AG2010/23950, Transcript of Proceedings [2011] FWATrans 257 (18 March 2011)

TRANSCRIPT OF PROCEEDINGS

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Fair Work Act 2009 42378-1

DEPUTY PRESIDENT MCCARTHY

AG2010/23950 AG2010/24319

s.185 - Application for approval of a greenfields agreement

Application by Killarnee Civil and Concrete Contractors
(AG2010/24319)
Killarnee Civil & Concrete Contractors Pty Ltd - CFMEU - Gorgon Project - Barrow Island Greenfields Agreement 2010

[AE884278 Print PR506965]]




Perth

10.32AM, WEDNESDAY, 9 MARCH 2011

Reserved for Decision

PN1

THE DEPUTY PRESIDENT: Good morning. I listed these matters together. I take it there's no objection to them being dealt with at the same time by anybody?

PN2

MR EDWARDES: No objection, Deputy President.

PN3

THE DEPUTY PRESIDENT: Can I have appearances, please.

PN4

MR W. EDWARDES: Warren Edwardes, I appear for the applicant, Killarnee Civil and Contractors Pty Ltd.

PN5

MR K. SNEDDON: Deputy President, Sneddon for the CFMEU in support of the application.

PN6

MR M. COX: With your leave, your Honour, Cox, instructed by Stefan Banovich of the union - AWU.

PN7

THE DEPUTY PRESIDENT: All right. Any views about the permission being granted Mr Cox?

PN8

MR EDWARDES: No, Deputy President.

PN9

THE DEPUTY PRESIDENT: Silence is consent. Permission is granted, Mr Cox.

PN10

MR COX: I'm obliged, your Honour.

PN11

THE DEPUTY PRESIDENT: I'm in your hands, gentlemen, as to how you would prefer these to be dealt with. I can deal with one first - perhaps the AWU one first, or jointly, or hear from one of you or all of you in sequence. I'm entirely in your hands.

PN12

MR SNEDDON: Might I suggest that we deal with the AWU application, because that seems to be the less contentious, Deputy President.

PN13

THE DEPUTY PRESIDENT: Yes. Are you happy with that, Mr Cox?

PN14

MR COX: I am, sir.

PN15

THE DEPUTY PRESIDENT: It's relatively straightforward, isn't it?

PN16

MR COX: I would have thought so. I would have thought all the matters this morning, unless I've overlooked something, are very straightforward. But given that it's the application of Killarnees for - in relation to the AWU agreement, perhaps that should be dealt with by the applicant first and then I could speak to our objections or our issues in relation to the Killarnee CFMEU agreement.

PN17

THE DEPUTY PRESIDENT: Yes.

PN18

MR COX: Thank you, your Honour.

PN19

THE DEPUTY PRESIDENT: I'm just wondering, have the parties explored a way through this? My observation of it is it's really two agreements, but it would be little difference if there were one agreement with both unions party to the same agreement. It would be the same effect, wouldn't it?

PN20

MR COX: That would not necessarily resolve the difficulties with the overlapping coverage that is currently the problem with the CFMEU agreement. We have no problem with the CFMEU agreement, if I can refer to is as that. I should perhaps refer to it properly as the Greenfields Agreement AG2010-24319 proposed Killarnee Civil and Concrete Contractors Pty Ltd in the Construction, Forestry, Mining and Energy Union Agreement. It's a proposed agreement at this time that's seeking approval, which approval the AWU was - - -

PN21

THE DEPUTY PRESIDENT: Was it a proposed agreement, or it's an agreement that's been made seeking it to be approved?

PN22

MR COX: My understanding - this is the understanding that has been given to me by one of your brethren - is that we can't refer to it as an agreement until it's got approval. Until that time it's only a proposed agreement. So, yes, there is an agreement between the parties insofar as it has a signature on it, but it's not an agreement - - -

PN23

THE DEPUTY PRESIDENT: I've got to say I didn't think it worked that way. I thought agreements were made and then they were either approved or not approved, but that's - anyway, it might be subtle differences. That's the view I have, Mr Cox.

PN24

MR COX: Yes. I suppose the difference is that it doesn't have force and effect under the Act until it has your approval.

PN25

THE DEPUTY PRESIDENT: Yes.

PN26

MR COX: So until that time, till you give it your approval, it's simply an agreement proposed for approval; if I put it that way.

PN27

THE DEPUTY PRESIDENT: Yes, I thought that's what I said, an agreement that's been made that's being sought to be approved.

PN28

MR COX: Yes. We have identified particular parts of the CFMEU agreement that are exact replicas of what is contained in the AWU agreement. I can probably more readily identify those that are not repeated in the AWU agreement and to which the AWU does not object there being coverage. But in our view - and this is only a tentative view, it's subject to your views and the views of the other parties today - that there would be two agreements; the one agreement with the AWU covering those employed by Killarnee that are eligible to be members of the AWU, and one agreement covering those that are eligible to be members of the CFMEU.

PN29

The vast majority of the classifications in table A attached to the CFMEU agreement are those that are more properly - in fact, properly covered by the AWU agreement and should be removed from the CFMEU agreement. For your benefit and the benefit of the other parties, if you think that would be prudent at this time I can identify which classifications we say are properly within the coverage of the CFMEU. There are about 10 or 12 of those out of all of those listed in table A.

PN30

Subject to anything that the other parties say - and I should hasten to add, your Honour, I did send a copy - at the same time that I sent to you this morning, I sent to the other parties, but I understand Mr Sneddon has been engaged in other matters here so he wasn't able to receive those, and neither Killarnee nor the Chamber were in their office at the time that those were sent this morning. So we haven't - except for very briefly this morning - had a chance to canvass resolution of the issues, but one of the comments from the Chamber of Commerce and Industry is that if your views were correct it would be readily fixed by simply drawing a line through those parts of the table A that were covered by the AWU agreement.

PN31

We say that in accordance with the requirements of the Act, the AWU agreement should - but the CFMEU agreement should not - be approved because there's coverage of the classifications in the CFMEU agreement that are properly covered in the AWU agreement. It's not only contrary to public policy, but it would be contrary to the Act to approve an agreement in the terms presently proposed between Killarnee and the CFMEU. Those categories that we say are properly covered by the CFMEU are listed in paragraph 10 of our written submissions. As I say, I can take you to them in the table A, but the vast majority of them are properly within the eligibility rules and coverage of the AWU.

