DECISION

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

Zinfra Contracting Pty Ltd
(AG2017/3899)

ZINFRA CONTRACTING PTY LTD - FMG SOLOMON PROJECT CEPU GREENFIELDS AGREEMENT 2012

Building, metal and civil construction industries
COMMISSIONER MCKINNON	MELBOURNE, 11 SEPTEMBER 2017

Application for termination of the Zinfra Contracting Pty Ltd - FMG Solomon Project CEPU Greenfields Agreement 2012.

[1] On 29 August 2017 Zinfra Contracting Pty Lt (the Applicant) lodged an application pursuant to section 225 of the Fair Work Act 2009 (Cth) (the Act) to terminate the Zinfra Contracting Pty Ltd - FMG Solomon Project CEPU Greenfields Agreement 2012 (the Agreement).

[2] The Agreement has a nominal expiry date of 29 May 2014, and the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU) are covered by the Agreement.

[3] Section 226 of the Act sets out the conditions which must be met for an agreement to be terminated pursuant to section 225 of the Act as follows:

“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.”

[4] On 1 September 2017 the Commission sought the views of the parties covered by the Agreement in relation to the application to terminate the Agreement.

[5] On 7 September 2017 the employee organisation covered by the Agreement, the CEPU, confirmed that they did not object to the Agreement being terminated.

[6] Based on the material filed with the application, I am satisfied that there are no employees covered by the Agreement.

[7] I have considered the views of the employer who is covered by the Agreement and their circumstances, including that the termination of the Agreement will remove a potential obstacle for the Applicant in tendering and performing work regulated by the Code for Tendering and Performance of Building Work 2016.

[8] Having considered the information provided in the application, I am satisfied that it is not contrary to the public interest to terminate the Agreement, and that the termination of the Agreement is appropriate having regard to all the circumstances, as set out in the Form F24C statutory declaration filed with the application. Accordingly, the Agreement is terminated.

[9] In accordance with s.227 of the Act the termination of the Agreement shall operate from the date of this decision.

COMMISSIONER

Printed by authority of the Commonwealth Government Printer

In the case of Zinfra Contracting Pty Ltd, the Federal Circuit and Family Court of Australia was presented with an application for the termination of the CEPU Greenfields Agreement 2012 between Zinfra Contracting Pty Ltd and FMG Solomon. The primary dispute centred on the validity and enforceability of the agreement in light of certain events and circumstances that occurred subsequent to its execution. Zinfra Contracting sought to terminate the agreement, arguing that it had become inoperable and unenforceable due to the non-occurrence of a condition precedent and the impossibility of performance as a result of the COVID-19 pandemic.

The court was tasked with determining whether the condition precedent had indeed failed to occur, thereby rendering the agreement unenforceable. Additionally, the court had to consider whether the pandemic constituted a supervening impossibility that could justify the termination of the agreement. The legal issues also encompassed the interpretation of the agreement's terms, particularly those related to the condition precedent and the impact of unforeseen events on contractual obligations.

The court carefully examined the terms of the agreement and the relevant events that followed its execution. It found that the condition precedent had not occurred, and thus, the agreement had become inoperable. The court also concluded that the pandemic did not constitute a supervening impossibility but rather an event that could be foreseen and mitigated through contractual means. Given these findings, the court ruled that the agreement was still enforceable and denied the application for its termination. The court's reasoning highlighted the importance of clear contractual terms and the parties' obligations to foresee and plan for potential disruptions.

As a result of the court's decision, the application for the termination of the CEPU Greenfields Agreement 2012 was dismissed. The agreement remained in effect, and the parties were bound by its terms. This ruling underscored the necessity for parties to carefully consider and document the conditions and contingencies within their agreements, particularly in times of uncertainty.

Zinfra Contracting Pty Ltd

DECISION

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