Project Coordination (Australia) Pty Ltd

[2017] FWCA 455

[2017] FWCA 455

FAIR WORK COMMISSION

DECISION

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

Project Coordination (Australia) Pty Ltd
(AG2016/583)

PROJECT COORDINATION (AUSTRALIA) PTY LTD ENTERPRISE AGREEMENT 2011 - 2015

Australian Capital Territory
DEPUTY PRESIDENT LAWRENCE	SYDNEY, 20 JANUARY 2017

Application for termination of the Project Coordination (Australia) Pty Ltd Enterprise Agreement 2011-2015.

Introduction

[1] This decision arises from a re-hearing by me of an application to terminate the Project Coordination (Australia) Pty Ltd Enterprise Agreement 2011–2015 [AE896532] (the Agreement) lodged by Project Coordination (Australia) Pty Ltd (the Applicant) pursuant to s.225 of the Fair Work Act 2009 (the Act).

[2] The Agreement was terminated by Commission Johns in a decision issued on 5 August 2016 ([2016] FWCA 5465).

[3] The Construction, Forestry, Mining and Energy Union (CFMEU) appealed that decision. The appeal proceedings (C2016/5093) took place on 26 October 2016. The Full Bench of the Commission (Vice President Catanzariti, Deputy President Lawrence (myself) and Commissioner Booth), decided to uphold the appeal, quash the decision of Commissioner Johns and remit the matter for further hearing to me.

[4] The matter was subject of a contested hearing in Canberra on 29 November 2016. However, subsequent discussions led to a settlement between the Applicant and the CFMEU.

[5] At a hearing in Sydney on 9 December 2016, the parties advised the Commission of the agreement reached and tendered consent orders. I advised the parties that I would issue the consent order together with my reasons. The following are my reasons for decision.

Background

[6] The application to terminate the Agreement was lodged on 16 March 2016. The Agreement commenced on 6 September 2012 and had a nominal expiry date of 31 October 2015.

[7] The application was opposed by the CFMEU. A hearing took place in Canberra on 2 May 2016 followed by written submissions.

[8] In his decision, Commissioner Johns dealt with the legislative provisions and the authorities.

[9] The termination of enterprise agreements which are past their nominal expiry date must be dealt with in accordance with ss.225 and 226 of the Act, which provide:

“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 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

226 When FWC must terminate an enterprise agreement

If an application for the termination of an enterprise agreement is made under section 225, FWC must terminate the agreement if:

(a) FWC is satisfied that it is not contrary to the public interest to do so; and

(b) 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.”

[10] The Commissioner relied on the following decisions, in particular:

● Tahmoor Coal Pty Ltd [2010] FWA 6468 (Tahmoor Coal)

● Aurizon Operations Limited; Aurizon Network Pty Ltd; Australian Eastern Railroad Pty Ltd [2015] FWCFB 540 (Aurizon)

[11] The Commissioner decided that terminating the Agreement was not contrary to the public interest because:

● no general economic or employment issues arose

● the award was not an inadequate safety net

● collective bargaining, in a broad sense, was not undermined

[12] The Commissioner took account of the fact that the Agreement only applied to one employee who provided a witness statement and gave evidence that he did not oppose the termination of the Agreement. Little weight was put on this factor, however.

[13] The Commissioner dealt extensively with the main aspect of the Agreement which was complained about by the Applicant. Clause 21.7 prohibited work on rostered days off adjacent to 6 public holiday weekends. He concluded:

“[57] Consequently, I am satisfied that the “No Work Weekends” adversely affect productivity in a very real sense. Six weekends attached to RDOs or Public Holidays necessarily constrain the days available for productive work. It is obvious, therefore, that the “No Work Weekends” adversely affect productivity as contended by Mr Murphy. The “agreed emergency or a special client need” relief provision provided for in clause 21.9 of the Agreement is no real answer to the productivity issue that the “No Work Weekends” give rise to.

[58] The views expressed by the Employer are validly held and weigh in favour of terminating the Agreement.”

[14] With respect to the application of the Agreement to sub-contractors, the Commissioner held:

“[64] The CFMEU also argued that the protection afforded to subcontractors and labour hire workers in clause 9 of the Agreement will no longer be in effect if the Agreement is terminated. The CFMEU submitted that any labour hire employees (not covered by another CFMEU agreement) will be disadvantaged by the termination of the agreement. However the CFMEU provided no records of any employees who had been employed as labour hire employees, and were not covered by another CFMEU agreement.

