Lend Lease Engineering Pty Ltd; Bouygues Construction Australia

[2016] FWC 126

[2016] FWC 126

FAIR WORK COMMISSION

REASONS FOR DECISION

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

Lend Lease Engineering Pty Ltd; Bouygues Construction Australia
(AG2015/6765)

Building, metal and civil construction industries
COMMISSIONER ROE	MELBOURNE, 7 JANUARY 2016

Application for approval of the NorthConnex/AWU Civil Works Greenfields Agreement 2015-2019.

[1] On 22 December 2015 I published a decision to approve the NorthConnex/AWU Civil Works Greenfields Agreement 2015-2019 (Agreement). 1 I foreshadowed the decision at a hearing on 18 December 2015.

[2] In that decision I made the following findings:

“The application was made pursuant to s.185 of the Fair Work Act 2009 (Act). It was made by Lend Lease Engineering Pty Ltd; Bouygues Construction Australia.

This is a greenfields Agreement that meets the requirements of s.172(2)(b) of the Act. I am satisfied that each of the requirements of ss.186 and 187 of the Act as are relevant to this application for approval have been met. In accordance with s.187(5)(a) of the Act, I am satisfied that The Australian Workers’ Union 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. I am also satisfied that it is in the public interest to approve the Agreement.

The Agreement does not cover all of the employees of the employers however taking into account the factors in ss.186(3) and (3A) I am satisfied that the group of employees was fairly chosen.”

[3] The CFMEU opposed the approval of the Agreement and I now publish my reasons for my findings.

[4] The CFMEU sought Orders for the production of certain documents. I did not issue an Order but requested the company, having regard to the CFMEU proposed Order, to provide relevant information it is able to in the limited time available prior to the hearing which addresses the union’s contention that there were employees employed by Lend Lease Engineering who would be covered by the Agreement at the time the Agreement was made and their contention that the enterprise established by the joint venturers was not a genuine new enterprise. Lend Lease provided relevant information.

[5] The CFMEU was involved in initial negotiations for an agreement to cover the North Connex project. Other unions were involved in this process with NSW Labour Council coordination. In the end agreement was not reached with the CFMEU but the Agreement was made with the AWU. The CFMEU is also covered by existing agreements which cover one of the joint venture partners. Some of those who have been employed under existing CFMEU agreements are likely to be engaged on the North Connex project under the Agreement. I was satisfied that the CFMEU had an interest in the matter and I therefore provided the CFMEU with access to relevant documents on the Commission file and requested submissions from the CFMEU and allowed them to participate in the hearing on 18 December 2015 which finalised the matter.

[6] The CFMEU was initially concerned that there were persons already employed by the joint venture who will be necessary for the normal conduct of the enterprise and will be covered by the Agreement. However, the evidence produced by the joint venture meant that the CFMEU did not pursue this argument. I am satisfied that the joint venture did not at the relevant time employ persons who will covered by the Agreement. The CFMEU also argued that the Agreement was uncertain and could not be approved because the disputes settlement clause, Clause 14.6, required that any decision made by the Fair Work Commission in any arbitration of a dispute under the Agreement must be consistent with the Building Code 2013 or its successor. In Kane Constructions Pty Ltd T/A Kane Constructions (NSW) Pty Ltd 2 and LCR Group Pty Ltd3 I distinguished this type of clause from that considered in the Full Bench decision in Construction, Forestry, Mining and Energy Union (105N) v CSR Limited T/A Viridian New World Glass.4 I reject the CFMEU argument for the same reasons in this case. The CFMEU did not pursue this argument at the hearing on 18 December 2015.

[7] The CFMEU opposed the application on the following grounds:

a) The project is not a genuine new enterprise because substantive work has already started.

b) LLE and Bouygeos are not engaged in a joint venture or common enterprise. They are not single interest employers because LLE will be the employer of the employees and Bouygeos will not be a employer of employees.

c) Approval of the Agreement is contrary to the public interest, contrary to Section 187(5), because employees are being deprived of the vote and the opportunity to put forward their views on the Agreement.

d) The Agreement did not include the signatures, names, addresses and/or any explanation of the person’s authority to sign the agreement, as required by Regulation 2.06A, and that this requirement is mandatory.

