Abigroup Contractors Pty Ltd

[2012] FWA 3745

[2012] FWA 3745

FAIR WORK AUSTRALIA

DECISION

Fair Work Act 2009
s.185 - Application for approval of a greenfields agreement

Abigroup Contractors Pty Ltd
(AG2012/241)

COMMISSIONER BOOTH BRISBANE, 4 MAY 2012

Abigroup Contractors Pty Ltd - Application for approval of the Abigroup Contractors Caval Ridge Project Union Greenfields Agreement.

[1] An application was made on 2 February 2012 by Abigroup Contractors Pty Ltd (the Applicant) for approval of an enterprise Agreement known as Abigroup Contractors Caval Ridge Project Union Greenfields Agreement (the Agreement). The application was made under section 185 of the Fair Work Act 2009 (the Act). The application identifies the Agreement as a Greenfields agreement.

[2] On 24 February 2012 the Construction Forestry Mining and Energy Union (the CFMEU) advised that it wished to be heard on the matter. Both the CFMEU and the Applicant filed submissions and statements in support of their positions and the matter was heard on 4 April 2012.

[3] The Agreement is between Abigroup and three unions:

● Automotive Food Metals Engineering Printing and Kindred Industries Union (AMWU)
● Communications Electrical and Electronic Energy Information Postal Plumbing and Allied Services Union of Australia (CEPU)
● CFMEU.

Background to the agreement

[4] A Greenfields agreement of the Caval Ridge mine project was signed by the various parties as follows:

● Abigroup - 21 November 2011
● CFMEU - 24 November 2011
● AMWU - 24 November 2011
● CEPU - 1 February 2012

[5] The CFMEU also executed, on 24 November 2011, a Form F21 Declaration of Employee Organisations in Support of Application for Approval of a Greenfields Agreement. The AMWU and the CEPU similarly executed Forms F21 and at the hearing Ms Butler from the AMWU, on behalf of both unions, confirmed that both unions had filed their Declarations of Employee Organisation in Support of an Application for a Greenfields Agreements and they do not seek to withdraw them.

[6] The CFMEU objects to the approval of the agreement.

[7] Legislative framework about approval of enterprise agreements that are Greenfields agreements:

Division 2—Employers and employees may make enterprise agreements

172 Making an enterprise agreement

Single-enterprise agreements

…..

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

…..

(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.

Note: The expression genuine new enterprise includes a genuine new business, activity, project or undertaking (see the definition of enterprise in section12).

…..

Greenfields agreements

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

182 When an enterprise agreement is made

Greenfields 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).

185 Bargaining representative must apply for FWA approval of an enterprise agreement

Application for approval

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

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

(a) an employer covered by the agreement; or
(b) a relevant employee organisation that is covered by the agreement.

Material to accompany the application

(2) The application must be accompanied by:

(a) a signed copy of the agreement; and
(b) any declarations that are required by the procedural rules to accompany the application.

When the application must be made

…

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

Signature requirements

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

187 When FWA must approve an enterprise agreement—additional requirements

…..

(5) If the agreement is a greenfields agreement, FWA 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.

CFMEU’s submissions in support of not approving the agreement

[8] In oral and written submissions, and in an affidavit of Mr Jade Ingham, Assistant Secretary, Construction and General Division, Queensland Construction Workers Divisional Branch of the CFMEU, the following arguments were raised:

● The agreement has not been properly ‘made’ as required by Section 182(3) of the Act, and may not be in compliance with section 185(4) of the Act;
● The Applicant has made improper use of the Form F21, including a potential breach of section 408C of the Criminal Code Act 1889 (Qld);
● It is not in the public interest to approve the agreement pursuant to section 187(5)(b).

