John Holland Pty Ltd v Construction, Forestry, Mining and Energy Union

REASONS FOR JUDGMENT 1 The applicant, John Holland Pty Ltd (John Holland), carries on business as a construction and engineering company. 2 At an unspecified date, John Holland was awarded the head construction contract to build the new children's hospital in Perth. During December 2011, the applicant employed three employees to perform building and construction work at that site. The employees commenced work on the site in January 2012. John Holland as head contractor, planned to perform the vast majority of work through subcontractors and to employ only a relatively small number of employees directly for the purposes of carrying out the children's hospital contract. John Holland expected that the total number of its direct employees at the children's hospital site would be around 25, in the positions of labourers and form workers and also the possibility of employees in the key roles as tow crane operators, riggers and doggers. 3 On 12 January 2012, John Holland had a meeting with the three employees at the site office in relation to the making of an agreement under the Australian Fair Work Act 2009 (Cth) (the Fair Work Act). The agreement making process was explained at that meeting. At the meeting, each of the three employees appointed themselves as bargaining agents for the purpose of negotiating the entry into an agreement with John Holland. 4 On 13 February 2012, the three employees voted in favour of entering into the agreement. At the time that the agreement was entered into John Holland was also tendering as head contractor for other government projects in Western Australia, such as the Perth waterfront project and the Kalgoorlie gaol project, and some private projects. Also, at that time, John Holland employed a broad range of employees in work classifications nationally from clerical to construction work. 5 Clause 1 of the agreement provides as follows: 1.1 This agreement is made under the Fair Work Act 2009 (Cth) and subject to Clause 1.2 those bound by this agreement are: (a) John Holland Pty Ltd ABN: 11 004 282 268 (the Company); and (b) All employees of John Holland Pty Ltd performing building or civil construction work in Western Australia in accordance with a classification specified in this Agreement (Employees). 1.2 Any project or site specific agreement entered into by the Company or by any Joint Venture or similar business arrangement of which the Company is part, will cover and apply to the Company and any employees at that particular project or site to the exclusion of this Agreement. 6 The three employees who voted in favour of the agreement were the only employees covered by the agreement who were employed by John Holland at the time that it was made. The job classifications referred to in cl 1.1(b) of the agreement were set out in an appendix to the agreement and included job classifications in addition to those in which each of the three employees were employed. 7 It was also common ground that the wage rates for the employees covered by the agreement were significantly higher than the wages prescribed under the applicable award and that no agreements had been entered into of the kind described in cl 1.2 of the agreement. 8 On 13 February 2012, John Holland lodged an application under s 185 of the Fair Work Act with Fair Work Australia to approve the agreement. 9 On 22 March 2012, a Deputy President of Fair Work Australia heard the application. The application was opposed by the first respondent, the Construction, Forestry, Mining and Energy Union (CFMEU). 10 On 22 May 2012, the Deputy President approved the agreement. One of the issues which the Deputy President addressed in approving the agreement is particularly relevant to this application. That issue was whether the group of employees covered by the agreement was fairly chosen within the meaning of s 186(3) and s 186(3A). Section 186(3) and s 186(3A) of the Fair Work Act are relevant in this respect. 11 Section 186(3) of the Fair Work Act provides as follows: FWA must be satisfied that the group of employees covered by the agreement was fairly chosen. 12 Section 186(3A) provides as follows: If the agreement does not cover all of the employees of the employer or employers covered by the agreement, FWA must, in deciding whether the group of employees covered was fairly chosen, take into account whether the group is geographically, operationally or organisationally distinct. 13 The Deputy President, having addressed that question, came to the view that the group of employees covered by the agreement was fairly chosen. The Deputy President had regard to the mandatory considerations referred to in s 186(3A) and found that the group of employees covered by the agreement was geographically and operationally distinct, but not organisationally distinct.