Re Project Coordination (Australia) Pty Ltd

[2016] FWCA 5465

[2016] FWCA 5465

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)

COMMISSIONER JOHNS SYDNEY, 5 AUGUST 2016

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

Introduction

[1] This decision concerns an application by Project Coordination (Australia) Pty Ltd (Applicant/Employer) under section 225 of the Fair Work Act 2009 (FW Act) to terminate the Project Coordination (Australia) Pty Ltd Enterprise Agreement 2011-2015 (Agreement). The application is opposed by the Construction, Forestry, Mining and Energy Union (CFMEU).
[2] The Agreement is a single enterprise agreement. However, like most agreements in the building and construction industry, the Agreement is a pattern agreement produced by the CFMEU. The applicant’s Director, Paul Murphy, gave evidence that Project Coordination had entered into 9 consecutive enterprise bargaining agreements with the CFMEU over the previous 24 years. The present Agreement commenced operation on 6 September 2012. The Agreement passed its nominal expiry date on 31 October 2015.

Background

[3] In support of the Application Mr Murphy declared that;

a) the Agreement currently only applies to one employee. This employee’s terms and conditions of employment will be maintained through a contract of employment, which has already been executed;
b) the termination of the Agreement will increase Project Coordination’s productivity as work will not be prohibited on 6 weekends which are adjacent to public holidays-per clause 21.

[4] Clause 21.7 of the Agreement provides:

21.7 It is recognised that there is merit in programming no work on the RDOs adjacent to public holiday weekends during the working year. This will allow the management and Employees of the Company to have quality paid leisure time. Work is prohibited on the following public holidays, weekends and agreed RDOs adjacent to Australia Day, Canberra Day, Easter Friday, Easter Monday, Anzac Day, Queens Birthday and Labour Day.

[5] Clause 21.9 of the Agreement provides:

21.9 Where there is an agreed emergency or a special client need and subject to the agreement of all parties to this Agreement, Ltd work may be undertaken on the No Work weekends and adjacent fixed RDOs. Unless impracticable the Company will give the other parties 7 days’ notice of any such need for work so as to ensure appropriate consultation.

[6] Clause 24 provides for a dispute settlement procedure which ultimately empowers the Fair Work Commission (Commission) with the jurisdiction to settle the dispute by arbitration. 1 It is common ground between the parties that, at no stage during the life of the Agreement, has the applicant invoked the dispute settlement procedure in relation to its desire to work on a “No Work Weekend”.
[7] By reason of the fact that the applicant presently employs only one person covered by the Agreement it is not possible to enter into a new enterprise agreement that might not include the provisions relating to “No Work Weekends”. 2
[8] Because s.172(6) of the FW Act prohibits the making of an enterprise agreement with a single employee, it must follow that it is also not possible to vary the Agreement to remove these restraints on productivity. In circumstances where Project Coordination could not make a new enterprise agreement with its single employee, Mr Stojce Stavreski, which would not include “No Work Weekends”, it would undermine the scheme and objects of the FW Act (and its emphasis on promoting collective bargaining) if Project Coordination and Mr Stavreski could agree to amend the Agreement to remove “No Work Weekends”. This conclusion is consistent with the principle that “when anything is forbidden, everything which leads to the same result is also forbidden” or “when anything is prohibited directly, it is prohibited indirectly”.
[9] Consequently, the applicant wants to terminate the Agreement. It submits that because it tenders for work it is left unsure of future plans as work is not systematic, meaning it is difficult for the applicant to predict its work load. The applicant submits in these circumstances that it would be beneficial to have the construction site open for workers, who consent to working, on the days ordinarily restricted in clause 21.7. 3 Further, it submits that the “No Work Weekends” cause them to fall behind schedule while they have a continuing obligation to pay project managers, contract administrators, general foremen and site fences, despite no work being undertaken on those days.4
[10] The CFMEU opposes the termination of the Agreement. In short the CFMEU submitted that termination of the Agreement was both not in the public interest and not appropriate in all the circumstances.

The hearing

[11] At the hearing on 2 May 2016:

a) the Applicant was represented by Mr C Spence, Industrial Relations Director.
b) the CFMEU was represented by its industrial officer, Mr P Boncardo.
c) the following witnesses were called:

i. Mr Jason O’Mara, Assistant Secretary of the CFMEU. He also submitted a statement (Exhibit R3) and a statement in reply (Exhibit R4);

ii. Mr Paul John Murphy, Managing Director of the Employer. He also submitted a statement (Exhibit A3); and,

iii. at the request of the Commission, as presently constituted, Mr Stojce Stavreski, the only employee of the Employer. He also submitted a statement (Exhibit A4).

[12] In coming to this decision the Commission, as presently constituted, has had regard to all of the evidence and submissions made by the parties including:

a) Exhibit A1 – Submissions on behalf of the applicant (8 April 2016);

b) Exhibit R1 – Submissions of the CFMEU (4 April 2016);

c) Exhibit A2 – Final Submissions of the applicant (22 April 2016);

d) Exhibit R2 – CFMEU’s submissions in reply (18 April 2016);

e) CFMEU submissions (16 May 2016);

f) Submissions of the applicant (30 May 2016); and

g) CFMEU submissions in reply (6 June 2016).

Legislative scheme
[13] Subdivision D of Division 7 contains provisions which enable the termination of an enterprise agreement to be terminated after the agreement has passed its nominal expiry date.

[14] The provisions are as follows:

“Subdivision D—Termination of enterprise agreements after nominal expiry date

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;

(c) an employee organisation 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.”

[15] What is apparent from the legislative scheme is that the Commission must consider two issues:

a) first, the public interest; and,
b) secondly, the appropriateness of termination (taking into account the matters listed in s.226).

[16] Further, “these provisions, and relevantly s.226, must be construed in a manner that is consistent with the language and purpose of the provisions by reference to the language of the FW Act as a whole, and so the context general purpose and policy of the provisions are an important means by which the meaning and effect of a provision is to be ascertained.” 5

Authorities

[17] The authorities considered and adopted in the making of this decision included the following:

• Energy Resources of Australia Ltd v Liquor, Hospitality and Misc. Union (ERA) 6;



• Tahmoor Coal Pty Ltd (Tahmoor Coal) 7;



• Aurizon Operations Limited; Aurizon Network Pty Ltd; Australain Eastern Railroad Pty Ltd 8 (Aurizon FWCFB); and



• Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Aurizon Operations Ltd (Aurizon FCAFC). 9

[18] In ERA Vice President Watson set out the relevant authorities relating to the public interest as follows:

[11] The public interest requirement in s 226(a) is expressed in similar terms to previous s 170MH(3) of the WR Act. That section was subject to consideration by a Full Bench of the AIRC on a number of occasions. Those authorities make it clear that the public interest involves something distinct from the interests of the parties although they may be similarly affected. In Re Kellogg Brown and Root Bass Strait (Esso) Onshore/Offshore Facilities Certified Agreement 2000 10 (Kellogg) a Full Bench said (at [22-27]):

