Fair Work Act 2009
s.185—Enterprise agreement

Construction, Forestry, Maritime, Mining and Energy Union
(AG2021/8400)

BESIX WATPAC AND CFMEU MINOR CIVIL CONSTRUCTION UNION COLLECTIVE AGREEMENT 2021 - 2025

Application for approval of the BESIX Watpac and CFMEU Minor Civil Construction Union Collective Agreement 2021-2025 – AWU objection – whether agreement relates to a genuine new enterprise – identity and novelty of the enterprise – whether CFMMEU entitled to represent a majority of employees who will be covered – nature of requirement in s 187(5)(a)

[1] The Construction, Forestry, Maritime, Mining and Energy Union (CFMMEU) has made an application under s 185 of the Fair Work Act 2009 (the Act) for approval of a greenfields agreement, the BESIX Watpac and CFMEU Minor Civil Construction Union Collective Agreement 2021-2025 (Agreement). The Agreement covers Watpac Constructions Pty Ltd (company), the CFMMEU, and employees of the company falling within the coverage provision in clause 4.

[2] The company’s declaration in support of the application states that the Agreement covers a genuine new enterprise that the employer is establishing or proposing to establish. No details of this business are contained in the declaration, however the submission of the company in the proceeding was that the new enterprise is the business or activity of undertaking ‘marine and civil’ engineering work, part of which involves the construction of a bridge at Kangaroo Point in Brisbane. The company’s declaration states that it has not employed any workers who will be covered by the Agreement. The CFMMEU filed a form F21 declaration in connection with the application, stating that it is entitled to represent a majority of employees who will be covered by the Agreement, in relation to work to be performed under the Agreement. The Agreement is expressed to cover the CFMMEU and was signed by the union and the company on 16 November 2021. The Agreement was therefore made on that day (see s 182(3)).

[3] The Australian Workers Union (AWU) sought to be heard in relation to the application on the basis that it is a union entitled under its registered rules to represent workers in the civil construction sector and that it was concerned that the Agreement did not meet the requirements of a greenfields agreement. The company and the CFMMEU opposed the AWU’s request to be heard. In a decision given on transcript at the conclusion of a telephone mention, I decided that I would inform myself in relation to the application by hearing from the AWU. In accordance with my subsequent directions, the AWU filed an initial outline of its objection. The company then filed submissions and a witness statement (and later a supplementary statement) of Mr Craig Dearling, its national workplace relations manager. The CFMMEU lodged submissions in support of the approval of the Agreement. The AWU then filed its submissions, together with witness statements of Mr Anthony Beers and Mr Ron Cowdrey.

[4] The AWU’s objection to the approval of the Agreement is fourfold. First, it contends that the Agreement is not a greenfields agreement within the meaning of s 172(2)(b), because it does not relate to a genuine new enterprise. Secondly, it submits that the scope of the Agreement extends to existing employees of the company and that the requirement of s 172(2)(b)(ii) has not been met. Thirdly, the AWU contends that the Commission cannot be satisfied that the CFMMEU is entitled to represent the majority of employees covered by the Agreement in relation to work to be performed under the Agreement, as required by s 187(5)(a). Fourthly, it submits that the Commission could not be satisfied that it is in the public interest to approve the Agreement, as required by s 187(5)(b).

The evidence

[5] Mr Dearling gave evidence that Watpac Constructions Pty Ltd is a publicly listed company that has delivered large-scale building construction and mining contracts across Australia, predominantly in the residential, health, science, education and stadium construction sectors, which he referred to collectively as ‘construction and property development’. Mr Dearling said that in December 2018 the company was acquired by the BESIX group, a Belgium-based multidisciplinary infrastructure contractor which is renowned for expertise in marine and civil construction. Mr Dearling said that following the acquisition, a strategic goal of the company was to broaden its previous operations beyond construction and property development and to expand its service offering into marine and civil engineering work, including water infrastructure and bridges. He said that in December 2018, the company sold its ‘civil and mining’ business in order to focus on diversifying its operations in new markets such as marine and civil construction.

[6] Mr Dearling’s evidence was that as part of the company’s plan to compete for a larger range of projects, including the construction of bridges, it tendered for the design and construction of the ‘Kangaroo Point Green Bridge’ (KPGB), a 466 metre pedestrian and cycling link between Kangaroo Point and the central business district of Brisbane. On 29 June 2021, Brisbane City Council announced that the ‘Connect Brisbane’ bid, which the company had led, had been selected to deliver the project. Mr Dearling said that this was the company’s first awarded contract for a marine and civil construction project in Australia. Construction of the bridge is due to commence in early 2022. On 29 June 2021, the company’s chief executive officer, Mr Bouharmont, sent a message to employees notifying them of the success of the company’s tender, and stating that it was a ‘perfect entry to complex infrastructure projects’.

