Workform Construction Pty Ltd

[2020] FWCA 4040

[2020] FWCA 4040

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.225—Enterprise agreement

Workform Construction Pty Ltd
(AG2020/1585)

WORKFORM CONSTRUCTIONS PTY LTD AND CFMEU BUILDING AND CONSTRUCTION INDUSTRY COLLECTIVE BARGAINING AGREEMENT 2002-2005
WORKFORM CONSTRUCTIONS PTY LTD AND THE CFMEU BUILDING AND CONSTRUCTION INDUSTRY ENTERPRISE AGREEMENT 2005-2008

Building, metal and civil construction industries
COMMISSIONER LEE	MELBOURNE, 4 AUGUST 2020

Application for termination of the Workform Constructions Pty Ltd and the CFMEU Building and Construction Industry Enterprise Agreement 2002-2005 and Workform Constructions Pty Ltd and the CFMEU Building and Construction Industry Enterprise Agreement 2005-2008

[1] An application has been made by Workform Construction Pty Ltd (the Applicant) to terminate the Workform Constructions Pty Ltd and the CFMEU Building and Construction Industry Enterprise Agreement 2002-2005 (the 2002-2005 Agreement) 1and the Workform Constructions Pty Ltd and the CFMEU Building and Construction Industry Enterprise Agreement 2005-2008 (the 2005-2008 Agreement) 2(the Agreements) under s.225 of the Fair Work Act 2009 (the Act).

[2] The Agreements have nominal expiry dates of 31 October 2005 and 31 March 2008 respectively.

[3] The matter for determination is whether or not to grant either or both of the applications to terminate the Agreements.

Background to the application

[4] The applications were lodged with the Fair Work Commission (the Commission) on 5 June 2020. The declaration in relation to termination of an enterprise agreement after the nominal expiry date (Form F24C) filed with the application was made by Ms Roberta La Verde (Director of the Applicant). Relevantly, Ms La Verde stated in answer to Q2.1 of the Form F24C that:

“We no longer work on commercial sites but have turned our interest to domestic work only.”

[5] However, in response to Q2.2 of the Form F24C, Ms La Verde ticked the box indicating that she did not know if there are any employees covered by the Agreements.

[6] The matter was listed for a mention hearing on 12 June 2020. Having regard to the fact that the Construction, Forestry, Maritime, Mining and Energy Union (CFMMEU) is an employee organisation covered by the Agreements the CFMMEU was included in the Notice of Listing for the mention hearing. My Chambers also forwarded the Applicant’s Application for termination of an enterprise agreement after the nominal expiry date (Form F24B) and Form F24C to the CFMMEU. In response, the CFMMEU emailed my Chambers indicating that they would appear at the mention hearing.

[7] At the mention hearing, Ms La Verde submitted that the she wanted to terminate the Agreements because the Applicant does not work on commercial sites and she did not know if any employees were covered by the Agreements. 3 Mr Ben Bromberg, representing the CFMMEU, submitted that there was not a lot of information in the application to allow the CFMMEU to assess their position properly, but that it was his understanding that the reason the Applicant sought to have the Agreement’s terminated was that the Applicant no longer does commercial work, or that they are not currently doing commercial work.4

[8] Mr Bromberg submitted that the 2005-2008 Agreement does not apply to domestic work, and as such could not see an argument that that Agreement can be affecting the Applicant’s operations currently. 5 Mr Bromberg stated that there may be some concerns regarding the displacement of the 2002-2005 Agreement by the 2005-2008 Agreement and the residual scope of the 2002-2005 Agreement which appeared to cover employees in domestic work, but stated the CFMMEU would reserve their position until they received further information on that point.6

[9] Directions were subsequently made for the Applicant and CFMMEU to provide an outline of submissions and any witness statements and any other documentary material on which they intend to rely having regard to s.226 of the Act.

[10] On 25 June 2020, my Chambers received a statement from the Applicant in response to the directions which included the following relevant information:

“Workform Constructions Pty Ltd wish to have EBA 2002 – 2005 and 2005 – 2008 terminated for the following reasons.

Workform haven’t undertaken commercial construction work for at least 10 years. We have concentrated on domestic construction works such as new homes, units, renovations and our own projects and do not intend to engage in commercial construction in the near future.

Our current employees are not impacted and they are all in agreement of the termination of the EBA agreement.

Workform believes that it is not going against public interests for the reasons above.”

[11] Subsequentially, on 29 June 2020, Mr Bromberg emailed my Chambers informing that:

“I am instructed not to press our objection to this application.

The CFMEU neither consents nor opposes this application.

The CFMEU does not propose to make any further submissions in this matter.”

[12] The matter was then listed for a second mention hearing on 22 July 2020 which proceeded with only the Applicant present.

[13] At the second mention hearing I informed the Applicant of my concern surrounding the coverage of the 2002–2005 Agreement, which does not have a “carve out” for the cottage housing industry as the 2005–2008 Agreement has at clause 4(d). Therefore, it is apparent that the 2002–2005 Agreement continues to cover and apply to employees of the Applicant involved in domestic work that the Applicant is currently undertaking.

[14] Ms La Verde confirmed that, if the termination of the Agreements was successful, the Building and Construction General On-site Award 2010 would cover and apply to the employees.

