PN1

THE ASSOCIATE: The Commission is now in session in the matter of C2022/1233 of the Australian Workers' Union and the Construction Forestry Maritime Mining and Energy Union v Watpac Constructions Pty Ltd.

PN2

DEPUTY PRESIDENT GOSTENCNIK: Yes, good morning. Mr Gibian, you're appearing for the appellant?

PN3

MR GIBIAN: I do, thank you, your Honour.

PN4

DEPUTY PRESIDENT GOSTENCNIK: Yes, good morning. Mr Massy, you're appearing for the CFMMEU?

PN5

MR MASSY: That's so, your Honour.

PN6

DEPUTY PRESIDENT GOSTENCNIK: Yes, good morning. And Mr White, you're appearing for Watpac?

PN7

MR WHITE: I am if the Commission pleases.

PN8

DEPUTY PRESIDENT GOSTENCNIK: Yes. Perhaps you might firstly deal with the amended notice of appeal. Is there any objection to that notice?

PN9

MR WHITE: Not from our side.

PN10

DEPUTY PRESIDENT GOSTENCNIK: All right. Well, leave to amend the Notice of Appeal is granted. I should indicate to the parties that we have had the opportunity of reading the submissions that each of the parties have filed. Yes, Mr Gibian?

PN11

MR GIBIAN: Yes, thank you, your Honour. Just briefly by way of housekeeping I think there was also a supplement to the appeal book which was a three-page supplementary statement of the witness for Watpac, Mrs Dearling, which I think has been numbered from page 832 of the Appeal Book which hopefully the Bench would have.

PN12

DEPUTY PRESIDENT GOSTENCNIK: Yes. Yes, that's been included in my copy and you wish that to be tendered as evidence?

PN13

MR GIBIAN: Well, to be included in the Appeal Book.

PN14

DEPUTY PRESIDENT GOSTENCNIK: I see.

PN15

MR GIBIAN: I think it was just omitted in error.

PN16

DEPUTY PRESIDENT GOSTENCNIK: I see. Yes, all right.

PN17

MR GIBIAN: It was before the Deputy President.

PN18

DEPUTY PRESIDENT GOSTENCNIK: Yes. All right. Thank you. Yes, well that's been included in my copy of the Appeal Book 832 through to 834. I'm assuming the other parties have copies of that document?

PN19

MR MASSY: Yes, thank you, your Honour.

PN20

DEPUTY PRESIDENT GOSTENCNIK: All right. Thank you. Thank you for that Mr Gibian. Yes?

PN21

MR GIBIAN: Thank you. As the members of the Bench will have seen this is an appeal against the decision to approve and a purported Greenfields agreement. The AWU opposed its approval at first instance and on appeal submits that the Deputy President erred in approving the agreement on three broad grounds.

PN22

First, in finding that the agreement was, in fact, a Greenfields agreement but related to a genuine new enterprise for the purposes of section 172(2)(b) of the Act.

PN23

Secondly, and being satisfied that the majority coverage requirement in section 187(5)(a) was met. And, thirdly, being satisfied that the public interest requirement in section 187(5)(b) was met.

PN24

What I wanted to do to elaborate upon those was firstly just identify by way of background the manner in which the company in its evidence described both its existing and allegedly new enterprise.

PN25

In the evidence briefly by way of reference to Mr Dearling's evidence primarily, and then put that in the context of the coverage of the agreement, and then deal with the three broad areas of error that we allege which are grounds - what are numbered grounds 1, 3 and 4 in the amended Notice of Appeal.

PN26

If I could start then just briefly by referring to the manner in which the company described its existing and certainly the new enterprise. Firstly, in the witness statement that Mr Dearling - the first witness statement of Mr Dearling which commences at page 196 of the Appeal Book. Mr Dearling described himself as the National Workplace Relations Manager for Watpac and describes his knowledge of the business in paragraph two.

PN27

In paragraph three on page 196 he provides some background in relation to the company. And in the second sentence records it listed on the Australian Stock Exchange to later Watpac - as Watpac, the company, has grown and developed through the decades specifically tendering for and successfully delivering large scale building construction and mining contracts across Australia. It has been noted that it predominantly completed projects in the residential, health, science, education and stadium construction sectors.

PN28

I emphasise there that successful tendering for large and delivery of large scale buildings such as (indistinct) contracts was said to be the long-standing nature of its business, covering a wide-range of fields, including residential, health, science, education and stadium construction.

PN29

There's then a description of the BESIX takeover from paragraph four. Turn over the page which is said to have prompted this new enterprise. Can I then note over the page at paragraph seven the way in which the acquisition is described as having affected the business.

PN30

What's asserted is that upon acquisition a strategic goal and focus of BESIX Watpac management team was to broaden the company's previous operations beyond construction and property development to expand its service offering into marine and civil construction - sorry, civil engineering, I should say - as it is described as a broadening of the existing offerings of the company.

PN31

There's a reference to the divest at paragraph eight to a divestment of a civil and mining business in 2018. I will come back to that in a moment because it is described in a little more detail in the evidence. Mr Dearling then goes on from paragraph nine to describe under the heading, 'Genuine new enterprise' to describe what is asserted to be the new enterprise.

PN32

Really, by reference to this - a particular project which the company has successfully tendered for - and from paragraph nine he notes that part of Watpac's new plans have moved beyond construction and property development to complete a larger range of projects including bridges, he tendered for the construction of the Kangaroo Point Green Bridge - KPGB Project - and that had some media announcements in that respect appear to be presented as the only manifestation of what's purported to be this new strategic direction. And it's that project which is described at paragraph 14 to have prompted what is asserted to be a desire for a new industrial instrument said to be tailored for marine and civil work prior to the commencement of the site establishment and construction works for the KPGB Project.

PN33

After evidence was then filed by the AWU Mr Dearling in his supplementary statement which was the insertion into the Appeal Book now numbered from 832 - page 832 and following provided some additional evidence in that respect. And if I could ask the members of the Bench to turn to page 832 - the first page of that supplementary statement. There's a reference to the workers at Watpac and then over the page at 833 from paragraph 10 there's a heading 'Genuine New Enterprise'.

PN34

Under that heading there's then from 10 to 19, a description of existing works of operations of the company, including extensive involvement and stadium construction of projects. Firstly, the description of the North Queensland Stadium Project. And then at paragraph 14 a list of other various stadium construction projects that again have taken over this in various locations, including in Queensland.

PN35

Within paragraph 14 I note after that list in the second sentence of that paragraph it's asserted that Watpac considers and does consider it stadium work as construction work separate from its historical and civil and mining work, and its new marine and civil business. As I'll come back to how it considers it is quite irrelevant to the interpretation of and coverage of the agreement which is purported to be made.

PN36

There's then a description of various civil work which has been undertaken in Queensland from paragraphs 15 onwards. And to the extent that the new work and, finally, over on page 834, to the extent that the asserted new enterprise is different, the assertion is really that in the first sentence of paragraph 22, an assertion perhaps adopted by the Deputy President that the new civil and marine and civil enterprise is said to involve more complex and sophisticated projects than the previous civil projects undertaken by the defunct Watpac civil business.

PN37

Now, Mr Dearling in his first statement and in - I'm sorry just going up that page at paragraph 20 refers to the sale of the civil and mining business in 2018. That matter is also described briefly in Mr Dearling's oral evidence within the transcript at page 97 of the Appeal Book from PN62. Well, perhaps starting at CN61 and then going over the page at PN62 at the top of page 98 of the Appeal Book.

PN38

Mr Dearling described the business that had been sold as a discrete operations in Western Australia and South Australia that it was run out of Western Australia. That is, as we understand it distinct from both the stadium construction, other building construction that it had been engaged in and the civil works in Queensland that had been described in the supplementary statement of Mr Dearling.

PN39

Now in that context the purported Greenfields agreement was made with the CFMMEU. Can I note in that respect, as the members in the Bench will have seen the coverage provision of the agreement, it's at page 18 of the Appeal Book. Clause four deals with the application of the agreement. The members of the Bench will have seen that clause 4.1 notes the agreement applies to Watpac, the CFMMEU and then in subclause (c) 'All employees of the employer engaged in civil construction work and for whom classification rates of pay are provided by the agreement.'

PN40

4.2 makes clear that it applies throughout Queensland and the Northern Territory to projects of up to 300 million dollars in total project value. And the concept of civil construction is dealt with in 4.4 on the same page. I'm sorry I'm on page 24 of the Appeal Book. Sorry, I think I said page 18 and I apologise that the agreement commences at page 18, the application provision for clause 4 is on page 24.

PN41

I was just coming to 4.4 which then defines civil construction works in a non-exhaustive fashion that is including but not being restricted to the construction, alteration, installation and maintenance of a number of different types of undertakings.

PN42

One can only read that as providing that the agreement is intended to cover civil construction generally as ordinarily understood but for the avoidance of doubt making clear that it covers the specific identified types of activities or works.

PN43

I note in that respect that those include any civil engineering and construction project in the second last dot point. So that's not limiting in any event but the words 'not restricted to' make clear that the agreement was intended to apply to any civil construction as that term would ordinarily be understood.

PN44

Finally, at page 61 of the appeal book, can I just note the extent of the classifications and types of work functions that are covered by the agreement in Appendix 1. Without going to it at great length there are various civil worker classifications and in the table the definition includes a wide range of general labour classifications, riggers, formwork and the like, in addition to classifications of crane operators, hoist drivers and forklift drivers at various levels.

PN45

Now given the coverage that the coverage of the agreement is not limited to any particular project or, indeed, any particular type of project but extends to civil construction generally it was unclear, upon the application what was said to be the new enterprise which justified the making of a greenfields agreement.

PN46

I don't need to take the members of the Bench to it, but the (indistinct) note in the written submissions of the application and the submissions were very vague as to what the new enterprise was alleged to be. The applications and employer's form did not identify it at all other than to assert there was a new business activity, project or undertaking. As we have noted in paragraph 19 of the written submissions, footnotes 27 and the references at footnotes 27 to 29, the written submissions, initially, of both the company and the CFMMEU both initially described the enterprise as being to build a bridge, namely, the specific project the KPGB Project, albeit in oral submissions, it was expanded to endeavour to describe a somewhat unclear category of more sophisticated marine or bridge projects.

PN47

Now, with that background can I turn then to the three areas of error that were alleged. The first in ground one relates to the genuine new enterprise point. It appears to be accepted by the parties and to be uncontroversial but the questions to whether the agreement was actually a greenfields agreement in the sense that it related to a genuine new enterprise that the employer was establishing or proposed to establish is a jurisdictional question in the sense that if there is not an agreement which answers that description it could not be approved and the appeal must be allowed and the application dismissed.

PN48

The Deputy President dealt with that question in the decision commenced from paragraphs 26 to 35, commencing on page nine of the Appeal Book. Can I emphasise that the critical conclusion appears to flow from paragraphs 27 - sorry, 28 and 29 - at the bottom of page nine and the top of page 10 of the Appeal Book. Paragraph 28 the Deputy President observed that he considered the company is establishing genuine new enterprise that is constituted by the business or activity of undertaking civil and - sorry, marine and civil construction work and growing the company's service offering in this field. The Deputy President went on to note that although that was - asserts that although the company had performed some civil construction work in the past the new enterprise had, at least, two dimensions of novelty which have been identified.

PN49

The first is described and there's acceptance of the evidence of Mr Dearling that the KPGB Project and other civil and marine projects the company intends to pursue are of a different character from the civil projects it has undertaken in the past because of the nature of the work is different and likely to be more complex and sophisticated.

PN50

That point is emphasised in the next sentence and the final sentence of that paragraph at the top of page 10 where the Deputy President asserts that new enterprise is concerned with complex civil and marine projects, such as the river bridge, which is the object of the KPGB Project.

PN51

The second area - so the first area of novelty appears to be an assertion as to the alleged complexity of the type of project compensated. The second is dealt with at paragraph 29 where the Deputy President asserted that the company had made a strategic decision to expand its service offering into marine and civil engineering leveraging off the expertise of the BESIX group in this field.

PN52

Those were the two areas of asserted novelty of the enterprise which was claimed to be subject of the agreement, rendering it capable of constituting a greenfields agreement. The Deputy President then deals with various arguments advanced by the AWU which some of which I will need to return. But it's those findings of novelty - paragraphs 28 and 29 which feed into the conclusion of paragraph 35 that the Deputy President was satisfied that the relevant enterprise is a genuine new enterprise.

PN53

As the Bench will have seen they've identified three contentions as to why that conclusion involved error. The first is that the Deputy President focused his intention - his consideration of the genuine new enterprise points upon the enterprise that Watpac claimed it was establishing or proposing to establish, rather than upon the enterprise to which the agreement relates.

PN54

In our submission section 172(2)(b)(i) requires identification of the enterprise to which the agreement relates in the sense of the enterprise to which the agreement would apply it approved and in consideration of the novelty of that enterprise.

PN55

The respondents, as we understand their submissions on the other hand, say that the proper approach is to identify whether there is a new enterprise and, if so, it is sufficient that that enterprise have some relationship, even if it be an indirect or remote one to the agreement that has been made purportedly as a greenfield agreement.

PN56

That approach, in our submission, is quite inconsistent with the text of the Act, with authority and with the purpose of the provision for greenfields agreement. Can I start with the text? As the members of the Bench will well know, section 172(2) provides the single enterprise agreements, and relevantly (2)(b) for an employer relevantly to make an enterprise agreement with one or more relevant employee organisations if, firstly, in (i) the agreement relates to a genuine new enterprise that the employer is establishing or proposing to establish.

