Lendlease Engineering Pty Limited

[2019] FWCA 6491

[2019] FWCA 6491

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.185—Enterprise agreement

Lendlease Engineering Pty Limited
(AG2019/2615)

LENDLEASE ENGINEERING PTY LIMITED KSD & M1/M3 PROJECTS ENTERPRISE AGREEMENT 2019

Building, metal and civil construction industries
COMMISSIONER MCKINNON	MELBOURNE, 20 SEPTEMBER 2019

Application for approval of the Lendlease Engineering Pty Limited KSD & M1/M3 Projects Enterprise Agreement 2019.

[1] Application has been made for approval of an enterprise agreement known as the Lendlease Engineering Pty Limited KSD & M1/M3 Projects Enterprise Agreement 2019 (the Agreement). The application was made pursuant to s.185 of the Fair Work Act 2009 (the Act) by Lendlease Engineering Pty Limited. The Agreement is a single enterprise agreement.

[2] The Construction, Forestry, Maritime, Mining and Energy Union (CFMMEU) and the Australian Workers’ Union (AWU) were bargaining representatives for the Agreement in addition to one employee bargaining representative who has since ceased employment.

[3] On 24 June 2019, the CFMMEU sought documents in relation to the application so that it “might file a Form F18”. Documents were provided to the CFMMEU on 31 July 2019. No Form F18 was filed by the CFMMEU in relation to the Agreement.

[4] On 8 August 2019, the matter was listed for hearing on 18 September 2019 with directions for the filing of materials by the parties on 29 August 2019 and 12 September 2019.

[5] On 28 August 2019, the CFMMEU engaged legal representatives in the matter and on 29 August 2019, five hours before materials were due to be filed, those legal representatives sought an extension to file materials. A short extension was granted.

[6] On 2 September 2019, the CFMMEU filed submissions objecting to the application on the grounds that:

1. There were reasonable grounds for believing that the Agreement was not genuinely agreed for the purposes of section 188(1)(c) of the Act, because the CFMMEU is identified as a party that will be covered by the Agreement in the text of the Agreement on the proviso that such coverage must be “noted by the Fair Work Commission at the time the Agreement is approved”. The CFMMEU has chosen not to support the Agreement with the result that it will not be covered by the Agreement, and leaving the reference to the CFMMEU in the Agreement would misrepresent to employees that it was supported by the CFMMEU; and

2. The Agreement is ambiguous or uncertain in referring to the CFMMEU as a party covered by the Agreement, with the result that approval of the application should be refused on discretionary grounds.

[7] The CFMMEU’s objections to the Agreement were withdrawn on 10 September 2019 and the matter proceeded to hearing on 18 September 2019. Lendlease and the AWU participated in the hearing. The CFMMEU did not appear.

[8] Lendlease submitted that there was no evidence that employees were misled in bargaining for the Agreement or in relation to whether the CFMMEU was covered by the Agreement. It referred to the terms of clause 1.2 of the Agreement, which states as follows:

“This Agreement covers each of the following:

● Lendlease Engineering Pty Limited (Company);

● Employees of the Company engaged on civil construction works performed by the Company on the Kingsford Smith Drive Upgrade Project (KSD) and the Pacific Motorway Upgrade: M1/M3/Gateway Merge Project - Miles Platting Road to Rochedale Road (M1/M3) who fall within the scope prescribed in clause 1.3, and the classifications prescribed in clause 3.1, of this Agreement (Employees);

● The Agreement will also cover:

○ The Australian Workers’ Union (AWU); and

○ The Construction Forestry Maritime Mining and Energy Union (CFMMEU)

provided that:

○ For the AWU and/or CFMMEU to be covered by the Agreement, such fact must be noted by the Fair Work Commission (FWC) at the time the Agreement is approved.”

