The CFMEU construction division and the Australian Manufacturing Workers Union have entered a "construction co-operation agreement" in the WA, laying new ground rules for union membership in order to end years of bitter rivalry.

WA employers however may view the deal with some alarm, fearful that the CFMEU could employ the same aggressive tactics that have become common place in Perth's construction industry. The deal between the unions will however, eliminate some issues of demarcation, and abrogates the responsibility for dispute settlement between the two unions to the ACTU.

Until recently the two unions had been at loggerheads resulting in the CFMEU being excluded from a three-union greenfields deal to represent about 2000 workers in the North West Shelf joint venture's fourth liquefied natural gas production train.

What impact the deal may have on investors is unclear although the CFMEU could now have a significant impact on the next wave of downstream gas projects, oil ventures and heavy engineering work in WA as the state looks forward to a number of major projects around the Burrup peninsula and the $10 billion dollar Gorgon gas development.

At the same time Woodside, the operators of the joint North West Shelf venture, and the CFMEU have agreed to settle a federal court case, due to start yesterday, with CFMEU officials agreeing not to enter the venture.