Commission upholds certification of project agreements

IN a vital ruling for the resources sector, the full bench of the Australian Industrial Relations Commission has found that industrial agreements relating to the Bayu-Darwin Pipeline Project were Greenfields Project Agreements under section 170LL of the Workplace Relations Act.

The Bayu Darwin Pipeline Project involves the construction of a pipeline from Darwin to the Bayu-Undan field in the Timor Sea.

The case arose when the Australian Workers Union appealed the earlier AIRC’s earlier decision that certified:

• A project agreement between Brunel Technical Services and the Australian Metal Workers Union, the Communications, Electrical and Plumbing Union and the AWU; and
• A project agreement between Minesite Catering and the AWU.

Commissioner Harrison at first instance found that the Bayu-Darwin Pipeline Project was a new business for Brunel and Minesite Catering and that the project agreements were made before the employment of any persons whose employment would be subject to the agreements.

The full bench of the commission agreed with commissioner Harrison and dismissed the appeal, finding that the Bayu-Darwin Pipeline Project was a new business for the purposes of the Workplace Relations Act.

The Full Bench commented: "We think it is sufficient for the purposes of S.170LL(1)(a) of the act that the Bayu-Darwin Pipeline Project, being the single business covered by the Brunel agreement and the Minesite agreement, was a new project that Brunel and Minesite as employers were proposing to establish or were establishing when the Brunel agreement and the Minesite agreement were made".

The decision should provide much needed certainty in relation to the certification requirements of project agreements for employers involved in major resource and construction projects.

Project agreements are widely used in the resource and construction sector to ensure that all labour is employed and covered by the project agreement before project work commences.

The decision of the full bench lays the groundwork for future project agreements with respect to major oil and gas projects in the Timor Sea and elsewhere.

Allan Drake-Brockman, partner  9220 4912

Gadens Lawyers