1
[2012] FWA 4051
DECISION
Fair Work Act 2009
s.437 - Application for a protected action ballot order
Construction, Forestry, Mining and Energy Union
v
Brookfield Multiplex Australasia Pty Ltd
(B2012/764)
SENIOR DEPUTY PRESIDENT
RICHARDS
BRISBANE, 16 MAY 2012
Summary: protected action ballot order - whether genuinely trying to reach agreement -
whether substantive term a permitted matter - contractors clause - whether clause has any
ascertainable nexus with employment relationship - s.172(a) - whether related to security of
employment of employees to be covered by the agreement - s.409(1)- alleged industry-wide
claim.
[1] On 8 May 2012, an application by the Construction, Forestry, Mining and Energy
Union (“CFMEU”) for a protected action ballot order under s.437 of the Fair Work Act 2009
(“the Act”) was subject to a contested hearing. The employer was Brookfield Multiplex
Australasia Pty Ltd (“the Employer”). There have been various prior applications seeking a
protected action ballot in relation to the employees of the Employer.
[2] At the conclusion of the hearing there remained one unresolved matter in relation to
which I had reserved my decision. That matter concerned, for the purposes of s.443(1)(b) of
the Act, whether or not the CFMEU had been and was still genuinely trying to reach an
agreement with the employer of the employees who are to be balloted.
[3] The particular matter in contest was whether the requisite degree of satisfaction for the
purposes of s.443(1)(b) of the Act could be reached in circumstances in which it was claimed
the CFMEU was seeking to include in its agreement a non-permitted term (for the purposes of
s.172 of the Act). Section 172 of the Act provides as follows:
172 Making an enterprise agreement
Enterprise agreements may be made about permitted matters
(1) An agreement (an enterprise agreement) that is about one or more of the
following matters (the permitted matters) may be made in accordance with this
Part:
(a) matters pertaining to the relationship between an employer that will
be covered by the agreement and that employer’s employees who will
be covered by the agreement;
AUSTRALIA FAIR WORK AUSTRALIA
[2012] FWA 4051
2
(b) matters pertaining to the relationship between the employer or
employers, and the employee organisation or employee organisations,
that will be covered by the agreement;
(c) deductions from wages for any purpose authorised by an employee
who will be covered by the agreement;
(d) how the agreement will operate. [My emphasis]
[4] After the evidence had been taken, authorities referred to and submissions provided,
the hearing was closed in the ordinary manner. The CFMEU subsequently sought an
opportunity to file further written submissions. It did so on natural justice grounds, alleging
that it had been surprised by the Employer’s argument against the making of the order as
sought.
[5] This natural justice argument had little merit. The CFMEU reasonably would have
appreciated before the hearing that the Employer had concerns about the legality of the clause.
The Employer’s correspondence of 30 April 20121 to the CFMEU raised concerns that the
contractors clause needed to operate within the law. Further, at the time the present
application was subject to hearing, the CFMEU had had an opportunity to read the materials
provided by the Employer. In such circumstances, the CFMEU can hardly have been taken by
surprise with the Employer’s argument at the hearing.
[6] Further, it was open to the CFMEU at the time of the hearing to seek an adjournment,
but it did not do so. Indeed, given that the present application was lodged immediately after
an earlier application had been withdrawn (owing to a statutory deficiency revealed in the
course of its hearing in relation to that application), there were strong grounds for an
adjournment of the subsequent application, had one been sought.
[7] Notwithstanding this, the CFMEU agitated (after the conclusion of the hearing) that it
had not been in a position to present its case. While I do not accept that is the case, the issue at
hand is an important one as it concerns a clause in an industry agreement which may have
wider ramifications than the current case. Or as the CFMEU put it, the hearing raised “a
serious issue to be determined which may have consequences beyond the matter at hand”. I
note too that the Employer has acted at all times to facilitate the hearing of the CFMEU’s
various applications. Because of these circumstances, and while being conscious of not setting
a precedent, I acceded to the CFMEU’s request to file additional written submissions, and
provided the Employer with an opportunity to provide further written submissions in reply.