“[22] The absence of any reference to the interests of the negotiating parties in s.170MH(3) is significant. It follows that the views of persons bound by the agreement may be relevant to the exercise of the discretion if they shed light upon the effect of termination on the public interest, but they should not be given any independent weight. To do so would be to import into the application of the section something which on its proper construction it does not include.
[23] The notion of public interest refers to matters that might affect the public as a whole such as the achievement or otherwise of the various objects of the Act, employment levels, inflation, and the maintenance of proper industrial standards. An example of something in the last category may be a case in which there was no applicable award and the termination of the agreement would lead to an absence of award coverage for the employees. While the content of the notion of public interest cannot be precisely defined, it is distinct in nature from the interests of the parties. And although the public interest and the interests of the parties may be simultaneously affected, that fact does not lessen the distinction between them.
[24] We were referred to a number of authorities concerning the ascertainment of the public interest. It is sufficient to refer to two. The first is the decision of the High Court of Australia in Queensland Electricity Commission; Ex parte Electrical Trades Union of Australia (the QEC case). In that case the Court was considering the exercise of the discretion conferred on the Conciliation and Arbitration Commission by s.41(1)(d)(iii) of the Conciliation and Arbitration Act 1904. A similar discretion is now conferred upon this Commission by s.111(1)(g)(iii) of the Act. That section reads:

"111 Particular powers of Commission
. . .
(1) The Commission may:
. . .
(g) dismiss a matter or part of a matter, or refrain from further hearing or from determining the industrial dispute or part of the industrial dispute, if it appears:
. . .
(iii) that further proceedings are not necessary or desirable in the public interest;"

[25] The QEC case was concerned with whether or not the Commission had failed to exercise its jurisdiction in upholding an application by the Queensland Electricity Commission to refrain from further hearing or from determining an industrial dispute between it and the Electrical Trades Union of Australia. The following passage appears in the joint judgement of the majority:

". . . Ascertainment in any particular case of where the public interest lies will often depend on a balancing of interests, including competing public interests, and be very much a question of fact and degree. In this case the Commission was called upon to weigh in the balance two competing public interests. One was the importance of settling in its entirety the dispute initiated by the E.T.U.'s log of claims. The other was the importance of leaving the dispute to be resolved by the State tribunal despite the limitations on its jurisdiction if that course was likely to maintain the marked improvement in industrial relations in the industry that had occurred since the dispute arose and thereby contribute to industrial peace and an efficient power supply.”

[26] It is clear from this passage that the ascertainment of the public interest may involve balancing countervailing public interests. That the Commission should take all of the circumstances into account is made clear by Dawson J in Re Australian Insurance Employees Union; Ex parte Academy Insurance Pty Ltd. These authorities provide useful general guidance in the application of the test in s.170MH(3). They illustrate the types of interests which can be properly described as public interests and confirm the breadth of circumstances which may be relevant to the ascertainment of those interests.
[27] It should be emphasized that the Commission's consideration of the public interest for the purpose of s.170MH(3) is directed to the consequences of terminating the agreement. In a given case, some consequences will be clearly predictable, others will be less so. For the most part the Commission should be guided by the likely foreseeable consequences of termination rather than speculation about possible consequences.” (references omitted)

[19] In relation to s.226(b) Vice President Watson observed that,

[15] Section 226(b) is a new requirement for termination of agreements enacted in the FW Act. It has not as yet been subject to any Tribunal consideration. In my view the requirement calls for an overall consideration of the context and all of the relevant circumstances involved and the exercise of an overall judgment based on those circumstances.
[16] As with other broad judgements under the Act there will often be competing considerations which will need to be balanced. The specific matters raised in s 226 will need to be given full consideration. Taking into account the views and circumstances of the parties involves far more than the expression of their views in support or opposition to termination. It should involve a consideration of the reasons for their views and the validity of their concerns.
[17] Section 226 requires a positive conclusion that termination of the Agreement is appropriate before the requirement for termination is satisfied. It is not desirable to attempt to formulate a test in substitution of the words of the section itself.
[18] In this matter the views and circumstances of the employees directly affected, other employees, the employer and the LHMU will clearly need to be taken into account. The proposed termination will need to be considered in the context of the current legislation including its objects and regard will need to be paid to the role and effect of the Agreement if it is to be terminated and if it is to continue.

[20] Having applied the statutory test, Vice President Watson reached the conclusion that it was not contrary to the public interest to terminate the agreement before him and that it was appropriate to terminate it having regard to all the circumstances of the matter.

[21] In Tahmoor Coal, the employer sought to terminate two agreements which imposed a number of restraints on its ability to operate its mining operations. Vice President Lawler declined to terminate the agreements even though he accepted that the constraints “adversely affected the productivity of the Tahmoor Mine to a material degree” 11.

[22] In his reasons for decision Vice President Lawler usefully set out the legislation in its historical context:

[17] … From 1904 until 1996 Commonwealth industrial legislation provided for the compulsory conciliation and arbitration of constitutional industrial disputes by an independent court or tribunal. The introduction of that system is generally understood to have been a response to the traumatic social dislocation caused by a series of bitter and protracted industrial disputes in the late 1800s. The introduction of compulsory conciliation and arbitration of industrial disputes was seen as ushering in what Justice Higgins famously described as a “new province of law and order” where the resolution of disputes by an independent court or tribunal through compulsory conciliation and arbitration replaced the “law of the jungle”. In 1983 enterprise bargaining was introduced into the federal industrial relations system and over the following period the scope of awards that could be made in settlement of industrial disputes became progressively limited. The WorkChoices amendments to the Workplace Relations Act 1996 all but did away with compulsory arbitration of industrial disputes. The Fair Work Act 2009 has continued that position so that our present federal system of industrial relations has enterprise bargaining as one of its centrepieces: it is the mechanism - the only mechanism - by which unions and employees acting collectively can achieve improved terms and conditions of employment over and above the safety net constituted by a set of minimum rates awards and statutorily prescribed minimum terms (presently found in the National Employment Standards). It is against this historical background that the relevant provisions of the FW Act should be considered.
[18] Broadly speaking, a certified agreement made under the pre-WorkChoices version of the WR Act commenced to operate when certified by the Australian Industrial Relations Commission (AIRC) and continued in operation until replaced by another statutory collective agreement or terminated in accordance with the WR Act and now the FW Act. This same general approach applies in relation to workplace agreements made under the WorkChoices version of the WR Act and in relation to enterprise agreements made under the FW Act. It is notable that that during the currency of the WorkChoices version of the WR Act, an employer could unilaterally terminate a certified agreement or workplace agreement by the giving of written notice. That method of terminating a statutory collective agreement did not exist under the pre-WorkChoices version of the WR Act and was removed in the FW Act.
[19] Broadly speaking, under the current regime a statutory a collective agreement continues in operation beyond its nominal expiry date unless terminated by FWA on the basis of agreement between employer and employees or pursuant to s.226 of the FW Act.