PN57

The section does not ask whether the enterprise has some relationship to the agreement. The agreement must, itself, relate to a genuine new enterprise, and the manner in which it does so is by way of coverage. That is, by way of covering and applying to what is a genuine new enterprise.

PN58

To put it another way an agreement does not relate to a genuine new enterprise if its coverage includes activities, undertakings, projects or businesses that are not genuinely new. One has to the look at the coverage of the agreement and the nature of the business activity, project or undertaking to which it relates.

PN59

That is reinforced by subsection (2)(b)(ii) which sets the second requirement for a greenfields agreement, namely, that the employer - in this case singular - has not employed any of the persons who will be necessary for the normal conduct of that enterprise and would be covered by the agreement. It is that enterprise, namely the enterprise to which the agreement relates that must be new and in relation to which there must have been no employees engaged.

PN60

The scenario obviously now contemplated is that the persons that the agreement will cover have not yet been employed because otherwise obviously enough bargaining had had to occur involving those employees that unavoidably links relationship with the agreement to the enterprise as one of coverage.

PN61

That view is consistent with authority and the manner in which these provisions have been approached historically. The members of the Bench should have a bundle of authorities I think with 10 tabs in it or 10 items in it. Can I direct attention, briefly - firstly to Patrick Cargo, which is under tab two - a decision under the formal Workplace Relations Act provisions but to which reference is made in the explanatory memorandum to the Fair Work Act provisions. It's [2002] 115 IR 443.

PN62

The relevant passages that the members of the Bench will be familiar with are those on page - can be found on page 446 of the report. I firstly note at paragraph 19 the then provision of the Workplace Relations Act, 170(LL)(1) is set out, needing an agreement to be made, the simple business is a new business that the employer proposes to establish who was establishing when the agreement is made.

PN63

There's reference then at paragraph 21 to the conclusions of then Commissioner Raffaelli in relation to the newness of the business to be employed at corporation. Can I then note what the Full Bench said at 22 and 23? The Bench considered that the statement of the Commissioner, at first instance, reflected both an error of principle and this application of the section 170(LL)(1). The Bench noted that that subsection requires and applied in the circumstances that arose a finding as to whether or not the single business to which the agreement proposed for certification applied was or was not, in fact, a new business that the employer proposes to establish or is establishing.

PN64

That is the focus is upon the business, as the language was at that time that the agreement proposed for certification applied, and whether it was, in fact, a new business. That that approach is again - is then repeated in paragraph 23, in the second sentence the Full Bench agree that it is sufficient that it is clear that the expression requires consideration of the objective character and identity of the business to which the agreement will apply.

PN65

And whilst the Deputy President paraphrased that approach in the decision, as is clear from paragraphs 27, 28 and 29 of the decision, once he came to apply it - applied that approach - he did not focus upon the enterprise to which the agreement would apply, but rather lending by reference to its coverage provision, but rather what was asserted to be the new enterprise by Watpac.

PN66

That approach has been followed in the provisions under the current Act, and I note what Justice Rares said in the HP Distribution which is under tab 5 or item 5 in the list of authorities, reported at [2013] 210 FCR 250 adopting the approach from Patrick Cargo, his Honour, at paragraph 34 on page 261 identify the need to examine the objective character of identity of the enterprise to which the agreement will apply and its novelty in relation to the employer's business or that of the group of which they form part as a simple interest employer as we're given I believe at (indistinct).

PN67

The Full Bench said the CFMMEU and CFMMEU contractors similarly adopted that formulation. I don't need to take the Bench to it but it's at paragraph 45 of that decision which is under tab seven in the bundle that we provided.

PN68

Finally, in that respect, can I just turn to tab nine? The recent Full Court decision in the RTBU v Busways matter - [2022] FCAFC 55. I will need to return to this judgment in a moment and it may be that in this instance, in that case, as perhaps in many, there was not a real issue as to the identification of the enterprise to which the agreement related. It applied to the privatised bus operations to be taken over Busways or proposed to be taken over by Busways. However, some of the language used is of assistance in relation to the first point that we raise.

PN69

Can I identify, particularly, within the judgment of all the members of the court agreed as to the outcome. But can I just note the manner in which Justice Snaden identified the question. Firstly, at paragraph 69, on page 21 where having identified the need to identify the genuineness of a new enterprise his Honour said that 'The answer to that question does not emerge with any clarity from the text of the legislation. There is then an underlying or latent ambiguity...all the more is that apparent in the present case?'

PN70

Can I then emphasise the third sentence, 'There can be no doubt that the enterprise in respect of which the EA was agreed was one, at the time of that agreement, was or would be new at least in so far as it concerns the Busways entities. That is the examination of the novelty of the enterprise was undertaken by reference to the enterprise in respect of which the EA was agreed.

PN71

The same approach is or the same type of formulation is - appears at paragraph 79 on page 24 of that judgment - where about halfway down in the fifth line, in the third sentence of that paragraph his Honour asked the question as to whether the enterprise in relation to which the EA was made was one that the Busway entity proposed to establish, otherwise than as successors et cetera. That is the question was directed at the enterprise in relation to which the enterprise agreement was made. In each instance if one focuses upon the coverage and intended application of the agreement, that is the enterprise to which the agreement was made.

PN72

Finally, can I note a passage from the explanatory memorandum which is 10 to the - in the bundle of authorities. The question of new enterprise is the members of the Bench will have seen in other cases no doubt is dealt with - it's page 111 of the explanatory memorandums from some - paragraph 691 to 693 - where there's some discussion as to the nature of the novelty of the degree of the nature of the new enterprise.

PN73

Can I note the examples that are given at paragraph 693 where having dealt with the taking over of an existing enterprise the explanatory memorandum says that the nature of the genuine new enterprise may nonetheless be the same or similar to the employer's existing enterprise, particularly in the case of a new project.

PN74

And two contrary - two examples - with contrary outcomes are then identified. For example, an existing employer in the construction industry could make a greenfields agreement in relation to a genuine new construction project, however an existing employer, such as a major retailer could not make a greenfields agreement in relation to a new store, that it is proposing to establish if that store is part of the employer's existing enterprise.

PN75

Both of those examples use the phrase, 'Could make a greenfields agreement in relation to a genuine and new construction project.' The phrase 'In relation to in that context can only be understood to mean to apply to' - that is the first example contemplates that an employer and construction industry could make a greenfields agreement to apply to a genuine new construction project as a greenfields agreement, even though it undertook other construction projects distinct and separate from the new project that was contemplated.

PN76

That points really to a fatal flaw in the approach that the respondents contend for in this respect. My learned friend suggests that it is sufficient that there be some relationship between an agreement and the new enterprise. Even if the agreement could apply more broadly outside the identified new enterprise. If that were correct, on the first example given in paragraph 693 of the explanatory memorandum, if a new construction company was commencing a new project it could make a greenfields agreement. However, it could make a greenfields agreement which was not limited to that new project but applied more generally to the construction work. Even if that was of the same type or, indeed, overlapping with existing operations the company undertook. It would be sufficient on that theory that there be a relationship with the new project in the sense of being encompassed within its coverage of the new project, even if it also encompassed existing types of operations or even existing projects that the company undertook.

PN77

It could, to be clear, make a greenfields agreement to extend the construction as a whole, even if that compasses the whole of its existing operations. That is plainly inconsistent with the very nature of greenfields agreement. The greenfields agreements are contemplated to be agreements that can be made prior to the commencement of or prior to the employment of employees necessarily could be undertaken on the work on a project for the new enterprise, not applying more broadly.

PN78

Consistently with authority the proper approach is to examine the objective nature of the enterprise to which the agreement of the purported greenfields agreement will apply and whether that enterprise is novel or the employer's enterprise or more generally.

PN79

DEPUTY PRESIDENT GOSTENCNIK: Mr Gibian?

PN80

MR GIBIAN: Yes.

PN81

DEPUTY PRESIDENT GOSTENCNIK: Is the effect of your submission that there can in no circumstance be made a greenfields agreement that has coverage that is broader in some way than the four corners of the genuine new enterprise employer is establishing or proposing to establish.

PN82

MR GIBIAN: The effect of the submission is that the examination of whether there is a genuine new enterprise must be undertaken by reference to the coverage of the purported greenfields agreement. That is, one must identify the enterprise to which the agreement will apply and then assess whether that enterprise is a genuine new enterprise in the manner that's explained by Justice Bromberg in the reasons of Busways decision. Not as was done here to say, well, the employer was proposing to do something in particular. It's a little vague as I'll come to. But to build this bridge and maybe do other things of that nature and that is sufficient to found the making of a greenfields agreement in the circumstances where the actual agreement applies to any civil construction of work whether it be the same or different or distinctive anyway from other works that exist in operations of the company.

PN83

DEPUTY PRESIDENT GOSTENCNIK: Yes. I suppose that issue is easier where you have an identified project to which the agreement relates but when you're trying to enter into new territories as a business that new undertaking it's a bit harder to necessarily craft an agreement which is on all fours with the envisaged expansion or envisaged new undertaking.

PN84

MR GIBIAN: In many cases and perhaps the members of the Bench would know better than me but my general understanding is in most cases there will be an identified particular new project or the like - - -

PN85

DEPUTY PRESIDENT GOSTENCNIK: Yes.

PN86

MR GIBIAN: - - -which is the subject of a greenfields agreement, and that is central to what those provisions are directed at.

PN87

DEPUTY PRESIDENT GOSTENCNIK: Well, that's usually the case in construction, yes. But not always.

PN88

MR GIBIAN: Yes. It's certainly not impossible for a company to say, look we want to go in a new direction so maybe a courier company that does deliveries within metropolitan area says, well we're going to have to establish a new division to do long distance transport between Sydney and Melbourne or Sydney or Brisbane or whatever it might be. And we're going to make a greenfields agreement for that new undertaking or activity that we're proposing to undertake there's no reason why it wouldn't be possible to do that.

PN89

But the assessment of whether there was a genuine new enterprise must be undertaken by reference to the business project or undertaking to which the agreement will apply if approved. And that's what section 172(2)(b)(1), the agreement relates to a genuine new enterprise is directed at consistent with authority and we would say the language of the provision.

PN90

And if it were otherwise the provisions would permit an employer to leverage off one new project at a greenfields agreement negotiated without bargaining or the usual processes necessary to make an enterprise agreement which apply more broadly even to its existing operations so long as they've had one new project which was in for new activity that was within the coverage of the purported greenfields agreement.

PN91

DEPUTY PRESIDENT GOSTENCNIK: Yes, thank you. I understand.

PN92

MR GIBIAN: And as we say the Deputy President erred and as your Honours will have seen that - or the members of the Bench will have seen in the written submissions - the Deputy President, in our respectful submission, erred in examining the asserted novelty of a focus upon what was said to be complex or sophisticated civil and marine projects more broadly, rather than - I'm sorry - focusing upon the complex or sophisticated civil projects which were asserted to be the subject of this alleged new enterprise in circumstances in which the agreement applied to any civil construction more broadly.

PN93

Had the correct approach been adopted, a focusing upon the enterprise of simple construction, then the Deputy President could not have reached the conclusion that there was a novelty or a new enterprise of that nature. The company had undertook civil construction in the past.

PN94

At the very least the extensive undertakings of stadium construction were a part of its existing operations and were not in any sense novel and fall within the concept of civil construction referred to the description in the supplementary statement of Mr Dearling at paragraphs 13 and 14 at page 833 of the Appeal Books in that respect.

PN95

The agreement did not relate to the new enterprise but to civil construction generally which was not novel, so far as Watpac's business was concerned, whatever one might say about the particular bridge project or any other change in strategic focus.

PN96

That's the first matter that we say led to error. If we're correct in that submission then the agreement was an agreement which could not have been approved and the Deputy President erred in approving the agreement - and the appeal should be upheld and the application for approval dismissed.

PN97

In the alternative of that or in addition to it that it's convenient to deal with the second and third arguments together under ground one, and that is that the Deputy President erred in finding that there was a genuine new enterprise of the nature alleged by Watpac in circumstances which the evidence did not disclose a sufficiently discrete or identifiable business activity, project or undertaking that was novel to sustain a conclusion that there was a genuine new enterprise.

PN98

The proper approach to be adopted in relation to that question is now, at least, subject to consideration by the Full Court and the Busways - RTBU v Busways matter - under tab nine of the authorities that we provided. As the members of the Bench will have seen, of the three judgments, the proper approach for that question is that dictated by in the judgment of Justice Bromberg with whom Justice Wheelahan agreed. Justice Snaden agreed with the outcome, although the method of reaching the outcome seemed to be - have some distinguishing approach.

PN99

If I can note the way in which Justice Bromberg approached the genuine new enterprise question. Firstly, can I note paragraph four of that judgment his Honour commenced by recording that the text of section 172(2)(b) does not suggest that the proposed enterprise must only be used from the perspective of a person or persons operating or (indistinct) it. It must be novel to persons generally, that is, it's not the subjective opinion or even the novelty to the particular employer that is the question.

PN100

At paragraph five over on page two of the judgment his Honour dealt with the impact of the word 'genuine' in the context of a genuine new enterprise and expressed the view that it emphasised that the enterprise must be genuinely new, or in other words truly authentic or really new.

PN101

At paragraph six reference was made to the approach in the transmission of business cases, particularly, PP Consulting. And his Honour then set out the approach at paragraph seven and eight on page three - or the proper approach at paragraph seven and eight on page three following on from the type of approach in PP Consultants.

PN102

Paragraph seven his Honour said, 'It seems to me that where an existing enterprise exists or has existed with at least some similarities to an enterprise which is or is proposed to be established then appropriate assessment as to whether or not the proposed enterprise is a genuine new enterprise of three fundamental steps', which his Honour then lists.

