John Holland Pty Ltd

[2018] FWCA 3473

[2018] FWCA 3473

FAIR WORK COMMISSION

DECISION

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

John Holland Pty Ltd
(AG2018/1630)

JOHN HOLLAND CPB CONTRACTORS GHELLA JOINT VENTURE - SYDNEY METRO CITY & SOUTHWEST - TSE WORKS, AWU GREENFIELD AGREEMENT 2018-2022

Building, metal and civil construction industries
DEPUTY PRESIDENT BULL	SYDNEY, 14 JUNE 2018

Application for approval of the John Holland CPD Contractors Ghella Joint Venture Sydney Metro City & Southwest TSE Works AWU Greenfield Agreement 2018-2022; a greenfields agreement. CFMEU right to make submissions under s.590, approval opposed on public interest grounds, CFMMEU submission dismissed.

[1] An application (Form F19) was made on 24 April 2018 by John Holland Pty Ltd (the applicant) for the approval of an enterprise agreement known as the John Holland CPD Contractors Ghella Joint Venture – Sydney Metro City & Southwest – TSE Works, AWU Greenfield Agreement 2018-2022 (the Agreement). The application was made pursuant to s.185 of the Fair Work Act 2009 (the Act). The Agreement is a single-enterprise greenfields agreement as per s.182(3) of the Act.

[2] The application was accompanied by the statutory declaration (Form F20) of Mr Razz Razlog, Workplace Relations Manager, made on behalf of the applicant and dated 24 April 2018. The declaration stated that the Agreement was made on 20 April 2018.

[3] The Agreement has been made between the applicant and the Australian Workers’ Union New South Wales (AWU). Mr Roushan Walsh, Industrial Officer of the AWU filed a statutory declaration (Form F21), stating that the AWU supported approval of the Agreement.

[4] The Agreement covers employees of the applicant engaged in works for the Tunnels and Station Excavation (TSE) Works package for the Sydney Metro City & Southwest Project (the Project) including the new tunnel under Sydney Harbour. The Project has a contract value of over $2 Billion.

[5] The Agreement at clause 2.3 Scope and Application sets out the Agreement coverage and the classification of employees covered by the Agreement which includes civil workers and tunnel workers. The Agreement does not cover administrative, supervisory or managerial employees, engineers, technicians, surveyors, paramedics, nursing or medical support personnel, or other listed exclusions. I am satisfied that the group of employees covered by the Agreement was fairly chosen taking into account the operational, organisational and geographical distinction of the employees covered under the Agreement. 1

[6] Section 172(2) of the Act provides, relevantly, that an employer may make an 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 proposed to establish; and

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

[7] As per s.172(4) such an agreement when made is a greenfields agreement.

[8] Section 172(2)(b)(i) extracted above, requires a greenfields agreement to relate to a genuine new enterprise the employer is proposing to establish. Section 12 of the Act defines an enterprise as a business, activity, project or undertaking. The Explanatory Memorandum to the Fair Work Bill 2008 at Item 693 in respect of s.172(2)(b)(i) of the Act states that an existing employer in the construction sector could make a greenfields agreement in relation to a genuine new construction project. I am satisfied based on the statutory declaration of Mr Razlog that the Agreement relates to a project as described above and is therefore a genuine new enterprise.

[9] As required by s.172(2)(b)(ii) of the Act I am further satisfied, accepting the statutory declaration of Mr Razlog, that the applicant has not employed any of the persons who will be necessary for the normal conduct of the Project and who will be covered by the Agreement.

Public Interest

[10] Section 187(5)(b) of the Act states that it is a requirement that the Commission is satisfied a greenfields agreement is in the public interest for it to be approved.

[11] In submitting that it is in the public interest that the Agreement is approved, the applicant states that the Agreement’s approval will assist the parties to meet their public interest objectives set out in clause 2.5 Objectives of the Agreement. These include the objectives of continuing to develop and implement:

•  Excellence in WHS

•  Quality of Work

•  Community Impact

•  Excellence in Environmental Management

•  Establishing effective consultative and communication processes

[12] The Agreement is said to:

•  Enable fairness in representation at the workplace

•  Prevent and protect against unfair treatment and discrimination

•  Provide accessible and effective procedures to resolve grievances and disputes and

•  Provide effective compliance mechanisms

[13] In supporting the approval of the Agreement the AWU stated in respect of the ‘public interest’ requirement that “The Agreement will provide for workers to be employed to work under a more relevant, more convenient and more accessible catalogue of employment terms and conditions than under the otherwise relatively more generic industry modern award”.

[14] The AWU stated that the Agreement offers superior wages and conditions than the relevant award and will assist in the smooth execution of the Project.