…

[24] Prior to 26 March 2006 s.170MH of the WR Act conferred a power on the AIRC to terminate collective agreements that had passed their nominal expiry date. Section 170MH(1) specified who could make an application. Subsections 170MH(2) and (3) provided:

(2) On receiving the application, the Commission must take such steps as it considers appropriate to obtain the views of persons bound by the agreement about whether it should be terminated.

(3) If, after complying with subsection (2), the Commission considers that it is not contrary to the public interest to terminate the agreement, the Commission must, by order, terminate the agreement.

[25] Between 26 March 2006 and 28 March 2008, as noted above, the WorkChoices version of the WR Act made provision for the unilateral termination by an employer of an expired certified agreement or workplace agreement upon the giving of written notice. The termination occurred by operation of the statute after the giving of the notice and the AIRC had no role in that process.

[26] From 28 March 2008 until the commencement of the FW Act on 1 July 2009, s.397A of the WR Act provided that on application the AIRC “may” terminate a collective agreement that had passed its nominal expiry date if the AIRC was “satisfied that it would not be contrary to the public interest to terminate the agreement.” Pursuant to s.397A(3), in deciding whether it would be contrary to the public interest to terminate the agreement, the AIRC was required to “have regard to all circumstances of the case, including:

(a) the views of each party bound by the agreement (including the employees) about whether it should be terminated; and

(b) the circumstances of each such party, including the likely effect on each such party of the termination of the agreement.”

[23] Vice President Lawler then adopted the reasoning in Kellogg and QEC and observed that “the public interest involves something distinct from the interests of the parties although they may be similarly affected.” 12

[24] In relation to the question of appropriateness Vice President Lawler observed that,

[32] Although the opening words of s.226 are mandatory (“...FWA must terminate the agreement if...”), the two preconditions in s.226(a) and (b) involve a degree of subjective judgment, particularly the requirement that FWA considers that it is “appropriate” to terminate the agreement taking into account all the circumstances including the matters specified in s.226(b)(i) and (ii). “Appropriateness” is a broad discretionary standard. Reasonable minds may differ, indeed, differ sharply, on what is appropriate in any given set of circumstances. The power to terminate an agreement turns on what is effectively an exercise of a broad discretion.
[33] While there is a history of provisions empowering the AIRC to terminate statutory collective agreements, prior to the enactment of s.226 of the FW Act the focus on when that power should be exercised has been on “the public interest”. Section 226 of the FW Act is the first time that this power has been made subject to a criterion of “appropriateness”. The inclusion of that criterion is of particular significance and means that some of the earlier authorities are of limited assistance in determining whether the termination of an expired agreement is “appropriate”.

…

[39] It goes without saying that what is effectively a discretion conferred by s.226 must be exercised judicially, that is, in accordance with the intent of the legislation and any principles emerging from the authorities, and not on the basis of any personal whim or ideological predisposition. …
…
[45] In relation to the matter specified in s.226(b)(ii), the apparent legislative intent is that both beneficial and detrimental effects on the employees, employer and union of termination as against no termination should be considered and that if the comparison of those effects suggests that one of them is disproportionately worse of when the benefits and detriments are balance, this is factor in favour of a conclusion that termination will be inappropriate. Of course, there is a problem of comparison here because it will often be inherently problematic to compare different species of benefit and detriment.
[46] The objects of the FW Act are clearly relevant to a judicial exercise of the power in s.226. If termination will promote the objects then that is a material factor in favour of considering termination appropriate and if termination will work against the objects then that is a material factor against considering termination appropriate.

[25] After setting out the objects of the FW Act, Vice President Lawler concluded that:

[49] The objects in s.3(f) and s.171(a) are particularly relevant. They indicate that collective bargaining in good faith for an enterprise agreement is the central way in which, in the framework that has been established by the FW Act, productivity benefits are to be achieved.
[50] The object in s.171(b) is also clearly relevant. It emphasises that a key role of FWA is to facilitate good faith bargaining and the making of enterprise agreements. This suggests that that one of the effects of termination which should be considered is whether termination will enhance or reduce the prospects of the parties concluding a new agreement through bargaining.
[51] The object in s.3(a) is advanced by a termination of an agreement where this would promote productivity. However, the object in s.3(a) is expressed in general terms whereas the objects in s.3(f) and s.171(a) are more specific. Given that principle of construction that the specific overrides the general, this suggests that the emphasis on promoting productivity (part of the object in s.3(a)) is primarily to be achieved through collective bargaining in good faith (the objects in s.3(f) and s.171) rather than by other means, such as termination of an expired agreement.

[26] The Vice President then considered the decision of Vice President Watson in ERA:

[53] While his Honour emphasised only the object in s.3(a), for the reasons I have given, I consider that the objects in s.3(f) and s.171 are also of particular importance and should be seen as qualifying the general object in s.3(a). I respectfully agree with the outcome in ERA. However, it needs to be born in mind that the circumstances in that case were very unusual indeed. The agreement in question was some 10 years past its nominal expiry date and had a continuing application to only three employees - less than one per cent of the employer’s workforce. The remainder of the relevant workforce was employed on statutory individual contracts and the terms and conditions of their employment would not be directly affected by termination of the agreement in that case. Clearly enough, ERA was not a case where bargaining for a replacement agreement had been ongoing since the passing of the nominal expiry date of the agreement in question.
[54] I respectfully agree with his Honour that it is not intended by the legislation that agreements should remain in place indefinitely and that it is unreasonable to lock an expired agreement in place indefinitely. On the other hand, this does not mean that a party to an agreement has a prima facie right to have the agreement terminated merely because the agreement has passed its nominal expiry date.
[55] It seems to me that under the scheme of the FW Act, generally speaking, it will not be appropriate to terminate an agreement that has passed its nominal expiry date if bargaining for a replacement agreement is ongoing such that there remains a reasonable prospect that bargaining (in conjunction with protected industrial action and or employer response action) will result in a new agreement. This will be so even where the bargaining has become protracted because a party is advancing claims for changes that are particularly unpalatable to the other party. While every case will turn on its own circumstances, the precedence assigned to achieving productivity benefits through bargaining, evident in the objects of the FW Act, suggests that it will generally be inappropriate for FWA to interfere in the bargaining process so as to substantially alter the status quo in relation to the balance of bargaining between the parties so as to deliver to one of the bargaining parties effectively all that it seeks from the bargaining.

[27] Having considered the statutory test Vice President Lawler was substantially concerned not to interfere with the protracted bargaining process that had been undertaken by the parties and concluded that he did,

“[70] … not consider that it is appropriate to terminate the Agreements at this time. Having reached that conclusion, it is unnecessary to make a finding as to whether termination of the Agreement is contrary to the public interest…”.

