FWAA 5724
Fair Work Act 2009
ABIGROUP, JOHN HOLLAND AND THE AUSTRALIAN WORKERS’ UNION - REGIONAL RAIL LINK FOOTSCRAY TO SUNSHINE PROJECT AGREEMENT 2011-2015
Building, metal and civil construction industries
MELBOURNE, 16 SEPTEMBER 2011
Application for approval of the Abigroup, John Holland and the Australian Workers’ Union - Regional Rail Link Footscray to Sunshine Project Agreement 2011-2015.
 An application has been made for approval of an enterprise agreement known as the Abigroup, John Holland and the Australian Workers’ Union - Regional Rail Link Footscray to Sunshine Project Agreement 2011-2015 (the Agreement). The application was made pursuant to s.185 of the Fair Work Act 2009 (the Act) by John Holland Pty Ltd (John Holland). The agreement is a greenfields agreement.
 The Agreement was made between John Holland and Abigroup Contractors P/L (Abigroup) and the Australian Workers Union (AWU). An Employer’s Declaration in Support of Application for Approval of Greenfields Agreement (Form F20) was filed by each of John Holland and Abigroup. A Declaration of Employee Organisation in Support of Application for Approval of Greenfields Agreement (Form F21) was filed by the AWU.
 A hearing of the application was held by telephone on 19 August 2011. At that hearing FWA advised the parties to the Agreement of concerns that FWA had in relation to the Agreement. The employer parties were given an opportunity to offer undertakings to FWA to address the concerns raised by FWA.
 On 24 August 2011 the Construction Forestry Mining Energy Union (CFMEU) contacted FWA with a request to be heard in relation to the approval of the Agreement. On 26 August 2011 the CFMEU filed an Outline of Submissions arguing against approval of the Agreement.
 A further hearing of the matter was listed for 2 September 2011.
 On 1 September 2011 the Australian Rail Tram and Bus Industry Union (RTBU) and the Automotive Food Metals Engineering Printing and Kindred Industries Union (AMWU) jointly wrote to FWA seeking to intervene in the matter and seeking an adjournment of the hearing date. The request for an adjournment was not granted and the hearing proceeded on 2 September 2011.
 The CFMEU in its written Outline of Submissions raised four specific grounds in opposition to the approval of the Agreement:
‘2. We argue that the Application does not meet the requirements of section 187 (5) (a) of the Fair Work Act 2009 (the Act), in that the AWU is not entitled to represent the industrial interests of a majority of the employees who will be covered by the Agreement.
3. Further and/or in the alternative we argue that it is not in the public interest to approve the agreement pursuant to section 187 (5) (b) of the Act.
4. Further and/or in the alternative we argue that it is not available to the Tribunal to accept undertakings in relation to a Greenfields Agreement.
5. Further and/or in the alternative we argue that the group of employees to be covered by the agreement has not been fairly chosen pursuant to section 18 (3) of the Act.’
 At the hearing on 2 September 2011 the CFMEU, represented by Mr W. Friend, abandoned the first ground but added as a further ground that the Agreement was not a greenfields agreement. At the hearing on 2 September 2011 the RTBU and AMWU, who were jointly represented by Mr Y. Bakri, adopted the submissions of the CFMEU and in addition opposed the approval of the Agreement on the ground that persons were already employed who would be necessary for the normal conduct of the enterprise and who would be covered by the Agreement.
 Evidence was given on behalf of the RTBU and AMWU by Mr Calvin Harvey, an organiser with the RTBU.
 Evidence was given on behalf of the employer parties to the Agreement by Mr Matthew Gault, Construction Manager for the joint venture project between John Holland and Abigroup in relation to the Regional Rail Link. Mr Gault was an employee of John Holland.
Drawing the Line on a genuine new enterprise
 The Agreement has been made at a time when John Holland and Abigroup acting as joint venture have tendered for Work Package C on the Regional Rail Link Project. The tender had not been awarded at the date of the making of the agreement.
 The challenge by the CFMEU was that John Holland and Abigroup as joint venturers could not meet the test in s.172(3)(b)(i) because there was not a genuine new enterprise that the employers are establishing or propose to establish.
 As Mr Friend for the CFMEU put it:
‘PN344. “the next point is that they haven't got far enough along the line, because it's really just the glint in their eye. They're hoping to get this, but they don't know if they will, and they've got no control over it whatsoever. So that's the first argument.”
PN346 ....... “it's not far enough along the track to say that it's a proposal. It's a thought. It's something that they want to do, but they haven't gone far enough, because they've only put in the tender and it hasn't been accepted. Because, you see, you can have agreements all over the place from every tenderer, which will never come into effect, which seems an odd result to have in relation to something as important as these sorts of statutory instruments.”
