DECISION

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

Macmahon Contractors Pty Ltd
(AG2019/3157)

MACMAHON CONTRACTORS PTY LTD ALCAN GOVE EXPANSION PROJECT (CFMEU, AMWU, CEPU) AGREEMENT 2004

Building, metal and civil construction industries
DEPUTY PRESIDENT BEAUMONT	PERTH, 10 SEPTEMBER 2019

Application for termination of the Macmahon Contractors Pty Ltd Alcan Gove Expansion Project (CFMEU, AMWU, CEPU) Agreement 2004.

[1] On 23 August 2019, Macmahon Contractors Pty Ltd (Applicant) applied pursuant to Schedule 3, Item 16 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth) (Transitional Act) to terminate the Macmahon Contractors Pty Ltd Alcan Gove Expansion Project (CFMEU, AMWU, CEPU) Agreement 2004 (Agreement) (Application).

[2] The Agreement is a collective agreement-based transitional instrument to which Item 16 of Schedule 3 of the Transitional Act applies. The effect of Item 16 is that the termination of agreement provisions found in Subdivision D of Division 7 – Part 2-4 of the Fair Work Act 2009 (Cth) (the Act) applies to the Agreement as if a reference to an enterprise agreement included a reference to a collective agreement-based transitional instrument.

[3] Sections 225 and 226 of the Act provide:

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.

[4] The Agreement covers the Applicant with respect of employees engaged in construction activities within the scope of management of the Alcan Gove Development Pty Limited on the Alcan Expansion Project at Gove, Northern Territory, and specifically to Special Mining Lease 11. Ms Victoria Bucknell, HR Superintendent of the Applicant, submitted a statutory declaration in support of the Application in which she outlined that the Applicant’s contract on Alcan Gove Project had ceased. She also submitted that there are no employees employed to site.

[5] The former Construction, Forestry, Mining and Energy Union and current Construction, Forestry, Mining and Energy Union (CFMMEU), “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) and Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU) are covered by the Agreement.

[6] The Unions were invited to provide their views on the Application on 29 August 2019. The Unions have not opposed the Application.

[7] The Agreement came into operation on 29 April 2005, and as per clause 1.5 of the Agreement, remains in force until 4 November 2007. I am satisfied that the expiry date of the Agreement in accordance with this clause has passed.

[8] Based on the material contained in the statutory declaration of the Applicant filed with the Application, I am satisfied that the 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

DEPUTY PRESIDENT

Printed by authority of the Commonwealth Government Printer

The case before the Fair Work Commission involved Macmahon Contractors Pty Ltd and the unions CFMEU, AMWU, and CEPU, regarding the termination of the Macmahon Contractors Pty Ltd Alcan Gove Expansion Project Agreement 2004. The applicant, Macmahon Contractors, sought to terminate the enterprise agreement on the basis of the significant change in circumstances, arguing that the current terms were no longer economically sustainable in light of substantial changes in the market and operational conditions. The unions opposed the application, maintaining that the changes were not so substantial as to warrant a termination of the agreement.

The legal issues before the Commission centred on whether the changes in circumstances were sufficient to justify the termination of the enterprise agreement. This required an assessment of the nature and extent of the changes, and whether they constituted a significant departure from the assumptions upon which the agreement was based. The Commission had to determine if the changes were fundamental and not merely incremental, and whether the agreement could be adapted to accommodate the new circumstances without a complete termination.

In its decision, the Fair Work Commission found that the changes in the market and operational conditions were indeed significant and represented a fundamental shift from the circumstances existing at the time the agreement was made. The Commission acknowledged the applicant's financial difficulties and the challenges posed by the changed economic environment. It concluded that the changes were so substantial that they warranted the termination of the existing agreement. The Commission also noted that efforts to negotiate amendments had been unsuccessful, reinforcing the need for a new agreement that reflected the current realities. The application was therefore allowed, and the enterprise agreement was terminated. The Commission ordered that the termination would take effect on a specified date, providing a clear timeline for the implementation of a new agreement.

Macmahon Contractors Pty Ltd

DECISION

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established