[28] The approach to the assessment of whether the termination of an enterprise agreement that has passed its nominal expiry date is not contrary to the public interest was also discussed in the Aurizon litigation. Relevantly, the Full Bench in Aurizon FWCFB set out and applied the following approach:

[115] In considering the relevant statutory provisions at issue in this application the starting point is to construe the words of the statute according to their ordinary meaning having regard to the context and legislative purpose.  The words of the statute being construed should be read by reference to the language of the statute as a whole. As Lawler VP and Bissett C observed in JJ Richards and Sons Pty Ltd v Transport Workers’ Union of Australia, after reciting relevant authorities concerning statutory construction:

“Drawing these principles together, the task of statutory interpretation is concerned with ascertaining the intention of the legislature as manifested by the text of the legislation. Context (using that word in its widest sense to include such things as the existing state of the law and the mischief which, by legitimate means, one may discern the statute was intended to remedy) and the purpose or object underlying the legislation must always be considered. These must be considered in the first instance, not merely at some later stage when ambiguity might be thought to arise. The text of a provision, read in context and having regard to the object and purpose of the provision, is always the surest guide.” 

[116] In J.J. Richards & Sons Pty Ltd and Another v Fair Work Australia and Another  Flick J discussed three long established and fundamental principles to statutory construction. In so doing His Honour said:

“First, the so-called “golden rule” of the common law as to statutory construction is that “the grammatical and ordinary sense of the words is to be adhered to, unless that would lead to some absurdity, or some repugnance or inconsistency with the rest of the instrument, in which case the grammatical and ordinary sense of the words may be modified, so as to avoid that absurdity and inconsistency, but no farther”: Grey v Pearson [1857] EngR 335; (1857) 6 HLC 61 at 106 per Lord Wensleydale. See also: Australian Boot Trade Employés’ Federation v Whybrow & Co [1910] HCA 53; (1910) 11 CLR 311 at 341 to 342 per Higgins J. The “golden rule” is not confined to circumstances where a “mistake” has been made in the wording of an Act; the rule is also applied to avoid construing legislation so as to produce patently unintended or absurd results: Footscray City College v Ruzicka [2007] VSCA 136 at [16], 16 VR 498 at 505 per Chernov JA (Warren CJ and Maxwell P agreeing).
Second, the common law also recognised that “[i]t is a strong thing to read into an Act of Parliament words which are not there, and in the absence of clear necessity it is a wrong thing to do”: Thompson v Goold & Co [1910] AC 409 at 420 per Lord Mersey. See also: Dallikavak v Minister for Immigration and Ethnic Affairs (1985) 9 FCR 98 at 103 per Northrop and Pincus JJ; Minister for Immigration and Citizenship v Hart [2009] FCAFC 112 at [6] per Spender J.
Third, a construction of a statutory provision is to be preferred “that would best achieve the purpose or object of the Act”: Acts Interpretation Act1901 (Cth) s 15AA. The requirement to look to the purpose or object of an Act is more than an instruction to adopt the traditional mischief or purpose rule in preference to the literal rule of construction; s 15AA requires no ambiguity or inconsistency in a statutory provision before a court is not only permitted, but required to have regard to purpose: Mills v Meeking [1990] HCA 6; (1990) 169 CLR 214 at 235. Dawson J there went on to observe that the provision there in question, being a provision comparable to s 15AA, “... requires a court to construe an Act, not to rewrite it, in the light of its purposes”. Similarly, in Trevisan v Commissioner of Taxation (1991) 29 FCR 157 at 162, Burchett J observed that s 15AA “... is not a warrant for redrafting legislation nearer to an assumed desire of the legislature. It is not for the courts to legislate ...”. See also: R v L (1994) 49 FCR 534 at 538 per Burchett, Miles and Ryan JJ; Skea v Minister for Immigration, Local Government and Ethnic Affairs (1994) 51 FCR 82 at 85 per Moore J; Minister for Immigration and Multicultural Affairs v Lim [2001] FCA 512 at [7], [2001] FCA 512; 112 FCR 589 at 592 to 593 per Sundberg J. “In the end the task of the court is to ascertain and to enforce the actual commands of the legislature”: Re Application of The News Corp Ltd (1987) 15 FCR 227 at 236 per Bowen CJ.”

[29] Then after setting out the relevant statutory provisions and context (including the objects of the FW Act and the relevant Division) the Full Bench concluded that,

[121] These provisions form part of a scheme established by Part 2-4 of the Act designed, inter alia, to enable bargaining for, making of, approving, varying and for the termination of, enterprise agreements.

….

[126] The legislative scheme therefore enables and facilitates good faith bargaining for an enterprise agreement. It also facilitates the making of enterprise agreements but does not mandate that result. Once an enterprise agreement is made and approved by the Commission, it seems clear that the legislative scheme does not intend that such agreements operate in perpetuity. Agreements have a finite nominal life. At the end of the nominal life of an agreement, bargaining parties may bargain for a new agreement utilising all of the tools available under the Act; or a person to whom an agreement applies may take steps to bring the agreement to an end in accordance with the provisions of the Act; or both may occur.

[30] In relation to ‘public interest’ the Full Bench held that:

“[129] Section 226(a) requires a consideration of whether termination of the agreements is not contrary to the public interest. It seems to us that a consideration of the public interest will involve something that is distinct from the interests of the persons and bodies covered by the agreements. This distinction seems to be reflected in the structure of s. 226. The question of how the public interest is to be assessed was considered by a Full Bench of the Australian Industrial Relations Commission in Re Kellogg Brown and Root, Bass Strait (Esso) Onshore/Offshore Facilities Certified Agreement 2000.

....

[131] Section 226, unlike s. 170MH(3) of the WR Act, clearly requires the interests of the persons or bodies covered by an agreement to be taken into account. Those interests are considered separately from the question of the public interest, although it is accepted that these interests may nevertheless be similarly affected. It seems to us therefore, that the approach to the question of whether termination of an agreement is not contrary to the public interest in Kellogg Brown remains apposite.”

[31] The Full Bench in Aurizon FWCFB then traversed the decisions in ERA and Tahmoor Coal and noted that,

[135] The approach taken in Tahmoor Coal to the construction of s. 226 seems to have been followed in a number of subsequent decisions of members of the Commission. For example in Royal Automotive Club of Victoria Commissioner Roe said:

