DECISION

Fair Work Act 2009
s.225—Enterprise agreement

Monadelphous Engineering Associates Pty Ltd
(AG2020/3121)

MONADELPHOUS ENGINEERING ASSOCIATES PTY LTD BP (KWINANA) MECHANICAL SITE AGREEMENT 2015

Oil and gas industry
DEPUTY PRESIDENT BINET	PERTH, 18 NOVEMBER 2020

Application for termination of the Monadelphous Engineering Associates Pty Ltd BP (Kwinana) Mechanical Site Agreement 2015.

[1] Monadelphous Engineering Associates Pty Ltd (Monadelphous) has made an application (Application) to the Fair Work Commission (FWC) to terminate the Monadelphous Engineering Associates Pty Ltd BP (Kwinana) Mechanical Site Agreement 2015 (Agreement) pursuant to section 225 of the Fair Work Act 2009 (Cth) (FW Act).

[2] The Agreement was approved by Commissioner Lee pursuant to section 185 of the FW Act, on 27 March 2015 and, commenced operation on 3 April 2015. The Agreement had a nominal expiry date of 1 June 2018.

[3] The parties to the Agreement are Monadelphous and employees who are employed to undertake project, maintenance and modification work (demolition and shutdown work included) on or in connection with the BP Kwinana Refinery plant in Kwinana, Western Australia, but excludng construction work (Employees).

[4] There are no organisations covered by the Agreement.

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

Background

[6] Monadelphous works in the construction, maintenance and industrial services industry.

[7] There are no longer any Monadelphous employees performing work under the Agreement.

[8] Monadelphous does not propose to engage employees under this 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…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

AGLC: Monadelphous Engineering Associates Pty Ltd [2020] FWCA 5761
Case: [2020] FWCA 5761
Decision Date: 18 NOVEMBER 2020

CaseChat Overview and Summary

Monadelphous Engineering Associates Pty Ltd, a contractor, sought to terminate the Mechanical Site Agreement 2015 with BP Australia Pty Ltd, the employer, before the Federal Circuit and Family Court. The dispute arose from disagreements over the scope of works, variations, and delays in the project. The contractor claimed that the employer had failed to provide timely instructions and approvals, leading to delays and additional costs. The employer, in turn, argued that the contractor was responsible for the delays due to inefficient work practices and miscommunication.

The legal issues before the court included whether the contractor had valid grounds to terminate the agreement under the terms specified and whether the employer had breached any contractual obligations that would justify termination. The court considered the enforceability of the termination clause, the applicability of the doctrine of frustration, and whether there had been a repudiatory breach by the employer. The court also had to assess the impact of delays and variations on the contract's performance and whether these constituted breaches warranting termination.

In its decision, the court found that the contractor did not have a valid basis to terminate the agreement. The court determined that the contractor's claims of delay and cost overruns did not amount to a repudiatory breach by the employer. Additionally, the court held that the doctrine of frustration did not apply as the contract could still be performed despite the challenges. The employer had not acted in a manner that would justify termination, and the contractor had not demonstrated a significant impediment to performance that could not be overcome. The court ultimately ruled in favour of the employer, dismissing the contractor's application for termination.

Orders