1 min read

FWC says no to West Gate Tunnel greenfields agreements

The Case

Application by CPB Contractors Pty Limited & John Holland Pty Ltd (2019)

CPB Contractors Pty Limited and John Holland Pty Ltd (the Joint Venture – JV) successfully tendered for the West Gate Tunnel project (the project). Thereafter, the JV commenced the negotiation period, with the relevant unions, for a Greenfields Tunnelling and a Greenfields Civil Surface Works Agreement.

While the enterprise agreement negotiations were taking place, the JV commenced what it considered preparatory works and entered into a Design and Construct subcontract.

When negotiations with the unions failed, the JV issued a further negotiation period with respect to both Greenfields agreements. During this time, the JV continued with what it considered to be further preparatory works.

When further negotiations with the unions failed, the JV applied to the Fair Work Commission (FWC) for approval of the Greenfields agreements. The unions opposed the approval on the basis the Greenfields agreements could not be used for an established enterprise, only a proposed enterprise.

The Verdict

The FWC indicted there were three stages of work to be considered in determining whether there was an established enterprise:

  • planning work – prior to the establishment of the new enterprise;
  • preparatory work – to establish the new enterprise; and
  • the substantive work – commences once the enterprise has been established.

The FWC held that it did not have jurisdiction to approve the Greenfields agreements, as at the date the agreements were made the new enterprise had already been established. The FWC made this determination on the fact that:

  • significant piling work had been completed;
  • the JV had already claimed significant payments for completed works;
  • 20% of the time estimated for completion had elapsed; and
  • 1,643 employees were already working on the project.

The Lessons

The decision reminds employers who want Greenfields agreements to plan ahead and make arrangements for such enterprise agreements prior to undertaking anything but initial planning work on a project.

Please note: Case law is reported as correct and current at time of publishing. Be aware that cases in lower courts may be appealed and decisions subsequently overturned.

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