[9] Lendlease referred to the Full Bench decision in Construction, Forestry, Mining and Energy Union v Lendlease Engineering Pty Ltd 1(Lendlease) where substantially the same argument was mounted by the CFMEU and rejected, with the Full Bench observing that reference in an enterprise agreement to an anticipated state of affairs that may arise in the future does not convey an actual fact and nor does it imply an intention on the part of the relevant union to be covered by the agreement. All it conveys is a belief as to the future intention of the parties.

[10] In relation to whether the Agreement is ambiguous or uncertain, Lendlease submits that it is not and that before and at the time of approval, employees knew about the content of clause 1.2 of the Agreement including as a result of information sessions, communication about the Agreement through bargaining representatives and the existence of similar clauses in previous enterprise agreements.

[11] The AWU also disagrees with the CFMMEU’s submissions to the effect that the Agreement could not, or should not, be approved. It supports the Agreement and seeks to be covered.

[12] According to Lendlease, the CFMMEU were active in bargaining for the Agreement including by the exercise of right of entry to hold discussions with employees on multiple occasions. I agree with the observations of the Full Bench in Lendlease that it is commonplace for unions to apply to be covered by enterprise agreements, even when they have not supported the making of the agreement. In the circumstances, it was both a reasonable and ordinary step for Lendlease to take to anticipate the CFMMEU doing so in relation to the Agreement by specifying that it would be covered by the Agreement in the circumstances set out in the Agreement. It does not give rise to any reasonable grounds for believing that the Agreement was not genuinely agreed, particularly given the absence of any evidence to that effect.

[13] I am also not satisfied that the Agreement is relevantly ambiguous or uncertain. The Agreement reflects the legal position that for a bargaining representative to become covered by an enterprise agreement, that fact must be noted by the Commission in its approval decision. 2 Any potential ambiguity or uncertainty about whether the CFMMEU will be covered is to be resolved at the time the Agreement is approved, at which time the requisite notation will be made if the statutory conditions are met. The same uncertainty could be said to arise in every application for approval of an enterprise agreement where there are employee organisations who are bargaining representatives.

[14] From the time an enterprise agreement is made until a Form F18 is filed with the Commission and the agreement is approved, the status of the relevant organisation in relation to the Agreement in the sense of whether ‘covers’ the organisation or not, remains unknown. Where an enterprise agreement clearly identifies that for an employee organisation to become covered by its terms, certain conditions must be met and those conditions align with those set out in the Act, the uncertainty is not found in the terms of the Agreement itself but rather in the operation of the statutory scheme.

[15] I am equally not persuaded that even if the Agreement was ambiguous or uncertain (which it is not) I could exercise my discretion to refuse to approve the Agreement. The Commission must approve an enterprise agreement upon application if the relevant statutory criteria are met. There is no general discretion in that regard and certainly no requirement upon the Commission to ensure that an enterprise agreement contains no ambiguity or uncertainty before it is approved. The mechanism for dealing with ambiguity or uncertainty is found in section 217 of the Act, which permits enterprise agreements to be varied to resolve the concern in appropriate cases.

[16] On the material before me, I am satisfied that each of the requirements of ss.186, 187 and 188 as are relevant to this application for approval have been met. The Agreement incorporates the Building and Construction General On-site Award 2010 (the Award) except to the extent of inconsistency. It does not exclude the National Employment Standards. It provides for wage rates that are in the range of 46-66% above the Award. There is material before me to demonstrate the content of, and context for, the explanations given to employees about the Agreement and its effect on them. Both the AWU and the CFMMEU were active participants in the bargaining process. No other concerns arise in relation to the various statutory criteria that must be met for an enterprise agreement to be capable of approval.

[17] The Australian Workers’ Union being a bargaining representative for the Agreement, has given notice under s.183 of the Act that it wants the Agreement to cover it. In accordance with s.201(2) I note that the Agreement covers the AWU.

[18] The Agreement is approved and, in accordance with s.54 of the Act, will operate from 27 September 2019. The nominal expiry date of the Agreement is 19 September 2021.

COMMISSIONER

 1   [2017] FWCFB 4001

 2   Fair Work Act 2009 (Cth), s.54(2), s.183 and s.201(2)

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