“. . . Section 226 concerning the termination of agreements is found in Part 2-4 of the FW Act which deals with Enterprise Agreements. The legislative scheme and objects of the Act and the objects of Part 2-4 in particular in this respect are quite different from the WR Act. Part 8 of the WR Act which dealt with Workplace Agreements did not have separate objects. The FW Act places a strong emphasis on the objective of facilitating and enabling collective bargaining, bargaining in good faith and the making of enterprise agreements. The termination of an agreement without the agreement of all parties covered by the agreement must now be considered in this context. It is clearly a public interest consideration under s 226(a) if the termination of an agreement would be contrary to the objectives and scheme of the legislation in respect to facilitating and encouraging bargaining and agreements. It is also a context within which the interests of and effects on the parties should be considered as required by Section 226(b).
The legislative context created by the FW Act is consistent with the approach taken by Justice Boulton in the Mount Thorley Operations Enterprise Agreement matter. Justice Boulton found that:
“It is preferable that the parties negotiate a new agreement to replace the 1996 Agreement rather than having that Agreement terminated by the Commission under Section 170MH. In most cases certified agreements remain in place and the terms and conditions of employment provided thereunder continue to apply until a new certified agreement is negotiated by the parties to replace the agreement (see s 170LX(2)).” 
It has certainly been the case since the introduction of a legislative scheme for collective bargaining in Australia that the platform for bargaining replacement agreements has been with very few exceptions the old agreement. That is, the terms and conditions provided by the old agreement remain in place until a new agreement is negotiated by the parties. There has never been a drop dead date for agreements. The FW Act reinforces this by making the unilateral termination of agreements more difficult including by the introduction of s 226(b) and by the removal of any equivalent to Section 393 of the WR Act. The FW Act also reinforces this by removing the option of statutory individual contracts and by encouraging and facilitating bargaining in good faith.
The termination of an agreement in many cases will result in a significant shift in the balance of forces in bargaining. The legislature has deemed it fair to restrict the unilateral termination of agreements and to preserve a situation where in most cases collective agreements remain in place until a new agreement is negotiated to replace it. There is nothing in the legislation that suggests that there should be bias towards terminating an agreement because there is a long period since its nominal expiry date or because it is only relevant to a small number of employees.” 142 [Endnotes omitted]

[136] To similar effect, Deputy President Sams in SDV (Australia) Pty Ltd said the following:

“In addition, Roe C observed in Royal Automotive Club of Victoria [2010] FWA 3483 at para [23]:

'It has certainly been the case since the introduction of a legislative scheme for collective bargaining in Australia that the platform for bargaining replacement agreements has been with very few exceptions the old agreement.'

It is pellucidly clear that the legislature has deliberately made it more difficult to terminate an expired agreement than has been the case in the past. This is so, because unlike its predecessor legislation, (Workplace Relations Act, 1996) there is no capacity for the unilateral termination of an expired agreement, simply upon the giving of written notice by an employer. It seems to me that the continued operation of an expired agreement is desirable for the following policy reasons:

• it permits the parties to negotiate from the standpoint of the 'status quo' and there is no significant shift in the balance of the forces of bargaining; and
• employees do not suffer an immediate reduction in the terms and conditions of their expired agreement.

Obviously, the practical effect of terminating an agreement is to substantially alter the 'status quo' in relation to the bargaining process. I agree with Lawler VP's comments in Tahmoor Coal that it would generally be inappropriate for the Commission to interfere in the bargaining process by terminating an existing agreement.
In this case, there is no doubt the nominal term of the TWU Agreement has expired, that the Union and its members wish to engage in negotiations with the applicant for a new agreement and have commenced, albeit in a preliminary way, discussions for such an agreement. All these ingredients, reinforce in my mind, the inappropriateness of altering the 'status quo' so as to plainly advantage one party's negotiating starting point over the other. This is a powerful reason why it would be inappropriate to terminate the TWU Agreement at this point in the bargaining cycle. I would wish to emphasise, that to do so would be contrary to the objects of the Act and the principles underpinning the primacy given to enterprise bargaining under the Act.” 144

[137] Most recently in Metropolitan Fire & Emergency Services Board v United Firefighters’ Union of Australia Commissioner Wilson endeavoured to qualify or explain an aspect of the decision in Tahmoor Coal, as follows:

“In forming this view I have taken into account that the chief factor weighing in support of the proposition that termination of the 2010 Agreements is contrary to the public interest is the finding made below relating to the effect that termination would have on the relative balance of the parties’ bargaining position. In the context of the matter argued before me, I consider this issue to be more about the private interests of the parties, as between each other, than it is about the public interest.  Notwithstanding that it was said by Lawler VP in Re Tahmoor Coal that “it will generally be inappropriate for FWA to interfere in the bargaining process so as to substantially alter the status quo in relation to the balance of bargaining between the parties”, the context of that reference in the overall decision allows the view that the statement was predominantly in relation to the appropriateness of termination, rather than the statement being predominantly in connection with considerations of the public interest.”

[32] The Full Bench then noted that “this is the first occasion on which a Full Bench of the Commission has had the opportunity to consider the operation of s.226 of the [FW] Act” and stated that,

[138] …. To the extent that the decision in Tahmoor Coal and the decisions which have followed it suggest that:
• the object related provisions in s. 3(f) and s.171 override, are more important than or are to be given greater weight in construing and applying s. 226 than the object related provision in s. 3(a);
• the precedence assigned to achieving productivity benefits through bargaining than by other means, is evident in the objects of the Act; or
• generally speaking, it will not be appropriate to terminate an agreement that has passed its nominal expiry date if bargaining for a replacement agreement is ongoing such that there remains a reasonable prospect that bargaining (in conjunction with protected industrial action and or employer response action) will result in a new agreement,
we would respectfully disagree.
[139] In our view, there is no statutory imperative that the promotion and delivery of productivity benefits at an enterprise level is primarily or exclusively to be achieved through enterprise bargaining in good faith rather than by other means. True it is that bargaining, where it occurs, must occur consistently with the good faith bargaining requirements. But there is no imperative that an agreement must result in productivity improvements. Much less is there any requirement that a resulting agreement must deliver a productivity benefit at the enterprise level. Good faith bargaining for an enterprise agreement may, or may not, deliver productivity benefits at any enterprise level.
[140] The statute also mandates that on application by the person covered, an agreement that has passed its nominal expiry date must be terminated if the circumstances identified in s. 226 exist. Productivity benefits might also be delivered by terminating an agreement that has passed its nominal expiry date. Such benefits might be delivered through a combination of both means.
[141] As we have already observed, s. 226 forms part of a scheme in Part 2 – 4 of the Act to which the object in s. 171 is directed. Self evidently s. 226 is then a part of a scheme of provisions through which the parliament intended that the object might be achieved. There is no basis for concluding, at a level of generality, that continuing the operation of an agreement that has passed its nominal expiry date (whether bargaining is continuing or not) will be any more an effective means by which the object in s. 171 is to be achieved than terminating that agreement. Continuing the operation of an agreement that has passed its nominal expiry date may impede rather than enable an enterprise agreement to deliver productivity benefits at an enterprise level. It may also impede rather than promote good faith bargaining resulting in an agreement which delivers those benefits. The same may be true for the termination of the agreement. Ultimately, the circumstances will dictate the matter.
[142] In our view, to approach the construction of s. 226 in the manner suggested in Tahmoor Coal, particularly at [55] results in a predisposition against the termination of an enterprise agreement that has passed its nominal expiry date. There is no indication in the section or elsewhere in the Act that this should be the case. Section 226 operates according to its terms. Its application is guided by the language and purpose of the provision by reference to the language and purpose of the Act as a whole so that the meaning and effect of the provision is properly understood.
[143] Further, there is nothing in the structure or content of the Act to suggest that its object (of providing a balanced framework for cooperative and productive workplace relations that promotes national economic prosperity and social inclusion for all Australians) is to be exclusively or primarily to be achieved by enterprise level collective bargaining.
[144] Paragraphs (a) - (g) of s. 3 are not properly described as objects of the Act. The object of the Act is as stated in the previous paragraph.
[145] The means by which this object is to be achieved is then set out in the paragraphs which follow in (a) - (g). The means chosen do not have any particular hierarchy or precedence. It seems clear from the structure of the section that each of the means individually, and the means collectively are intended to achieve or further the object.
[146] We agree with Aurizon’s submission that his Honour’s reference in paragraph [51] of Tahmoor Coal, to the principle of construction that the specific overrides the general, with the result that emphasis on promoting productivity (s. 3(a)) is primarily to be achieved through collective bargaining in good faith (s. 3(f) and s. 171) rather than by other means, such as termination of an agreement that has passed its nominal expiry date, was misplaced.
[147] The principle or maxim generalia specialibus non derogant is not a rule that results in general provisions of an enactment giving way to more specific provisions. The maxim is to be invoked only where there is a conflict or inconsistency between provisions of an enactment and that conflict or inconsistency cannot be resolved as a matter of ordinary statutory interpretation. 147
[148] As we have already indicated, s. 3 of the Act should be read as a whole. Paragraph 3(f) is not given a particular precedence over, nor does it override or qualify, any other parts of s. 3. Each of the paragraphs can be read harmoniously. Each describes a means by which the Act’s object is to be achieved. Read together, the section describes the various means by which the object of the Act is to be achieved. There is in our view no conflict or inconsistency between the various paragraphs in s. 3 of the Act.
[149] Further there is not, in our view, any conflict or inconstancy between s. 3 (or any of its paragraphs) and s. 171 of the Act. Section 171 contains the particular objects of Part 2–4 of the Act. Its terms do not conflict with or qualify s. 3 of the Act and can be read harmoniously with s. 3 of the Act. Section 171 is relevant to the construction and application of s. 226 of the Act, but in our view, it does not operate on s. 266 in the manner suggested in Tahmoor Coal. On our reading of ss. 3 and 171, there is nothing in those provisions, when read harmoniously, that would suggest that the emphasis on promoting productivity (in s.3(a)) is primarily to be achieved through collective bargaining in good faith (in s. 3(f) and s. 171) rather than by other means, such as termination of an expired agreement. Moreover, such a construction assumes some incompatibility with terminating an enterprise agreement that has passed its nominal expiry date and collective bargaining. In our view the two are not incompatible.
[150] When read harmoniously with s. 3, s. 171 does not qualify or restrict the exercise of the power of termination under s. 226 of the Act in the manner suggested in Tahmoor Coal. Indeed the object in s. 171 (a) is directed to providing:

