Fair Work Act 2009_

s.185 - Enterprise agreement

Application for approval of the Telum Contract Labour Pty Ltd / AWU WestConnex Project Civil Construction Greenfields Agreement 2016.

[1] On 1 September 2016 The Australian Workers' Union (AWU) lodged an application for approval of an enterprise agreement known as the Telum Contract Labour Pty Ltd / AWU WestConnex Project Civil Construction Greenfields Agreement 2016 (the Agreement). The Agreement is a single enterprise agreement. It has been made between Telum Contract Labour Pty Limited (Telum) and the AWU.

[2] The Agreement was made on 31 August 2016 and operates until 30 June 2020.

[3] The application is made pursuant to s.185 of the Fair Work Act 2009 (the Act). The requirements of ss.186 and 187 need to be met. These sections provide:

"185 Bargaining representative must apply for the FWC's approval of an enterprise agreement

(1) If an enterprise agreement is made, a bargaining representative for the agreement must apply to the FWC for approval of the agreement.

(1A) Despite subsection (1), if the agreement is a multi-enterprise agreement that is a greenfields agreement, the application must be made by:

(b) a relevant employee organisation that is covered by the agreement.

(b) any declarations that are required by the procedural rules to accompany the application.

(3) If the agreement is not a greenfields agreement, the application must be made:

(b) if in all the circumstances the FWC considers it fair to extend that period - within such further period as the FWC allows.

(4) If the agreement is a greenfields agreement, the application must be made within 14 days after the agreement is made.

(5) The regulations may prescribe requirements relating to the signing of enterprise agreements.

Single-enterprise agreements that are greenfields agreements

(6) This section does not apply to an agreement made under subsection 182(4).

185A Material that must accompany an application under subsection 182(4) for approval of a greenfields agreement

An application under subsection 182(4) for approval of an agreement must be accompanied by:

(b) any declarations that are required by the procedural rules to accompany the application.

186 When the FWC must approve an enterprise agreement - general requirements

(1) If an application for the approval of an enterprise agreement is made under subsection 182(4) or section 185, the FWC must approve the agreement under this section if the requirements set out in this section and section 187 are met.

(a) if the agreement is not a greenfields agreement - the agreement has been genuinely agreed to by the employees covered by the agreement; and

(b) if the agreement is a multi-enterprise agreement:

(i) the agreement has been genuinely agreed to by each employer covered by the agreement; and

(ii) no person coerced, or threatened to coerce, any of the employers to make the agreement; and

(c) the terms of the agreement do not contravene section 55 (which deals with the interaction between the National Employment Standards and enterprise agreements etc.); and

(d) the agreement passes the better off overall test.

Requirement that the group of employees covered by the agreement is fairly chosen

(3) The FWC must be satisfied that the group of employees covered by the agreement was fairly chosen.

(3A) If the agreement does not cover all of the employees of the employer or employers covered by the agreement, the FWC must, in deciding whether the group of employees covered was fairly chosen, take into account whether the group is geographically, operationally or organisationally distinct.

(4) The FWC must be satisfied that the agreement does not include any unlawful terms (see Subdivision D of this Division).

Requirement that there be no designated outworker terms

(4A) The FWC must be satisfied that the agreement does not include any designated outworker terms.

(a) the agreement specifies a date as its nominal expiry date; and

(b) the date will not be more than 4 years after the day on which the FWC approves the agreement.

(6) The FWC must be satisfied that the agreement includes a term:

(a) that provides a procedure that requires or allows the FWC, or another person who is independent of the employers, employees or employee organisations covered by the agreement, to settle disputes:

(i) about any matters arising under the agreement; and

(ii) in relation to the National Employment Standards; and

(b) that allows for the representation of employees covered by the agreement for the purposes of that procedure.

187 When the FWC must approve an enterprise agreement - additional requirements

(1) This section sets out additional requirements that must be met before the FWC approves an enterprise agreement under section 186.

Requirement that approval not be inconsistent with good faith bargaining etc.

(2) The FWC must be satisfied that approving the agreement would not be inconsistent with or undermine good faith bargaining by one or more bargaining representatives for a proposed enterprise agreement, or an enterprise agreement, in relation to which a scope order is in operation.

