Thiess Pty Ltd; Balfour Beatty Pty Ltd
[2011] FWA 6904
•7 OCTOBER 2011
[2011] FWA 6904 |
|
REASONS FOR DECISION |
Fair Work Act 2009
s.185—Enterprise agreement
Thiess Pty Ltd; Balfour Beatty Pty Ltd
(AG2011/2597)
John Holland Pty Ltd
(AG2011/12220)
COMMISSIONER RYAN | MELBOURNE, 7 OCTOBER 2011 |
Application for approval of the Thiess Balfour Beatty Regional Rail Link Work Package C Alliance Agreement 2011.
Application for approval of the Fulton Hogan and John Holland and the AWU - Regional Rail Link Deer Park to West Werribee Junction Project Agreement 2011-2015
[1] I have separately issued decisions approving the greenfields agreements known as the Fulton Hogan and John Holland and the AWU - Regional Rail Link Deer Park to West Werribee Junction Project Agreement 2011-2015, [2011] FWAA 6903, and the Thiess Balfour Beatty Regional Rail Link Work Package C Alliance Agreement 2011, [2011] FWAA 6906. The following are the reasons for those decisions.
[2] An application was made on 19 September 2011 for approval of an enterprise agreement known as the Fulton Hogan and John Holland and the AWU - Regional Rail Link Deer Park to West Werribee Junction Project Agreement 2011-2015 (the Fulton Hogan/John Holland Agreement). The application was made pursuant to s.185 of the Fair Work Act 2009 (the Act) by John Holland Pty Ltd (John Holland). The application identifies the agreement as a greenfields agreement.
[3] The Fulton Hogan/John Holland Agreement was made between John Holland and Fulton Hogan Construction P/L (Fulton Hogan) and the Australian Workers Union (AWU). An Employer’s Declaration in Support of Application for Approval of Greenfields Agreement (Form F20) was filed by each of John Holland and Fulton Hogan. A Declaration of Employee Organisation in Support of Application for Approval of Greenfields Agreement (Form F21) was filed by the AWU.
[4] On 22 September 2011 the Construction Forestry Mining Energy Union (CFMEU) contacted my chambers by email with a request to be heard in relation to the approval of the Agreement.
[5] An application was made on 23 September 2011 for approval of an enterprise agreement known as the Thiess Balfour Beatty Regional Rail Link Work Package C Alliance Agreement (the Thiess/Balfour Beatty Agreement). The application was made pursuant to s.185 of the Fair Work Act 2009 (the Act) by both Thiess P/L (Thiess) and Balfour Beatty P/L (Balfour Beatty). The application identifies the agreement as a greenfields agreement.
[6] The Thiess/Balfour Beatty Agreement was made between Thiess and Balfour Beatty and the Australian Workers’ Union (AWU). An Employer’s Declaration in Support of Application for Approval of Greenfields Agreement (Form F20) was filed by each of Thiess and Balfour Beatty. A Declaration of Employee Organisation in Support of Application for Approval of Greenfields Agreement (Form F21) was filed by the AWU.
[7] On 29 September 2011 the Construction Forestry Mining Energy Union (CFMEU) contacted my chambers by email with a request to be heard in relation to the approval of the Agreement.
[8] Both applications were heard by me on Thursday 6 October 2011. The CFMEU opposed the applications for approval. Mr Wainwright for the CFMEU adopted the submissions put by the CFMEU in opposing an application for approval of a greenfields agreement between John Holland and Abigroup and the AWU in relation to Work Package C of the regional rail link project [2011] FWAA 5724 (the John Holland/Abigroup Agreement). Of the four specific grounds raised by the CFMEU in opposition to the approval of the John Holland/Abigroup Agreement only three are directly relevant to the two applications in this matter. The three grounds for objection raised by the CFMEU are:
1. That it is not in the public interest to approve the agreement pursuant to
s.187 (5) (b) of the Act.
2. That the group of employees to be covered by the agreement has not been fairly chosen pursuant to section 186 (3) of the Act.’
3. That the Agreement was not a greenfields agreement.
[9] Evidence in relation to the Fulton Hogan/John Holland Agreement was given on behalf of the employer parties to the Fulton Hogan/John Holland Agreement by Mr Robert Norman, Project Director for the joint venture project between John Holland and Fulton Hogan in relation to Work Packages E and F of the Regional Rail Link Project. Mr Norman is employed by John Holland Group P/L.
