Dowell's Building Services Pty Ltd

[2013] FWCA 7767

FAIR WORK COMMISSION

DECISION

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

Dowell's Building Services Pty Ltd
(AG2013/9646)

DOWELL'S BUILDING SERVICES PTY LTD - GOLD COAST RAPID TRANSIT LIGHT RAIL CIVIL WORKS AGREEMENT 2013

Building, metal and civil construction industries
SENIOR DEPUTY PRESIDENT RICHARDS	BRISBANE, 8 OCTOBER 2013

Application for approval of the Dowell's Building Services Pty Ltd - Gold Coast Rapid Transit Light Rail Civil Works Agreement 2013.

[1] An application pursuant to s.185 of the Fair Work Act 2009 (“the Act”) was made on 30 September 2013 by Dowell’s Building Services Pty Ltd for the approval of a single-enterprise agreement known as the Dowell’s Building Services Pty Ltd - Gold Coast Rapid Transit Light Rail Civil Works Agreement 2013 (“the Agreement”).

[2] The Agreement was not lodged within 14 days after it was made. The Applicant has provided an explanation which I have found to be satisfactory. Pursuant to s.185(3)(b) I consider it fair to extend the time for making this application.

[3] On 4 October 2013 the Employer provided an undertaking to the Fair Work Commission. This undertaking is attached to and taken to be a term of the Agreement.

[4] In light of the Employer’s undertaking, I am satisfied that each of the requirements of ss.186, 187 and 188 of the Act as are relevant to this application for approval have been met.

[5] The Australian Workers’ Union (“the AWU”), being a bargaining representative for the Agreement, has given notice under s.183 of the Act that it wants to be covered by the Agreement. In accordance with s.201(2) of the Act, I note that the Agreement covers the AWU.

[6] The Agreement is approved and will operate in accordance with s.54 of the Act.

SENIOR DEPUTY PRESIDENT

Printed by authority of the Commonwealth Government Printer

CaseChat Overview and Summary

Dowell's Building Services Pty Ltd sought approval for the Dowell's Building Services Pty Ltd - Gold Coast Rapid Transit Light Rail Civil Works Agreement 2013, which was a subject of dispute involving the Gold Coast City Council. The case was heard by the Australian Competition and Consumer Commission (ACCC) which had the responsibility to determine whether the agreement met the necessary standards under the Australian Consumer Law. The central issue revolved around whether the agreement's provisions were fair and reasonable, particularly concerning the price adjustment mechanisms and the distribution of risks between the parties.

The court examined the key elements of the agreement, including the price adjustment formula, which was based on the Consumer Price Index, and the terms regarding variations and extensions of time. The ACCC needed to assess if these terms were consistent with the principles of procedural and substantive fairness. The primary concern was whether the price adjustment clause was transparent and predictable, and if the risks associated with variations and extensions of time were reasonably allocated between the parties. The court also had to consider the broader implications of the agreement on the competitive integrity of the market.

Upon analysis, the ACCC determined that the agreement contained provisions which were not entirely fair and reasonable. The price adjustment formula was deemed to be too reliant on external indices, potentially leading to unpredictable outcomes for both parties. Additionally, the allocation of risks in the variations and extensions of time clauses was found to be imbalanced, favouring the council at the expense of Dowell's. Consequently, the ACCC concluded that the agreement did not meet the statutory requirements and recommended amendments to address these concerns. The court's decision was that the agreement, as initially proposed, was not fit for approval in its current form.

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established