[7] Mr Dearling said that after being awarded the KPGB contract, the company required a new industrial instrument tailored to marine and civil work, prior to the commencement of site establishment and construction works, for the purpose of applying to the project and to all future marine and civil construction works in Queensland and the Northern Territory. He said that between 1 September and 7 October 2021, the company negotiated with the CFMMEU for a greenfields agreement, which resulted in the finalisation and signing of the Agreement on 16 November 2021. He said that the company had not employed any employees necessary for the performance of the KPGB project or any other civil construction work, and that employees of the company engaged in general building and construction work were not covered by the Agreement and were instead covered by the BESIX Watpac and CFMEU Union Collective Agreement 2021. Mr Dearling said that the KPGB project is currently the company’s only civil construction project in Queensland and the Northern Territory.

[8] Mr Dearling’s evidence was that although the Agreement can apply to all employees of the company who are engaged in civil construction work in Queensland and the Northern Territory in the classifications covered by the Agreement (where project value is below $300 million), the company had decided only to employ persons in connection with cranage, namely tower crane operators, mobile crane drivers, crawler crane drivers, hoist drivers and forklift drivers. He said that the company might also employ some labourers to assist such employees, but that no decision had been made about this.

[9] Mr Cowdrey is an AWU organiser and vice president of the New South Wales branch of the union. Mr Cowdrey’s evidence was that he had viewed information about the KPGB project on the websites of both the company and the Brisbane city council and that, based on his experience with similar work, construction of the bridge would require labourers, steel fixers, riggers, dogmen, and various other categories of worker. He said that the public information about the project suggested that the piling work into the river would be done by cranes, and that cranes would be placed on barges in the river, but that riggers would be needed to work with the cranes both on the riverbank and at the point where their loads would be set down. Mr Cowdrey said that he believed the majority of these workers would be in classifications covered by the AWU’s rules. He also said that crane drivers would be a small minority of the total workforce typically engaged on bridge construction projects, and that it was common for cranes and crane drivers to be contracted in on a ‘wet hire’ basis.

[10] Mr Anthony Beers is the central district secretary of the Queensland branch of the AWU. Mr Beers gave evidence that there is a distinction between general building and construction work on the one hand and civil construction work on the other, and that this distinction is reflected in the terms of the Building and Construction General On-Site Award 2020 (Award), which covers and applies to employers in the on-site building, engineering and civil construction industry. Mr Beers said that in his experience, the definitions in the Award are generally accepted and adopted within the construction industry as drawing the relevant distinction between general and civil construction, and that in this regard the Award treats mechanical engineering projects, as well as the construction of bridges, as civil construction.

[11] Mr Beers said that the AWU is recognised as the industry union with respect to civil construction, because its rules have extensive coverage of the work performed in the industry, whereas other unions such as the CFMMEU have limited occupational coverage, and because the AWU has a large number of members employed or seeking work in the industry. He said that the classifications covered by the Agreement relate to the types of workers who would be covered by the AWU’s rules and would form the majority of work on a civil construction project. Mr Beers said that the AWU was not approached by Watpac to negotiate a greenfields agreement for the KPGB project or for civil construction work generally.

[12] Mr Beers said that he was aware that the company had recently been the managing contractor for the construction of the North Queensland Stadium Project, which involved the construction of a sporting stadium for the Cowboys NRL team, and that this project was a civil construction project because it fell within the definition of a civil construction project in the Award (see clause 4.3(b)(i), which lists the construction of sports or entertainment complexes). Mr Beers also stated that he was aware that the company had been responsible for the design and construction of a 230 tonne single span footbridge to the new stadium.

[13] Mr Beers said that it would be necessary for the company to source labour for the KPGB project associated with the classifications of riggers and doggers and that in his experience such workers would outnumber the required crane drivers. He said that for example it would be necessary for there to be a worker to assist from the land, one to rig the load, and another to assist with placements, and that there would need to be at least two workers for each crane driver. Mr Beers said that in Queensland, workers assisting crane drivers in the civil construction industry fell within the eligibility rules of the AWU, and that it would be unusual to hire a crane driver directly but to contract the accompanying dogmen or riggers.

[14] In his supplementary witness statement, Mr Dearling reiterated that the company had no intention of employing under the Agreement any persons other than the ‘crane-related’ workers referred to in his previous statement, and that at most the company might employ one labourer or ‘peggy’. He said that the company had traditionally not had a large construction workforce on its building projects, and that it subcontracts major packages (formwork, steel, concrete etc.) and maintains small numbers of workers in its crane crews. He said that the company currently employs crane drivers on general construction projects who hold high risk and advanced scaffolding licences as well as intermediate rigger tickets that enable them to perform rigging and dogman work from time to time (‘dual ticketed’ crane drivers). He said that such workers are engaged, paid and classified by the company as crane drivers. Presently, the company had three general building projects in Queensland, and on each project the company deployed a single crane and employed a single construction worker, namely the crane driver. It did not employ labourers, riggers or dogmen. A fourth general construction project, which is nearly completed, had seen the company deploy two cranes, and employ crane operators with rigging and dogman qualifications. Mr Dearling said that no specialist riggers or doggers would be employed by the company on the KPGB project, and that any rigging or dogging work would be done by dual ticketed crane drivers, or by contractors.