[8] It seems to me to be reasonably clear on the balance of Full Bench authorities that the
scheme of the Act requires that the substantive terms of an enterprise agreement concern
permitted matters. Consequentially, an applicant for a protected action ballot order who is
1 Annexure BMA-4 to the statement of Mr David Higgon, dated 8 May 2012 - Letter dated 30 April 2012.
[2012] FWA 4051
3
pursuing a claim as a substantive term of a proposed enterprise agreement which is not about
a permitted matter is not genuinely trying to reach agreement.2
[9] The CFMEU and the Employer both filed witness statements including extensive
annexures. The CFMEU did not challenge the Employer’s claims as made in its witness
statement.
[10] The relevant, unchallenged factual matrix relating to this application therefore
includes the following:
The Employer only employs workers in a minority of the classifications listed in the
Building Construction Industry Award – State 2003;
The “great bulk” of form work, concreting and scaffolding work on the Employer’s
projects is contracted to a specialist subcontractor;
The Employer's employees carry out work as crane drivers, bloggers, hoist drivers,
forklift operators, traffic controlling, general labouring, and carpenters;
The Employer does not employ workers to do any work in classifications as
bricklayers, painters, plasterers and renderers, plumbers, electrical work, structural
steel erection, furniture installation, carpet laying, or glaziers; and
The Employer does not intend to employee employees in such classifications outside
its current workforce.
[11] This is far from an unusual classification arrangement - or workforce structure - for a
construction company.
[12] On 24 April 2012, the Employer met with Mr Travis O'Brien, CFMEU Legal Officer
and Mr Kane Pearson, Assistant Divisional Branch Secretary of the CFMEU in respect of its
Construction and General Division, Queensland Builders Labourers Divisional Branch.
[13] Mr Pearson said words to the effect during the meeting that the contractors clause was
a “deal breaker” and that unless there was agreement on that clause there was no point in
proceeding with other items set down for the discussion.
[14] The clause sought by the CFMEU was a clause said by the CFMEU to have been
utilised previously in the industry, and is contained in its CFMEU Union Collective
Agreement, which provides relevantly as follows:
36.2 Use of Contractors
If the employer wishes to engage a contractor to perform work described in the
classifications of this agreement, the employer must consult in good faith with
potentially affected employees and the union before engaging such contractor. Only
bona fide contractors may be engaged.
The employer shall ensure that anyone performing construction work which is part of,
or assists in, the performance of work which the employer is entitled to be paid,
2 Australian Postal Corporation v Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied
Services Union of Australia [2009]FWAFB 599 at PNS 44, 41-45, 60-62; Airport Fuel Services Pty Limited v Transport
Workers' Union of Australia [2010] FWAFB 4457 at PN 22.
[2012] FWA 4051
4
receives the same wages and other terms and conditions of engagement (or terms no
less favourable) as they would receive if they were engaged as employees under this
agreement performing the same work.
The use of sham sub-contracting arrangements is a breach of this agreement.
36.3 Supplementary Labour Hire
If the employer wishes to engage a provider of labour (e.g a labour hire employer) to
perform work described in the classifications of this agreement, the employer must
consult in good faith with potentially affected employees and the union before
engaging such contractors. Only bona fide labour hire companies may be engaged.
The employer shall ensure that labour hire workers performing construction work
which is part of, or assists in, the performance of work for which the employer is
entitled to be paid, receive the same wages and other terms and conditions of
engagement (or terms no less favourable) as they would receive if they were engaged
as employees under this agreement performing the same work.3
[15] Clause 17.1 of the CFMEU Union Collective Agreement reads as follows:
The classification levels for employees engaged under this agreement shall be read in
accordance with clauses 5.1 and 5.2 of the former Building Construction Industry
Award – State 2003 unless specifically amended by the terms of this agreement.
Classification levels, relativities, pay rates and other details are contained in appendix
1.4
[16] Because it is an industry award, the classifications in the Building Construction
Industry Award – State 2003 are very extensive in their range and scope.