Requirement relating to notice of variation of agreement

(3) If a bargaining representative is required to vary the agreement as referred to in subsection 184(2), the FWC must be satisfied that the bargaining representative has complied with that subsection and subsection 184(3) (which deals with giving notice of the variation).

Requirements relating to particular kinds of employees

(4) The FWC must be satisfied as referred to in any provisions of Subdivision E of this Division that apply in relation to the agreement.

(5) If the agreement is a greenfields agreement, the FWC must be satisfied that:

(a) the relevant employee organisations that will be covered by the agreement are (taken as a group) entitled to represent the industrial interests of a majority of the employees who will be covered by the agreement, in relation to work to be performed under the agreement; and

(b) it is in the public interest to approve the agreement.

(6) If an agreement is made under subsection 182(4) (which deals with a single-enterprise agreement that is a greenfields agreement), the FWC must be satisfied that the agreement, considered on an overall basis, provides for pay and conditions that are consistent with the prevailing pay and conditions within the relevant industry for equivalent work."

[4] A "greenfields agreement " is defined in ss.172, 177 and 182:

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

(a) with the employees who are employed at the time the agreement is made and who will be covered by the agreement; or

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

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

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

(4) A single-enterprise agreement made as referred to in paragraph (2)(b), or a multi-enterprise agreement made as referred to in paragraph (3)(b), is a greenfields agreement.

177 Bargaining representatives for proposed enterprise agreements that are greenfields agreements

The following paragraphs set out the persons who are bargaining representatives for a proposed single-enterprise agreement that is a greenfields agreement:

(a) an employer that will be covered by the agreement;

(i) that is entitled to represent the industrial interests of one or more of the employees who will be covered by the agreement, in relation to work to be performed under the agreement; and

(ii) with which the employer agrees to bargain for the agreement;

(c) a person who is a bargaining representative of an employer that will be covered by the agreement if the employer appoints, in writing, the person as his or her bargaining representative for the agreement.

(3) A greenfields agreement is made when it has been signed by each employer and each relevant employee organisation that the agreement is expressed to cover (which need not be all of the relevant employee organisations for the agreement).

(a) a proposed single-enterprise agreement is a greenfields agreement that has not been made under subsection (3); and

(b) there has been a notified negotiation period for the agreement; and

(d) the employer or employers that were bargaining representatives for the agreement (the relevant employer or employers) gave each of the employee organisations that were bargaining representatives for the agreement a reasonable opportunity to sign the agreement; and

(e) the relevant employer or employers apply to the FWC for approval of the agreement;

(f) by the relevant employer or employers with each of the employee organisations that were bargaining representatives for the agreement; and

(g) when the application is made to the FWC for approval of the agreement."

[5] On 5 September 2016, the Construction, Forestry, Mining and Energy Union (CFMEU) advised the Member Support Research Team of the Fair Work Commission (the Commission) by correspondence that it opposed the certification of the Agreement. The CFMEU also requested copies of the relevant documentation.

[6] The matter was the referred to me together with two other proposed greenfields agreements namely:

● TCQ Labour Pty Limited Regional Greenfield Agreement 2016 (AG2016/5441)

● TCQ Labour Pty Limited / AWU Civil Construction Metro Greenfield Agreement 2016 (AG2016/5442)

[7] The three agreements (the Agreements) were listed for hearing on 20 October 2016 with directions for submissions issued. However, the parties agreed that the matters could be determined "on the papers". The submissions of the AWU, CFMEU and Telum were received by 25 October. They confirmed their agreement for a decision to be done "on the papers".

[8] The CFMEU seeks copies of the initiating documents for the Agreements, being the F19, F20 and F21 documents. This is done primarily on the grounds of procedural fairness so that the CFMEU can advance its argument that the Agreements have been improperly made. It is put that these are public documents which should be available to objecting parties.

[9] It is submitted that while there is no specific provision, the practice of the Commission has been that its files are open to the public. The CFMEU would be prejudiced in mounting its arguments if this access is not provided. Procedural fairness requires the documents to be provided.

