LCR Group Pty Ltd

[2016] FWCA 7956

[2016] FWCA 7956

FAIR WORK COMMISSION

DECISION

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

LCR Group Pty Ltd
(AG2016/4316)

LCR GROUP PTY LTD MOBILE CRANE ENTERPRISE AGREEMENT 2011 (ACN: 095 626 798)

Building, metal and civil construction industries
COMMISSIONER HUNT	BRISBANE, 22 NOVEMBER 2016

Application for termination of the LCR Group Pty Ltd Mobile Crane Enterprise Agreement 2011.

[1] On 19 August 2016, LCR Group Pty Ltd (LCR) applied pursuant to s.225 of the Fair Work Act 2009 (the Act) to terminate the LCR Group Pty Ltd Mobile Crane Enterprise Agreement 2011 (the Agreement). The Agreement has passed its nominal expiry date.

The Original Application

[2] An earlier decision dated 25 October 2016 [[2016] FWC 7298] of the Fair Work Commission (the Commission) as currently constituted determined that allowable material in this application would be limited to:

(a) each document that was an exhibit or written submission in the proceedings of AG2016/3212 (Original Application);

(b) the transcript of the evidence and argument in the proceedings of the Original Application; and

(c) evidence and submissions in relation to the decision of Johns C in Project Coordination (Australia) Pty Ltd [2016] FWCA 5465 (Project Coordination) and its application to this application.

[3] On 26 October 2016, a Full Bench of the Commission heard an appeal against the decision in Project Coordination. The appeal was upheld, and the decision of Johns C quashed. The Full Bench stated that it will provide its reasons for the decision at a later date, and has remitted the application to Lawrence VP for determination.

[4] On the same date, LCR wrote to the Commission proposing to file submissions within seven days of the Full Bench publishing the reasons for the decision to allow the appeal.

[5] On 31 October 2016, my Associate wrote to the parties as follows:

‘The Commissioner notes that the Full Bench in the appeal in Project Coordination has quashed the decision of Commissioner Johns.

Accordingly, the matter having been remitted to DP Lawrence is simply a matter before the Commission, and in the Commissioner’s view, has no bearing on the current application by LCR.

It is the Commissioner’s view that it is unnecessary to await the reasons for the decision of the Full Bench, and the application currently before the Commission can be determined upon LCR filing and serving as directed.

Upon the material being filed, the Commissioner intends to reserve the decision in the current application. Please contact Chambers by no later than 4.00pm Wednesday, 2 November 2016 if any party wishes to be heard in relation to this proposed course of proceedings.’

[6] On 1 November 2016, LCR filed the material directed in [2] (a), (b), and (c). The material filed with respect to [2] (c) included submissions which, in part, covered the Project Coordination decision, together with a witness statement of Ms Candice Micarain, Human Resources Manager at LCR.

[7] Given my earlier decision only allowed for new evidence and submissions to be accepted with respect to the Project Coordination decision (now quashed), and the correspondence to the parties of 31 October 2016, in determining this application I have limited the material for consideration to that directed in [2](a) and (b).

[8] It is unnecessary to have regard for any new material. Accordingly, I have not had regard for Ms Micarain’s witness statement dated 1 November 2016, nor the submissions of LCR of the same date.

[9] LCR communicated that it was content for the application to be determined on the papers. The CFMEU did not seek a further hearing, and accordingly, there being no disputed facts between the parties, I have determined to issue this decision on the material before the Commission, limited to the material and evidence in the Original Application.

[10] During the hearing of the Original Application, LCR was granted leave pursuant to s.596 of the Act to be represented by Ms Theresa Moltoni of IRIQ Pty Ltd. The Construction, Forestry, Mining and Energy Union (the CFMEU) was represented by Mr Ashley Borg, Senior Industrial Officer of the CFMEU.

LCR Submissions in support of termination of the Agreement

[11] At the time the Agreement was approved by the Commission on 3 April 2012, the coverage of employees included LCR’s South-East depots at Hendra and Wacol, together with the South-West depots of Chinchilla and Roma.

