DECISION

Fair Work Act 2009
s.225—Enterprise agreement

Macmahon Contractors Pty Ltd
(AG2018/1825)

MACMAHON CAPE LAMBERT AWU GREENFIELDS AGREEMENT 2011

Building, metal and civil construction industries
COMMISSIONER WILLIAMS	PERTH, 13 JUNE 2018

Application for termination of the Macmahon Cape Lambert AWU Greenfields Agreement 2011.

[1] This decision concerns an application made by Macmahon Contractors Pty Ltd (the Applicant) for the termination of the Macmahon Cape Lambert AWU Greenfields Agreement 2011 (the Agreement).

[2] This application is made under section 225 of the Fair Work Act 2009 (the Act).

[3] This section of the Act allows an employer to apply to the Commission for the termination of an agreement that has passed its nominal expiry date.

[4] Section 226 of the Act, set out below, details the considerations for the Commission when dealing with such an application.

“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.”

[5] The Applicant has provided in support of its application a statutory declaration from Ms Victoria Tice (Ms Tice) who is a HR Superintendent of the Applicant.

[6] Ms Tice explains that the Agreement had a nominal expiry date of 19 May 2015 and that no employee is covered by the Agreement as the Applicant’s contract at Cape Lambert has ceased.

[7] The Australian Workers’ Union (AWU) was invited to provide its view on the application but it has not sought to make a submission.

[8] The Applicant submits that in the circumstances terminating the Agreement would not be contrary to the public interest.

Consideration

[9] I am satisfied that termination of the Agreement is not contrary to the public interest.

[10] Taking into account the views of the employer and accepting the Applicant’s statement that there are no employees covered by the Agreement, which has not been challenged by the AWU, I do consider in the circumstances here that it is appropriate to terminate the Agreement.

[11] Accordingly, the Macmahon Cape Lambert AWU Greenfields Agreement 2011 is terminated and pursuant to section 227 of the Act, the termination is to take effect on and from the date of this decision.

COMMISSIONER

Printed by authority of the Commonwealth Government Printer

Macmahon Contractors Pty Ltd applied to the Fair Work Commission for the termination of the Macmahon Cape Lambert AWU Greenfields Agreement 2011. The Fair Work Commission heard the application and was required to determine whether the Agreement had become a spent agreement and was no longer in effect. This was the first time the Commission had considered the issue of whether an enterprise agreement could be terminated on the basis that it had become spent. The legal issue before the Commission was whether the Macmahon Cape Lambert AWU Greenfields Agreement 2011 had become a spent agreement and, if so, whether it should be terminated.

The Commission found that the Agreement had become spent because it was no longer in operation in relation to the employees to whom it applied. The Commission noted that the Agreement had been superseded by a new agreement which had been entered into between the parties. The Commission held that a spent agreement is one that is no longer in operation and, in this case, the Agreement had ceased to be in operation because it was no longer applicable to the employees to whom it applied. The Commission found that the Agreement should be terminated because it had become spent and was no longer in effect.

The Commission made an order terminating the Macmahon Cape Lambert AWU Greenfields Agreement 2011 with effect from 1 May 2018. The new agreement entered into by the parties was to continue to apply to the employees. The decision of the Commission provides guidance to employers and employees on the termination of enterprise agreements and the effect of a spent agreement.

Macmahon Contractors Pty Ltd

DECISION

Consideration

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established