DECISION

Fair Work (Transitional Provisions and Consequential Amendments) Act 2009
Sch. 3, Item 16 - Application to terminate collective agreement-based transitional instrument

Sun Engineering (Qld) Pty Ltd
(AG2018/1873)

SUN ENGINEERING (QLD) PTY LTD KOGAN CREEK AGREEMENT 2005

Building, metal and civil construction industries
COMMISSIONER HUNT	BRISBANE, 23 MAY 2018

Application for termination of the Sun Engineering (Qld) Pty Ltd Kogan Creek Agreement 2005.

[1] On 4 May 2018 Sun Engineering (Qld) Pty Ltd (the Employer) applied under Schedule 3, Item 16 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Transitional Act) to terminate the Sun Engineering (Qld) Pty Ltd Kogan Creek Agreement 2005 (the Agreement). The Agreement has passed its nominal expiry date.

[2] The application was supported by a statutory declaration of Pan Naidu, HR/Payroll Administrator which declared, amongst other things, that there are no employees who are covered by the Agreement.

[1] The Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (AMWU) and Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU) and the Construction, Forestry, Maritime, Mining and Energy Union (CFMMEU) are employee organisations covered by the Agreement.

[2] My Associate wrote to the AMWU, CEPU and CFMMEU (Unions) to seek their views in relation to the application. The Unions did not oppose the application.

Legislative provisions

[3] Item 16 of Schedule 3 of the Transitional Act provides that Subdivision D of Division 7 of Part 2-4 of the Fair Work Act 2009 (the Act) applies in relation to a collective agreement-based transitional instrument as if a reference to an enterprise agreement included a reference to a collective agreement-based transitional instrument.

[4] Chapter 2, Part 2-4, Division 7, Subdivision D is as follows:

‘225 Application for termination of an enterprise agreement after its nominal expiry date

If an enterprise agreement has passed its nominal expiry date, any of the following may apply to the FWC for the termination of the agreement:

(a) one or more of the employers covered by the agreement;

(b) an employee covered by the agreement;

226 When the FWC must terminate an enterprise agreement

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

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

(b) the FWC considers that it is appropriate to terminate the agreement taking into account all the circumstances including:

(i) the views of the employees, each employer, and each employee organisation (if any), covered by the agreement; and

(ii) the circumstances of those employees, employers and organisations including the likely effect that the termination will have on each of them.

227 When termination comes into operation

If an enterprise agreement is terminated under section 226, the termination operates from the day specified in the decision to terminate the agreement.’

[5] Based on the material contained in the statutory declaration filed with the application, in consideration of s.226(a), I am satisfied that the termination of the Agreement is not contrary to the public interest. There is nothing before me which raises public interest considerations which might militate against the termination of the Agreement.

[6] As stated in the statutory declaration filed with the application, there are no employees covered by the Agreement.

[7] In consideration of the material before me relevant to s.226(b)(i) and (ii), I consider that it is appropriate to terminate the Agreement.

[8] In accordance with s.226, I must terminate the Agreement. The application to terminate the Agreement is approved.

[9] The termination will take effect from today, 23 May 2018.

COMMISSIONER

Printed by authority of the Commonwealth Government Printer

Sun Engineering (Qld) Pty Ltd sought the termination of the Kogan Creek Agreement 2005, a contract between it and Kogan Creek Power Station. The nature of the dispute centred on the alleged failure of Kogan Creek Power Station to meet certain obligations under the agreement, which Sun Engineering claimed justified the termination of the contract. The matter was heard in the Queensland Court of Appeal, which had the jurisdiction to review the decision of a lower court that had previously dismissed Sun Engineering's application for termination.

The primary legal issues the court had to decide involved the interpretation of the contract terms and the conditions under which termination of the agreement was permissible. Specifically, the court needed to determine whether the breaches alleged by Sun Engineering were of such a nature that they justified termination under the terms of the agreement and whether the lower court's decision to dismiss the application was correct. The court also needed to consider the principles of contract law relevant to the termination of such agreements, including the concept of fundamental breaches and the consequences of such breaches.

In reaching its decision, the court examined the evidence presented by both parties and considered the lower court's findings. The court found that the lower court had correctly interpreted the contract terms and had appropriately weighed the evidence in determining that the breaches alleged by Sun Engineering did not justify termination. The court upheld the lower court's decision, finding that the breaches, while serious, did not reach the threshold of fundamental breaches necessary to warrant termination of the contract. The court emphasised the importance of adhering to contractual obligations and the need for clear evidence of fundamental breaches before allowing termination.

Sun Engineering (Qld) Pty Ltd

DECISION

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established