A contractor on Woodside's giant Pluto LNG project has failed to convince a Fair Work Australia full bench that the tribunal should not have granted a majority support determination when a planned demobilisation meant many of the workers who voted in favour of bargaining wouldn't be covered by any agreement that might have eventuated.

CBI Constructors argued that Deputy President Brendan McCarthy's construction of the expression "a majority of employees . . . who will be covered by the agreement" in s237(2)(a) of the Fair Work Act was wrong.

It maintained the word "will" required assessing which employees, if any, would be covered by the proposed agreement then determining whether a majority of that group wanted to bargain (see Related Article).

But Vice President Michael Lawler, Senior Deputy President Lea Drake and Commissioner John Lewin disagreed.

They said the phrase "employees who will be covered by [an] agreement" was used in many contexts in the Act, and "we are compelled to the conclusion that the legislature used that expression merely as a way of conveniently referring to the group or groups of employees who are proposed to be covered by an agreement (and who, therefore, will be covered when the agreement is made) rather than as a requirement that calls for a prediction as to which particular employees in the group will, when the agreement is made, be covered by the agreement".

They said that the composition of an employer's workforce would typically vary over time, and at the start of and during bargaining it would "often, if not typically," be impossible to determine when an agreement would be made, or, in some instances, whether one would be made at all.

The full bench also held that it was open to the Deputy President to "take the view that he apparently did" that there was a real prospect that CBI would continue to have employees beyond May 2010 (which proved to be the case) who would be covered by the proposed agreement if made.

They noted that a CFMEU official refused to accept during a hearing last year that it could be assumed employee numbers would be reduced to zero by May 2010 because he believed the company would "pick up more work on the site", which is what happened.

"This was evidence that the Deputy President was entitled to accept and act upon," the full bench said. "We note that the Deputy President has substantial experience in construction industry matters. It would be unsurprising if [the official's] evidence struck a chord with the Deputy President's experience."

CBI also argued that Deputy President McCarthy was wrong to make the majority support determination without first being satisfied that the group to be covered by the agreement was "fairly chosen".

But the full bench said that the "fairness with which s237(2)(c) is concerned is fairness assessed in a practical way, not in some philosophical or abstract fashion".

"In this case, the practical situation was clear: the ITEA employees were the overwhelming majority and there was no practical chance of those employees securing improved terms and conditions without resort to industrial action (or the threat of it) and that could only occur if the non-ITEA employees were excluded from the group. Excluding the non-ITEA employees from the group did not render the choice of the group unfair because they were deprived of nothing. On the contrary, in our view it would have been unfair to the ITEA employees, the 'vast majority', if they were deprived of the window of opportunity that they had to pursue improved terms and conditions through the negotiation of new enterprise agreement to cover them, with resort to protected industrial action if necessary."

The bench said that while evidence from a company that it was planning a workforce demobilisation "may" lead to a conclusion that it was not reasonable to make a majority support determination, in this case Deputy President McCarthy was not satisfied CBI wouldn't have any employees on the project beyond May 10. It was "well within his discretion to conclude that it was reasonable to make the determination sought by the CFMEU".

"We do not see the possibility or even probability that an employer would have no employees who would be covered by a proposed agreement when made as requiring a conclusion that it is unreasonable to made a determination in such a case. Of course, depending on the evidence in a particular case, such a circumstance might contribute to contrary conclusions that making a determination in a particular case is unreasonable. However, we are not persuaded that CBI has demonstrated that the Deputy President's conclusion as required by s237(2)(d) is affected by an error within principles laid down in House v King, being the principles applicable to a challenge to a finding of the sort called for by s237(2)(d)."

In refusing permission to appeal, the bench noted that there was no prospect that the proposed deal sought by the CFMEU could be made before June 30 last year (when the termination of workers' ITEAs took effect and they came under a five-year non-union collective deal).

It said the factual circumstances underpinning the appeal were "very unusual", and while public interest existed on the requirements of s237(2), this could be met by its reasons for decision.

The bench said CBI had established an arguable case of error on one aspect of the decision, but it agreed with the essential substance of Deputy President McCarthy's reasoning.

CBI told the tribunal last year that it had some 100 employees on the project. The five-year 2009 agreement made under the Workplace Relation Act applied to about 10 of them, with the rest covered by ITEAS that reached their nominal expiry date at the end of 2009. The company successfully applied to terminate the ITEAS, meaning under the transitional legislation they remained in force for a further 90 days, ending on June 30 last year. Unless a new deal was made before that date, the 2009 agreement would apply to ITEA workers.

CBI workers were among those who took part in the earlier "motelling" dispute on the Pluto project (see Related Article).

CBI Constructors Pty Ltd v CFMEU [2011] FWAFB 7642 (9 November 2011)