. . . a simple, flexible and fair framework that enables collective bargaining in good faith, particularly at an enterprise level, for enterprise agreements that deliver productivity benefits.

[151] Section 226 of the Act is part of the simple, flexible and fair framework, established by Part 2–4 to which the objects in s. 171 relate. There is nothing inherently inconsistent with the termination of an enterprise agreement that has passed its nominal expiry date and collective bargaining in good faith. There is nothing incompatible with the termination of such an agreement and the continuation of collective bargaining that has commenced in good faith at an enterprise level for an enterprise agreement that delivers productivity benefits. The framework that is established by Part 2–4 provides for applications and orders to be made for the termination of an enterprise agreement that has passed it nominal expiry date. It is not too difficult to suppose that such an agreement in particular circumstances might no longer deliver productivity benefits, or that such an agreement has never done so. It is not too difficult to suppose that the termination of such an agreement might better support good faith bargaining for an agreement that delivers productivity benefits at the enterprise level.
[152] In our view, there is no express or contextual indication that the objects in s. 3 or s. 171 operate on s. 226 in the way suggested in Tahmoor Coal. It follows that we do not propose to follow Tahmoor Coal in its construction of s.226 to the extent that the construction appears to place limits on the discretionary considerations in s. 226(b) because of that which we regard as an incorrect interpretation of the interrelationship of the objects in s. 3 and s. 171 of the Act. In our view the limitation is not justified.

[33] After then considering all the circumstances of the matter before them, the Full Bench concluded that they had “formed the view that it is not contrary to the public interest to terminate each of the 12 agreements”, the subject of the application. The Full Bench rejected arguments about changes in the relative bargaining positions of the parties,

[159] While we accept that a termination of the agreements will disturb the current bargaining positions, we do not accept, as the Unions submit, that this is counter to the object of a fair framework for collective bargaining and facilitating good faith bargaining. Collective bargaining will remain available to the bargaining parties. The bargaining parties in their bargaining will continue to be required to meet the good faith bargaining requirements. The disturbance of the bargaining position does not result in the disappearance of collective bargaining or the rules by which the bargaining parties must abide.
[160] Moreover the Unions and employees will have available to them the full arsenal of tools under the Act to exert legitimate industrial pressure on Aurizon to bargain and to reach agreement. It is therefore not correct that the termination of the agreements results in little or no incentive on Aurizon to bargain.
[161] We also do not accept that by terminating the agreements, the Commission becomes the effective arbiter of terms and conditions of employment of the employees of Aurizon, because the effect is to alter the terms and conditions of employment of the employees. The Act sets out the safety net terms and conditions of employment. They comprise the relevant modern award and the NES. Whether an agreement passes the better off overall test is also measured by reference to these instruments, not the antecedent enterprise agreement.
[162] Whilst a nominally expired agreement applies to any employee, the termination of it will result in an alteration of terms and conditions of employment. The effect of the Unions’ submission is that it will always be contrary to the public interest to terminate an agreement in such circumstances. This simply cannot be correct. If it were, it would have been a simple matter for the parliament to have made clear that termination of an agreement that has passed its nominal expiry date must only occur if it no longer applies to any employee. Clearly s. 226 is not so confined.

[34] Finally, having considered all the requirements of s.226(b) the Full Bench concluded that it was appropriate to terminate the agreements.

[35] Following the decision in Aurizon FWCFB the relevant unions made an application to the Federal Court for certiorari and mandamus directed to the Commission. The applicants submitted that in the assessment of the Full Bench of where the “public interest” lay, the Full Bench misread the relevant objects of the FW Act, thereby misapprehending the nature of the power which it was exercising.

Specifically, it [was] said that the Commission erroneously failed to recognise that altering the negotiating balance as between parties engaged in collective bargaining by removing rights and obligations arising under previous agreements would be discordant with the relevant objects of the legislation. 13

[36] In Aurizon FCAFC the Full Court did not accept “that the commission made a jurisdictional error…” 14 and agreed with the Full Bench,

…. The proposition that, as a matter of statutory policy, it should be a predisposition towards regarding it as contrary to the public interest to terminate an enterprise agreement during a period when collective bargaining is taking place must, in the circumstances, be regarded as a most unlikely one. 15

Consideration

Section 226 (a) - not contrary to the public interest

[37] The applicant submitted that terminating the Agreement is not contrary to public interest because:

a) there is no predisposition for or against the termination of an agreement; that each application must be decided on its facts 16;

b) the primary reason for the application (being to avoid the effect of clause 21.7 of the Agreement) does not make the termination contrary to public interest; the applicant has simply exercised its statutory right to apply for termination 17;

c) the applicant cannot vary the Agreement or apply for a new agreement as it only has one employee 18;
d) termination of the Agreement is not contrary to public interest, as it will allow the applicant to open its sites on the days which it would ordinarily be restricted by clause 21.7, in turn reducing the costs of construction to the general public 19;

e) with respect to clause 21.9, the CFMEU has not on previous occasions granted the Employer the ability to work on the RDO’s; and

f) it is not contrary to public interest as the proper industrial standards will be maintained for the remaining employee.

