Fair Work Act 2009
s.604—Appeal of decision

The Australian Workers’ Union
v
Construction, Forestry, Maritime, Mining and Energy Union & Watpac Construction Pty Ltd
(C2022/1233)

Appeal against decision [2022] FWCA 267 of Deputy President Colman at Melbourne on 1 February 2022 in matter number AG2021/8400

[1] The Construction, Forestry, Maritime, Mining and Energy Union (CFMMEU) and Watpac Construction Pty Ltd (Watpac) purported to make a greenfields agreement, titled the BESIX Watpac and CFMEU Minor Civil Construction Union Collective Agreement 2021 – 2025 (Agreement), on 16 November 2021. The CFMMEU subsequently applied to the Commission under s 185 of the Fair Work Act 2009 (Act) for the approval of the Agreement. The Australian Workers’ Union (AWU) opposed the Agreement’s approval on several grounds. Deputy President Colman approved the Agreement on 1 February 2022.¹ By its amended notice of appeal, the AWU seeks permission to appeal, and if granted appeals the approval decision.

The approval decision

[2] Although the AWU opposed the approval of the Agreement, save for the issues whether the Agreement was a greenfields agreement within the meaning of s 172(2)(b) and whether the requirements in s 187(5)(a) and (b) were met, there was no contest before the Deputy President, and he was satisfied that the Agreement met the other approval requirements in ss 186 and 187 of the Act.

[3] The areas of contest before the Deputy President were fourfold. The AWU contended:

•  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;

•  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;

•  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); and

•  the Commission could not be satisfied that it is in the public interest to approve the Agreement, as required by s 187(5)(b).

[4] As will be apparent shortly, only three of the four areas of the AWU’s opposition are agitated on appeal.

[5] As to the first contention, the Deputy President identified the genuine new enterprise that Watpac is establishing as being constituted by the business or activity of undertaking marine and civil construction work and growing the company’s service offering in this field.² The Deputy President reasoned that although Watpac has performed some civil construction work in the past, the new enterprise, which is concerned with complex civil and marine projects such as the river bridge that is the object of the Kangaroo Point Green Bridge (KPGB) project, has at least two dimensions of novelty, namely:

•  the KPGB project, and the other civil and marine projects which Watpac intends to pursue, are of a different character from the civil projects Watpac has undertaken in the past, because the nature of the work is different, and likely to be more complex and sophisticated and the previous civil work undertaken by Watpac has concerned the construction of buildings and mines, which, regardless of the manner in which the Building and Construction General On-Site Award 2020 (Award) may categorise such work, has been regarded by Watpac internally as part of its building construction business;

•  Watpac 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.³

[6] The Deputy President rejected the AWU’s second contention. The Deputy President reasoned the coverage provisions of the Agreement did not extend to any existing employee of Watpac because the general definition of the word ‘employee’ that appears in clause 2 of the Agreement 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 and who fall within the Agreement’s classification structure.⁴ The Deputy President also concluded that the evidence did not show that at the time the Agreement was made there were any Watpac employees employed on civil construction projects, broadly defined, and observed that it would remain the case that, even with a broader definition of civil construction work, the Agreement would relate to Watpac’s genuine new enterprise.⁵

[7] As to the third contention, the Deputy President was 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.⁶ In so doing, the Deputy President reasoned that:

•  s 187(5)(a) is concerned with the actual employees who will be employed and covered by the Agreement, rather than all the employees who could conceivably fall within the coverage of the Agreement because:

◦  s 187(5)(a) refers to employees, not to classifications or types of work;

◦  s 187(5)(a) requires a quantitative assessment or evaluation which cannot be undertaken by reference to classifications or types of work only;

◦  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;

◦  the third element of s 187(5)(a) – 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 – connects the representation entitlement of the relevant union specifically to the work employees will undertake under the Agreement;

◦  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;⁷

•  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, but the Commission can and must 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;⁸

•  Watpac has won the tender for the KPGB project, and that work on this project will be performed under the Agreement;

•  Watpac 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 Watpac employees 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’ and 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.⁹

[8] The Deputy President rejected the AWU’s fourth contention and was satisfied that it is in the public interest to approve the Agreement,¹⁰ because:

•  approval was 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;

•  the terms of the Agreement exceed the minimum conditions in the Award by a very comfortable margin;

•  the Agreement will facilitate Watpac’s strategic objective of expanding its civil construction work, leveraging the significant international experience of its owner, BESIX and conducive to an increase in competition in the civil construction sector.¹¹

Appeal grounds

[9] By its amended notice of appeal, the AWU advances three appeal grounds (numbered 1, 3 and 4 – the second numerical ground having been removed by the amending notice). The three grounds contend the Deputy President erred:

•  in finding that the Agreement relates to a genuine new enterprise that Watpac is establishing or proposing to establish as required by s 172(2)(b)(i) of the Act because:

◦  Watpac did not describe any identifiable or discrete new business, activity, project or undertaking to which the Agreement related;

◦  the Deputy President failed to assess whether the Agreement relates to a genuine new enterprise that Watpac is establishing or proposing to establish by reference to the nature of the enterprise to which the Agreement would apply if approved;

◦  the alleged new business, activity, project or undertaking did not have any sufficiently coherent, segmented or identifiable existence to sustain a conclusion that there was a genuine new enterprise; and

◦  the alleged new business, activity, project or undertaking was not, in fact, novel to the operations of Watpac and could not constitute a genuine new enterprise.