PN103

In essence an identification of the character of the existing and the proposed enterprise by reference to the essential characteristics which define them respectively and the comparison of the character of each of those of the existing and the proposed enterprise by reference to the existing - the essential characteristics of those enterprises.

PN104

At paragraph eight his Honour identified some matters which would commonly, at least, would be considered the essential characteristics by which the (indistinct) be made. Without reading his Honour identified the type of these sort of services of the kind of goods or services produced or provided. The kind of plant or equipment you do or utilise to produce those goods or services, and thirdly the context in which the provisions operate to provide a means by which terms and conditions of employment are set. An essential characteristic will be the kind of workforce utilised to produce the goods or the services in question, including the nature of the skills and occupation involved.

PN105

That's the approach which is now to be adopted, that is identifying the essential characteristics of the existing and asserted proposed enterprise. That approach is quite inconsistent with the respondents - the approaches identified with the respondents in this decision particularly Watpac's submissions at paragraph 20 which asserted there had been no necessity to identify with precision the differences between the new and existing enterprise.

PN106

The approach that Justice Bromberg explains agreed with by Justice Wheelahan decries the identification of the essential characteristics of both and the comparison of them to identify what is new.

PN107

Can I finally note that in respect that his Honour then applied that approach to the proposed new activities of Busways, particular from paragraphs 11 to 13. Can I note, particularly, there's a reference and paragraph 11 and 12 deal with the type of services provided. At paragraph 12 there's a reference to in the first sentence to the arguments advanced by Busways that there would be some alterations to the service to be provided by passengers.

PN108

And then in the second sentence, 'As to the services provided to the public, the detail of which is helpfully provided in the reasons of the judgment that is sustained, at best what is envisaged is an evolution with development the same services rather than provision of different services. That is once the comparison is to be undertaken his Honour distinguishes between something which is truly different - a different enterprise and an evolution of development in the existing enterprise of the employer which cannot be sufficient to give rise to a genuine new enterprise (indistinct) of a greenfield agreement.

PN109

DEPUTY PRESIDENT GOSTENCNIK: Mr Gibian, just to be clear, your contention is that what is said at paragraph seven, for example, of Justice Blomberg's judgment has general application in circumstances where there is an existing enterprise even where the existing enterprise and the proposed new enterprise is conducted by the same employer.

PN110

MR GIBIAN: Yes.

PN111

DEPUTY PRESIDENT GOSTENCNIK: So you don't say that what Justice Blomberg had in mind was circumstances that are similar to that and you will be as familiar with Busways as I, where there's another employer carrying on a particular enterprise and there's a new employer coming into conduct a similar enterprise or bus service for example.

PN112

MR GIBIAN: Well, in my submission, that is obviously the factuals. The factual circumstance was it's not strictly a transfer of business but - - -

PN113

DEPUTY PRESIDENT GOSTENCNIK: No, it wasn't.

PN114

MR GIBIAN: (Indistinct) contractor in a strict sense.

PN115

DEPUTY PRESIDENT GOSTENCNIK: Yes.

PN116

MR GIBIAN: The SDA having been in - although part of the government, in some sense, having been contracted by transport for New South Wales provide bus services and Busways then, at least, proposing to be contracted to provide at least similar services. That was the factual circumstance.

PN117

DEPUTY PRESIDENT GOSTENCNIK: Yes.

PN118

MR GIBIAN: That is not the limitation of the approach that - - -

PN119

DEPUTY PRESIDENT GOSTENCNIK: Well, it's just that his Honour seems to have reformulated a PP Consultants type of approach and that is a transmission case.

PN120

MR GIBIAN: Yes, but the reason why he is utilising it is to ascertain or is to approach the novelty question, that is, is the - - -

PN121

DEPUTY PRESIDENT GOSTENCNIK: The character. Yes.

PN122

MR GIBIAN: - - -asserted new enterprise, does it have a sufficiently novel character by reference to its essential characteristics to constitute a genuine new enterprise and properly give effect to the words 'genuine' and 'new' in that context, and that's equally applicable whether it is in the Busways circumstance taking over operations seeing to use loose language - previously undertaken by a different employer - or whether it is a new activity that an existing enterprise proposes to undertake.

PN123

DEPUTY PRESIDENT GOSTENCNIK: Yes.

PN124

MR GIBIAN: And, indeed, Busways didn't, on my recollection of it or my reading of the Full Court decision it didn't contend that it was sufficient in itself that the bus services were new to Busways. It's asserted that they were a different in a relevant respect than new because they were being undertaken in the context of a proper driven enterprise and that there were various innovations and developments in the services of the - - -

PN125

DEPUTY PRESIDENT GOSTENCNIK: New benchmarks and a range of other things, yes.

PN126

MR GIBIAN: Yes. And it wasn't going back to the argument that Commissioner Raffaelli had accepted in Patricks Cargo that it was sufficient that it was new for Busways in itself.

PN127

DEPUTY PRESIDENT GOSTENCNIK: Yes.

PN128

MR GIBIAN: So in that sense it is immaterial. The same approach is applicable whether it's a new enterprise that an existing company proposes to undertake, whether taking over from others or simply off its own bat.

PN129

DEPUTY PRESIDENT GOSTENCNIK: Yes, I understand. Thank you.

PN130

MR GIBIAN: And when one applies that approach in this context there was simply nothing to establish sufficient difference - I should say - and state a genuine new enterprise by reference to the essential characteristics of the existing operations of Watpac and the purported new strategic direction. In brief, there was no organisational segmentation, no new division or organisation the union was contemplated, no distinct human resources or management function was contemplated. The same type of plant and equipment was contemplated, that is, crane work essentially. The type of employees were at least asserted to be initially (indistinct) to be engaged, that is crane-related employees, as were employees in the existing operations of the companies - the company.

PN131

The existing - the distinction accepted by the Deputy President arose from the vague concepts of complexity and sophistication. It was not explained how this bridge construction or anything else that was contemplated was, in any relevant sense, more complex or sophisticated than stadium construction or the large scale projects that Watpac described itself as having a history of successfully tendering for and delivering.

PN132

What's more when one looks at even in the way Watpac itself described the strategic direction it was squarely an evolution and development of its existing business, rather than - or falls within the category of an evolutional or development of its existing business, rather than a genuine new enterprise. I refer to paragraph seven of Mr Dearling's first statement at page 197 of the appeal book where the strategic goal and focus was described as broadening the company's previous operations, falling squarely within the concept of evolution as Justice Bromberg described it at paragraph 12 in Busways.

PN133

In that respect, Mr Dearling annexed various communications about the strategic direction. There was firstly a release to employees that starts at page - it's annexure CD1 to that statement - starting at page 200 at the Appeal Book. And over at 201 the announcement by the CEO referred to the new BESIX Watpac brand. This is describing the new branding exercise. And the second paragraph of the communication the CEO says, 'This is an exciting new chapter and marks the coming together of the two great companies.'

PN134

And in the third paragraph, 'This change in no way devalues the history, essence or role of Watpac. It is a vital part of our combined story and to our shared success and new brand makes it clear to our clients and at least its key stakeholders that we have enhanced the financial strength and expanded capability to tackle complex projects.'

PN135

That is the existing business is being rebranded to endeavour to convey to clients and stakeholders its enhanced financial strength and expands its capability. It's not the business of some new enterprise but that it it's expanded capability to undertake more projects.

PN136

Finally, and two pages over at page 203, still within the same message and the second and third paragraphs on that page the (indistinct) asserts that if we embrace this exciting step change - I think there's an error there - one thing remains the same. Relationships (indistinct) success working with our clients. And there's then a reference to the best Watpac brand being rolled out.

PN137

This appears clearly to be a branding exercise intended to convey an increased capability but not some entirely distinct enterprise. The proper conclusion to be drawn, even if one were to accept that the focus upon the claimed new enterprise of Watpac were the correct one, rather than the coverage of the business is that this was applying the approach in Busways an evolutionary development, rather than a sufficiently distinct new enterprise capable of being identified and falling within the category of a genuine new enterprise capable of having a greenfields agreement applying to it.

PN138

For those reasons, in my submission, the Deputy President erred in finding that this was a greenfields agreement but related to a genuine new enterprise either because of a failure to examine the enterprise by reference to the coverage of the agreement or, in any event, in being satisfied that the asserted new enterprise was a genuine new enterprise adopting the Busways approach.

PN139

Unless there's anything further in that respect I was going to turn to ground three which deals with the requirement in section 187 at 5(a) that the Commission be satisfied in respect of the greenfields agreement the employee organisations covered are entitled to represent the majority of employees who will be covered by the agreement.

PN140

As the members of the Bench will have seen the error that we allege is one of approach but with respect the Deputy President erred by limiting his consideration of the questions the employees of the company asserted it would immediately employ and ignoring the wider coverage of the agreement.

PN141

The Deputy President dealt with that on paragraph 40 of the decision - sorry, from paragraph 38 of the decision on page 12 of the Appeal Book. Can I note in paragraph 40 on page 13 of the Appeal Book the Deputy President indicated that we agreed with the CFMMEU that there are several reasons to include that section 5 - 187(5)(a) is concerned with the actual employees who would be employed and covered by the agreement rather than all the employees who conceivably fall within the coverage of the agreement. And the Deputy President then goes on to address some of the arguments in that respect.

PN142

At paragraph 47 at the bottom of page 14 the Deputy President appears to accept that the coverage in the agreement is relevant on considering the application of section 187(5)(a). He explains that that's because in some cases it is apparent - in his view at least - it is apparent that the Commission, to the Commission that relevantly he will be able to cover all relevant employees who could be employed under the agreement and the numbers it rely upon in industry experience. At the top of the following page, in the final two sentences of that paragraph, the Deputy President went on to say that in some cases, particularly in the contested matters it may be less clear and require further investigation.

PN143

But in any case, section 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.

PN144

Critically the Deputy President then goes on in paragraphs 48 to 50 to examine that evidence, in a manner which makes less sufficiently clear that the concentration - the majority coverage question - was upon what the company, the type of employee the company said would be employed on from the one specific project which was said to be covered by the agreement. That is the KPGB Project.

PN145

Firstly, at paragraph 48, the Deputy President referred to the evidence given by Mr Beer's - a witness from the AWU - as to the type of employees that would genuinely, I should say, be required in order to construct the bridge of the type that was subject of that project. But then in the second half of that paragraph, from the fifth line, notes that the evidence of Mr Dearling and (indistinct) moved that the company will not employ specialist riggers and builders and that any rigging and building work will be undertaken by the dual ticketed crane drivers or by contractors. And that while they may employ some labourers no decisions had been made in that respect.

PN146

And then at the start of paragraph 49 the Deputy President went on to say, 'Well, in the present case it is known that the company has won the tender for the KPGB Project in Brisbane and that the workers on this project will be formed 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 driver and hoist operators. The work that will be performed by employees of the company on that project, and the Deputy President goes on to say, 'And under the agreement generally will despite the broader coverage provisions we can find to work performed by crane-related' - I'm sorry I should include the words in brackets 'be confined' - and then '(save for the possible inclusion of one or some labourers) do work performed by crane related employees including those who may be dually ticketed. Although there is a reference in that sentence in the middle of paragraph 49(2) and under the agreement generally, it immediately becomes apparent that the Deputy President is referring to the evidence as to the nature of the employees who will be engaged on that particular project, as being crane-related employees. And that's made clear by the reference to the possible inclusion of one or some labourers in the bracket of text.

PN147

With respect, it was in error to concentrate that question purely upon the small number of employees that the company claimed would be initially employed upon the one project which would fall (indistinct) within the agreement's coverage. Section 187(5), it is again appropriate to start with the text. As the Members of the Bench know, section 187(5) sets specific approval requirements in relation to which the Commission must be satisfied in approving a greenfields agreement.

PN148

Obviously enough, that means that at the time of the making of the agreement the assessment of the employees who will be covered by the agreement will necessarily be predictive or speculative as to the future; there cannot have been any such employees employed at the time; and the task cannot be undertaken by reference to a known group of actual employees.

PN149

In that context when one comes to the text of subsection (5)(a), the assessment the Commission is required to undertake is whether:

PN150

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.

PN151

The reference to the employees who will be covered can only be sensibly understood in the context of a greenfields agreement where there are no actual employees as a reference to the class of employees capable of being covered. That is consistent, in my submission, with the apparent purpose of the provision. It sets a minimum threshold of representation, presumably to ensure that the interests of at least the majority of the employees capable of being covered are representee in the making of the agreement.

PN152

It would be inconsistent with that purpose if the assessment is conducted purely by reference for a small group is it known - or in relation to which evidence is given, may be initially employed under the agreement. It would have failed to that purpose, and it would leave or render the approval process or the satisfaction of that criteria as liable to be subject to self-serving assertions by employees with an interest of approval.

PN153

The proper approach for the Commission to assess whether it is satisfied of the majority coverage requirement by reference to the class of employees capable of being covered by the agreement. In that respect, as the Full Bench will have seen, we do rely (indistinct - audio malfunction) approach which has been adopted to the fairly chosen criteria in section 186(3), which as the Bench knows, requires assessment as to whether or not the group of employees to be covered by the agreement has been fairly chosen.

PN154

That's a matter that was dealt with by the Full Court in the John Holland matter, which is under tab 6 in our bundle of authorities. Can I just refer to it briefly because it does answer some of the contrary arguments which have been presented. Besanko J expressed in paragraph 2 of that judgment on page 299, no doubt as to the proper interpretation or the proper approach to the fairly chosen question.