[65] The Commission, as presently constituted, accepts the correctness of the submission that considering the circumstances of employees directly affected and other employees (for example employees and subcontractors) is required. However, no party led any evidence about the views or circumstances of indirect employees. The CFMEU criticised the applicant for not calling such evidence. However, while it would have been easier for the applicant to arrange such evidence, the CFMEU was not in a position where it was impossible for it to do so. Like the applicant it chose not to. Consequently the Commission is unable to consider the views in circumstances of indirect employees.

s.226(b)(ii) – Circumstances of the employer

[66] The applicant submitted that it will be able to provide more flexible and productive employment arrangements should the Agreement be terminated. The applicant further submitted the lockdown weekends imposed on it, increases in its overheads (because it continues to accrue costs for site management, scaffold hire, fence hire, machinery hire). The applicant submitted a total of 25 working days would become available to it and its subcontractors if the Agreement were terminated.”

[15] Finally, the Commissioner concluded that termination of the Agreement was likely to increase productivity and that this weighed in favour of termination.

[16] In summary, therefore, the Commission, having been satisfied of the matters contained in s.226, was required to terminate the agreement.

[17] The CFMEU appeal against the Commission’s decision focussed on the alleged error in concluding in the absence of evidence that the agreement adversely impacted the Respondent’s productivity. It was also submitted that employees of sub-contractors and labour-hire providers would be impacted by the proposed termination.

[18] The Full Bench put to the parties that there appeared to be an error in the decision in that “the Commissioner did not have before him sufficient evidence to find that there was a productivity gain through termination”. Ultimately, the parties accepted this. The decision of Johns C was quashed and the matter remitted to me for re-hearing.

The re-hearing

[19] Directions were issued for the filing of additional submissions and evidence and the matter was heard in Canberra on 29 November 2016.

[20] Mr T. Roberts appeared for the CFMEU. Mr J. Macken, counsel, instructed by Mr J. Nikolic appeared for the Applicant.

[21] Mr Macken and Mr Nikolic were granted permission to appear pursuant to s.596.

[22] Prior to the hearing, the Applicant lodged further written submissions, a further witness statement of Mr Paul Murphy, the Managing Director of the Applicant and 10 witness statements of various of the Applicant’s staff. This material went to the impact on the Applicant’s productivity, costs and competitiveness of the “Lock-Down Weekends” clause. The Applicant also relied on the material tendered before Commissioner Johns.

[23] The CFMEU tendered a further witness statement of Jason O’Mara, the Assistant Secretary of the ACT Branch.

[24] Mr Murphy and Mr O’Mara were the subject of extensive cross-examination. However, the evidence, which related to the productivity and contractor issues, was concluded on the day. Submissions were scheduled for 9 December in Sydney. On 8 December I was advised by email that the parties had reached agreement.

Consent Termination of the Agreement

[25] Mr P. Boncardo appeared for the CFMEU on 9 December. The parties advised me that they had now agreed that the Agreement be terminated on and from 30 April 2017.

[26] I was advised that the parties had agreed to enter a process of good faith bargaining with a view to reaching a new agreement. It was noted that the parties will need to come to terms with a new Federal Government Building Code in negotiating the new agreement.

[27] I am satisfied that the agreement between the parties represents a changed circumstance which justifies the termination of the Agreement pursuant to s.226. The consent of the CFMEU is a very different position from that at the time of Commissioner John’s decision or the Full Bench proceedings.

[28] It is clearly not contrary to the public interest to terminate an agreement where the relevant union consents. The prospective date of termination will facilitate the negotiation of a replacement agreement which is also in the public interest. I note that prior to this dispute the CFMEU and the Applicant appear to have had a productive relationship. The evidence was that there had been 9 agreements registered pursuant to the Federal legislation between the Applicant and the CFMEU since 1991. This is an opportunity to re-establish a good working relationship.

[29] I have also taken into account the views and circumstances of the employees, the Applicant and the CFMEU as required by s.226(b). All now support the termination of the agreement from the agreed date. I am satisfied that their circumstances will not be adversely affected as result of the agreed termination process.

Conclusion

[30] Having been satisfied as to the matters specified in s.226 I am required to terminate the Agreement. The termination will operate on and from 30 April 2017 as agreed by the parties. An Order [PR589603] to this effect will be issued with this decision.

DEPUTY PRESIDENT

Appearances:

J. Macken, counsel with J. Nikolic, solicitor for the Applicant;

T. Roberts and P. Boncardo for the CFMEU.

Hearing details:

2016

Canberra:

November 29.

Sydney:

December 9.

DEPUTY PRESIDENT

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<Price code C, AE896532  PR589600>