[15] Mr Dearling said that, for the Cowboys project, the company had subcontracted all of the work, and that it was different from the KPGB project, because it was much smaller and involved no marine element. He said that the company’s previous stadium construction work had involved construction of dressing rooms, media facilities and corporate boxes, seating, stairs and lifts, topped by a roof. He said that the company considered such work to be separate from its historical civil and mining work and its new marine and civil business, and that the stadium work had been undertaken using employees covered by its general construction agreements. Mr Dearling said that the company had undertaken relatively little civil work in Queensland, and that this had involved haul roads, mine access, earthworks and roadworks. The company had not undertaken any civil and marine work, such as the KPGB project.

Legislative framework

[16] Section 172 of the Act provides for the making of ‘greenfields agreements’, either as single-enterprise agreements or multi-enterprise agreements (s 172(4)). In respect of single-enterprise agreements, s 172(2)(b) states:

“(2) An employer, or 2 or more employers that are single interest employers, may make an enterprise agreement (a single-enterprise agreement):

…

(b) with one or more relevant employee organisations if:

(i) the agreement relates to a genuine new enterprise that the employer or employers are establishing or propose to establish; and

(ii) the employer or employers have not employed any of the persons who will be necessary for the normal conduct of that enterprise and will be covered by the agreement.

Note: The expression genuine new enterprise includes a genuine new business, activity, project or undertaking (see the definition of enterprise in section 12).”

[17] Section 172(2)(b) requires the existence of jurisdictional facts as a precondition to the Commission’s approval of a greenfields agreement. If those facts are not present, a greenfields agreement cannot be said to have been made within the meaning of s 172, and there is no valid application before the Commission (see National Union of Workers v HP Distribution Pty Ltd [2013] FCA 139 (HP Distribution) at [29]).

[18] Section 186(1) of the Act states that if an application for approval of an enterprise agreement is made under s 185, the Commission must approve the agreement if the requirements of ss 186 and 187 are met. The requirements of s 186 relevantly include that the agreement pass the ‘better off overall test’ as defined in s 193. Section 187(5) provides that, if an agreement is a greenfields agreement, the Commission must, before approving the agreement, be satisfied that the relevant employee organisations that will be covered by the agreement are ‘entitled to represent the industrial interests of a majority of the employees who will be covered by the agreement, in relation to work to be performed under the agreement’ (s 187(5)(a)); and that it is ‘in the public interest’ to approve the agreement (s 187(5)(b)).

Contentions of the parties

[19] The first of the AWU’s four objections to the approval of the Agreement was that the Commission could not be satisfied that the Agreement related to a genuine new enterprise. It said that neither the Agreement itself nor the supporting declarations lodged in the Commission identified the genuine new enterprise that the employer was said to be establishing. The AWU submitted that whether there is such a new enterprise requires consideration of the objective character and identity of the enterprise to which the relevant agreement is said to relate, based on a consideration of all of the circumstances. It contended that the submissions of the company and the CFMMEU and the evidence of Mr Dearling had failed to define what the new enterprise was, and that it was not clear whether the new enterprise was said to be a new line of work in respect of civil and marine construction projects, or the KPGB project, and that in any event neither could be regarded as new. If the new enterprise was the business or activity of undertaking civil construction work, it could not be described as new because the company had undertaken civil construction work in the past. Although the company and CFMMEU materials made reference to ‘civil and marine’ construction, the Agreement contained no definition of this expression, nor had any clear explanation of it been provided. If the new enterprise was the KPGB project, this too lacked novelty, because it was a project for the construction of a bridge, and the company had only recently finished a project that had involved the construction of a bridge, namely the Cowboys stadium project. The AWU further contended that the company’s decision, made after the Agreement was made, to engage only cranage employees, had not been explained and called into question whether the enterprise to which the Agreement was said to relate was a genuine new enterprise.

[20] Secondly, the AWU submitted that the Agreement covers persons who are existing employees of the company, contrary to the requirement of s 172(2)(b)(ii). It said that although clause 4.1 of the Agreement states that the instrument will apply to all employees of the company engaged in civil construction, the term ‘employee’ was defined in clause 2 to mean any employee of the employer, which would include existing employees, such that the Agreement could not be a greenfields agreement, because a requirement of such an agreement is that it must be made when there are no relevant persons employed by the employer.

[21] The AWU’s third objection was that the Commission could not be satisfied that the requirement of s 187(5) had been met, because this matter was linked to the identification of the new enterprise, and the uncertainty in the present matter about the identity of the relevant enterprise meant that no conclusion could be drawn about the majority representation requirement. The AWU further contended that s 187(5) required the Commission to take account of all of the employees who would be covered by the Agreement, and that the Commission could not be satisfied that the CFMMEU met the majority representation requirement, because whether the CFMMEU was entitled to represent the industrial interests of various employees would depend on the work that employees actually perform and where that work was undertaken, matters about which there was a scarcity of evidence.

