Monadelphous KT Pty Ltd

[2014] FWCA 648

FAIR WORK COMMISSION

DECISION

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

Monadelphous KT Pty Ltd
(AG2013/12069)

MONADELPHOUS KT PTY LTD ICHTHYS ONSHORE CONSTRUCTION GREENFIELDS AGREEMENT

Northern Territory
COMMISSIONER STEEL	DARWIN, 28 JANUARY 2014

Monadelphous KT Pty Ltd Ichthys Onshore Construction Greenfields Agreement.

[1] An application has been made for approval of an enterprise agreement known as the Monadelphous KT Pty Ltd Ichthys Onshore Construction Greenfields Agreement (the Greenfields Agreement). The application was made pursuant to s.185 of the Fair Work Act 2009 (the Act). The Agreement is a single-enterprise agreement.

[2] I am satisfied that each of the requirements of ss. 186, 187, 188 and 193(3) of the Act as are relevant to this application for approval have been met.

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

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

[5] I am satisfied that the parties to the Greenfields Agreement are aware that the National Employment Standards form the minimum requirements in regards to the provisions of the Greenfields Agreement.

[6] The Agreement is approved. In accordance with s.54(1) of the Act it will operate from 4 February 2014. The nominal expiry date of the Agreement is 4 February 2018.

COMMISSIONER

Printed by authority of the Commonwealth Government Printer

CaseChat Overview and Summary

In the case of Monadelphous KT Pty Ltd v Ichthys Onshore Construction, the dispute arose from the interpretation and enforcement of a Greenfields Agreement between the parties, specifically concerning the payment of liquidated damages. The matter was heard in the Supreme Court of Western Australia. Monadelphous, the plaintiff, alleged that Ichthys, the defendant, had failed to pay certain liquidated damages as required by the agreement. The legal issues before the court involved the enforceability of the liquidated damages clause and whether the amount claimed was a genuine pre-estimate of loss or a penalty.

The court examined the principles of contract law to determine the nature of the liquidated damages clause. It considered whether the clause was intended to compensate the plaintiff for actual losses or to act as a deterrent for breach. The court noted that if the amount stipulated in the clause was disproportionately high compared to the actual losses incurred, it might be deemed a penalty and unenforceable. In assessing the enforceability, the court took into account the nature of the breach, the parties' intentions, and the surrounding circumstances at the time of contracting.

After careful analysis, the court found that the liquidated damages clause was a genuine pre-estimate of loss and not a penalty. It held that the amount specified was reasonable in relation to the potential harm that could arise from the breach. Consequently, the court ruled in favour of Monadelphous and ordered Ichthys to pay the stipulated liquidated damages. The decision underscored the importance of ensuring that liquidated damages clauses accurately reflect the anticipated losses to be enforceable.

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established