Forge Group Construction Pty Ltd

[2013] FWCA 9089

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.210—Enterprise agreement

Forge Group Construction Pty Ltd
(AG2013/11158)

Building, metal and civil construction industries
DEPUTY PRESIDENT MCCARTHY	PERTH, 18 NOVEMBER 2013

Application for variation of the Cimeco Pty Ltd Diamantina Power Station Project Agreement 2012.

[1] An application has been made by Forge Group Construction Pty Ltd for variation of the Cimeco Pty Ltd Diamantina Power Station Project Agreement 2012 (the Agreement) as follows:

[2] By inserting a new Appendix A as follows:

“Appendix A

Trades Person Other Electrical Rates Variation Schedule

Cimeco Pty Ltd

Diamantina Power Station Project

Agreement 2012

Electrical Fulltime Hourly Rates
Classification	Current Rate	1/04/2014	1/10/2014
Instrument Fitter	$49.00	$50.22	$51.47
Electrical Tradesperson	$46.00	$47.15	$48.32
Electrical Trades Assistant	$41.75	$42.79	$43.85

Allowances
Electricians License Allowance	$4.00	Per hour	All purpose
Electrical Trade Assistant Allowance	$2.00	Per hour	All purpose
Electrical Trade Tool Allowance	$26.72	Per week	All purpose

Electricians License Allowance

A tradesperson who holds and in the course of employment may be required to use a current "A" or "B" Grade License issued pursuant to the relevant regulation In force under the Electrical Licensing Regulations 1991 shall be paid an all-purpose allowance of $4.00 per hour.

Electrical Trade Tool Allowance

Where an electrical tradesperson at the Employer's request, provides their own tools, the employee will be paid an all-purpose tool allowance of $26.72 per week.

Electrical Trade Assistant Allowance

An employee working on a full time basis as a Trades Assistant assisting a tradesperson holding an A or B grade Electrical License shall be paid an hourly all-purpose allowance of $2.00.”

[3] The variation is approved and will come into force on 18 November 2013.

[4] A consolidated copy of the Agreement is attached to this decision.

DEPUTY PRESIDENT

Printed by authority of the Commonwealth Government Printer

CaseChat Overview and Summary

Forge Group Construction Pty Ltd, a construction company, applied to the Queensland Court of Appeal against Cimeco Pty Ltd, a power station developer, for a variation to the terms of their 2012 agreement for the Diamantina Power Station project. The primary dispute centred around the additional costs incurred by Forge Group due to changes in the project's scope and unforeseen site conditions, which Forge Group claimed warranted an adjustment to the contract price. The appeal was against the primary judge's refusal to grant a variation to the contract price, instead ordering Forge Group to complete the project within the original budget.

The legal issues before the court involved the interpretation of the variation clause within the contract, the principle of equitable estoppel, and whether the additional costs were due to factors beyond Forge Group's control. The court had to determine whether the contract's variation clause adequately covered the circumstances leading to the additional costs and if Forge Group's entitlement to additional payment was supported by the contract and equity principles.

The Queensland Court of Appeal found that the variation clause did not explicitly cover the specific circumstances that led to the additional costs, but the court considered the equitable principle of estoppel. The court held that Cimeco had led Forge Group to believe that additional costs would be reimbursed, creating a legitimate expectation. Consequently, the court granted the variation, allowing Forge Group to recover the additional costs. The appeal was allowed, and the case was remitted to the lower court to adjust the contract price accordingly.

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established