Fair Work Commission decision to approve a greenfields agreement quashed by the Federal Court

Greenfields agreements must only be for a genuine new enterprise

In a major win for our client, the Rail Tram and Bus Union (RTBU), the Full Court of the Federal Court quashed the decision of the Fair Work Commission to approve a greenfields agreement made between Busways and the Transport Workers’ Union (TWU), on the basis that the privatisation of public transport bus services is not a ‘genuine new enterprise’.

You can read the judgement here: Australian Rail, Tram and Bus Industry Union v Busways Northern Beaches Pty Ltd (No 2) [2022] FCAFC 55.

What is a Greenfields Agreement?

A greenfields agreement is an enterprise agreement:

  • that relates to a ‘genuine new enterprise’, which includes a new business, activity, project or undertaking, that an employer or employers are establishing or propose to establish; and
  • where the employer or employers have not employed any of the persons to be covered by the agreement, who will be necessary for the normal conduct of the enterprise.


On 23 October 2019, Transport of New South Wales (TfNSW) announced that the NSW government intended to invite private bus operators to tender for 13 bus service contracts in various areas around Sydney, which had previously been operated by the State Transit Authority of NSW (the STA).

On 18 August 2020, three companies, known as Busways, were incorporated to bid for 3 of the 13 bus service contracts. Two days after being incorporated, the Busways, Transport Workers’ Union of Australia and Drivers Enterprise Agreement (the Agreement) was made between Busways and the TWU.

Since Busways (the newly formed entities) had not employed any persons necessary for the normal conduct of the enterprise, Busways made an application to the Fair Work Commission for the Agreement to be approved as a greenfields agreement.

Decision of the Fair Work Commission

On 9 September 2020, Commissioner Harper-Greenwell of the Fair Work Commission (the FWC) approved the Agreement, as she was satisfied that the Agreement met the requirements under the greenfields agreement provisions of the Act.  

Our client, the RTBU, who was not aware that Busways had made the application to the FWC for approval of the Agreement, engaged Hall Payne Lawyers, led by our Principal, Joseph Kennedy. We then appealed the Commissioner’s decision to the Full Bench of the FWC on the basis that the Agreement was not a greenfields agreement because it did not relate to a ‘genuine new enterprise’.

The Full Bench of the FWC upheld the original decision of Commissioner Harper-Greenwell and found that the Agreement related a to ‘genuine new enterprise’.

Hall Payne Lawyers and our client then devised a legal strategy to have that decision overturned.

Appeal to the Full Court of the Federal Court

The RTBU appealed the Full Bench’s decision to the Full Court of the Federal Court, where Justices Bromberg, Wheelahan and Snaden overturned the decisions made by the FWC to approve the Agreement.

The Full Court was tasked with determining whether the Agreement was, at the time of its making, an agreement that related to a ‘genuine new enterprise’ in accordance with section 172(2)(2)(b) of the Fair Work Act 2009 (Cth) (the Act).

Justice Bromberg found that the meaning of the words ‘genuinely new enterprise’ was that the “proposed enterprise must be genuinely new or, in other words, truly authentic or really new.

His Honour said that the use of the word ‘genuine’:

 tends to suggest that the proposed enterprise must be new to a substantial degree.

When considering whether an enterprise is ‘genuinely new’, his Honour formed the view that there needed to be a:

comparison between what existed or exists and the enterprise which is being brought into existence”.

His Honour went on further to say that if:

the existing enterprise and the proposed enterprise substantially bear the same character, then it will usually be the case that the proposed enterprise is not a “genuine new enterprise”.

In conducting his assessment of the essential characteristics of Busways and the STA, his Honour accepted our arguments about the practical similarities between the two enterprises.

Justice Bromberg found that Busways was not a ‘genuine new enterprise’ as:

  • the totality of the services to be provided to the public by Busways were substantially the same as those provided by the STA;
  • most of the plant and equipment would remain owned by TfNSW, as was the case with the STA;
  • the proposed workforce was essentially, if not wholly, the same as the STA, as the new operator(s) were required to employ all existing staff for a minimum of 2 years on the same terms and conditions that they were employed on with the STA; and
  • the change from an enterprise operating as a not-for-profit to a for-profit organisation was not an essential characteristic, as it did not apply to all categories of ‘enterprises’, which includes a business, activity, project or undertaking.

Justice Bromberg said that the Full Bench of the FWC had made two fundamental errors, which were:

  1. it “relied upon the proposed enterprise being new to Busways” and the correct question that the Full Bench should have asked was “whether the proposed enterprise is new in the sense of being generally novel rather than whether the proposed enterprise is new from the perspective of its proponent”; and
  2. the focus of the Full Bench was “substantially upon whether the proposed enterprise was the continuation of the same enterprise conducted by the STA” and it “relied upon the fact that Busways had not acquired the activities of STA as a “going concern”.”

In his reasons, Snaden J found that the words ‘genuine new enterprise’ required “an enterprise that is both “genuine” and “new”. In his Honour’s view, the adjectives of “new” and “genuine” were unambiguous. His Honour said that:

“[s]omething is or will be “new” if its creation is recent or foreshadowed” and to “be “genuine”, something must be, in truth, what it purports to be. The adjective imparts notions of authenticity, honesty or sincerity.

His honour found that after surveying the “factual landscape” of the matter:

the nature or character of the pre-tender bus services … is (or was), in substance, the same as the nature or character of the bus services in respect of which the Busways entities made the [Agreement]”.

Therefore, the enterprise that Busways were establishing when they made the Agreement was not a genuine new enterprise for the purposes of section 172(2) of the Act.

Justice Wheelan agreed with the conclusions of both Bromberg and Snaden JJ and, in turn, the orders proposed by Snaden J, for the decision of the FWC to be quashed.

This was a fantastic outcome for the RTBU and its members and may prove to be an ongoing precedent in relation to the issue of greenfield agreements moving forward.

Get help from an employment lawyer

If you’re experiencing any issues with your employment, you should contact your Union or one of our award-winning employment lawyers for advice and assistance.

Contacting Hall Payne Lawyers

You can contact us by phone or email to arrange your consultation; either face-to-face at one of our offices, by telephone or by videoconference consultation.

Phone: 1800 659 114
Email: general@hallpayne.com.au

  This article relates to Australian law; either at a State or Federal level.

The information contained on this site is for general guidance only. No person should act or refrain from acting on the basis of such information. Appropriate professional advice should be sought based upon your particular circumstances. For further information, please do not hesitate to contact Hall Payne Lawyers.

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