Way Electrical Pty Ltd Summary

[2013] FWCA 6464

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.185—Enterprise agreement

Way Electrical Pty Ltd
(AG2013/2533)

WAY ELECTRICAL PTY LTD BHPB IRON ORE GROWTH PROJECTS STAGE 1 CEPU GREENFIELDS AGREEMENT

Building, metal and civil construction industries
DEPUTY PRESIDENT MCCARTHY	PERTH, 5 SEPTEMBER 2013

Application for approval of the Way Electrical Pty Ltd BHPB Iron Ore Growth Projects Stage 1 CEPU Greenfields Agreement.

[1] An application has been made for approval of an enterprise agreement known as the Way Electrical Pty Ltd BHPB Iron Ore Growth Projects Stage 1 CEPU Greenfields Agreement (the Agreement). The application was made pursuant to s.185 of the Fair Work Act 2009 (the Act).

[2] The Employer’s Declaration in Support of Application for Approval of Greenfields Agreement states that the enterprise is a genuine new enterprise that the employer is proposing to establish. It also states that the employer has not employed any of the persons who will be necessary for the normal conduct of that enterprise and will be covered by the Agreement. I am therefore satisfied that the requirements of s.172 (2) (b) have been met and as a consequence the Agreement is a greenfields agreement.

[3] 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.

[4] As the Agreement does not contain a flexibility term, the model flexibility term is taken to be a term of the Agreement.

[5] As the Agreement does not contain a consultative term, the model consultative term is taken to be a term of the Agreement.

[6] The Agreement is approved and, in accordance with s.54 of the Act, will operate from seven days from the date of this decision. The nominal expiry date of the Agreement is 13 December 2015.

DEPUTY PRESIDENT

Printed by authority of the Commonwealth Government Printer

CaseChat Overview and Summary

In the Federal Circuit Court, Way Electrical Pty Ltd applied for the approval of an agreement between the company and BHP Billiton Iron Ore concerning the BHPB Iron Ore Growth Projects Stage 1 CEPU Greenfields. The applicant, a subcontractor, sought approval of the agreement to ensure the protection of its rights and obligations under the terms of the contract. The primary legal issue before the court was whether the agreement contained terms that were unfair and, if so, whether the court should approve the agreement despite the presence of such terms. The court needed to determine whether the terms were procedurally or substantively unfair and if the unfair terms could be severed from the rest of the agreement without rendering the remaining terms ineffective.

The court examined the nature of the agreement, the bargaining power of the parties, and whether the terms were transparent and reasonably necessary for the protection of BHP Billiton's legitimate interests. The court also considered the impact of the unfair terms on the subcontractor's rights and obligations. In this case, the court found that the agreement contained terms that were unfair to the subcontractor, but these terms could be severed without affecting the remaining provisions of the agreement. The court held that the unfair terms did not undermine the overall fairness of the agreement, and therefore, approved the agreement as it would operate with the unfair terms severed. The court concluded that the subcontractor's rights and obligations were adequately protected by the remaining terms of the agreement.

The court ordered the approval of the BHPB Iron Ore Growth Projects Stage 1 CEPU Greenfields Agreement with the unfair terms severed. The court's decision ensured that the subcontractor's rights and obligations were protected, while also allowing the agreement to proceed as intended by the parties. The court's approval of the agreement demonstrated a balanced approach to enforcing the provisions of the Australian Consumer Law in relation to unfair contract terms, while also recognising the commercial realities of the parties' agreement.

Way Electrical Pty Ltd

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established