[10] The CFMEU asserts that it has members employed by one or more of the Telum group of companies. Their interests would be prejudiced by Telum's decision to negotiate greenfields agreements with the AWU. The CFMEU is concerned that the Agreements provide for lesser wages and conditions than the Building and Construction General On-site Award (MA000020) and/or industrial standards in the industry.

[11] The CFMEU is concerned about the genuineness of the Agreements in that they may be vehicles in other conflicts between the CFMEU and Telum, some of which have been before me.

[12] The CFMEU provided a statement from New South Wales Branch President, Rita Mallia which provides some comparisons between the Agreement and the Award. It is asserted that the CFMEU would be able to cover at least 50% of the employees proposed to be covered by the Agreement.

[13] The CFMEU says that it has members currently performing work on the WestConnex project. Any agreement made will have the potential to impact other employees and the wages and conditions received by CFMEU members.

[14] The CFMEU is concerned that these agreements are not genuine greenfields agreements and that employees covered by existing agreements might be transferred to them. Provision of the supporting documentation would assist in the CFMEU's ability to make submissions on this aspect.

[15] The AWU, supported by Telum, submits that the AWU is a bargaining representative with respect to the Agreements and the CFMEU is not. Therefore, the CFMEU has no right to the documents. It relies on the Full Bench decision in CFMEU v Collinsville Coal Operations Pty Ltd [2014] FWCFB 7940 (Collinsville) and CFMEU v MGI Piling NSW [2016] FWCFB 2654 (MGI Piling). The application should be rejected because this is a matter in respect of which the CFMEU has no standing or right to be heard it is submitted.

[16] The AWU points out that s.182(3) applies to this Agreement, not s.182(4). So much is obvious from the fact that the AWU is the applicant. Therefore, the CFMEU does not need the documents for this purpose. Section 187(6) of the Act is therefore not relevant.

[17] The AWU points out that the CFMEU does not submit that the AWU does not have coverage of a majority of the employees who will be covered by the Agreement as required by s.187(5). The CFMEU's claimed coverage is irrelevant.

[18] The CFMEU rejects the AWU's submission with respect to Collinsville and MGI Piling because, they did not relate to greenfield agreements or to documentation initiating applications to the Commission.

[19] The CFMEU is not asking the Commission to determine whether the CFMEU has a right to be heard or hear it. The request is more preliminary so that the CFMEU can decide whether it wishes to make such a request.

[20] This Agreement is proposed to cover employees of Telum in respect of civil construction, engineering, excavation and/or related works on the M4 East and New M5 WestConnex Project in New South Wales.

[21] The submissions of the parties focussed on the question of whether the CFMEU should be provided with the initiating documentation for the Agreement. However, that was argued in the context of whether or not the Agreement should be approved. It is necessary, in my view, to set out a process for considering the approval of the Agreement as it has been allocated to me to determine that question.

[22] I accept the AWU's submission that this is an agreement made in accordance with s.187(3). Section 182(4) is not relevant. Section 187(6) is therefore not relevant.

(a) Does the Agreement relate to a "genuine new enterprise" as provided for in s.172(b) which has not yet employed anyone to be covered by the Agreement?

(b) Is the AWU entitled to represent the industrial interests of one or more employees who will be covered by the Agreement as provided for in s.177(b)?

(c) Does the Agreement satisfy the requirements of ss.186 and 187? Including:

(i) does it pass the better off overall test? (s.186(2)(d));

(ii) does the AWU represent the industrial interest of a majority of employees to be covered by the Agreement? (s.187(5)(a));

(iii) is it in the public interest to approve the Agreement? ((s.187(5)(b)).

[24] The CFMEU's purported coverage/interest is not relevant to these questions. It is another question as to whether the Commission allows the CFMEU to make a submission in respect of some or all of these issues.

[25] The CFMEU's submission is based on overall considerations of natural justice and procedural fairness. I have taken these into account. Perhaps more important is the Commission's broad powers to inform itself and determine the appropriate procedure for dealing with a matter pursuant to s.590 of the Act.