The project is not a genuine new enterprise because substantive work has already started

[8] The evidence established that preparatory work had begun on the North Connex project. That work included demolition of housing at the site, work preparatory to excavating the mainline tunnels including excavation of access shafts, temporary surface road works to allow construction vehicle access and to provide a construction corridor, and brining high voltage power to the tunnel sites. When compared to the scale of this $2.8 billion four year project these preparatory works are relatively small scale. The work covered by the Agreement is estimated to be worth around $500 million. There are around 300 workers currently employed by sub-contractors and labour hire agencies to carry out the preparatory work.

[9] The CFMEU submitted that the scale of the work went beyond preparatory work and meant that it was no longer a new project. The so called preparatory work was in fact a substantial part of the overall project and the work to be covered by the Agreement could not be seen as a separate project.

[10] I consider that the evidence of Mr Clothier establishes that the joint venture is a genuine new enterprise established for the purpose of undertaking the tunnel work for the North Connex project. I am also satisfied that the preparatory work is distinguishable from that work. This is consistent with the finding of Justice Rares in National Union of Workers V HP Distribution Pty Ltd: 5

“Indeed, the expressions “are establishing” and “propose to establish” in each of ss 172(2)(b)(i) and (3)(b)(i) indicated that one of the two scenarios might exist and that preparatory steps, even of a very substantial nature, would not necessarily disqualify an agreement from being a greenfields agreement for the purposes of s 72(2) or (3).” 6

LLE and Bouygeos are not engaged in a joint venture or common enterprise

[11] The CFMEU argues that the joint venture partners are not single interest employers because LLE will be the employer of the employees and Bouygeos will not be a employer of employees. The application has been made on the basis that the joint venture are single interest employers. This is necessary if they are to make a single enterprise greenfields Agreement. The relevant parts of Section 172 of the Act are as follows:

“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):

(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.

Note: The expression genuine new enterpriseincludes a genuine new business, activity, project or undertaking (see the definition of enterprise in section 12).

Multi-enterprise agreements

(3) Two or more employers that are not all single interest employers may make an enterprise agreement (a multi-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 employers are establishing or propose to establish; and
(ii) the 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 enterpriseincludes a genuine new business, activity, project or undertaking (see the definition of enterprise in section 12).

Greenfields agreements

(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.

Single interest employers

(5) Two or more employers are single interest employers if:

(a) the employers are engaged in a joint venture or common enterprise; or
(b) the employers are related bodies corporate; or
(c) the employers are specified in a single interest employer authorisation that is in operation in relation to the proposed enterprise agreement concerned.”

[12] It is not suggested that Section 172(5)(b) or (c) apply. Mr Green, QSE Director of Bouygues Construction, Australia has given uncontested evidence that Bouygues Construction Pty Ltd employs 178 persons in Australia. He also gave evidence that there are two joint venture deeds between the joint venture partners LLE and Bouygues Construction Australia Pty Ltd and that one of those deeds relates to the tunnelling works on the North Connex Project. He gave evidence that:

“Whilst it is not presently intended for Bouygues Construction Australia Pty Ltd to employ construction workers on the North Connex Project under the Agreement, I cannot foreclose the possibility that we might decide to do so in the future.” 7

[13] I am satisfied that Section 175(2)(a) applies because both LLE and Bouygues Construction Australia Pty Ltd are employers who employ persons in Australia and who are engaged in a joint venture or common enterprise. The agreement relates to a genuine new enterprise that the joint venture employers are establishing and the 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.

Approval of the Agreement is contrary to the public interest

[14] The CFMEU argues that the joint venture partners have already selected employees who are to be employed on the project. Employees have been transferred between Lend Lease associated companies in the past. Contact has been maintained with former employees of LLE with a view to re-engaging them on the project in the future. The actions of LLE in making the Agreement have been designed to prevent known employees from voting on their own terms and conditions and this is contrary to the public interest.