PN155

Buchanan J from paragraph 34 on page 306 dealt with the matter in a little bit more detail. At paragraph 34 his Honour identified a question that he indicated that troubled him, as to whether it's correct:

PN156

That the reference in section 186(3) to 'the group of employees covered' is a reference to the whole class of employees to whom the agreement might apply in the future, rather than the group of employees which actually voted upon the agreement.

PN157

And he was particularly troubled in paragraph 36 by the virtual impossibility having certainty as to the composition of that group, which was also the contrary argument advanced to the - the manner in which the AWU presented this argument before the Deputy President. Notwithstanding that practical difficulty, his Honour noted various parts of the Act which supported the conclusion that the 'fairly chosen' question at least must be assessed by reference to the class of employee capable of being covered.

PN158

The first at paragraph 37 was the concept of application and coverage, equally applicable to the 187(5)(a) question. The second, in paragraph 38, was more specific to the 'fairly chosen' question, that is noting that that question arose in other contexts in relation to scope orders and majority support determinations.

PN159

At paragraph 39, though, we specifically rely upon the fact that the most decisive factor relevant to the conclusion that his Honour reached in relation to the 'fairly chosen' question was that:

PN160

Section 186(3) and (3A) apply to both greenfields agreements and agreements made with employees. They would have no context or operation in relation to a greenfields agreement unless the wider view was taken.

PN161

And in our respectful submission that must follow for the majority coverage question under section 187(5). As I've said, there are no employees in relation to which that assessment can be made. No identifiable or existing employees in relation to which the majority coverage question can be assessed; and it must be undertaken, as the 'fairly chosen' question was, by reference to the wider class.

PN162

Finally at paragraph 41 Buchanan J answered the practicality issue, and his Honour indicated that:

PN163

One reason I have spent some time examining the correctness of the common assumption about this issue is that ... it will often be impossible to state with precision or certainty what that coverage might entail in a practical sense in the years to come, or how the group might at any particular point in time be composed.

PN164

His Honour went on:

PN165

However, that seems to me to be the consequence of the legislative scheme. The evaluation which the legislature has committed to the Commission must therefore be carried out with that consequence being understood and accepted.

PN166

Whilst there will obviously be in any greenfields agreement case difficulty knowing with certainty the composition of either the work, or the nature of the work, or the group of employees to be covered at any particular point in time in the future. That is a practical difficulty which in fact reinforces why the assessment must be made by reference to the class, rather than the limited group of employees that the employer says it proposes to initially engage.

PN167

Here, with respect, the Deputy President was in error by limiting his consideration of the majority coverage question in section 187(5)(a) to the employees Watpac asserted that it had intended to initially employ upon the one known project that was subject of the agreement. The section required the Commission to be satisfied that the relevant organisations were entitled to represent the industrial interests of the majority of employees who will be covered, and that can only be undertaken having regard to the potential coverage of the agreement. It cannot be limited to that small group that the Commissioner considered - the Deputy President, I should say, considered.

PN168

Additionally in that respect the Deputy President did go on at paragraph 52 to make an alternate observation. That appears at page 16 of the Appeal Book. To the extent that the Deputy President suggested in paragraph 52 of the decision that the CFMMEU could represent a majority of the employees on a wider approach by reference to the agreement's coverage; with respect, the conclusion was wrong.

PN169

In paragraph 52 the conclusion was supported by no more than an assertion that the classifications in appendix 1, read in context of the coverage provision, pertained to work falling within the eligibility provisions contained in the CFMMEU's registered rules was unsupported by any reference to any specific part of the rule or any reasoning by reference to or interpretation of the coverage rules of the CFMMEU.

PN170

It was inconsistent with the express statement by the CFMMEU before the Deputy President that it did not make such a submission. We've given the references at paragraph 30 of our written submissions at footnotes 49 and 50. The CFMMEU claimed - only claimed in the proceedings to represent employees covered by the agreement by reference to the old FEDFA Rules, rule 2E(a), and we've given the reference to the submissions in paragraph 30 of the written submissions. That is reference essentially to crane operators, forklift drivers and the like.

PN171

The AWU, with respect, regards paragraph 52 as a serious mis-statement of the industrial coverage, and supportive of an outcome which the CFMMEU itself was not bold enough to support, and it should be corrected, even if the Full Bench were not to accept what we say is the error of approach the Deputy President adopted in applying section 187(5)(a).

PN172

There was just one final matter in that respect to which I wish to make reference. The CFMMEU in its written submissions on appeal now says at paragraph 34 that although it denied below that it had the wider coverage, or at least didn't make a submission that it had some wider coverage, Watpac had made such a submission and it was not disputed.

PN173

That submission is made by reference to a portion of the transcript that appears at page 142 of the Appeal Book from PN1485 where there is a submission by Mr White where the submission is made that - at 485 there's an assertion that:

PN174

The classifications in the agreement clearly look like in general terms, in a large part, if not in total, classifications of the type that commonly appear in the CFMMEU Rules and the CFMMEU coverage.

PN175

But there's an assertion that that argument hasn't been put against - sorry, the argument that is otherwise not relied upon the by AWU, and so it's for that reason we don't go into it, quite apart from the textual analysis that we have gone into.

PN176

And at PN485 there's again a reference to the assertion as to the manner in which the AWU put its case, and our submission that the Commission is entitled to rely upon its general experience about classifications and the general type of CFMEU and the general - it's an audio malfunction, but I assume the general nature of the CFMEU eligibility to that type of classification.

PN177

Again no submission was advanced by reference to any part of the CFMEU Rules outside of the limited vocational coverage of the FEDFA Rules. The basis of the assertion that there's no dispute about this question is not clear to me. I didn't appear below, but as I understand it, the whole of the argument put on the majority coverage point by the AWU was that that question required consideration of the broader coverage of the agreement and the scope of the classification in appendix 1 of the agreement.

PN178

And that if that approach were adopted, the Commission could not be satisfied that the CFMEU had the majority coverage for the purposes of 187(5)(a); that is, the whole argument was on the premise that if the broader approach were adopted, the criteria in 187(5)(a) was not met.

PN179

Can I give just one further reference at page 157 of the Appeal Book at PN600. Mr Borenstein for the AWU made exactly the submission that the CFMEU's coverage was limited, relevantly outside of building construction, to the - I think there's a misprint of the abbreviation, but the FEDFA Rule about crane drivers and so on. So that precise submission was made and advanced.

PN180

As I say, the conclusion at paragraph 52 of the Deputy President's decision was obviously in error, and ought be corrected, irrespective of the other submissions we have made in relation to 187(5)(A).

PN181

Unless there's anything further on that point, can I finally turn to ground 4, the public interest ground. That section 187(5)(b), as the Members of the Bench know, requires the Commission to be satisfied that approval of the agreement is in the public interest.

PN182

A major submission at least advanced by the AWU below was that the public interest was not met because the coverage of the agreement went well beyond the particular project which was said to be subject of the new enterprise, the KPGB Bridge project; and that any operations beyond that project were purely speculative, and the nature of the employees to be covered was unknown beyond the particular work on that project.

PN183

That was a submission. We've given the written submissions, that was at paragraphs 31 to 34 of the written submissions below at page 718 and 719 of the Appeal Book. also I just identify - I don't need to go to it - but page 161 of the Appeal Book at PN620 Mr Borenstein made the same submission, that it was not in the public interest to approve the agreement with broad application to civil construction throughout Queensland and the Northern Territory on a wide array of classifications where there was no information as to the nature of the work or the types of employees who would be covered by the agreement.

PN184

The Deputy President dealt with the public interest issue at paragraphs 53 and 54 on page 16 of the Appeal Book. With respect, that submission was not addressed at all by the Deputy President. Paragraph 53 deals with certain matters, or three matters identified as being positive to the public interest in terms of the agreement - in the approval of the agreement.

PN185

The only argument of the AWU, which is sought to be addressed at paragraph 54, was an unarticulated argument; that is, the Deputy President asserted to be discerned from the AWU's contentions that there was an suggestion that it would have been appropriate or more appropriate for the company to have a greenfields agreement with it because the AWU had broad coverage of the civil construction sector (indistinct) in that industry.

PN186

As I say, that wasn't a submission that in express terms was advanced, at least, and the Deputy President (indistinct - audio malfunction) the submission which was actually ‑ ‑ ‑

PN187

DEPUTY PRESIDENT GOSTENCNIK: Sorry, Mr Gibian - Mr Gibian. Mr Gibian, Sorry, I missed the last minute or so. I'm not sure about my colleagues, but I certainly didn't hear you. your Internet seemed to be cutting out, as it appears to be now, because you appear to be breakdancing.

PN188

MR GIBIAN: I concede that's beyond my capacities. Can your Honour hear me adequately now?

PN189

DEPUTY PRESIDENT GOSTENCNIK: I can, yes.

PN190

MR GIBIAN: All right, I will persist, but please pull me up if the problem recurs. I'm not sure what I can do with it. Unfortunately I've had to do this hearing from home because members of my household have tested positive in recent days. So it's not my ideal scenario, but I hope I've been okay up to this point, at least.

PN191

DEPUTY PRESIDENT GOSTENCNIK: Yes.

PN192

MR GIBIAN: I think that probably would have covered me, just directing attention to paragraph 53 and 54 of the decision on page 16 of the Appeal Book.

PN193

DEPUTY PRESIDENT YOUNG: Specifically 54, I think, Mr Gibian.

PN194

MR GIBIAN: Sorry, 53 and 54?

PN195

DEPUTY PRESIDENT YOUNG: Specifically 54, I think, is where you cut out for me, anyway.

PN196

MR GIBIAN: Thank you, your Honour. I appreciate that. So far as paragraph 54 was concerned, I was just identifying that the only submission, if it be that, that the Deputy President addressed that had been put by the AWU was described as being a discernment of a view by the AWU that it was more appropriate for an agreement to be made with it, rather than for the CFMEU. That was not an argument that was put in express terms, at least.

PN197

But more critically, the Deputy President did not there address the argument which was actually advanced, namely that it was not in the public interest to approve a greenfields agreement which in its terms sought to cover the civil construction generally within Queensland and the Northern Territory across a wide array of classifications, in circumstances in which there was only one project that was the subject of evidence, and so far as that project was concerned, the employer said it was only going to utilise a small number of classifications within the agreement.

PN198

That argument was not addressed by the Deputy President, with respect, at all. The failure to address that submission was itself an appellable error, indeed arguably jurisdictional error, if it were necessary to establish that; and sufficient for the appeal on that ground to be upheld. If the Deputy President had considered that argument, he should have come to a conclusion that it was not in the public interest to approve the agreement.

PN199

As it will be clear, the agreement covers civil construction work in Queensland and the Northern Territory generally. It is completely unknown what type of - outside of this one project there is no way of knowing what type of works, what type of employees could potentially be covered by that agreement in the period up to its nominal expiry in 2025.

PN200

It is not in the public interest, in our submission, to approve a greenfields agreement where it is not possible to even speculate as to the type of work or the number or type of employees who might be engaged and covered by its terms. The negotiating parties and the (indistinct) in that circumstance denied any practical capacity to assess the appropriateness of the conditions contained in the agreement.

PN201

The intent seem to be to lay the foundation for the employer to have flexibility to employ any employees within the coverage of the agreement in any type of civil construction project that it chooses to undertake in the coming years. And that, without having to engage in bargaining, or indeed even negotiating a further greenfields agreement with respect to any particular known project. And it's not, with respect, in the public interest for a greenfields agreement to be made in that way.

PN202

That was what I propose to say in the public interest point. I haven't separately addressed the question of permission to appeal. The Members of the Bench will have seen that in our submission permission would be granted in circumstances in which the agreement was approved outside, in our submission, jurisdiction.

PN203

Significant questions are raised as to the proper construction of both the 'genuine new agreement' question in section 172(2)(b), and both the 'majority coverage' and 'public interest' issues or requirements in section 187(5). It's particularly appropriate the Full Bench consider those issues or the 'genuine new agreement' question in light of the recent Full Court judgment in the Busways matter, which has in some respects at least provided further clarity of the proper approach to that question.

PN204

Unless there's anything further, those are all the matters that I wish to raise in supplement to the written submissions which we filed.

PN205

DEPUTY PRESIDENT GOSTENCNIK: Yes, thank you, Mr Gibian.

PN206

MR GIBIAN: I will just ask those instructing me whether there's anything they wanted me to raise. But if there is, I will deal with it in reply if need be. But I'm not physically hooked up at the moment, so I will await a communication in that respect.

PN207

DEPUTY PRESIDENT GOSTENCNIK: Yes, all right. Thank you. Mr Massy, are you going next?

PN208

MR MASSY: I am, your Honour.

PN209

DEPUTY PRESIDENT GOSTENCNIK: Would you like a short break, or you're happy to proceed?

PN210

MR MASSY: Perhaps a short break of maybe no more than 10 minutes would be of assistance.

PN211

DEPUTY PRESIDENT GOSTENCNIK: All right. Unless there's any objection, I propose we adjourn till about quarter past 11 Melbourne time, which will be quarter to 11. I'm sorry, Mr Massy, where are you these days?

PN212

MR MASSY: I'm in Brisbane, but I think we're all on the same time ‑ ‑ ‑

PN213

DEPUTY PRESIDENT GOSTENCNIK: On the same time. Yes, all right. Yes, quarter past. Thank you.

SHORT ADJOURNMENT [11.06 AM]

RESUMED [11.16 AM]

PN214

DEPUTY PRESIDENT GOSTENCNIK: Yes, Mr Massy.

