Monadelphous Engineering Associates Pty Ltd

[2020] FWCA 5761

[2020] FWCA 5761

FAIR WORK COMMISSION

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 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. 1

[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. 2

[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. 3

[20] Monadelphous submits that there are no matters contrary to the public interest in terminating the Agreement, as the scope of work at which the Agreement applied has ceased and as a result , there are no Employees covered by the Agreement and no plans to engage employees covered by the Agreement.

[21] Based on the submissions of the Monadelphous and the evidence before me, 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] Monadelphous submits that there are no longer employees performing work under the Agreement.

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

[23] There are no employee organisations covered by the Agreement.

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

[24] Monadelphous has made an application to terminate the Agreement as there are no longer any Employees performing work under the Agreement.

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

[25] There are no employee organisations covered by the Agreement.

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

[26] Monadelphous wish to have the Agreement terminated because the Agreement is past its nominal expiry date and does not apply to any employees.

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

[27] 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.” 4

[28] I am satisfied that the views of Monadelphous, that the Agreement should be terminated, are valid. The Agreement has passed its nominal expiry date. The scope of work covered by this Agreement has ceased. Monadelphous does not propose to engage employees covered by the Agreement in the future.

Conclusion

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

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

[31] 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. 5

DEPUTY PRESIDENT

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

 2   Ibid.

 3   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.

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

 5   PR724042.

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