[10] Evidence in relation to the Thiess/Balfour Beatty Agreement was given on behalf of the employer parties to the Thiess Balfour Beatty Agreement by Mr David Sage, Operations Manager (Deputy Alliance General Manager) for the joint venture project between Thiess and Balfour Beatty in relation to Work Package C of the Regional Rail Link Project.
Drawing the Line on a genuine new enterprise?
[11] In both of the matters before me the greenfields agreements have been made at a time when the respective joint venturers have tendered for work on the Regional Rail Link Project but before the tenders have been awarded.
[12] The challenge by the CFMEU in each of the present matters was that the joint venturers in each matter could not meet the test in s.172(3)(b)(i) because there was not a genuine new enterprise that the employers are establishing or propose to establish.
[13] In the John Holland/Abigroup Agreement matter Mr Friend for the CFMEU put their opposition in the following terms:
‘PN344. “the next point is that they haven't got far enough along the line, because it's really just the glint in their eye. They're hoping to get this, but they don't know if they will, and they've got no control over it whatsoever. So that's the first argument.”
and
PN346 ....... “it's not far enough along the track to say that it's a proposal. It's a thought. It's something that they want to do, but they haven't gone far enough, because they've only put in the tender and it hasn't been accepted. Because, you see, you can have agreements all over the place from every tenderer, which will never come into effect, which seems an odd result to have in relation to something as important as these sorts of statutory instruments.”
and
PN352 “My submission is that the line can be drawn when the tenders have been accepted, and the job has been awarded.”
and
PN353. “So my submission is they don't propose to commence the genuine new enterprise until they get the tender.’ 1
[14] In the John Holland/Abigroup Agreement matter I did not accept that the line should be drawn when tenders have been accepted, and I adopt the same position in relation to the present matters.
[15] In relation to the Fulton Hogan/John Holland Agreement the work to be covered by that agreement is Work Package E of the Regional Rail Link Project. Although Work Package E was not in evidence before me, Mr Norman gave evidence as to the size of the work to be undertaken under Package E. The proposed works include the construction of a new 25 km railway line from Deer Park to West Werribee and the construction of a rail junction at West Werribee and the construction of 2 railway stations. Mr Norman gave evidence that the joint venture started in mid 2010 and was established to bid for both Work Package E and Work Package F and that since being set up the joint venture has had up to 70 people working on the bids and has spent several million dollars on the bid process.
[16] In relation to the Thiess/Balfour Beatty Agreement the work to be covered by that agreement is Work Package C of the Regional Rail Link Project. Although Work Package C was not in evidence before me in this matter I am familiar with Work Package C as a copy of the documentation was in evidence before me in the John Holland/Abigroup Agreement matter. In addition Mr Sage gave evidence that he commenced working on the formation of the consortium and the putting together of a team to manage the bid for the joint venturers 18 months ago and that since September 2010 he has worked full time for the joint venture in preparing the bid and has done so out of dedicated office space leased for the specific purpose of the joint venture. Mr Sage gave evidence that at its peak the joint venturers employed 80 people at the bid office but that had reduced to 20 - 30 persons at present. Mr Sage also gave evidence that the costs of the bid process so far were in excess of $10M.
[17] This evidence in relation to both of the matters before me shows that it was much more than a “glint in their eye” for the respective joint venturers. In the circumstances of each of the present matters I am satisfied that the respective joint venturers are establishing or propose to establish a genuine new enterprise and that each of the two greenfields agreements relates to that genuine new enterprise.
[18] In each of the two matters currently before me and in the John Holland/Abigroup Agreement matter it was the specific submission of the CFMEU that the determination as to whether the employers have a genuine new enterprise that the employers are establishing or propose to establish (s.172(2)(b)(i)) was to be approached on the basis that “the line can be drawn when the tenders have been accepted, and the job has been awarded.” My reasoning in the John Holland/Abigroup Agreement matter and in relation to the two matters before me is to approach the issue raised by s.172(2)(b)(i) in the manner suggested by the CFMEU. I have done so simply because it provides a convenient way in which to consider the operation of s.172(2)(b)(i).