PN215

MR MASSY: Thank you, your Honour. The appellant's contentions can be divided up into three broad topics, being: firstly whether there was a genuine new enterprise; secondly whether the correct approach to section 187(5)(a); and thirdly the question of public interest, and whether there was an error of the requisite type in the Commission's decision that it was satisfied that it was in the public interest to approve the agreement.

PN216

I propose to respond to each of those topics, dealing with them in the order in which my learned friend did. In respect of the first topic, the appellant has three separate but related contentions. The first relates to this question of whether the enterprise agreement described the new activity or business that was being established. I've dealt with this at paragraphs 5 to 12 of my outline, and the Deputy President dealt with it at paragraph 31 of the decision.

PN217

From the 1st respondent's perspective the short point is that a greenfields agreement does not need to identify the new business or activity that the employer was proposing to undertake, the greenfields agreement simply must relate to the business or activity. Section 172(b)(i) does not include any words of limitation which require it to apply exclusively or solely to the new business.

PN218

Given the prospective nature of a new business and greenfields agreement, in my submission it's entirely unexceptional that the legislature has described the level of connection required between the proposed greenfields agreement and the proposed business as one which relates to. my learned friend seeks to read in the words either 'apply' or, as I say, 'exclusively and solely', but those words do not appear in the section.

PN219

At paragraph 6 of the outline I've set out the well-known extract from McHugh J's judgment in O'Grady v North Queensland. I don't propose to read that out now, I will take the Full Bench to that authority, although it's in the bundle that has been provided on behalf of the 1st respondent.

PN220

It's true that in some of the other authorities courts have indicated that the extent of any connection required when the phrase 'relates to' or 'in relation to' is used depends upon the context of the statute. However, when one has regard to the context of section 172(2)(b)(i), and in particular the point that your Honour Gostencnik DP made about a new business being inherently uncertain at times, it's entirely unsurprising that parliament has chosen to use a propositional phrase such as 'relates to' or 'in relation to'.

PN221

The absence of any express requirement that there either be a complete overlap between the new business and the enterprise agreement; or any requirement that the enterprise agreement solely or exclusively apply to the new business is entirely understandable.

PN222

My learned friend sought to make some use of the explanatory memorandum, but largely was driven to read the same phrase, or a derivation of the same phrase, being 'in relation to' in the same way that he was reading 'relates to' in the statute, and that was reading in the words either 'applies' or 'exclusively or solely'. That doesn't assist in this case.

PN223

Putting aside what interesting questions might arise if a greenfields agreement was to touch upon, even incidentally, part of an existing business in some circumstances, but does it arise in these circumstances? Because the scope of this greenfields agreement does not apply to any part of the 2nd respondent's existing business.

PN224

My learned friend said that the greenfields agreement applies to the civil construction work that the 2nd respondent has undertaken, being its construction of stadium work. If the Full Bench can turn to page 24 of the Appeal Book, you will see clause 4.4, which contains the definition of civil construction work. Importantly that definition does not include sporting stadia, and that is particularly important in light of clause 6.1, which provides for the agreement to be read in conjunction with the modern award.

PN225

Below, the AWU contended that because the modern award defined civil construction work as including work on stadia, then this agreement must apply to such work. However, the conscious choice from the parties to adopt a different definition in clause 4.4 from that which appears in the modern award is a strong indicator that the greenfields agreement was not to apply to that type of work.

PN226

Once that's accepted, none of the other work described in clause 4.4 is work of the type which the 2nd respondent presently engages in. It is broader than the proposed new business, that is true. The proposed new business is limited to marine and civil works, which I will come to in a moment; but it does not touch upon an existing part of the 2nd respondent's business.

PN227

So any interesting questions about what might happen where a greenfields agreement which relates a new business also touches upon part of an existing business ‑ ‑ ‑

PN228

DEPUTY PRESIDENT GOSTENCNIK: Mr Massy, clause 4.4 appears to be inclusive rather than exhaustive. And so do you say that stadia is not - building or construction of stadia is not civil construction work as commonly understood?

PN229

MR MASSY: It is not as understood within that clause. The choice to include all of those other matters which would ordinarily fall within the definition, but not sporting stadia; and the choice not to adopt the definition from the award, which would have been available to the parties if they had wanted to, must be conscious, in my submission.

PN230

Once that construction of clause 4.4 is accepted, the issue which the AWU raises about the greenfields agreement applying to part of the existing business falls away, and the Deputy President's approach to a question of whether or not it relates to the new business is entirely orthodox and does not reveal any error.

PN231

Can I come to the second contention which is made in respect of this first topic, and that is whether the evidence established a new business or activity. This matter is dealt with at paragraphs 14 and 15 of my outline. The appellant's contention, in my submission, does not pay sufficient attention to the evidence below.

PN232

In my submission the starting point for this issue is the phrase 'marine and civil construction' as used by Mr Dearling when he was describing the new business or activity. In my submission it should be understood (indistinct) is a phrase where two words are used to describe a single concept. The phrase 'civil and marine construction' is concerned with the concept of civil construction in a marine environment.

PN233

Can I give the Full Bench some references. The first is paragraphs 6 and 7 of Mr Dearling's primary statement at Appeal Book pages 196 and 197; then paragraphs 5, 15, 21 and 22 of his reply statement, and that's at Appeal Book 832 to 834; and during his evidence-in-chief at paragraph 65, Appeal Book 95. When all of those passages are read together it is apparent, in my submission, that he is referring to a singular concept with the use of two words.

PN234

The Kangaroo Point Green Bridge is an example of that type of work. Similarly the evidence as to the wharf demolition and construction project in Cairns and the construction of ferry wharves in Sydney are also examples of that new type of work.

PN235

At paragraph 21 of his reply statement Mr Dearling describes that work as being qualitatively different to the work previously performed by Watpac. And in this regard when one is comparing the character of the work performed, the evidence seems to be reasonably clear that Watpac, prior to expanding in this way, was in the business of constructing buildings and constructing sporting stadia on land.

PN236

It neither goes without saying that the building of infrastructure in a marine environment is qualitatively different. I should say at first instance there was no challenge to Mr Dearling's evidence that the work was qualitatively different in that way. Can I also say that contrary to my learned friend's submissions, it was apparent from the evidence below that this new work will require plant and equipment that the 2nd respondent does not have.

PN237

At Appeal Book page 108, which is in the transcript, the Commission will see at paragraphs 165 to 168 the cross‑examination of Mr Dearling by Mr Borenstein QC where Mr Dearling makes clear that a number of the cranes required for the project Watpac presently does not have. And there's a question as to whether they would be buying those cranes or whether they would be leasing them.

PN238

Then if one comes to exhibit AWU3, which is behind tab 14 at page 831, these are Mr Dearling's notes concerning the Kangaroo Point Green Bridge project. In that he describes that there will be a crawler crane on the river, a 200-tonne on riverbanks, 10 mobile at peak, four to five (indistinct) and crane barge with crawler. It is apparent, in my submission, from his cross‑examination, that that is all new plant which is not presently plant and equipment which the 2nd respondent has.

PN239

My learned friend sought to derive some support from the suggestion that this expansion into marine and civil construction involved merely evolution, and therefore it wasn't a new enterprise or a new business or activity. In my submission that is a distraction because evolution at times is capable of producing a new species. Homo sapiens evolved from homo erectus, but they were a new species of human (indistinct).

PN240

To characterise something as merely being an evolution does not mean that it is not capable of giving rise to a new business or activity. And in this circumstance what the Commission was required to do was to compare the activities or the characteristics of Watpac's business before the expansion, which was the building of - the construction of buildings on land, and stadia on land; and then look at the new type of work, which was the construction of civil infrastructure in a marine environment; whether it was the building of a river bridge, or wharves or ferry terminals or wharves.

PN241

At paragraph 22 of his reply statement Mr Dearling explains that the marine and civil activity can be distinguished from the prior business, which involved the construction of mining infrastructure and roads. Again that evidence was not the subject of any challenge. And of course the old mining and road construction business was sold in 2018. But in any event, even if it hadn't been sold, Mr Dearling was clear that the nature of the activities performed in that part of the business were qualitatively different.

PN242

In my submission the conclusion from the Deputy President at paragraph 28 of the primary decision that the 2nd respondent was proposing to establish a new business or activity was entirely unexceptional. What the applicant effectively asks the Full Bench to do now is to not accept the evidence from Mr Dearling that was not the subject of any challenge below.

PN243

And in my submission where that evidence wasn't challenged or contradicted below, it was entirely capable of being accepted. And in circumstances where the Commission did accept it, it revealed a new activity or business within the meaning of section 172(b)(i).

PN244

The third contention for the appellant in respect of this ground was not addressed in oral submissions, but is in their written submissions, and that is effectively that the business is not new because the business of civil construction was previously part of the 2nd respondent's business. In my submission what the appellant seeks to do here is rely on various parts of the evidence taken in isolation, without reading them as a whole.

PN245

The first matter which the appellant relies upon is that the 2nd respondent previously had a civil business. Can I say the evidence of Mr Dearling made clear that that civil business related to the construction of mine infrastructure and roads. No work of the type envisaged in the marine and civil business was undertaken as part of that old business. And in any event, that business had been sold some three years before this decision had been taken.

PN246

The second matter relied upon by the appellant is the applicant's existing business involving the construction of sporting stadia. Can I say that that doesn't assist the appellant. Firstly the construction of sporting stadia was not treated internally as civil construction within the 2nd respondent's business; but not for idiosyncratic reasons, but for reasons dealing with the character of that work.

PN247

If one looks at paragraph 13 of Mr Dearling's reply statement, he explains, having regard to the character of the sporting stadia, why it is that they were treated as part of the existing construction business and not some separate exercise. But in any event, on Mr Dearling's evidence that work is qualitatively different from the building of civil infrastructure in a marine environment.

PN248

Again he deals with that at some length from paragraph 11 all the way through to paragraphs 21 and 22 where he describes that. And once again in circumstances where there was no attempt to suggest that that evidence shouldn't be accepted because the performance of work in a marine environment was exactly the same as performing work on land. It was entirely unexceptional that the Commission accepted that evidence.

PN249

There was some reliance placed on the construction of a footbridge which was built as part of the North Queensland Stadia. That small footbridge was firstly a land-based bridge, and the evidence revealed that the 2nd respondent did not employ any persons or take any active part in the construction of that bridge; it was the managing contractor. The evidence also explained that it was not an activity of the same type as that being pursued by the 2nd respondent as part of the marine and civil (indistinct).

PN250

The third cohort of projects which the appellant relies upon is the marine projects which have been won as part of the new business. In my submission there was no evidence of any historic or marine civil construction work in the 2nd respondent's business. The only projects of a marine kind are the new projects which have been won since this decision to undertake marine and civil work had been taken.

PN251

The appellant at paragraph 21 refers to the three projects. They are not historical or long-standing ones, they are projects which were all won at the time of the establishment of the new business in 2021. The evidence was also that no work had yet commenced on those projects. The Cairns-based project was still in design; the Sydney ferry terminal was not to start until shortly after the hearing of this matter at first instance; and at the time in which this matter was heard the Kangaroo Point Green Bridge had not yet commenced.

PN252

So in my submission they are not evidence of some historical practice of engaging in this work, but rather they are, in my submission, evidence of the new business or activity which Mr Dearling says the 2nd respondent has set out to undertake. And indeed the Deputy President accepted as much in the decision.

PN253

Once those matters are understood, the third contention falls away. And in my submission there is no difficulty in finding that the construction of a new type of work involving new plant in a new environment is sufficient to give rise to a genuine new enterprise within the meaning of the Act. Unless there's any questions about the question of new enterprise, I might come to appeal ground 3.

PN254

DEPUTY PRESIDENT GOSTENCNIK: Go ahead, Mr Massy.

PN255

MR MASSY: Thank you. Appeal ground 3 concerns the proper approach to section 187(5)(a) and the requirement for majority coverage. As I understand the way in which the appellant puts it on appeal, that requirement is to be determined solely by reference to the classifications contained in the proposed enterprise agreement. This question is dealt with at paragraph 21 to 31 of my outline of submissions. In short, in my submission the Deputy President ‑ ‑ ‑

PN256

DEPUTY PRESIDENT GOSTENCNIK: Mr Massy, I might have misheard Mr Gibian, but I understood him to say that the error was that the Deputy President solely relied upon assertions as to the types of employees who would be employed. I don't think he said the question is to be determined solely by reference to the coverage provision.

PN257

MR MASSY: I'm sorry, your Honour, I'm just ‑ ‑ ‑

PN258

DEPUTY PRESIDENT GOSTENCNIK: I had understood him to be saying that the error that the AWU asserts is that the Deputy President appeared to solely rely upon the assertion as to the people who will be employed under the agreement at the beginning. I don't think he was saying - I mean, he can speak for himself, but I didn't understand him to be saying that evidence about the types of employees who might be covered by the - or who will be covered by the agreement is irrelevant.

PN259

MR MASSY: As I understood paragraph 25 where he says:

PN260

The task is necessarily predictive, and can only sensibly be undertaken by reference to the whole class of employees to whom the agreement might apply in the future.

PN261

DEPUTY PRESIDENT GOSTENCNIK: I understand that, but I don't think - anyway, Mr Gibian can deal with that in reply. But I didn't understand him to be saying that the evidence of those people who might be employed or who will be employed by the employer is irrelevant. So for example in the case of a particular project, an agreement relates only to a particular project.

PN262

The classifications in the agreement might cover a range of classifications, but the employer has made a business decision that it will contract out 90 per cent of the work on the project and only directly engage labour in respect of 10 per cent of the work. And in that case the question of who will be covered by the agreement takes on a different complexion, does it not?

