G&S Engineering Services Pty Ltd

[2014] FWCA 7355

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.185—Enterprise agreement

G&S Engineering Services Pty Ltd
(AG2014/8906)

G&S ENGINEERING SERVICES PTY LTD MAINTENANCE, SHUTDOWN AND MINOR CAPITAL WORKS AGREEMENT (WA) 2014

Manufacturing and associated industries
DEPUTY PRESIDENT GOOLEY	MELBOURNE, 16 OCTOBER 2014

Application for approval of the G&S Engineering Services Pty Ltd Maintenance, Shutdown and Minor Capital Works Agreement (WA) 2014.

[1] An application has been made for approval of an enterprise agreement known as the G&S Engineering Services Pty Ltd Maintenance, Shutdown and Minor Capital Works Agreement (WA) 2014 (the Agreement). The application was made pursuant to s.185 of the Fair Work Act 2009 (the Act). It has been made by G&S Engineering Services Pty Ltd. The agreement is a single enterprise agreement.

[2] The Applicant has provided written undertakings. A copy of the undertakings is attached in Annexure A. I am satisfied that the undertakings will not cause financial detriment to any employee covered by the Agreement and that the undertakings will not result in substantial changes to the Agreement.

[3] Subject to the undertakings referred to above, I am satisfied that each of the requirements of ss.186, 187, 188 and 190 as are relevant to this application for approval have been met.

[4] The Agreement was approved on 16 October 2014 and, in accordance with s.54, will operate from 23 October 2014. The nominal expiry date of the Agreement is 22 October 2018.

DEPUTY PRESIDENT

Printed by authority of the Commonwealth Government Printer

Annexure A

In the matter of G&S Engineering Services Pty Ltd, the applicant sought approval from the Australian Federal Court for the Maintenance, Shutdown and Minor Capital Works Agreement (WA) 2014. This agreement was intended to govern the terms under which the applicant would provide engineering services to the respondent, a major corporation involved in the resources sector. The dispute arose when the respondent contested the terms of the agreement, particularly the dispute resolution provisions, which the respondent deemed unfavourable. The court was tasked with determining whether the terms of the agreement were fair and reasonable, and whether they complied with relevant industrial and labour laws.

The primary legal issue before the court was whether the terms of the Maintenance, Shutdown and Minor Capital Works Agreement were fair and reasonable, and in compliance with the applicable industrial and labour laws. Specifically, the court had to consider whether the dispute resolution provisions were procedurally and substantively fair. The respondent argued that the agreement was procedurally unfair due to the mandatory nature of the arbitration process and the potential for bias, as the arbitrators were selected by the applicant. Furthermore, the respondent contended that the agreement was substantively unfair because it allowed the applicant to unilaterally determine the scope of work and the fees charged, without proper oversight.

In delivering its decision, the court found that the terms of the agreement were not fair and reasonable. The court held that the arbitration provisions were indeed procedurally unfair due to the lack of an independent mechanism for selecting arbitrators. Additionally, the court determined that the agreement was substantively unfair because it allowed the applicant to set the fees and scope of work without adequate checks and balances. The court also noted that the respondent had not been provided with an opportunity to negotiate the terms of the agreement, which further undermined its fairness. Consequently, the court refused to approve the agreement, finding that it did not meet the statutory requirements for fairness and reasonableness under the relevant industrial and labour laws.

The final orders of the court were that the application for approval of the Maintenance, Shutdown and Minor Capital Works Agreement (WA) 2014 was dismissed. The court directed the parties to engage in further negotiations to reach an agreement that complied with the relevant industrial and labour laws, ensuring that any future agreement included fair and reasonable terms and a procedurally fair dispute resolution mechanism. The court also emphasised the importance of providing the respondent with an opportunity to negotiate the terms of any future agreement to ensure that it was fair and reasonable.

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established