KMN Constructions Pty Ltd

[2024] FWCA 1538

[2024] FWCA 1538

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

s.222—Enterprise agreement

KMN Constructions Pty Ltd

(AG2024/1302)

KMN CONSTRUCTIONS PTY LTD ENTERPRISE AGREEMENT 2022 - 2026

Building, metal and civil construction industries
COMMISSIONER CRAWFORD	SYDNEY, 26 APRIL 2024

Application for termination of the KMN Constructions Pty Ltd Enterprise Agreement 2022 -2026

1. An application has been made by KMN Constructions Pty Ltd (KMN Constructions) for the termination of the KMN Constructions Pty Ltd Enterprise Agreement 2022 - 2026 (Agreement) pursuant to s.222 of the Fair Work Act 2009 (Cth) (FW Act). The application was filed on 18 April 2024. The Agreement’s nominal expiry date is 3 February 2027.

1. Sections 222 and 223 of the FW Act set out the conditions which must be met for an agreement to be terminated by agreement pursuant to s.222 of the FW Act:

“222 Application for FWC approval of a termination of an enterprise agreement

Application for approval

(1)If a termination of an enterprise agreement has been agreed to, a person covered by the agreement must apply to FWC for approval of the termination.

Material to accompany the application

(2)    The application must be accompanied by any declarations that are required by the procedural rules to accompany the application.

When the application must be made

(3)The application must be made:

(a)     within 14 days after the termination is agreed to; or

(b)     if in all the circumstances FWC considers it fair to extend that period— within such further period as FWC allows.

223 When the FWC must approve a termination of an enterprise agreement

If an application for the approval of a termination of an enterprise agreement is made under section 222, the FWC must approve the termination if:

(a)     the FWC is satisfied that each employer covered by the agreement complied with subsection 220(2) (which deals with giving employees a reasonable opportunity to decide etc.) in relation to the agreement; and

(b)     the FWC is satisfied that the termination was agreed to in accordance with whichever of subsection 221(1) or (2) applies (those subsections deal with agreement to the termination of different kinds of enterprise agreements by employee vote); and

(c)     the FWC is satisfied that there are no other reasonable grounds for believing that the employees have not agreed to the termination; and

(d)     the FWC considers that it is appropriate to approve the termination taking into account the views of the employee organisation or employee organisations (if any) covered by the agreement.”

1. Section 224 of the FW Act regulates the operative date of the termination and states: “If a termination of an enterprise agreement is approved under section 223, the termination operates from the day specified in the decision to approve the termination.”

Consideration

1. The Agreement is a single enterprise agreement. It was approved by the Fair Work Commission (Commission) on 3 February 2023.[1] It was approved to operate from 10 February 2023 with a nominal expiry date of 3 February 2027. It is an agreement made directly with employees and no industrial organisation is covered by it.

1. This application needs to be considered in conjunction with an application for approval of the KMN Constructions Pty Ltd/CFMEU Collective Agreement 2019 - 2023 (New Agreement) – Matter AG2024/1301. KMN Constructions and the two affected employees have reached agreement to make the New Agreement and to have that instrument replace the Agreement. The Agreement must be terminated to give practical effect to this arrangement given it has not nominally expired and would otherwise operate to the exclusion of the New Agreement until the nominal expiry date.[2] The Construction, Forestry and Maritime Employees Union (CFMEU) has negotiated this arrangement on behalf of the affected employees and it supports the application.

1. KMN Constructions has filed a Form F24A declaration made by Kenneth Curry (Director) on 17 April 2024. Mr Curry’s declaration outlined the process undertaken in relation to the vote to approve the termination of the Agreement. The material in this matter, and in the application for approval of the New Agreement, demonstrates the employees voted to approve the New Agreement, and to terminate the Agreement, on 15 April 2024. There were two employees covered by the Agreement and both of these employees cast a valid vote in relation to whether the Agreement should be terminated. The two affected employees voted in favour of terminating the Agreement. This is consistent with the voting process for the New Agreement whereby two employees cast a valid vote and both voted to approve the New Agreement. I am satisfied that the termination was agreed in accordance with s.221(1) and s.223(b) of the FW Act.

1. I am satisfied that there are no other reasonable grounds for believing that the affected employees have not agreed to the termination in accordance with s.223(c) of the FW Act.

1. There are no employee organisations covered by the Agreement whose views or circumstances I can take into account. I am satisfied it is appropriate to approve the termination in accordance with s.223(d) of the FW Act. I note the CFMEU supports the New Agreement replacing the Agreement after it has been approved by the Commission.

Conclusion

1. Section 223 of the FW Act states that the Commission must approve a valid application for the termination of an agreement if all the requirements in ss.223(a) to (d) are met. For the reasons set out above, I have determined that I am satisfied that all these requirements have been met.

1. I approve the termination of the Agreement and specify that the termination will take effect on 7 May 2024. This will ensure the Agreement remains in operation until the New Agreement commences operating on this same date.

COMMISSIONER

Determined on the papers.

[1] KMN Constructions Pty Ltd  [2023] FWCA 347.

[2] Section 58 of the FW Act.

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