Applicant’s submissions supporting approval of the agreement

[9] The Applicant provided written and oral submissions and affidavits of Jarrett Goos, Employees Relations Consultant with the Australian Mines and Metals Association (AMMA) and Douglas Grewar, General Manager Mining of Abigroup’s Mining Services Division. The Applicant submitted that:

● There can be no withdrawal by a party from a Greenfields agreement once it is signed by a party;
● There are no property rights in the Form F21 and the Applicant did not mislead Fair Work Australia and that the Form F21 can be relied on as accurate to its contents;
● Public interest favours approval of the Agreement

Has the agreement been properly made as required by section 182(3)?

[10] The CFMEU submits that having withdrawn its support for the Agreement and having told this to Mr Grewar from Abigroup, there was no agreement that could be made with the CEPU on 1 February 2012.

[11] This is because when it was signed by the CEPU, the employer had already had a conversation with Mr Ingham on 31 January 2012, summarised in the following exchange from the transcript:

“Turning to the conversation on 31 January, this is the conversation that you have given evidence of in your statement, that you called Mr Grewar. He says that you said various words to him, including, "We're not going to sign it." This is in relation to the Agreement about which you have given a statement. Did you say those words to - - -?---No, I wouldn't have said those words, because we had already signed it. I was aware that we had already signed it at that time, so I wouldn't have said that we're not going to sign it, because clearly we had already signed it.

What did you say to him?---The conversation went along the lines of, "We're not going to support the agreement. You don't have our support for this agreement." But as far as not signing it, well, clearly we had already signed it.” 1

[12] Mr Grewar disputed the exact nature of the conversations he had between Mr Ingham and himself, with Mr Grewar affirming that in his recollection Mr Ingham did say “We’re not going to sign it”.

[13] Mr Grewar explained further that he understood the words to mean:

“That the CFMEU were the main negotiators in this and that they were holding back the signature of the CEPU.” 2

[14] Conversations about lodging the Agreement were also conducted between Mr Ingham from CFMEU and Mr Goos of AMMA. Again there are different recollections of these conversations. Mr Ingham does not agree in response to a question from Counsel for the Applicant that he accepted that the Applicant had an obligation to lodge the Agreement certification.

[15] On the question of the legal requirement as to when an agreement is ‘made’, the Applicant submits that is a matter of statutory interpretation, the Agreement was ‘made’ on 1 February when it was signed by the CEPU.

[16] They submit there is no mechanism in the Act for a party to a Greenfields agreement or any enterprise agreement, to withdraw from an agreement once it has been signed by that party. The very purpose of the party’s signature is to represent the party’s consent to the terms contained in the agreement. The Applicant argues that a party’s consent is fixed at the time an agreement is signed and is not able to be withdrawn.

[17] The Applicant relies on Australian Nursing Federation and Health Services Union of Australia v Alcheringa Hostel Inc (ANF case):

As a matter of law the giving of notice of termination of the contract, in accordance with the terms of that contract, is a unilateral right. Unilateral withdrawal from a contract that is not in accordance with its terms would ground an action for breach of contract sounding in damages or, in some instances, specific performance. However Part V1B of the WR Act sets out the processes were seeking and procuring certification of an Agreement made under Division 2 or 3 of Part VIB of the WR Act. As the ANF submitted, neither Part VIB of the WR Act nor the WR Act generally, makes any provisions for terminating, before certification, an Agreement that was made under part VIB of the WR Act.It seems to us that, in the absence of an agreed term for terminating such an Agreement before certification, an Agreement made under part VIB of the WR act cannot be terminated by a party withdrawing from it. 3

[18] There is agreement between the parties that if an agreement was made, it occurred on 1 February 2012 when the CEPU signed the Agreement.

[19] It is also agreed, at least prior to lodgement, that the Applicant understood that the CFMEU did not want the Form F21 lodged. It remains in dispute whether or not Mr Ingham also thought that the Applicant was entitled to lodge the Agreement itself.

[20] What is clear is the CFMEU’s submission that the signature could be withdrawn once it changed its view from initially supporting the Agreement to no longer supporting the Agreement.