[15] Although it has been held that the expression ‘public interest’ has no fixed and precise content, 2 the meaning of ‘public interest’ was addressed in by a Full Bench of the Australian Industrial Relations Commission in Re Kellogg Brown and Root, Bass Strait (Esso) Onshore/Offshore Facilities Certified Agreement 2000 (2005) 139 IR 34 where the Full Bench stated:

“The notion of public interest refers to matters that might affect the public as a whole such as the achievement or otherwise of the various objects of the Act, employment levels, inflation, and the maintenance of proper industrial standards. An example of something in the last category may be a case in which there was no applicable award and the termination of the agreement would lead to an absence of award coverage for the employees. While the content of the notion of public interest cannot be precisely defined, it is distinct in nature from the interests of the parties. And although the public interest and the interests of the parties may be simultaneously affected, that fact does not lessen the distinction between them.” 3

[16] In respect of the assessment of the public interest required by s.187(5)(b) of the Act, the Supplementary Explanatory Notes to the Fair Work Bill 2008 state:

“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.” 4

[17] The applicant and the AWU directed the Commission’s attention to provisions of the Agreement in demonstrating the public interest in approving the Agreement. In the Commission’s view, the public interest in approving the Agreement can be best related to the social and economic significance to the State of New South Wales of a major infrastructure project and for the necessity of industrial certainty relating to the employment terms and conditions of prospective employees prior to the commencement of the Project. The objects of the Act and provisions of the Agreement identified by the applicant and the AWU are also a consideration.

CFMMEU’s application to be heard

[18] On 26 April 2018, the Construction and General Division NSW Branch of the Construction, Forestry, Maritime, Mining, and Energy Union (CFMMEU) emailed the Commission requesting copies of the application and any documentation relating to the application. 5

[19] On 2 May 2018, the CFMMEU advised the Commission that it wished to be heard in relation to the Agreement, stating that it was a bargaining representative and had members covered by the Agreement.

[20] On 15 May 2018 the CFMMEU corrected the assertion that it was a bargaining representative and that it had members covered by the proposed Agreement stating that it had ‘members employed on another aspect of the project which is being operated by the joint venture applicant in these proceeding.’ In the same email the CFMMEU stated it was concerned that the applicant would be unable to satisfy the Act’s ‘genuine new enterprise’ requirements and that the Agreement contained clauses that offend freedom of association, and which offend the general protections provisions of the Act.

[21] The CFMMEU requested that the Commission exercise its power under s.590 of the Act to inform itself and allow the CFMMEU to make submissions in relation to the Agreement.

[22] In an email of 17 May 2018, Mr Alistair McClaren Sage Industrial Officer for the AWU advised that Commission that the AWU was capable of representing the interests of prospective employees and refuted the claims of the CFMMEU. The AWU submitted that the Commission should refuse the CFMMEU’s request to be heard.

[23] The matter was subsequently allocated to my chambers and a direction was sent to the CFMMEU to provide any submissions it wished to be make in relation to the approval of the Agreement by COB by 1 June 2018.

[24] On 1 June 2018 the CFMMEU forwarded a document titled Outline of Submissions providing reasons why the CFMMEU should be permitted to participate in the proceedings by making submissions. The submissions did not pursue the issue of whether the Project is a genuine new enterprise and referred to potential breaches the General Protections provisions of the Act and the Code for Tendering and Performance of Building Work 2016 (the Code)

[25] The applicant and the AWU were invited by the Commission to provide any response to the CFMMEU’s Outline of Submissions by COB 8 June 2018.

[26] It is accepted that the CFMMEU was not a bargaining representative for the Agreement and it therefore does not have a statutory right to appear and/or be heard as a party to the application. The CFMMEU however sought to be heard under the discretion provided to the Commission by s.590 of the Act which allows the Commission to inform itself in relation to any matter before it in such manner as it considers appropriate.

[27] The Full Benchin Construction, Forestry, Mining and Energy Union v Collinsville Coal Operations Pty Limited 6at [75] stated the following in respect of s.590 of the Act and the Commission’s agreement approval process:

“[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. (Section 590)”

[28] For the reasons set out in the CFMMEU’s Outline of Submissions being primarily that the CFMMEU has extensive membership in the construction industry and that it is likely that employees engaged under the Agreement will include members of the CFMMEU, the Commission will consider and have regard the CFMMEU’s written submissions.

[29] I note further that as this application involves the approval of a greenfields agreement it is only where the employer has agreed to bargain with a particular employee organisation does that organisation become a bargaining representative. In this instance the employer it has not agreed to bargain with the CFMMEU. There is no default bargaining representative status or ability for an employee to nominate an employee organisation as their bargaining representative such as exists for non-greenfields agreements.