[22] The AWU’s fourth objection was that it could not be in the public interest for the Commission to approve a greenfields agreement in circumstances where the application relied on a non-binding statement by the company as to the types and number of employees who will be directly employed under the Agreement (i.e. the crane-related workers). Those employees were in any event not representative of the types of employees who are actually covered by the terms of the Agreement. To the extent that the Agreement was said to relate to the company’s focus on or desire to obtain more civil work, this was merely an aspiration or intention, which the AWU said could not be sufficient to conclude that the company ‘proposed to establish’ a genuine new enterprise. It relied in this regard on the obiter in the decision of the Full Bench in ARTBU v Busways [2021] FWCFB 591 (No 2) (ARTBU) at [33]. The AWU contended that, as well as being a reason to conclude that the jurisdictional requirement in s 172 had not been made out, the poorly defined or vague nature of the supposedly new enterprise was a reason for the Commission to conclude that it was not in the public interest to approve the Agreement.

[23] The company contended that each of the approval requirements for the Agreement had been met, that the Commission should be so satisfied, and that accordingly the Commission was required by s 186(1) to approve the Agreement. It contended that the evidence of Mr Dearling had established the objective character and identity of the enterprise and its novelty, which was genuinely new and different from its previous work and projects, and that the KPGB project was part of the work of the new enterprise.

[24] As to the majority representation requirement, the company contended that Mr Dearling had given evidence about the employees who will be employed and perform work under the Agreement, and in particular the decision of the company that, although the Agreement can potentially apply to all employees engaged in civil construction works as defined in the Agreement, the company had decided only to employ crane-related workers. The company submitted that it was clear that these workers fell within the CFMMEU’s eligibility rules (see in particular rule 2E). The company said that it was this narrower group of employees who were the relevant employees for the purpose of the majority representation requirement, and that the relevant time for assessing the requirement was the period of mobilisation. The company contended that it was in the public interest for the Commission to approve the Agreement, because the instrument was consistent with the object of the Act and provided for conditions of employment that were more generous to employees than those of the Award.

[25] Like the company, the CFMMEU submitted that the approval requirements had been met and that the Commission must approve the Agreement. It contended that Mr Dearling’s evidence had convincingly explained that, after its acquisition by BESIX, the company had decided to broaden the work that it would undertake and expand into civil and marine construction and that consistent with this decision it had successfully tendered for the new KPGB project. The CFMMEU contended that the majority representation requirement focused on the employees who will be covered by the agreement, not all of the persons who could conceivably fall within its coverage, and that the CFMMEU met this requirement, because the kinds of persons whom the company will employ in relation to work to be performed under the Agreement were confined to crane-related workers. These workers were unambiguously covered by the CFMMEU’s rules, because its right to represent their industrial interests was not dependant on the industry or location in which they worked. The CFMMEU also contended that approval was in the public interest because the Agreement would provide certainty to the company for future marine and civil tenders and reduce the scope for industrial action.

Does the Agreement relate to a genuine new enterprise (s 172(2)(b)(i))?

[26] To determine whether a greenfields agreement relates to a genuine new enterprise, as it must do in order to be approved, it is necessary to consider the ‘objective character and identity of the enterprise to which the agreement will apply and its novelty in relation to the employer’s business’ (see HP Distribution at [34]).

[27] What is the new enterprise in this case? It is true that the enterprise was variously described by the company and the CFMMEU as the company’s pursuit of civil and marine construction projects generally and as the KPGB project. However, I do not consider this to reflect uncertainty about the identity or nature of the new enterprise. As the note to s 172 reminds us, ‘enterprise’ is defined in s 12 to mean ‘a business, activity, project or undertaking’. There is no reason why a genuine new enterprise cannot be several of these things at the same time. It is common that a new ‘business’ that an employer has established or is proposing to establish has in train an initial ‘project’, and that both the business and the project could meet the definition of an ‘enterprise’ in s 12. In any event, the company and the CFMMEU were very clear at the hearing that the KPGB project was only part of the new enterprise.

[28] I consider that the company is establishing a genuine new enterprise that is constituted by the business or activity of undertaking marine and civil construction work and growing the company’s service offering in this field. Although the company has performed some civil construction work in the past, the new enterprise has at least two dimensions of novelty. First, I accept the evidence of Mr Dearling that the KPGB project, and the other civil and marine projects which the company intends to pursue, are of a different character from the civil projects it has undertaken in the past, because the nature of the work is different, and likely to be more complex and sophisticated. The previous civil work conducted by the company has concerned the construction of buildings and mines, which, regardless of the manner in which the Award may categorise such work, has been regarded by the company internally as part of its building construction business. The new enterprise is concerned with complex civil and marine projects, such as the river bridge that is the object of the KPGB project. Mr Dearling said in his evidence that the company did not intend to undertake projects similar to those engaged in by its defunct civil and mining business.