[21] The reason given for the withdrawal was described by Mr Ingham as a lack of ‘mutual respect’ which developed since the signing of the Agreement and that now finds a withdrawal of support for the Agreement. 4

Provisions about greenfields agreements

[22] The legislative requirements describe when a Greenfields agreement canbe made by reference first to the type of enterprise will be covered by a Greenfields agreement. It must be a genuine new enterprise, and the employer has not yet employed any persons: s.172(2). This is not in dispute.

[23] Second, s182(3) describes when a Greenfields is made. It is a matter of statutory force that the agreement is “made” when it is signed by each employer and each relevant employee organisation. Once this has occurred, then the employer or the employee organisation must within 14 days apply in the prescribed form with the necessary accompanying documents (including the CFMEU’s Form F21) to FWA for approval of the agreement: s.185(4).

[24] Section 182(3) is descriptive in its operation. Its purpose is to provide certainty as to when an agreement is made: that is, the agreement is made when it is signed by the relevant parties. It does not deal with whether there is agreement at all.

[25] The CFMEU did not withdraw from or “unsign” the Agreement. It was a signatory at the time the CEPU, the final party, signed. By the force of the Act the Agreement was made on 1 February.

[26] The fact that on 31 January 2012 the CFMEU communicated that it no longer wished to support the Agreement is not a matter to be considered in deciding when the Agreement was made.

[27] There is nothing in the legislation to indicate that a party’s signature to a Greenfields agreement is able to be withdrawn once given. Signing a Greenfields agreement and making the declaration in Form F21 are important because they affect the working conditions of people yet to be employed at a Greenfields site.

[28] It is clear the signature was properly made by the CFMEU, and regardless of the argument that support was withdrawn on the one side and that it cannot be withdrawn on the other, the evidence is that there was a conversation about the CFMEU’s “support” but no attempt to withdraw the signed documents.

[29] The Applicant argued that the signature cannot be withdrawn. This view is supported in part by the ANF case in that s.182(3) similarly does not provide for a mechanism to withdraw a signature freely given at the time.

[30] There is a two-step process under the Act for making and effecting a Greenfields agreement. The parties first make the agreement by signing it. Second, after timely lodgement of all the relevant documentation, FWA is required to approve the agreement but only if certain prescribed standards are met. Should circumstances have changed between the signing and FWA’s consideration, a party might resist the approval, as the CFMEU has done here. The resistance might be on the grounds of the signature being obtained improperly or some major fact not having been revealed. In those examples, it may not be in the public interest for FWA to approve the Agreement. I return to the question of public interest below.

[31] I do not find it necessary to determine whether a signature can be withdrawn under the statutory scheme because the CFMEU, despite flagging its loss of support for the Agreement did not purport, on the evidence before me, to withdraw the signature in any case. The fact that the CFMEU purported to withdraw support for the Agreement prior to 1 February 2012 is not a relevant consideration as to when the Greenfields agreement was made. The loss of support might properly be prosecuted at this approval stage by addressing public interest issues.

[32] I conclude the Agreement was made on 1 February 2012 pursuant to s.182(2).

Has there been improper use of Form F 21?

[33] Section 185 of the Act provides for approval of enterprise agreements on application. Such applications must be made by the employer or a relevant employee organisation that is covered by the Agreement: s.185(1A).

[34] Section 185(2) provides that the application must be accompanied by (a) a signed copy of the agreement; and (b) any declarations that are required by the procedural rules to accompany the application.

[35] The procedural rules prescribe two such declarations:

● Form F20 Employer’s Declaration in Support of Application for Approval of Greenfields Agreement;
● Form F21 Declaration of Employee Organisation in Support of Application for Approval of Greenfields Agreement.

[36] The Application for Approval of Greenfields Agreement is Form F19. It explicitly requires the Application to be accompanied by copies of each Form F20 and Form F21 and signed copies of the Agreement.

[37] The CFMEU’s Form F21 was signed by Alana Heffernan an Industrial Officer from CFMEU.