[30] On 8 June 2018 the parties and the CFMMEU were notified that the Commission would deal with the Agreement approval application on the papers and, pursuant to s.590, would take into consideration the submissions of the CFMMEU regarding the Agreement’s approval. The CFMMEU were also advised that should it wish to make any further written submissions, these should be received by COB 12 June 2018. No additional submissions were received from the CFMMEU.

CFMMEU’s submission

[31] The CFMMEU submits that the proposed Agreement contains terms that offend Part 3.1 General Protections of the Act in relation to workplace rights and freedom of association. It is put that such terms weigh against the approval of the Agreement being in the public interest.

[32] The CFMMEU single out two clauses of the Agreement which it says offend against the Act’s General Protections provisions.

[33] The first is Clause 4.6.1 Mandatory Equipment of the Agreement. That clause is in the following terms:

“The safety helmet and other items of personal protective equipment provided must be worn at all times as instructed during the site induction process. Helmets must not be painted, drilled or modified in any way, including any other paraphernalia not approved by the Company.”

(CFMMEU emphasis)

[34] The CFMMEU submit that clause 4.6.1 is clearly intended to support s 13(12)(j) of the Code which provides as follows:

“(j) building association logos, mottos or indicia are not applied to clothing, property or equipment supplied by, or which provision is made for by, the employer or any other conduct which implies that membership of a building association is anything other than an individual choice for each employee;”

[35] The CFMMEU states that it is currently in dispute with the Australian Building and Construction Commission (ABCC) as to the correct interpretation of this section of the Code. It is submitted that the ABCC has interpreted 4.6.1 of the Code as preventing any union stickers from being applied to hard hats. The CFMMEU submits that insisting that no union stickers be applied denies employees the right to show their union membership which is a breach of the freedom of association provisions under the Act and the Code.

[36] The first point to note is that the clause makes no mention of ‘union stickers’ only that safety helmets cannot be modified in any way, including ‘paraphernalia not approved’ by the company. What is approved or not approved in respect of paraphernalia on safety helmets is a matter for the company as per the Agreement clause.

[37] The General Protections provisions of the Act at s.346 state that a person must not take adverse action against another person because the other person is or is not, or was or was not, a member of an industrial association.

[38] The Code is not an instrument that the Commission is required to have regard to in the agreement approval process, whether the agreement is a greenfields or non-greenfields agreement. This is not to discount the Commission having regard to the Code as a matter of public interest.

[39] The Agreement makes a number of aspirational references to being consistent with the Act and the Code 7 and complying with discrimination laws. I am not persuaded that clause 4.6.1 contravenes the Code or the objects of the Act in respect of the General Protections provisions at s.336(b).

[40] Employers and unions are entitled to reach agreement on what is worn in respect to clothing and personal protective equipment as is reflected at clause 4.6 of the Agreement. I fail to see how not allowing ‘union stickers’ is a breach of the freedom of association provisions of the Act, if such a prohibition is the eventual outcome of clause 4.6.1. It is easier to envisage the potential for such a breach to occur where union stickers identify allegiance to an employee’s membership of a building union compared to employees who may chose not to attach such labelling to their safety helmets. Where no ‘union stickers’ are permitted on safety helmets the issue does not arise.

[41] I am unable to see where the public interest is enlivened by the terms of clause 4.6.1. In any event where an agreement is approved which contains unlawful or objectionable content the terms are unenforceable as per s.253 and s.356 of the Act. 8 The alleged dispute between the CFMMEU and the ABCC over its interpretation is not a matter required to be determined by the Commission in the agreement approval process.

[42] The CFMMEU also submit that clause 7.2.2 Absenteeism of the Agreement offends against s.340 of the Act. The clause is in the following terms:

“If an employee is taking personal/carer’s leave such that there is an indication of a pattern of regular and /or excessive absenteeism, the Company may commence counselling in accordance with the procedure set out in clause 3.13.” 9

[43] Section 340 of the Act provides that a person must not take adverse action against another person because the person has a workplace right or has exercised a workplace right. The CFMMEU submit that action taken under the Counselling & Disciplinary Procedure clause taken against an employee exercising their workplace right to take personal/carer’s leave could constitute adverse action.

[44] The National Employment Standards (NES) include minimum standards for personal/carer’s leave entitlements that an enterprise agreement cannot fall below. Should an enterprise agreement purport to provide an entitlement less than the NES that term has no effect to the extent it provides a lesser entitlement. Clause 2.7 of the Agreement also reflects this legislative obligation where it states the Agreement is to be read in conjunction with the NES and that the NES applies a minimum standard to the Agreement entitlements.