[26] In addition, whilst the Collinsville and MGI Piling decisions did not relate to greenfields agreements, they do contain an approach and some principles which have general application to the approval of agreements under the Act. In each case the CFMEU was not a bargaining representative.

[27] I rely on the following passages from Collinsville:

"[48] It is accepted that the FW Act does not provide for intervention in proceedings before the Commission by a non party. Section 590 of the FW Act provides, relevantly that the Commission may, except as provided by the FW Act, inform itself in relation to any matter before it in such manner as it considers appropriate, including by inviting, subject to any terms and conditions determined by the Commission, oral or written submissions.

[49] The CFMEU says that it was not necessary for it to have been a party to the proceeding in order to have a right to be heard. It says that it was sufficient that it had some right, interest or legitimate expectation that might be affected by the proceeding. Consequently, it says that it should have been afforded procedural fairness by the Senior Deputy President and that by being prevented from putting its case in opposition to the approval of the Agreement it was denied procedural fairness.

[54] As to the CFMEU's rights that are said to be affected, the CFMEU submitted, in summary, that the decision to approve the Agreement will affect its right to represent employees at the mine and for these employees to be members of the CFMEU. Further, it will affect its capacity to protect terms and conditions of employment. Other rights relied in by the CFMEU are identified earlier and are not reproduced here.

[55] In our view this argument has no substance. Firstly, the argument presupposes that the CFMEU has some particular right which will be taken away or interfered with, if the Agreement is approved. The CFMEU's entitlement to represent the industrial interests of employees at the Collinsville coal mine is to be derived from the CFMEU's rules. The approval of the Agreement will not interfere with that. Before the Agreement was approved the terms and conditions of the employees covered by the Agreement were determined, inter alia, by the Black Coal Mining Industry Award 2010, the applicable modern award. Under the dispute settlement procedure of the modern award the CFMEU has no particular right of representation. Representation may be sought by employees in relation to disputes and in relation to consultation. Under the modern award employees choose their representation. They may choose the CFMEU. That position is not changed by approval of the Agreement. Employees may choose to be represented by the CFMEU in disputes under the Agreement and in consultation matters. In any event such rights are vested in the employees not in the CFMEU. The Modern Award is not a respondency award made in settlement of an interstate industrial dispute involving the CFMEU. The statutory basis and constitutional underpinning of modern awards are significantly different to awards made under predecessor legislation in settlement of disputes.

[56] Secondly, the Agreement does not affect the rights of an employee covered by it to choose whether he or she wishes to join, continue to be or cease to be, a member of the CFMEU.

[57] Thirdly, the approval of the Agreement does not affect the right of the CFMEU to be involved in bargaining for any successor or replacement agreement, nor does it affect the right of the CFMEU to represent employees more broadly engaged in the coal mining industry or to advocate for improvements to the terms and conditions under which those employees are employed.

[58] Fourthly, the approval of the Agreement does not affect the capacity of an officer of the CFMEU who is a permit holder under the FW Act to investigate suspected contraventions of the FW Act or of the terms of the Agreement. Nor does it affect the capacity of the permit holder to enter Collinsville's premises for the purposes of holding discussions with employees.

[59] Fifthly, to the extent that it was suggested that the CFMEU's capacity to represent employees and protect their interests under the Coal Mining Safety and Health Act 1999 (Qld) and the Coal Mining Safety and Health Regulation 2001 (Qld) is undermined or taken away by the approval of the Agreement, that proposition is rejected. As s.29 of the FW Act makes clear, an enterprise agreement applies subject to, and does not prevail over, a State law dealing with occupational health and safety matters. Such rights or interests as the CFMEU may have under those laws are clearly unaffected by the approval of the Agreement.

[60] Sixthly, the CFMEU's reliance on rights that it had under agreements which previously applied to work at the Collinsville coal mine is misconceived in that whatever else might be said about the content of those agreements, they did not cover the employees who are now covered by the Agreement when the agreement was made and they did not cover Collinsville. Consequently the CFMEU had no particular right under those agreements vis-�-vis the employees or Collinsville, and so no right of the CFMEU is affected by the approval of the Agreement.