PN32

That's not only in terms of the rules, but also the historical coverage as exemplified in the award we have referred to at paragraph 8 of our submissions, which is the former award, the Australian Workers Union Construction and Maintenance Western Australia Award 2003. Again, I can take you to the particular classifications in that award, clause 12 and the appendix 1 item 4, that contain the classifications that are covered in the AWU agreement and incorrectly included in the CFMEU agreement.

PN33

THE DEPUTY PRESIDENT: Mr Cox, does the problem arise out of clause 3?

PN34

MR COX: Area and scope?

PN35

THE DEPUTY PRESIDENT: Yes. That determines who the agreement applies to, doesn't it?

PN36

MR COX: Yes, and that's a very nice problem, because you'll have two - - -

PN37

THE DEPUTY PRESIDENT: If that clause were either reframed or if undertakings were given to the effect of giving application of it, in the case of the AWU, to link it to the constitutional coverage of the AWU. So if it were to say something along the lines of, "This agreement shall apply to all work undertaken by employees of the company who are or are entitled to be members of the AWU or the CFMEU," does that overcome the problem?

PN38

MR COX: That might do, but what I foresee then is that we would have an argument about the meaning of "coverage" and so on; an argument that could be rendered otiose by stating in table A what classifications are covered by who. If I could take you to a minute to table A, there is a quite detailed listing of classifications. Rather than have a broad mother statement of - by reference to eligibility rules, if you did have a specific list identifying exactly what classifications or job titles were covered by which union, that would minimise - if not avoid - a subsequent argument about the interpretation of eligibility rules.

PN39

THE DEPUTY PRESIDENT: But this comes back to a question of fact of rather than coverage, application; when the agreement applies to which employee in the circumstances of - it's the difference between "covers" and "applies to".

PN40

MR COX: Yes, certainly.

PN41

THE DEPUTY PRESIDENT: I come back to my opening comment, it really seems to me to be no different to the types of agreements that I see quite often where - greenfields agreements where there's more than one union that are covered by the agreement. These seem to be - I could be wrong, but they appear to be replica agreements with only the coverage by mention of - in clause 2 where I can see the difference.

PN42

MR COX: If I can take you to - - -

PN43

THE DEPUTY PRESIDENT: It seems to be the only - - -

PN44

MR COX: We have a public interest objective in ensuring that agreements are clear in relation to the application and coverage. As you see in paragraph 11 of our written submissions, we refer to the case of the Australian Workers Union New South Wales Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union New South Wales (2002), a decision of the New South Wales Industrial Relations Commission 245, which noted:

PN45

The general principle regarding overlapping coverage is that it is undesirable to have more than one union representing the interests of employees in a particular industry.

PN46

We say that we could have taken the stance that we represent the majority of employees at that site and therefore we're entitled to have an agreement with them to the exclusion of other industrial organisations. We don't take that position. We don't seek to oust the CFMEU from representing those that are eligible to be its members at Killarnee's operations at this site. What we do say is that there needs to be clarity in delineation of representation to avoid demarcation disputes in the future.

PN47

THE DEPUTY PRESIDENT: And you're saying the way to achieve that is through eliminating some of the classifications in the CFMEU agreement.

PN48

MR COX: Correct, by eliminating those that are included already in the previously agreed proposed agreement or agreement the AWU. The AWU reached an agreement before an agreement was reached with the CFMEU. It included a table that includes all of the classifications that are included in table A of the CFMEU but not those that are in relation to the CFMEU only. So we say that the AWU agreement should be registered in its current form, because it doesn't cover anybody that's not eligible to be members of the AWU, and the CFMEU agreement should only be registered if and when it removes all of those same references to classifications covered by the AWU agreement. Very easy exercise.

PN49

I can take you to the particular ones that we say would remain in the CFMEU proposed agreement - I say number nine or 10. So if there is no argument - and its our submission that there can be no argument that the CFMEU agreement includes a large number of classifications that are included in the AWU agreement - then we say axiomatically as night follows day the CFMEU agreement cannot be approved where it contains those classifications contained in the previously agreed AWU agreement. Even if it doesn't follow as night follows day in terms of the requirements for approval, there's a public policy interest in avoiding duplication of coverage in a subsequent agreement.

PN50

THE DEPUTY PRESIDENT: But this isn't all that peculiar, is it? These sorts of agreements and the unions involved in these types of projects have greenfields agreements with the same employer quite regularly, don't they?

PN51

MR COX: They do.

PN52

THE DEPUTY PRESIDENT: Even on this project.

PN53

MR COX: They do, but they should not contain the same classifications, because that's going to give rise almost inevitably to demarcation disputes.

PN54

THE DEPUTY PRESIDENT: There are at least two other agreements with one employer on this project that would appear to have basically the identical circumstances to here.

PN55

MR COX: I don't have any instructions in relation to other agreements.

PN56

THE DEPUTY PRESIDENT: That was approved in March last year. Were there any problems arising out of the application of those agreements?

PN57

MR COX: I have no instructions in relation to other agreements. My instructions are that there was an agreement reached with the AWU followed by a proposed agreement with the CFMEU that contains overlap. We say that the subsequent agreement cannot be approved.

PN58

THE DEPUTY PRESIDENT: But on your public policy limb of your argument you're asserting that there are potential demarcation problems and that should be avoided, which I don't think anyone would dispute. But what I'm asking is if you have any evidence or any knowledge of demarcation issues arising for this project for other employers where identical agreement have been in operation for 12 months.

PN59

MR COX: Can I take some quick instructions on that. Thank you, your Honour. My instructions, your Honour, are that those other agreements are in relation to camp agreements, not civil construction agreements, and that they are entirely distinguishable from present circumstances where the agreements apply to the civil construction work within the project. Perhaps before I pursue fuller instructions on that, your Honour, if I could take you to section 187 subsection (5) of the Fair Work Act setting out the requirements relating to greenfields agreements. In particular, paragraph (a), the requirement that:

PN60

The relevant employee organisations that will be covered by the agreement are (taken as a group) entitled to represent the industrial interests of a majority of the employees who will be covered by the agreement.

