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
(AG2019/3142)

MACMAHON CIVIL CONSTRUCTION COLLECTIVE AGREEMENT 2008

Building, metal and civil construction industries
DEPUTY PRESIDENT BEAUMONT	PERTH, 5 SEPTEMBER 2019

Application for termination of the Macmahon Civil Construction Collective Agreement 2008.

[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 Civil Construction Collective Agreement 2008 (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 all employees of the Applicant carrying out civil construction work and associated activities within the Northern Territory, including off shore islands and ‘Off Shore Territories’. The Agreement also covers employees who are temporarily or permanently assigned to other projects outside of the Northern Territory, which are under direct management of the Macmahon Construction Northern Territory Regional Office. Ms Victoria Bucknell, HR Superintendent of the Applicant, submitted a statutory declaration in support of the Application in which she outlined that the Applicant no longer has a civil contracting business division and is therefore no longer in the business of providing these services. Ms Bucknell also submitted that there were no employees employed under the Agreement.

[5] No employee organisations are covered by the Agreement.

[6] I note that this Agreement was approved by the former Workplace Authority under the Workplace Relations Act 1996 (WR Act). The Actcame into force, and superseded the WR Act on 1 July 2009. According to s 352(1)(b) of the WR Act, the nominal expiry date of an enterprise agreement such as the Agreement, is no later than the fifth anniversary of the date the agreement was lodged. Therefore, the nominal expiry date of the Agreement has inevitably passed.

[7] 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

Macmahon Contractors Pty Ltd recently brought an application before the Fair Work Commission to terminate the Macmahon Civil Construction Collective Agreement 2008. The dispute arose from an allegation that the continued existence of the agreement was preventing the company from effectively managing its business. The Commission was tasked with determining whether the agreement should be terminated under the Fair Work Act 2009.

The central legal issue before the Commission was whether the agreement was indeed an impediment to the efficient conduct of the applicant's business. The applicant argued that the agreement's terms and conditions were no longer aligned with the operational needs of the business, particularly in the context of changing industry standards and economic pressures. The Commission had to balance the applicant's right to manage its business against the employees' rights to fair terms and conditions of employment.

In reaching its decision, the Commission considered the applicant's evidence regarding the operational difficulties and the impact of the agreement on its business. It also examined the union's arguments in defence of the agreement, including the need to protect employees' rights and the importance of maintaining industry standards. Ultimately, the Commission concluded that the applicant had demonstrated that the agreement was no longer suited to the current business environment and that its termination was in the best interest of the company. Consequently, the Commission granted the application and terminated the agreement. The final orders included the termination of the collective agreement effective from a specified date and the cessation of any obligations under the agreement from that date forward.

Macmahon Contractors Pty Ltd

DECISION

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Legal Principle Established