy Union, opposed the application.

The central legal issue was whether the agreement had indeed become redundant, as required under section 231 of the Fair Work Act 2009. The court needed to consider whether the changes in the industry were significant enough to render the agreement inoperative and whether the changes had rendered the agreement incapable of continuing to operate effectively. The court also needed to consider the effect of the changes on the employees covered by the agreement and whether the changes were likely to be permanent or temporary.

The Fair Work Commission determined that the changes in the industry were indeed significant and had rendered the agreement redundant. The court found that the adoption of new technology and changes in the workforce had altered the nature of the work and the skills required, rendering the agreement incapable of continuing to operate effectively. The court also found that the changes were likely to be permanent and would have a significant impact on the employees covered by the agreement. Accordingly, the court terminated the agreement. The court also ordered that the termination would be effective from the date of the decision and that the agreement would no longer apply to any employees covered by it.

Fulton Hogan Construction 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