Complex union rules and 'scope creep' by stealth

A recent decision [1] of the Fair Work Commission has delivered a win to the Australian Workers' Union over its rival, the Construction, Forestry, Maritime Employees Union, in an eligibility dispute concerning concrete terminal operators.

The outcome will not assist the two unions feuding relationship, which is one of the longest-running and most politically significant tensions in the Australian labour movement.

In practical terms however, it is an important reminder for employers of the importance of scrutinising union eligibility, which is frequently not pressure tested due to generalised assumptions or reliance on the status quo – despite being critical in shaping IR strategy.

Cement Australia Pty Limited (Cement Australia) applied to the Fair Work Commission for approval of a single-enterprise agreement, the Cement Australia Clyde Terminal Operators Enterprise Agreement 2025 (Agreement).

The Agreement covered four Terminal Operators employed at a bulk materials rail terminal in Clyde, New South Wales, where the employer receives, stores, packages, and distributes dry cement. The Construction, Forestry, Maritime Employees Union (CFMEU) sought for the Agreement to cover it – which ultimately requires that at least one employee be eligible to join the CFMEU.

Shortly after the Agreement was lodged, the Australian Workers' Union (AWU) requested various documents lodged with the application. It then sought to be heard and objected to the application on two grounds:

• first, on the basis that the CFMEU had no constitutional coverage under its rules to enrol the employees as members, and accordingly could not be a bargaining representative and therefore covered by the Agreement; and
• second, if the FWC determined that the CFMEU was not eligible to be a bargaining representative, that the employees could not have "genuinely agreed" to the Agreement pursuant to s.188(2) of the Act.

Despite the CFMEU being covered by antecedents to the Agreement, and other similar terminal agreements covering the employer’s other sites, the FWC found that the CFMEU is not eligible to represent the industrial interests of the terminal operators.

The FWC also found however that this did not impact the validity of the Agreement, which it ultimately approved.

Principles governing union eligibility

The CFMEU argued that the terminal operators were "pump attendants" within the meaning of rule 2(E) of its rules, as they operated machinery described as a "weight feeder system with a cement pump".

In addressing this contention, the Deputy President applied the principles summarised in CFMMEU v DuluxGroup (Australia) Pty Ltd and anor (2022) 293 FCR 1 (DuluxGroup) at [27] regarding the effect of union eligibility rules, namely that:

• “ such rules are to be construed objectively, not narrowly nor technically, but rather liberally;
• the identity of the industry in respect of which the organisation is registered is not definitive of eligibility where the eligibility clause travels beyond the bounds of the industry in respect of which the organisation is registered, but where there is some ambiguity in the eligibility rule, recourse may be had to the industry rule to resolve the ambiguity; and
• in determining whether an employee is engaged in a particular calling or occupation, the relevant task involves a qualitative assessment of the primary purpose of the position. Put another way, the proper approach requires an assessment of the principal purpose or primary function for which the employee was employed.”

(citations omitted)

The Deputy President noted that the facts in DuluxGroup were also instructive. In that matter, the CFMMEU relied on the "forklift drivers" occupation in rule 2(E) of its registered rules. The time spent by the employees in control of a forklift was between 60 and 90 per cent. Notwithstanding this, the Full Court concluded that the principal purpose of the employee's role was not that of a forklift driver. The mere fact that an employee operated a forklift to undertake a substantial portion of his work did not mean he was a forklift driver pursuant to the CFMMEU rules. Rather, the principal purpose of his role was to work as a Warehouse Operator, undertaking

"all tasks in connexion with the receiving, storing, picking and despatching of goods in the Dulux business (and, if required, to work flexibly in the paint manufacturing facility). The driving or other use of forklifts is best seen as a function directed to the end of fulfilling the purpose of [the worker’s] job, which is to carry out his assigned tasks necessary for the operation of the warehouse" (see DuluxGroup at [44]).

Similarly here, the Deputy President noted that while he was satisfied that the cement pump was critical to terminal operations, he was not satisfied that the terminal operators' primary function was that of "pump attendants". The terminal operators' role encompassed a broader range of functions, including rail unloading, silo operations, stock monitoring, weighing operations, compliance with safety procedures, paperwork, and coordination with tradespeople. They were highly skilled, requiring at least two years to attain competency in terminal systems. Consequently, the Deputy President concluded that the principal purpose of their role was that of a "terminal operator" and not a "pump attendant". The CFMEU was not entitled to represent them.

Genuine Agreement

Despite the CFMEU not being able to act on behalf of the terminal operators as a bargaining representative, the Deputy President was satisfied that the employees had genuinely agreed to the Agreement. The material accompanying the application demonstrated that the employees had an informed understanding of the terms, particularly given this was a "roll over" agreement. The mere fact that the CFMEU were involved in negotiations did not, in these circumstances, invalidate or infect the employees' genuine agreement.

Historical tensions

One can speculate as to whether the decision will be appealed, and also whether the outcome will inflame long running tensions between the CFMEU and the AWU – often revolving around attempts by the CFMEU to intrude further into the arena of major civil construction works.

This campaign has recently been described in the report by independent investigator Geoffrey Watson SC: Rotting from the Top: The CFMEU in Victoria During the Setka Era (Watson Report), the CFMEU having “through a combination of violence and intimidation”, driven the AWU and its members off civil sites all over Melbourne (at [76]). The report identifies several methods by which this has occurred, including “threatening contractors with industrial action unless they engaged CFMEU-aligned subcontractors” and insisting that contractors require their “employees to switch [union] membership to the CFMEU” as a condition of making an enterprise bargaining agreement (at [78]).

Union rights under the Fair Work Act almost exclusively depend upon a capability for the relevant union to “represent the industrial interests” of relevant employees – which in turn depends upon the scope of their eligibility rules.

Notwithstanding the importance of this eligibility requirement, we frequently see unions and employers alike paying little attention to the question of whether and how a union’s rules entitle it to enter the industrial arena of their workplace.

Often times, it is simply assumed that a union’s overtures are within the boundaries of its rule book, or that history is a faithful guide to industrial rights. As this case demonstrates, neither assumption is reliable.

The views expressed in this article are general in nature only and do not constitute legal advice. Please do not hesitate to contact us if you require specific advice tailored to the needs of your organisation.

References

[1] Re: Cement Australia Pty Limited [2026] FWCA 447