[45] Clause 7.2.2 makes no reference to an employee’s entitlement to personal/carer’s leave, it refers to a pattern of regular or excessive ‘absenteeism’. As the AWU point out in opposing the CFMMEU application, excessive absenteeism is the practice of staying away from work without good reason. The Macquarie Dictionary Online defines ‘absenteeism’ as the practice of absenting oneself from duties, studies, employment, often for inadequate reasons. The Australian Concise Oxford Dictionary 10 refers to the practice of absenting oneself from work, especially frequently or illicitly.

[46] The Agreement clearly provides that the NES in respect to personal/carer’s leave applies as a minimum. Clause 7.2.2 can only have application where ‘absenteeism’ falls outside the NES entitlement. An employee’s absenteeism doesn’t necessarily equate to the employee’s NES entitlement; the use of the phrase ‘excessive absenteeism’ connotes an absence outside the minimum standard entitlement. An employer is entitled to review an employee’s absences to ensure they are legitimate and not absences which are being misused to the detriment of the employer and other employees. The clause does not purport to provide a right to take adverse action against an employee exercising a workplace right.

[47] The CFMMEU’s submissions on clause 7.2.2 are without substance.

Better off overall test

[48] Section 186(2)(d) requires the Agreement to pass the better off overall test (BOOT). A greenfields agreement passes the BOOT if the Commission is satisfied, as at test time, that each prospective award covered employee for the Agreement would be better off overall if the Agreement applies to the employee than if the relevant modern award applied to the employee.

[49] Section 193(3) of the Act defines the ‘test time’ as being when the application for approval of the Agreement was made.

[50] In Armacell Australia Pty and Others 11a Full Bench of Fair Work Australia said:

“The BOOT, as the name implies, requires an overall assessment to be made. This requires identification of terms which are more beneficial for an employee, terms which are less beneficial and an overall assessment of whether an employee would be better off under the agreement.”

[51] Mr Razlog’s Statutory Declaration (F20) lists a number of benefits said to be more beneficial than the relevant award, the Building and Construction General On-site Award 2010, (the Award) the most significant being the substantially higher rates of pay which vary from being 48.17% (CW1 Civil Worker) to 110.46% (CW5 Tunnel Worker) above the hourly rates in the Award. There are other variations all well above the hourly Award rates depending on the particular classification.

[52] In respect of less beneficial terms and conditions, they include an inferior higher duties clause, a longer span of hours and the exclusion of some Award allowances said not to be relevant to the Project.

[53] In comparing and making an overall assessment of the more beneficial and less beneficial terms and conditions of the Agreement I am satisfied that the Agreement passes the BOOT.

[54] The application has been made within the 14 day time limit established by subsection 185(4) of the Act.

[55] I am further satisfied that each of the requirements of ss.186 and 187 as are relevant to this application for approval of the Agreement have been met.

[56] I am satisfied that the AWU is entitled to represent the industrial interests of a majority of employees who will be covered by the Agreement in relation to work that is to be performed under it and is therefore covered by the Agreement. 12

[57] I am also satisfied for the reasons provided above that it is in the public interest to approve the Agreement.

[58] I note that the Agreement contains an Individual Flexibility term at clause 3.3 and a Consultation term at clause 3.5.

[59] Part 2-4 of the Act includes various procedural requirements that must be satisfied before the Commission can approve of an enterprise agreement. I have considered the contents of the applicant’s Statutory Declaration and I am satisfied that the procedural requirements of Part 2-4 of the Act have been met in this instance.

[60] The Agreement is approved. In accordance with s.54(1) of the Act it will operate 7 days from the date of this approval.The nominal expiry date of the Agreement as indicated in clause 2.4 Date and Period of Operation is 30 April 2022.

DEPUTY PRESIDENT

 1   S.186(3) and s.186(3A) of the Act

 2   Gregory v Qantas Airways Ltd and Another (2016) 241 FCR 72 at [53] per Buchanan J, with whom Bromberg and Rangiah JJ agreed

 3 (2005) 139 IR 34 at 40

 4   At [118]

 5   The email refers to the Union prior to its amalgamation with the Maritime Union of Australia.

 6   [2014] FWCFB 7940

 7   Clause 2.6 (d) and 3.15

 8   See decision of Full Bench majority in The Australian Industry Group v ADJ Contracting Pty Ltd[2011] FWAFB 6684 at [47]

 9   Clause 3.13 is titled Counselling & Disciplinary Procedure

 10   5th edition

 11   [2010] FWAFB 9985 at [41].

 12   S.187(5)(a) and s.53(2)(b)

Printed by authority of the Commonwealth Government Printer

<AE428812  PR608095>