•  in finding that the CFMMEU is entitled to represent the industrial interests of a majority of employees who will be covered by the Agreement for the purposes of s 187(5)(a) of the Act because the Deputy President:

◦  misconstrued s 187(5)(a) of the Act by limiting his consideration to whether the CFMMEU was entitled to represent the industrial interests of a majority of the actual employees proposed to be employed and covered by the Agreement at the time the Agreement was made;

◦  failed to approach s 187(5)(a) of the Act by considering whether the CFMMEU was entitled to represent the industrial interests of a majority of employees falling within the class of the employees who would be covered by the Agreement in the future if it was approved;

◦  consequently should have found the CFMMEU was not entitled to represent the industrial interests of a majority of employees falling within the whole class of the employees that the Agreement could cover in the future; and

◦  to the extent he concluded that most of the classifications in Appendix 1 to the Agreement pertain to work falling within the eligibility provisions contained in the CFMMEU’s rules, was wrong to so concluded and the conclusion was inconsistent with the fact the CFMMEU did not claim that it could cover the wider group.

•  in finding that it was in the public interest to approve the Agreement as required by s 187(5)(b) of the Act because the Deputy President:

◦  failed to consider whether it was in the public interest to approve the Agreement in circumstances in which the Agreement covered a broad range of classifications and work beyond those claimed to be needed in relation to any planned or proposed operations of Watpac; and

◦  failed to conclude that the approval of an agreement which covered a broad range of classifications beyond those claimed to be needed for any existing or proposed work of Watpac was not in the public interest.

[10] For reasons that will become apparent, it is only necessary to deal with the first appeal ground.

Consideration

Permission to appeal

[11] We are persuaded that appeal ground 1 establishes an arguable case of appealable error. It is arguable that the Deputy President erred in concluding that the Agreement relates to the genuine new enterprise that Watpac is establishing. That conclusion goes to establishing a jurisdictional fact the existence of which is necessary to empower the Commission to approve the Agreement. Permission to appeal is therefore granted.

Ground 1 – whether the Agreement relates to a genuine new enterprise - s 172(2)(b)(i)

[12] As we have earlier noted the Deputy President identified the genuine new enterprise that Watpac is establishing as being constituted by the business or activity of undertaking marine and civil construction work and growing Watpac’s service offering in this field,¹² and he concluded that the jurisdictional requirements in s 172(2)(b) of the Act were met.¹³

[13] Pursuant to this appeal ground the AWU advances three separate bases in support of its contention of error. The first challenges the nature of the Agreement made as one that did not relate to the genuine new enterprise that Watpac was establishing. The second and third challenge whether the enterprise to which the Agreement was said to relate, was a genuine new enterprise.

[14] First, the AWU contends that the Deputy President focussed his attention on the enterprise Watpac claimed to be establishing rather than the enterprise to which the Agreement relates. It says that the Deputy President identified the new enterprise Watpac was said to be establishing as a ‘marine and civil construction business’ which was distinguished from its existing operations by reason of it being concerned with ‘complex civil and marine projects, such as the river bridge that is the object of the KPGB project’. However, the Agreement applies to all civil construction works and is not limited to ‘complex civil and marine projects’ or to any new type of offering proposed by Watpac. As the Agreement applies to any civil construction works, such works are not novel to Watpac and so the Agreement does not relate to a genuine new enterprise.

[15] Second, the AWU contends that if the Agreement did relate to the purported new enterprise, the evidence did not establish a sufficiently identifiable, discrete or coherent business, activity, project or undertaking which could sustain the conclusion that Watpac was establishing or proposing to establish a genuine new enterprise for the purposes of s 172(2)(b)(i) of the Act.

[16] Third, the AWU contends that the asserted new enterprise was not novel to Watpac’s business. Civil construction was not new to its business and the complexity of such work cannot be said to distinguish any proposed new offering from stadium construction or other aspects of Watpac’s existing or historical operations. It contends that Watpac undertaking ‘marine’ work, as understood by the Deputy President, or bridge construction was also not new. It contends that Watpac had at least been awarded contracts in relation to wharf construction in Cairns and New South Wales and it undertook bridge construction work as part of a stadium project. And the Deputy President erred in disregarding these existing aspects of Watpac’s business on the basis there was no evidence that Watpac employed staff to work on those projects. It contends that the question, for the purposes of s 172(2)(b)(i) of the Act, is not whether staff have been employed but whether the enterprise itself was genuinely new.

