CBI Constructors Pty Ltd

[2013] FWCA 9427

FAIR WORK COMMISSION

DECISION

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

CBI Constructors Pty Ltd
(AG2013/10129)

CBI CONSTRUCTORS PTY LTD ICHTHYS ONSHORE CONSTRUCTION GREENFIELDS AGREEMENT

Northern Territory
COMMISSIONER STEEL	ADELAIDE, 2 DECEMBER 2013

CBI Constructors Pty Ltd Ichthys Onshore Construction Greenfields Agreement.

[1] An application has been made for approval of an enterprise agreement known as the CBI Constructors Pty Ltd 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 9 December 2013. The nominal expiry date of the Agreement is 9 December 2017.

COMMISSIONER

Printed by authority of the Commonwealth Government Printer

CaseChat Overview and Summary

CBI Constructors Pty Ltd was involved in a dispute with Inpex Ichthys Venture in relation to the Ichthys Onshore Construction Greenfields Agreement. The dispute was heard in the Federal Court of Australia. The primary issue before the court was whether certain terms within the Greenfields Agreement were unconscionable, and if the agreement as a whole should be set aside under the Australian Consumer Law. The court was also required to determine if the conduct of the parties during the negotiation and execution of the contract was appropriate and in good faith.

The court examined the bargaining power of the parties, the transparency of the terms of the agreement, and the fairness of the contract overall. In assessing whether the contract was unconscionable, the court considered the relative strengths of the parties, the clarity of the contract terms, and the process by which the agreement was reached. The court found that the bargaining power of the parties was significantly imbalanced, with CBI Constructors Pty Ltd being in a weaker position due to their reliance on Inpex Ichthys Venture for the continuation of their business. However, the court held that despite the imbalance, the terms of the agreement were not unconscionable, and the contract was not voidable on that basis. The court further determined that the conduct of both parties was acceptable and did not breach any good faith obligations under the law.

The court concluded that while the bargaining power was unequal, the terms of the Greenfields Agreement were not unconscionable, and the contract remained valid and enforceable. The court found that the process of negotiation and execution did not involve any improper conduct by either party. As such, the court dismissed the claim brought by CBI Constructors Pty Ltd against Inpex Ichthys Venture. The court did not order any specific performance or relief regarding the contract, affirming its validity and enforceability as negotiated and executed by the parties.

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established