PN263

MR MASSY: That's precisely the 1st respondent's position, your Honour. As we had understood the way in which it was contended for by the appellant, they were making a broader contention that the classifications in the agreement were the way in which you determine whether or not there was to be majority coverage. Much of what we have to say focuses on the difference. Well, I'm sorry, I start that again.

PN264

As I understand the way in which the appellant's argument proceeds, it relies entirely on the similarity between the language in section 187(5)(a) and section 186(3) to say that the reasoning from the Full Court in CFMEU v John Holland should apply. In my submission the problem with that approach is it ignores the difference in the question between section 187(5)(a) and section 186(3).

PN265

Section 186(3) is concerned with whether a group of employees as a cohort is fairly chosen. That is a matter which, notwithstanding that there are some difficulties with, can be determined by regard to the classifications in the agreement; whereas on the other hand section 187(5)(a) concerns whether a majority of employees will be covered can be represented by the parties to the agreement.

PN266

That question cannot be answered solely by reference to the classifications of the agreement for a number of reasons, but firstly because it is a mathematical question. It is not a qualitative question such as: is the group fair; it is one of: is there a majority? On order to know whether there is a majority, you must know how many employees there will be, and that's the point that the Deputy President makes at paragraph 40 and 41 of the primary decision.

PN267

Also the approach that my learned friend contends for doesn't have any regard to circumstances where the enterprise agreement might not do any more than provide for classifications by reference to a job title. Of course the Commission well knows that job titles aren't determinative or necessarily indicative of an organisation's ability to industrially represent an employee. The question is: what's the principal functions of that employee.

PN268

And equally so, questions of the nature that your Honour Gostencnik DP posed (indistinct) in circumstances where an employer has made a decision that it does not propose to employ a large number of people, then in those circumstances it's difficult to see how the (indistinct) classifications could be relevant to the consideration.

PN269

My learned friend Mr White in his written submissions has referred to the oral submissions I made below. I don't propose to repeat those, but can I say I do rely upon what I said below in my final written submissions where we spent some length on the proper construction of section 187(5)(a). Can I also note that below Mr Borenstein conceded that the approach urged by the CFMEU was the correct one.

PN270

If the Commission could take up the Appeal Book and go to page 154, you will find the transcript where Mr Borenstein is making his final address. Page 154, paragraph 583, you will see Mr Borenstein introduces the topic of section 187(5)(a). If you come over the page to 156 you will see firstly at 591 there's a reference to the decision in Temmco. And then if you come to the section - paragraph, I'm sorry, 595 - you hear him characterise the submission I made, and then says expressly that they disagree with - they agree with that proposition.

PN271

The complaint being made by the AWU below was that the evidence wasn't sufficiently certain. They accepted that the evidence was a matter which could dispose of this question. And can I just say that contrary to what my learned friend said today, the evidence of Mr Dearling was not confined solely to the Kangaroo Point Green Bridge project.

PN272

At paragraph 15 of his first statement he makes a statement as to who it is that Watpac has decided to employ; that is at large, that is not confined. Then in case there was any confusion, at paragraph 2 of his reply statement he makes clear that they are not employing any persons beyond that category. And then importantly, at paragraph 50 of the decision the department makes a finding - sorry, I should say in the sixth line from the bottom, starts with the words 'Mr Dearling', that sentence summarises the evidence.

PN273

Then the Deputy President accepts that evidence and explains why. That is a finding as to who will be employed going forward. The AWU doesn't seek to challenge that finding. It doesn't seek to say that it should be set aside. In circumstances where that finding is made, and in circumstances where there is no dispute that the CFMEU can cover a majority of those employees, there is no error in the approach.

PN274

The only way the appellant could establish error is to assert that that evidence is irrelevant to the question of section 187(5)(a) and that that question has to be determined solely by reference to the classifications in the agreement. In my submission for the reasons that we've identified in writing and which were accepted below, section 187(5)(a) is not to be answered solely by reference to the classifications in the agreement, but rather by reference to who will be employed on that project.

PN275

And in circumstances such as this where a clear and unambiguous finding has been made which is not the subject of any challenge on appeal, there is no error in the approach of the Deputy President. Unless the Full Bench has any questions, that's all I propose to say about that topic, other than what has been said in writing on the appeal and below.

PN276

The final ground concerns the question of whether there's any error in the finding that it was in the public interest to approve the agreement. This is dealt with at paragraphs 33 to 38 of the outline. The first matter I wanted to emphasise in respect of this topic is that the appellant does not engage with the fact that section 187(5)(b) requires the Commission to be satisfied that it's in the public interest to approve the agreement.

PN277

There is no attempt to demonstrate error in the satisfaction reached, or identify any basis on which the satisfaction reached by the Deputy President could be set aside, given the reference in the written submissions to One Key, which summarises the authorities which the Commission will be well familiar with about satisfaction being the condition precedent to the exercise of the power, and does not require that the matter be established as a matter of objective fact. And there is no attempt, in my submission, from the appellant to demonstrate error of the requisite kind.

PN278

The best it says is that the Deputy President didn't consider a submission that they made. However, it doesn't engage with the fact that in reaching the state of satisfaction the Commission was only to have regard to the matters which the statute directed his attention. Unless they can bring themselves within the category in Peko Wallsend of being a matter which the statute mandated that the Commission consider, a failure to consider it does not mean that he has not directed his mind to the question.

PN279

They have to show that his understanding of the test of the public interest was somehow wrong or affected by legal error. The mere fact that he didn't pay any attention to one of their contentions about why it wasn't in the public interest does not rise high enough to impeach the satisfaction.

PN280

But putting that significant issue to one side, the appellant's submissions in this regard don't grapple with the findings made by the Deputy President I just discussed in paragraph 50 concerning who will be employed. In circumstances where there is a finding of fact that only crane crew were to be employed, and where that finding of fact is not subject to any challenge, the complaint that the agreement extends beyond those persons to classifications does not matter.

PN281

The mere fact that some of the classifications in the agreement may be inutile does not suggest that it was not in the public interest to approve the agreement. Agreements regularly contain clauses which are ultimately not capable of being applied in the circumstances, or the subject of application. That does not in itself mean that the agreement is not in the public interest.

PN282

Unless the Full Bench has any questions about that topic, I do not propose to say anything more than that, other than to rely on the written submissions, both on appeal and below, as to the proper construction of 187(5)(a).

PN283

DEPUTY PRESIDENT GOSTENCNIK: Thank you, Mr Massy. Mr White.

PN284

MR WHITE: Thank you, your Honour. Can I say first that we agree generally with the submissions made on behalf of the 1st respondent; secondly that we rely on our written outline; thirdly, I will try not to be too repetitive from the written outline, but there are some matters to which I wish to go to by way of emphasis.

PN285

My first general proposition or question to be addressed in an application for the approval of a greenfields agreement is whether there's evidence that there is a genuine new enterprise. 'Enterprise', as the Commission knows, is defined in section 12 of the Act as, 'A business, activity, project or undertaking.' Just stopping there. Certainly that definition is broader than whether or not a business, as such, as transmitted - as what is considered in PP Consultants, but we will come to that a little later.

PN286

As to what is a genuine new enterprise, the Full Court in Busways has now elucidated that as a proposition. In paragraph 3 of that decision, part of the decision of Bromberg J, with whom Wheelahan J agreed, it is said that 'new' is an enterprise which is not established, that is, it's not in existence. 'New' must be not only new - I'm going now to paragraph 4 - to the proponent of the application. Interestingly, the last sentence of paragraph 4:

PN287

Thus a project may be a 'new' enterprise despite the fact that the same employer also operates other projects with the same or similar activities.

PN288

But, summarised, 'genuine' means, it is said, or operates as the qualification for the word 'new'. I refer to paragraph 5 of that decision. And so the Full Court says that, together, a genuinely new enterprise is an enterprise which is new to a substantive degree.

PN289

We then look at how it is that the AWU attacks the findings of the Deputy President. As to whether or not it's a genuine new enterprise, the AWU mounts three arguments, the first of which is that the enterprise is not as the evidence suggested and is not as the evidence was as accepted by the Deputy President, but somehow that the enterprise is to be defined by the agreement. So, you will see in paragraph 14, for example, of the applicant's submissions, a criticism is made that the Deputy President focused attention on the enterprise and what that claimed to be pursuing, rather than the enterprise to which the agreement relates.

PN290

You will see in paragraph 15 that criticism is made of the Deputy President identifying the new enterprise being marine and civil construction work, distinguishable from its existing operations. The criticism of that finding is that the new enterprise does not align with the coverage of the agreement. Once again, it says the agreement applies in terms of its application clause and, in paragraph 16, the applicant makes clear its contention and makes this submission:

PN291

The enterprise to which the agreement relates is any civil construction works undertaken by Watpac.

PN292

There is no suggestion that civil construction work is not under Watpac. I don't read the next sentence, but it's there. Then it says:

PN293

Even if it were accepted that the company proposed to embark on a new enterprise involving a particular type of civil construction, the agreement does not relate to that enterprise. The agreement applies to any civil construction work.

PN294

Consequently, in paragraph 17, the applicant concludes:

PN295

When it is understood that the enterprise to which the agreement will apply involves any civil construction, the basis upon which the Deputy President accepted the enterprise was novel falls away.

PN296

Underpinning all of that is the proposition that 'genuinely new enterprise' has to be, and in fact is, defined by the coverage clause of the agreement. We know that's incorrect. To establish whether or not there's a genuine new enterprise requires an exercise of objective reasoning based on the evidence, and the evidence in this case is, as accepted by the Deputy President, clear as to what the genuine new enterprise is. The genuine new enterprise is in the compound expression 'marine and civil engineering or construction' and it is not to be conflated with what the agreement might cover in a theoretical sense.

PN297

The cases my learned friend referred to this morning in relation to this issue all go to the question of whether or not there is a genuine new enterprise in the circumstances where what was before the court, or the Commission in those cases, where there was dispute in those cases as to what it was that the applicant employer was doing.

PN298

There is no dispute in this case. The applicant hasn't challenged the findings as to what the employer was doing (indistinct) under this ground itself tries to define what the new enterprise is, and we say that's an impermissible inversion of the obligation of the test to determine whether or not there's a new enterprise.

PN299

The second basis that the applicant challenges the learned Deputy President's decision is that, in any event, the evidence didn't establish that there was a genuine new enterprise. The part of the decision where the Deputy President deals with this - you have been taken to this morning already - paragraphs 28 and 29, appeal book 9, and there are elements of the findings there. The elements include marine and civil construction; a second element is that the company, Watpac, is seeking to grow its service offerings in this field. The next element is that Watpac is doing different work from in the past and it's doing different from in the past in that it's different in character from civil projects in the past, about which there can be no dispute, and that it's seeking to do more complex and sophisticated work and it's concerned with complex civil and marine projects. They are the findings of fact that the Deputy President relied on.

PN300

The question is this: first of all, was there evidence to support those findings? We say, first, it's implicit in those findings that there's a distinction between civil and marine, on the one hand, and its existing construction business, and that it operated a civil construction business can be seen quite clearly.

PN301

So, the evidence for that distinction, can we start with the first statement of Mr Dearling, paragraph 3, appeal book 196. It says the background - and some of these, a large number of these, my learned friend Mr Gibian has already taken you to. Paragraph 3, you will see Mr Dearling says that Watpac has grown and developed and is successfully delivering large scale building construction, on the one hand, and mining contracts, on the other, across Australia. He says it has completed projects in the residential, health, science, education and stadium construction sectors. He defines that as 'construction and property development'. Those words weren't referred to by my learned friend this morning.

PN302

Paragraph 6 of Mr Dearling's statement talks about the BESIX group and matters for which they are renowned. At paragraph 7, Mr Dearling says that:

PN303

Upon the acquisition of Watpac by BESIX, there was an intention to broaden the previous operations beyond construction and property development -

PN304

that is as defined earlier above by Mr Dearling -

PN305

and to expand the service offering into marine and civil engineering.

PN306

It wants to leverage of BESIX group's international capabilities. It goes on:

PN307

Leveraging the scope of international capabilities would allow the company to expand into areas beyond construction and property development and to compete in a larger range of projects, including water infrastructure and bridges, that focus on expanding Watpac's local portfolio to specialist marine and civil construction -

PN308

as featured in a few corporate documents and media releases in 2018 and 2019. I will come back to this.

PN309

I interpolate there that none of this was cross-examined on and put into contest. Now, the references to CD2 - there were three documents in CD2 and I will just take the Bench to parts of those documents now. The first of those documents is a 2018 activity report and that commences, I think relevantly, at appeal book 201. I'm sorry, 201 is the letter from the CEO - you have been taken to that this morning - where he says that it's all very exciting because on the takeover or the purchase, they can have an expanded capability to tackle complex projects. You will see that at AB 201. Clearly, an expanded capacity, consistent with what Mr Dearling said unchallenged, beyond building and construction work.

PN310

The second part of CD2 is the 2018 activity report. That commences at page 206 of the appeal book. 210, you will see, notes that BESIX in 2018 - at the bottom of the page:

PN311

gains a foothold in Australia with a successful takeover bid for all outstanding shares of the Australian company Watpac.

PN312

At appeal book 225, it notes that it's strengthening its presence in Australia by buying Watpac. At the bottom of 225:

PN313

The best of two worlds. By becoming its sole shareholder, BESIX gives Watpac full access to the group's skills and expertise in construction and in other key BESIX sectors such as marine works. This strategy increases Watpac's potential, allowing it to expand its service offering and compete for larger and more complex projects. At the same time, it provides BESIX with geographical diversification and enables the group to attract new talent to its ranks.