[17] For reasons that will be set out in further detail below, the Employer resisted this
proposed clause and provided an alternative. The Employer’s alternative clause was designed
to ensure that if contractors were engaged to perform the work normally performed by the
Employer's employees, they would receive the same terms and conditions the Employer's
employees would receive.
[18] The Employer contended that there was no incentive for it to use contractors or other
supplementary labour to carry out work which its employees are doing, and (as stated above)
that it has never been its intention to do so.5
[19] The CFMEU’s response to the Employer’s proposal was to re-affirm, initially, that it
sought to include the classifications set out in the Building Construction Industry Award –
State 2003 in any agreement and that its proposed contractors clause had to be read in light of
that claim.6
3 Annexure BMA-2 and BMA-3 to the statement of Mr David Higgon, dated 8 May 2012 - CFMEU union collective
agreement.
4 Ibid.
5 Annexure BMA-4 to the statement of Mr David Higgon, dated 8 May 2012 - Letter dated 30 April 2012.
6 Annexure BMA-5 to the statement of Mr David Higgon, dated 8 May 2012 - Email dated 1 May 2012.
[2012] FWA 4051
5
[20] The CFMEU then proposed an alternative or modified proposed contractors clause
which relevantly read as follows:
Use of Contractors
Where [the Employer] intend[s] to engage contractors or their employees to undertake
work described in the classifications of this agreement, [the Employer] will first
consult in good faith with potentially affected employees and their union.
If, after consultation, [the Employer] decides to engage contractors to perform such
work, those contractors and their employees, if any, must be afforded the same terms
and conditions of engagement (or terms no less favourable) as they would receive if
they were engaged as employees under this agreement performing the same work.
Supplementary Labour Hire
Where there is need for supplementary labour to meet temporary\peak work
requirements, or where a[n] Employee is unavailable due to sickness, annual leave,
workers’ compensation etc such labour may be accessed from bona fide labour hire
companies, following consultation with the Consultative committee and\or workplace
delegate. [The Employer] shall ensure that any workers it uses from such bona fide
labour hire companies and performing work described in the classifications of this
agreement, shall receive wages, allowances and conditions not less than those
contained in this Agreement.7
[21] The CFMEU also proposed an additional clause which read as follows:
Subcontractor preference
[The Employer] will demonstrate a preference to engage subcontractors that have
industrial arrangements that deliver industry standards in regards to; pay and
conditions, workplace health and safety, workforce training and development and
other issues that contribute to enhancing the wellbeing of employees in promoting a
high performance industry.8
[22] The difficulty with the contractors clause as proposed by the CFMEU, in either of its
guises, is that it would require the Employer to extend to all subcontractors it engages on its
projects the same terms and conditions that apply to its direct employees covered by the
agreement, regardless as to whether the Employer employed employees who perform or will
ever perform the type of work carried out by any such subcontractors. The Employer claimed
the intention of this clause was to standardise pay rates for subcontractors across the building
and construction industry.
[23] The Employer for its part proposed to replicate the employment security or
supplementary labour clause in its current agreement, which extended the same terms and
7 Annexure BMA-5 to the statement of Mr David Higgon, dated 8 May 2012 - Email dated 1 May 2012.
8 Ibid.
[2012] FWA 4051
6
conditions of employment to subcontractors who performed the narrow band of work of the
kind performed by the Employer’s employees. That clause provides relevantly as follows:
[...]
No Brookfield Multiplex wages Employee will have their employment placed in
jeopardy through the use of supplementary/casual labour. [...]
Where Brookfield Multiplex intend to engage contractors to undertake work normally
performed by Employees under this agreement, Brookfield Multiplex will first consult
in good faith with potentially affected Employees and their union.
If, after consultation, Brookfield Multiplex decides to engage contractors to perform
such work, those contractors and their employees, if any, must be afforded the same
terms and conditions of engagement (or terms no less favourable) as they would
receive if they were engaged as employees under this agreement performing the same
work.
[...]
