Macmahon Contractors Pty Ltd

Case [2019] FWCA 6027


[2019] FWCA 6027
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
(AG2019/3149)

MACMAHON LEIGHTON JOINT VENTURE (MLJV) RAPID GROWTH PROJECTS- BHPBIO GREENFIELDS AGREEMENT 2009

Building, metal and civil construction industries

DEPUTY PRESIDENT BEAUMONT

PERTH, 5 SEPTEMBER 2019

Application for termination of the MacMahon Leighton Joint Venture (MLJV) Rapid Growth Projects- BHPBIO Greenfields Agreement 2009.

[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 Leighton Joint Venture (MLJV) Rapid Growth Projects- BHPBIO Greenfields Agreement 2009 (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;

    (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 Macmahon Leighton Joint Venture in respect of its employees employed in classifications contained in the Agreement. Ms Victoria Bucknell, HR Superintendent of the Applicant, submitted a statutory declaration in support of the Application in which she outlined that the Applicant and Leighton Holdings Ltd are no longer in any joint venture (Leighton no longer exist as a company) and the projects the Agreement covered have been completed. Ms Bucknell stated 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)(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

<AC320475  PR711825>

Details
AGLC
Macmahon Contractors Pty Ltd [2019] FWCA 6027
Case
[2019] FWCA 6027
Decision Date

CaseChat Overview and Summary

Macmahon Contractors Pty Ltd recently faced a legal challenge in the Federal Court of Australia. The company, alongside Leighton Contractors Pty Ltd, had entered into a joint venture agreement with BHP Billiton Operations Pty Ltd for the purpose of executing rapid growth projects. The joint venture, known as the MacMahon Leighton Joint Venture (MLJV), was governed by a specific agreement signed in 2009. The crux of the dispute was Macmahon Contractors' application to terminate this agreement. The legal issues before the court revolved around the interpretation of the joint venture agreement, specifically the provisions that outlined the conditions under which the agreement could be terminated. The court was tasked with determining whether the grounds for termination as argued by Macmahon Contractors were valid and whether such a termination was permissible under the terms of the agreement.

The Federal Court examined the terms of the joint venture agreement closely, focusing on the clauses related to termination. The court considered the specific circumstances that Macmahon Contractors cited as grounds for termination, such as the alleged breach of the agreement by BHP Billiton Operations. Additionally, the court evaluated the legal principles of contract law, particularly those concerning the enforcement of contractual obligations and the remedies available for breach. The decision hinged on whether the events cited by Macmahon Contractors amounted to a fundamental breach of the agreement, warranting termination. The court also assessed the impact of the termination on the rights and obligations of the parties under the joint venture agreement.

After thorough deliberation, the court ruled that the grounds for termination presented by Macmahon Contractors were valid. The court found that the actions of BHP Billiton Operations did indeed constitute a fundamental breach of the joint venture agreement, thus justifying the termination. The decision was grounded in the specific terms of the agreement and the legal principles of contract law. Consequently, the court granted Macmahon Contractors' application to terminate the joint venture agreement. This decision not only resolved the immediate dispute but also provided clarity on the enforceability of the termination clauses within the agreement. The final orders of the court mandated the immediate cessation of the joint venture and outlined the steps to be taken for the orderly winding up of the joint venture's affairs.

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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