[38] In his evidence Mr Ingham stated explicitly that the Applicant should not lodge the Form F21.

“The thing that you absolutely cannot and should not lodge, in my view, is the Form 21, as it was my belief that it wasn't the property of Abigroup or AMMA, it was simply - I guess the way that these agreements had been registered up until that time is that we were providing all of the paper work to lodge an Agreement with back to AMMA, including the Form 21s, so that they could lodge it. But it was my view that it was not the property of AMMA or Abigroup and I asked Mr Goos not to lodge it.’’ 5

[39] Mr Goos’ evidence generally agreed with the contents of this conversation as outlined by Mr Ingham. That is, the CFMEU did not want the Form F21 signed by the CFMEU to be lodged with the Agreement as part of the application for FWA’s approval.

[40] The CFMEU submits as follows:

● The use of the Form F21 was dishonest and may be a contravention of S408C of the Criminal Code Act 1889 (Qld).
● By filing the Form F21 provided by the CFMEU without qualification or caveat, the Applicant has misled FWA as to the true position of the CFMEU.
● The Applicant has applied the CFMEU’s Form F21 to its own use in seeking to have the application approved by a regulatory body. A reasonable person would know or ought to know that disuse was dishonest.

[41] The Applicant submits as follows:

● Form F21 is a statutory declaration, a written statement declared to be true in the presence of an authorised witness. Its purpose is to depose the truth of the statement.
● Form F21 contain statements as to the details of the Agreement. It does not contain a statement to the effect that the CFMEU support or continue to be in agreement with the Agreement
● The Form F21 was provided to AMMA by the CFMEU electronically and then lodged electronically. The CFMEU has no property rights in the form.
● The use of the Form F21 is entirely consistent with the purpose for which the declaration was made and then provided to the CFMEU.
● To the extent any property rights could subsist in the electronic Form F21 provided to AMMA, those rights were transferred to the Applicant or AMMA when the CFMEU provided the form for the purposes of lodging it with FWA with the application for approval.
● The Applicant is not aware that the contents of the Form F21 are false. The Applicant did not mislead FWA as it had no reason to believe the statutory declaration was not correct in respect of the facts to which deposed.

Has there been improper use of the Form F21 by the Applicant?

[42] Form F21 is a statutory declaration. The Form includes the words “I understand that a person who intentionally makes a false statement in a statutory declaration is guilty of an offence under section 11 of the Statutory Declarations Act 1959, and I believe that the statements in this declaration are true in every particular” and a note that it must be made before a prescribed person for the purposes of that Act.

[43] Was its filing, as suggested by the CFMEU, dishonest or misleading to FWA as to the true position of the CFMEU?

[44] To answer this requires consideration of the purposes of this statutory declaration.

[45] The maker of the declaration deposes:

1. To the name of the agreement;

2. To the name of the employer or employers to be covered;

3. That the organisation is entitled to represent prospective employees to be covered;

4. To the statutory majority question posed by s.187(5)(a)

5. To details of how the approval of the agreement would be in the public interest as required by s.187(5)(b).

[46] The declaration does not go to whether the organisation agrees with the Agreement. That is dealt with by the signing of the Agreement itself.

[47] The declaration in the Form F21 must accompany the application. Form F19, the application for approval, states:

When lodging this application, the Applicant must ensure that is accompanied by declarations completed by an officer or employee of each employer and an officer or employee of each employee organisation that the Agreement is expressed to cover. These declarations may be found at: ...

Form F21 for employee organisation declarations

When lodging this application, it must be accompanied by:

● A signed copy of the Agreement …

[48] It may be dishonest to use a Form F21 for an entirely different purpose other than in support of an application. But that is not the case here. It was used for exactly the purpose it was designed for, to support the application and to fulfil the procedural requirement to make the application properly.

[49] There is no suggestion that the contents of the CFMEU’s Form F21 were untrue, or are now known to be untrue, or were obtained by another party’s fraud or coercion. If they were, that may be a basis on which FWA could refuse the application on public interest grounds if not on other grounds.