[15] I am satisfied that the AWU is entitled to represent the industrial interests of the majority of the employees who will be covered by the agreement in relation to the work to be performed under the agreement (Section 187(5)(a)). The evidence of Mr Clothier satisfies me that there is nothing artificial about the arrangements entered into. LLE has identified some persons who might potentially be engaged to work under the Agreement however none of these persons has been offered employment. There is nothing artificial or contrary to the public interest for the joint venture to determine that it is appropriate to have a separate industrial agreement to cover such a major and distinct project as the tunnel works for North Connex. For reasons already outlined that project is a genuine new enterprise.

[16] I am satisfied that it is in the public interest to approve the Agreement.

The Agreement is not compliant with Section 185(2)

[17] The Act requires that the application must be accompanied by a signed copy of the agreement. It also requires that “the regulations may prescribe requirements relating to the signing of enterprise agreements” (Section 285(5)). The regulation is as follows:

“2.06A Bargaining representative must apply for FWC approval of an enterprise agreement—requirements for signing agreement

(1) For subsection 185(5) of the Act, this regulation prescribes the requirements for the signing of an enterprise agreement.
(2) For paragraph 185(2)(a) of the Act, a copy of an enterprise agreement is a signed copy only if:

(a) it is signed by:

(i) the employer covered by the agreement; and
(ii) at least 1 representative of the employees covered by the agreement; and

(b) it includes:

(i) the full name and address of each person who signs the agreement; and
(ii) an explanation of the person’s authority to sign the agreement.

Note: Paragraph 185(2)(a) of the Act requires an application for approval of an enterprise agreement to be accompanied by a signed copy of the agreement.”

[18] The copy of the Agreement which accompanied the application was signed in manner consistent with the regulations, however, the State Secretary of the AWU, signed as R,K Collison. The full name of Mr Collison and his address was not included. The addresses of the persons who signed on behalf of the joint venture partners were also omitted.

[19] I am satisfied that the application was accompanied by a signed copy of the agreement as required by Section 185(2)(a). However, the signature requirements prescribed by the regulations pursuant to Section 185(5) were not met at the time the application was made.

[20] I consider it is appropriate to use Section 586 to allow the parties to correct this error or irregularity. Section 586 provides:

“586 Correcting and amending applications and documents etc.

The FWC may:

(a) allow a correction or amendment of any application, or other document relating to a matter before the FWC, on any terms that it considers appropriate; or
(b) waive an irregularity in the form or manner in which an application is made to the FWC.”

[21] The approach I have taken is consistent with the approach of the Full Bench in CEPU & AMWU v Sustaining Works Pty Limited. 8 In exercising this discretion I would not be extending the time for the making of the application. Section 185(4) does not allow any such discretion in respect to greenfields agreements. Rather I would be exercising discretion to allow the application and/or a document relating to the application which is the matter before the Fair Work Commission to be corrected.
[22] I consider that the failure to include the addresses of the signatories at the time of making the application should not be fatal to the application. I consider that it is well known what the name and address of the State Secretary of the AWU is and it is also well known what the addresses of LLE and Bouygues are. In these circumstances it would be consistent with the objective of Part 2-4 of the Act to provide a simple and fair framework for collective bargaining if I was to exercise discretion under Section 586 of the Act to allow the parties to provide a corrected signature page that meets the requirements of the Regulation.

[23] I allowed the parties to submit a corrected signature page which they did on 18 December 2015.

[24] For these reasons the objections of the CFMEU were dismissed and the Agreement was approved and, in accordance with Section 54, operates from 29 December 2015. The nominal expiry date of the Agreement is 22 December 2019.

COMMISSIONER

 1   [2015] FWCA 8851.

 2   [2015] FWC 8327.

 3   [2015] FWCA 7243.

 4   [2015] FWCFB 3889.

 5 [2013] FCA 139.

 6 [2013] FCA 139 at para 32.

 7   Statement of Mr Green of 17 December 2015, at para 5.

 8   [2015] FWCFB 4422 at[30] to [32].

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