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Australia – Greenfields Agreements And “Competing Unionism”.

6 February, 2013

 

Legal News & Analysis – Asia Pacific – Australia – Labour & Employment

 

The AWU challenges the approval of a greenfields agreement made between an employer and other unions. 

 

WHAT YOU NEED TO KNOW

 

  • Unions sometimes challenge the approval of a Greenfields agreement made between an employer and competing unions on the basis that the agreement does not meet the approval requirements contained in the Fair Work Act 2009.
  • In this case, the AWU challenged the approval of an agreement made between two employers and the AMWU, CEPU and CFMEU on the basis that the CFMEU signatory to the agreements wasn’t properly authorised by the CFMEU National Rules to execute the agreements. Ultimately the challenge failed because the AWU’s contentions about how the CFMEU Rules and the provisions of the Fair Work Act operated were not accepted.

 

WHAT YOU NEED TO DO

 

  • Where such a challenge is anticipated (typically there will be other demarcation issues in relation to a project or geographical site which raise a red flag) it is important for parties submitting agreements for approval to be vigilant in ensuring that all technical requirements for approval are met, and that future demarcation issues are thought through and managed so that disruption caused by industrial issues is minimised.

 

 

In Australian Workers’ Union v Leighton Contractors Pty Limited [2013] FCAFC 4, the Full Court of the Federal Court dismissed an application by the Australian Workers’ Union (AWU) seeking to overturn a decision of the Full Bench of FWA.

 

Background – FWA proceedings

 

Leighton Contractors Pty Limited (Leighton) and Bechtel Australia Pty Limited (Bechtel) were contracted to carry out construction work at various mine sites in the Bowen Basin in Southern Queensland.

 

Leighton and Bechtel made greenfield agreements with the AMWU, the CEPU and the CFMEU in relation to each of these sites. There were four Greenfields agreements in total – one covering each site. One agreement was entered into by Leighton and the other three were entered into by Bechtel. In mid-2011, each of the agreements was submitted to Fair Work Australia (FWA)(now the Fair Work Commission) for approval under the agreement making provisions contained in the Fair Work Act 2009 (Cth) (Act).

 

The AWU objections to FWA approving the agreements

 

Each of the agreements which was submitted to FWA for approval was signed on behalf of the CFMEU by Mr Peter Close, Assistant State Secretary of the CFMEU Construction and General Division, Queensland Construction Workers Divisional Branch.

 

The AWU appeared at the approval hearing and argued that the agreements should not be approved. Its main argument was that under the CFMEU National Rules (National Rules), the CFMEU was not able to authorise the person who signed the agreements to do so.The AWU pointed to some aspects of the National Rules which suggested that an agreement could not be signed by an officer of one division of the union (here, the Construction and General Division) if the agreements would cover employees eligible to be represented by a different Division of the union.

 

The AWU argued that it was impossible for the CFMEU to guarantee that only members of the Construction and General division of the CFMEU would be covered by the agreement, and that it was possible given the nature of the work being performed that members of other divisions of the CFMEU, namely the Mining and Energy Division, may be employed by either Leighton or Bechtel. The AWU argued that given this possibility Mr Close was not authorised under the National Rules to sign the agreements.

 

Senior Deputy President (SDP) Richards found that at the time each of the agreements was made, each agreement was intended to apply to construction work and expressly excluded mining work. SDP Richards was not satisfied on the evidence before him that Mr Close was not properly authorised to sign the agreement on behalf of the CFMEU, nor that the risk of a member of another Divisional Branch of the CFMEU being employed by Leighton or Bechtel was anything more than a future hypothetical risk.

 

On 15 August 2011 and 30 August 2011, SDP Richards approved each of the agreements. A Full Bench of FWA later refused the AWU permission to appeal this decision to approve the agreements.

 

Federal Court proceedings

 

The AWU applied to the Full Court of the Federal Court for writs of mandamus and certiorari. It asked the court to quash the decision of the Full Bench and direct FWA to hear and determine the matters again.

 

The question before the Full Court was whether the Full Bench of FWA had made a jurisdictional error. In answering this question, the Full Court reviewed the FWA decisions and considered whether the Full Bench had made an error of fact or law which amounted to a jurisdictional error.

 

The AWU application is dismissed

 

To succeed in its application to the Full Court, the AWU was required to establish that the Full Bench exceeded its jurisdiction and the powers conferred on it by the Act to approve the agreements. It was not sufficient, in this type of appeal, for the AWU to simply show that there was some legal or factual error – the error had to be of a jurisdictional type. The AWU argued that “the necessary precondition for the exercise of the jurisdiction of FWA was not established because an enterprise agreement had not been made within the meaning of s182(3) “. The argument was put on the basis that because the agreements had not been signed by a person properly authorised under the National Rules to sign it, there was no agreement at all. In contrast, the employees and union parties to the Greenfields agreements argued (and the Full Court agreed) that all requirements for approval of the agreements had all been met.

 

Ultimately, the Full Court concluded that “while the categories of jurisdictional error are not closed, if the Full Bench of FWA did fall into error, the error was within jurisdiction.” Accordingly, the AWU’s challenge to the approval of the agreements failed.


 

For further information, please contact:

 
Michael Tamvakologos, Partner, Ashurst

 

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