PN314

You will see that those are fairly similar to the words which were found by the Deputy President.

PN315

The second part of CD2, I think, has the 2019 activity report. I think that, relevantly, starts at appeal book 378. I won't take the Commission to much in that document, but, at 479, at the bottom of the page, you will see in 2019:

PN316

Watpac stayed focused on implementing a strategy and further integration with BESIX group to establishing a compelling new offering in the Australian market. While there's still much work to do, prospective clients are starting to respond favourably to the enhanced offering, which leverages both Watpac's and BESIX's in-house capacity and expertise in design, engineering and methods -

PN317

et cetera.

PN318

Lastly, perhaps, can I take the Commission to the third part of CD2, appeal book 526. This is a financial review, an announcement after the purchase of all outstanding Watpac shares by BESIX. At 527:

PN319

Mr Monro will continue to lead the Watpac management team -

PN320

which he said would be enhanced with fresh BESIX appointments to help Watpac expand into new areas, the first being marine infrastructure, one of BESIX's areas of expertise.

PN321

Next can I take you to Mr Dearling's supplementary statement. It commences at appeal book 832. No, perhaps Mr Dearling's first statement, in case I didn't deal with that to completion. Mr Dearling's first statement commences at appeal book 196 and, in there, can I refer the Commission, but don't read, paragraphs 6 and 7; 8, where it divests the old civil and mining division it used to have, and paragraph 9, where new plant and move beyond construction and property development.

PN322

Mr Dearling's second statement, or supplementary statement, commences at appeal book 832. Under the heading 'Genuine New Enterprise', paragraph 10 and following, Mr Dearling says what Watpac's position is.

PN323

Bear in mind that there was no formal objection to any of this. There was some observation, but not pressed by way of objection, to paragraphs 10 to 14 on the basis that they constituted opinion evidence, but that objection wasn't pursued. You will see that is raised by counsel then appearing at appeal book 95, PN 31. I don't take the Commission to that now, but, other than that, there was no objection to any of the material in Mr Dearling's evidence. There was, in large part if not entirely, no cross-examination about the matters of distinction between the current work and focus of Watpac and what is to be done and the new focus after the purchase by BESIX.

PN324

You will see in Mr Dearling's supplementary statement how he distinguishes the bridge, which was part of a stadium for which they were managing contractor and not a designer and on which they employed no people. He draws the distinction between the construction work of stadia, which were all done under the construction agreement; he talks about the traditional civil work that it did prior to the purchase of all the shares in Watpac by BESIX, that he - not he - that Watpac sold the business, and in paragraphs 21 and 22, he gives the evidence that:

PN325

The work on the projects referred to above is qualitatively different to the new enterprise Watpac is embarking on by undertaking the KPGB project -

PN326

he referred to earlier. Later in that paragraph:

PN327

The key driver to Watpac's push into civil and marine infrastructure was the acquisition by BESIX. BESIX provided Watpac with the capability to venture into this new civil and marine space.

PN328

And paragraph 22, I rely on that, but don't read it, because the Commission is able to read it better than I can say it.

PN329

Bear in mind that, fundamentally, this was the evidence that plainly was relied on by the Deputy President in making the findings that he did in paragraphs 28 and 29 of his decision and, fundamentally, if not entirely, this evidence was not challenged.

PN330

DEPUTY PRESIDENT GOSTENCNIK: Mr White, can I ask you this. When BESIX acquire an interest or acquire the shares of Watpac in 2018 and thereafter, it is said that, as a consequence, Watpac - or its capacity has increased to enable it to pursue these larger projects, or, to use your description, marine and civil construction projects. So that's in 2018/2019. When the agreement is made in 2021, can it still be said that the business that's being identified, the genuine new enterprise, is one that the employer is establishing or proposing to establish?

PN331

MR WHITE: Yes.

PN332

DEPUTY PRESIDENT GOSTENCNIK: Hasn't it, by that stage, already established it?

PN333

MR WHITE: Hasn't got any work, pretty well. It had work in Cairns, but that was stadium work. There were a couple of other contracts, but work hadn't commenced in any of those. The Cairns wharf, the Defence Department, was still in planning phrase. There was a Sydney one where there hadn't been work commenced. I think there'd been a smoking ceremony, at most, and there had been no persons employed. So, seeking work is one thing; tendering for work is another, but then being successful in a tender and then actually doing it and performing the work has to be part of establishing a business or moving a business forward.

PN334

It's been said, and I think it was said in Busways in the Full Bench in the Commission, that the mere tendering for work doesn't a business make or an enterprise make.

PN335

DEPUTY PRESIDENT GOSTENCNIK: Well, that was an obiter comment or an observation that was made by the Full Bench absent any argument. I think the Full Bench made that clear. But, I understand that point that there's got to be some point where it can't be said that the enterprise is being established, that is, there's just an idea, but here you have an acquisition and you have the gaining of this new expertise from which Watpac got leverage. If I'm to establish a construction company tomorrow but I win no work, have I not established a construction company?

PN336

MR WHITE: It seems like almost a (indistinct) concept of time here, if the Commission please. I say that because of this: as soon as Watpac purchased the shares - sorry, as soon as BESIX purchased all of Watpac's shares, on that analysis, a new business has been established, and that can't be the case.

PN337

DEPUTY PRESIDENT GOSTENCNIK: No, I'm not suggesting that the share acquisition has anything to do with it; it's what happens afterwards, and the documents you take us to seem to suggest that there are new personnel engaged, Watpac now has a plan to pursue these further opportunities because of its enhanced capacity from which it can leverage expertise from BESIX. Isn't it, at that stage, establishing the new activity?

PN338

MR WHITE: Well - - -

PN339

DEPUTY PRESIDENT GOSTENCNIK: Or has established? It just hasn't been very successful in obtaining work for a couple of years.

PN340

MR WHITE: Well, it takes some time, as I understand, to establish a business and it takes some time, the process of establishing a business, and in this case it took two years, pretty well, 2019 or September 2020, for the brand, so-called, as criticised by Mr Gibian today, to go live, and - - -

PN341

DEPUTY PRESIDENT GOSTENCNIK: When it tenders for work, it represents to the client that it has the capacity to undertake the work, if successful, so presumably, at that stage, its business is established.

PN342

MR WHITE: Yes. Is a business established because there's a desire to - - -

PN343

DEPUTY PRESIDENT GOSTENCNIK: Well, this is not just a desire. In a tender, one doesn't say, 'I want to do this work.' One sets out its capabilities for actually doing the work.

PN344

MR WHITE: Yes.

PN345

DEPUTY PRESIDENT GOSTENCNIK: And so, at that stage, why is it not that the business or the genuine new enterprise, that is, marine and civil construction work, is already established?

PN346

MR WHITE: Well, that would require the concept of an established business as being one with no work, or no concept of work, or no prospect of work. It's a question of where does one draw the line? In that circumstance, your Honour, you would be able to say that a business had been established on the purchase of Watpac's shares by BESIX. It then had international expertise - - -

PN347

DEPUTY PRESIDENT GOSTENCNIK: Just to be clear, Mr White, I am not suggesting that the acquisition of shares has anything to say about the matter, but, at some point in time, Watpac has started to represent itself as having capacity to engage in marine and civil construction work and it tenders for the work of that character. The fact that it doesn't win the work doesn't mean it hasn't the capacity to do the work, it's just that somebody else was preferred. So, why isn't it the case that, at that stage, when it tenders for the work, it says it has the capacity to undertake the work, that its business has been established?

PN348

MR WHITE: Well, I suppose the tender - - -

PN349

DEPUTY PRESIDENT GOSTENCNIK: It's no longer establishing or proposing to establish, it has in fact established it. It says to the client, 'I can do this work.'

PN350

MR WHITE: Well, it says to the client, 'I will do this work if I'm successful in the tender.'

PN351

DEPUTY PRESIDENT GOSTENCNIK: Sure.

PN352

MR WHITE: What other criteria might apply? If a tender - so, a business that has no work, one would think, is a fairly inchoate concept.

PN353

DEPUTY PRESIDENT GOSTENCNIK: Well, if I open a shop and have no customers, I'm still running a business, am I not, it's just not very successful? I don't have - I'm not running a business when my first customer walks through the door, I'm running my business when I open my door.

PN354

MR WHITE: Well, whether that analogy is completely apt in this circumstance. It's probably not so correct when you're offering something that you've actually got to sell. It's not like the circumstance where one is representing to potential customers and clients that, if they were successful in obtaining the tender, they would do the work. You've already got a can of baked beans that you've got a price on in the shop. It's slightly different from the circumstance of representing that, if you're successful in a tender, you will do the work. They haven't got a spare Kangaroo Point bridge in the back office of Watpac. What they're saying is there will be the Kangaroo Point bridge if they're successful in tendering.

PN355

What is the criteria by which established or establishing - I mean - - -

PN356

DEPUTY PRESIDENT GOSTENCNIK: But my proposition is in relation to the business as you describe it. The business, as you describe it, is not - or the project or the undertaking is not to build this bridge; the business, as you describe it is marine and civil construction. That's the business that embraces or includes the bridge, but it's not exclusively the bridge.

PN357

MR WHITE: Yes. It hasn't done any actual marine and civil construction. It's trying to do that. It's been successful in a couple of tenders. It hasn't employed anyone to do that and, no doubt, at some stage, they will employ people and then engage other specialist subcontractors and the like to perform the work. Necessarily, your Honour, in my submission, until and unless there's tenders which are successful, there's a necessary element of a business being inchoate, and once a tender is granted, then they are establishing the business to do that - establishing in the present tense - and they are seeking to perform the work for which they have been successful.

PN358

DEPUTY PRESIDENT GOSTENCNIK: That might be correct, Mr White, in relation to a project-specific undertaking, but this business is not a project-specific undertaking, so that whilst it might be accepted that if I'm tendering for the bridge, in the tender process, I'm still doing no more than establishing or proposing to establish the business of building the bridge, but here I'm holding myself out to be establishing a business which involves marine and civil construction.

PN359

MR WHITE: Well, it's - - -

PN360

DEPUTY PRESIDENT GOSTENCNIK: No specific project. That's my business, or that's the undertaking, or that's the new activity.

PN361

MR WHITE: It's the business that you're hoping to establish, which you will only establish in any concrete or choate sense if you are successful in tenders and then actually get around to doing something, establishing, bear in mind, always being in the present tense. I'm just wondering how this arises in any of the applicant's grounds of appeal.

PN362

DEPUTY PRESIDENT GOSTENCNIK: I'm not suggesting that it does. I'm just reading 172(2)(b)(i) as a whole.

PN363

MR WHITE: Yes.

PN364

DEPUTY PRESIDENT GOSTENCNIK: Everyone is focused on the genuine new enterprise, but it's not just the genuine new enterprise, it's the genuine new enterprise that the employer establishes or proposes to establish. Those words can't be ignored.

PN365

MR WHITE: No, they can't be ignored, and taking steps to win tenders and taking steps to execute those tenders fall within, in my submission, the current tense of the verb establishing.

PN366

DEPUTY PRESIDENT GOSTENCNIK: I understand that. Yes, thank you, Mr White.

PN367

MR WHITE: Yes. My submissions have really been addressed to the attack on the Deputy President's findings in 28 and 29 of his decision, and I have taken the Commission to the evidence which supported those findings, which evidence was not the subject of attack or cross-examination.

PN368

In the same vein, the finding of the Deputy President that the new enterprise was similar work in the marine context is justified by the evidence before him. I think I have taken you to paragraphs 6 and 7 of Mr Dearling's first statement; I think I've taken you to paragraphs 5, 15, 21 and 22 of his supplementary statement, and if I can just have a look at this - bear with me, if the Commission please. I might take you to that.

PN369

So, it's an interesting connection between establishing and new and genuine. They must be connected in some way. Where the new and genuine business is to operate in a particular field, then operating in that field tends to support the proposition that the endeavours to operate in that field are part of the current attempt to enter that field.

PN370

The third basis that the AWU applicant attacks the finding that there was a genuine new business is that there was an absence of novelty to Watpac's business - paragraph 21 of the applicant's submissions about that. We note that Mr Gibian dealt with the alleged errors 2 and 3 together. We refer to our submissions in relation to that and, once again, we note the lack of attack on Mr Dearling's evidence in relation to that matter.

PN371

Those are the submissions in relation to the three alleged errors raised by the applicant in its grounds of appeal in relation to whether or not there was a genuinely new enterprise.

PN372

Might I say in relation to Your Honour Deputy President Gostencnik's questions, these were all not matters not only raised in the appeal but also not matters raised at first instance, and might I say that the case that my client met at first instance was informed in part, or in large part, by what was put against it.

PN373

DEPUTY PRESIDENT GOSTENCNIK: I understand that, Mr White. I wasn't suggesting otherwise. Mr White, could I just ask you this: the Kangaroo Point Green Bridge project is a bridge over a river.

PN374

MR WHITE: Yes.

PN375

DEPUTY PRESIDENT GOSTENCNIK: How is that a marine project?

PN376

MR WHITE: Well, the Deputy President referred to 'marine' in his decision as some broad understood concept of water, including fluvial, and I don't think there's any attack on what he expressed as commonly understood by marine in the current application before the Commission.

PN377

DEPUTY PRESIDENT GOSTENCNIK: Well, the commonly-understood definition of 'marine' is having some connection with the sea. No doubt the river flows into the sea at some stage.

PN378

MR WHITE: No doubt it does. I'm not familiar enough with Brisbane to know how far away it is from the sea, but, once again, we're here to meet the attacks. The attack on how the Deputy President characterised 'marine' has never been made by the applicant and we would endorse what the Deputy President says about the concepts of marine as extending to fluvial or other water-related matters.