[12] Presently no employees are employed at LCR’s South-East Queensland depots, and a new agreement, the ‘2016 Agreement’ has been approved by the Commission and taken effect on 18 May 2016 with respect to the two South-West Queensland depots. 1

[13] It is LCR’s submission that since 18 May 2016, all employees that were covered by the Agreement have been covered by the 2016 Agreement. Accordingly, no employees have been covered by the Agreement since 18 May 2016.

[14] LCR submitted that there are no immediate plans to employ workers outside of the scope of the 2016 Agreement who would otherwise be covered by the Agreement. If, in the future, LCR did employ employees who would otherwise have been covered by the Agreement, their minimum conditions would be in accordance with the Mobile Crane Hiring Award 2010 and the National Employment Standards.

[15] The effect of termination of the Agreement is that if LCR decided to employ employees at the Hendra or Wacol depots, it would provide for a ‘fresh start’. 2

[16] If future relevant employees are employed by LCR, bargaining for a new agreement would remain available. It was put by LCR:

‘The bargaining parties in their bargaining will continue to be required to meet the good faith bargaining requirements. 3 Moreover the Union(s) and employees “will have available to them the full arsenal of tools under the Act to exert legitimate industrial pressure” on LCR to bargain and to reach agreement.4

The section is quite clear that it is only current employees or unions whose views or likely impact are considered. The language of the Act refers to employees covered by the Agreement, that is, it has a present or contemporaneous meaning. It does not envisage future employees who may, or may not, be covered by the Agreement, and there could be severely adverse impacts if it did.’  5

[17] It is Ms Micarain’s evidence that labour hire is being utilised at the South-East Queensland depots, and not direct employees of LCR. 6

[18] LCR submitted that it was not contrary to the public interest for the Commission to approve the termination of the Agreement.

Evidence of the CFMEU

[19] Mr Shaun Desmond, Organiser gave evidence for the CFMEU. Mr Desmond stated that in May 2015, LCR put a proposed variation to the Agreement to a vote of employees at the four relevant depots then covered by the Agreement. The proposed variation included a wage freeze in the final year of the Agreement. The variation was not approved by a majority of the employees.

[20] In early June 2015, a majority of LCR’s employees covered by the Agreement were made redundant. Only a small number of employees working out of the South-West depots continued in employment.

[21] A further vote was then conducted by LCR seeking to vary the Agreement, with the remaining employees approving the variation. It is Mr Desmond’s contention that employees were coerced to vote for the variation. The variation approval came before Richards SDP in proceedings that were protracted. His Honour approved the variation on 15 March 2016 and backdated the variation to 28 June 2015. 7

[22] With respect to the South-West depots, the CFMEU was unaware of bargaining between LCR and its employees during early 2016. The CFMEU submits it was not invited to bargain on behalf of its members in negotiations for the 2016 Agreement.

[23] Mr Desmond’s evidence is that the CFMEU would be impacted in a number of ways Reference was made to the following clauses of the Agreement:

‘Clause 3.7: Where there is a need for supplementary labour to meet temporary peak work requirements, such labour may be accessed from bona fide labour hire companies. Supplementary labour is defined as temporary top up labour designed to meet short situations such as absence due to sick leave, annual leave and short time work peaks. The company undertakes not to use supplementary labour in any position on site for a period of more than four weeks. Any departure from this maximum period shall require the consent of the union.’

Clause 11.2.12: The Company will allow the Union to promote membership of the Union.

Clause 11.2.11: ‘The Company will inform the Union of the induction for all new employees.’

[24] It is Mr Desmond’s evidence that if the Agreement is terminated by the Commission the CFMEU would not be able to talk to members. 8 I understand this to mean to future employees in the Hendra and Wacol depots who become members of the CFMEU.

