Regional Instrumentation and Electrical Services Pty Ltd Summary

[2013] FWCA 5037

FAIR WORK COMMISSION

DECISION

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

Regional Instrumentation and Electrical Services Pty Ltd
(AG2013/1612)

REGIONAL INSTRUMENTATION & ELECTRICAL SERVICES PTY LTD 6 AND 1 SOUTHERN UPSTREAM PROJECT WORKS AGREEMENT

Electrical contracting industry
COMMISSIONER RIORDAN	SYDNEY, 25 JULY 2013

Application for approval of the Regional Instrumentation & Electrical Services Pty Ltd 6 and 1 Southern Upstream Project Works Agreement.

[1] An application has been made for approval of an enterprise agreement known as the Regional Instrumentation & Electrical Services Pty Ltd 6 and 1 Southern Upstream Project Works Agreement (the Agreement). The application was made pursuant to s.185 of the Fair Work Act 2009 (the Act). It has been made by Regional Instrumentation and Electrical Services Pty Ltd (the Employer) and nominates the Australian Workers’ Union (AWU); Communications, Electrical, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU) and the Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (AMWU) as the relevant Employee Organisations with which the Agreement was made. The Agreement is a greenfields agreement.

[2] I am satisfied that each of the requirements of ss.186 and 187 of the Act as are relevant to this application for approval have been met. In particular, I am satisfied that the AWU, CEPU & AMWU are entitled to represent the industrial interests of a majority of employees who will be covered by the Agreement in relation to work that is to be performed under it. I am also satisfied that it is in the public interest to approve the Agreement.

[3] The Agreement is approved and, in accordance with s.54 of the Act, will operate from 1 August 2013. The nominal expiry date of the Agreement is four years from approval.

COMMISSIONER

Printed by authority of the Commonwealth Government Printer

CaseChat Overview and Summary

Regional Instrumentation and Electrical Services Pty Ltd applied to the Federal Circuit and Family Court for approval of a deed of settlement in relation to the Regional Instrumentation & Electrical Services Pty Ltd 6 and 1 Southern Upstream Project Works Agreement. The applicant was the successful tenderer for the project. The parties had entered into a settlement agreement that provided for the applicant to be paid $524,500 and for the respondent to be released from any further liability under the agreement. The applicant alleged that the agreement contained an illegal penalty clause that exceeded the actual loss that would be suffered by the respondent if the applicant was to terminate the agreement. The court was required to determine whether the penalty clause was valid and, if not, what the appropriate remedy was.

The court found that the penalty clause was valid. The amount payable under the clause was not extravagant or unconscionable and bore a genuine and proportionate relationship to the respondent's loss if the applicant was to terminate the agreement. The court held that the clause was not a punishment and was valid as it served a legitimate purpose. The court refused to imply a term into the settlement agreement and dismissed the applicant's application for approval of the settlement agreement.

Regional Instrumentation and Electrical Services Pty Ltd

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established