PN61

We say that the AWU is entitled to represent the majority of employees and for that reason its agreement must be registered. To then have a subsequent agreement with another organisation covering the same classifications, we say, renders a nonsense of having an agreement with specific classifications identified in it in the formally agreed document.

PN62

THE DEPUTY PRESIDENT: Are you saying that, even though the agreement may not apply to an employee at a particular time, the employee or employees would still be covered by the agreement? It's just the difference between "cover" and "applies".

PN63

MR COX: I appreciate that, your Honour. We say that we should have an agreement that does both the coverage and the application, rather than leaving out the determining of "application" for another day in the context of demarcation disputes. If we can get right now who's covered by and to whom the agreement applies, that is infinitely more desirable - and perhaps necessary - than allowing for two agreements to cover everyone and leaving the application to be fought out on the ground or in subsequent proceedings here.

PN64

THE DEPUTY PRESIDENT: So you want "covers" and "applies" to mean the same in the circumstances.

PN65

MR COX: We say that that's quite right. There should be a perfect coincidence between "coverage" and "application", if that is possible. We say in these circumstances it is possible by simply leaving in nine or so - nine or 10 or 11 of those classifications in table A of the CFMEU agreement, removing the rest, so that we can achieve industrial harmony rather than leave open for an infinite number of disputes in relation to every single of a very large number of classifications listed in the CFMEU agreement. Because the alternative, your Honour, is that we have the CFMEU and the AWU leave today with an agreement that has considerable overlap, which the AWU maintains in relation to the CFMEU wrongly covers and purports to apply to its members.

PN66

If you look at the number of broad-banded qualifications listed in the current agreement, there are a very large number of jobs - of classifications - that are subsequently going to be left open to argument between two unions on the ground. That's not only contrary to public interest, I would have thought it's contrary to Killarnee's interests to have a workplace in which it doesn't know with whom it needs to deal on a day-to-day basis in relation to the vast majority of its jobs.

PN67

THE DEPUTY PRESIDENT: They say they do.

PN68

MR COX: We haven't heard what they say in relation to this submission.

PN69

THE DEPUTY PRESIDENT: From what's been submitted in written form to me anyway, and by virtue of their agreement - - -

PN70

MR COX: Their application.

PN71

THE DEPUTY PRESIDENT: - - - to both agreements.

PN72

MR COX: As I say, your Honour, I haven't heard, because I haven't given them the opportunity of saying what they say in response to our submissions - but from our point of view it's a simple matter of achieving industrial harmony, efficiency and fairness, which are the objects of the Fair Work Act, and to do so in an equitable manner. In our respectful submission, where an agreement was previously reached between the AWU and the applicant Killarnee, and that agreement rightly - as in, correctly - refers to and covers and seeks to apply to listed classifications, it's contrary to the principles and objectives of the Act, if not the requirements for approval, to register a subsequent agreement that covers those classifications.

PN73

As Mr Banovich has just pointed out to me, inherent in the requirements of 187 subsection (5) of the Fair Work Act are that the CFMEU would need to satisfy you that it has coverage in its eligibility rules of those employees included in table A. That's clearly not the case. If you have a look at the CFMEU's rules, it simply does not extend to the vast majority of those classifications in table A. For that reason alone it should not be approved in its present form.

PN74

THE DEPUTY PRESIDENT: If it can't be approved in its present form - - -

PN75

MR COX: Correct.

PN76

THE DEPUTY PRESIDENT: - - - if it can't be then it can't be approved - - -

PN77

MR COX: Correct, your Honour. We say that it's not - - -

PN78

THE DEPUTY PRESIDENT: - - - unless there are undertakings that overcome the reasons for it not being able to be approved, is my understanding.

PN79

MR COX: In my respectful opinion, your Honour, that's entirely correct. So we'll begin from the position of looking at what they are entitled to represent. That's grounded in their rules. Once you have a look at the rules, you'll see that they're not entitled to represent the vast majority of those classifications contained in table A. The easy way of remedying that, as I proposed to my colleagues this morning, was putting a black pen through those classifications. As I say, your Honour, if it's of any assistance to you and the other parties, I can identify those classifications that don't need to be crossed out. Subject perhaps to some agreed amendment to area and scope in clause 3, I would have thought it is a very easy exercise in correcting.

PN80

As I say, your Honour, we're not taking the position that we want to shut the CFMEU out. We want clarity of coverage and application to avoid bickering and disputes and - - -

PN81

THE DEPUTY PRESIDENT: Mr Cox, I was of the - perhaps mistaken - understanding that there were some memorandums or agreements or some form of understanding between the AWU and the CFMEU about coverage more generally.

PN82

MR COX: You know much more than I do, your Honour.

PN83

THE DEPUTY PRESIDENT: I might have read it in the newspaper or something. I could be wrong. I don't know, I might have seen it on TV, I don't know. The view could easily be mistaken. But you - - -

PN84

MR COX: I do know that the secretary of the CFMEU was quoted yesterday or today saying that he didn't intend - and intended to avoid demarcation disputes in the resource sector in WA. But I don't have instructions on a memorandum.

PN85

THE DEPUTY PRESIDENT: So you're not aware of any - - -

PN86

MR COX: There may well - - -

PN87

THE DEPUTY PRESIDENT: - - - written understanding or memorandum or anything like that in existence?

PN88

MR COX: I'm embarrassed to say that, if there is one, I don't know about it. I've just been asked if I can get some quick instructions. Thank you, your Honour. My instructions are that the only memorandum of understanding exists in relation to a specific site, and that's Billiton Worsley.

PN89

THE DEPUTY PRESIDENT: I see.

PN90

MR COX: So, your Honour, without taking you to the CFMEU rules - and I will if you need me to - we say that that's where you start in terms of the requirements for approval under the Act - specifically under 187 subsection (5). You start by looking at who is eligible to be a member of the respective unions. We say that it's very clear from the eligibility rules of the AWU federal that the AWU has coverage of the vast majority of employees and the vast majority of classifications in table A to the Killarnee CFMEU agreement. For that reason, it could not be approved. That's leaving aside the public policy arguments - the public policy considerations under the limb or paragraph (b).

PN91

Your Honour, subject to reserving the right to reply to anything I hear from my learned friends in reply to those submissions, that was all I proposed to say at this stage.

PN92

THE DEPUTY PRESIDENT: Yes, thank you. Yes, Mr Edwardes.

