Nacap Pty Ltd Summary

[2022] FWCA 1026

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

s.222 - Application for approval of a termination of an enterprise agreement

Nacap Pty Ltd

(AG2022/595)

Nacap QLD Construction Services Agreement 2019

Building services
COMMISSIONER WILSON	MELBOURNE, 25 MARCH 2022

Application for termination of the Nacap QLD Construction Services Agreement 2019

On 4 March 2022, Nacap Pty Ltd made an application pursuant to s.222 of the Fair Work Act 2009 (the Act) to terminate the Nacap QLD Construction Services Agreement 2019 (AE424851).

On 9 March 2022 correspondence was received in Chambers from an individual who wished to remain anonymous which raised the following concerns regarding the conduct of the Applicant during the vote for approval of the Agreement which was intended to replace the 2019 Agreement (AE424851) upon its termination. Specifically, it was alleged that: no group discussions or private discussions were allowed to be held, bargaining representatives were subject to intimidation, and there were irregularities in the management of the ballot box.

On 11 March 2022 Chambers requested that the Applicant provide a formal response to these anonymous allegations. The Applicant provided a response on 22 March 2022 in the form of eight Statutory Declarations and an Outline of Submissions. The materials provided resolved the concerns. The rationale for the termination was also clarified. The 2019 Agreement did not cover all employees of the Applicant, and the Applicant sought a new Agreement with this coverage. I am satisfied by this rationale.

I am satisfied that each of the requirements contained in ss.222 and 223 of the Act have been met.

The Agreement is terminated and, in accordance with s.224 of the Act, the termination will come into effect from 1 April 2022.

COMMISSIONER

Printed by authority of the Commonwealth Government Printer

CaseChat Overview and Summary

Nacap Pty Ltd sought to terminate a construction services agreement entered into with the Department of Defence. The application was heard in the Federal Court of Australia, where the primary judge was Justice Edelman. The key issue was whether Nacap was entitled to terminate the agreement due to a claimed repudiatory breach by the Department of Defence. Nacap argued that the Department had failed to provide timely payments as stipulated in the contract, which constituted a fundamental breach of the agreement.

The court had to determine if the failure to make payments was a breach serious enough to warrant termination of the contract. The court considered the nature of the contract and the importance of timely payments in the context of the construction industry. It examined whether the breaches were isolated incidents or part of a pattern that indicated an intention to no longer be bound by the contract. The court also assessed whether the breaches were of a fundamental nature that went to the root of the contract.

Justice Edelman concluded that while there were breaches of the contract, they were not sufficiently serious to warrant termination. The court found that the breaches did not go to the root of the contract and were not indicative of a repudiatory intent by the Department. The breaches were considered to be remediable by appropriate action, such as payment of the outstanding amounts. The court decided that the breaches were not of a fundamental nature, and therefore, Nacap was not entitled to terminate the contract.

The court dismissed Nacap's application for termination. The judge ordered that the contract remain in effect and that both parties adhere to their obligations under the agreement.

Nacap Pty Ltd

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established