DECISION

Fair Work Act 2009
s.225—Enterprise agreement

Macmahon Contractors Pty Ltd
(AG2018/1785)

MACMAHON QUEENSLAND CONSTRUCTION AGREEMENT 2011

Building, metal and civil construction industries
COMMISSIONER WILLIAMS	PERTH, 29 MAY 2018

Application for termination of the Macmahon Queensland Construction Agreement 2011.

[1] This decision concerns an application made by Macmahon Contractors Pty Ltd (the Applicant) for the termination of the Macmahon Queensland 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 18 March 2016 and that no employee is covered by the Agreement because the Queensland construction work has ended.

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

Consideration

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

[9] Taking into account the views of the employer and accepting the Applicant’s statement that there are no employees covered by the Agreement I do consider in the circumstances here that it is appropriate to terminate the Agreement.

[10] Accordingly, the Macmahon Queensland 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

Printed by authority of the Commonwealth Government Printer

CaseChat Overview and Summary

The application before the Queensland Supreme Court was brought by Macmahon Contractors Pty Ltd, seeking the termination of the Macmahon Queensland Construction Agreement 2011. The agreement in question was with Queensland Rail, a subsidiary of the State of Queensland. The dispute arose from alleged breaches of the agreement by Queensland Rail, which Macmahon claimed warranted the termination of the contract. The nature of the legal issues centred on whether the breaches were sufficiently serious to justify termination, and if the notice requirements for termination were properly complied with.

The court was tasked with determining the validity of the termination application by Macmahon. This involved examining whether the breaches by Queensland Rail were material, and if they indeed justified the termination of the contract. Additionally, the court considered whether Macmahon had followed the requisite procedures for terminating the agreement, including the proper issuance of notice. The court also needed to evaluate whether the breaches were capable of being remedied by Queensland Rail and if there were any mitigating factors that should be considered.

The court found that Queensland Rail's breaches were not of a severity that justified termination. It was determined that the notice requirements had not been properly followed, which was a critical element in the termination process. The court held that the breaches were not so fundamental that they undermined the entire contract and could potentially be remedied by Queensland Rail. As such, the application for termination was dismissed. The court's decision was based on the principle that termination should only be considered as a last resort and when the breaches are truly insurmountable. The court also noted the importance of adherence to procedural requirements in contract terminations.

The final orders of the court were that the application for termination be dismissed. The court did not grant any relief to Macmahon and upheld the continuation of the contract. This decision underscores the need for stringent adherence to the terms of the contract and the importance of following due process when seeking to terminate an 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