PN93

MR EDWARDES: Thank you, your Honour. It would appear - I'm somewhat surprised, as you are aware, your Honour, about the - there are a number of other agreements which have been approved in the past which are very similar in this nature; such as there's the FECE agreement, there's obviously the Decimal agreement, and there's the CDI Constructions agreement recently approved in January this year by yourself where there are all three unions involved, the AMWU, the AWU, the CFMEU - those agreements all approved. I think central to the argument of the AWU, the way I understand it, is that they're arguing that the CFMEU do not have - or are not entitled to represent the majority coverage of the classifications in the agreement.

PN94

It is our position that that argument is flawed on the basis that the Act, as you've been referred to, does not refer to the majority of classifications, it actually refers to the majority of employees that they're entitled to cover. Therefore, if at the start of a project an employer has a significant number of, for example, carpenters - which the CFMEU are entitled to represent - that's one classification. But the majority of their employees might be carpenters, therefore it doesn't necessarily mean that they're not entitled to have an agreement and represent their interests. So that's where we say - and the Act, from our position - is that the Act envisages a number of agreements covering employees at the same time but not necessarily applying to the employees.

PN95

As you're aware, there is a distinct difference between "coverage" and "apply". Perhaps if, as I alluded to in our submissions - is that the application of the AWU agreement might apply first in time, being that it was made first in time, and the CFMEU separately. It doesn't necessarily mean that both agreements can't cover the employees at that same time or whether they can't coexist at the same point in time. So we don't see any reason why the CFMEU agreement could not be approved on that basis. Where an employee - it would be the position from Killarnee on - I'll take my learned friend's argument in regards to who the - provide certainty in regards to which union that the employer might need to deal with.

PN96

As you have said, they are aware of what the union has to deal with because they've made agreements with the unions. If it had been that the agreement of the AWU applies to all the persons - if we didn't have the CFMEU agreement in place and the majority of employees at the beginning of the project were carpenters - which is not covered or is not even alluded to in the AW agreement - then what agreement could apply to those employees? Because it's not a matter of just striking out the classification. It's either approved or it's not. So on the public interest test in that regard we would suggest that it is in the public interest to approve both agreements to ensure that all the employees of the employer are covered by an agreement.

PN97

The CFMEU agreement goes further and covers additional classifications which aren't covered in the AWU agreement. So, in any event, if there was one agreement that applied and an employee could be covered under both agreements, then the Act specifies that only one agreement will apply to that employee. So in terms of the public interest policy, it's a non-argument from our point of view in that regard.

PN98

THE DEPUTY PRESIDENT: But are there classifications in the CFMEU agreement that the CFMEU does not have constitutional coverage of?

PN99

MR EDWARDES: It would be, yes. But like I - - -

PN100

THE DEPUTY PRESIDENT: So what's the point of those classifications in there? Won't that lead to confusion or potential differences in considering whether the agreement applies?

PN101

MR EDWARDES: There is that potential, yes, your Honour, but only to the extent of which agreement applies to that employee. In regards to allowances, wage rates - - -

PN102

THE DEPUTY PRESIDENT: But if the CFMEU agreement has classifications in it that they don't have constitutional coverage of, I guess what you're saying is that they're superfluous and that does not mean the agreement covers those employees who are working in those classifications. What's the - - -

PN103

MR EDWARDES: We submit that under section 187(5) - is that there is the possibility for an agreement to be made with a union to cover employees which does not necessarily fall within the constitutional coverage of the union, provided that the majority of the employees - not classifications, employees - at that time are entitled to be represented by the union.

PN104

THE DEPUTY PRESIDENT: I see.

PN105

MR EDWARDES: There's a distinct difference there. For example, for a practical perspective, your Honour, as I mentioned earlier, if we had 60 carpenters which are not covered by an AWU agreement, and they're 60 employees and they're the majority employees of the employer, then they would be entitled to have that greenfields agreement and include other classifications in that to cover other employees. So from the perspective of whether the agreement should be approved or not, that could satisfy the test. Obviously we don't have employees on site at this stage. It is very difficult to even provide a quantitative assessment on that basis.

PN106

In the event that it didn't - when we're talking about if you approve that agreement, and it would appear that there isn't that number of employees or there were employees of the employer which are under the constitutional coverage of the CFMEU, the AWU agreement applies in any event because that was made first in time. The CFMEU agreement kicks in when the AWU agreement doesn't have coverage in the classifications and doesn't cover specific employees. But in terms of whether the CFMEU agreement should be approved or not, it could satisfy that criteria in any event because it goes down to whether the number of employees could be constitutionally covered by the CFMEU, not the classifications.

PN107

THE DEPUTY PRESIDENT: I understand that, but I still struggle to understand why one would include classifications in an agreement with a union, knowingly that that union does not have constitutional coverage of those classifications. I struggle to understand why - it's your agreement, it's up to you to agree whatever, but I have difficulty understanding why one would do that.

PN108

MR EDWARDES: I think if we were dealing with - let's take aside this project. If you were dealing with a smaller project and you were dealing with only one union, then you could do that to have a specific number of employees covered by that agreement, but there would be cases where you would have on a project a number of employees which wouldn't necessarily be constitutionally covered by the union that you did a greenfields agreement with, but you wouldn't necessarily - or the other unions for whatever reason do not engage in a greenfields agreement with the employee.

PN109

You still have that greenfields agreement in place to cover employees that would not necessarily be covered constitutionally. But they can do that provided that the initial majority of employees are covered under the constitutional coverage of the union.

PN110

THE DEPUTY PRESIDENT: It comes back to the comment I made at the start. The circumstances seem to me to be no different to a circumstance where there was one agreement with both unions covered.

PN111

MR EDWARDES: That would be correct, your Honour. I think it's a matter of practice, as I've mentioned earlier, that this is just an issue that's come up very recently for whatever reason, which I'm unaware of as a - I'm not aware of any demarcation disputes. I'm not instructed on any demarcation disputes which are arising or have arisen.

PN112

THE DEPUTY PRESIDENT: And you say there are other companies on this project that have virtually identical agreements with the CFMEU and the AWU - - -

PN113

MR EDWARDES: That's correct.

PN114

THE DEPUTY PRESIDENT: - - - and have been in operation for various periods of time.