[25] Mr Desmond stated that a company called Revol has been contracted by LCR as a supplier of labour, and also as a subcontractor. Revol provides small cranes, including a crane driver and dogman. Where, however, the larger cranes owned by LCR are operated, Revol provides labour only.

Closing submissions of LCR

[26] It is LCR’s contention that pursuant to s.226 of the Act, the Commission must terminate an enterprise agreement if application is made under s.225, and the Commission is satisfied that it is not contrary to the public interest to do so. LCR relies on the decision in Aurizon 9, and in particular, paragraphs 138, 139 and 142.

[27] In relation to the views of the employees, LCR submitted that given there are no employees covered by the Agreement, there are no views to be considered.

[28] In relation to the views of the employer, LCR submitted that given LCR is the employer and the applicant in these proceedings, the employer’s views are known.

[29] LCR referred to the evidence given by Mr Desmond, that if the Agreement were to be terminated, the impact to the CFMEU would be that they would not have the right to represent members or potential members; they will not have the right to talk to workers who might want to join the union. It is LCR’s submissions that the Act provides for comprehensive right of entry entitlements for authorised officers of the CFMEU to come to site upon the giving of 24 hours’ notice. Authorised officers of the CFMEU could speak with prospective members if the prospective members are employed pursuant to the CFMEU rules. Further, the CFMEU could represent employees relevant to a dispute resolution clause within the modern award. 10

[30] LCR submitted that there is nothing in the Agreement that prevents LCR from contracting with a subcontractor. While the Agreement currently limits the use of labour hire on site, the use of subcontractors is not limited.

Closing submissions of the CFMEU

[31] In relation to the public interest consideration, it is the CFMEU’s submission that the variation to the Agreement was made by employees in June 2015 only after a number of employees had been made redundant, and the numbers of employees eligible to vote reduced. It is submitted that LCR then coerced the remaining employees to approve the variation.

[32] Given that the Commission approved the variation in March 2016, the CFMEU submitted that it does not make any sense for LCR to now seek to terminate the Agreement given that LCR achieved the outcome they had sought. 11

[33] The CFMEU submitted that LCR, in not informing the CFMEU of its intention to bargain with respect to the South-West depots in 2016, has undermined an ‘established bargain’. By now asserting that there are no employees at the South-East depots, and having the 2016 Agreement cover the South-West depots, the method of getting to the position of there being no employees now covered by the Agreement falls foul of the public interest test. 12

[34] Having regard to the circumstances of the CFMEU, including the likely effect on the CFMEU, it was submitted that if the Agreement is terminated by the Commission, the CFMEU would lose the rights contained within this clause. It was submitted that there would then be a predisposition by LCR to use labour hire as opposed to direct employment.

[35] I questioned Mr Borg as to whether clause 3.7 of the Agreement only became effective where there are absences of LCR employees due to sick leave, annual leave and short-term work peaks; there being no direct employees, how should clause 3.7 be constructed? Mr Borg responded that if there was an instance of labour hire being used to replace direct employees, there would be a prima facie contravention of the Agreement in default of there being consent of the CFMEU for the use of that labour hire. 13

[36] It is the CFMEU’s contention that clause 3.7 has on-going importance, and that is why it is necessary to ensure the Agreement is not terminated.

[37] With respect to the clauses within the Agreement to allow for the CFMEU to meet with new employees and promote union membership, if the Agreement is terminated by the Commission, this would represent a significant loss to the CFMEU. This would affect recruitment into the union, and affect the interests of the CFMEU members ‘overall’. 14

[38] It is submitted that the mere convenience put by LCR that the termination of the Agreement would allow it a ‘fresh start’ does not outweigh the detriment to the CFMEU of the loss of rights that would be dissolved on termination. There needs to be a balancing exercise. The evidence of LCR is that the termination of the Agreement would be helpful. The evidence of the CFMEU is that it would be a significant loss of access to potential members, together with no ability to limit LCR’s use of supplementary labour.

