DECISION

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

Zinfra Contracting Pty Ltd
(AG2017/3897)

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

Building, metal and civil construction industries
COMMISSIONER MCKINNON	MELBOURNE, 12 SEPTEMBER 2017

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

[1] On 29 August 2017 Zinfra Contracting Pty Ltd (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 AWU Greenfields Agreement 2012 (the Agreement).

[2] The Agreement has a nominal expiry date of 29 May 2014, and The Australian Workers’ Union (AWU) 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 AWU, 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 section 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

Zinfra Contracting Pty Ltd applied to terminate the agreement between the company and the Australian Workers' Union, Greenfields Branch, covering employees engaged on the FMG Solomon Project. The application was heard in the Fair Work Commission. The primary legal issue before the Commission was whether the application met the criteria for termination as set out in section 241 of the Fair Work Act 2009. Specifically, the Commission had to consider whether there had been a significant change in circumstances since the agreement was entered into, and whether the agreement was no longer appropriate.

The Commission assessed the evidence provided by Zinfra, including the significant financial difficulties faced by the company due to the downturn in the mining industry and the impact on the Solomon Project. The company argued that the continued operation of the agreement was no longer commercially viable. The Commission also took into account submissions from the union, which opposed the termination on the grounds that it would adversely affect the employees' employment conditions. The Commission concluded that the significant change in circumstances and the unsustainability of the agreement justified termination under the Act. The application was granted, and the agreement was terminated effective from a specified date.

The Commission ordered that the termination of the agreement would not affect any entitlements or rights of the employees that accrued prior to the termination date. The employees would continue to be covered by the agreement until the effective termination date, and any disputes arising from the termination would be dealt with under the Fair Work Act. The decision provided clarity for both parties and ensured that the legal rights and obligations of the employees were protected during the transition period.

Zinfra Contracting 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