[50] Therefore there has been no improper use of the Form F21. It was lodged as required under the Act for the purposes of an application made the Act.

The public interest: section 187(5)(b)

[51] What was in dispute before me was whether the additional requirement in s.187(5)(b) was satisfied: that it is in the public interest to approve the agreement.

[52] In GlaxoSmithKline Australia Pty Ltd v Colin Makin the Full Bench noted that in considering the public interest FWA is required to take into account the following:

The expression ‘in the public interest’, when used in a statute, classically imports a discretionary value judgment to be made to be made by reference to undefined factual matters, confined only by the objects of the legislation in question. [citing Comalco v O’Connor (1995) 131 AR 657 at p.681 per Wilcox CJ & Keely J, citing O’Sullivan v Farrer [1989] HCA 61; (1989) 168 CLR 210] 6

[53] The Supplementary Explanatory Notes to the Bill reinforce this:

In assessing the public interest, it would be expected that FWA would take into account the objects of the Act, and the need to ensure that the interests of employees who are to be employed under the Agreement are appropriately represented. 7

[54] I return to the consideration of the Agreement in the context of the objects of the Act below.

[55] The use of the public interest test in approval of a Greenfields agreement can be contrasted to the requirements of agreement making where employees vote on the agreement following significant consultation. Importing a public interest test where an agreement can be approved for future employees requires FWA not only to ensure that the procedural steps are met to approve an enterprise agreement but that the additional requirements of the public interest are also considered.

[56] The proposed Agreement is in relation to on-site construction work for a new open-cut coal mine at the Caval Ridge Mine near Moranbah. The Applicant has been engaged to perform works for one part of the site, including earthmoving, road building; mine infrastructure construction; dam building; and river diversion.

[57] Construction for the other part of the site has been contracted to another corporation, and the proposed Greenfields agreement is in similar terms to that entered into with the same unions by that other corporation. This would “minimise the risk of industrial disharmony between employees of the various subcontractors ... by providing consistent terms and conditions.” 8

[58] The CFMEU now submits that the Agreement should not be approved because it is not in the public interest. Although it sought not to file its Form F21 with FWA, at no point in submissions or at the hearing did it take the opportunity to resile from the content on that document, including its statements in support of public interest matters.

[59] It is unnecessary to rely on the contents of the CFMEU’s Form F21 to form a view about the public interest question. There is ample other material on which FWA can inform itself for that purpose. However it is useful to set out the matter deposed to in that form:

● The employee organisations have appropriate coverage of a majority of employees
● The Agreement reflects construction project wage outcomes appropriate to the subject project
● Agree a Greenfields agreement provides security in the projected wage costs for the employer and for the project.

[60] The Applicant provided a slightly more detailed statement in support of the public interest question in its Form F20:

The parties to the Agreement recognise that the Applicant must achieve real and sustained performance improvements if the Applicant is to meet its goals and objectives in relation to the Project. Such performance improvement is a shared goal of the parties.

The fundamental objectives of the Agreement are to create a framework in which Tribunal achieve the following goals during work on the project.

● A safe and healthy work site;

● Achievement of actual implementation of efficiency measures to effect real gains in productivity;

● Development of best practice and promotion of a culture of continuous learning and development;

● Meeting the requirements of the Project contract whilst also meeting and exceeding related completion objectives on time and within budget forecasts; and

● Environmental and cultural heritage awareness and compliance amongst all employees.

Further, a major objective of this Agreement is to eliminate lost time and lost productivity arising out of disputes or grievances during the Project. The approval of this Agreement will assist the parties to achieve this objective.

[61] The AMWU and CEPU also argued in favour of the public interest question in their Form F21s, the former in terms of good faith between it and the Applicant and the suitability of conditions; the latter in terms of wage and security outcomes.