Legislative scheme

[39] Subdivision D of Division 7 of Part 2-4 of the Act provides for the termination of an enterprise agreement after its nominal expiry date. This subdivision consists of ss. 225, 226 and 227, the terms of which are 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;

(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.

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.’

[40] The Full Bench in Aurizon 15considered the issue of public interest in the context of s.226(a) of the Act, making the following observations:

‘[129] Section 226(a) requires a consideration of whether termination of the agreements is not contrary to the public interest. It seems to us that a consideration of the public interest will involve something that is distinct from the interests of the persons and bodies covered by the agreements. This distinction seems to be reflected in the structure of s. 226. The question of how the public interest is to be assessed was considered by a Full Bench of the Australian Industrial Relations Commission in Re Kellogg Brown and Root, Bass Strait (Esso) Onshore/Offshore Facilities Certified Agreement 2000. The decision in Kellogg Brown concerned an application to terminate a certified agreement pursuant to s. 170MH of the WR Act. The Full Bench observed:

“The absence of any reference to the interests of the negotiating parties in s.170MH(3) is significant. It follows that the views of persons bound by the agreement may be relevant to the exercise of the discretion if they shed light upon the effect of termination on the public interest, but they should not be given any independent weight. To do so would be to import into the application of the section something which on its proper construction it does not include. The notion of public interest refers to matters that might affect the public as a whole such as the achievement or otherwise of the various objects of the Act, employment levels, inflation, and the maintenance of proper industrial standards. An example of something in the last category may be a case in which there was no applicable award and the termination of the agreement would lead to an absence of award coverage for the employees. While the content of the notion of public interest cannot be precisely defined, it is distinct in nature from the interests of the parties. And although the public interest and the interests of the parties may be simultaneously affected, that fact does not lessen the distinction between them.”’

[41] Applying the decision in Aurizon, in Latrobe Retirement Villages Services Association Inc T/A Latrobe Retirement Villages, 16 Deputy President Gostencnik summarised the task to be performed under s.226(b) as follows:

‘[22] All of the circumstances also need to be taken into account in considering whether termination of the Agreement is appropriate. In particular, the views of employers, employees and employee organisations covered by the Agreement, their circumstances, and the impact of termination need to be taken into account. The requirement in s.226(b) to take into account all of the circumstances, including those set out in s.226(b)(i) and (ii), is a requirement to take the matters into account and to give them due weight in assessing whether it is appropriate to terminate an enterprise agreement. In assessing appropriateness by taking into account all of the circumstances, it is appropriate to approach the task by reference to the construction of s.226 and the contextual matters that bear upon that construction as well as giving specific consideration to the matters identified in s.226(b)(i) and (ii).’

Consideration

Public interest consideration

[42] It was put by the CFMEU that the considerations with respect to the public interest relate to three matters:

(a) the alleged coercion of employees at the Chincilla and Roma depots to approve a variation of the Agreement in the absence of employees at the Hendra and Wacol depots; and

(b) the variation having been approved by the Commission, there is no sense to then shortly thereafter seek termination of the Agreement; and

(c) the co-ordination by LCR to make employees redundant at Hendra and Wacol, and have employees at Chinchilla and Roma collectively vote to accept an agreement in the absence of bargaining including the CFMEU on behalf of members undermines the established bargain that the Agreement represents.

[43] The application to vary the Agreement was determined before Richards SDP in March 2016. In November 2015, his Honour had determined the objection of the CFMEU in relation to the suggestion that LCR had engaged in inappropriate behaviour by making employees at the Hendra and Wacol depots redundant in an effort to reduce the number of eligible employees to vote on a variation to the Agreement. 17 His Honour found:

‘[117] There is insufficient evidence for me to conclude that the employer’s conduct in some manner caused the ballot not to be a reflection of the employees’ genuine approval. The only evidence that I have before me that is of a direct nature is that of Mr Henry and Mr Cahill. Mr Henry forthrightly denied the claims made about him by the CFMEU (to the point that he had in some manner coerced or intimidated the relevant employees to vote in support of the ballot). Mr Cahill, one of the employees to whom Mr Henry was said to have coerced prior to the ballot, rejected the CFMEU contention that Mr Henry had made any comments to him of the kind alleged by the CFMEU.

