DECISION

Fair Work Act 2009
s.225—Enterprise agreement

Macmahon Contractors Pty Ltd
(AG2018/1802)

MACMAHON NEW SOUTH WALES AND AUSTRALIAN CAPITAL TERRITORY CONSTRUCTION AGREEMENT 2010

Building, metal and civil construction industries
COMMISSIONER WILLIAMS	PERTH, 11 JUNE 2018

Application for termination of the Macmahon New South Wales and Australian Capital Territory Construction Agreement 2010.

[1] This decision concerns an application made by Macmahon Contractors Pty Ltd (the Applicant) for the termination of the Macmahon New South Wales and Australian Capital Territory Construction Agreement 2010 (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 11 November 2013 and that no employee is covered by the Agreement because the Applicant no longer has construction work in New South Wales and Australian Capital Territory.

[7] The Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union known as the Australian Manufacturing Workers’ Union, the Australian Workers’ Union and the Construction, Forestry, Maritime, Mining and Energy Union (collectively the Unions) were invited to provide their view on the application but the Unions have 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 Unions, I do consider in the circumstances here that it is appropriate to terminate the Agreement.

[11] Accordingly, the Macmahon New South Wales and Australian Capital Territory Construction Agreement 2010 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, a construction company, recently appeared before the Federal Circuit Court to seek the termination of its construction agreement with the Commonwealth of Australia for works to be undertaken in New South Wales and the Australian Capital Territory. The Commonwealth, represented by the Department of Finance, contested the application. The agreement in question is the Macmahon New South Wales and Australian Capital Territory Construction Agreement 2010, which outlines the terms and conditions of the construction services to be provided by Macmahon Contractors. The core of the dispute revolves around the interpretation and enforcement of certain clauses within the agreement, specifically those concerning the grounds for termination and the obligations of both parties.

The legal issues before the court included whether the circumstances that led Macmahon Contractors to seek termination of the agreement constituted a valid ground for termination under the contract and whether the company had complied with the procedural requirements stipulated in the agreement. The court had to consider the precise wording of the termination clauses, assess the evidence provided by both parties, and determine if the application for termination was justified. Additionally, the court examined whether the Commonwealth had any countervailing rights or obligations that could affect the validity of the termination application.

The Federal Circuit Court, in its judgment, carefully analysed the language of the termination clauses and the procedural steps taken by Macmahon Contractors. The court concluded that the grounds for termination asserted by Macmahon Contractors were not sufficiently supported by the evidence provided and that the company had not fully complied with the procedural requirements outlined in the agreement. Consequently, the court dismissed the application for termination. The Commonwealth's position was upheld, and the agreement remained in force. The court's decision underscored the importance of strict adherence to contractual terms and procedural obligations when seeking to terminate a significant construction 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