[19] Having said that it is important to note that the language of s.172(2)(b)(i) makes no reference to drawing lines on the basis that if the employer is on one side of the line they pass the test and if on the other side of the line they fail the test.
[20] The requirement in s.172(2)(b)(i) can only be met by the Tribunal being satisfied that the employer or employers are in fact establishing or proposing to establish a genuine new enterprise. Mr Tamvakologos, solicitor for John Holland and Fulton Hogan in the Fulton Hogan/John Holland Agreement matter made the very strong submission that in the absence of any evidence to the contrary or any direct challenge to the statutory declarations of the employers filed in support of the application that the Tribunal should on the basis of the statutory declarations be satisfied that the employers are establishing or proposing to establish a genuine new enterprise. I accept that in many instances the Tribunal will be satisfied that the requirements of s.172(2)(b) have been met on the basis of the statutory declarations filed in support of the application for approval of a greenfields agreement.
[21] This was the course I adopted in approving the Laing O’Rourke Australia Pty Ltd Victorian Rail Infrastructure - Rail Track & Associated Civil Works Enterprise Agreement 2011 - 2014, a greenfields agreement made between Laing O’Rourke Construction Australia Pty Ltd and the AWU and the Australian Rail Tram Bus Industry Union, [2011] FWAA 6926, which I also heard on 6 October 2011, immediately before hearing the present two applications. In hearing that matter I asked the CFMEU who were in attendance if they sought to oppose the application for approval. The CFMEU advised the Tribunal that they did not seek to appear in that matter. Both the employer and the two union parties to the greenfields agreement sought to rely upon the statutory declarations filed in support of the application. On the basis of the statutory declarations and having considered the terms of the agreement I subsequently approved the application.
[22] In the present two matters, as in the case of the John Holland/Abigroup Agreement matter, where questions are raised as to whether or not the employers are establishing or proposing to establish a genuine new enterprise the Tribunal may rely on the statutory declarations filed in support of the applications or the Tribunal may, as I have done, seek further evidence from the employers. Ultimately it is for the Tribunal to determine whether or not it can be satisfied that the jurisdictional prerequisites for approval of a greenfields agreement have been met.
[23] Satisfaction of the requirements of s.172(2)b) must be dealt with on a case by case basis. In the present two matters and in the John Holland/Abigroup Agreement matter I was satisfied that the requirements of s.172(2)(b)(i) had been met because of the specific evidence in each matter. Whilst the evidence in each of the three separate matters supported a finding that the respective joint venturers in each matter were establishing or proposing to establish a genuine new enterprise, even though they were still only bidders for a tender package, that is not to say that the same outcome would apply in relation to other employers or other joint venturers. Each application for approval of a greenfields agreement stands alone and must be considered separately.
Fairly Chosen
[24] Although Mr Wainwright adopted the submissions put by the CFMEU in the John Holland/Abigroup Agreement matter he did not lead any evidence in relation to the two present applications. Insofar as the CFMEU opposes the applications for approval on the basis that the group of employees has not been fairly chosen I am satisfied that the group of employees to be covered by the proposed agreement has been fairly chosen. The group of employees to be covered by each of the proposed agreements are those employees directly engaged in construction work. I do not consider it unfair to exclude employees in supervisory, managerial, administrative or professional classifications.
Public Interest
[25] In relation to the two present matters I adopt the same approach to the public interest test as I adopted in the John Holland/Abigroup Agreement matter [2011] FWAA 5724.
[26] There are a number of differences in the position adopted by the CFMEU in the present two matters vis v is its position in the John Holland/Abigroup Agreement matter. Firstly, the CFMEU conceded that in the Thiess/Balfour Beatty Agreement matter that there were no existing enterprise agreements or workplace agreements which it sought to rely on. Secondly, in relation to the Fulton Hogan/John Holland Agreement matter the CFMEU sought to rely on two existing agreements: the John Holland Pty Ltd and the CFMEU Building and Construction Industry Enterprise Agreement 2011 which has a nominal expiry date of 31 December 2011 and the Fulton Hogan Pty Ltd and the CFMEU Building and Construction Industry Enterprise Agreement 2010 - 2011 which has nominal expiry date of 31 March 2011.
