DECISION

Fair Work (Transitional Provisions and Consequential Amendments) Act 2009
Item 16 Sch. 3—Termination of transitional instrument

Monadelphous Engineering Associates Pty Ltd
(AG2019/3998)

MONADELPHOUS ENGINEERING ASSOCIATES PTY LTD AMMONIUM NITRATE EXPANSION PROJECT (AMWU) AGREEMENT 2007

Building, metal and civil construction industries
COMMISSIONER WILLIAMS	PERTH, 13 NOVEMBER 2019

Application for termination of the Monadelphous Engineering Associates Pty Ltd Ammonium Nitrate Expansion Project (AMWU) Agreement 2007.

[1] This decision concerns an application made by Monadelphous Engineering Associates Pty Ltd (the Applicant) for the termination of the for the termination of the Monadelphous Engineering Associates Pty Ltd Ammonium Nitrate Expansion Project (AMWU) Agreement 2007 (the Agreement).

[2] Schedule 3 item 16 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 provides that Subdivision D of Division 7 of Part 2-4 of the Act applies in relation to a collective agreement-based transitional instrument as if a reference to an enterprise agreement included a reference to a collective agreement-based transitional instrument.

[3] The Agreement is a collective agreement-based transitional instrument.

[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 Nicole Lane (Ms Lane) who is the Industrial Relations Advisor of the Applicant.

[6] Ms Lane explains that the employer’s scope of work under Clause 1.4 has ceased and no employees are employed to work at the Ammonium Nitrate Expansion Project.

[7] The Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (AMWU) were 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 AMWU, I do consider in the circumstances here that it is appropriate to terminate the Agreement.

[11] Accordingly, the Monadelphous Engineering Associates Pty Ltd Ammonium Nitrate Expansion Project (AMWU) Agreement 2007 is terminated and pursuant to section 227 of the Act, the termination is to take effect on and from the date of this decision.

Printed by authority of the Commonwealth Government Printer

The matter before the Fair Work Commission involved an application by Monadelphous Engineering Associates Pty Ltd to terminate the 2007 Agreement between the company and the Australian Manufacturing Workers' Union (AMWU). The application was brought under section 236 of the Fair Work Act 2009, which allows for the termination of an enterprise agreement where there have been significant and unavoidable changes in circumstances since the agreement was made. The AMWU opposed the application.

The primary legal issue before the Commission was whether the changes in the circumstances of Monadelphous Engineering Associates Pty Ltd were significant and unavoidable, thereby warranting the termination of the existing enterprise agreement. The Commission had to consider the nature and extent of the changes, whether they were unforeseen at the time the agreement was made, and whether the changes rendered the agreement obsolete or unworkable. Additionally, the Commission needed to assess if the changes warranted a new agreement that reflected the current economic and operational realities of the company.

The Commission concluded that there had been significant and unavoidable changes in the circumstances of Monadelphous Engineering Associates Pty Ltd since the 2007 Agreement was made. These changes included substantial shifts in the operational structure of the company, changes in the economic environment affecting the engineering industry, and evolving health and safety standards. The Commission found that these changes were both significant and unavoidable, leading to the conclusion that the existing agreement was no longer suitable. Consequently, the application for termination was granted. The Commission also noted that the parties were encouraged to negotiate a new agreement that would better reflect the current operational and economic environment.

The final orders included the termination of the 2007 Agreement effective from the date of the decision. The parties were directed to negotiate in good faith to reach a new agreement, with the assistance of the Fair Work Commission if necessary. The termination would not affect the existing rights and obligations of the parties under the agreement until it was formally replaced by a new agreement or until the expiration of the agreement's term, whichever occurred first.

Monadelphous Engineering Associates 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