[15] Subsequent to the mention hearing, and with the agreement of Ms La Verde, I issued correspondence to the Applicant indicating that they should take the following action in order for me to obtain information on the views and circumstances of employees:

“The views and circumstances of employees are to be obtained by the Employer forwarding the following notice to employees via email, by no later than close of business Wednesday, 22 July 2020:

“An application has been made by Workform Construction Pty Ltd to terminate the Workform Constructions Pty Ltd and CFMEU Building and Construction Industry Collective Bargaining Agreement 2002 – 2005 and the Workform Constructions Pty Ltd and the CFMEU Building and Construction Industry Enterprise Agreement 2005 – 2008.

The matter has been allocated to Commissioner Lee of the Fair Work Commission for determination.

The Employer has submitted that the employees of Workform Construction Pty Ltd are involved in domestic building work, therefore it is the Commissioner’s view that Workform Constructions Pty Ltd and CFMEU Building and Construction Industry Collective Bargaining Agreement 2002 – 2005 may apply to you.

If the application to terminate the Workform Constructions Pty Ltd and CFMEU Building and Construction Industry Collective Bargaining Agreement 2002 – 2005 is successful, your minimum employment entitlements will be regulated by the Building and Construction General On-site Award 2010. This will have an effect on the terms and conditions of employment to which you are entitled.

Commissioner Lee, when determining whether to terminate the agreement, is required to take into account the views of employees covered by the Agreement.

If you have any views about the application to terminate the Agreement, please advise the Commissioner by email at [email protected] or by calling [phone]. Views are to be provided to the Fair Work Commission by close of business Wednesday, 29 July 2020.”

The Commissioner will take into account any views of employees provided when deciding whether or not to terminate the Agreement.

Once this course of action is followed, the Commissioner asks that the Employer send an email to Chambers verifying that the Employer has emailed the above notice to all employees.

The Commissioner has asked the email verifying distribution of the notice by the Employer be provided as soon as possible, but by no later than close of business Friday, 24 July 2020.”

[16] Subsequently, on 24 July 2020 my Chambers received an email from Ms La Verde confirming that an email was circulated to employees to which the above notice had been attached.

Consideration

[17] In making a decision whether to grant the application, the Fair Work Commission is required to comply with s.225 and s.226 of the Act.

[18] Section 225 of the Act provides:

“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.

[19] Section 226 of the Act provides:

“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.”

[20] Each of the applications need to be determined in their own right. However, it is convenient to deal with the factual circumstances together.

[21] The application to terminate the Agreements was made by the employer who is covered by the Agreement, consistent with s.225(a) of the Act.

[22] No submissions that the termination of the Agreements would be contrary to the public interest have been received. The CFMMEU, who are covered by the Agreements and are aware of the application before me, have indicated they do not press an objection and have not made any submissions on the matter. Accordingly, the views and circumstances of the employee organisation covered by the Agreements is a neutral consideration.

[23] The views of employees have been sought through the distribution of a notice advising of the termination of both Agreements and the effect of the termination of the 2002-2005 Agreement on the terms and conditions of their employment. No views of any employee covered by the Agreement have been forwarded to my Chambers. This weighs in favour of a consideration that it is appropriate to terminate the Agreements.

[24] Both Agreements have expired a considerable time ago. The 2002-2005 Agreement expired approximately 15 years ago and the 2005-2008 Agreement expired approximately 12 years ago. The legislative scheme does not intend that agreements operate in perpetuity. Agreements have a finite nominal life. 7 The considerable length of time since the nominal expiry of the Agreements weighs in favour of a consideration that it is appropriate to terminate the Agreements.

[25] There are some factors however that are unique to each Agreement. Firstly in respect to the 2005-2008 Agreement, I have taken into account the changed operation of the Applicant’s business which is now entirely involved in residential construction and this clearly weighs in favour of a consideration to terminate the 2005-2008 Agreement as it no longer covers any employees and is not relevant to the business. This weighs in favour of a consideration that it appropriate to terminate the 2005-2008 Agreement.

[26] Considering the circumstances in s.226 of the Act in respect to the 2005-2008 Agreement, I am satisfied, in accordance with s.226 (a) of the Act, that it is not contrary to the public interest to terminate the Agreement. Having regard to the matters set out in s. 226(b) of the Act as set out above in respect to the 2005-2008 Agreement consideration of those matters weigh towards a finding that it appropriate to terminate the Agreement or are neutral considerations. Therefore, I am also satisfied, in accordance with s.226 (b) of the Act, that it is appropriate to terminate the 2005-2008 Agreement having regard to all of the circumstances of the matter as set out above. I am therefore required by s.226 of the Act to terminate the 2005-2008 Agreement.

[27] In respect to the 2002-2005 Agreement the circumstances differ. The 2002-2005 Agreement continues to cover and apply to employees of the Applicant working in the domestic sector of construction according to its terms. The terms of the 2002-2005 Agreement, are more beneficial to employees in a number of respects to that of the relevant Award. Consideration of this factor weighs against finding that is appropriate to terminate the Agreement. However, the consideration of the other factors set out above all weigh towards a finding that termination of the Agreement is appropriate or are neutral considerations. Having considered all of the circumstances I am satisfied that it is appropriate to terminate the 2002-2005 Agreement. I am also satisfied, in accordance with s.226 (a) of the Act, that it is not contrary to the public interest to terminate the 2002-2005 Agreement. I am therefore required by s.226 of the Act to terminate the 2002-2005 Agreement.

[28] The termination of the Agreements shall operate from the date of this decision.

COMMISSIONER

 1   AG823992

 2   AG846352

 3   PN10 – PN15.

 4   PN35.

 5   PN36.

 6   PN40 – PN41.

 7   Aurizon Operations Limited; Aurizon Network Pty Ltd; Australia Eastern Railroad Pty Ltd [2015] FWCFB 540 at [126].

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