Keena Fencing Pty Ltd

[2021] FWC 1539

[2021] FWC 1539

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.225—Enterprise agreement

Keena Fencing Pty Ltd
(AG2020/3342)

Building, metal and civil construction industries
DEPUTY PRESIDENT MILLHOUSE	MELBOURNE, 24 MARCH 2021

Application for termination of the Keena Fencing Pty Ltd and the CFMEU (Victorian Construction and General Division) Enterprise Agreement 2016-2018.

[1] Keena Fencing Pty Ltd has applied under s 225 of the Fair Work Act 2009 (Cth) (Act) to terminate the Keena Fencing Pty Ltd and the CFMEU (Victorian Construction and General Division) Enterprise Agreement 2016-2018 (Agreement). 1

[2] The Agreement nominally expired on 30 June 2018. 2 The Construction, Forestry, Maritime, Mining and Energy Union (CFMMEU) is covered by the Agreement.3

[3] For the reasons that follow, I have decided that it is not appropriate to terminate the Agreement.

Context

[4] The application was accompanied by a statutory declaration made by Ms Belinda Foreman in her capacity as Director, in which it is said that there are no employees covered by the Agreement. 4

[5] Supplementary information was sought from Keena Fencing concerning whether any employees remain covered by the Agreement. The response provided by Keena Fencing relevantly stated that “There are no employees of Keena Fencing that remain covered by the Agreement.” 5

[6] The CFMMEU advised that it opposed the application to terminate the Agreement and sought time to file and serve relevant materials in support of its position. It submitted that contrary to the advice from Keena Fencing, its preliminary view was that there are employees who remain covered by the Agreement.

[7] The CFMMEU subsequently filed and served an outline of written submissions in which it submitted that the application should be dismissed. 6 The CFMMEU relies upon the witness statement of organiser/official, Mr John Thomson.7 The CFMMEU contends that there is a “real question” as to whether, despite its claims, Kenna Fencing does in fact have employees that are covered by the Agreement.8

[8] Directions were issued requiring Keena Fencing to provide a copy of the application and materials in support of the application to any employees that fall within the scope of the Agreement’s coverage, irrespective of whether such employees are union members or do not work on “union sites.” 9 The views of the employees and the CFMMEU were also sought.10

[9] On 21 January 2021, the Commission was provided with emails from two persons, who are understood to be employees of Keena Fencing to whom the Agreement applies.

[10] Submissions were filed by Keena Fencing on 22 January 2021 and the CFMMEU filed supplementary submissions on 1 February 2021 in which it maintained that the application should be dismissed.

Statutory framework

[11] Section 226 of the Act provides:

“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

[12] Keena Fencing has standing to make the application pursuant to s 225(a) of the Act, as an employer covered by the Agreement.

Public interest – s 226(a)

[13] Keena Fencing submits that it is not contrary to the public interest to terminate the Agreement because “we have no one in the union and don’t work on union sites anymore.” 11

[14] The CFMMEU says that these submissions are insufficient. It contends that the status of employees as union members, or the performance of work on “union sites” does not assist in the assessment required by s 226(a) of the Act.

[15] The notion of public interest refers to matters that might affect the public as a whole, as distinct from the interests of the parties. 12 In the context of s 226 of the Act, public interest considerations are directed to the consequences of terminating the Agreement and particularly those consequences which are likely foreseeable.13

[16] While I accept the CFMMEU’s submission that the matters relied upon by Keena Fencing do not address the considerations contemplated at [15] of this decision, the issue is whether the Commission is satisfied that termination of the Agreement is not contrary to the public interest. Section 226(a) does not require the Commission to be satisfied that the termination of the Agreement is in the public interest. There is nothing before me which raises public interest considerations that might militate against termination of the Agreement, such as the achievement or otherwise of the various objects of the Act, employment levels, inflation, and the maintenance of proper industrial standards. 14 

[17] I am satisfied that termination of the Agreement is not contrary to the public interest.