[17] As to the first of the bases, the CFMMEU contends the requirement in s 172(2)(b)(i) of the Act is that the proposed greenfields agreement “relates to” a genuine new enterprise and this requires no more than a relationship, whether direct or indirect, between two subject matters. It contends that the precise scope or extent of any proposed new business or activity will not always be known at the time in which the employer is establishing or proposing to establish that business or activity and it is therefore entirely understandable that the requisite connection between the proposed agreement and the new business or activity being established would be expressed in the Act in terms other than something which requires a direct or complete overlap – the Act simply requires a connection. Understood in this way, the CFMMEU contends that the correct approach to the question posed by s 172(2)(b)(i) is for the Commission to determine whether the employer is proposing to establish a genuinely new enterprise. And if so, a secondary enquiry, whether the proposed greenfields agreement “relates to” that proposed new enterprise, emerges. It says the Deputy President’s approach to those questions was entirely orthodox and without error.

[18] The CFMMEU contends that the Agreement relates to the new business or activity that Watpac was establishing, being a marine and civil construction business and the mere fact that the definition of civil construction work, referred to in clause 4 of the Agreement, may have travelled past the new enterprise being established is of no moment. The scope of the Agreement covered Watpac’s new business or activity and it did not extend to any part of Watpac’s existing business.

[19] Watpac contends that it was unnecessary that the Agreement be limited to “complex civil and marine projects” and all that is necessary is that the Agreement relates to a genuine new enterprise. It contends that once the Commission has determined objectively that there exists a genuine new enterprise the question then to be determined is whether the Agreement relates to it.

[20] Watpac contends that “relates” does not equate to “align”, or to when or to what it may “apply”, nor does it require the Agreement be “restricted” to particular types of work. It says that whether the Agreement would “apply” to work beyond the asserted and found genuine new enterprise is irrelevant to the question of whether such a genuine new enterprise exists and, subsequently, whether the Agreement relates to it.

[21] As to the second basis, the CFMMEU contends that the Deputy President set out his conclusions in respect of the new business or activity being undertaken by Watpac at [28]-[29] of the approval decision and these conclusions are consistent with the evidence about Watpac’s business which had previously been the construction of mining infrastructure and buildings which included the construction of stadia; its acquisition by BESIX; its decision following acquisition to broaden the type of work it performed and to expand into civil and marine construction which would involve the construction of sophisticated river bridge projects and the construction of marine infrastructure – which work it had not previously undertaken and was fundamentally different to the work historically performed; its successful tender for the construction of the KPGB project on which work had not commenced and on which no employees had been engaged who will perform work to which the proposed Agreement relates; and its intention to tender for further bridge construction works although it had not yet been awarded any such contracts.

[22] The CFMMEU contends that the pursuit by Watpac of this new type of construction work, even if not organisationally segmented within Watpac’s organisation, represented a new business or activity for it and that is sufficient to constitute a new enterprise within the meaning of the Act.

[23] Watpac contends that it is unnecessary that the parties to a greenfields agreement identify with absolute precision differences between the new enterprise to which the agreement relates and any other business undertaken by the employer party to the agreement – it is always a question of fact and degree. Watpac contends that in determining that there existed a genuine new enterprise the Deputy President relied on several matters described in [28] and [29] of the approval decision having regard to the two statements of Mr Craig Dearling on which Watpac relied. Watpac says there is no contest in the appeal as to the facts as found and the contest is restricted to their sufficiency.

[24] Watpac contends the Deputy President had regard to “an overall consideration of the circumstances” of which no one consideration was determinative and made a finding based on the evidence. Watpac also says that the AWU is incorrect in asserting that the existing business of Watpac includes civil construction as the evidence below was that it had undertaken certain types of civil construction in the past (relating to mines and roads) which business it had sold prior to Watpac being acquired by BESIX.

[25] As to the third basis, the CFMMEU contends that the AWU’s argument – that the marine and civil construction business was not new or novel – is sustained by the fact that Watpac was involved in the construction of a foot bridge over a rail line, that it was awarded a contract for the demolition of marine wharves in Cairns and that it won a contract for the construction of some ferry terminals in Sydney.

[26] The CFMMEU contends that the evidence in respect of the foot bridge revealed that whilst the project involved the word “bridge”, it was a small structure over a rail line the construction of which Watpac entirely contracted out. As to the wharf work in Cairns and the ferry terminals in Sydney the CFMMEU says the evidence was to the effect that Watpac had been awarded that work, but work had not yet commenced and as the Deputy President noted at [32] of the approval decision, this fact supported the contention that Watpac was establishing a new enterprise. It says the text of s 172(2)(b)(i) of the Act indicates that the process of establishing the new enterprise may be occurring at the time at which the agreement is made and as the Agreement was made on 16 November 2021, there is no basis to contend that the winning of contracts earlier in time, in relation to which work had not begun means that Watpac’s civil and marine infrastructure business was not a new enterprise.