[118] The evidentiary case supports a finding that the employer did not interfere unreasonably in the ballot process and that the employer reasonably represented its commercial circumstances to its employees.’

[44] It is not necessary for the Commission as currently constituted to re-open what was decided by Richards SDP, nor is it appropriate to do so. The submission that LCR’s conduct in having employees at Chincilla and Roma vote to approve a variation to the Agreement amounted to coercion has not been accepted by the Commission. It cannot then be properly asserted that the alleged conduct results in it being contrary to the public interest in consideration of this application.

[45] The submission that the variation to the Agreement having been approved in March 2016 makes the application to terminate the Agreement shortly thereafter senseless is not sound. While I accept that there were no employees at the Hendra and Wacol sites at the time the variation was approved by the Commission, it does not correspond that LCR should be precluded from making the application at the point in time that it did. This is particularly so where the variation application was subject to a protracted contest in the Commission. The variation application was made on 23 June 2015 and was approved by Richards SDP on 15 March 2016.

[46] In the approval decision of the variation, his Honour gave consideration to the delays caused by the CFMEU in deciding that the variation should act retrospectively, and stated:

‘I note that the approval process has been long delayed owing to various applications and objections to the application. As set out in my prior decision, I dismissed the larger body of objections pressed by the CFMEU which were dealt with over some time. Further, the employer and its employees agreed to vary their agreement for the particular purpose at an earlier time and applied to the Commission to give effect to that agreement.’ 18

[47] The CFMEU has not properly made out how the termination of the Agreement would be contrary to the public interest on the basis that the purported outcome was achieved by the act of the variation of the Agreement. No information was put before the Commission, other than that it does not make sense to the CFMEU. 19

[48] With regard to the submissions that the conduct of LCR in having the 2016 Agreement voted and approved undermines an established bargain, I accept that this is a relevant consideration to determine the public interest considerations in this application.

[49] I am satisfied on the evidence before me that there are no employees employed pursuant to the Agreement. LCR does not employ employees at the Hendra and Wacol depots who are covered by the Agreement. LCR employees at the Chinchilla and Roma depots are employed pursuant to the 2016 Agreement.

[50] While Mr Borg submitted that the first the CFMEU had become aware of the 2016 Agreement was during the proceedings to approve the termination of the Agreement, there was no suggestion that the CFMEU had sought to appeal the decision of the Commission to approve the 2016 Agreement.

[51] Whilst I accept that it might be a consideration to the public interest test, in all of the circumstances, I am not satisfied that LCR’s conduct in bargaining for the 2016 Agreement, rendering the Hendra and Wacol depots with an agreement having reached its nominal expiry, results in it being contrary to the public interest to terminate the Agreement.

[52] If the CFMEU had been involved in the negotiations of the 2016 Agreement, there is no evidence before the Commission, nor could there be as to what might have eventuated with respect to the scope of that Agreement. I accept that the effect of the 2016 Agreement is that the Hendra and Wacol depots have an expired Agreement and no employees presently working there. The effect of a termination of this Agreement is that if future employees are employed they will fall back to the conditions within the modern award and those contained within the Act.

[53] I accept that the effect of the 2016 Agreement is that it does displace an established bargain. So too does every termination of an expired agreement. I do not, however, accept that the conduct of LCR is an attempt to ‘undermine’ an established bargain.

[54] It was not put by the CFMEU that if it had been involved in the negotiation of the 2016 Agreement it would categorically have ensured that the 2016 Agreement covered the Hendra and Wacol depots in the absence of any LCR employees.

