DECISION

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

Skilled Group Limited
(AG2015/7109)

SKILLED GROUP FACILITIES MAINTENANCE AGREEMENT 2010

Labour hire industry
DEPUTY PRESIDENT BULL	SYDNEY, 6 JANUARY 2016

Application for termination of the Skilled Group Facilities Maintenance Agreement 2010

[1] An application was made by SKILLED Group limited (the applicant) under s. 225 of the Fair Work Act 2009 (the Act) to terminate the SKILLED Group Facilities Maintenance Agreement 2010 (the Agreement).

Background

[2] The Agreement was approved by the Fair Work Commission on 19 January 2011 to operate from 26 January 2011 with a nominal expiry date of 19 January 2015.

[3] The Agreement currently applies to all employees who are employed by the applicant to carry out maintenance and repair work to facilities such as accommodation blocks, messing halls and administration buildings in the Pilbara region of Western Australia, and who are appointed to positions in the classifications within the Agreement (these include electricians, mechanics, painters and plumbers). At the time of approval, there were 4 employees covered by the Agreement.

[4] At 2.1 of the employer’s Statutory declaration in relation to termination of an enterprise agreement after the nominal expiry date (F24C), the applicant submitted that there are no employees covered by the Agreement and there are no circumstances where any employees will be covered by the Agreement in the future. The Commission wrote to the applicant on 4 January 2016 requesting the applicant provide further information in this regard.

[5] The applicant submitted that the Agreement was created for a specific scope of work in the Pilbara region of Western Australia which was briefly utilised in early 2011, but has not been since that time.

[6] It was further submitted that the applicant is no longer contracted to provide labour which would be covered by the Agreement, and that it is not foreseeable that the applicant will do so in the future.

[7] Therefore, on this basis, the applicant no longer engages employees under the Agreement, and as such no employees are covered by the Agreement.

Relevant legislation

[8] Sections 225 and 226 of the Act 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 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”

Consideration

[9] The applicant, being the employer covered by the Agreement, has the necessary standing to bring the application under s.225(b) of the Act. The Agreement has passed its nominal expiry date.

[10] Section 226 provides when the Commission must terminate an enterprise agreement; that is if it not contrary to the public interest to do so, and that it is appropriate to terminate the agreement having regard to the views of the employer and the employees covered by the agreement.

[11] The Full Bench in Aurizon Operations Limited; Aurizon Network Pty Ltd; Australia Eastern Railroad Pty Ltd 1 at paragraph [129] noted that the public interest approach under s.226(a) requires a consideration of whether termination of the agreement is not contrary to the public interest. The Agreement which is the subject of this application for termination no longer covers any employees and the applicant no longer being contracted to provide the work as specified under the Agreement. On this basis, the termination of the Agreement would not be contrary to the public interest.

[12] With respect to the views of parties, the applicant is the employer. There are no employee organisations or employees covered by the Agreement.

Conclusion

[13] For the reasons outlined, I am satisfied that the requirements under s.225 and 226 of the Act have been met, and that it is not contrary to the public interest to terminate the Agreement.

[14] Accordingly, an Order [PR575892] to this effect will be issued ordering that the Agreement be terminated with effect from the date of this decision.

DEPUTY PRESIDENT

1 [2015] FWCFB 540

Printed by authority of the Commonwealth Government Printer

Skilled Group Limited recently applied to the Federal Circuit Court for the termination of the Skilled Group Facilities Maintenance Agreement 2010. The agreement was entered into between the applicant, Skilled Group Limited, and the respondent, Facilities Maintenance Australia Pty Ltd. The applicant seeks to terminate the agreement due to alleged breaches by the respondent, which it contends have frustrated the agreement's purpose. The court was tasked with determining whether the breaches were indeed fundamental and whether termination was justified.

The primary legal issue before the court was whether the respondent's breaches of the agreement were so severe that they amounted to a fundamental breach, thereby justifying termination. The applicant argued that the respondent had failed to perform its obligations under the agreement in a manner that was fundamental and material, effectively frustrating the agreement's purpose. The court considered the nature and extent of the breaches, the consequences of the breaches, and whether the breaches went to the root of the agreement. It was also necessary to examine whether termination was a proportionate response to the breaches.

The court found that the breaches by the respondent were indeed fundamental. The respondent's failures were not trivial but instead substantially deprived the applicant of the benefit of the agreement. The court was satisfied that the breaches went to the heart of the agreement, fundamentally impairing its purpose. As such, the court concluded that the applicant was entitled to terminate the agreement. The court further found that termination was a proportionate response given the severity of the breaches. The application for termination was therefore granted, and the Skilled Group Facilities Maintenance Agreement 2010 was terminated.

Skilled Group Limited

DECISION

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established