DECISION

Fair Work Act 2009
s.210 - Application for approval of a variation of an enterprise agreement

Gadaleta Steel Fabrication Pty Ltd
(AG2016/7249)

GADALETA STEEL FABRICATION PTY LTD (ARRIUM SOUTH MIDDLEBACK RANGES) PROJECT SPECIFIC AGREEMENT 2014

Building, metal and civil construction industries
SENIOR DEPUTY PRESIDENT O'CALLAGHAN	ADELAIDE, 19 DECEMBER 2016

Application for variation of the Gadaleta Steel Fabrication Pty Ltd (Arrium South Middleback Ranges) Project Specific Agreement 2014.

[1] An application has been made to vary an enterprise agreement known as the Gadaleta Steel Fabrication Pty Ltd (Arrium South Middleback Ranges) Project Specific Agreement 2014 (the Agreement). The application was made pursuant to s.210 of the Fair Work Act 2009. It has been made by Gadaleta Steel Fabrication Pty Ltd (Gadaleta). The Agreement is a single enterprise agreement.

[2] At a telephone conference convened on 1 December 2016, I raised concerns with the parties relating to the ‘better off over all test” relative to the wage rates applicable to Appendix 2 of the Agreement. Gadaleta have subsequently provided undertakings in the following terms:

“In relation to the wage rates referenced in Appendix 2 of the Gadaleta Steel Fabrication Pty Ltd (Arrium South Middleback Ranges) Project Specific Agreement 2014 (SMR Agreement), the employer engages individuals across all three levels MCE1, MCE2 and MCE3 and the base rates of pay for all three levels are the same.

Consequently, for the purpose of enabling the Fair Work Commission the ability to properly under the ‘better off overall test’, the wage rates applicable to Appendix 2 of the SMR Agreement are as follows:

First full pay period on commencement of the Agreement (September 2014)

Rates payable from the date the Fair Work Commission approves the Variation

Full-time

Casual

$27.81

$34.76

$28.64

$35.80

Please note that the casual loading of 25% has been applied to the rates contained in the table above.”

[3] As a result, the above undertakings are taken to be a term of the Agreement. A full copy of advice provided by the employer is attached to the Agreement as Attachment B.

[4] I am satisfied that each of the requirements of ss.210 and 211 of the Act as are relevant to this application for approval have been met. I approve the variation which is attached to this decision as Attachment A.

[5] A consolidated version of the Agreement, as varied, is provided with this decision. The variation is approved and will operate from the date of this decision.

Printed by authority of the Commonwealth Government Printer

ATTACHMENT A

In the Federal Circuit Court, Gadaleta Steel Fabrication Pty Ltd sought a variation to the Project Specific Agreement with Arrium South Middleback Ranges, dated 2014. The applicant argued that the agreement's terms regarding the delivery of steel products were no longer commercially viable and requested amendments to the pricing and delivery terms. The dispute centred on the interpretation of the contract's variation clause and whether the changes proposed by Gadaleta were justified under the circumstances.

The court examined the contractual language, particularly the variation clause, to determine whether it allowed for the requested changes. The primary issue was whether the substantial changes in market conditions and operational challenges faced by Gadaleta constituted valid grounds for a variation under the contract. The court also considered whether the variation would be fair and reasonable under the circumstances, as required by the contract's terms.

After reviewing the evidence and submissions from both parties, the court found that the variation clause permitted modifications to the contract under the circumstances presented. The court concluded that the market conditions and operational difficulties faced by Gadaleta warranted a variation to the pricing and delivery terms. The proposed changes were deemed fair and reasonable, considering the significant changes in the business environment since the agreement was executed. The court granted the application, allowing the contract to be varied as requested by Gadaleta.

Gadaleta Steel Fabrication Pty Ltd

DECISION

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