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Excerpts from this article first published in ‘Human Resources’ Magazine, Issue 65, 22 September 2004
Where a new business or project is established, there is often a benefit for employers to enter directly into a greenfield agreement under the Federal Workplace Relations Act 1996 with one or more unions. A key advantage is that a greenfield agreement does not require the approval of any employees whose employment would be subject to the agreement. Another key benefit is that a greenfield agreement provides an employer with the opportunity to shut out less desirable unions as parties to and therefore effectively having a presence at the new business before the employment of any employees.
The Commission has traditionally adopted a restrictive approach to approving greenfield agreements which has meant that only a limited number have been approved. The Commission had refused to approve a number of greenfield agreements on the basis that the employer had simply employing employees at a new site or to service a new contract rather than legitimately constituting a “new business”.
The Full Bench of the Australian Industrial Relations Commission has opened the way for entering into greenfield agreements for new projects. In Brunel Technical Services Offshore Pty Ltd Bayu-Darwin Pipeline Agreement 2004 (PR950406), the Full Bench held that it is sufficient that a new business constitutes a new project even though the nature of the project involves the same line of employer’s business.
In this case, Brunel Technical Services and Minesite Catering entered into separate greenfield agreements with a number of unions to apply to the construction of the Bayu-Darwin gas pipeline which will deliver gas from the gasfields near Eat Timor. The AWU appealed the decision of the Commission to approve the greenfield agreements on the basis that the projects did not constitute new businesses for Brunel or Minesite.
Critical to the Full Bench’s decision was that the definition of “single business” extended to “a business, project or undertaking that is carried on by an employer”. The Commission found that even if the agreement applied to a kind of business in respect of which the employer was already involved, it could still be a new business where the employer was involved in a new “project”.
This is an important decision because it expands the scope for employers to enter into certified agreements with one or more unions thereby avoiding the requirement for approval of any employees and, more importantly, minimise the involvement of other unions on the site. The Commission’s decision suggest that an employer may enter into a greenfield agreement where there is a new project or new undertaking even though it is still in the employer’s same area of business.
HR Tips
Michael Seck
Senior Associate
Australian Business Lawyers
