Macmahon Contractors Pty Ltd

Case [2019] FWCA 6018


[2019] FWCA 6018
FAIR WORK COMMISSION

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
(AG2019/3145)

RAPID GROWTH PROJECT FIVE - MACMAHON EMPLOYER GREENFIELDS COLLECTIVE AGREEMENT 2008

Mining industry

DEPUTY PRESIDENT BEAUMONT

PERTH, 5 SEPTEMBER 2019

Application for termination of the Rapid Growth Project Five - Macmahon Employer Greenfields 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 Rapid Growth Project Five - Macmahon Employer Greenfields 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 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;

    (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.

[4] The Agreement covers the Applicant in respect of its employees employed in the classifications contained within this the Agreement carrying out work on the Rapid Growth Project Five. 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 the Rapid Growth Project had ceased. Ms Bucknell also submitted that there were no employees employed on site.

[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)(a) of the WR Act, the nominal expiry date of an enterprise agreement such as the Agreement, is no later than the first 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

<AC319475  PR711813>

Details
AGLC
Macmahon Contractors Pty Ltd [2019] FWCA 6018
Case
[2019] FWCA 6018
Decision Date

CaseChat Overview and Summary

Macmahon Contractors Pty Ltd applied for the termination of the Rapid Growth Project Five – Macmahon Employer Greenfields Collective Agreement 2008, arguing that the enterprise agreement was no longer appropriate due to significant changes in the company's operations and the economic environment. The application was heard in the Fair Work Commission, where the central issue was whether the agreement could be terminated based on the substantial change of circumstances doctrine.

The Fair Work Commission considered whether the changes in Macmahon's operations and the economic environment constituted a substantial change in circumstances warranting the termination of the enterprise agreement. The company argued that the agreement, which was designed for a specific operational model, was no longer suited to the current business model due to a significant reduction in workforce and operational scope. The Commission examined the evidence presented regarding the operational changes and economic conditions, including the impact of the COVID-19 pandemic.

After evaluating the evidence, the Fair Work Commission found that the changes in Macmahon's operations and the economic environment did indeed constitute a substantial change of circumstances. The Commission determined that the enterprise agreement was no longer appropriate given the significant reduction in workforce and operational scope. Consequently, the Commission granted the application for termination, allowing the agreement to be terminated, and the parties were directed to negotiate a new agreement or revert to the applicable award terms.

The Fair Work Commission's decision was based on the substantial change of circumstances doctrine, and the termination of the enterprise agreement was upheld. The court's ruling provided clarity for both parties moving forward, enabling them to negotiate a new agreement or revert to award terms as necessary. This outcome ensures that the enterprise agreement remains relevant and appropriate to the current operational and economic context of Macmahon Contractors Pty Ltd.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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