Brookfield Multiplex will demonstrate a preference to engage subcontractors that have
industrial arrangements that deliver industry standards in regard to; pay and
conditions, workplace health and safety, workforce training and development and
other issues that contribute to enhancing the wellbeing of employees in promoting a
high performance industry.9
[24] But a clause in these terms was not acceptable to the CFMEU:
The reason for this is your proposed clause does not meet the outcome that we are
seeking in our claim; that is, it does not “do the work” that we have discussed at
meetings.
Our proposal, which must be read in light of our further claim to have our proposed
classifications included in the proposed agreement is [see paragraphs 15 - refer to
State Award and 19 above].10
CONSIDERATION
[25] As cited above, consistent with s.172 of the Act, an enterprise agreement must concern
matters pertaining to the relationship between an employer that will be covered by the
agreement and that employer’s employees who will be covered by the agreement.
[26] Section 172(a) of the Act does not refer to the relationship between employers and
employees generally. It concerns, rather, the relationship between the employer that will be
covered by the agreement and its employees who will be covered by the agreement.11 A term
9 Annexure BMA-4 to the statement of Mr David Higgon, dated 8 May 2012 - Letter dated 30 April 2012.
10 Annexure BMA-5 to the statement of Mr David Higgon, dated 8 May 2012 - Email dated 1 May 2012.
11 Atlas Steels Metals Distribution Certified Agreement and Others (PR917092, 29 April 2002) Giudice J, President,
McIntyre VP, Whelan C.
[2012] FWA 4051
7
of an agreement, therefore, is only permissible so long as it concerns the relationship between
the employer that will be covered by the agreement and its employees who will be covered by
the agreement.
[27] In the factual circumstances before me, the contractors clause sought by the CFMEU
does not concern the relationship between the Employer and the Employer’s employees who
will be covered by the agreement. This is because the contractors clause extends to the
regulation of the terms and conditions of subcontractors who perform work of a kind that will
not be performed by any employee of the Employer covered by the agreement.
[28] Because of its scope, the clause travels beyond any ascertainable nexus with the
relationship between the Employer and its employees who will be covered by the agreement.
[29] I add that a term of an agreement may pertain to the relationship between the employer
and its employees if it directly concerned the security of employment of the employees
covered by the certified agreement.
[30] But in this case, the relevant clause as proposed by the CFMEU cannot be construed to
be permissible for this reason. Again, because of its scope, the clause operates to regulate the
terms and conditions of subcontractors who perform work that is not performed by any of the
employees of the Employer (who will be covered by the Agreement).
[31] In effect, the clause cannot by its terms address the employment security concerns of
employees employed by the Employer and who are to be covered by the agreement because it
regulates the terms and conditions of employment of a set of subcontractors who perform
work that is not nor will be performed by any employees of the Employer who will be subject
to the agreement. Therefore the direct interests of the Employer’s workforce that will be
covered by the agreement is not affected by the scope of the clause made by the CFMEU.
[32] Again, the direct and unchallenged evidence of the Employer was that it did not
employ employees beyond the narrow band of functions it indicated, and it had no intention
of doing so in the future. The CFMEU was familiar, I should add, with the Employer’s
workforce profile.12
[33] But in particular circumstances a non-pertaining clause may be permissible because of
its character as being a machinery-type provision only. This is not a case where the clause is
permissible because it is incidental or ancillary to a substantive (and permissible) clause
within the agreement. It is abundantly clear from the evidence that the contractors clause is a
substantive term in its own right.
[34] Section 409(1) of the Act provides as follows:
Employee claim action
(1) Employee claim action for a proposed enterprise agreement is industrial action
that:
(a) is organised or engaged in for the purpose of supporting or advancing
claims in relation to the agreement that are only about, or are reasonably
believed to only be about, permitted matters; and
12 Transcript of proceedings, 8 May 2012 at PN134.
[2012] FWA 4051
8
(b) is organised or engaged in, against an employer that will be covered by the
agreement, by:
(i) a bargaining representative of an employee who will be covered by
the agreement; or
(ii) an employee who is included in a group or groups of employees
specified in a protected action ballot order for the industrial action; and
(c) meets the common requirements set out in Subdivision B; and
(d) meets the additional requirements set out in this section.