PN352 “My submission is that the line can be drawn when the tenders have been accepted, and the job has been awarded.”
PN353. “So my submission is they don't propose to commence the genuine new enterprise until they get the tender.’
 I do not accept that in this matter the line should be drawn when tenders have been accepted.
 Having regard to the complexity of the tender process and the nature of Work Package C (which was appended to the written outline of submission of the CFMEU) it would appear that John Holland and Abigroup had a proposal to establish a genuine new enterprise. The evidence is that John Holland and Abigroup had appointed Mr Gault as the Construction Manager for the genuine new enterprise and that a joint venture agreement had been finalised between John Holland and Abigroup. This evidence shows that it was much more than a “glint in their eye”. The size and complexity of some tenders means that tenderers need to make substantial commitments in time, money, staff and other resources in order to tender. It would take much more than a “glint in the eye” to get to the stage of tendering for a project such as the Work Package C in this matter. In the circumstances of the present matter I am satisfied that John Holland and Abigroup are establishing or propose to establish a genuine new enterprise and that the agreement relates to that genuine new enterprise.
Genuine new enterprise and Existing employees
 Both the CFMEU and the RTBU/AMWU challenged the application for approval on the basis that the agreement could not be a greenfields agreement because the employers have employed persons who will be necessary for normal conduct of the enterprise and who will be covered by the agreement.
 The evidence of Mr Harvey was that there were employees of John Holland who would be covered by the greenfields agreement if it was approved. The evidence was vague and very general.
 The test in s.172 (2)(b) is not: Are there employees of the employers who may be employed in the normal conduct of the enterprise to covered by the agreement? The test is: Are there employees employed by the employers who will be necessary for the normal conduct of that enterprise and will be covered by the agreement. There is not a subtle difference between to the two tests but rather a stark difference.
 I must apply the proper test as specified in s.172(2)(b). There is no need to strain the language of s.172(2)(b) to find its meaning.
 The test is a negative test not a positive test.
 The test is that the single interest employers have not employed a particular class of employees.
 The class of employees is defined as those “persons who will be necessary for the normal conduct of that enterprise and who will be covered by the agreement”.
 The critical words are “necessary for the normal conduct of that enterprise”.
 The word ‘necessary’ is defined by the Macquarie Concise Dictionary to mean: ‘that cannot be dispensed with’ or ‘something necessary, indispensable, or requisite’.
 There is nothing put by the CFMEU or RTBU/AMWU which identifies any existing employees of John Holland or Abigroup who are indispensable for the normal conduct of the project covered by the greenfields agreement.
 Existing employees may very well have skills which might lead to them being employed on the enterprise to be covered by the greenfields agreement, but that is long way away from establishing that existing employees are indispensable to the normal conduct of the enterprise to be covered by the greenfields agreement. In the present matter the very fact that there are existing employees of John Holland or Abigroup employed under the terms of other enterprise agreements suggests that as they are already engaged on work which is not part of the enterprise to be covered by the greenfields agreement that they are not indispensable for the normal conduct of the enterprise to be covered by the greenfields agreement.
 Having considered all of the material before me I am satisfied that neither of the single interest employers in this matter, John Holland and Abigroup, acting as a joint venture have employed any of the persons who will be necessary for the normal conduct of the enterprise and who will be covered by the agreement.
Undertakings and Greenfields Agreements
 The CFMEU submitted that FWA is not permitted to accept undertakings under s.190 to address any concerns that FWA may have in relation to a greenfields agreement.
 The essence of the argument of the CFMEU is that, as s.190(4) requires that FWA must not accept an undertaking unless FWA has sought the views of bargaining representatives, then, this requirement can never be met in relation to greenfields agreements as there are no bargaining representatives for a greenfields agreement.
 The effect of the interpretation contended for by the CFMEU is to read s.190(1) as if it contained additional words as identified below:
Application of this section
(1) This section applies if:
(a) an application for the approval of an enterprise agreement, that is not a greenfields agreement, has been made under section 185; and
(b) FWA has a concern that the agreement does not meet the requirements set out in sections 186 and 187.
 This interpretation of s.190 must be rejected.
 The interpretation of s.190 contended for by the CFMEU perpetrates the very wrong warned against in the oft quoted passage from Thompson v Goold and Co  AC 409 at 420 where Lord Mersey said:
‘It is a strong thing to read into an Act of Parliament words which are not there, and in the absence of clear necessity it is a wrong thing to do.’