[55] If in future, LCR employs employees out of the Hendra and Wacol depots, and the CFMEU is eligible to represent the interests of such employees, it can do so. It can do so pursuant to the rights to represent its members contained in the Act.

[56] Section 176(1)(b) of the Act bestows on the CFMEU a right to be a bargaining representative if at least one employee to be covered by a proposed agreement is a member of the CFMEU, unless the employee has appointed another person to be their bargaining representative, or revoked the CFMEU as their bargaining representative.

[57] I was not taken to any provision within the Agreement that provided for the renegotiation of a new agreement, entitling the CFMEU to any greater rights to negotiate a new agreement than those contained within the Act. Accordingly, there does not appear to me to be any reduced entitlement to represent members if they are so employed at the Hendra and Wacol depots.

[58] For the reasons above, with respect to the submissions on the public interest considerations, I am satisfied that it is not contrary to the public interest to termination the Agreement.

[59] I am mindful however, that during the oral closing submissions of the parties, it may not have been clearly articulated which submissions related solely to the public interest considerations in s.226(a), and the considerations required in s.226(b). Where I have dealt with the specific issues and clauses below, I have given consideration to both requirements of ss. 226(a) and (b).

Purported clause 11.2.11

[60] Attached to Mr Desmond’s witness statement is a copy of the Agreement. It was not immediately apparent that the copy attached was the Agreement, as varied by SDP Richards on 15 March 2016. There was some discussion between myself and Mr Borg as to the correct copy of the Agreement, and the one shown to Mr Desmond in examination-in-chief. 20

[61] Mr Desmond was asked by Mr Borg his views on the purported clause 11.2.11 of the Agreement, that being the obligation on LCR to inform the CFMEU of inductions LCR held for all new employees. Mr Desmond was incorrectly shown by Mr Borg the earlier version of the Agreement containing that clause.

[62] With the benefit of having the two versions of the Agreement before me, I am satisfied that the varied Agreement does not contain clause 11.2.11. Accordingly, there is no current obligation on LCR to inform the CFMEU of inductions for all new employees. I accept that this was simply an error on the CFMEU’s behalf during the proceedings.

Clause 11.2.12

[63] In considering clause 11.2.12, because of the potential meshing of the arguments put in closing submissions, and for the sake of thoroughness, I have considered clause 11.2.12 in the Agreement with respect to s.226(a) and (b) of the Act.

[64] Clause 11.2.12 has survived the variation to the Agreement, and the effect of this provision is the CFMEU is afforded a right to promote membership of the CFMEU. This right would be extinguished if the Agreement is terminated.

[65] I have determined that it is not contrary to the public interest to approve the termination of the Agreement on the loss to the CFMEU of this current right. In explaining the reasons for this finding below, I have also separately had regard to the appropriateness of terminating the Agreement pursuant to s.226(b), having considered the views of the CFMEU, including the circumstances of the CFMEU and the likely effect the loss of this right would have on the CFMEU.

[66] An employer may, during the nominal term of an agreement agree to allow for the promotion to eligible members of a union party to the agreement. It does not, however, beholden an employer to that position forevermore. In the circumstances before me, I am satisfied that LCR should not be prevented from having the Agreement terminated because of a clause entitling the CFMEU the right to promote its services to future employees.

[67] I am satisfied that there are suitable avenues available to the CFMEU to promote the benefits of membership to future employees of LCR without the express consent of LCR to ‘allow’ the CFMEU to promote membership. Section 484 of the Act provides as follows:

‘484 Entry to hold discussions

A permit holder may enter premises for the purposes of holding discussions with one or more employees or TCF award workers:

(a) who perform work on the premises; and

(b) whose industrial interests the permit holder’s organisation is entitled to represent; and

(c) who wish to participate in those discussions.’

[68] The potential loss to the CFMEU and the audience of potential members is that future eligible members of the CFMEU employed by LCR would be those who “wish to participate in those discussions”. Mr Desmond put it that the CFMEU would “not be able to talk to members”. I am not satisfied that there is a significant loss to the CFMEU, if there is any loss at all. I do not accept that the CFMEU would not be able to talk to members. The right of entry provisions within the Act would allow the CFMEU to speak with eligible members, if they were so interested to participate in discussions.

