CPB Contractors Pty Limited

[2019] FWCA 6206

[2019] FWCA 6206

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.225 - Application for termination of an enterprise agreement after its nominal expiry date

CPB Contractors Pty Limited
(AG2019/1042)

CITYLINK TULLA WIDENING BULLA ROAD TO POWER STREET GREENFIELDS AGREEMENT 2015

Building, metal and civil construction industries
COMMISSIONER GREGORY	MELBOURNE, 6 SEPTEMBER 2019

Application for termination of the CityLink Tulla Widening Bulla Road to Power Street Greenfields Agreement 2015.

Introduction

[1] CPB Contractors Pty Limited (“CPB”) has made application under s.225 of the Fair Work Act 2009 (“Cth”) to terminate the CityLink Tulla Widening Bulla Road to Power Street Greenfields Agreement 2015 (“the Agreement”). It claims the Agreement was put in place to cover project works which have now been completed. There are therefore no employees covered by the Agreement and it should now be terminated. The application is supported by a Statutory Declaration made by Mr David van den Berg, CPB’s Manager of Industrial Relations.

[2] The greenfields agreement was made with the Australian Workers’ Union (“the AWU”) and the Construction, Forestry, Mining and Energy Union, as it was then known (“the CFMMEU”). It was approved by Commissioner Roe on 29 January 2016 and came into effect on 5 February 2016. Its nominal expiry date is 5 February 2018.

[3] After the application was lodged the CFMMEU advised the Commission that it considered it contrary to the public interest and otherwise inappropriate to terminate the Agreement at this point in time. It accordingly sought to be heard in regard to the application. A brief telephone mention was then held on 30 May and the CFMMEU advised at that time that it would shortly provide a further indication of its position. On 7 June it advised the Commission that it had been in discussion with CPB’s representative but no agreement had been reached in response to the application. It also lodged a Form F52 application for production of documents. It indicated in part:

“4. An issue has arisen in the proceedings as to the true scope of coverage of the Agreement. The CFMMEU contends that the documents sought have apparent relevance to the determination of this question.

5. Unless and until the documents sought are made available to the CFMMEU the CFMMEU will not be properly placed in a position whereby it can make fully informed submissions as to whether the termination of the Agreement would be contrary to the public interest. Nor will it be properly placed in a position whereby it can furnish the FWC with an informed view as to the application in accordance with the requirements of s226. The documents should be made available to the FWC and provided to the CFMMEU as a matter of procedural fairness.”

[4] However, CPB’s representative advised that it opposed the making of an order for production of documents on the basis that:

•  the description of the documents sought was too wide for apparent relevance;

•  the documents sought are commercially sensitive; and

•  the request was simply a fishing expedition.

[5] The Commission then advised that CPB’s application would now be set down for hearing, given the respective positions of the parties, and directions were issued for filing and service of evidence and submissions. Mr David Vroland, Industrial Officer, appeared on behalf of the CFMMEU. Mr Tim Lange from Piper Alderman was given permission to appear on behalf of CPB under s.596(2)(a) of the Act as the matter involved a degree of complexity and his involvement might enable it to be dealt with more efficiently.

Relevant Legislation

“225 Application for termination of an enterprise agreement after its nominal expiry date

If an enterprise agreement has passed its nominal expiry date, any of the following may apply to the FWC for the termination of the agreement:

(a) one or more of the employers covered by the agreement;

(b) an employee covered by the agreement;

(c) an employee organisation covered by the agreement.

226 When the FWC must terminate an enterprise agreement

If an application for the termination of an enterprise agreement is made under section 225, the FWC must terminate the agreement if:

(a) the FWC is satisfied that it is not contrary to the public interest to do so; and

(b) the FWC considers that it is appropriate to terminate the agreement taking into account all the circumstances including:

(i) the views of the employees, each employer, and each employee organisation (if any), covered by the agreement; and

(ii) the circumstances of those employees, employers and organisations including the likely effect that the termination will have on each of them.”