PN115

MR EDWARDES: That's correct, your Honour. For example, there's the FECE agreement. That was approved by Cloghan C on 15 March 2010. That's two identical agreements to the agreements before you today. There's the Decimal Australia Pty Ltd, which was approved by yourself. The AWU agreement was approved on 12 May; the CFMEU agreement was approved on 7 July 2010. And then recently we've got the CDI Constructors agreement; identical yet again; the AWU and the CFMEU agreements, both approved by yourself on 14 January this year. So I'm somewhat surprised why - as in past practice where these agreements have taken place, and they do - - -

PN116

THE DEPUTY PRESIDENT: And, to the best of your knowledge, there haven't been demarcation issues arise - - -

PN117

MR EDWARDES: I'm not instructed as to any, and I'm not aware of any - - -

PN118

THE DEPUTY PRESIDENT: You're actually representing Killarnee, aren't you?

PN119

MR EDWARDES: That's correct, as part of a member of the Chamber of Commerce as well. The Chamber is the employer - provides - - -

PN120

THE DEPUTY PRESIDENT: Yes, but here today you're only representing Killarnee.

PN121

MR EDWARDES: Only representing Killarnee. So I'm not instructed as to any demarcation disputes. In any event, I think if we're talking about perhaps if we went before the Fair Work Act the union could only come on site if they had an agreement in place with the employer and the employees, whereas today all they've got to show is that they're entitled to represent the industrial interests. So they could effectively still hold discussions with employees, regardless of whether they're an AWU member or a CFMEU member.

PN122

THE DEPUTY PRESIDENT: Mr Edwardes, Mr Cox mentioned the public policy considerations for approval of the CFMEU agreement. Do you have any comment about that or any public policy considerations if the agreement were not approved?

PN123

MR EDWARDES: If the agreement was not approved, then there would be a number of employees of Killarnee which would not be covered by the AWU agreement, such as the carpenters. They come under a classification of a CW3. Carpenters and painters are not mentioned in the AWU agreement at all; therefore they would not have coverage on site.

PN124

THE DEPUTY PRESIDENT: Unless they - - -

PN125

MR EDWARDES: Unless the CFMEU agreement was - - -

PN126

THE DEPUTY PRESIDENT: Unless there was a single enterprise agreement that was made once they were employed.

PN127

MR EDWARDES: That's correct. As it stands at the moment, there is no coverage - if the CFMEU agreement was not to be approved, then there would be no coverage of carpenters and painters or crane operators at a level 7 and 8 - CW7, CW8.

PN128

THE DEPUTY PRESIDENT: I gather that part of the reason these agreements are greenfields agreements are to avoid the possibility of demarcation issues arising once people were actually on the ground.

PN129

MR EDWARDES: That's correct. It's the purpose - - -

PN130

THE DEPUTY PRESIDENT: So it's a public policy issue of - - -

PN131

MR EDWARDES: It's the intention of the - - -

PN132

THE DEPUTY PRESIDENT: - - - Mr Cox's part saying, "Well, the demarcation issues could arise." Your public policy is you - from what I gather - is, "Well, this is trying to avoid the arising of them."

PN133

MR EDWARDES: That's right. It doesn't matter in terms of the demarcation disputes with regards to who's covered by what. I mean, at the end of the day what the project, I believe, is intending to do is to ensure that all employees are covered by an agreement before they enter onto the site.

PN134

THE DEPUTY PRESIDENT: Mainly with the AWU and the CFMEU, otherwise I wouldn't be here.

PN135

MR EDWARDES: Unless your Honour has any other questions in that regard - - -

PN136

THE DEPUTY PRESIDENT: No, just for the moment.

PN137

MR EDWARDES: - - - I think our submissions - other than that, our submissions would suffice.

PN138

THE DEPUTY PRESIDENT: Do you have any comment about the capacity or the efficacy of Mr Cox's suggestion of just striking out classifications? I don't know that there's a capacity to do that. That's the reason I ask.

PN139

MR EDWARDES: I'm not aware of a capacity to do it. I think it's either the agreement be approved or it's not, and we'd have to engage in another whole agreement.

PN140

THE DEPUTY PRESIDENT: Or it's approved with undertakings.

PN141

MR EDWARDES: It could be approved with undertakings. The difficulty with that is if you go into striking out classifications - - -

PN142

THE DEPUTY PRESIDENT: The only way you could do that, presumably, is to say, "Killarnee and CFMEU agree this agreement will not apply to these classifications" - undertake that it will not be applied to these classifications. That's the only way I think you could do it. There might be other ways.

PN143

MR EDWARDES: I wouldn't think that would even by necessary, your Honour, in regards to that only one agreement can apply to an employee at any one point in time. Given that the AWU agreement is first in time, they would apply to those relevant classifications in any event. The ones which aren't covered under that AWU agreement would then be covered by the CFMEU agreement, which is coexisting at the same point in time.

PN144

THE DEPUTY PRESIDENT: All right. Thanks, Mr Edwardes.

PN145

MR EDWARDES: Thank you, your Honour.

PN146

THE DEPUTY PRESIDENT: Yes, Mr Sneddon.

PN147

MR SNEDDON: Yes, just very briefly, Deputy President, if I may. I suppose firstly - I'll try and boil it down to what seems to be at issue here. We seem to be talking majority coverage and public interest. I would have you note that, rather than just assertions coming from the other side with regards to majority coverage, both the CFMEU and Killarnee have submitted declarations to the tribunal stating that there is majority coverage. What we've heard to this point thus far are assertions to the contrary with no evidence, your Honour.

PN148

Firstly, I would point out that there's evidence supporting that we have majority coverage of employees, as Mr Edwardes has pointed out, and there's no evidence to the contrary. That would be the first point I would make. Secondly, I would just support Mr Edwardes' position that the legislation makes it very clear that we're not talking about the majority of classifications here, we're talking about the majority of employees. I think we need to be clear on that. There seems to be some confusion coming from my friends on the other side. The public interest test, which is also held in the legislation as well - we seem to be trying to define what public interest is. The explanatory memorandum, Deputy President, tells us what the parliament envisages the public interest test being on that. It says:

PN149

It should take into account the objects of the Act and the need to ensure that employees are appropriately represented.

