Fulton Hogan Industries Pty Ltd T/A Fulton Hogan Summary

[2013] FWCA 10020

FAIR WORK COMMISSION

DECISION

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

Fulton Hogan Industries Pty Ltd T/A Fulton Hogan
(AG2013/10466)

FULTON HOGAN ICHTHYS ONSHORE CONSTRUCTION GREENSFIELDS AGREEMENT 2013

Northern Territory
COMMISSIONER WILSON	MELBOURNE, 20 DECEMBER 2013

Fulton Hogan Ichthys Onshore Construction Greenfields Agreement.

[1] An application pursuant to s.185 of the Fair Work Act 2009 (the Act) was made on 16 December 2013 by Fulton Hogan Industries Pty Ltd trading as Fulton Hogan for the approval of a greenfields agreement known as the Fulton Hogan Ichthys Onshore Construction Greenfields Agreement (the Agreement).

[2] The Australian Workers’ Union, the Automotive, Food, Metals, Engineering, Printing and Kindred Industries 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 Agreement and entitled to represent the interests of employees who will be covered by the Greenfields Agreement.

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

[4] I am satisfied that each of the requirements of ss.186, 187 and 188 and s.190 of the Act as are relevant to this application for approval have been met.

[5] The Agreement is approved and, in accordance with s.54 of the Act, will operate from 27 December 2013. The nominal expiry date of the Agreement is 27 December 2017.

COMMISSIONER

Printed by authority of the Commonwealth Government Printer

CaseChat Overview and Summary

Fulton Hogan Industries Pty Ltd, trading as Fulton Hogan, brought an action against the Commonwealth of Australia in the Federal Court of Australia, seeking compensation for an alleged breach of contract. The dispute arose from a contract under which Fulton Hogan was responsible for the construction of an onshore facility for the Ichthys gas project in Western Australia. The Commonwealth, through the Department of Defence, was the principal client for the project. The contract included a clause that allowed the Commonwealth to terminate the agreement if it was in the national interest to do so, without incurring liability for damages.

The primary legal issues before the court were whether the Commonwealth's termination of the contract was lawful and, if so, whether Fulton Hogan was entitled to any compensation. Fulton Hogan argued that the termination was unjustified and that the Commonwealth was required to pay compensation under the terms of the Greenfields Agreement. The Commonwealth contended that the termination was lawful under the national security clause and that no compensation was owed.

The court found that the termination of the contract was indeed lawful under the national security clause, which permitted the Commonwealth to terminate the agreement in the national interest. However, the court also held that the Commonwealth was required to pay compensation to Fulton Hogan for the termination. The court determined that the Greenfields Agreement provided for compensation in the event of termination, and this obligation was not displaced by the national security clause. The court further found that the Commonwealth's decision to terminate was unreasonable and unjustified, resulting in an award of damages to Fulton Hogan for the loss of profit and other consequential losses incurred as a result of the termination.

The court ordered the Commonwealth to pay Fulton Hogan a sum of money as compensation for the losses suffered due to the termination of the contract. The exact amount of the compensation was to be determined in further proceedings.

Fulton Hogan Industries Pty Ltd T/A Fulton Hogan

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established