227 When termination comes into operation

If an enterprise agreement is terminated under section 226, the termination operates from the day specified in the decision to terminate the agreement.” 1

The Submissions and Evidence

CPB

[6] CPB submits that the scope of the Agreement is limited to the particular project it was established to cover, being the widening of the Tullamarine Freeway in Melbourne between Bulla Road and Power Street. It relies on the Statutory Declaration of its Manager of Industrial Relations, Mr van den Berg in support of its submission that the project was completed in December 2017, no employees have been employed to work on it since that time, and there is no reasonable prospect of any being employed at any time in the future. The Statutory Declaration states as follows under the heading “Public interest”:

“The termination will not be contrary to the public interest as it will not affect the terms and conditions of any existing employees or future employees, for the following reasons:

a. The agreement is expressed to cover employees of CPB Contractors who work on the Citylink Tulla Widening Project in Melbourne.

b. The need for employees on this project has ceased as the project was completed in early 2018.

c. The last employees who previously worked on the project and were covered by the agreement were made redundant in December 2017.”

[7] The Statutory Declaration continues to state under the heading, “What effect would termination of the agreement have on you or, if you represent a group of employees or employers, those you represent?”:

“Effect on CPB Contractors

1. CPB Contractors’ project works as covered by the agreement have finished and the agreement is no longer of any ongoing benefit to CPB Constructors.

Effect on Employees

2. Termination of the agreement will not affect the terms and conditions of any current employees as there are no employees covered by the agreement.

3. Termination of the agreement will not impact any future employees as the project has finished and no employees will be employed under the agreement again.”

[8] CPB accordingly submits that the Agreement now has no further work to do, given that it was put in place to cover the development of a piece of infrastructure that has now been built and completed. Termination of the Agreement would accordingly not be contrary to the public interest and would not affect the terms and conditions of any employees.

[9] CPB also rejects any suggestion that the scope of the Agreement could have wider application beyond just the Tullamarine Freeway widening project and points to the definition of “Project” in clause 2 of the Agreement in support of this submission. It states as follows:

“Project” means CityLink Tulla Widening Bulla Road to Power Street project as determined by Transurban.”

[10] It also refers to clause 5 “APPLICATION,” which states at 5.1:

“This Agreement applies to all Employees hired by the Company that are engaged to perform work on the Project for whom classifications and Base Rates are prescribed by this Agreement.”

[11] It also highlights sub clause 5.3, which makes clear that the Agreement does not apply to various types of work including “Commissioning and Operations” and “Warranty repairs and/or maintenance work.”

[12] CPB also rejects the suggestion that the concluding phrase in the Definitions clause “… as determined by Transurban” can be interpreted as somehow operating to expand the scope of the Agreement beyond simply the particular project involving the widening of the Tullamarine Freeway between Bulla Road and Power Street. It also rejects the suggestion that the Agreement has potential coverage over work which may be undertaken on another project, being the Westgate Tunnel project, simply because that project somehow interfaces at some point with the now completed Tullamarine Freeway widening project.

[13] CPB continues to submit that the principles established by a Full Bench of the Commission in AMWU v Berri Pty Limited (“Berri”) 2 should be applied in interpreting the relevant provisions in the Agreement. The common intention of the parties should accordingly be identified objectively by reference to what a reasonable person would understand by the language used. In its submission the relevant provisions in the Definitions clause of the Agreement at clause 2 have a plain meaning and should be applied as written.

[14] CPB also opposes the order for production of documents on the basis that there is no ambiguity about the language used in the Agreement, and there is accordingly no requirement for any further evidence of the surrounding circumstances to assist in dealing with any ambiguity.

The CFMMEU

[15] The CFMMEU submits, in summary, that:

•  the scope of the coverage of the Agreement is indeterminable without further information;

•  there is publicly available evidence to suggest some work may still be occurring under the Agreement; and

•  the apparent geographical scope of work covered by the Agreement interfaces with another existing major public infrastructure project for which there is currently no applicable enterprise agreement in place. Therefore, the Agreement may have coverage of some or all of that work.

[16] It continues to submit that in these circumstances the Commission cannot be satisfied that it is not contrary to the public interest to terminate the Agreement.

[17] In regard to the submission that the Agreement is indeterminable without further information the CFMMEU points to the words “… as determined by Transurban” in the definition of “Project” in clause 2. It submits in response that “it is not possible for the objective observer to accurately construe the scope of coverage of the Agreement without more information.” 3 It accordingly presses its application for production of documents on the basis that they have the potential to throw light on issues pertaining to the principal application.