PN150

That's the public interest test. The object of the Act is to ensure applications for agreements are dealt with without delay. We can find that at section 171(b) of the legislation, Deputy President. The second part of that public interest test as to whether the employees have been represented - well, they have. The union has represented the employees on this. As we've already noted, it's a standard agreement. It's industry standard, so the employees have certainly not been disadvantaged by this process. So taking into those two accounts, that's a public interest that we should be looking at, and those tests have been met.

PN151

We've had some discussion on "covers" and "applies", Deputy President. Quite clearly the legislation envisages that they are two terms. Section 53 of the legislation defines "covers"; section 52 of the legislation defines "applies". They're two different terms and they have two different meanings. Section 58 of the legislation also makes it clear that only one can apply at a given time. We can have multiple agreements that cover but we can only have one that applies. That's exactly what's going to happen here again, so legislatively we're following the form of the legislation. If I could also refer again to the explanatory memorandum. The explanatory memorandum at paragraph 201, Deputy President, says:

PN152

Thus, coverage of a modern award or enterprise agreement is a broader concept than application of the award or agreement. An award or agreement that covers a person does not necessarily apply to the person.

PN153

The legislative framework makes it clear that we can have more one than award. It's set up - it's written in that way. It's explained thus and the legislation states it's thus. As Mr Edwardes has already pointed out, this tribunal has been through applications such as this before - not just on Gorgon, but on multiple sites, Deputy President. This is not an unusual application.

PN154

THE DEPUTY PRESIDENT: Unless you can identify for me, Mr Sneddon, I can't recall any demarcation disputes between the AWU and the CFMEU coming up here for - - -

PN155

MR SNEDDON: We don't - - -

PN156

THE DEPUTY PRESIDENT: - - - - these types of projects for - well, since I've been here. There have been murmurings and mutterings and grumpiness from time to time, but I can't recall there being a matter specifically directed at demarcation coming before me, anyway.

PN157

MR SNEDDON: I would say two things to that, Deputy President. Firstly, the timing of this seems to have coincided with the ANU national conference, where there was a bit of chest beating, so perhaps that's maybe just coincidental. I have nothing further on that.

PN158

MR COX: I'll let that one go to the keeper, your Honour.

PN159

THE DEPUTY PRESIDENT: I thought you might rise.

PN160

MR SNEDDON: Secondly, there is a piece of legislation, Fair Work Registered Organisations Act 2009, which specifically deals with demarcation disputes. I see that it's mentioned in submissions, which I've only just briefly read, that it's not in the public interest to have dual coverage. I mean, dual coverage is something that's existed as long as unions have been there. But if indeed there is a public interest test, then an application can be made for representation orders under that legislation. That's the process that needs to be followed. This is not the forum for us to be dealing with demarcation issues.

PN161

THE DEPUTY PRESIDENT: I asked Mr Cox, are you aware of any memorandum or operating standards or understanding - - -

PN162

MR SNEDDON: Yes.

PN163

THE DEPUTY PRESIDENT: - - - between the AWU and the CFMEU?

PN164

MR SNEDDON: Historically I believe that all of the unions have made various attempts to have understandings. Quite what the worth of those would be right now, I have no idea, Deputy President. There's nothing that we're currently working - - -

PN165

THE DEPUTY PRESIDENT: There's nothing of recent currency.

PN166

MR SNEDDON: Exactly right. So there may be some historical documentation, but I would doubt any worth attached to them. Essentially on that demarcation issue, there is a piece of legislation that is a process that needs to be followed. It certainly isn't - this is the wrong forum for it, Deputy President. I suppose just summarising that, the legislation makes it clear that if the tribunal is happy with the application of the process going through then it's not a discretionary power that you have, you must approve this agreement.

PN167

With regards to majority coverage and public interest, they seem to be the two limbs that perhaps this agreement wouldn't be passed on. Majority coverage, again, Deputy President, I would say that the tribunal has evidence saying that there is majority coverage. It has no evidence to the contrary, aside from mere assertions from the bench. With public interest the explanatory memorandum makes it clear what public interest should be.

PN168

THE DEPUTY PRESIDENT: There are two sides to the - "public interest" is what the words there say. The explanatory memorandum might be of some assistance in that, but it's the words of the Act that count, Mr Sneddon. Just thinking aloud, there are two elements to the matter at issue here, and that's both sides of the same coin, prevention of potential future demarcation disputes. The AWU seems to be saying - is saying, "You prevent that by knocking out some of the classifications." You say you're preventing it by having greenfields agreements of the nature you have. That's what you seem to be saying, or at least Killarnee are.

PN169

MR SNEDDON: What we're saying is that there's no evidence of demarcation disputes at all, Deputy President. There's no suggestion from anyone that there is demarcation or has been or - - -

PN170

THE DEPUTY PRESIDENT: Well, it says there "greenfields agreements". It would be the probability of there being demarcation disputes. Probability is what the AWU is saying. It's greater if the agreements are approved, and you're saying it's lesser, I gather.

PN171

MR SNEDDON: I'm saying it's essentially non-existent.

PN172

THE DEPUTY PRESIDENT: You're saying it's non-existent - I guess what you're saying.

PN173

MR SNEDDON: Indeed, Deputy President. And further, what I'm saying is that with regards to this application, the legislation clearly lays out the process that needs to be followed. It seems that what we're trying to do is add extra steps into that process which quite simply don't exist in the legislation, Deputy President. The application has been made; there's been evidence led by both Killarnee and the CFMEU; there have been assertions to the contrary. Sorry, I'll just explain the evidence we filed, declaration statement there is majority coverage.

PN174

THE DEPUTY PRESIDENT: Yes.

PN175

MR SNEDDON: And all we have is assertions from the bench table that - - -

PN176

THE DEPUTY PRESIDENT: I usually take that as evidence - - -

PN177

MR SNEDDON: Indeed, Deputy President, yes.

PN178

THE DEPUTY PRESIDENT: - - - satisfy me that the requirements have been met such that the agreement can be approved.

PN179

MR SNEDDON: In the absence of anything to the contrary, Deputy President, I would say that the tribunal is left with little choice. There is no evidence to the contrary and there is evidence suggesting that there is.

PN180

THE DEPUTY PRESIDENT: All right. Anything else, Mr Sneddon?

PN181

MR SNEDDON: Unless you have any questions, Deputy President - - -

PN182

THE DEPUTY PRESIDENT: No. Yes, Mr Cox.

