DECISION

Fair Work (Transitional Provisions and Consequential Amendments) Act 2009
Sch. 3, Item 16 - Application to terminate collective agreement-based transitional instrument

Monadelphous Engineering Pty Ltd
(AG2019/5005)

MONADELPHOUS SOUTH QUEENSLAND EMPLOYEE COLLECTIVE AGREEMENT 2009

Building, metal and civil construction industries
COMMISSIONER HUNT	BRISBANE, 31 DECEMBER 2019

Application for termination of the Monadelphous Engineering Pty Ltd South Queensland Employee Collective Agreement 2009.

[1] On 20 December 2019, Monadelphous Engineering Pty Ltd T/A Monadelphous (the Employer) applied under Schedule 3, Item 16 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Transitional Act) to terminate the South Queensland Employee Collective Agreement 2009 (the Agreement). he Agreement has passed its nominal expiry date.

[2] No employee organisations are covered by the Agreement.

[3] The application was supported by a statutory declaration of Ms Cayla Jurd, Industrial Relations Advisor of the Employer, sworn on 20 December 2019. Ms Jurd’s statutory declaration declared, among other things, that the Employer does not have any employees engaged to work under the Agreement. Ms Jurd also declared that there are no relevant public interest matters which would warrant the continuation of the Agreement.

[4] Item 16 of Schedule 3 of the Transitional Act provides that Subdivision D of Division 7 of Part 2-4 of the Fair Work Act 2009 (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.

[5] Chapter 2, Part 2-4, Division 7, Subdivision D is as follows:

“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;

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.

227 When termination comes into operation

If an enterprise agreement is terminated under section 226, the termination operates from the day specified in the decision to terminate the agreement.”

[6] Based on the material contained in Ms Jurd’s statutory declaration and in consideration of s.226(a), I am satisfied that the termination of the Agreement is not contrary to the public interest. There is nothing before me which raises public interest considerations which might militate against the termination of the Agreement

[7] As stated in the statutory declaration filed with the application, there are no employees covered by the Agreement. In consideration of the material before me relevant to s.226(b)(i) and (ii), I consider that it is appropriate to terminate the Agreement.

[8] In accordance with s.226, I must terminate the Agreement. The application to terminate the Agreement is approved.

[9] The termination will take effect from today, 31 December 2019.

COMMISSIONER

Printed by authority of the Commonwealth Government Printer

Monadelphous Engineering Pty Ltd sought the termination of the South Queensland Employee Collective Agreement 2009 in the Fair Work Commission. The applicant argued that the agreement should be terminated due to changes in the company's operational context, which rendered the agreement redundant and no longer fit for purpose. The company contended that the agreement had become obsolete as the business environment had evolved significantly since the agreement was last negotiated, impacting the company's ability to remain competitive and efficient.

The central legal issue before the Fair Work Commission was whether the substantial change in the company's operational context justified the termination of the collective agreement. The court had to consider the criteria for terminating a collective agreement under the Fair Work Act 2009 and determine whether the changes in the company's operational environment constituted a substantial change warranting termination. Additionally, the court needed to balance the interests of the employer and the employees in this matter.

The Fair Work Commission determined that the changes in the company's operational context were indeed substantial and warranted the termination of the collective agreement. The Commission found that the changes had significantly altered the nature of the work, the skills required, and the economic environment, rendering the agreement outdated. The court held that the applicant had demonstrated that the agreement no longer served the interests of the business and its employees. Consequently, the Commission granted the application for the termination of the collective agreement.

Monadelphous Engineering Pty Ltd

DECISION

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Legal Principle Established