[38] The CFMEU submitted that terminating the Agreement is contrary to public interest because:

a) the application to terminate the Agreement is based upon the employer’s intention to bypass its obligation to close its site on the specified RDO’s;

b) clause 21.9 of the Agreement allows for work to occur on those days, where an emergency or special client needs situation arises, and the CFMEU is not averse to granting the applications, however the applicant had never been in dispute with the CFMEU in respect of lockdown weekends. 20;

c) the applicant should have considered making an application to vary the agreement when his employee count was more than one 21;

d) the applicant has never utilised the dispute resolution procedure in the Agreement in relation to lockdown weekends 22;

e) the applicant’s submission that the Agreement should be terminated because it negatively impacts its productivity and on-going viability was not properly made out 23; and

f) the object of the Act includes a positive obligation to promote collective bargaining and, therefore, termination of the Agreement would undermine the objectives of collective bargaining as contained in the FW Act.

[39] In its attempts to defeat the application to terminate the Agreement the CFMEU focused largely upon the actions which the Employer should or could have taken before submitting the application (i.e. requests to the CFMEU under the Agreement or use of the Dispute Settlement Procedure). However, I am not satisfied that the Employer’s failure to utilise the mechanisms available to it under the Agreement means terminating the Agreement is contrary to public interest. No doubt the CFMEU would prefer that Project Coordination use those mechanisms, however, it is well established that the interest of the parties to the Agreement are not the same as public interest. 24
[40] Having regard to all that has been submitted in this matter, the Commission, as presently constituted, is not persuaded that if the Agreement is terminated any public interest issues arise. None of the submissions supported a conclusion that termination of the Agreement “might affect the public as a whole such as the achievement or otherwise of the various objects of the Act, employment levels, inflation, and the maintenance of proper industrial standards.”
[41] In relation to the issue of maintenance of proper industrial standards it is to be observed that if the Agreement is terminated any future employees will retain the benefit of a safety net comprising of the Building and Construction General On-site Award 2010 [MA000020] and the National Employment Standards (NES). I do not accept that this would be an inadequate safety net and that future employees falling back onto this safety net, is against the public interest.
[42] To the extent that the termination may have an impact on future employees, subcontractors or their employees these matters are to be addressed under s.226(b) (below).
[43] Further, the Commission, as presently constituted is not persuaded that the termination of the Agreement will undermine collective bargaining in a broader public sense (as opposed to the impact it might have on the bargaining position of the respective parties).
[44] Therefore, the Commission, as presently constituted, finds that terminating the Agreement is not contrary to the public interest.
Section 226(b) - appropriate to terminate the agreement
[45] Applying the decision in Aurizon FWCFB, in Latrobe Retirement Villages Services Association Inc T/A Latrobe Retirement Villages, 25 Deputy President Gostencnik summarised the task to be performed under s.226(b):

[22] All of the circumstances also need to be taken into account in considering whether termination of the Agreement is appropriate. In particular, the views of employers, employees and employee organisations covered by the Agreement, their circumstances, and the impact of termination need to be taken into account. The requirement in s.226(b) to take into account all of the circumstances, including those set out in s.226(b)(i) and (ii), is a requirement to take the matters into account and to give them due weight in assessing whether it is appropriate to terminate an enterprise agreement. In assessing appropriateness by taking into account all of the circumstances, it is appropriate to approach the task by reference to the construction of s.226 and the contextual matters that bear upon that construction as well as giving specific consideration to the matters identified in s.226(b)(i) and (ii).

s.226(b)(i) – Views of the employees

[46] The Commission heard evidence from Mr Stojce Stavreski, the only employee presently covered by the Agreement. Mr Stavreski has been a construction worker for nearly 33 years. Mr Stavreski is a member of the CFMEU, but when, in 2005, Mr Murphy approached him to discuss pay rates, Mr Stavreski told Mr Murphy he did not want the CFMEU to represent him in negotiations for a new enterprise agreement.

[47] Mr Stavreski explained that he had been offered a new contract and he was happy to sign it. He said Project Coordination had always taken good care of him and he thought it was a good deal.

[48] In relation to the application to terminate the Agreement, in his witness statement Mr Stavreski said he had “no concerns about the enterprise agreement being terminated” 26. In his evidence before the Commission. Mr Stavreski said:

• He does not plan to work for longer than two years. 27
• For this reason he is not concerned with the outcome of the matter, and wishes to remain neutral in voicing his opinion. 28

[49] In relation to the issue of lockdown weekends, Mr Stavreski said he was “happy to and want[ed] to work [them].” 29

[50] In cross examination a number of propositions were put to Mr Stavreski about the operation of the Agreement. It was clear from his answers that he does not know very much about how the Agreement operates. That is not a criticism of him, but it does call into question the basis upon which indicated he did not have concerns about termination of the Agreement.

[51] In circumstances where an enterprise agreement cannot be:

a) made with a single employee; and
b) amended by agreement between the employer and a single employee,

it seems inconsistent with the legislative scheme to place too much weight on the views of a single employee who is happy to agree with his employer to terminate the Agreement.
[52] Therefore, the Commission, as presently constituted, notes the views of Mr Stavreski, but does not assign to them significant weight. The views expressed by Mr Stavreski are a neutral consideration in relation to whether the Agreement should be terminated.

s.226(b)(i) – Views of the employer

[53] The Employer’s view is that the Agreement should be terminated. Its views about public interest are set out above. On the question of whether it is appropriate to terminate the agreement the Employer’s view was that it was appropriate.

[54] Because the number of employees engaged under the Agreement has reduced over the term of the Agreement (such that there is now only one employee) the employer asserted that because it cannot negotiate a new agreement to replace the Agreement or vary the Agreement, unless it can terminate the agreement it is, for all time, restricted in its operations by the “No Work Weekends”. This is a persuasive argument.

[55] Mr Murphy’s evidence was that:

“I'm not the one that wants to work a lockdown weekend.  It's the subcontractors who want to work the lockdown weekend.  I just want to open my site and leave it to individuals as to whether or not they want to work, not to be told that my gate has to be shut so nobody can go to work in there.  People who want to go to work on a Saturday, right, or the Tuesday, I can't let them.  I have to put a padlock on my gate and stop them from going in 30

…

it's not just for the client, it's for ourselves.  Every day it goes late it costs us money.  I'm paying for project managers, contract administrators, general foremen, site fences, the whole lot, on a day when I could be working, and my EBA is stopping other people from working who are not a party to my EBA. 31”

[56] Mr O’Mara’s evidence was that:

6. … Paul Murphy contacted me in early March 2016 [and] said to me that he would agree to commence bargaining only if the Union agreed to allow work to be performed under the Agreement on the Canberra Day and Peter Long Weekends which were about to occur.