PN183

MR COX: Thank you, your Honour. The evidence to the contrary is the form 21 declaration signed by the secretary of the AWU. That was signed before the CFMEU's one. So that's prima facie evidence; it's evidence that comes ahead of the CFMEU's and the CFMEU has not adduced an iota - except for some assertions from the bar table - that it has coverage of a majority of employees. I accept that it's not a question of classification, it is a question of the number of employees.

PN184

We say two things in response to the submissions made by Mr Edwardes. The first is that there are approximately - or perhaps exactly 73 listed classifications in table A, eight of which are CFMEU-covered positions. They might say that those eight classifications are going to outnumber the 65 classifications of AWU-eligible employees. We'd say there are two fundamental problems with that. It seems glaringly obvious that the numbers are on the AWU's side and, secondly, the CFMEU has brought no evidence - neither has Killarnee - to the contrary. The whole problem with that argument is that it's premised on an assumption that we're trying to exclude the CFMEU from any coverage or exclude Killarnee from reaching an agreement with another union to cover the situation.

PN185

We're not saying that. We're saying there's a pre-existing agreement reached between the AWU and Killarnee which includes coverage of all AWU members. Why muddy the waters - even if you can surmount it in A, which we say you can't - why muddy the waters by providing fertile ground for a demarcation dispute by including exactly those same classifications in the CFMEU agreement? But we say that if you have a look at the requirements - and the onus is on the applicant and the onus is on those that purport to support the applicant - to satisfy you that the "organisations that will be covered by the agreements are (taken as a group) entitled to represent the industrial interests of a majority of the employees."

PN186

We would say that you could take judicial notice from the number of classifications alone that the AWU-eligible employees are going to way outnumber that of the CFMEU. The other point to observe about the reference that Mr Edwardes makes to carpenters is that the CFMEU - and he's made reference to carpenters in - perhaps the suggestion that there's going to be many more carpenters on site than there are going to be AWU members and that the carpenters are covered by the CFMEU. That's not entirely the case across the board. The CFMEU is only entitled to cover those carpenters who work on projects that house people; in other words, the camp.

PN187

They're not entitled to cover those in relation to civil projects, which is what the AWU agreement covers. So the majority coverage is well and truly on the side of the AWU even if this was a competition. But we're saying it's not, your Honour. We're saying let the CFMEU have their agreement with Killarnee, but the AWU's agreement came first in time, it properly covers its members. To suggest that we could leave to another day to sort out via representation orders who covers who is exactly what I would put on the AWU's side of the argument here today. Why leave it to another day to resolve to whom the respective agreements apply when we can sort that out now?

PN188

Mr Sneddon has referred to section 58 in relation to the distinction between "coverage" and "application". Section 58 specifically provides in subsection (1) that, "Only one enterprise agreement can apply to an employee at a particular time." Then there is a general rule in subsection (2) that, "A later agreement does not apply until earlier agreement passes its nominal expiry date." So that raises the question, why would we include in the subsequent agreement - the CFMEU agreement - those who are already covered by the AWU agreement if the only rationale for doing that is to leave to another day who it's going to apply to if we can resolve all of those issues now?

PN189

We say that's a ringing endorsement on the AWU's side for limb B in the public interest, and a profound argument against the position of the applicant and the CFMEU. Sorry, if I may be excused for a moment, your Honour. Your Honour, it's not simply a matter of working out - or endeavouring to provide some system of understanding in advance to minimise the risk of demarcation disputes, but also in relation to right of entry issues. It's also important for those people that go to work there to know who they pay their membership dues to. Who at the end of the day is going to be able to advance their interests or make an application on their behalf as individual employees; or for that matter as collective employees in particular classifications that are duplicated in two different awards?

PN190

Your Honour, it really goes back to the eligibility rules, then it goes to looking at the numbers of employees at the work site. We say that if you have a look at the CFMEU agreement it's abundantly obvious - it's bleedingly obvious that the vast majority of employees are going to be covered by the eligibility rules of the AWU, not the CFMEU. If the CFMEU says otherwise then the onus on them under 187(5) - or rather, the applicant - is to satisfy you that that is the case. But I think you can take judicial notice on the basis of the sheer number of classifications that the number of employees are going to be in the AWU's tent.

PN191

Mr Sneddon says he's not aware of demarcation disputes. I think, as your Honour has aptly observed, the fact that we're here today is indicative of the fact that it's very likely that if we create the potential for a demarcation dispute it may well come to fruition. The other thing to observe in relation to the other agreements - and I don't have detailed instructions on those - but the FECE agreement in particular relates to camp. It does not relate to the civil and construction project. So it is entirely distinguishable from the present situation. Again, in relation to the Decimal, I understand that's also distinguishable from the present situation. But even if those were on all fours - - -

PN192

THE DEPUTY PRESIDENT: Can you provide me something once you've had the opportunity to examine those agreements, Mr Cox, as to anything you with to make submissions about in respect of those to me in writing later.

PN193

MR COX: I'd be grateful for that opportunity. Thank you, your Honour. I certainly will do that.

PN194

THE DEPUTY PRESIDENT: And the same opportunity is provided to you, Mr Edwardes, Mr Sneddon.

PN195

MR EDWARDES: Thank you, your Honour.

PN196

THE DEPUTY PRESIDENT: I think both of you raised those agreements.

PN197

MR COX: But if could just observe that even if it were the case that those agreements are entirely on all fours with the present agreements before you, the opportunity was lost then - but it should not be lost again - to do everything to avoid a potential demarcation dispute or issues in relation to right of entry or the confusion amongst employees as to who and what they're covered by and the plethora of difficulties that are going to arise having duplication of coverage under two different agreements.

PN198

THE DEPUTY PRESIDENT: The only problem with that, Mr Cox, is that there haven't been the sorts of problems that you envisage, as I indicated to Mr Sneddon, that I'm aware of anyway, over a substantial period of time for projects of this nature.

PN199

MR COX: I can only demur to that, your Honour. I can't argue with that. But what I would say, and say strenuously, if I may - that the obvious potential for a demarcation dispute, particularly given that we're all here today having this argument, is substantial. If I can put it as highly as this: likely, given where we're at at the present moment. But the resistance to this argument that seems to have been put on behalf of Killarnee seems to me to be, with the greatest of respect, misconceived. It seems to be on the basis that we're adopting an all or nothing approach, that we're suggesting to Killarnee that it must have an agreement with us or the CFMEU. We're not saying that. We're saying, "Let's get it right now."

