A Greenfields Agreement is either a single or multi-enterprise
agreement made between one or more unions and an employer, where
the agreement relates to a genuine new enterprise and the employer
has not employed any of the persons who would be necessary for the
normal conduct of the enterprise and who would be covered by the
agreement. Enterprise means a business, activity, project or
To approve a Greenfields Agreement, Fair Work Australia (FWA)
must be satisfied that:
The relevant unions 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, in relation to work to be performed under the agreement;
It is in the public interest to approve the agreement.
When one goes to section 174 of the Fair Work Act 2009 (Cth) (FW
Act), you will see that the next section is section 176 and the
next section after 176 is section 178. There are no sections 175
If the Federal Government follows the recommendations of the
recent Fair Work Act Review (Review) and reinstates sections 175
and 177 and the other Greenfields Agreements processes are inserted
as recommended by the Review, the combined effect of those
provisions will be potent, if not toxic (as some would say).
As set out in the Explanatory Memorandum to the Fair Work
Bill 2008, the combined effect of the proposed sections 175
and 177 would have been to impose upon employers seeking a
Greenfields Agreement the obligation to notify all unions who may
have eligibility to cover employees in any of the vocations to be
contained in the Greenfields Agreement, and each of those unions
would have been automatically entitled to be bargaining
representatives for the agreement.
As a result of representations by employer groups, sections 175
and 177 did not make their way to the FW Act. Employer groups
submitted that it would be overly complicated to involve every
conceivable union in the making of a Greenfields Agreement. In fact
as everyone knows who is experienced in the industrial relations
arena, quite often relevant unions will not agree to make a
Greenfields Agreement with other unions or be involved in a
Greenfields Agreement at all.
Not only would the Review reinsert sections 175 and 177, it has
recommended that 'good faith bargaining' obligations should
apply to Greenfields Agreements.
Further, the Review has purported to insert a 'safety
valve' by recommending that if negotiations for a Greenfields
Agreement have failed, the FWA may, on its own motion or in an
application by a party, conduct a limited form of arbitration,
including 'last offer arbitration', to determine the
content of the Greenfields Agreement.
In a perfect world this may seem like a reasonable process, but
in the real world of industrial relations, if enacted, the Review
recommendations may in the end completely undermine the utility of
Greenfields Agreements and could lead to a series of costly and
A few questions arise.
Under the scheme for Greenfields Agreements, every union will be
at the bargaining table, and although it may come as a shock for
some, not all unions see eye-to-eye concerning the making of
agreements. This can, in turn, give rise to demarcation disputes
Where a union does not want to be part of a Greenfields
Agreement with other unions, it may not be capable of making a
Greenfields Agreement alone, because it may not be entitled to
represent the industrial interests of a majority of the employees
who will be covered by the agreement in relation to work to be
performed under the agreement. Where does this leave the
Greenfields Agreement process?
If 'good faith bargaining' and a limited form of
conciliation is introduced, this will no doubt drag out the process
of making a Greenfields Agreement in circumstances where employers
may need to proceed to engage employees because of project demands.
Could a Greenfields Agreement still be made at that point?
Finally, if enacted, the Review recommendations are at least
problematic and at worst may undermine the utility of Greenfields
Agreements, leading to a series of costly and unacceptable
stalemates. This is an outcome that the Review itself sought to
This publication is intended as a general overview and
discussion of the subjects dealt with. It is not intended to be,
and should not used as, a substitute for taking legal advice in any
specific situation. DLA Piper Australia will accept no
responsibility for any actions taken or not taken on the basis of
DLA Piper Australia is part of DLA Piper, a global law firm,
operating through various separate and distinct legal entities. For
further information, please refer to www.dlapiper.com
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
Long experience representing many of Australia's leading employers has taught us that in employment litigation the identity of an employee's representative is a major factor in how employee litigation runs.
Australian employees receive certain entitlements (such as annual leave and superannuation) where contractors do not.
Some comments from our readers… “The articles are extremely timely and highly applicable” “I often find critical information not available elsewhere” “As in-house counsel, Mondaq’s service is of great value”
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).