Monadelphous Engineering Associates Pty Ltd

[2020] FWCA 6164

[2020] FWCA 6164

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.225—Enterprise agreement

Monadelphous Engineering Associates Pty Ltd
(AG2020/3114)

MONADELPHOUS ENGINEERING ASSOCIATES PTY LTD BP REFINERY (KWINANA) SITE ELECTRICAL AGREEMENT 2016

Manufacturing and associated industries
DEPUTY PRESIDENT BINET	PERTH, 18 NOVEMBER 2020

Application for termination of the Monadelphous Engineering Associates Pty Ltd BP Refinery (Kwinana) Site Electrical Agreement 2016.

[1] Monadelphous Engineering Associates Pty Ltd (Mondadelphous) has made an application (Application) to the Fair Work Commission (FWC) to terminate the Monadelphous Engineering Associates Pty Ltd BP Refinery (Kwinana) Site Electrical Agreement 2016 (Agreement) 1 pursuant to section 225 of the Fair Work Act 2009 (Cth) (FW Act).

[2] The Agreement was approved by Commissioner Roe pursuant to section 186 of the FW Act on 14 December 2016 and commenced operation on 21 December 2016. The Agreement has a nominal expiry date of 30 June 2019.

[3] The parties to the Agreement are Monadelphous and all Monadelphous employees performing work covered by the Agreement at the BP Refinery (Kwinana) site (Employees).

[4] The Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (the CEPU) are covered by the Agreement.

[5] In support of the Application, Monadelphous filed a statutory declaration by Mr Stuart Wood, IR Advisor to Monadelphous (Wood Declaration).

[6] On 19 October 2020, directions were issued with respect to the Application (Directions). The CEPU were directed to file an outline of submissions in response to the Application and any evidence on which the AWU and the AMWU sought to rely by 4pm, Thursday 5 November 2020.

Background

[7] Monadelphous are an engineering services provider in the oil and gas industry. They provided services to BP at a BP’s refinery in Kwinana, Western Australia. Since the approval of the Agreement, Monadelphous has ceased to provide services to BP at the Kwinana Refinery.

[8] As a consequence of the above circumstances, there are no longer any Employees covered by the Agreement and Monadelphous does not propose to engage employees under the Agreement in the future.

Legislation

[9] Subdivision D of Division 7 of Part 2-4 of the FW Act sets out the mechanism by which an enterprise agreement may be terminated after the agreement has passed its nominal expiry date.

[10] Section 225 of the FW Act provides that:

“225 Application for termination of an enterprise agreement after its nominal expiry date

If an enterprise agreement has passed its nominal expiry date, any of the following may apply to the FWC for the termination of the agreement:

(a) one or more of the employers covered by the agreement;

(b) an employee covered by the agreement;

(c) an employee organisation covered by the agreement.”

[11] As the Agreement has passed its nominal expiry date and Monadelphous is an employer covered by the Agreement, I find that Monadelphous has standing to make the Application pursuant to section 225(a) of the FW Act.

[12] Section 226 of the FW Act states:

“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.”

Is it contrary to the public interest to termination the Agreement?

[13] Section 226(a) requires the FWC to be satisfied that it is not contrary to the public interest to terminate the Agreement.

[14] This requires the FWC to consider how the termination of the Agreement might foreseeably affect the public as a whole, such as the impact on the achievement or otherwise of the various objects of the Act, employment levels, inflation, and the maintenance of proper industrial standards. 2

[15] There is no positive onus on the applicant to persuade the FWC that there are positive benefits to the public interest arising from the termination. In Geelong Wool Combing Ltd (AIRC) 5 September 2003, Commissioner Wheelan said:

“… the Commission must be persuaded that termination is contrary to the public interest [and] in the absence of any effect of termination which is contrary to the public interest it is not necessary to persuade the Commission that there are positive benefits to the public interest arising from the termination.”

