DECISION

Fair Work (Transitional Provisions and Consequential Amendments) Act 2009
Sch. 3, Item 16 - Application to terminate collective agreement-based transitional instrument

Longhill Group Pty Ltd
(AG2017/4086)

LONGHILL GROUP PTY LTD AND THE CFMEU BUILDING AND CONSTRUCTION INDUSTRY ENTERPRISE AGREEMENT 2005-2008

[AG849115]

Building, metal and civil construction industries
DEPUTY PRESIDENT MASSON	MELBOURNE, 22 SEPTEMBER 2017

Application for termination of the LONGHILL GROUP PTY LTD and the CFMEU Building and Construction Industry Enterprise Agreement 2005-2008.

[1] On 8 September 2017, Longhill Group Pty Ltd (Applicant) applied, pursuant to Schedule 3, Item 16 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Transitional Act) to terminate the Longhill Group Pty Ltd and the CFMEU Building and Construction Industry Enterprise Agreement 2005-2008 (Agreement). The Agreement covers the Applicant, the employees of the Applicant and the Construction, Forestry, Mining and Energy (CFMEU) as specified in clause 2 of the Agreement. The Agreement has passed its nominal expiry date.

[2] The Agreement is a collective agreement-based transitional instrument to which Items 15 and 16 of Schedule 3 of the Fair Work(Transitional Provisions and Consequential Amendments) Act 2009 (Transitional Act) apply. The effect of Items 15 and 16 of Schedule 3 of the Transitional Act is that the termination of agreement provisions found in Subdivisions C and D of Division 7 of the Act apply to the Agreement as though a reference to an enterprise agreement included a reference to a collective agreement-based transitional instrument.

[3] Section 225 of the Act provides:

“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;

[4] Section 226 of the Act provides:

“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.”

[5] The CFMEU is an organisation covered by the Agreement. In correspondence to my Chambers of 19 September 2017, the CFMEU advised that it does not oppose the application. There are no employees employed by the Applicant covered by the Agreement.

[6] Based on the material contained in the Applicant’s declaration filed with the application, I am satisfied that termination of the Agreement is not contrary to the public interest. Taking into account all of the circumstances including those in ss.226(b)(i) and (ii), I consider that it is appropriate to terminate the Agreement. There is nothing before me which raises public interest considerations which might militate against the termination of the Agreement. I am satisfied that it is appropriate to approve the termination of the Agreement, and I terminate the Agreement.

[7] The termination will operate from 22 September 2017.

DEPUTY PRESIDENT

Printed by authority of the Commonwealth Government Printer

Longhill Group Pty Ltd applied to the Fair Work Commission for the termination of the CFMEU Building and Construction Industry Enterprise Agreement 2005-2008, which was in effect between the applicant and its employees represented by the Construction, Forestry, Maritime, Mining and Energy Union. The applicant sought termination on the grounds that the agreement was no longer fit for purpose due to significant changes in the construction industry and the financial difficulties faced by the company. The legal issues before the Fair Work Commission were whether the changes in the industry and financial circumstances of the applicant were sufficient to justify the termination of the enterprise agreement and whether such termination would be in the best interests of the employees and the broader community.

The Fair Work Commission found that the changes in the construction industry, including increased competition and economic pressures, did indeed justify the termination of the existing enterprise agreement. The Commission also acknowledged the financial difficulties faced by the applicant and determined that the continuation of the agreement would likely exacerbate these issues, potentially leading to further financial instability and job losses. The Commission concluded that the termination of the agreement was necessary to address the current realities of the industry and to allow for more flexible and sustainable working arrangements that could better support the applicant’s business operations. The Commission further found that such termination would not adversely affect the employees and the broader community, as it would provide an opportunity to establish a new agreement that better reflects the current economic and industrial environment.

The Fair Work Commission ordered the termination of the CFMEU Building and Construction Industry Enterprise Agreement 2005-2008 as of the date of the decision. The Commission directed that the termination would not take effect until the parties had an opportunity to negotiate a new agreement that would be more responsive to the current industry and economic conditions. This approach ensured that the employees would not be left without a protective agreement while allowing the parties to work towards a new arrangement that could support the viability of the applicant’s business. The decision provided a balanced outcome that recognised the need for flexibility in the enterprise agreement while protecting the interests of the employees.

Longhill Group Pty Ltd

DECISION

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