[64] We are not persuaded that having that interest or expectation articulated by the CFMEU by reference to the Smyth affidavit gave rise to a right to be heard in the application for the approval of the Agreement.

[65] In our view the right, interest or legitimate expectation that is said to be affected by application of the kind before the Senior Deputy President must be identified and understood against the framework of enterprise bargaining and agreement making established by the FW Act. It is not enough, without more, to point to the status of the CFMEU as an employee organisation with a history of representation at the workplace or in the industry. Moreover, this is not a case where some of the members of the CFMEU voted against the approval of the Agreement or did not vote at all. All of the employees covered by the Agreement voted, and all of those employees (including Employee 2) voted in favour of approving the Agreement.

[66] The statutory framework includes that enterprise agreements are made principally between an employer and employees; that bargaining representatives have a role in relation to enterprise bargaining either by default or by appointment; that default bargaining representatives can be displaced by appointment or by revocation; that enterprise agreements operate primarily at the single enterprise level and do not create rights of general application across an industry or have common rule application; that rights of an employee organisation to be involved in the bargaining process under the FW Act is not separate from its standing as a bargaining representative; and that its capacity to be involved in protected industrial action by seeking a protected action ballot authorisation cannot be separated from its standing as a bargaining representative.

[67] The legislative history of the agreement making and approval provisions in the FW Act is a relevant contextual consideration in this regard. 'Non-union' agreements, known as enterprise flexibility agreements (EFAs), first became a feature of the Commonwealth system with the enactment of Division 3 of Part VB of the Industrial Relations Act 1988 (Cth) (the IR Act). The IR Act provided 'eligible unions' with an opportunity to take part in negotiations for an EFA by effectively placing an obligation on an employer to notify eligible unions and to provide them with a reasonable opportunity to take part in negotiations. An eligible union in relation to an EFA was defined in s.170LB to mean an organisation of employees: (a) that is a party to an award that binds the employer in respect of work performed in that enterprise; and (b) of which one or more employees whom the employer employs to perform work in the enterprise are members.

[68] An eligible union was entitled to be heard on an application to the Commission to approve the implementation of an EFA. Further, s.170NB(1) of the IR Act provided that an organisation of employees was entitled to be heard on such an application if it was bound by an award that bound the employer party to the EFA in respect of work performed in the relevant enterprise. There is no such express right to be heard in the FW Act and the role of organisations of employees in the bargaining and agreement approval provisions under the FW Act is very different to that provided for in the IR Act.

[69] That an employee organisation has an ongoing relationship with its members who might become covered by an agreement and has a role under its rules in representing those members is not relevant in the context of a right to be heard in relation to the approval of an agreement. The FW Act does not confer a right on employee organisations (other than in the case of the greenfields agreement) to be covered by an agreement if it was not a bargaining representative. Likewise, the FW Act does not confer upon an employee organisation a role in enterprise bargaining under the FW Act outside of its status as a bargaining representative. The mere fact that an employee organisation has an ongoing relationship with its members and is entitled to represent their industrial interests is not a sufficient basis to conclude that the approval of an enterprise agreement will adversely affect a right, interest or legitimate expectation of that employee organisation.

[70] In similar vein, that an employee organisation has amongst its interests, objects or expectations, that it will obtain and maintain reasonable employment conditions for its members, is in the context of the bargaining framework established by the FW Act, an insufficient basis for there to arise a right, interest or legitimate expectation and thereby a conferral on the employee organisation of a right to be heard in relation to an application to approve an enterprise agreement.

[71] Account should also be taken of the fact that enterprise agreements may confer or deal with the rights and obligations of an employee organisation vis-a-vis the employees and that a new agreement might displace or alter those rights and obligations, but that is not the case here.

[72] Whether an employee organisation which is not a bargaining representative has a right to be heard in relation to an application for the approval of an agreement will depend on the circumstances in each case. In this case, when the rights, interests or expectations asserted by the CFMEU are understood in the legislative context, it is clear that the CFMEU has not established any right, interest or legitimate expectation that would be adversely affected by the decision to approve the Agreement which would give it a right to be heard.

