FWC 912
FAIR WORK COMMISSION
Fair Work Act 2009
s.185 - Application for approval of a greenfields agreement
Construction, Forestry, Mining and Energy Union
SENIOR DEPUTY PRESIDENT RICHARDS
BRISBANE, 26 FEBRUARY 2013
Summary: objection on basis of coverage - undertaking about coverage restriction - implication of coverage clause for contractors clause - security of employment - relational nexus - permitted matters - s.253(1) - s.356.
 On 10 December 2012, an application was made by the Construction, Forestry, Mining and Energy Union (“the CFMEU”) for the approval of the Mirvac Hamilton Park South (Reedy Creek) Project Union Greenfields Agreement (“the Agreement”). The Agreement purports to apply to employees who are employed under the classifications set out at clause 12 thereof. This is a particularly wide set of classifications, which may extend beyond the coverage provided for under the rules of the CFMEU.
 On its face therefore, an issue arises, in the context of the application clause in the Agreement as to how the Fair Work Commission (“the Commission”) could be satisfied that the Agreement meets the requirements of s.187(5)(a) of the Fair Work Act 2009 (“the Act”).
 Section 187(5)(a) of the Act provides as follows:
187 When the FWC must approve an enterprise agreement—additional requirements
Requirements relating to greenfields agreements
(5) If the agreement is a greenfields agreement, the FWC must be satisfied that:
(a) the relevant employee organisations that will be covered by the agreement are (taken as a group) 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
 Notwithstanding this, I am satisfied that on the evidence that has now come before me that the Agreement, despite the terms of its application clause, in actuality meets the requirements of s.187(5)(a) of the Act. The following sets out how the requisite degree of satisfaction was achieved, and how other consequential issues must be dealt with for purposes of the approval process.
 On 17 December 2012 and 21 December 2012, the Australian Workers Union (“the AWU”) directed correspondence to the Commission stating that it objected to the approval of the Agreement on the basis that the Agreement was made with an employee organisation that could not represent the industrial interests of a majority of the employees who will be covered by the agreement.
 Before proceeding, it is best first of all to set out the application provisions of the agreement so that the AWU’s objection, as it was, can be better appreciated.
 Clause 3(a)(ii) of the Agreement states that the Agreement covers the CFMEU, the employer and the employees of the employer who will:
(i) Perform on-site construction work within the employer's scope of work during performance of the Mirvac Hamilton Park South (Reedy Creek) project in any of the work classifications identified in sub clause 12.3 of the Agreement.
 Sub clause 12.3 of the Agreement, amongst other related matters, refers to the various classification groups within which the employees will work. There are five such classification groups. For the purposes of this decision there is no requirement to set out all of the classifications there set out, other than to note that there is an extensive array of classifications cited.
 The AWU contended that the majority of the occupations outlined in the agreement did not fall within the CFMEU’s general construction division rules. And further, the CFMEU general construction division’s rules in relation to civil or mechanical engineering projects restricted it to representing the industrial interests of carpenters and various plant.
 The AWU contended that the Commission could not be satisfied the requirements of the section were met given its above stated concerns.
 In response to the AWU’s concerns, Mr Cameron Kirkwood, the Project Manager, Development Queensland, for Mirvac provided a written statement, received on 23 January 2013, which included the following comments:
 Mr Kirkwood’s statement was underpinned by written submissions made by Mr Travis O'Brien, the CFMEU legal officer, that “Mirvac will only be employing a limited number of forklift drivers pursuant to the proposed enterprise agreement”, and that the Commission “can be satisfied of the eligibility for membership of workers who will be engaged under a proposed agreement based on the sworn statement is provided on behalf of the employer.”
 A conference was convened on 6 February 2013 at the request of the AWU to discuss the circumstances of the Agreement. Following that conference, I directed the following correspondence to the CFMEU and Mr Kirkwood:
I note that the statement of Mr Cameron Kirkwood of 23 January 2013 is not in the form of a sworn statutory declaration (in accordance with the Statutory Declarations Act). Can you please arrange for this statement to be sworn as a statutory declaration by Mr Kirkwood as soon as practicable and by 5pm on Monday 11 February 2013. Please provide the statement to the AWU at the same time as providing it to the Tribunal.
This statutory declaration will assist me in reaching the requisite degree of satisfaction in relation to whether or not the CFMEU represents a majority of the employees to employed under the Agreement for purposes of s.187(5) of the Fair Work Act 2009 (“the Act”).
Further, I note also, that because of the contracted scope of the application of the agreement as will be deposed, clause 23 of the Agreement presumably will only require consultation in relation to the forklift drivers (and their union), given that the forklift drivers will and can only be the “potentially affected employees” in relation to any decision to engage contractors and\or supplementary labour hire. In so far as the clause sought to do otherwise the clause may constitute a non – permitted matter for purposes of s.172(1) of the Act.
 A statutory declaration was received by Mr Kirkwood to the same end as his statement as referred to above. That statutory declaration was received on 22 February 2013.
 Having received Mr Kirkwood’s statement, I am now satisfied that the requirements of s.187(5)(a) of the Act are now met for purposes of the approval process.
 Notwithstanding this, I make the following comments about clause 23 of the Agreement, the operation of which is affected by the constrained application of the Agreement as evidenced by Mr Kirkwood and as advanced by the CFMEU. The above correspondence as cited alludes to this concern on my part.
 Clause 23 of the Agreement is headed “Employment Security and Engagement of Sub-contractors and Labour Hire”, and provides as follows.