 The interpretation of s.190 contended for by the CFMEU has none of the virtue of the approach referred to by McHugh JA in Bermingham v Corrective Services Commission of NSW 1, and in Kingston v Keprose P/L2 and in Newcastle City Council v GIO General Ltd3, all of which are discussed under the heading ‘Implying words in legislation’ in Statutory Interpretation in Australia, 6th Edition at 2.28 - 2.29.
 The decision of a Full Bench of FWA in Bupa Care Services Pty Ltd and P & A Securities Pty Ltd as trustee for the D'Agostino Family Trust t/as Michel's Patisserie Murwillumbah and others 4; discussed the purpose of s.190 and the decision makes clear that where FWA has concerns in relation to an agreement that FWA must give the employer an opportunity to offer undertakings. FWA may accept the undertakings subject to the operation of ss.190(3), (4) and (5).
 Subsection 190(4) provides that:
(4) FWA must not accept an undertaking under subsection (3) unless FWA has sought the views of each person who FWA knows is a bargaining representative for the agreement.
 On the plain language of s.190(4) FWA does not have to seek the views of all bargaining representatives but only those who FWA knows are bargaining representatives. The very structure of s.190(4) presupposes that there may be bargaining representatives who have been appointed but who are not known to FWA and whose views are not sought in relation to proposed undertakings. This alone suggests that the interpretation of s.190 contended for by the CFMEU is wrong.
 The requirement in s.190(4) is only activated if FWA knows that there are bargaining representatives. In the case of greenfields agreements the Act does not provide for bargaining representatives to be appointed. Therefore FWA knows that there are no bargaining representatives whose views have to be sought in relation to undertakings offered by the employer or employers.
 This approach to the construction of s.190 is consistent with the purpose of s.190.
 Both the CFMEU and the RTBU/AMWU contended that the requirements of s.187(5)(b) have not been met.
 Section.187(5)(b) provides that:
‘(5) If the agreement is a greenfields agreement, FWA must be satisfied that:
(b) it is in the public interest to approve the agreement.’
 Each of John Holland, Abigroup and the AWU provided, in their respective statutory declarations in support of the approval of the Agreement, the same details as to why it was in the public interest to approve the greenfields agreement. The details were as follows:
‘A major objective of this agreement is to eliminate lost time and/or lost productivity arising out of disputes or grievances during the construction of the Footscray to Sunshine Project - a $1 Billion infrastructure project for Victoria and the key part of the overall Regional Rail Link program of works upgrading rail infrasturcure for both regional and metropolitan Victoria.’
 The CFMEU written Outline of Submissions filed in this matter (which were adopted by the RTBU/AMWU ) contended as follows:
13. We submit that it is not in the Public Interest to approve this Agreement.
14. Given the significant structural works outlined in Appendices A and B, it is clearly foreseeable that many of the tradespeople required to complete the project will be members of the CFMEU.
15. The effect of certifying a greenfields agreement prior to the engagement of these workers, with the express purpose of excluding the CFMEU, will be to deny these workers the ability to choose who will represent them.
16. While the Applicant may reply that workers can have any representative they wish to assist them in a dispute over the implementation of the Agreement, they will have been denied the opportunity to have their chosen representatives involved in developing the Agreement.
17. In public interest terms this is a fundamental breach of the Objects of the Act, clause 3 (e).
18. Further, we submit that it is in breach of ILO convention 87, Freedom of Association and Protection of the Right to Organise Convention, 1948.’
 At the hearing of the matter the CFMEU contended that it was not in the public interest to approve the greenfields agreement as it would result in overlap with other existing agreements and that this would cause confusion amongst employers. This was put by Mr Friend for the CFMEU in the following terms:
‘PN401. ....What is sought to be done here is to have a separate layer which will cover some employees but not others - perhaps on one argument, for some work and not other work. In those circumstances it can hardly be said, in my submission, that it's in the public interest to approve the agreement in the form that it is.
PN403.....what one needs to look at is what are the legal consequences of approval, because you are being asked to approved it, and the legal consequences are a huge potential for confusion.
PN411. Yes, we do. I mean, I haven't taken instructions on precisely what they are, but the point is the same - there is a debate about that and there will be a debate about what conditions people should be paid under. It's John Holland that comes here, having made that agreement just a few weeks ago, saying, "Well, we want to have an overlay." There shouldn't be an overlay. As a matter of public interest it should be clear what the agreement applies to. It's not in the public interest for this tribunal to approve two instruments, which on their face apply to the same work with different conditions.