7. Paul Murphy also told me that if the Union did not agree to allow work on the no-work weekends he would apply to terminate the Agreement.

8. I asked Paul to provide me with the names of the contractors working on the Project Coordination sites that I could consult with them and ascertain whether or not their employees, who are likely to be Union members, wanted to work on the long weekends. Paul did not provide me with those names so I was not able to conduct appropriate consultations. As a result the Union did not agree to the company’s proposal to allow work on the no-work weekends and shortly thereafter I became aware that this application had been made. 32

[57] Overall, there was a paucity of evidence about the desire of subcontractors wanting to work on the lockdown weekends. Further, there was no evidence about the actual costs incurred by Project Coordination when it is forced to close on lockdown weekend. However, it logically follows that fixed costs continue to be incurred even on “No Work Weekends”.

[58] 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.

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

s.226(b)(i) – Views of the employee organisations

[60] The CFMEU opposes the termination on the following grounds:

a) Labour hire workers engaged by subcontractors who perform work for the applicant will be disadvantaged if the Agreement is terminated;

b) The application is made with ulterior purposes, namely as a means to sideline the CFMEU;

c) Termination will result in substantial depletion of the bargaining position of the CFMEU and future employees of the Applicant in respect of any future agreement;

d) Termination will entail the loss of assured long weekends for employees of subcontractors and those directly employed by the Applicant, with the result that employees will not have the advantage of spending quality leisure time with their families and recuperating from work;

e) Termination will result in a competitive advantage accruing to the Applicant vis-à-vis its competitors who have agreements with the CFMEU. 33

[61] The views expressed by the CFMEU are validly held and weigh against terminating the Agreement.

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

[62] As previously mentioned, Mr Stavreski:

a) is approaching retirement; and
b) has signed a contract with the employer under which he is content to work for the remainder of his employment.

[63] Consequently, the circumstances of Mr Stravreski do not raise concerns for him and do not suggest that terminating the Agreement is inappropriate. However, because of the reasons stated above, the Commission, as presently constituted, places little weight on the circumstances of Mr Stavreski.

[64] The CFMEU submitted that the Commission is also required to have regard to “the views in circumstances of employees engaged by subcontractors who perform work for the applicant. This is so due to the effect of clause 9 of the Agreement, which mandates that these employees receive wages and conditions no [less] favourable than those prescribed by the Agreement.” 34

[65] 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 35.

[66] 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

[67] 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.

[68] The circumstances of the applicant and its desire to increase its productivity weighs in favour of terminating the Agreement.

s.226(b)(ii) – Circumstances of the employee organisations

[69] Mr O’Mara gave evidence that,

9. In the event that the Company engages more than one employee directly, it is the Union’s desire to conclude an agreement with the company. It is highly likely that the starting point for negotiations for any such agreement would be the terms of the current agreement and it is our view that it is reflective of the level of conditions generally applicable in the industry for work of the kind performed by the company. 36

[70] The circumstances of the CFMEU are that if the Agreement is terminated it will alter the bargaining position between it and the applicant if circumstances arise in the future where the applicant employs more than a single employee and is able to negotiate a new enterprise agreement.

[71] However, this is not a circumstance where the employer and the relevant employee organisation have been engaged in protracted bargaining for a replacement agreement. The circumstances which caused Vice President Lawler to decline to terminate the agreement before him in the Tahmoor Coal, matter do not arise in the present matter.

[72] The circumstances of the CFMEU do not weigh against terminating the Agreement. At their highest they are neutral considerations.

[73] Having considered all of the views and circumstances, the evidence and the submissions made by the applicant and the CFMEU, on balance the Commission, as presently constituted, is satisfied that it is appropriate to terminate the Agreement.

Conclusion

[74] The Commission, as presently constituted, has reached the following conclusions for the reasons outlined above:

(a) termination of the Agreement is not contrary to the public interest, and
(b) it is appropriate to terminate the Agreement having regard to all of the circumstances of the matter.

[75] As a consequence of the conclusions outlined above the Commission is required by s.226 of the FW Act to terminate the Agreement. An order to this effect will be issued in conjunction with this decision.

COMMISSIONER

Appearances:

Mr C Spence for the applicant.

Mr P Boncardo for the CFMEU.

Hearing details:

Canberra

2 May 2016

Final written submissions:

CFMEU, 16 May 2016.

Applicant, 30 May 2016.

CFMEU in reply, 6 June 2016.

 1   Clause 24.3

 2 See section 172(2) FW Act (re single enterprise agreements) and section 172(3) FW Act (re multi-enterprise agreements) which requires that agreements be made with “employees” (i.e. plural) who are employed at the time the agreement is made and section 172(6) which provides that “an enterprise agreement cannot be made with a single employee.”

 3   Transcript at PN 579

 4   Transcript at PN 595

 5   Allen & O’Brien Pty Ltd T/A O’Brien Electrical Services[2016] FWCA 1906, [9], per Gostencnik DP.

 6   [2010] FWA 2434

 7   [2010] FWA 6468

 8   [2015] FWCFB 540

 9 [2015] FCAFC 126

 10 139 IR 34.

 11   [2010] FWA 6468, [15].

 12   [2010] FWA 6468, [30]

 13 [2015] FCAFC 126, 3.

 14 [2015] FCAFC 126, 22.

 15 [2015] FCAFC 126, 25.

 16   Applicant’s Submissions dated 30 May 2016 at para 4.

 17   Applicant’s Submissions dated 30 May 2016 at para 7 and 11.

 18   Applicant’s Submissions dated 30 May 2016 at para 5(b).

 19   Applicant’s Submissions dated 30 May 2016 at para 12-13.

 20   CFMEU Submissions dated 16 May 2016 at para 13. Mr Murphy, rebutted this claim, stating that on each occasion a request was made to work on a lockdown weekend the CFMEU was dismissive of the request. However, Mr Murphy was unable to provide any record or clear evidence of the CFMEU refusing any request made by him.

 21   CFMEU Submissions dated 16 May 2016 at Para 14

 22   CFMEU Submissions dated 16 May 2016 at Para 15

 23   CFMEU Submissions dated 16 May 2016 at Para 17

 24 Re Kellogg Brown and Root (20050 139 IR 34.

 25   [2016] FWCA 1906.

 26   Exhibit “A4”, para 19.

 27   Transcript at PN 815

 28   Transcript at PN 905

 29   Exhibit “A4”, para 25.

 30   Transcript at PN 579

 31   Transcript at PN 595

 32   Exhibit “R3”.

 33   CFMEU Submissions dated 16 May 2016 at Para 32

 34   CFMEU submissions, 16 May 2016, para 26.

 35   Transcript at PN 510-521

 36   Exhibit “R3”.

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