[29] Secondly, the company has made a strategic decision, following its acquisition by BESIX, to expand its service offering into marine and civil engineering, leveraging the experience and expertise of the BESIX group in this field. This strategic decision is not simply a concept. It has been operationalised. In this regard, Mr Dearling gave evidence that BESIX experts in civil and marine projects had been sent from Belgium and the United Arab Emirates to work for the company in Australia, one as an engineering director and two others as project directors, and that among other things, these persons are assisting the company with engineering expertise, with tenders, and, if tenders are successful, with project delivery. This evidence is consistent with the company’s claim that it is engaged in an enterprise that is substantively new. It also speaks to the scale and strategic importance of the new work. Further, the presence of the specialist advisers from BESIX is indicative of the existence of different technical requirements connected to the performance of civil and marine projects.

[30] The AWU contended that there was no evidence that the alleged new enterprise had been segmented from the rest of the company’s business (see CFMMEU v CPB Contractors Pty Ltd and AWU [2018] FWCFB 3702 (CPB) at [45]), and that this was an important consideration telling against a conclusion that the company was establishing a genuine new enterprise. It is true that the new enterprise has not been placed into a separate division or other formal organisational unit within the company, however the search is ultimately for the objective character and identity of the enterprise, and its novelty in relation to the employer’s business. The substance of the new enterprise is that the company has embarked upon a major drive to win and undertake civil and marine construction work. The formation of a new business unit might have further emphasised the novelty of the enterprise, but in my view, in this case at least, the substance of the work that is being pursued is of greater significance than the internal corporate structure.

[31] The AWU is correct to point out that the Agreement does not identify the new enterprise, but the Act does not require it to do so. The question is whether the greenfields agreement relates to a genuine new enterprise. It is also the case, as the AWU submitted, that the company has not formally defined what it means by ‘civil and marine’ or ‘marine and civil’ construction work. But the meaning is clear enough. It means civil construction work, including marine work. The word ‘marine’ is one of the sub-areas of ‘civil construction works’ identified in the Agreement’s coverage clause. It is not defined in that clause, however its dictionary meaning is ‘relating to the sea’. In everyday language, ‘marine’ extends to things relating to rivers, perhaps because adjectives associated with rivers, such as ‘fluvial’ or ‘riparian’, are not in common usage. In ordinary language, a ‘marine bridge’ could span the sea, a river, or another significant body of water. I understand the company’s various references to ‘marine’ to have this ordinary meaning. A further indication of the meaning of ‘civil and marine’ is found in Mr Dearling’s evidence that the types of projects that the company is seeking to deliver within its new enterprise were complex civil infrastructure projects such as the KPGB project.

[32] In this regard, Mr Dearling was asked in cross-examination about two other marine projects with which the company was associated in 2021. One concerned a project for the Department of Defence which, according to a government press release of 4 May 2021, would see the demolition of a wharf, and the construction of a new wharf, in Cairns. The second concerned a project that in December 2021 was soon to commence in New South Wales concerning the upgrading of ferry wharves. These projects were not referred to in the AWU’s submissions or evidence. They were raised for the first time in cross-examination. Mr Dearling said that he was aware of these projects but not of their details. There was no evidence that the company had employed anyone to conduct work on these projects or that, because of the company’s involvement in these projects, its marine and civil enterprise was not new. If anything, this evidence tends to underscore the company’s new engagement in marine projects, although the general nature of the evidence means that it is not possible to draw any firm conclusions from it. For example, it is not clear precisely what the company’s role in either project is. The press release from the Department of Defence states that the company is the ‘managing contractor’ for the project. Perhaps the company considers this project to be outside its civil and marine enterprise because it will be managing rather than performing the construction, as it did on the Cowboys stadium project. But it is not necessary to explore why the company did not rely upon or refer to these projects in its materials. They do not call into question the novelty of the enterprise.

[33] I agree with the AWU that it would not be enough for an employer to make a greenfields agreement in respect of a proposed activity that was merely speculative and had not progressed beyond some contemplative stage. I agree with the obiter of the Full Bench in ARTBU at [33]. Section 172 requires that the relevant enterprise be one that the employer or employers ‘are establishing or propose to establish’. One does not establish or propose to establish a new enterprise merely by thinking about it. But that is not what has happened here. The owner of the company has recognised international expertise in civil construction. The company wishes to use this expertise to pursue civil and marine work. It has a new strategic emphasis on winning work of this kind. Other lines of work have been discontinued. The company has won an important civil and marine project and is resolved to pursue other such projects. It is not merely undertaking the odd civil construction project, as it seems to have done in the past. And it is not simply thinking about expanding its work into civil and marine projects. It has embarked on an activity that is substantively, strategically, and genuinely new.

[34] I reject the AWU’s contention that, because the company has not explained its reasons for deciding only to employ cranage workers under the Agreement, a shadow of doubt is cast on the novelty of the enterprise. The question of who will be employed by the company and covered by the Agreement is separate from the question of whether there is a genuine new enterprise. It is relevant to the Commission’s consideration of s 187(5)(a), discussed below.

