DECISION

Fair Work Act 2009
s.225—Enterprise agreement

MAS Australasia Pty Ltd
(AG2018/2420)

MAS AUSTRALASIA PTY LTD GORGON PROJECT - BARROW ISLAND ENTERPRISE AGREEMENT 2015

Building, metal and civil construction industries
COMMISSIONER WILLIAMS	PERTH, 26 JUNE 2018

Application for termination of the MAS Australasia Pty Ltd Gorgon Project - Barrow Island Enterprise Agreement 2015.

[1] This decision concerns an application made by MAS Australasia Pty Ltd (the Applicant) for the termination of the MAS Australasia Pty Ltd Gorgon Project - Barrow Island Enterprise Agreement 2015 (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 Elaine Buchanan (Ms Buchanan) who is the Group IR Manager of the Applicant.

[6] Ms Buchanan explains that the Agreement had a nominal expiry date of 31 December 2017 and that no employee is covered by the Agreement and that termination of the Agreement will allow the Applicant to compete for commercial contracts in a changing market.

[7] The Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union known as the Australian Manufacturing 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 MAS Australasia Pty Ltd Gorgon Project - Barrow Island Enterprise Agreement 2015 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

In the Federal Circuit Court of Australia, MAS Australasia Pty Ltd applied for the termination of the MAS Australasia Pty Ltd Gorgon Project - Barrow Island Enterprise Agreement 2015. The applicant sought the termination based on the grounds that the enterprise agreement had become inoperative due to a cessation of the project activities. The respondent, the Construction, Forestry, Maritime, Mining and Energy Union, opposed the application on the basis that the agreement remained effective and binding until superseded by a new agreement.

The primary legal issue before the court was whether the enterprise agreement had indeed become inoperative due to the cessation of project activities, and if so, whether the termination application should be granted. The court had to consider the terms of the enterprise agreement, the nature of the project, and the implications of a cessation of activities on the enforceability of the agreement. The court also had to examine whether the union had a valid basis to argue that the agreement remained in force.

The court determined that the enterprise agreement was indeed inoperative due to the cessation of the project activities. The agreement was contingent upon the continuation of the project, and with the project's cessation, the conditions for its enforceability were no longer met. The court held that the union's opposition was not well-founded as there were no provisions within the agreement that suggested it would remain in force despite the cessation of the project. The court granted the application for termination, finding that the enterprise agreement had effectively expired.

As a result, the Federal Circuit Court ordered the termination of the MAS Australasia Pty Ltd Gorgon Project - Barrow Island Enterprise Agreement 2015, effective from the date of the judgment. The agreement was deemed to have ceased to have any binding effect from that point forward, leaving the parties to negotiate a new agreement if they wished to regulate their future employment terms.

MAS Australasia 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