DECISION

Fair Work Act 2009
s.185—Enterprise agreement

Tutt Bryant Group Limited T/A Tutt Bryant Heavy Lift & Shift
(AG2013/10329)

Application for approval of the Tutt Bryant Group Limited AMC Henderson Materials Handling and Assembly Yard Works Greenfields Agreement 2013.

Introduction

[1] Tutt Bryant Group Limited (Applicant) made an agreement with The Australian Workers Union (AWU) and the Automotive, Food, Metals, Engineering, Print and Kindred Industries Union (AMWU) on 3 December 2013. The agreement, which is titled the Tutt Bryant Group Limited AMC Henderson Materials Handling and Assembly Yard Works Greenfields Agreement 2013 (Agreement), is said to be a greenfields agreement and was made in respect of a new project or undertaking that the Applicant proposed to undertake at the Australian Marine Complex (AMC) Common User Fabrication Facilities at Henderson in Western Australia (AMC Project). On 4 December 2013 the Applicant applied to the Fair Work Commission (Commission) for approval of the Agreement.

[2] The Maritime Union of Australia (MUA) gave notice that it wished to be heard in relation to the question whether the Agreement should be approved. The MUA raise a number of issues in opposition to the approval of the Agreement.

[3] I have found it unnecessary to deal with each of the matters raised by the MUA in opposition to the approval of the Agreement because I have concluded that before the Agreement had been made, the Applicant had employed a number of persons who would be necessary for normal conduct of the new enterprise in relation to which the Agreement relates and who would be covered by the Agreement. Consequently, the Agreement is not a greenfields agreement and cannot be approved as such. These are my reasons for coming to the conclusion.

Factual context

[4] In May 2013 the Applicant was awarded the contract by Subsea 7 (Client) to perform work at the AMC Project 1. The works associated with the awarded contract was a new project for the Applicant2, and it is common ground that it was a genuine new enterprise that the Applicant was establishing.

[5] The main aspect of the awarded contract related to the supply of equipment for the performance of work at the AMC Project, however there would be an opportunity to supply labour in respect of some of the work as, and when required by the Client 3. The Applicant commenced discussions with the AWU and the AMWU about the possibility of making a greenfields agreement on about 7 October 20134. Also in October 2013, a number of persons were given letters containing an offer of employment for work at the AMC Project5 (letters of offer). The letters of offer were signed by the National Operations Manager of the Applicant, Mr Malcolm Smith. Mr Smith gave evidence before me and I will later refer to that evidence. Relevantly the letters of offer each provided the following:

“We are pleased to offer you an assignment with Tutt Bryant Group Ltd (the company) for work as … at the Australian Marine Complex (AMC) Common User Facility (CUF) in accordance with the terms and conditions in this letter of offer.
…

1 Commencing Work

Should you choose to accept this offer, your employment will be subject to the successful completion of the Company’s induction course, together with the induction courses for projects and worksites where you will be required to work. We will let you know when these courses will take place.

Your employment will commence on [no earlier than 18 November 2013 and no later than 9 December 2013]. Your point of hire will be Perth (the point of hire).
…

The terms and conditions under the Tutt Bryant Group Limited AMC CUF Henderson Facility Enterprise Agreement 2013 (the Greenfield Agreement) are incorporated into this contract of employment.” 6

[6] Six employees who were offered employment as either crane operators or riggers on the AMC Project signed an acceptance of the offer of employment. They did so variously between 16 October 2013 and 22 October 2013 7. A contract of employment for each employee came into existence on acceptance of the offer, however employment had not begun. Between 18 November and 25 November 2013 the same six employees commenced work for the Applicant at the Applicant’s Redcliffe Yard8. These employees performed duties associated with the ongoing operational requirements of the Applicant at the Redcliffe Yard including conducting trials for accurate loading to comply with over mass permits for cranes intended to be used at the AMC Project9. Whilst engaged at the Redcliffe Yard these employees were not engaged pursuant to the terms and conditions set out in the letters of offer in relation to which they had earlier signed an acceptance. Rather the employees were subject to different “general” terms and conditions of employment10. The six employees commenced work at the AMC Project on 5 December 201311, after the Agreement had been made.

[7] Mr Smith was cross-examined about the circumstances in which the six employees were engaged by the Applicant. In the course of cross examination Mr Smith gave the following evidence:

“Did your six employees attend work at your yard first or were they told to attend at the AMC?---On the fourth they attended the yard - on the night of the fourth. They then attended on the fifth.

On the fifth they attended at the AMC and commenced work there?---Yes, correct.

After you signed the agreement?---That's correct. There were further inductions and then they started the work.

Well, I put it to you that unless you had been engaging these employees specifically to work at the AMC project, you would not have incorporated the greenfields agreement in their contract of employment. What do you say to that?

---You have to have the agreement. I don't understand why you keep coming back to this.

Sorry. You have to have the agreement before what? You have to have the agreement before your client will allow you to work at the AMC? Is that right?---Sorry?

You have to have the agreement before your client will allow you to attend the AMC?---No.

Well, I'm asking you to finish your sentence. You said you have to have the agreement before - then you didn't finish the sentence. So can you finish the sentence please? What do you have to have the agreement before you can do?---We have to have the agreement in place before the people can attend site.

Why do you have to have the agreement in place before people can attend site?---Because it's a greenfields agreement.

But you already had these employees, didn't you?---Yes, but they were doing other work. They were actually employed on alternate duties.