[69] The loss of clause 11.2.11 to the CFMEU is not contrary to the public interest because the result of the termination of the Agreement is the fall-back position of statute. It would not be in the public interest for the Commission to decline applications for termination of agreements only on the basis of unions retaining rights greater than those contained within the Act.

Clause 3.7

[70] In the same way that I have considered clause 11.2.12 at [62], I have considered clause 3.7 in the Agreement with respect to s.226(a) and (b) of the Act.

[71] It is Mr Desmond’s evidence that if the Agreement is terminated the effect on the CFMEU is that LCR will have subcontractors perform the work without consultation with the CFMEU. 21

[72] On the evidence before the Commission, LCR currently has subcontractors performing work at least at the Wacol depot. It does so without any consultation with the CFMEU. Some of the work is performed by a subcontractor providing both cranes and labour. At other times, the subcontractor’s employees perform the work utilising the cranes owned by LCR.

[73] Clause 3.7 defines ‘supplementary labour’ as:

‘temporary “top up” labour designed to met (sic) short situations such as absence due to sick leave, annual leave and short time work peaks.’

[74] The clause then further states that LCR undertakes not to use supplementary labour in any position on site for a period of more than four weeks. Any departure from this maximum period shall require the consent of the union. Notably, the clause states that labour may be accessed from bona fide labour hire companies.

[75] There appears to me to be a different concern held by Mr Desmond with respect to LCR’s use of subcontractors if the Agreement is terminated, as opposed to Mr Borg’s concern on the use of labour hire employees. In an exchange with me during the hearing, Mr Borg was clear that the CFMEU’s concern is in relation to the use of labour hire employees, not subcontracting where the subcontractor also brings with it equipment. 22

[76] I am satisfied in accordance with the terms of the Agreement, there is currently no restriction on LCR on engaging subcontractors to perform work. Although it is not necessary to find so, if it was a determining issue, I would also find that the use of subcontractors providing only ‘labour’ at the Wacol or Hendry depots where there are no LCR employees would not enliven clause 3.7 of the Agreement.

[77] I would find that way because in the absence of LCR employees at the two depots, I do not agree that labour hire employees could be properly defined as “top up” labour designed to meet shortage situations such as absence due to sick leave, annual leave and short term work peaks as specified within the clause. If there are no LCR employees performing the work, there can be no absences due to sick leave, annual leave, or additional employees required in addition to LCR employees to cover short term work peaks.

[78] Given that it is not necessary for me to make a finding in the above issue, I am left to determine the views of the CFMEU and the impact a termination of the Agreement might have on the CFMEU with respect to clause 3.7.

[79] It was put by the CFMEU as follows:

‘….what we are saying is that if this agreement were to be terminated, the benefits to both employees who would otherwise be directly employed by the employer and the union would be adversely affected to a substantial degree.’ 23

[80] Essentially, what I understand the CFMEU is submitting is that the Commission should not terminate the Agreement because it would result in LCR engaging labour hire employees to perform the work, whereas if the Agreement remained in operation, LCR would be required to directly employ employees.

[81] It is not necessary to have regard to the benefits of future employees of LCR who might, in some months or years be covered by this Agreement. It is only necessary to have regard to the views of current employees, of which there are none.

[82] I have determined that it is not contrary to the public interest to approve the termination of the Agreement on the basis that the CFMEU would no longer have any right to provide consent as to LCR’s use of supplementary labour (as defined in clause 3.7) beyond a period of four weeks. In explaining the reasons for this finding below, I have also separately had regard to the appropriateness of terminating the Agreement having considered the views of the CFMEU, including the circumstances of the CFMEU and the likely effect the loss of this right would have on the CFMEU.