[35] I am satisfied that the relevant enterprise is a genuine new enterprise. It is clear from the terms of the Agreement and from the evidence of Mr Dearling that the instrument relates to the new enterprise. The jurisdictional requirements in s 172(2)(b) are met.

Does the agreement apply to current employees?

[36] I reject the AWU’s contention that the coverage provision in the Agreement extends to persons who are presently employed by the company. The general definition of the word ‘employee’ that appears in clause 2 (see also clause 5.1) is to be read subject to clause 4.1(c), which confines the application of the Agreement to employees engaged in ‘civil construction work’ as defined in clause 4.4 of the Agreement and who fall with the Agreement’s classification structure.

[37] At the hearing, the AWU contended that the meaning of ‘civil construction work’ in the coverage clause of the Agreement was informed by the definition of such work in the Award, because clause 6.1 of the Agreement states that the Agreement is intended to be interpreted in conjunction with the Award. The definition of civil construction work in clause 4.4 of the Agreement is not an exhaustive one (‘shall include (but not restricted) to (sic) …’), and there is scope to read it together with the definition of ‘civil construction’ in the Award (although the classifications of work covered by the Agreement are confined to those in Appendix 1 – see clause 4.1(c)). But in any event, the evidence does not show that at the time the Agreement was made there were any employees of the company employed on civil construction projects, broadly defined. And it would remain the case that, even with a broader definition of civil construction work, the Agreement would relate to the company’s genuine new enterprise.

Has the majority representation requirement been met (s 187(5)(a))?

[38] Section 187(5)(a) requires that I be satisfied that the CFMMEU, the only employee organisation that will be covered by the Agreement, is ‘entitled to represent the industrial interests of a majority of the employees who will be covered by the agreement, in relation to work to be performed under the agreement’. Three elements require consideration. The first is relatively straightforward. A union’s entitlement to represent the industrial interests of employees is determined by reference to the eligibility provisions of its registered rules and the work that relevant employees perform.

[39] Secondly, the employees with whom s 187(5)(a) is concerned are the ‘employees who will be covered by the agreement’. Section 53(1) provides than an employee is covered by an enterprise agreement if the agreement ‘is expressed to cover (however described) the employee’. Clause 4 of the Agreement states:

“4. Application of the Agreement

4.1 This Agreement applies to:

(a) Watpac Construction Pty Ltd (BESIX Watpac or the Employer);

(b) the CFMEU (the Union); and

(c) all Employees of the Employer engaged in Civil construction work and for whom classifications and rates of pay are provided by this Agreement (the Employee).

Collectively known as Parties

4.2 This Agreement only applies to work done in Queensland or Northern Territory and to work temporarily done outside Queensland or Northern Territory by Employees who are based in Queensland or Northern Territory, and only on projects below $300 million in total project value.

4.3 Associated Entity

(a) In accordance with Division 2 of Part 2-8 of the Fair Work Act, where an Employee transfers to an Associated Entity of the Employer and performs the same work or substantially the same work for the Associated Entity of the Employer, the Agreement will continue to cover the Employee.

(b) For clarity, this clause does not apply to a circumstance where an Employee commences employment with the associated entity more than 3 months after the Employee ceases working for the Employer.

4.4 Civil construction works shall include (but not restricted) to the construction, alteration, installation and maintenance of:

•  Water Supply and Sewerage

•  Roads, Bridges and Wharves

•  Dams

•  Railway Civil Works

•  Subdivisions and Site Development Work

•  Earthworks and land clearing

•  Civil Engineering Infrastructure projects

•  Marine works”

[40] I agree with the CFMMEU that there are several reasons to conclude that s 187(5)(a) is concerned with the actual employees who will be employed and covered by the agreement, rather than all of the employees who could conceivably fall within the coverage of the agreement. First, the section refers to employees, not to classifications or types of work. If the Parliament had intended the majority coverage requirement to attach to classifications, it could easily have provided for this.

[41] Secondly, s 187(5)(a) requires a quantitative assessment: the Commission must be satisfied that the relevant unions are entitled to represent a majority of employees who will be covered by the agreement. Generally, it would be unworkable for the Commission to undertake this quantitative evaluation by reference to classifications or types of work only, because to say that a union has representation rights in respect of a majority of classifications says nothing about the number of employees who might be employed in those classifications.

[42] Thirdly, in order to determine whether a union is entitled to represent the industrial interests of an employee it is generally necessary to assess the primary function of the employee’s employment in the context of the employer’s workplace and compare it with the eligibility rules of the union. This too indicates that s 187(5)(a) requires the Commission to consider the actual employees who will be employed by the employer under the agreement, and the work that they will do.

[43] Another reason to conclude that the assessment of majority representation is concerned with actual employees can be found in the third element of s 187(5)(a), which is the stipulation that the relevant union be entitled to represent a majority of the employees who will be covered by the agreement in relation to work to be performed under the agreement. These words connect the representation entitlement of the relevant unions specifically to the work employees will undertake under the agreement. It would not be enough that a union could represent an employee who was covered by the agreement; the representation must pertain to the work undertaken under the agreement. (For example, a union might be entitled to represent the industrial interests of a particular employee who will be covered by the greenfields agreement, but only have this entitlement at times when the employee undertakes work under another of the employer’s enterprise agreements). If the union is not entitled to represent the employee ‘in relation to work to be performed under the (greenfields) agreement’, that employee would not count towards the number of employees whom the union could represent for the purpose of the assessment in s 187(5)(a).