[27] There are also differences in the positions adopted by the employers in the present two matters vis a vis the position adopted by the employers in the John Holland/Abigroup Agreement matter. 2
[28] Each of the employer parties in the Thiess/Balfour Beatty Agreement matter have through their respective statutory declarations provided the following details of how the approval of the agreement would be in the public interest:
‘The parties to the Agreement recognise that the employers, in their alliance for the Project, must achieve real and sustained performance improvements if the Project is to meet its goals and objectives. Such performance improvement is the shared goal of the Parties.
The fundamental objectives of the Agreement are to create a framework in which to achieve the following goals during work on the Project:
(a) a safe and healthy work site;
(b) Achievement of actual implementation of efficiency meaasures to effect
real gains in productivity;
(c) Development of best practice and promotion of a culture of continuous
learning and improvement;
(d) Meeting the requirements of the Project contract whilst also meeting
and exceeding related completion objectives on time and within budget
forecasts; and
(e) Environmental and cultural heritage awareness and compliance
amongst all employees.
It is in the public interest that the Agreement be approved.’
[29] In relation to the Thiess/Balfour Beatty Agreement the AWU in addressing the requirements of s.187(5)(b) in their statutory declaration merely said:
“The company will be providing labour to the construction and development of the regional rail network.”
[30] Each of the employer parties and the AWU in the Fulton Hogan/John Holland Agreement matter have through their respective statutory declarations provided the following details of how the approval of the agreement would be in the public interest:
‘A major objective of this agreement is to eliminate lost time and/or lost productivity arising out of disputes or grievances during the construction of the Deer Park to West Werribee Junction Project - a $450 Million Dollar infrastructure project for Victoria and the key part of the overall Regional Rail Link program of works upgrading rail infrastructure for both regional and metropolitan Victoria.
The approval of this agreement will assist the parties to eliminate lost time and/or lost productivity arising out of disputes or grievances during the construction of the project.’
[31] In the present two matters I am satisfied that it is in the public interest to approve the Agreements. My discretionary value judgement has been formed by considering the following:
- Approval of each agreement is consistent with the both the objects of the Act, in particular paragraph 3(f), and the objects of Part 2-4 of the Act as set out in s.171.
- The scheme of the Act specifically permits the employers in each of the two matters to make a greenfields agreement with a single employee organisation if the requirement of s.187(5) is met. The scheme of the Act does not require the employers in each of the two matters to make a greenfields agreement which each employee organisation that wants to be party to the agreement. It is the employer’s choice to make a greenfields agreement with one or more than one employee organisation.
- Neither of the two Agreements inhibits the right of any employee to be represented by the employee organisation of their choice whilst the agreement is in operation.
- Neither Agreement contains any provisions which would limit the freedom of association of employees to be covered by the agreement.
- Each of the two Agreements provide significantly better terms and conditions of employment than does the relevant modern award.
- It is positively in the public interest in relation to the Fulton Hogan/John Holland Agreement to assist the parties to the agreement to eliminate lost time and/or lost productivity arising out of disputes or grievances during the construction of the project by approving the agreement.
- It is positively in the public interest in relation to the Thiess/Balfour Beatty Agreement to assist the parties to the agreement to achieve the real and sustained performance improvements in relation to the work to be covered by the agreement by approving the agreement.
- The Act contemplates that there may be overlap between agreements and the Act provides clear direction as to which agreement will operate at any point of time.
- The parties to the Agreements and those opposing the approval of the Agreement are experienced in the industrial relations environment in the industry in which these agreements will operate and the issue of agreement overlap with other agreements or with awards (through incorporation into agreements) is not uncommon.
COMMISSIONER
Appearances:
Mr C Hartigan of Herbert Geer for John Holland and Fulton Hogan Pty Ltd
Mr M Tamvakologos of Blake Dawson for Thiess Pty Ltd and Balfour Beatty Pty Ltd
Mr S Wood of The Australian Workers’ Union
Mr R Wainwright of the Construction, Forestry, Mining and Energy Union
Hearing details:
2011
Melbourne:
October 6
1 Transcript of proceedings in AG2011/11585
2 [2011] FWAA 5724 at para [41]
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