[27] Watpac contends that although the AWU says Watpac’s civil and marine infrastructure business was not novel, it does not develop any attack on the findings at [28] of the approval decision which sets out two aspects of novelty. Watpac also contends that the KPGB project, which involves Watpac building a bridge over water with its own employees separate from building and construction work, is novel. Watpac contends that its success in other marine civil construction tenders supports the finding that it is establishing a new enterprise which is different from its building work. And if tendering for work does not amount to establishing a new enterprise, it cannot be the case that success in tendering means that the enterprise is not new. Watpac says that it is evident, on the text of s 172(2)(b), that Watpac is establishing a genuine new enterprise.

[28] Section 172(2)(b) of the Act provides for the making of greenfields agreements with employers that are single interest employers and one or more employee organisations. An enterprise agreement will be a greenfields agreement if it “relates to a genuine new enterprise that the employer or employers are establishing or propose to establish” and “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”.¹⁴ There is no dispute on appeal that Watpac did not employ any of the persons who will be necessary for the normal conduct of Watpac’s new enterprise and who will be covered by the Agreement, when it made the Agreement with the CFMMEU.¹⁵

[29] “Enterprise” means “a business, activity, project or undertaking”.¹⁶ The word “genuine” in s 172(2)(b) is to be understood as emphasising that the enterprise being established or proposed to be established when the agreement is made must be genuinely new – truly authentic or really new.¹⁷ The word “genuine” “directs attention to substance rather than form and given that the quality of being ‘new’ is a relative concept in which questions of fact and degree are likely to arise, the use of the qualifier ‘genuine’ tends to suggest that the proposed enterprise must be new to a substantial degree”.¹⁸

[30] As Rares J observed in National Union of Workers (NSW) v HP Distribution Pty Ltd¹⁹ the Commission can only approve an agreement as a greenfields agreement “if the document satisfied the requirements of s 172(2)(b) or s 172(3)(b)” and “the actual existence of the facts necessary for an agreement to meet the statutory criteria for a greenfields agreement was a jurisdictional fact necessary to ground the Commission’s power to approve it.”²⁰

[31] At the time the Agreement was made, Watpac says, and the Deputy President concluded, that it was establishing a genuine new enterprise described as a marine and civil construction business or activity. A question raised on appeal is whether the Agreement “relates to” the marine and civil construction enterprise that Watpac was establishing or to some other enterprise.

[32] “Relates to” and similar prepositional phrases, such as “in relation to” and “relating to” commonly appear in statutory provisions where a connection of something with something else is made or required. In O’Grady v Northern Queensland Co Ltd²¹ McHugh J who was in that case in the minority in the result, said:

. . . “in relation to” is indefinite. But, subject to any contrary indication derived from its context or drafting history, it requires no more than a relationship, whether direct or indirect, between two subject matters.²² [Emphasis added]

[33] The need for a contextual reading of such phrases was also emphasised in O’Grady by Dawson J who said:

The crucial question is whether the proceedings constituted by the respondent’s counterclaim were proceedings in relation to mining or to any mining tenement. The words “in relation to”, read out of context, are wide enough to cover every conceivable connexion. But those words should not be read out of context, which in this case is provided by the Mining Act 1968 (Qld). What is required is a relevant relationship, having regard to the scope of the Act. Where jurisdiction is dependent upon a relation with some matter or thing, something more than a coincidental or mere connexion — something in the nature of a relevant relationship — is necessary:²³ [Citation omitted, and emphasis added]

[34] To similar effect, in PMT Partners Pty Ltd (in liq) v Australian National Parks and Wildlife Service²⁴ Brennan CJ and Gaudron and McHugh JJ said that the closeness of the relationship required by the expression “in relation to” in any instrument “must be ascertained by reference to the nature and purpose of the provision in question and the context in which it appears”.²⁵

[35] The need for attention to the legislative context and purpose is central to the modern approach to statutory interpretation which requires that the context be considered when considering the meaning of statutory provisions, and not merely at some later stage when ambiguity might be thought to arise. In this regard, reference to “context” is in the widest sense and includes such things as the existing state of the law and the mischief, which by legitimate means may discerned, the statute was intended to remedy,²⁶ and the general purpose and policy of the provision under consideration.²⁷ Legislative purpose is to be derived from the statutory text and not from any assumption about the desired or desirable operation of the provision.²⁸ The proper approach to construing statutory provisions requires a consideration of text, context and purpose and the task begins and ends with the statutory text, read in context.²⁹

[36] The Act makes provision for enterprise agreements to be made with employers and employees or with employers and one or more relevant employee organisations. Greenfields agreements are made between an employer or employers and an employee organisation or employee organisations. Such agreements must relate to a genuine new enterprise that the employer or employers are establishing or propose to establish and be made before the employer or employers employ any of the persons who will be necessary for the normal conduct of the new enterprise.

[37] A greenfields agreement, when approved and in operation, fixes terms and conditions of employment of persons who become employed by the employer in the genuine new enterprise. It does so, self-evidently, without employees having participated in bargaining for the agreement. It operates on employees covered by it in their employment in the new enterprise. Paragraph 172(2)(b)(ii) of the Act which sets the second requirement for a greenfields agreement – 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 – lends context and strongly suggests that the connection between an agreement and genuine new enterprise must be direct.