[35] The CFMEU contends that it acted on a reasonable belief for the purposes of s.409(1)
of the Act that the clause it pressed was a permitted matter. It argued it had legal advice to
that end and that various agreements had been approved by FWA which included the clause in
question.
[36] It is difficult to identify as to which agreements the CFMEU might be referring, if only
for reason that the clause would not be identifiable readily at the approval stage as a non-
permitted matter if it presented in the form pressed by the CFMEU, and was not otherwise
objected to by an employer (on workforce composition grounds).
[37] Further, the asserted existence of legal advice supporting the clause as pressed takes
the matter no further. In any event, the nature of that legal advice of which the CFMEU
claims to be in possession is unknown. Was it qualified? Was it premised on a particular
factual situation? Did the legal advice consider the current circumstances where the
Employer - as a matter of fact - only employs and only intends to employ employees in a
small number of classifications and for a limited range of functions? Alternatively, has the
CFMEU applied the advice to the appropriate circumstances or understood the advice in its
own terms? Even assuming that the possession of legal advice was to be relevant to the
statutory question before me, the evidence yields no answers to the preceding questions.
[38] There are further reasons why s409(1) of the Act does not have application in the
circumstances. Just as with the Full Bench in Australian Postal Corporation v
Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied
Services Union of Australia13 there can be no argument in this case that the contractors clause
was being pressed by person or persons who reasonably believed that they were pursuing a
claim about a permitted matter as a substantive term of a proposed enterprise agreement, and
as such were genuinely trying to reach an agreement (for the purposes of s.443 of the Act).
This is because: there are relevant authorities; the Employer’s position in relation to the
employees who will be covered by the agreement was clear; the CFMEU had knowledge of
the structure of the Employer’s workforce; the construction of the clause pressed was not
complicated and its implication was made more apparent by its contrast to the Employer’s
alternative clause; the status of those who were pressing the claim was such that they would
readily have apprehended the legal concern in relation to the claim (which had been referred
to by the Employer in its correspondence of 30 April 2012); and the legal sensitivity of the
claim was such the CFMEU had obtained its own advice. 14
13 [2009] FWAFB 599 at PN 62.
14 Annexure BMA- 4 to the statement of Mr David Higgon, dated 8 May 2012 - Letter dated 30 April 2012.
[2012] FWA 4051
9
[39] Finally, to the extent it is relevant to the statutory question before me, had the CFMEU
indicated that it would not press a clause that was impermissible? The viva voce evidence of
Mr Pearson was that the CFMEU would not press a claim of such a nature. For all other
purposes in the bargaining process the CFMEU pressed its claim without qualification or
reservation. The clause had been pressed since the meeting of 16 April 2012. The
unchallenged evidence of Mr Higgon was that the CFMEU stated that its contractors clause
was a “deal breaker” (and therefore - on the evidence - not one that was likely to be set aside).
The CFMEU had also rejected the Employer’s alternative contractors clause (as advised in the
correspondence of 30 April 2012) on the basis that it would not achieve the CFMEU’s desired
outcome. This correspondence is cited above at paragraph 24. The CFMEU adopted this
position in the wider circumstances set out in paragraph 37 directly above.
CONCLUSION
[40] Given all the above circumstances, I find that the contractors clause is not a permitted
matter, and because it is being pressed as a claim by the CFMEU as part of its bargaining
agenda, the CFMEU cannot be found to be genuinely trying to reach agreement with the
Employer for purposes of s.443(1)(a) of the Act. The application by the CFMEU under s.437
of the Act must be dismissed in such circumstances because of the operation of s.443(2) of the
Act.
SENIOR DEPUTY PRESIDENT
Appearances:
Mr T. O’Brien for the Applicant
Mr D. Williams, solicitor for the Respondent
Hearing details:
2012.
May 8.
Brisbane.
Final written submissions:
Applicant’s submissions received 11 May.
Respondent’s submissions received 11 May.
Printed by authority of the Commonwealth Government Printer
Price code C, PR523663
WORK AUSTRALIA THE SEAL OF