[16] The public interest is distinct in nature from the interests of those covered by the Agreement. The views of those covered by an agreement may be relevant to the exercise of the discretion if they shed light on the effect of the termination on public interest but those views should not be given any independent weight. 3

[17] The object of the FW Act is set out in section 3 of the FW Act, as follows:

“3 Object of this Act

The object of this Act is to provide a balanced framework for cooperative and productive workplace relations that promotes national economic prosperity and social inclusion for all Australians by:

…

(b) ensuring a guaranteed safety net of fair, relevant and enforceable minimum terms and conditions through the National Employment Standards, modern awards and national minimum wage orders;

…

(f) achieving productivity and fairness through an emphasis on enterprise level collective bargaining underpinned by simple good faith bargaining obligations and clear rules governing industrial action;

…”

[18] The specific objects in section 171 of the FW Act inform how the general object in section 3 of the FW Act is to be satisfied in the context of matters dealt with in Part 2-4 of the FW Act:

“171 Objects of this Part

The objects of this Part are:

(a)  to provide a simple, flexible and fair framework that enables collective bargaining in good faith, particularly at the enterprise level, for enterprise agreements that deliver productivity benefits; and

(b)  to enable the FWC to facilitate good faith bargaining and the making of enterprise agreements, including through:

(i) making bargaining orders; and

(ii) dealing with disputes where the bargaining representatives request assistance; and

(iii) ensuring that applications to the FWC for approval of enterprise agreements are dealt with without delay.”

[19] The ascertainment of what is not in the public interest does not involve the mere identification of a consequence of the termination of the agreement that is arguably contrary to the public interest. The ascertainment of the public interest may involve balancing countervailing public interests. 4

[20] Monadelphous submits that there are no matters contrary to the public interest in terminating the Agreement, as there are no employees covered by the Agreement and the termination of the Agreement will have no effect on current industry standards.

[21] Based on the submissions of the Monadelphous, I am satisfied that it is not contrary to the public interest to terminate the Agreement.

What are the views of the Employees covered by the Agreement?

[22] At Part 2.2 of the Wood Declaration, Mr Wood has stated that no employees are covered by the Agreement.

What are the views of the Employee Organisation covered by the Agreement?

[23] The Agreement covers the CEPU. Directions were issued on 19 October 2020 seeking the views of the CEPU by 29 October 2020. No views were provided to the FWC regarding the Application.

What are the views of the Employer covered by the Agreement?

[24] Monadelphous has made the Application to terminate the Agreement and therefore supports the termination of the Agreement.

What are the circumstances of the Employees covered by the Agreement?

[25] There are no Employees covered by the Agreement and, as Monadelphous has ceased operations at the Kwinana Refinery, there is currently no prospect that Employees will be covered by the Agreement in the future.

What are the circumstances of the Employee Organisation covered by the Agreement?

[26] As stated above at [23], no views or submissions were received from the CEPU. Given that no employees are covered by the Agreement, it appears likely that the termination of the Agreement will not impact the circumstances of the CEPU.

What are the circumstances of the Employer covered by the Agreement?

[27] Monadelphous wish to have the Agreement terminated because the Agreement has passed its nominal expiry date and is no longer relevant to its business.

Is it appropriate to terminate the Agreement taking into all the circumstances?

[28] In assessing the views and circumstances of the parties it is important to remember that:

“Taking into account the views and circumstances of the parties involves far more than an expression of their views in support or opposition to termination. It should involve a reason for their views and the validity of their concerns.” 5

[29] I am satisfied that the views of Monadelphous, that the Agreement should be terminated, are valid. The Agreement has passed its nominal expiry date and Monadelphous no longer employ any Employees under the Agreement. Monadelphous does not propose to engage Employees under the Agreement in the future.

Conclusion

[30] For the reasons enunciated above, I am satisfied that it is not contrary to the public interest to terminate the Agreement.  On the contrary, based on the submissions of the Monadelphous, the Agreement is no longer relevant. 

[31] Taking into account all the circumstances, including the views and circumstances of Monadelphous, I am satisfied that it is appropriate to terminate the Agreement.

[32] Accordingly, the Agreementis terminated. The termination is to take effect on and from the date of this Decision. An Order to this effect will be issued in conjunction with this Decision. 6

DEPUTY PRESIDENT

 1   [2016[] FWCA 8916; AE422645.

 2   Re Kellogg Brown and Root, Bass Strait (Esso) Onshore/Offshore Facilities Certified Agreement 2000 (2005) 139 IR 34, 40 – 41.

 3   Ibid.

 4   Kellogg Brown & Root Pty Ltd & Ors and Esso Australia Ltd (2005) 139 IR 34 referred to the decision of the High Court of Australia in Queensland Electricity Commission; Ex parte Electrical Trades Union of Australia (1987) 61 ALJR 393.

 5   Energy Resources Australia Ltd v Liquor, Hospitality and Miscellaneous Union[2010] FWA 2434, [16].

 6   PR724630.

Printed by authority of the Commonwealth Government Printer

<AE422645  PR724625>