Article

Note: The Construction, Forestry, Mining and Energy Union (Union) appealed an order requiring it to pay civil penalties for engaging in unlawful industrial action in 2011 and enjoining further violations. Union argued that the industrial action was rendered unlawful under the provisions of the Building and Construction Industry Improvement Act 2005. The provisions rendering the actions unlawful were subsequently repealed by the Building and Construction Industry and Improvement Amendment (Transition to Fair Work) Act 2012 (Amendment Act).

Notwithstanding the repeal, the Federal Court of Australia, Collier, J., found that the court possessed the proper jurisdiction to grant injunctive relief under the provisions in the repeal and other statutory authority, and that such injunctive relief was appropriate in terms agreed by the parties.

The Applicant agreed to provide a AUD 150,000 bank guarantee in favor of Lend Lease Project Management & Construction (Aust) Pty. Ltd. (Beneficiary) "in the nature of further deterrence of unlawful industrial action" to assure compliance with the terms of the injunction. Based on the agreement, the Judge ordered:

"The [Union] shall provide security in the sum of $ 150,000 by way of bank guarantee in favour of [Beneficiary] as surety for compliance by the [Union and others] with Injunction and the Undertaking (the Bank Guarantee). Such Bank Guarantee will be provided within 30 days of this Order unless otherwise agreed by [Beneficiary].

The [Union] shall obtain the Bank Guarantee in favour of [Beneficiary] on terms acceptable to [Beneficiary].

[Beneficiary] may only present the Bank Guarantee for payment from the issuing bank in the event that any, all, or a combination of the [Union and others'] breach the Injunction or the Undertaking.

The determination of whether any of the [Union and others], have breached the Injunction or the Undertaking will be made by way of Court Order, if the parties cannot agree."

Comment: This use of a demand guarantee to assure compliance with a court order is unique. It should be noted that the order in effect requires a judicial determination before the beneficiary can draw on it.

[JEB/so]

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