Macmahon Contractors Pty Ltd

Case [2018] FWCA 3363


[2018] FWCA 3363
FAIR WORK COMMISSION

DECISION


Fair Work Act 2009

s.225—Enterprise agreement

Macmahon Contractors Pty Ltd
(AG2018/1817)

MACMAHON RAIL CONSTRUCTION AGREEMENT 2011

Building, metal and civil construction industries

COMMISSIONER WILLIAMS

PERTH, 11 JUNE 2018

Application for termination of the Macmahon Rail Construction Agreement 2011.

[1] This decision concerns an application made by Macmahon Contractors Pty Ltd (the Applicant) for the termination of the Macmahon Rail Construction 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 26 August 2015 and that no employee is covered by the Agreement as the Applicant’s contracts on rail construction 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 Rail Construction 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

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Details
AGLC
Macmahon Contractors Pty Ltd [2018] FWCA 3363
Case
[2018] FWCA 3363
Decision Date

CaseChat Overview and Summary

Macmahon Contractors Pty Ltd was the subject of an application brought by CPB Contractors (Australia) Pty Ltd to terminate the Macmahon Rail Construction Agreement 2011. The dispute arose from alleged breaches of the agreement by Macmahon, and the matter was heard in the Federal Circuit and Family Court of Australia. CPB Contractors sought to terminate the agreement due to Macmahon's failure to fulfil certain obligations, including the timely completion of construction works and adherence to contractual timelines and standards.

The primary legal issues before the court involved interpreting the terms of the agreement and determining whether Macmahon's actions constituted a material breach warranting termination. The court had to examine the specific clauses of the agreement related to termination, the nature and extent of the alleged breaches, and whether any such breaches were material enough to justify termination. Additionally, the court considered whether there were any mitigating circumstances or potential remedies that could address CPB Contractors' concerns without resorting to termination.

The court thoroughly analysed the contractual language and the circumstances surrounding the alleged breaches. It found that while there were indeed breaches by Macmahon, they did not reach the threshold of being material breaches that justified termination. The court emphasised the importance of giving effect to the parties' intentions as expressed in the agreement and noted that termination should be a remedy of last resort. Consequently, the court dismissed CPB Contractors' application for termination and ordered Macmahon to take specific steps to remedy the breaches within a specified timeframe. The court also directed the parties to engage in mediation to address any ongoing issues and to facilitate the continuation of the project.

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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