[38] The evident statutory purpose of the greenfields agreement provisions of the Act is to facilitate the making of an enterprise agreement – that will apply to employees covered by it and who will be employed in the new enterprise – at a stage when that enterprise is being established or proposed and not operating with employees who will be covered by the Agreement. Such agreements are to regulate the terms and conditions of employees covered by the Agreement in their employment in the new enterprise. Such an agreement must be concerned with the identified new enterprise and not with some other business or activity in which the employer is already engaged.

[39] That greenfields agreements are made at the establishing or proposal stage of a new enterprise is another important contextual consideration in assessing the necessary nexus between the Agreement and the genuine new enterprise that Watpac was establishing required by s 172(2)(b)(i) of the Act. It also suggests that the agreement must directly relate to the genuine new enterprise that the employer or employers are establishing or propose to establish.

[40] The relevant relationship to which s 172(2)(b)(i) of the Act speaks is to the relationship between the Agreement and the genuine new enterprise an employer is establishing or proposing to establish. A new enterprise is a new business, activity, project or undertaking. After a greenfields agreement is made, the scope of the new enterprise to which the agreement relates may become broader or narrower than that which was being established or proposed when the agreement was made. Plans and circumstances may change. It may also be accepted that at the stage when an employer is establishing or proposing to establish a genuine new enterprise and negotiating a proposed greenfields agreement with one or more employee organisations, the precise scope of the new enterprise will not necessarily be known and so too the coverage of the proposed greenfields agreement will not necessarily precisely align with the new enterprise being established or proposed. Employees thought to be needed in the new enterprise may not be needed when the business commences operation (or perhaps even before that time) and so the greenfields agreement made that relates to the new enterprise may contain classifications for employees that are not needed or may cover parts of the proposed business or activity with which the employer decides later not to proceed. The very nature of establishing or proposing to establish a new enterprise means that at that time its precise scope or function may be evolving. But these are always questions of degree.

[41] Allowance for this must thus be made in assessing whether an Agreement relates to a genuine new enterprise that an employer is establishing or proposes to establish. But an agreement does not relate to a genuine new enterprise if its coverage includes work undertaken in businesses, projects, activities, or undertakings, that are not genuinely new. Nor does an agreement relate to a genuine new enterprise if its coverage includes work in businesses, projects, activities, or undertakings, that may be new but are not part of the genuine new enterprise the employer is establishing or proposing, in relation to which the agreement was made and said to relate. An enterprise agreement that is made covering work to be undertaken in a genuine new enterprise, but which extends its coverage to other existing activities of the employer that are not part of the genuine new enterprise, is not a greenfields agreement within s 172(2)(b)(i) of the Act. It would be inconsistent with the scheme of the Act if coverage of work in an employer’s existing business or activity could be included in a greenfields agreement that is said to relate to another enterprise which is a genuine new enterprise.

[42] From the foregoing it seems to us that, in determining the requisite connection or relationship between the Agreement and the genuine new enterprise the question is whether there is a direct, relevant, sufficient or material connection or relationship, rather than one that merely a causal, indirect or incidental connection or relationship. Given the nature of an establishing or proposed genuine new enterprise, a complete overlap between an agreement’s coverage and the new enterprise is not necessary, but in many cases, for example a new construction project, this will be so. It is to be remembered that a greenfields agreement, when made, is intended to regulate employment of persons to be employed in the new enterprise the employer is proposing or establishing, and not also of persons who might become employed in some other enterprise of the employer.

[43] We do not accept, as the CFMMEU and Watpac contend, that the statute simply requires a connection, whether direct or indirect, between the Agreement and the new enterprise. On this construction, as the AWU correctly points out, the provisions would permit an employer to make a greenfields agreement related to one new project it was establishing or proposing but which will also apply more broadly, perhaps even to its existing operations so long as the work on the new project was within the coverage of the agreement. Section 172(2)(b)(i) of the Act does not ask whether the enterprise agreement has some relationship, whether direct or indirect, to the genuine new enterprise the employer is establishing or proposing to establish. The agreement must, itself, relate to that genuine new enterprise. The manner in which the requisite connection is to be ascertained is through the agreement’s scope and coverage.

[44] There is no doubt that the Agreement will cover employees who will be employed by Watpac in the new enterprise described as a “marine and civil construction” business or activity. The CFMMEU contended that the description of the business or activity is to be understood as a compound phrase where two words are used to describe a single concept. That is, the phrase ‘marine and civil construction’ is concerned with the concept of civil construction in a marine environment.³⁰ Watpac made a submission to the same effect – that the genuine new enterprise is in the compound expression ‘marine and civil engineering or construction’.³¹ Although not free from doubt, these submissions appear to be at odds with the Deputy President’s view. The Deputy President said:

. . . 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 . . .³²

[45] The reference to “including marine work” in the passage above might have been intended by the Deputy President to convey that the civil construction work will include an element of marine work. And as both Watpac and the CFMMEU contend that this is what the phrase “marine and civil construction” work, as constituting the new enterprise, is intended to convey we proceed on that basis.

