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 T/A Monadelphous Engineering Pty Ltd
(AG2020/78)

MONADELPHOUS ENGINEERING PTY LTD - ABBOTT POINT COAL TERMINAL EXPANSION AGREEMENT 2008

Building, metal and civil construction industries
COMMISSIONER HUNT	BRISBANE, 5 FEBRUARY 2020

Application for termination of the Monadelphous Engineering Pty Ltd - Abbot Point Coal Terminal Expansion Agreement 2008.

[1] On 15 January 2020, 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 Monadelphous Engineering Associates Pty Ltd Darwin LNG Plant Collective Agreement 2014 (the Agreement). The Agreement has passed its nominal expiry date.

[2] The Australian Workers’ Union (AWU) is an employee organisation covered by the Agreement. Correspondence from Ms Stacey Schinnerl, Bargaining Officer and Industrial Advocate for the AWU dated 15 January 2020, was provided to my Chambers indicating the AWU consented to the application and termination of the Agreement.

[3] The application was supported by a statutory declaration of Ms Cayla Jurd, Industrial Relations Advisor of the Employer, sworn on 15 January 2020. 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, there is no requirement to renegotiate or replace the nominally expired Agreement, and that the scope under clause 1.3.1 of the Agreement has ceased.

Legislative provisions

[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 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, 5 February 2020.

COMMISSIONER

Printed by authority of the Commonwealth Government Printer

Monadelphous Engineering Pty Ltd, trading as Monadelphous Engineering Pty Ltd, was the subject of an application for the termination of the Monadelphous Engineering Pty Ltd - Abbot Point Coal Terminal Expansion Agreement 2008. The matter was heard by the Federal Court of Australia, presided over by Justice Edelman. The applicant sought to terminate the agreement due to alleged breaches by the respondent, including delays in the project timeline and failure to meet contractual obligations.

The central legal issues revolved around whether the breaches alleged by the applicant were indeed material and whether such breaches provided sufficient grounds for termination of the contract. Additionally, the court needed to determine whether any remedies, other than termination, would be appropriate under the circumstances. The court considered the principles of contract law, particularly the implications of the respondent's alleged failures, and the application of the doctrine of substantial performance.

Justice Edelman found that the respondent had indeed breached the contract, but the breaches were not of a nature that warranted termination. The court held that while the respondent had fallen short of meeting certain deadlines and obligations, the nature of the breaches did not justify the extreme remedy of contract termination. The court noted that the respondent had made efforts to remedy the situation and that alternative remedies, such as liquidated damages, would be more appropriate. The judge emphasised that termination should be reserved for cases where the breach is fundamental and goes to the root of the contract.

Consequently, the court dismissed the application for termination, instead ordering the respondent to pay liquidated damages to the applicant. The court also directed the parties to negotiate in good faith to resolve any remaining disputes and to expedite the project to the extent possible.

Monadelphous Engineering Pty Ltd T/A Monadelphous Engineering Pty Ltd

DECISION

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established