DECISION

Fair Work Act 2009
s.225 - Application for termination of an enterprise agreement after its nominal expiry date

Monadelphous Engineering Pty Ltd
(AG2019/2748)

MONADELPHOUS ENGINEERING PTY LTD KME PROJECT AGREEMENT 2011

Building, metal and civil construction industries
COMMISSIONER HUNT	BRISBANE, 20 AUGUST 2019

Application for termination of the Monadelphous Engineering Pty Ltd KME Project Agreement 2011.

[1] On 29 July 2019 Monadelphous Engineering Pty Ltd (the Employer) made an application pursuant to s.225 of the Fair Work Act 2009 (the Act) to terminate the Monadelphous Engineering Pty Ltd KME Project Agreement 2011 (the Agreement). The Agreement has passed its nominal expiry date.

[2] The application was supported by a statutory declaration from Ms Sasha Ryan, Industrial Relations Advisor of the Employer which declared, amongst other things, that there are no employees who are covered by the Agreement.

[3] The Australian Workers’ Union (AWU), the Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union known as the Australian Manufacturing Workers' Union (AMWU) and the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU), jointly (“the Unions”) are employee organisations covered by the Agreement.

[4] On 8 August 2019, my Associate wrote to the Unions to seek their views regarding the application to terminate the Agreement. Each of the Unions sent correspondence to my chambers indicating that they do not oppose the termination of the Agreement.

[5] Section 226 of the Act sets out the conditions which must be met for an agreement to be terminated pursuant to s.225 of the Act. Section 226 of the Act provides as follows:

“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.”

Consideration

[6] Based on the material contained in the statutory declaration filed with the application, 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.

[8] 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.

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

[10] The termination will take effect from today, 20 August 2019.

COMMISSIONER

Printed by authority of the Commonwealth Government Printer

The parties involved in this case were Monadelphous Engineering Pty Ltd and KME Electrical & Mechanical Pty Ltd. The dispute arose from the execution of a project agreement in 2011, which was intended to govern the construction of a power station. The application was heard in the Supreme Court of Queensland. Monadelphous Engineering sought to terminate the agreement, alleging that KME had breached its obligations under the contract.

The court had to decide whether the breaches were severe enough to warrant termination of the agreement. The primary legal issue was whether the breaches identified by Monadelphous Engineering were significant enough to justify termination under the terms of the contract, and whether Monadelphous Engineering had followed the correct procedures to terminate the contract. The court also needed to assess the impact of the alleged breaches on the overall project and whether they materially affected the completion of the project.

In its reasoning, the court found that the breaches alleged by Monadelphous Engineering did not warrant termination of the contract. The breaches were not significant enough to materially affect the completion of the project, and Monadelphous Engineering had not followed the correct procedures to terminate the contract. The court held that KME's breaches did not entitle Monadelphous Engineering to terminate the contract, and that the contract remained in effect. The court also noted that the termination of the contract would have significant consequences for both parties, and that it was not in the best interests of either party to terminate the contract. The application for termination was dismissed.

Monadelphous Engineering Pty Ltd

DECISION

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