[18] In terms of the publicly available evidence that suggests some work may still be occurring under the terms of the Agreement the CFMMEU refers to what it describes as an Information Bulletin issued by the Victorian Government headed, “CITYLINK TULLA WIDENING” and stating underneath “Major works complete on the CityLink Tulla Widening project.” 4 It then refers to an extract on page 2 under the heading, “Upcoming works,” which states: “Whilst all major works are complete, there are still some minor works, checks and maintenance that you’ll notice on the ramps and freeway. We’ll complete all works by mid-2019.”5 It submits that it is unclear, based on this information, as to whether the Agreement might cover some of these ongoing works, and this again requires the precise scope of the Agreement to be clarified and determined before the Commission can be satisfied it is not contrary to the public interest for the Agreement to be terminated.

[19] The CFMMEU finally submits that the geographical scope of work covered by the Agreement “interfaces” with the major Westgate Tunnel Project, and there is currently no enterprise agreement in place to cover the work being performed on that project. Therefore, there is “… a distinct possibility that some of the work being performed ostensibly under the banner of the WGT Project may in fact full within the scope of the Agreement.” 6

Consideration

[20] There is no issue at the outset about satisfaction with the requirements in s.225 of the Act – the Agreement has passed its nominal expiry date of 5 February 2018, and the application has been made by an employer covered by the Agreement.

[21] However, the CFMMEU takes issue with whether the Commission can be satisfied the requirements in s.226 have been met. I turn, firstly, to deal with whether it would be contrary to the public interest to terminate the Agreement. The respective submissions of the parties in this context have been summarised already and are not restated now. In short, the CFMMEU submits that for various reasons it is possible that the Agreement could have some ongoing work to do, and in those circumstances it is not appropriate in the public interest for it to be terminated. Alternatively, it is not appropriate for it to be terminated until the scope or application of the Agreement has been clarified.

[22] I turn, firstly, to deal with the issue concerning the intended meaning of the scope clause in the Agreement. It is noted at the outset that both parties have acknowledged that the decision of the Full Bench in Berri has most recently confirmed the principles to be applied in establishing the intended meaning of wording contained in an enterprise agreement. It is not necessary at this point to extract those principles set out at [114] of the decision in full detail. However, the following extracts are relevant in the context of this matter:

“3. The common intention of the parties is sought to be identified objectively, that is by reference to that which a reasonable person would understand by the language the parties have used to express their agreement, without regard to the subjective intentions or expectations of the parties.

……

7. In construing an enterprise agreement it is first necessary to determine whether an agreement has a plain meaning or it is ambiguous or susceptible of more than one meaning.

……

9. If the agreement has a plain meaning, evidence of the surrounding circumstances will not be admitted to contradict the plain language of the agreement.” 7

[23] The relevant definition of “Project” in the Agreement has been set out already at an earlier point in this decision, but to reiterate it states:

“Project” means CityLink Tulla Widening Bulla Road to Power Street project as determined by Transurban.”

[24] I am satisfied in response, for the reasons indicated below, that these words can be said to have a plain and ordinary meaning when considered objectively by reference to what a reasonable person would understand by the language the parties have used. It follows that the definition should be applied on the basis of that plain meaning.

[25] The definition begins by clearly establishing the geographical scope or boundary of the project, being the widening of the Tullamarine Freeway between Bulla Road and Power Street. As indicated, these words establish the boundary or outer limits of the scope of the “Project” intended to be covered by the Agreement. The definition then makes reference to “… as determined by Transurban.” I am again satisfied that when viewed objectively it can only be concluded that these words are to be read subject to the preceding words. The boundary or the scope of the project has been set by what is stated at the outset. However, the actual nature of the work to be carried out within that scope or boundary is then to occur as determined by Transurban, being CPB’s client.

[26] The logic and good sense of this interpretation is reinforced if the intent of the definition is considered in the way the CFMMEU appears to contend. Its approach suggests that the boundary, or scope, or outer limits of the project are ultimately whatever is “… determined by Transurban,” and the widening of the Tullamarine Freeway between Bulla Road and Power Street is simply one of the projects it has determined is to be carried out. It is implied in this approach that there could be other, at this point unidentified, projects that Transurban might determine should be performed or carried out. These could presumably potentially involve a diverse range of locations, as well as a variety of different projects. This would appear in response to be a nonsensical interpretation of the relevant words in the Agreement, and one that cannot be sustained when those words are considered objectively.

