LCR Group Pty Ltd

[2016] FWCA 9112

[2016] FWCA 9112

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
(AG2016/4080)

LCR GROUP AND CFMEU UNION COLLECTIVE AGREEMENT 2011-2015

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

Application for termination of the LCR Group and CFMEU Union Collective Agreement 2011-2015.

[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 and CFMEU Union Collective Agreement 2011-2015 (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;

(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.’

[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 employer. His Honour dealt with this issue in the decision as follows:

[20] Section 313 of the FW Act does not suggest a transferable instrument is a new or distinct statutory instrument created in the transfer of business process. A transferable instrument applies to both the old and the new employer subject to the default coverage rules, which are set out in Part 2-1, Division 3 of the FW Act.

[21] It appears to me, therefore, that the effect of a transfer of business upon an enterprise agreement is to widen the coverage of the instrument to extend to the new employer and the transferring employees, preserving the same coverage rules in the process.

[8] Later, at paragraph [29], his Honour said:

‘…It appears to me that where a variation application is made or where a termination application is made (as in this case) there are multiple employers (the old employer and the new employer) and the employees covered by the agreement extend to the employees covered by the transferable instrument. Again, this is because the effect of the transfer of business on the original agreement is to extend its coverage or application to the new employer and the transferring employees. The same applies in respect of variations to enterprise agreements that have become transferable instruments as a consequence of a defined transfer of business process.’

Amended application

[9] The application was subsequently allocated to me for determination upon his Honour’s retirement from the Commission.

[10] On 12 October 2016, LCR sought leave to file an amended application. The amended application listed the Trustee for G A Caelli Discretionary Trust (General Cranes) as an additional employer that is covered by the Agreement.

[11] The material filed by LCR stated that on 7 November 2013, the Agreement became a transferrable instrument pursuant to s.313 of the Act by virtue of a sale of LCR’s tower cranes business and assets to General Cranes. Any employees employed under the Agreement were transferred to General Cranes at this time.

[12] It became evident that General Cranes had acquired a part of LCR’s business, and pursuant to the decision of Richards SDP, it was a relevant consideration that the views of the new employer, and the employees employed (if any) by General Cranes be considered.

[13] The CFMEU opposed the filing of the amended application. On 31 October 2016, I conducted a conference with the parties in relation to the amended application. The parties were advised that I would accept the amended application on the basis that it would be necessary to take into consideration the views of General Cranes, as an employer covered by the Agreement, with respect to the criteria set out in s.226 of the Act.

General Cranes’ various agreements

[14] The Commission was provided with a statement from Mr Guy Caelli, owner of General Cranes. Mr Caelli stated that General Cranes no longer employs anyone in New South Wales. I note that there is a separate related application filed by LCR in AG2016/4077 to terminate the LCR Group Pty Ltd/CFMEU Collective Agreement 2012-2016, which covered LCR and General Cranes employees in New South Wales.

[15] With respect to Queensland, and the Agreement the subject of this application, LCR submitted that employees of General Cranes in Queensland had subsequently become covered by a new agreement titled The Trustee for G A Caelli Discretionary Trust General Cranes and CFMEU Union Collective Agreement 2015 – 2019 (General Cranes Agreement), which came into effect on 3 May 2016.

[16] On 11 November 2016, a representative of General Cranes wrote to the Commission providing confirmation that its employees in Queensland were covered under the General Cranes Agreement. In response, my Associate wrote to General Cranes advising that they may wish to file material addressing the application. No further material was received from General Cranes.

Hearing not required

[17] The application was listed for hearing on 1 December 2016. On 30 November 2016, the CFMEU advised the Commission that it withdrew its objections to the termination of the Agreement and requested that the hearing scheduled for the following day be vacated.

[18] As the CFMEU, the only objectors to the termination, withdrew its objections, I am satisfied that the matter can be determined ‘on the papers’.

Consideration

[19] 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.

[20] As stated in the statutory declaration filed with the application, there are no employees of LCR covered by the Agreement. On the submission made by LCR as outlined at [15], I am satisfied that relevant employees of General Cranes who were once covered by the Agreement are now covered by the General Cranes Agreement.

[21] 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.

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

[23] The termination will take effect from 22 December 2016.

COMMISSIONER

 1   Construction, Forestry, Mining and Energy Union v LCR Group Pty Ltd[2016] FWC 5823.

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