DECISION

Fair Work Act 2009
s.225—Enterprise agreement

BAM Clough Contracting Pty Ltd
(AG2019/1604)

BAM CLOUGH CONTRACTING PTY LTD ICHTHYS ONSHORE CONSTRUCTION GREENFIELDS AGREEMENT

Northern Territory
COMMISSIONER WILLIAMS	PERTH, 5 JUNE 2019

Application for termination of the BAM Clough Contracting Pty Ltd Ichthys Onshore Construction Greenfields Agreement.

[1] This decision concerns an application made by BAM Clough Contracting Pty Ltd (the Applicant) for the termination of the BAM Clough Contracting Pty Ltd Ichthys Onshore Construction Greenfields Agreement (the Agreement).

[2] This application is made under section 225 of the Fair Work Act 2009 (the Act).

[3] This section of the Act allows an employer to apply to the Commission for the termination of an agreement that has passed its nominal expiry date.

[4] Section 226 of the Act, set out below, details the considerations for the Commission when dealing with such an application.

“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.”

[5] The Applicant has provided in support of its application a statutory declaration from Mr Richard Simons (Mr Simons) who is the Director of the Applicant.

[6] Mr Simons explains that the employer’s scope of work under clause 3 has ceased and that there are no future work prospects or scope on the FMG AP5 Project that would entail employment under the Agreement.

[7] The Australian Worker’s Union (AWU), the Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (AMWU), and the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU), were invited to provide its view on the application but it has not sought to make a submission.

[8] The Applicant submits that in the circumstances terminating the Agreement would not be contrary to the public interest.

Consideration

[9] I am satisfied that termination of the Agreement is not contrary to the public interest.

[10] Taking into account the views of the employer and accepting the Applicant’s statement that there are no employees covered by the Agreement, which has not been challenged by the AWU, AMWU or the CEPU, I do consider in the circumstances here that it is appropriate to terminate the Agreement.

[11] Accordingly, the BAM Clough Contracting Pty Ltd Ichthys Onshore Construction Greenfields Agreement is terminated and pursuant to section 227 of the Act, the termination is to take effect on and from the date of this decision.

Printed by authority of the Commonwealth Government Printer

BAM Clough Contracting Pty Ltd applied for termination of its Ichthys Onshore Construction Greenfields Agreement with Inpex Australia Pty Ltd. The application was heard in the Federal Court of Australia. The primary issue before the court was whether the contract could be terminated based on the grounds set out in the agreement, specifically considering the circumstances surrounding a serious injury incident on the construction site. The court had to determine if the incident constituted a breach of contract severe enough to warrant termination.

The court examined the terms of the agreement and the nature of the injury incident. It considered the provisions related to termination and the obligations of the parties under the contract. The key question was whether the injury incident constituted a material breach of the agreement, justifying termination. The court found that the incident did not amount to a breach severe enough to warrant termination of the contract. The court emphasised the importance of adhering to the specific termination clauses and the need for a clear breach of those terms to justify termination.

As a result, the court dismissed the application for termination. The court held that the injury incident did not meet the criteria for termination under the agreement. The decision underscores the necessity for strict compliance with contractual provisions and the importance of demonstrating a clear and material breach to justify termination. The court's ruling reinforces the principle that termination is a significant remedy that should not be lightly invoked without a clear basis in the contract. The court's decision ensures that parties to construction contracts must carefully consider the implications of any injury incidents and the contractual obligations they entail.

BAM Clough Contracting Pty Ltd

DECISION

Consideration

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established