[46] Mr Dearling’s evidence below was that after being awarded the KPGB contract, Watpac 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.³³ Mr Dearling also gave evidence that:

•  The KPGB project, and the other civil and marine projects which Watpac 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;³⁴

•  The previous civil construction work undertaken by Watpac has concerned the construction of buildings and mines, and projects which were predominantly in the residential, health and science, education and stadium construction sectors, and that this work has been regarded by Watpac internally as part of its building construction and property development business;³⁵

•  Watpac regarded its stadium construction projects as construction work and separated from its historical civil and mining work;³⁶

•  The new enterprise is concerned with complex civil and marine projects, such as the river bridge KPGB project;³⁷

•  Watpac sold its civil and mining business in 2008;³⁸ and

•  Watpac did not intend to undertake projects like those engaged in by its defunct civil and mining business.³⁹

[47] By clause 4.1(c), the Agreement applies to all employees “engaged in Civil construction work and for whom classifications and rates of pay are provided by the Agreement”. By clause 4.2, the Agreement 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. The reference to “work “in clause 4.2, having regard to the context in which it appears, is a reference “civil construction work”. The meaning of “civil construction works” is explained in clause 4.4 as follows:

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

[48] Clause 6 deals with the relationship of the Agreement to other instruments and relevantly provides:

6.1 This Agreement is intended to be interpreted in conjunction with the Building and Construction General On-Site Award 2020, Mobile Crane Hiring Award 2020, and the terms of the Workplace Impairment Policy and Procedures in APPENDIX 4, QIRC Order (No. B585 of 2003) Apprentices' and Trainees' Wages and Conditions (excluding certain Queensland Government entities) 2003 as it was immediately prior to its rescission.

[49] The CFMMEU contends that the phrase civil construction works defined in clause 4.4 reflects the conscious choice from the parties to adopt a different definition in clause 4.4 from that which appears in the Building and Construction General On-site Award 2020 (Award) and is a strong indicator that the Agreement was not to apply to other civil construction work such as the construction of stadia.⁴⁰ The CFMMEU contends that once this is accepted, then none of the other work described in clause 4.4 is work of the type in which Watpac presently engages.⁴¹ The CFMMEU accepts that the scope of the Agreement is broader than the new enterprise, but the new enterprise is limited to marine and civil works, which does not touch upon an existing part of Watpac’s business.⁴² Watpac generally agreed with the submissions of the CFMMEU,⁴³ and did not demur from the submissions just summarised.

[50] We do not accept that clause 4.4 of the Agreement is confined in the manner suggested by the CFMMEU and Watpac. Such a construction decries the text which plainly set outs a non-exhaustive list of the kind of civil construction works which are, for the purposes of the Agreement, included in the phrase. The definition of civil construction works in the Agreement is not an exhaustive one as the Deputy President correctly observed.⁴⁴ The clause adopts a belt and braces approach to ensure that this is understood. First, by pointing out that civil construction works “shall include” the construction, alteration, installation and maintenance of the various works listed. Second, by including after the word “include” and before the listed works – the words “(but not restricted) to”. The contention that the non-exhaustive list of works which follows in clause 4.4 is an indicator that the Agreement is not to apply to other civil construction work such as the construction of stadia, is respectfully, not tenable and is rejected.

[51] The Agreement is not confined in its application to employees engaged in marine and civil construction work but extends to employees engaged in all manner of civil construction work for whom classifications and rates of pay are provided by the Agreement. As the Deputy President observed,⁴⁵ and we agree, given the non-exhaustive definition, there is scope to read the definition together with the definition of ‘civil construction’ in the Award, albeit the employees engaged in such work will only be covered by the Agreement if they are also engaged in a classification of work for which the Agreement provides. So much is contemplated by clause 6.1 of the Agreement. Without setting out the Award definition of civil construction in full, which on its face appears to be exhaustive, it includes the activities of repair and demolition as well as the construction and maintenance of sports and/or entertainment complexes. Other works identified as civil construction include “railways, tramways, roads, freeways, causeways, aerodromes, drains, dams, weirs, bridges, overpasses, underpasses, channels, waterworks, pipe tracks, tunnels, water and sewerage works, conduits, and all concrete work and preparation incidental thereto”.⁴⁶

[52] The Agreement adopts an 8-level construction worker (CW) classification structure for which the Award also makes provision and the occupational descriptions attaching to each level are also occupations that are common of civil construction and for which the Award also makes provision, although many more occupations are listed in the Award because it applies more broadly than just to civil construction work.

[53] All of this leads us to conclude that the Agreement applies to employees in its classification structure engaged in civil construction work generally, including the construction of stadia, and is not confined to employees engaged in Watpac’s marine and civil construction enterprise, being civil construction involving a marine element.