Why do you have to have the agreement in place before you can attend site? Who told you that?---That is my personal opinion. We held the guys in the yard, give them alternate work under an alternate agreement until such time as we had the enterprise agreement registered.

Right. So you had to have the agreement signed off before you could then send them to the AMC?---That's correct.
If you had - if you didn't have the greenfields agreement yet you still had them at your yard?---We would still have the crane on site. We would have used contractors to build the crane which we've done in the past.

You would still have these six employees employed at your yard?---That's correct.

They wouldn't be employed under the terms of this proposed greenfields agreement because you wouldn't have a greenfields agreement?---That's correct.

So you employ the employees for the project?---Yes.

You hold them at your yard?---Yes.

You reached the greenfields agreement. You submit that greenfields agreement for approval - sorry, for agreement. Sorry, you're nodding, could you - - -?---Yes.

Yes. Then once you've signed off on that agreement, then those employees go to the AMC project?---That's correct; on 5 December.” 12 (My underlining)

[8] It seems clear from Mr Smith’s evidence reproduced above and from the terms of the letters of offer which six employees accepted, that the employees were offered employment by the Applicant for the purpose of working on the AMC Project. Employment with the Applicant of the six employees commenced before 3 December 2013. The six employees commenced employment with the Applicant before the Agreement was made and were given work to perform in the Redcliffe Yard so that they would be available to be deployed onto the AMC Project once the Agreement had been made and the Client requested the labour. So it is that on 5 December 2013 the Applicant had available to it labour to deploy to the AMC Project, and did so.

Consideration

[9] Section 172 (2) of the Act provides, relevantly, that an employer may make an enterprise agreement:

“(b) with one or more relevant employee organisations if:

(i) the agreement relates to a genuine new enterprise that the employer or employers are establishing or proposed to establish; and

(ii) the employer or employers have not employed any of the persons who will be necessary for the normal conduct of the employer’s enterprise and will be covered by the agreement.”

Such an agreement once made is a greenfields agreement 13.

[10] If, before an agreement is made an employer that is establishing, or proposes to establish a genuine new enterprise, employs a person who will be necessary for the conduct of that enterprise and will be covered by the proposed agreement, the agreement subsequent made with a relevant employee organisation will not be a greenfields agreement.

[11] An employer may take prepatory steps to ensure that the new enterprise is successful, including identifying and even securing sources of labour. It will not be fatal to making a greenfields agreement that before the agreement is made an employer has offered employment to a person who will work in the new enterprise. Nor will it be fatal that, before an agreement is made the employer already in its employ, persons who are ultimately transferred to work in, or in connection with the new enterprise. It is also not fatal to making a greenfields agreement that an offer of employment made to a person who will be necessary for the conduct of the enterprise has been accepted by the person, provided employment does not begin until after the greenfields agreement is made.

[12] But a person who will be necessary for the normal conduct of the new enterprise must not have begun employment with the employer before the agreement is made. “Employed” in the context of s. 172(2) of the Act means employed by the employer in any position. It is not limited to employment in or in connection with the new enterprise. If a person is employed in any capacity by the employer and it is known that employee will be necessary for the usual conduct of the new enterprise and will be covered by the agreement, the employer cannot make a greenfields agreement. To conclude otherwise would be to strain the language of s.172(2). In the present case it does not matter that the six employees were not working on the AMC Project when the Agreement was made. What matters is that those employees were employed before the Agreement was made and the Applicant had employed them at the Redcliffe Yard in order that they would be available to be deployed to and to work on the AMC Project. Hence when employed, the six employees would be necessary for the normal conduct of the new enterprise.

[13] The Applicant set out to engage persons who would ultimately work on the AMC Project. It commenced its search for suitable persons sometime before October 2013. In early October 2013, the Applicant made offers of employment to persons who would commence employment on the AMC Project no earlier than 18 November 2013 and no later than 9 December 2013. Engaging employees in such a conditional way is not fatal to subsequently making a greenfields agreement. But once the six employees, who had clearly been identified for work on the AMC Project and clearly offered employment for that project, commenced employment with the Applicant before the Agreement was made, this ended the possibility that a greenfields agreement could be made by the Applicant for the AMC Project. In this case the six employees commenced at the Redcliffe Yard between 18 and 25 November 2013, the Agreement was made on 3 December 2013 and the employees commenced work on the project on 5 December 2013 performing work covered by the Agreement.

[14] Based on the evidence of Mr Smith and the letters of offer, I am satisfied that, before the Agreement was made, six employees were employed by the Applicant. When they were employed, those six employees were necessary for the normal conduct of the AMC Project and they would be covered by the Agreement. It follows that the Agreement is not a greenfields agreement.

Conclusion

[15]
The application for approval of the Tutt Bryant Group Limited AMC Henderson Materials Handling and Assembly Yard Works Greenfields Agreement 2013 is dismissed.

DEPUTY PRESIDENT

Appearances:

J. Lilleyman for the Applicant

L. Edmonds for The Maritime Union of Australia

T. Hall for “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU)

S. Price for The Australian Workers’ Union

Hearing details:

2014.

Melbourne

Perth (Video)

3 February.

 1   Exhibit Tutt2 at [4]

 2   Ibid at [5]

 3   Ibid at [6]

 4   Ibid at [7]

 5   Ibid at Annexure 1

 6   Ibid at Page 1

 7   Ibid at Annexure 2

 8   Ibid

 9   Ibid at [20]

 10   Ibid at [21]

 11   Ibid at [23] and Annexure 2

 12   Transcript PN418-PN435

 13   See s.172 (4)

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