PN412. It is in the public interest, consistent with the objects of the Act, for someone to be able to look at the agreement and say, "That covers me" or, "That covers me." That's where we worked it out - that's why we have got the modern awards. How much easier is it now to find out what award covers someone than it was 20 years ago, but that's what we should be working towards, in my submission, and it is in the public interest if any agreement were to be approved that it only on its face applied to those that it could apply to, otherwise confusion results, inconsistent instruments result, people are potentially misled by pulling the wrong agreement off the web site, all sorts of things which are regrettable and unfortunate and ought to be avoided if possible. If the tribunal pleases those are the submissions of the CFMEU.’
 Mr Bakri for the RTBU/AMWU contended as follows:
‘PN424. In my submission, the tribunal should not be satisfied that it's in the public interest to approve the agreement.
PN425. I point to the following reasons. Firstly, the agreement is made with only one of four relevant unions. The employers should not be awarded for their capricious and unfair conduct. Secondly, approving the agreement would be contrary to the objects of the Act, as the objects of the Act include to provide a balanced framework for cooperative and productive workplace relations and to enable fairness and representation (indistinct) in my submission, what has occurred here - and the application that's before the tribunal to approve the greenfields agreement is the antithesis of those objects - the employees have not been afforded the opportunity to have their union of choice negotiate the agreements - it's only an agreement with one union, not with four - and if it was to be approved, I do not think that it would be the basis for a cooperative and productive workplace.
PN426. Just taking this point a little bit further, the final reason that I submit that it's not in the public interest is that the agreement - I think the tribunal should have a concern that the agreement is not conducive to industrial harmony as it has not been made with the approval of the other major unions that have an interest in the project. That concludes my submissions, Commissioner.’
 The requirement in s.187(5) is only met if FWA is positively satisfied that the approval of a greenfields agreement is in the public interest. The Full Bench decision in GlaxoSmithKline Australia Pty Ltd v Colin Makin 5 provides appropriate guidance on the approach to be taken to “public interest”:
‘ Appeals have lain on the ground that it is in the public interest that leave should be granted in the predecessors to the Act for decades. It has not been considered useful or appropriate to define the concept in other than the most general terms and we do not intend to do so. The expression ‘in the public interest’, when used in a statute, classically imports a discretionary value judgment to be made to be made by reference to undefined factual matters, confined only by the objects of the legislation in question.’
 In the present matter I am satisfied that it is in the public interest to approve the Agreement. My discretionary value judgement has been formed by considering the following:
● Approval of the agreement is consistent with the both the objects of the Act, in particular paragraph 3(f), and the objects of Part 2-4 of the Act as set out in s.171.
● The scheme of the Act specifically permits the employers in this matter to make a greenfields agreement with a single employee organisation if the requirement of s.187(5) is met. The scheme of the Act does not require the employers in this matter to make a greenfields agreement which each employee organisation that wants to be party to the agreement. It is the employer’s choice to make a greenfields agreement with one or more than one employee organisation.
● The Agreement does not inhibit the right of any employee to be represented by the employee organisation of their choice whilst the agreement is in operation. In fact the definition of “Employee Representative” in clause 2 of the agreement makes this clear.
● The Agreement does not contain any provisions which would limit the freedom of association of employees to be covered by the agreement.
● The Agreement provides significantly better terms and conditions of employment than does the relevant modern award.
● It is positively in the public interest to assist the parties to the agreement to eliminate lost time and/or lost productivity arising out of disputes or grievances during the construction of the project by approving the Agreement.
● The Act contemplates that there may be overlap between agreements and the Act provides clear direction as to which agreement will operate at any point of time.
● The parties to the Agreement and those opposing the approval of the Agreement are experienced in the industrial relations environment in the industry in which this agreement will operate and the issue of agreement overlap with other agreements or with awards (through incorporation into agreements) is not uncommon.
 I am satisfied that each of the requirements of ss186 and 187 as are relevant to this application for approval have been met.
 Undertakings have been given by John Holland and by Abigroup in relation to various clauses of the Agreement and these undertakings have become terms of the Agreement in accordance with s.191(2) of the Act and are appended at Appendix A.
 I am satisfied that The Australian Workers’ Union is entitled to represent the industrial interests of a majority of employees who will be covered by the Agreement in relation to work that is to be performed under it. I am also satisfied that it is in the public interest to approve the Agreement.
 The Agreement is approved and, in accordance with s.54(1), will operate from 23 September. The nominal expiry date of the Agreement is 30 June 2014.
** end of text **
1 (1988) 15 NSWLR 292 at 302
2 (1987) 11 NSWLR 404 at 423
3 (1997) 191 CLR 85 at 113 - 116
4  FWAFB 2762
5  FWAFB 5343
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