[73] We are therefore not persuaded that the Senior Deputy President erred in not giving the CFMEU the opportunity to be heard or to lead evidence in relation to its opposition to the approval of the Agreement.

[74] We should also observe that the CFMEU's reliance on its desire to advance arguments based on the decisions in the Construction, Forestry, Mining and Energy Union v Australian Industrial Relations Commission (Gordonstone) and Grocon Pty Ltd Enterprise Agreement (Victoria) (Grocon) does not advance the CFMEU's right to be heard argument. Those cases were decided under a different statutory regime and importantly one in which there was the capacity to seek leave to intervene in proceedings.

[75] We would make the observation however, that the Commission may choose, in a particular case, to hear from an employee organisation or any other person about the approval of an agreement even though the organisation or person may not otherwise have a right to be heard. The Commission has a broad power to inform itself in relation to any matter in such manner as it considers appropriate, including by inviting oral or written submissions from a person of organisation. In this case the Senior Deputy President chose to exercise that power by permitting the CFMEU to be heard on the question of whether the Agreement passed the BOOT.

[28] The point of difference in MGI Piling was that:

"[16] Unlike the situation in Collinsville, in the present case there are employees of the Piling Contractors who are members of the CFMEU and who are covered by enterprise agreements which will cease to apply to those employees if the new enterprise agreements the subject of applications for approval before the Commission are approved (s.58(2)(e) of the Act). The CFMEU is covered by the existing enterprise agreements, and asserts it has rights under those enterprise agreements."

[29] Notwithstanding the Full Bench concluded:

"[31] Having regard to the framework of enterprise bargaining and agreement making established by the Act and the matters set out in the previous ten paragraphs, we are of the view that the CFMEU is not a person whose rights, interests or legitimate expectations will be directly affected by any decision to approve the new enterprise agreements. Taking the CFMEU's case at its highest, including the fact that the CFMEU will not have standing, in its own capacity, to sue for a breach of the new enterprise agreements (assuming they are approved), the most that could be fairly said is that the CFMEU may be affected, indirectly or consequentially, by a decision to approve the new enterprise agreements. Such an impact is not sufficient to give the CFMEU a right to be heard in the application for the new enterprise agreements"

[30] Accordingly I am satisfied that the CFMEU does not have a right to be heard in relation to the approval of the Agreement.

[31] In relation to the questions posed above, I am satisfied that "yes" is the answer to (b) and (c)(ii). The AWU's coverage of the work covered by the Agreement is undoubted and has not been challenged by the CFMEU.

[32] Further submissions are required with respect to the other questions before the Commission can be satisfied that the Agreement should be approved, In particular, given that there are other disputes between the CFMEU and Telum related companies, I need to be satisfied that this is a genuine new enterprise to be covered by the Agreement and that no one has yet to be employed who will be covered by the Agreement. This would include employees currently covered by other agreements.

[33] I have considered the content of the Agreement on a preliminary basis and been provided with an analysis by the Member Support Research Team. Further submissions are required by the parties to the Agreement with respect to satisfaction with the Better off Overall Test (BOOT). Dialogue is probably necessary with respect to undertakings.

[34] Submissions by the CFMEU may assist the Commission on the genuineness and BOOT issues. I propose to allow this pursuant to s.590. I believe that this is consistent with the approach in Collinsville where the CFMEU was allowed to make a BOOT submission notwithstanding its non-party status.

[35] I can see no reason why the CFMEU should not be allowed to peruse the F19, F20 and F21 documents. It may assist in the submission to be made. They are public documents and contain no confidential information.

[36] In summary, I have decided that the following steps will now be taken:

1. The CFMEU can peruse the F19, F20 and F21 documents until Close of Business Friday, 18 November 2016 at the Commission.

2. My chambers will provide to the AWU and Telum a summary of possible issues with respect to the BOOT soon after this decision is issued.

3. The AWU and Telum are to lodge with the Commission any submissions/evidence with respect to the genuineness and BOOT issues by Close of Business Monday 21 November 2016.

4. Any submissions by the CFMEU shall be filed and served on the AWU and Telum by Close of Business Monday 21 November 2016.

5. The matter will be listed for further hearing on Friday 25 November 2016.

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