The employer recognises that in certain circumstances the use of contractors and labour hire may affect the job security of employees covered by this agreement.
a) Use of Contractors
If the Company wishes to engage contractors and their employees to perform work in the classifications covered by this agreement, the Company must first consult in good faith with potentially affected employees and their union. Consultation will occur prior to the engagement of subcontractors for the construction works.
If, after consultation, the Company decides to engage bona fides contractors, these contractors and their employees will receive terms and conditions of engagement (on terms no less favourable) as they would receive if they were engaged as employees under this agreement performing the same work. [....]
b) Supplementary Labour Hire
Where there is need for supplementary labour to meet temporary/peak work requirements, such labour may be accessed from bona fides businesses, including subcontractors and labour hire companies, following consultation with the Company consultation committee and/or union(s) party to this agreement. (sic) The Company shall ensure that any workers engaged by such businesses and performing work described in the classifications of this agreement shall receive wages, allowances and conditions not less than those contained in this agreement.
 Section172(1) of the Act provides as follows:
172 Making an enterprise agreement
Enterprise agreements may be made about permitted matters
(1) An agreement (an enterprise agreement) that is about one or more of the following matters (the permitted matters) may be made in accordance with this Part:
(a) matters pertaining to the relationship between an employer that will be covered by the agreement and that employer’s employees who will be covered by the agreement;
(b) matters pertaining to the relationship between the employer or employers, and the employee organisation or employee organisations, that will be covered by the agreement;
(c) deductions from wages for any purpose authorised by an employee who will be covered by the agreement;
(d) how the agreement will operate.
Note 1: For when an enterprise agreement covers an employer, employee or employee organisation, see section 53.
Note 2: An employee organisation that was a bargaining representative for a proposed enterprise agreement will be covered by the agreement if the organisation notifies FWA under section 183 that it wants to be covered.
 In so far as clause 23 purports to operate in respect of any contractors or subcontractors engaged under classifications other than forklift driver (which is the only classification of employees to be employed under the Agreement), it would appear to me at least that the clause, arguably, would not comprise a permitted matter. This is because the clause would require the Company to extend to all contractors and subcontractors the terms and conditions under the Agreement in respect of classifications under which the Company does not employ any employees (other than forklift drivers).
 That is, in so far as it purports to operate beyond a classification of forklift driver, the clause may not concern the relationship between the employer that will be covered by the Agreement and its employees who will be covered by the Agreement.
 The evidence led is that the Company will not at any point in the future (given the application relates to a Greenfields agreement) employ any employees other than forklift drivers under the Agreement (notwithstanding sub clause 12.3 of the Agreement). No action taken under clause 23 other than in relation to those forklift drivers can therefore affect the job security of any employees under the Agreement. Indeed, the relationship of any persons (other than forklift drivers) engaged by the Company under the clause could not even be of an indirect, consequential or remote kind in relation to the Company’s employees (which, in any event, would be insufficient to make out the required relational nexus). I have previously made findings in this respect in relation to a prior matter with some similar facts. 1
 In all, other than in respect of forklift drivers, clause 23 may have no operation as a term of the Agreement because arguably it is not a permitted matter as it does not pertain to the relationship between an employer that will be covered by the Agreement and that employer’s employees who will be covered by the agreement.
 Notwithstanding, I have not pursued this issue to the point of making determinative findings as I might otherwise (for example, in respect of an issue arising for purposes of s.443 of the Act) as the Act does not ascribe to the existence of non-permitted terms any particular status for the approval process. Indeed the Explanatory Memorandum to the Act suggests the following is the intended effect of the Act:
...is not intended to that FWA will have to scrutinise each enterprise agreement to ensure that all its terms are about permitted matters as this would unduly delay the agreement approval process.
 I have been mindful of not delaying the approval process by instigating processes that would delay the approval of the Agreement before me.
 I note too, that s.253 of the Act provides as follows:
253 Terms of an enterprise agreement that are of no effect
(1) A term of an enterprise agreement has no effect to the extent that:
(a) it is not a term about a permitted matter; or
(b) it is an unlawful term; or
(c) it is a designated outworker term.
(2) However, if an enterprise agreement includes a term that has no effect because of subsection (1), or section 56 or 326, the inclusion of the term does not prevent the agreement from being an enterprise agreement.
 It follows that notwithstanding that whilst it is arguable that clause 23 of the agreement (other than in relation to persons engaged as forklift drivers) is not a term about a permitted matter (though the CFMEU begs to differ in its view), the inclusion of a term to that effect does not prevent the agreement from being an enterprise agreement. It further follows that the inclusion of the term does not invalidate the application nor cannot give the Commission reason to not approve the agreement, despite the term being of no effect. The Full Court of the Federal Court put it this way:
Section 253(1) and s 356 of the FW Act have the effect of preserving the overall bargain reached and approved by the employees. Insofar as the two may have both lawful and a potentially unlawful operation, those provisions limit the operation of the term only to that which is lawful. 2
 The matter, then, may ultimately be one for the parties to consider themselves as a matter of legal risk, when and if the clauses are acted upon.
 The further consideration of this application for approval of a Greenfields agreement is dealt with by separate instrument.
SENIOR DEPUTY PRESIDENT
1 Construction, Forestry, Mining and Energy Union v Brookfield Multiplex Australasia Pty Ltd  FWA 4579.
2 Australian Industry Group v Fair Work Australia  FCAFC 108 (14 August 2012) at .
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