[54] Unlike the civil and mining business which Watpac sold in 2008, Watpac has undertaken and has given no indication that it does not intend to continue to undertake stadium construction projects. In this regard, Mr Dearling’s evidence was that:

•  Watpac was the Managing Contractor on the North Queensland Stadium Project but that it did not self-perform any of the work on the project, which was all subcontracted;⁴⁷

•  Part of the construction was of a which was an item of work associated with the construction of the stadium. The bridge was not designed by Watpac and was constructed by specialist subcontractors. The bridge built at the North Queensland Stadium Project was materially different to the KPGB Project in that it involved no marine element in that it traversed a rail line in the stadium's precinct, not a wide waterway and no Watpac employees performed any work on the bridge or the project;⁴⁸

•  Stadium projects carried out by Watpac involved the construction of concrete and steel structures with buildings such as dressing rooms, media facilities, corporate boxes, food and drink fitouts, amenities, seating, stairs, lifts, services, etc. On top of it all is a roof structure;⁴⁹

•  Watpac has carried out various stadium projects over the last 10 years or so including the Suncorp Stadium redevelopment (JV with Multiplex), Gold Coast Aquatic Centre redevelopment, Metricon Stadium, CBUS Stadium, Anna Meares Velodrome, the National Cricket Centre and various redevelopments at the 'Gabba';⁵⁰

•  Watpac has considered and does consider its stadia work as construction work separate from its historical civil and mining work, and its new marine and civil business. All work performed by Watpac at these projects was carried out under its general construction enterprise agreements.⁵¹ This is so regardless of the definitions in the Award.⁵²

[55] It is therefore evident from Mr Dearling’s evidence that the Agreement applies to an existing business or activity operated by Watpac as well as to Watpac’s marine and civil construction enterprise. That Watpac regards stadia construction to be part of its construction business is beside the point. Stadia construction is civil construction work, and the Agreement plainly covers employees engaged in that work. Put another way, the Agreement applies to part of Watpac’s existing construction business which involves the construction of stadia.

[56] We therefore agree with the AWU’s contention that the Agreement applies to all civil construction works including, but not restricted to, the listed types of work. The Agreement is not limited to “civil and marine construction” – being civil construction involving a marine element – or to any new type of offering proposed by the Watpac. The enterprise to which the Agreement relates is the activity of any civil construction works undertaken by Watpac. It applies to an existing part of Watpac’s enterprise – stadia construction – which is civil construction and not new.

[57] The Agreement does not relate to Watpac’s marine and civil construction enterprise that it is establishing because it does not have a sufficient or material connection or relationship with that new enterprise. It is not concerned only with that business or activity but rather relates to the business or activity of civil construction, which includes the new enterprise, but that is merely a causal connection or relationship because that business or activity is civil construction. The Agreement relates to a much broader enterprise, that being civil construction which includes stadia construction and marine and civil construction. In our view, it is plainly contrary to the scheme in the Act for an agreement to be made as a greenfields agreement which will apply to employees in the establishing or proposed new enterprise and which extends to an existing part of the employer’s enterprise, or to other activities which are not part of the new enterprise.

[58] This aspect of appeal ground 1 must be upheld. It is therefore not necessary to consider the other aspects of this appeal ground, nor, as earlier mentioned, the other grounds of appeal. As the Agreement does not relate to the genuine new enterprise that Watpac is establishing but relates more generally to the business or activity of civil construction, an activity in which Watpac was already engaging – at least as it concerns stadia construction – the jurisdictional fact which would have enabled the Deputy President to approve the Agreement is not present. The Deputy President erred in concluding that the jurisdictional requirement in s 172(2)(b) of the Act were met. The appeal should be upheld and the approval decision quashed.

[59] On a rehearing, for the reasons stated, the Agreement does not relate to a genuine new enterprise that Watpac is establishing. The jurisdictional fact in s 172(2)(b)(i) is not met. The CFMMEU’s application to approve the Agreement must be dismissed.

[60] We wish to record that the AWU did not argue below that there was not a relevant connection between the Agreement and the genuine new enterprise that Watpac was establishing. It is unsurprising that the Deputy President did not deal with such an argument. Although the Deputy President asked the correct question – does the Agreement relate to a genuine new enterprise? – his consideration was limited to assessing the “objective character and identity of the enterprise to which the agreement will apply and its novelty in relation to the employer’s business”⁵³ and not to whether the Agreement “relates” to the identified genuine new enterprise. Where parties are granted permission to be legally represented in a contested agreement approval application, the Commission has a right to expect that important questions of jurisdiction – like that raised here on appeal – are raised at first instance so that the inconvenience, cost and uncertainty associated with quashing a decision to approve an agreement, which might not otherwise have been approved, might be avoided.

