The Fair Work Commission (FWC) has approved the termination of an employer’s in-term EBA on the grounds that the agreement had made it uncompetitive because of unaffordable pay rates and non-compliance with the Code for the Tendering and Performance of Building Work 2016 (Building Code 2016). Employees had narrowly voted in favour of terminating the South Australian Agreement, despite opposition from the CFMEU.

In reaching the decision to terminate the in-term Agreement, the Commissioner noted that he had to weigh consideration of the fact that some employees stood to lose pay if the deal was undone against the “potential loss of employment of some or all of the employees” if the company continued to be unable to win work.

The South Australian CFMEU had argued that the Company should negotiate a variation to their EBA rather than terminating it. The Commissioner observed that the parties had commenced negotiations but were unable to agree on an agreement that would meet the requirements of the Code; and that from the employer’s perspective, “it needs Code compliance urgently to enable it to bid for work and the fastest way to achieve that goal is to terminate” the EBA.

Master Builders notes that pressure on contractors holding the non-compliant Victorian CFMEU Pattern EBA 2016-2018 to move to terminate their agreements will intensify should a code-compliant variation not be agreed in the near term.