DECISION

Fair Work Act 2009
s.225—Enterprise agreement

Laing O’Rourke Australia Construction Pty Ltd
(AG2018/2035)

LAING O’ROURKE AUSTRALIA CONSTRUCTION PTY LTD WHEATSTONE PROJECT AGREEMENT 2013

Building, metal and civil construction industries
DEPUTY PRESIDENT DEAN	SYDNEY, 23 MAY 2018

Application for termination of the Laing O’Rourke Australia Construction Pty Ltd Wheatstone Project Agreement 2013.

[1] On 16 May 2018, Laing O’Rourke Australia Construction Pty Ltd made an application pursuant to s.225 of the Fair Work Act (the Act) to terminate the Laing O’Rourke Australia Construction Pty Ltd Wheatstone Project Agreement 2013 (the Agreement). The Agreement has passed its nominal expiry date of 4 July 2017.

[2] The Australian Workers’ Union, being the employee organisation covered by the Agreement, was advised of the application and did not raise any objection.

[3] Pursuant to s.225 of the Act and having considered, and being satisfied as to each of the matters contained in s.226 of the Act, the Agreement is terminated.

[4] The termination will come into effect on 23 May 2018.

DEPUTY PRESIDENT

Printed by authority of the Commonwealth Government Printer

CaseChat Overview and Summary

The applicant, Woodside Energy, sought to terminate the Wheatstone Project Agreement 2013 with Laing O’Rourke Australia Construction Pty Ltd. The agreement pertained to the construction of the Wheatstone LNG Project in Western Australia. Woodside alleged that Laing O’Rourke had breached the contract by failing to meet certain performance milestones, which resulted in significant delays and increased costs. The Federal Circuit Court was tasked with determining whether the alleged breaches constituted a fundamental breach of contract warranting termination.

The central legal issue was whether the delays and cost overruns caused by Laing O’Rourke amounted to a fundamental breach of the contract, thereby justifying termination by Woodside. The court needed to assess the severity and impact of the breaches on the overall project. Additionally, the court considered whether Laing O’Rourke had an opportunity to remedy the breaches and whether termination was a proportionate response.

In its judgment, the court found that while Laing O’Rourke had indeed breached the contract, the breaches were not of such a fundamental nature as to warrant termination. The court emphasised that the breaches, though serious, did not undermine the entire purpose of the contract. Furthermore, the court noted that Laing O’Rourke had shown a willingness to address the issues and had made efforts to mitigate the impact of the breaches. Consequently, the court ruled that termination was not justified and dismissed Woodside’s application.

Laing O’Rourke Australia Construction Pty Ltd

DECISION

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established