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  • An enterprise is not a ‘genuine new enterprise’ simply because it is new to an employer or that employer has a different financial objective.
  • A ‘genuine new enterprise’ requires a qualitative assessment and comparison of existing and proposed enterprises, taking into account a number of essential characteristics, including services, equipment and employees.

In the recent decision of Australian Rail, Tram and Bus Industry Union v Busways Northern Beaches Pty Ltd (No 2) [2022] FCAFC 55, the Federal Court set aside an enterprise agreement that had been approved by the Fair Work Commission (‘FWC’) as a greenfields agreement, finding that it did not relate to a ’genuine new enterprise’.

The decision concerned the proper application of section 172(2)(b) of the Fair Work Act 2009 (Cth) (‘FW Act’). For an agreement to be a greenfields agreement – which can only be made before employees are employed and with a union entitled to represent the employees to be covered by the agreement – it must relate to a ‘genuine new enterprise’ that the employer or employers proposes to establish.

In this case, the Busways, Transport Workers’ Union of Australia and Drivers Enterprise Agreement 2020 (‘Agreement’) was made between entities of Busways – incorporated to bid for certain bus services – and the Transport Workers’ Union of Australia. Previously, the bus services were operated by the Transit Authority of New South Wales, a government-owned authority, on behalf of Transport for New South Wales (‘TfNSW’).

The Agreement was approved as a greenfields agreement on the basis that Busways had yet to employ any of the persons necessary for the normal conduct of its enterprise who would be covered by the Agreement, and the Agreement related to a ‘genuine new enterprise’ that Busways sought to establish (i.e. public transport operations as detailed in Busways’ tenders to the NSW Government).

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