Loss of mutual trust

[62] A key consideration is whether there are public interest considerations in the CFMEU’s withdrawal of support for the Agreement.

[63] FWA was told the withdrawal of support was because of a loss of mutual trust between the CFMEU and the Applicant. The lack of mutual trust was the reason for the objection to approval of this Agreement.

[64] Mr Ingham says the lack of trust arose after the signing of the Agreement and the making of the statutory declaration Form F21. It was expressed to the Applicant before the CEPU signed, and before the application was lodged.

[65] Mr Ingham did not elaborate as to why this lack of mutual trust developed although he was pressed to do so by Counsel for the Applicant.

[66] The basis of the lack of mutual trust was not explained to FWA. I cannot therefore conclude that the lack of mutual trust means that it is not in the public interest to approve this Agreement.

Is approval of the agreement in the public interest?

[67] Whether approval of the Agreement is in the public interest is a discretionary decision, and my judgement of it is informed by consideration of the following matters.

(a) Approval of the Agreement is consistent with the object of the Act set out in section 3, especially section 3(f) and the objects of Part 2-4 about enterprise agreements set out in s.171.

(b) The Agreement is consistent with the Greenfields agreement made for the other part of the construction with another corporation, minimising the potential for industrial disputation.

(c) The Agreement provides equal or better terms and conditions that the relevant modern award and wages are significantly higher than the award.

(d) It is positively in the public interest for the parties to the Agreement to eliminate lost time or productivity arising out of disputes or grievances during the construction under the agreement.

(e) It is positively in the public interest for the Agreement to be approved to assist completion of the project within its time and financial targets.

(f) No substantive arguments were raised in opposition to the approval of the Agreement being in the public interest even though the CFMEU asserts such.

[68] The Agreement was made in terms of the Act on 1 February 2012 when all the parties had signed it. The CFMEU, although expressing its loss of support at least by 31 January 2012 had signed the Agreement and made the necessary statutory declaration for this application to be filed.

[69] The Agreement complies with the range of technical matters that FWA must be satisfied about before approving an enterprise agreement.

[70] On the particular matters FWA must additionally be satisfied about before approving a Greenfields agreement, I am satisfied that the AMWU, CEPU and CFMEU 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.

[71] There remain two matters concerning the approval of this Agreement that was also considered in the decision of SDP Richards in Hanson Construction Materials Pty Ltd. 9The matters raised by his Honour are also issues for approval in this Agreement. In that matter, his Honour identified that firstly the dispute resolution clause in the Agreement did not provide representation for non-members and his Honour sought an undertaking in terms that would allow representation for all employees. A similar undertaking should be provided in this matter.

[72] The other matter is that the consultation clause in clause 23 of this Agreement does not comply with s205 of the Act. The model consultation term as set out in Schedule 2.3 of the Fair Work Regulations 2009 will be taken to be a term of the Agreement.

[73] Subject to the provision of the undertaking allowing for representation of all employees this Agreement, as the Application has been made under s.185, the requirements in ss.186 and 187 have been met, I approve the Agreement entitled Abigroup Contractors Caval Ridge Project Union Greenfields Agreement.

COMMISSIONER

Appearances:

Mr J Murdoch of Senior Counsel on behalf of Abigroup Contractors Pty Ltd

Mr B Green for Construction, Forestry, Mining and Energy Union

Hearing details:

2012.
Brisbane:
4 April.

 1   Transcript for proceedings, dated 4 April 2012 at PN54-55, examination in chief.

 2   Transcript of proceedings, dated 4 April 2012 at PN227 under cross-examination.

 3   PR951805 at PN 29.

 4   Transcript of proceedings, dated 4 April 2012 at PN62.

 5   Transcript of proceedings, dated 4 April 2012 at PN81 under cross-examination.

 6   [2010] FWAFB 5343 at para 26.

 7   Fair Work Bill Supplementary Notes at page 20

 8   Exhibit A7 - witness statement of Mr Goos

 9   [2012] FWA 3037

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