[44] Another indication that the Commission is to make the majority representation assessment in s 187(5)(a) based on the available evidence of which employees will be employed and covered by the agreement is that s 172(2)(b)(ii) requires consideration of which employees may be ‘necessary’ for the ‘normal’ conduct of the enterprise, matters which are unlikely to be apparent on the face of the agreement.

[45] The expression ‘the employees who will be covered by the agreement’ in s 187(5)(a) may be contrasted with the formulation ‘employees employed at the time who will be covered by the agreement’ that appears in s 181(1), which concerns the employee vote for a non-greenfields agreement. The employees referred to in that provision are all ascertainable and need to be ascertained: the Commission must be satisfied that the employees who voted on the agreement are those who will be covered by the agreement (see AMWU and CFMMEU v Temmco Total Energy Mining Maintenance Company Pty Ltd [2021] FWCFB 6048 at [36] and following)). However, when a greenfields agreement is made, it is a requirement that the employer not yet have employed any persons who will be covered by the agreement. The employees referred to in s 187(5)(a) are future employees, not ones ‘employed at the time’. This informs the meaning of ‘employees who will be covered by the agreement’, as it appears in s 187(5)(a). Greenfields agreements are concerned with the conditions of employment for employees who will be employed by the employer in the future. They are by their nature therefore somewhat predictive (see CFMEU v John Holland Pty Ltd (2010) 186 FCR 88 at [103]). However this is not a matter that tells against the quantitative, ‘employee-based’ approach outlined above. It simply means that it is to be expected that the Commission will not be able to ascertain all of the individual employees, and all of the work that each of them will do, over the life of the agreement. What the Commission can and must do however is to identify the ‘employees who will be covered by the agreement’ and the work they will perform, based on the evidence and information before the Commission, and then determine whether the union party or parties are entitled to represent a majority of those employees in relation to that work.

[46] The AWU submitted that it would be incorrect for the Commission to determine the majority representation issue by reference to evidence of a small number of employees who may be employed on one project at the time of mobilisation, and that the correct approach was to focus on the words of the proposed agreement. It relied in this regard on the decision of the Full Federal Court in CFMEU v John Holland Pty Ltd [2015] FCAFC 16. There, the Court found that s 186(3), which requires the Commission to be satisfied that the ‘group of employees covered by the agreement was fairly chosen’, is concerned with the agreement’s potential coverage of employees (see Buchanan J at [34] to [41]). However, s 186(3) does not contain the additional words found in s 187(5)(a) which have been considered above. Further, s 186(3) requires the Commission to make a qualitative assessment, not a quantitative one.

[47] Clearly, the coverage of the agreement is relevant when considering the application of s 187(5)(a). In some cases, it is apparent to the Commission that the relevant union is able to cover all of the relevant employees who could be employed under the agreement. In others, the Commission may be able to rely on its industry experience and the description of the work that is found in the instrument and the supporting documentation and information filed in the Commission to satisfy itself that the relevant union has majority coverage of relevant employees. In some cases, particularly in contested matters, the position may be less clear and require further investigation. In any case, s 187(5)(a) requires the Commission to undertake an evaluation of the employees who ‘will be covered by the agreement’, based on the information and evidence before it about who will be employed and covered by the agreement and what work those employees will undertake.

[48] Mr Beers said that in Queensland the CFMMEU does not have coverage of doggers and riggers, and that such employees will be required in order to construct the bridge that is the subject of the KPGB project. He said that ordinarily there would be two doggers or riggers for every crane driver, and that it would be unusual for a company to employ a crane driver directly but to source a dogger or rigger indirectly, as a contractor. But the evidence of Mr Dearling was firmly that the company will not employ specialist riggers and doggers, and that any rigging and dogging work would be undertaken by dual ticketed crane drivers or by contractors. Mr Dearling also said that, while the company might hire some labourers, no decision had been made, and it was thought that at most it might hire a single labourer.

[49] In the present case, it is known that the company has won the tender for the KPGB project in Brisbane, and that work on this project will be performed under the Agreement. It is also known that the company has decided that it will employ tower crane operators, mobile crane operators, crawler crane operators, forklift drivers and hoist operators. The work that will be performed by employees of the company on the project, and under the Agreement generally, will, despite the broader coverage provision in the Agreement, be confined (save for the possible inclusion of one or some labourers) to work performed by crane-related employees, including those who may be dual ticketed. These are the employees who ‘will be covered by the agreement’. The CFMMEU is entitled to represent the industrial interests of these employees, in relation to the work that the employees will perform under the Agreement.

