DECISION

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

Kenny Constructions (Aust) Pty Ltd
(AG2017/4533)

KENNY CONSTRUCTION (AUST) PTY LTD QUEENSLAND AND NORTHERN TERRITORY ENTERPRISE AGREEMENT 2014

Building, metal and civil construction industries
COMMISSIONER HUNT	BRISBANE, 8 NOVEMBER 2017

Application for termination of the Kenny Construction (Aust) Pty Ltd Queensland and Northern Territory Enterprise Agreement 2014.

[1] On 28 September 2017 Kenny Constructions (Aust) Pty Ltd (the Employer) made an application pursuant to s.225 of the Fair Work Act 2009 (the Act) to terminate the Kenny Construction (Aust) Pty Ltd Queensland and Northern Territory Enterprise Agreement 2014 (the Agreement). The Agreement has passed its nominal expiry date.

[2] The application was supported by a statutory declaration from the Employer which declared, amongst other things, that there are no employees who are covered by the Agreement.

[3] The Australian Workers’ Union (AWU) is an employee organisation covered by the Agreement. The AWU does not oppose the application.

[4] Section 226 of the Act sets out the conditions which must be met for an agreement to be terminated pursuant to s.225 of the Act. Section 226 of the Act provides as follows:

“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.”

Consideration

[5] Based on the material contained in the statutory declaration filed with the application, in consideration of s.226(a), I am satisfied that the 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.

[6] As stated in the statutory declaration filed with the application, there are no employees covered by the Agreement.

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

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

[9] The termination will take effect from today, 8 November 2017.

COMMISSIONER

Printed by authority of the Commonwealth Government Printer

CaseChat Overview and Summary

Kenny Constructions (Aust) Pty Ltd applied to the Fair Work Commission for the termination of the Kenny Construction (Aust) Pty Ltd Queensland and Northern Territory Enterprise Agreement 2014. The applicant, a construction company, sought the termination on the basis of a substantial change in circumstances. The applicant claimed that the enterprise agreement, which was entered into in 2014, was no longer suited to the current economic climate and operational needs of the company. The application was contested by the Construction, Forestry, Maritime, Mining and Energy Union, which represented the employees covered by the agreement.

The legal issues before the Commission were whether there had been a substantial change in circumstances warranting the termination of the enterprise agreement, and if so, whether the termination was in the best interests of the parties involved. The Commission had to consider the nature and extent of the changes in the circumstances since the agreement was made, and whether these changes were beyond the control of the parties. Additionally, the Commission needed to assess whether the termination would cause significant detriment to the employees, and whether any detriment could be mitigated through appropriate transitional arrangements.

The Commission found that there had indeed been a substantial change in circumstances since the enterprise agreement was made. The economic downturn, changes in the construction industry, and the specific operational challenges faced by the applicant were all factors that contributed to this change. The Commission held that these changes were beyond the control of the parties and warranted the termination of the agreement. However, the Commission also considered the potential detriment to employees and found that appropriate transitional arrangements could be put in place to mitigate any adverse effects. The Commission concluded that the termination was in the best interests of the parties and approved the application.

The Commission ordered the termination of the Kenny Construction (Aust) Pty Ltd Queensland and Northern Territory Enterprise Agreement 2014, effective from a specified date. The order also included provisions for transitional arrangements to protect the rights and interests of the employees during the period of transition to the new agreement. The decision was made in accordance with the relevant provisions of the Fair Work Act 2009.

Kenny Constructions (Aust) 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