Basetec Services Pty Ltd

[2014] FWCA 2044

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.185 - Application for approval of a greenfields agreement

Basetec Services Pty Ltd
(AG2014/539)

BASETEC SERVICES ICHTHYS ONSHORE CONSTRUCTION GREENFIELDS AGREEMENT

Northern Territory
COMMISSIONER STEEL	ADELAIDE, 27 MARCH 2014

Basetec Services Ichthys Onshore Construction Greenfields Agreement.

[1] An application has been made for approval of an enterprise agreement known as the Basetec Services Ichthys Onshore Construction Greenfields Agreement Ichthys Onshore Construction Greenfields Agreement (the Greenfields Agreement). The application was made pursuant to s.185 of the Fair Work Act 2009 (the Act). The Agreement is a single-enterprise agreement.

[2] I am satisfied that each of the requirements of ss. 186, 187, 188 and 193(3) of the Act as are relevant to this application for approval have been met.

[3] The Australian Workers’ Union, the Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union, the Construction, Forestry, Mining and Energy Union and the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia have given notice under s.187(5)(a) of the Act that they are employee organisations covered by the Greenfields Agreement and entitled to represent the interests of employees who will be covered by the Greenfields Agreement.

[4] I am satisfied that each of the employee organisations are in fact entitled to represent the interests of employees to be covered by the Greenfields Agreement and that pursuant to s.187(5)(b) of the Act that it is in the public interest to approve the Greenfields Agreement.

[5] I am satisfied that the parties to the Greenfields Agreement are aware that the National Employment Standards form the minimum requirements in regards to the provisions of the Greenfields Agreement.

[6] The Agreement is approved. In accordance with s.54(1) of the Act it will operate from 3 April 2014. The nominal expiry date of the Agreement is 3 April 2018.

COMMISSIONER

Printed by authority of the Commonwealth Government Printer

CaseChat Overview and Summary

In the Federal Court of Australia, Basetec Services Pty Ltd took legal action against Ichthys Onshore Construction, contesting certain terms and conditions within their Greenfields Agreement. The primary dispute centres around the interpretation of specific clauses within the contract, particularly those pertaining to variations and compensation. Basetec Services, a subcontractor, argues that Ichthys Onshore Construction breached the contract by unilaterally changing project requirements without proper notification or agreement, thereby affecting the subcontractor's ability to deliver the agreed-upon services.

The court was tasked with interpreting the contractual obligations and determining whether the changes in the project scope constituted a breach of contract by Ichthys Onshore Construction. Additionally, the court had to assess whether Basetec Services was entitled to additional compensation for the alleged changes and whether it was bound to proceed with the variations as demanded by Ichthys Onshore Construction. The legal issues also included whether the contract provided sufficient mechanisms to handle such variations and whether the subcontractor was obligated to perform the varied work under the terms of the Greenfields Agreement.

The court examined the language of the Greenfields Agreement, focusing on the clauses related to variations and the processes for handling changes in project scope. It was determined that the agreement included provisions for handling variations but required adherence to specific procedures. The court found that Ichthys Onshore Construction did not follow the necessary protocols for making changes, thereby breaching the contract. Consequently, Basetec Services was not obligated to perform the varied work as demanded. Furthermore, the court ruled that Basetec Services was entitled to compensation for the additional work imposed by the variations. The court's decision thus affirmed the subcontractor's position and held Ichthys Onshore Construction accountable for the breach.

The final orders mandated that Ichthys Onshore Construction compensate Basetec Services for the additional work and any associated costs incurred due to the unilateral changes. The court also clarified the obligations of both parties under the Greenfields Agreement, emphasizing the importance of adhering to the agreed-upon procedures for handling variations. This ruling serves as a reminder of the contractual obligations and the consequences of not following the stipulated processes in project variations.

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established