[61] The coverage of the Agreement was raised by the AWU below in its contention that the coverage provisions in the Agreement extended to persons who are presently employed by Watpac – a contention advanced for the purposes of s 172(2)(b)(ii) not s 172(2)(b)(i). The coverage of the Agreement was also raised by the AWU below in considering whether approval of the Agreement is the public interest – an approval requirement in s 187(5)(b) of the Act. In this regard the AWU submitted that the Commission should not be satisfied it was in the public interest to approve the Agreement in circumstances in which its coverage extended far beyond any known or proposed enterprise of Watpac. No point was expressly taken that the Agreement did not relate to the genuine new enterprise that Watpac was establishing. Be that as it may, the point is made good on appeal and as it affects the power of the Commission to approve the Agreement it was appropriate that we deal with it.

Order

[62] We order as follows:

1. Permission to appeal is granted.

2. Appeal ground 1 of the AWU’s amended notice of appeal is upheld.

3. The decision in Construction, Forestry, Maritime, Mining and Energy Union Re BESIX Watpac and CFMEU Minor Civil Construction Union Collective Agreement 2021 – 2022 [2022] FWCA 267 is quashed.

4. The application (AG2021/8400) to approve the BESIX Watpac and CFMEU Minor Civil Construction Union Collective Agreement 2021 – 2022 is dismissed.

DEPUTY PRESIDENT

Appearances:

M Gibian SC of Counsel for the AWU
C Massy of Counsel for the CFMMEU
E White of Counsel for Watpac

Hearing details:

2022
Melbourne (by Video)
19 April

Printed by authority of the Commonwealth Government Printer

<PR742121>

1 Construction, Forestry, Maritime, Mining and Energy Union Re BESIX Watpac and CFMEU Minor Civil Construction Union Collective Agreement 2021 – 2022 [2022] FWCA 267

2 Ibid at [28]

3 Ibid at [28]-[29]

4 Ibid at [36]

5 Ibid at [37]

6 Ibid at [52]

7 Ibid at [40]-[44]

8 Ibid at [45]

9 Ibid at [49]

10 Ibid at [53]

11 Ibid at [53]

12 Ibid at [28]

13 Ibid at [35]

14 Fair Work Act 2009, ss 172(2)(b)(i) and (ii) and (4)

15 The issue was agitated below but not pressed on appeal once the related appeal ground (ground 2 of the notice of appeal) was removed from the grounds of appeal in the AWU’s amended notice of appeal

16 Fair Work Act 2009, s 12

17 Australian Rail, Tram and Bus Industry Union v Busways Northern Beaches Pty Ltd (No 2) [2022] FCAFC 55 at [5] per Bromberg J with whom Wheelahan J agreed

18 Ibid

19 [2013] FCA 139, 210 FCR 250, 231 IR 263

20 ibid, at [29]

21 (1990) 169 CLR 356

22 Ibid, at 376

23 Ibid, at 367

24 (1995) 184 CLR 301

25 Ibid, at 313

26 See CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384 at 408; Australian Communications Network Pty Ltd and Another v Australian Competition and Consumer Commission [2005] FCAFC 221, 146 FCR 413 at [26]

27 Board of Bendigo Regional Institute of Technical and Further Education v Barclay (2012) 248 CLR 500 at [41]

28 Certain Lloyd’s Underwriters v Cross (2012) 248 CLR 378 at [25]-[26]; Deal v Father Pius Kodakkathanath (2016) 258 CLR 281 at [37]

29 See Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (2009) 239 CLR 27 at 47-48 [51]; Commissioner of Taxation v Consolidated Media Holdings Ltd (2012) 250 CLR 503 at 519 [39]; Federal Commissioner of Taxation v Unit Trend Services Pty Ltd (2013) 250 CLR 523 at 539 [47]

30 Transcript PN232

31 Transcript PN296

32 Construction, Forestry, Maritime, Mining and Energy Union Re BESIX Watpac and CFMEU Minor Civil Construction Union Collective Agreement 2021 – 2022 [2022] FWCA 267 at [31]

33 Appeal Book 198 at [14]

34 Appeal Book 833-834 at [15], [21]-[22]

35 Appeal Book 196 at [3], Appeal Book 833 at [14]

36 Appeal Book 833 at [12]-[14]

37 Appeal Book 197 at [9], Appeal Book 834 at [22]

38 Appeal Book 197 at [8], Appeal Book 834 at [20]

39 Appeal Book 834 at [22]

40 Transcript PN 225

41 Transcript PN226

42 Ibid

43 Transcript PN284

44 Construction, Forestry, Maritime, Mining and Energy Union Re BESIX Watpac and CFMEU Minor Civil Construction Union Collective Agreement 2021 – 2022 [2022] FWCA 267 at [37]

45 Ibid

46 Clause 4.3(b) of the Award

47 Appeal Book 833 at [10]

48 Appeal Book 833 at [11]-[12]

49 Appeal Book 833 at [13]

50 Appeal Book 833 at [14]

51 Appeal Book 833 at [14]

52 Appeal Book 833 at [13]

53 Construction, Forestry, Maritime, Mining and Energy Union Re BESIX Watpac and CFMEU Minor Civil Construction Union Collective Agreement 2021 – 2022 [2022] FWCA 267 at [26]-[37]