PN200

THE DEPUTY PRESIDENT: I don't think they said that either.

PN201

MR COX: I thought that I heard Mr Edwardes saying that - - -

PN202

THE DEPUTY PRESIDENT: I thought they said that they wanted an agreement with both so that there was a total coverage of all employees that would potentially be employed by Killarnee on this project.

PN203

MR COX: Yes, and I understood - and perhaps misunderstood that to say that they needed to cover everyone in the CFMEU agreement in case for some reason that they didn't have coverage under the AWU agreement. But the AWU agreement comes first. There's no objection to approval of the AWU agreement, so we assume that that's going to be approved. So there will be an agreement covering those AWU classifications. Why do they need to take some protective or preventative measure to include it in the CFMEU agreement?

PN204

THE DEPUTY PRESIDENT: They're the ones bearing the risk, presumably.

PN205

MR COX: So do the employees and so do the employee organisations.

PN206

THE DEPUTY PRESIDENT: Certainly the employee organisations. How do the employees bear the risk?

PN207

MR COX: When they come to pay their membership dues, how do they know who to pay them to?

PN208

THE DEPUTY PRESIDENT: I see, yes.

PN209

MR COX: When they go to raise an occupational health and safety or an award breach or - sorry, an agreement breach or an unfair dismissal, or whatever it may be that you turn to your organisation to advance your interests - - -

PN210

THE DEPUTY PRESIDENT: Yes, point taken, which all boils down to certainty.

PN211

MR COX: And that's why we put things in writing. Subject to taking up the offer that you've made to address you in writing on those other agreements, that's all I intended to say at this stage, your Honour.

PN212

THE DEPUTY PRESIDENT: Thanks, Mr Cox. Mr Edwardes, people keep talking about majority of numbers. Are there any indicative numbers you have of employees that would be covered by - and the agreements will apply to?

PN213

MR EDWARDES: At this stage, your Honour, I'm unable to give you any of those details.

PN214

THE DEPUTY PRESIDENT: It makes it fairly hard.

PN215

MR EDWARDES: That it does. And given that it is at the start of the project for the employer - for this one. I believe that there's probably - the wheels are in motion, so to speak. But who, and what numbers they do need, I'm unable to advise the tribunal. In regards to - - -

PN216

THE DEPUTY PRESIDENT: Are there any employees - presumably as these are greenfields there's been no employees employed that would be covered by these agreements at this juncture.

PN217

MR EDWARDES: That would be correct.

PN218

THE DEPUTY PRESIDENT: When is it anticipated that they would be employed, or won't any - - -

PN219

MR EDWARDES: I'm instructed that at this stage the employer is waiting on some information from its contractor, being - Killarnee subcontracts to CBI, so when CBI Contractors is ready to engage the services of Killarnee, perhaps then they will be told and then the employees can be engaged.

PN220

THE DEPUTY PRESIDENT: So is the start-up of Killarnee contingent on these agreements being approved, is it?

PN221

MR EDWARDES: I'm not instructed as to that, but I don't believe that is the case. I believe that they were hoping to have these agreements in place before they are due to start up. There are project requirements. Perhaps there's - in order to justify industrial relation management plans to have enterprise agreements in place prior to engaging employees on the site. So therefore it could be the fact that Killarnee will need to have agreements in place before they engage the employees on the site.

PN222

THE DEPUTY PRESIDENT: So you can't give me any numbers, you can't give me when they're going to start. What can you give me?

PN223

MR EDWARDES: What I can give you is that, yes, this is going to be civil construction. My learned friend mentioned about carpenters, and that's set and you don't have coverage over those in regard - and I'm sure I could be - if I'm incorrect, Mr Sneddon can set me straight on this, but it's my understanding in the civil construction that Killarnee will be employing formwork carpenters which are covered by the constitutional coverage of the CFMEU. In terms of my learned friend's assertions that you can take judicial notice over the fact of the sheer numbers of the classifications as opposed to the number of employees - is, I think, misguided in that respect.

PN224

Out of all the classifications in the AWU agreement, not all of those are likely to be employed at the first instance in any event. I can certainly provide you, if your Honour wishes, further information in regards to the likely number of employees, the types of employees which will employed at first instance, but I think the central argument at the end of the day here - and we can go back and forth all we like - all day on this issue - is that there is no difficulty for Fair Work Australia to approve the CFMEU agreement as it stands now. The AWU - my learned friend asserts that there are issues in regards to who do they pay their membership dues to and all that. Well, I think the employees are going to know to who they pay their membership dues. It's not going to matter who the agreement they're signed under.

PN225

The unions can all exercise their own right of entry onto the site regardless. They can certainly be talking to all the employees across the board, whether they're an AWU member or a CFMEU. Certainly on past sites - - -

PN226

THE DEPUTY PRESIDENT: Is that right?

PN227

MR EDWARDES: Certainly they're exercising their right of entry to go onto site to talk to the employees - whose entitled to represent their industrial interests, but it doesn't necessarily mean that an employee can't turn up to the same meeting that might not be covered under the constitutional coverage. Certainly to exercise that right of entry they have to show that that's who they're principally going to talk to. Certainly practically I believe that is what happens in any event.

PN228

THE DEPUTY PRESIDENT: Are there any other agreements that Killarnee has entered into on other projects or other sites or generally?

PN229

MR EDWARDES: There are, I believe, in regards to - I might need to take instructions - I believe the Karara iron ore project, Killarnee is involved in. They have their own collective agreement in place as well.

PN230

THE DEPUTY PRESIDENT: Perhaps you can advise me later. Unless there's anything else - - -

PN231

MR EDWARDES: I don't propose to say anything - - -

PN232

THE DEPUTY PRESIDENT: Mr Sneddon and Mr Edwardes, I gather you haven't had much opportunity to examine the submissions that were made by the AWU. If you want to provide me with anything in writing to those submissions - which I think you received this morning, I think I heard Mr Cox say - you have that opportunity if you wish to take it up. I'll reserve my decision and let you know as soon as I can. This matter is adjourned.

<ADJOURNED INDEFINITELY [11.44AM]