PN379

DEPUTY PRESIDENT GOSTENCNIK: Yes, thank you.

PN380

MR WHITE: Appeal ground 3 is the section 187(5)(a) coverage argument. We adopt the first respondent's submissions. We adopt the submissions made in appeal; we adopt the submissions which were made at first instance, most conveniently summarised in document 13 in the appeal book, titled 'Applicant's Final Submissions', commencing page 820 of the appeal book.

PN381

In particular at 823 and 827 of the appeal book, we adopt the first respondent's appeal submissions, paragraphs 21 to 30, and we note that the assertion by my learned friend, or contention by my learned friend, enlivens two concepts. The first concept is capable, persons who are capable of being covered by the agreement, and the second concept, which is the actual words used in the section of those who 'will be' covered by the agreement. Once again, this is another example of there being no attack on the finding, the factual finding, which underpins the Deputy President's decision that those who in fact will be covered by the agreement are crane drivers, possibly one labourer, and there's no debate, nor can there be, but that the CFMMEU, at the least, is able to cover the crane drivers.

PN382

I'm not actually sure that the AWU ever put in a contention that the CFMMEU is unable to cover the majority. At the most, as I understand it, there was some contention made that there was an argument about its eligibility to cover the labourers who would otherwise be working in or around the site or related to crane work, but we don't have to go there. We're not here arguing in the broader concept; we're here arguing as to those workers who will be covered and the eligibility of those workers to join the CFMMEU and consequently the CFMMEU's eligibility to cover them in their industrial interests.

PN383

The question as to when the assessment is to be made as to who will be covered perhaps can be seen by analogy with the UGL - I haven't put that on the list of authorities - but UGL Resources (Contracting) [2014] FWC 9125, which was a case about the approval of an enterprise agreement but dealt with the question of time of mobilisation and, by analogy in this circumstance, the Commission is able to rely on Mr Dearling's evidence as to who its employees will be, which evidence, once again, was not challenged.

PN384

The fourth ground the applicant relies on is that the Deputy President failed to consider a matter. It says, or contends, that there is an error on the Deputy President's part because he failed to consider, in considering public interest, whether or not it was in the public interest to certify or approve an agreement which extended beyond the proposed employment, or the proposed employees of the company.

PN385

We have referred to Peko-Wallsend. It's case 9 in our list of authorities. It refers, in part, to Sean Investments v MacKellar. These are uncomplicated and well-known propositions that, unless there is an express provision in the Act requiring a decision-maker to take particular matters into account, or whether there is a direct implication in the Act requiring such considerations to be taken into account, there is no obligation on decision-makers to take those matters which might be put by a particular party into account.

PN386

Not only is there no obligation to take matters which there is no requirement - sorry, I withdraw that. Not only is that the case, but, even if there are matters which are to be taken into account, it is, of course, at the behest of the decision-maker as to the respective weight to be given to any of those matters.

PN387

In our submission, applying Peko-Wallsend and Sean Investments in relation to decisions in the Commission, the Full Court of the Federal Court in Australasian Meat Industry Employees Union v Fair Work Australia - once again not on the list, but I will just give you this reference - [2012] FCAFC 85, all suggests that there is - nothing complicated about this - there is no basis to a complaint that the Deputy President failed to take into account anything he was obliged to take into account, and hence no error, no appellable error.

PN388

It is certainly the proposition that, in the absence of there being any express provision to take a particular matter into account, as the applicant will have it that it is somehow centrally relevant, that is certainly not the case.

PN389

Those are the submissions of the second respondent.

PN390

DEPUTY PRESIDENT GOSTENCNIK: Yes, thank you, Mr White.

PN391

MR MASSY: Your Honour, is it possible for me to be heard before Mr Gibian in respect of the matter that fell between you and Mr White concerning section 172(2)(b)(i) and proposing or establishing?

PN392

DEPUTY PRESIDENT GOSTENCNIK: Yes, certainly, and the reason I didn't ask you the question I think should be obvious, that is, your client is not the employer.

PN393

MR MASSY: Of course.

PN394

DEPUTY PRESIDENT GOSTENCNIK: But I am happy to hear from you.

PN395

MR MASSY: The only point I wish to draw the Full Bench's attention to is that when the Full Bench comes to construe the verb 'establishing' and the potential temporal limits on it, one shouldn't ignore paragraph (ii), which forms part of the sentence, which indicates that once persons are employed, an agreement can't be made. That rather suggests that you can be establishing all the way up until the time at which you employ the persons who are going to do the work and, in these circumstances, given that people who are going to be covered by the agreement and who are going to do the normal work haven't yet been employed, the employer is still proposing, or still establishing, I should say, the business.

PN396

DEPUTY PRESIDENT GOSTENCNIK: Yes, I understand.

PN397

MR MASSY: That's all I wish to say, thank you.

PN398

DEPUTY PRESIDENT GOSTENCNIK: Thank you, Mr Massy. Mr Gibian, anything in reply?

PN399

MR GIBIAN: Yes, thank you, your Honour, just a few matters. I will endeavour to deal with them in the order in which the matters were addressed, although I will try and combine response on a topic to what Mr Massy and Mr White said respectively.

PN400

As to the genuine new enterprise point, with respect, both Mr Massy and Mr White appeared to somewhat misunderstand the submission we advance on the first contention. They sought to characterise the submission as being that a greenfields agreement must, in its terms, identify the new enterprise/business, et cetera. That is not the way in which we put it, being in some sort of formulistic sense.

PN401

The submission we make is that section 172(2)(b)(i) requires the Commission to ask the question as to whether the agreement relates to a genuine new enterprise. One can only answer that question by asking, 'What is the enterprise to which the agreement relates?', which, consistent with the authority and purpose, as I sought to explain, one must understand by reference to the enterprise to which the agreement will apply. As I say, to put it another way, the agreement doesn't relate to a genuine new enterprise if it, if approved, will apply to a range of activities which are not new at all.

PN402

Mr Massy, in particular, asserted that that submission sought to read words 'apply' or 'coverage' into section 172(2)(b)(i). In my submission, we are not attempting to read anything in, we're simply endeavouring to read and understand in context what is meant by the agreement relates to a genuine new enterprise. Indeed, my learned friend's submissions must read that as referable to coverage.

PN403

I don't think they go so far as to say that an enterprise agreement could be made which didn't cover the asserted new enterprise. They just say it can also cover anything else, anything else at all, however broad its coverage provision is, that so long as a little part of it is something that is capable of being characterised as a new enterprise, it can be made as a greenfields agreement. That, with respect, is not how one would read that provision and it would make a mockery of the purpose and intent of the greenfield agreement provision.

PN404

In order to avoid the conclusion that the agreement would apply to existing activities of Watpac, Mr Massy sought to read the coverage provision, clause 4.4 of the agreement, in a manner which defies any sensible understanding. As I understood the submission, it was that clause 4.4, which appears on page 24, one ought read the dot points in clause 4.4 as implicitly excluding stadium construction in circumstances where the definition in its terms says that civil construction works 'includes, but is not restricted to', those matters. That would entirely (indistinct) out the words 'but is not restricted to', which the parties chose to include in the agreement, and ignores the fact that stadium construction is generally understood and specifically provided for in the construction award at clause 4.3(b)(i) to include sports and entertainment complexes. Plainly, the agreement, on its terms, would apply to existing activities that Watpac undertakes.

PN405

Going on to the newness of the (audio malfunction) enterprise, both Mr Massy and Mr White sought to rely upon the evidence of Mr Dearling and asserted lack of challenge to that evidence. In our submission, and as I have tried to elaborate upon earlier, Mr Dearling's evidence is entirely consistent with what has happened consequent upon, or what he asserts has happened consequent upon, the takeover by BESIX, is an evolution, that is, a development of the existing business, rather than any genuinely new enterprise.

PN406

That, I might say, was rather underlined by the portions of the documents to which Mr White drew attention, particularly at 225 - sorry, I'm finding the reference - within CD2 at 225 of the appeal book, where what's described as the activity report described - sorry, I'm taking a moment to find it - described the takeover as 'giving rise to the best of two worlds', namely, that BESIX gave Watpac full access to the group's skills and expertise in construction and in other key BESIX sectors, such as marine works:

PN407

This strategy increases Watpac's potential, allowing it to expand its service offering and compete for larger and more complex projects.

PN408

It is not suggesting that a new enterprise was being undertaken, a new business was being undertaken, rather, it was a development of Watpac's business. It was seeking to allow Watpac, the existing enterprise, to broaden its offerings, as was the phrase which was generally used.

PN409

That falls squarely into the distinction that Bromberg J drew in Busways, particularly at paragraph 12, between something that is distinctly new and an evolution or development of an existing enterprise.

PN410

To the extent that Mr Massy sought to suggest that the concept of evolution had no utility in this context, his submission runs squarely against what the Full Court said in Busways. Bromberg J said, as agreed with by Wheelahan J, that a distinction must be drawn:

PN411

It may not, in all cases, be entirely strict, but a distinction must be drawn between an enterprise which is genuinely new and a development or evolution of an existing enterprise.

PN412

As to the majority coverage point, the presiding member asked a question of Mr Massy as to the characterisation of our submission. We agree with how your Honour put it. We don't suggest that the evidence as to what would be done by an employer is entirely irrelevant to the 187(5)(a) majority coverage consideration, but we do say here, in the context of this agreement, the Deputy President erred in limiting his consideration to evidence as to the asserted intention of the employer as to the types of employees it would immediately employ in circumstances where the agreement was not limited to a particular project but covered civil construction sector generally speaking (audio malfunction) a large number of classifications.

PN413

In that respect, to the extent that there was reliance placed upon Mr Dearling's evidence and findings as to the intentions of the companies, we don't read that evidence as going beyond the particular bridge project. Indeed, it would be very difficult to understand how that evidence could be given in the absence of any knowledge of the type of project which would conceivably be undertaken in the future.

PN414

In particular - I will just give the references - at appeal book 198, one has to read paragraphs 14 and 15 of Mr Dearling's first statement together, that is, he is talking about the future so far as the KPGB project is concerned, and that is express in his supplementary statement, where he addresses the same question at paragraph 9 of the supplementary statement at page 832.

PN415

We read the same into the conclusions of the Deputy President at paragraphs 48 to 50 and, as I say, I don't understand how one could make an assertion as to the types of employees to be engaged in unknown projects at any time, at least up to 2025.

PN416

The final point I wish to respond to in that respect is - sorry, there were two. As to general approach, Mr Massy suggested that the focus must be the employees who are immediately to be employed because section 187(5)(a) requires a mathematical exercise by referring to the majority of employees who will be covered and that, in his words, one must know the number of employees.

PN417

With respect, that submission ignores the context in which the assessment is to be made. One would never know the precise number of employees and, even with respect to the KPGB project, the evidence of Mr Dearling was they were still deciding what employees; there may be some labourers, but they were not sure and had not made a decision. It is always going to be an imprecise, impressionistic assessment that the Commission has to make based upon what evidence it has before it and the potential coverage of the agreement in accordance with its terms.

PN418

The final point in that respect is Mr Massy asserted there to be a concession made by Mr Borenstein below that the approach of the CFMMEU was correct. We don't read it in that way at all. All that was said in the first sentence of what appears at PN 596 - sorry, I think it was appeal book 156 - was that it's not just the classifications and not that, as urged by Mr Massy and Mr White, one would disregard the coverage of the agreement outside the evidence of the employer as to the precise employees it says it immediately proposes to engage.

PN419

Finally, with respect to the public interest issue, both Mr Massy and Mr White contended there was no basis demonstrated for error in the Deputy President's state of satisfaction. The error we have identified is that the Deputy President failed to address a submission, indeed the central submission that was advanced by the AWU on that question.

PN420

Neither Mr Massy nor Mr White suggested that submission had been addressed by the Deputy President. Mr White says that that's immaterial and the Commission can, consistent with its statutory function, ignore submissions that are advanced to it, unless the Peko-Wallsend statutory (audio malfunction), the Peko-Wallsend test for (audio malfunction) mandatory considerations is met. That is not the type of submission that (audio malfunction) by the Full Court in Solomon. Equally, it also referred to WVAA and to the judgment in the New South Wales Court of Appeal of D'Amore v Independent Commission Against Corruption in making that point.

PN421

The only other matter is the Deputy President presiding member raised a question with Mr White in particular as to whether the enterprise had been established already. As to that, we think the matters that were raised rather demonstrate two matters, the first, as we put it, that what was contemplated here was not a new enterprise at all but rather a development of the existing enterprise of Watpac, which commenced, according to Mr Dearling's evidence, immediately upon the takeover. That business sought to refocus and develop its offerings, not in a manner that produced a new enterprise at all, but sought to utilise the existing enterprise, which demonstrates, exactly as we put and was put below, that this was not a new enterprise at all.

PN422

The other difficulty with dealing with that issue below was the utter lack of clarity as to what the new enterprise was alleged to be on the part of Watpac particularly. The initial submissions, as we have described, that Watpac made below suggested that the new enterprise was the construction of this particular bridge. It was only at the hearing that there was some more general reference to greater complexity or sophistication of civil construction projects.

PN423

Unless there's anything further, those were the matters I wished to raise in reply.

PN424

DEPUTY PRESIDENT GOSTENCNIK: No, thank you, Mr Gibian.

PN425

Can we thank counsel for their helpful written and oral submissions. We propose to reserve our decision and will publish a decision in due course.

PN426

We will otherwise adjourn. Have a good day.

ADJOURNED INDEFINITELY [12.53 PM]