[50] The AWU contended that the company might change its mind about confining its employment of employees under the Agreement to cranage employees, and that it might decide later to use the full scope of labour that can be engaged under the Agreement. It has not given an undertaking to the Commission that it will only employ this narrower group of employees. However, the question of who are the employees that will be employed under the agreement, and whether the relevant union has majority coverage of such employees in relation to work to be performed under the agreement, must be assessed at the time that the Commission considers the application for approval of the agreement, based on the evidence before it. Mr Dearling has given sworn evidence that the company has decided only to employ cranage employees under the Agreement. I accept his evidence. It was clear and convincing. He explained that the company has used dual ticketed cranage workers in the past and that its rationale for having done so was that it allowed the company to keep its core group of crane drivers employed because they are able to do more things.

[51] This does not mean that this core group of crane drivers will be deployed on the KPGB project or other civil and marine construction work. If that were the case, and if this core group of cranage employees were currently employed by the company but deployed on other work, the requirement of s 172(2)(b)(ii) would not be met. The enterprise agreement would need to have been made as a non-greenfields agreement, approved by vote of all employees employed at the time who would be covered by the agreement. But there is no evidence that this ‘core group’ will work in the new enterprise. Further, Mr Dearling’s evidence was that it is possible that any rigging or dogging work will be undertaken by contractors. In any event, I accept Mr Dealing’s evidence that the company has not employed any employees who will be required for the normal conduct of the KPGB project or any other work to which the Agreement relates.

[52] I am satisfied that the CFMMEU is entitled to represent the industrial interests of a majority of the employees who will be covered by the Agreement, in relation to work to be performed under the Agreement. Even if I had adopted the broader approach of assessing the ‘majority’ requirement in s 187(5)(a) by reference to the Agreement’s coverage, I would have concluded that the CFMMEU met the requirement. Most of the classifications of work in Appendix 1 of the Agreement, read in the context of the coverage provision in clause 4 and the nature of the new enterprise, pertain in my view to work falling within the eligibility provisions contained in the CFMMEU’s registered rules. Having regard to this and based on the evidence about the work to be performed by employees of the company under the Agreement, I would consider that the CFMMEU is entitled to represent a majority of employees who will be covered by the Agreement, in relation to work to be performed under the Agreement.

Is approval of the Agreement in the public interest?

[53] I am satisfied that it is in the public interest to approve the Agreement. First, I consider that approval of the Agreement is consistent with the object of the Act set out in s 3(f), and also the object of Part 2-4 that is expressed in s 171. Secondly, the terms of the Agreement exceed the minimum conditions in the Award by a very comfortable margin. This in turn will likely have the tendency to attract persons to seek to work under the Agreement, such that labour will be deployed in a timely way and the KPGB project, as well as other civil construction projects undertaken under the Agreement, will be well serviced by the company. Thirdly, I consider that the Agreement will facilitate the company’s strategic objective of expanding its civil construction work, leveraging the significant international experience of its owner, BESIX. This will be a matter that is in the interest of the company but also the public, because it may be conducive to an increase in competition in the civil construction sector. Further, the company will be able to bid for and undertake work on the basis that for the nominal life of the agreement, it cannot be the object of protected industrial action.

[54] I discern from the AWU’s contentions and evidence a suggestion that it would have been appropriate, or more appropriate, for the company to have made a greenfields agreement with it, because the AWU has broad coverage of the civil construction sector and is an eminent union in this industry. However, the concept of an ‘appropriate’ union is alien to the Act’s framework for the making of greenfields agreements. It is very clear from s 187(5)(a) that unions with coverage of relevant employees can be left out of negotiations for a greenfields agreement. What is required is that the union or unions that will be covered by the agreement are entitled to represent a majority of the employees who will be covered by the agreement, in relation to work to be performed under the agreement. That an employer has decided not to negotiate with a particular union (even one that might be an obvious potential partner with which to make an agreement in a particular sector) is not relevant to the public interest. As I said in SC Hydro Pty Ltd [2021] FWC 5110 at [52], s 187(5)(a) represents the full extent of the Act’s concern about which unions should be party to a greenfields agreement. It recognises that some unions might have coverage of relevant employees yet not be party to them.

Conclusion

[55] I am satisfied that the Agreement relates to a genuine new enterprise that the company is establishing and that it has not employed any of the persons who will be necessary for the conduct of that enterprise and who will be covered by the Agreement. I am also satisfied that the CFMMEU is entitled to represent the industrial interests of a majority of the employees who will be covered by the Agreement, in relation to work to be performed under the Agreement, and that it is in the public interest to approve the Agreement. I am satisfied that the other relevant approval requirements in ss 186 and 187 of the Act have been met.

[56] The Agreement was approved on 1 February 2022 and, in accordance with s 54, will operate from 8 February 2022. The nominal expiry date of the Agreement is 30 June 2025.

DEPUTY PRESIDENT

Appearances:

C. Massy of counsel for the CFMMEU
E. White of counsel for Watpac Construction Pty Ltd
H. Borenstein Q.C. for the AWU

Hearing details:

2022
Melbourne
27 January

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