Section 226(b) – appropriateness of terminating the Agreement

[18] It is declared by Keena Fencing that there are no employees covered by the Agreement. 15 However, the material before the Commission does not bear this out. Two persons said to be employees of Keena Fencing filed submissions with the Commission in respect of the application. The first employee relevantly said as follows:

“I am aware that my employer Keena Fencing has been made aware that they are required to request not to renew their CFMEU EBA as they thought once expired it was done, this will have no impact to me or my employment with them…”

[19] The second employee’s submissions relevantly provide:

“… my employer Keena Fencing wanting to terminate their agreement with the CFMEU will have No impact to my conditions of employment and my employer requesting to leave the agreement has No impact to me…”

[20] The CFMMEU submits that while the employees have expressed the view that the termination of the Agreement will have “no impact” upon them, this “would seem to be demonstrably untrue.” The CFMMEU says that whether the employees realise it or not, the termination of the Agreement will impact upon their legal position as they will revert from the Agreement to the relevant modern award. The CFMMEU submits that “it is unclear whether this has been explained to Keena’s employees.” 16

[21] Keena Fencing submits that it provided copies of the application and relevant materials to its employees in accordance with the Commission’s directions. 17 It is therefore apparent that Keena Fencing does have employees covered by the Agreement, contrary to the statutory declaration filed with the application and correspondence provided to the Commission. While the two employee submissions indicate support for the termination of the Agreement, the material before the Commission does not allow any findings to be made about the total number of employees that are in fact covered by the Agreement, their circumstances, and the likely effect that the termination of the Agreement will have upon them.

[22] Further, there is insufficient material before the Commission as to Keena Fencing’s circumstances, including the likely effect that the termination would have on it. The basis for the application and the effect of reverting to the terms and conditions of the modern award have not been adequately explained to the Commission (or, on the materials, to Keena Fencing’s employees). While Keena Fencing submits that it has lost a contract which it “heavily” relied upon to keep the business afloat, it does not address how the ongoing application of the Agreement has any bearing upon the lost contract or the business viability more generally. There is no other material before the Commission which informs Keena Fencing’s position.

[23] I consider that these matters weigh against the appropriateness of terminating the Agreement.

Conclusion and disposition

[24] In the absence of sufficient material in support of the application and taking into account all of the circumstances including those required by s 226(b)(i) and (ii) of the Act, I do not consider that it is appropriate to terminate the Agreement at this time.

[25] The application to terminate the Agreement is dismissed.

[26] I observe that this decision does not prevent Keena Fencing from lodging a fresh application at the appropriate time if it wishes to do so, which adequately addresses the matters contemplated by s 226 of the Act.

DEPUTY PRESIDENT

Printed by authority of the Commonwealth Government Printer

<AE425069  PR727972 >

 1   [2017] FWCA 4064; AE425069

 2   Ibid at [4]; clause 3.1 of the Agreement

 3   Ibid at [3]; clause 4.1(c) of the Agreement

 4   Form F24C Declaration in relation to termination of an enterprise agreement after the nominal expiry date dated 5 November 2020 (Foreman declaration) at 2.2

 5   Email from Keena Fencing to the Commission dated 1 December 2020

 6   Outline of submissions of the CFMMEU dated 15 December 2020 (CFMMEU submissions) at [2]

 7   Witness statement of John Thomson dated 15 December 2020

 8   CFMMEU submissions at [20]

 9   See Foreman declaration at 2.1

 10   Directions of the Commission dated 24 December 2020

 11   Foreman declaration at 2.1

 12   Re Kellogg Brown and Root, Bass Strait (Esso) Onshore/Offshore Facilities Certified Agreement 2000 (2005) 139 IR 34 (Kellogg Brown) at p.40; see also Aurizon Operations Limited; Aurizon Network Pty Ltd; Australia Eastern Railroad Pty Ltd [2015] FWCFB 540 (Aurizon) at [153]

 13   Kellogg Brown at p.41

 14   Ibid

 15   Foreman declaration at 2.2 and 2.3; email from Keena Fencing to the Commission dated 1 December 2020

 16   CFMMEU supplementary submissions dated 1 February 2021 at [9]

 17   Keena Fencing submissions dated 22 January 2021