[83] An employer may, during the nominal term of an agreement agree to restrict the use of supplementary labour. It does not, however, beholden an employer to that position forevermore. In the circumstances before me, I am satisfied that LCR should not be prevented from having the Agreement terminated because of a clause requiring the CFMEU’s consent for supplementary labour beyond a period of four weeks.

[84] This is so because currently no LCR employees are employed pursuant to the Agreement. As I understand it, clause 3.7 is primarily in place to protect work flowing from LCR employees to labour hire employees beyond what the parties agreed at the time of making the Agreement was a reasonable period of time. It is illogical to keep this requirement in place when there are no direct LCR employees to protect, and on the evidence before the Commission, none in the foreseeable future.

[85] While I have had regard to the views of the CFMEU and the impact the loss of clause 3.7 will have on them, I do not accept that the circumstances and likely effect a termination of the Agreement will have on the CFMEU will be of any substantial or significant detriment. If at any future time LCR does employ employees at the Wacol and Hendry depots who could become members of the CFMEU, there is the opportunity to enterprise bargain.

No predisposition against the termination of an agreement

[86] I have had regard for the following in the Aurizon decision:

‘[142] In our view, to approach the construction of s. 226 in the manner suggested in Tahmoor Coal, particularly at [55] results in a predisposition against the termination of an enterprise agreement that has passed its nominal expiry date. There is no indication in the section or elsewhere in the Act that this should be the case. Section 226 operates according to its terms. Its application is guided by the language and purpose of the provision by reference to the language and purpose of the Act as a whole so that the meaning and effect of the provision is properly understood.’ [endnotes omitted]

[87] It was submitted by the CFMEU that absent any evidence of LCR as to the effect on LCR if the Agreement is not terminated, the termination should not be made. 24

[88] There is evidence from LCR as to the effect the termination of the Agreement would have on it, and the reasons why it made the application. The evidence is not extensive; however it is clear why LCR wishes to have the Agreement terminated, particularly as there are no employees presently employed pursuant to the Agreement, and unlikely to be in the foreseeable future.

Conclusion

[89] In regard to the balancing act that the Commission should have, as urged by the CFMEU, for the reasons above I am satisfied that it is not contrary to the public interest to terminate the Agreement.

[90] For the reasons set out above, I consider it is appropriate to terminate the Agreement taking into account all of the circumstances, including the views of LCR and the CFMEU, including the likely effect that the termination will have on each of them. I determine that with respect to the loss of clause 3.7 and clause 11.2.12, the balancing act weighs in favour of LCR and its desire to be free of an agreement that has now expired, no longer employs employees under, and no longer wishes to be bound by.

[91] I approve the termination of the Agreement effective from 22 November 2016.

COMMISSIONER

 1   LCR Group Pty Ltd (South West Queensland) Mobile Crane Enterprise Agreement 2016.

 2   Statutory Declaration of Ms Candice Micairan at 2.3(2).

 3   Aurizon Operations Limited and others [2015] FWCFB 540 at [159].

 4 Ibid at [160].

 5   Construction, Forestry, Mining and Energy Union v John Holland Pty Ltd [2015] FCAFC 16.

 6   PN138.

 7 Witness statement of Shaun Desmond at [19].

 8   PN282.

 9   Aurizon Operations Limited; Aurizon Network Pty Ltd; Australia Eastern Railroad Pty Ltd [2015] FWCFB 540.

 10   PN328.

 11   PN345.

 12   PN348.

 13   PN365.

 14   PN369.

 15   Aurizon Operations Limited; Aurizon Network Pty Ltd; Australia Eastern Railroad Pty Ltd [2015] FWCFB 540.

 16   [2016] FWCA 1906.

 17   LCR Group Pty Ltd [2015] FWC 7311.

 18   LCR Group Pty Ltd [2016] FWCA 1633 at [15].

 19   PN345.

 20   PN265.

 21   PN271.

 22   PN355.

 23   PN366.

 24   PN396.

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