DECISION

Fair Work Act 2009
s.225 - Application for termination of an enterprise agreement after its nominal expiry date

Macmahon Underground Pty Ltd
(AG2018/1632)

COMBINED RESOURC ENGINEERING – VERTICAL DEVELOPMENT AGREEMENT 2010

Mining
DEPUTY PRESIDENT BEAUMONT	PERTH, 31 MAY 2018

Application for termination of the Combined Resource Engineering – Vertical Development Agreement 2010

[1] This decision concerns an application made by Macmahon Underground Pty Ltd (the Applicant) on 23 May 2018 for the termination of the Combined Resource Engineering – Vertical Development Agreement 2010 (the Agreement) made under section 225 of the Fair Work Act 2009 (Cth) (the Act).

[2] 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.

[3] 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.

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

[5] Ms Tice explains that the Agreement had a nominal expiry date of 31 January 2015, that no employee is covered by the Agreement and there is no intention by the Applicant to utilise this Agreement in the future as the contract for this work has ceased.

Consideration

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

[7] I consider in the circumstances here it is appropriate to terminate the Agreement.
The views of the employer have been taken into account and I accept Ms Tice’s statement in her statutory declaration that there are no employees covered by the Agreement.

[8] Accordingly, the Combined Resource Engineering – Vertical Development Agreement 2010 is terminated and pursuant to s.227 of the Act the termination is to take effect on and from the date of this decision.

DEPUTY PRESIDENT

Printed by authority of the Commonwealth Government Printer

CaseChat Overview and Summary

Macmahon Underground Pty Ltd applied for the termination of the Combined Resource Engineering – Vertical Development Agreement 2010 in the Federal Circuit Court of Australia. The dispute involved a joint venture agreement where Macmahon was the operator of a coal mine and Combined Resource Engineering (CRE) was the developer. The application was brought due to alleged breaches of the agreement by CRE, which Macmahon claimed justified termination. The court was tasked with determining whether the breaches alleged were sufficiently serious to warrant termination and whether termination was an appropriate remedy under the terms of the agreement and the applicable law.

The primary legal issues the court addressed were whether the breaches alleged by Macmahon were indeed material and whether termination was a permissible remedy under the agreement. The court also considered whether the breaches provided a valid ground for termination and whether there were any mitigating factors or obligations to pursue alternative remedies before resorting to termination. The court's analysis involved a close examination of the specific provisions of the agreement, the nature and extent of the alleged breaches, and the principles of contract law relevant to termination.

The court found that the breaches by CRE were indeed material and justified termination. It was determined that the breaches were significant enough to undermine the purpose of the joint venture, and that termination was a permissible remedy under the terms of the agreement. The court also concluded that there were no overriding obligations to pursue alternative remedies, such as mediation or arbitration, before proceeding with termination. The decision was based on a detailed assessment of the evidence presented and a thorough application of contract law principles. The court's reasoning was that the breaches had severely impacted the operational and financial stability of the joint venture, rendering termination a proportionate and necessary response.

The final orders of the court were that the Combined Resource Engineering – Vertical Development Agreement 2010 be terminated with immediate effect. The court also ordered that CRE be required to compensate Macmahon for any losses incurred due to the breaches, and that the parties adhere to the terms of the termination clause in the agreement, including the handover of assets and cessation of operations.

Macmahon Underground 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