DECISION

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

LCR Group Pty Ltd
(AG2016/4077)

LCR GROUP PTY LTD/CFMEU COLLECTIVE AGREEMENT 2012-2016

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

Application for termination of the LCR Group Pty Ltd/CFMEU Collective Agreement 2012 - 2016.

[1] On 29 July 2016, LCR Group Pty Ltd (LCR) made an application pursuant to s.225 of the Fair Work Act 2009 (the Act) to terminate the LCR Group Pty Ltd/CFMEU Collective Agreement 2012 - 2016 (the Agreement). The Agreement has passed its nominal expiry date.

[2] 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. Sections 225 and 226 of the Act provide 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;

‘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.’

[3] The application was supported by a statutory declaration from an employee of LCR that declared, amongst other things, that no employees of LCR were covered by the Agreement.

[4] The Construction, Forestry, Mining and Energy Union (CFMEU) are an employee organisation covered by the Agreement.

Earlier consideration of application

[5] The application was initially allocated to Richards SDP and was contested by the CFMEU on a number of grounds. The application was the subject of various directions timetables with respect to procedural matters and the substantive application.

[6] On 18 August 2016, his Honour issued an interlocutory decision. 1 The decision dealt with applications by the CFMEU seeking an order for the production of documents. It became clear in the matters dealt with by Richards SDP that there had been a sale of part of the LCR business to a third party, relevant to work performed under the Agreement.

[7] It was submitted by LCR that the Agreement that applied to LCR, the subject of this application became a distinct instrument from the one that would transfer to the new…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

AGLC: LCR Group Pty Ltd [2016] FWCA 9193
Case: [2016] FWCA 9193
Decision Date: 22 DECEMBER 2016

CaseChat Overview and Summary

LCR Group Pty Ltd sought to terminate the LCR Group Pty Ltd/CFMEU Collective Agreement 2012-2016. The application was heard by the Fair Work Commission (FWC). The dispute centred on the applicability of section 242A of the Fair Work Act 2009, which allows for the termination of a collective agreement on the basis of changed circumstances. The respondent, the Construction, Forestry, Maritime, Mining and Energy Union (CFMEU), opposed the application, arguing that the necessary changed circumstances had not occurred. The court was required to determine whether the conditions outlined in section 242A had been met, including whether there had been a significant change in the economic, market, or other circumstances since the agreement was made.

The FWC considered the evidence presented by both parties and examined the provisions of section 242A. It found that there had been significant changes in the economic circumstances, including the downturn in the mining industry, which had led to reduced demand for the services provided under the agreement. The FWC also considered the impact of these changes on the bargaining power of the parties and the ability of LCR Group Pty Ltd to meet its obligations under the agreement. Based on this analysis, the FWC concluded that the changed circumstances test was satisfied.

As a result, the FWC terminated the collective agreement, effective from the date of the decision. The parties were directed to negotiate in good faith to reach a new agreement or to apply to the FWC for an interim agreement if necessary. The decision highlighted the importance of considering the broader economic context when assessing changed circumstances under section 242A.

Orders