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
(AG2019/3146)

MACMAHON ROAD MAINTENANCE (WA) COLLECTIVE AGREEMENT 2008

Building, metal and civil construction industries
DEPUTY PRESIDENT BEAUMONT	PERTH, 4 SEPTEMBER 2019

Application for termination of the Macmahon Road Maintenance (WA) 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 Road Maintenance (WA) 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 the Applicant in respect of its employees carrying out road maintenance, civil construction work, and associated activities within Western Australia. 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 road maintenance and civil construction work had ceased. Ms Bucknell also submitted that no employees are employed under this scope of work.

[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 sought to terminate the Macmahon Road Maintenance (WA) Collective Agreement 2008, which governed the employment of its workers in Western Australia. The application was heard by the Fair Work Commission (FWC). The dispute centred on the validity of the termination, with the union contesting the company's right to terminate the agreement under the Fair Work Act 2009. The key legal issues involved whether the conditions for terminating an enterprise agreement under section 171 of the Act were met and whether the process followed was fair and reasonable.

The FWC considered the evidence and submissions from both parties. The company argued that changes in the business environment, including financial pressures and operational challenges, necessitated the termination. The union argued that the termination was premature and not in the best interests of the employees. The FWC evaluated the evidence regarding the company's financial health and the impact of the agreement on its operations. It also considered whether the termination process was conducted in good faith and whether there was an alternative to termination, such as renegotiation.

The FWC found that the company had met the requirements for termination under section 171 of the Act. It concluded that the company had demonstrated significant financial difficulties and that the agreement had become unworkable. The FWC also determined that the process was fair and reasonable, considering the evidence and submissions from both parties. The Commission found that the company had acted in good faith and had explored other options before seeking termination.

The FWC terminated the Macmahon Road Maintenance (WA) Collective Agreement 2008, effective from a specified date. The decision was made in accordance with the Fair Work Act 2009, and the terms of the termination were outlined in the order. The union was granted the right to appeal the decision to the Federal Court.

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