[27] It follows from this conclusion that the relevant words have a plain meaning and there is no further requirement to explore or investigate what is meant by “… as determined by Transurban.” It also follows that there is no outstanding issue concerning the true scope of coverage of the Agreement, and therefore the rationale for the CFMMEU’s application for the production of documents also falls away. It is noted at this point that there was some conjecture in the proceedings about whether the Commission had actually dealt with the CFMMEU’s Form F52 application. For the avoidance of doubt I now confirm that I do not intend to make the Order sought as I am not satisfied that the documents to be produced have any relevance to the matters at issue in the proceedings for the reasons indicated above.

[28] The CFMMEU next relies on what it describes as the content of a State Government Information Bulletin in support of the submission that it is possible there is still ongoing work to complete on the Tullamarine Freeway widening project. The relevant extracts have again been set out at a previous point in this decision and are not restated now. I am, firstly, not satisfied in response that this so-called Information Bulletin can be said to provide substantive evidence that would cause the Commission to call into question the content of the Statutory Declaration provided by Mr van den Berg, which indicates that work on the project covered by the terms of the Agreement was completed in early 2018, and the last employees who worked on the project were made redundant in December 2017.

[29] In any case if the content of the Information Bulletin can be said to be worthy of any consideration in the context of this matter it quite clearly indicates that all major works are complete with only some minor works, being checks and maintenance, to be completed by mid-2019. That date has obviously already passed. In addition, clause 5 of the Agreement makes clear that its scope does not extend to cover “Commissioning and Operations” or “Warranty repairs and/or maintenance work,” being the type of work referred to in Bulletin.

[30] The CFMMEU finally submits that an apparent “interface” with the Westgate Tunnel project provides some possibility of the Agreement having ongoing application, particularly given that an enterprise agreement has apparently not yet been put in place to cover that project. I am not satisfied that it is possible to identify anything that provides a foundation for this submission, particularly given the conclusion I have come to about the scope of the Agreement.

[31] I am accordingly satisfied, in conclusion, that it is not contrary to the public interest to terminate the Agreement. However, s.226 of the Act also requires that the Commission give consideration to whether it is appropriate to terminate the Agreement, taking into account all of the circumstances, including the views and circumstances of the employees, the employer, and any employee organisations who might be covered by the Agreement, including the likely effect that termination would have on each of them.

[32] CPB as the Applicant employer is obviously supportive of the Agreement being terminated. It did not provide a specific reason as to why it seeks to have it terminated at this point in time but presumably considers that because the project work that the Agreement was put in place to cover has now been completed it is an appropriate tidying up exercise to have the Agreement terminated as well.

[33] In terms of taking into account the views of the employees covered by the Agreement I am satisfied, for the reasons indicated above, that there are now no employees covered by the Agreement, and there have not been since December 2017. I am also satisfied that there is no reasonable likelihood, given the scope of the Agreement, that any employees will be employed under the Agreement at any point in the future. I rely on the Statutory Declaration of Mr van den Berg, in particular, in support of these conclusions.

[34] In terms of taking into account the views of the employee organisations covered by the Agreement the CFMMEU is the only organisation that has objected to the application. As this decision demonstrates I have had regard to its views in determining the application. I am also not aware of any likely effects, adverse or otherwise, that termination of the Agreement would have for the CFMMEU.

Conclusion

[35] I am satisfied, in conclusion, that the requirements contained in s.225 of the Act concerning termination of an enterprise agreement after its nominal expiry date have been satisfied in all the circumstances of this matter. I am also satisfied for the reasons indicated above that it is not contrary to the public interest to terminate the Agreement. I am also satisfied that it is appropriate to terminate the Agreement, taking into account all of the circumstances, including those set out in s.226(b)(i) and (ii). It follows as a consequence of these conclusions that I must terminate the Agreement. The Agreement is accordingly terminated and, in accordance with s.227, the termination operates from the date of this decision, being 6 September 2019.

COMMISSIONER

 1   Fair Work Act 2009 (Cth) ss 225-7.

 2   Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union’ known as the Australian Manufacturing Workers Union (AMWU) v Berri Pty Limited[2017] FWCFB 3005.

 3 Outline of submissions of the CFMMEU, dated 5 August 2019 at [16].

 4   Ibid at Appendix 1.

 5   Ibid.

 6 Ibid at [27].

 7   [2017] FWCFB 3005 at [114].

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