Adelaide Independent Glass Pty Ltd v Construction, Forestry, Mining and Energy Union
[2017] FWC 6540
•11 DECEMBER 2017
| [2017] FWC 6540 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
Section 418 - Application for an order that industrial action by employees or employers stop etc.
Adelaide Independent Glass Pty Ltd
v
Construction, Forestry, Mining and Energy Union
(C2017/6728)
| Deputy President Anderson | ADELAIDE, 11 DECEMBER 2017 |
Alleged industrial action at Adelaide Independent Glass Pty Ltd – protected action ballot authorised protected action – agreement voted on and made – dissatisfied party continuing to make bargaining demands - whether industrial action taken after agreement made but prior to decision on approval is protected – action held unprotected – orders made
Adelaide Independent Glass Pty Ltd (the employer) has applied to the Fair Work Commission (the Commission) for an order against the Construction, Forestry, Mining and Energy Union of South Australia and the Construction, Forestry, Mining and Energy Union of Australia (CFMEU) to stop industrial action that is threatened, impending and probable, and which is being organised.
The application is made under section 418 of the Fair Work Act (the FW Act).
The application is opposed by the CFMEU.
The application was made on 5 December 2017. In light of the statutory requirement to deal with applications of this nature within two days (where practicable) (section 420), I heard the matter on 7 December 2017.
Evidence and submissions were presented by the employer and by the CFMEU.
I delivered this decision on transcript at 1.45pm on 7 December 2017. I advised the parties that I reserved my right to edit and supplement my reasons when I published my decision more formally. This is my published decision which, in some respects, supplements the reasons I gave on transcript.
The Facts
The factual background of this matter, briefly summarised, is as follows:
The employer operates a manufacturing business in Adelaide, South Australia that employs approximately sixteen employees. It seeks that those sixteen employees be covered by a first single enterprise agreement;
Bargaining has been occurring between the employer and employees for a number of months;
The CFMEU is a bargaining agent for some but not all of the employees;
A majority support determination order was made by the Commission on the application of the CFMEU on 6 June 2017[1];
On 10 October 2017 the employer advised the CFMEU that it considered negotiations to have been exhausted and that it intended to ballot employees on an agreement proposed by the employer[2];
The CFMEU applied for the making of a protected action ballot order on 11 October 2017. A protected action ballot order was made by the Commission on the application of the CFMEU on 17 October 2017[3];
On 19 October 2017 a secret ballot of employees was held. A slender majority of employees voted in favour of the agreement[4];
On 27 October 2017 the employer applied to the Commission for approval of the agreement. Those proceedings are before the Commission and yet to be determined[5];
The CFMEU has notified the employer and the Commission that it opposes approval of the agreement on grounds which include the ground that the agreement was not genuinely entered into[6];
10. On 16 November 2017 the results of the protected action ballot of employees represented by the CFMEU were declared by the Australian Electoral Commission (AEC). A majority voted in support of taking specified protected action[7];
11. On 17 November 2017 the CFMEU notified the employer that it intended to take action in the form of an overtime ban and served a notice of intended protected action.[8] The employer notified the CFMEU that it considered any action to be unprotected[9];
12. On 25 November 2017 the employer sought the working of overtime on a Saturday. Certain employees worked overtime, others did not[10];
13. On 29 November 2017 the employer received demands from the CFMEU concerning industrial matters relating to wages, allowances, a heat policy and variations to starting and finishing times of work[11];
14. On 29 November 2017 the employer received a further notice of intended protected industrial action from the CFMEU.[12] That notice concerned intended industrial action to disrupt usual work in the form of a four hour stoppage on Friday 8 December 2017 from 10am until 2.30pm (including unpaid meal break).
It is that notice of 29 November 2017 which is the subject of the employer’s application before me.
At the hearing of this matter on 7 December 2017 I granted permission to the employer to be represented by a lawyer under section 596 of the FW Act. That request was not contested. I did so having regard to the efficiency of proceedings and the complexity of the matter (including the legal issues arising in this matter concerning the application of section 418 and related statutory provisions concerning both protected and unprotected industrial action). I also had regard to fairness between the parties given that the employer was relatively small and did not otherwise have specialists with expertise in the statutory scheme.
I received witness statements and oral evidence from two officers of the employer, Rada Radisic and David Stevens. I received witness statements and oral evidence from two officers of the CFMEU, David Kirner and Matthew Blowes.
The facts recited above are uncontested or largely uncontested from the evidence before me. I make findings in those terms.
The Issue
The issue before the Commission is whether the proposed industrial action on Friday 8 December 2017 that has been notified is protected or unprotected industrial action.
If it is unprotected action then orders must be made under section 418. If it is protected industrial action then orders cannot be made under section 418.
More precisely, the matter raises the issue of whether industrial action taken between the date an agreement is voted up by a majority of employees and the date the Commission considers whether to approve the agreement is protected industrial action in circumstances where a protected industrial action ballot had authorised industrial action of the type taken and where a bargaining representative dissatisfied with the agreement as voted up by a majority of employees continues to make bargaining demands.
The Employer Contentions
The employer submits that the action is unprotected and not within the scope of the protected action ballot order of 17 October 2017 because, whilst that order contemplated action of this type, it can no longer be said that the CFMEU is “genuinely trying to reach an agreement”. This, the employer says, is because the bargaining process for the agreement has been completed, the access period leading up to the vote provided for in the statutory scheme has occurred, and the proposed enterprise agreement has been voted on and voted up by a majority. In those circumstances the employer says that an agreement has been made and is awaiting approval. It says that industrial action is no longer protected because a bargaining representative can no longer be trying to reach an agreement or genuinely doing so if the agreement has already been made.
The CFMEU Contentions
The CFMEU submits that it considers the agreement voted up to be a sub-standard agreement. The evidence of both Mr Kirner and Mr Blowes is that the union is continuing to seek to have the employer accede to bargaining demands that would lead to a new and (in its view) better agreement being made. It submits that industrial action in pursuit of its bargaining demands continues to be protected because it is of the type authorised by the order of 17 October 2017 and the union, as a bargaining representative, continues to genuinely try to reach agreement with the employer.
Consideration
On the facts before me I find that industrial action in the form of a stoppage of work on 8 December 2017 is threatening, impending and probable. I also find that it is being organised by the CFMEU and (based on the evidence of Mr Stevens[13]) certain employees. The precondition for making an order under sections 418(1)(b) and 418(1)(c) is satisfied.
The application has been made by the employer. I find that the employer is a person likely to be directly affected by the industrial action based on the evidence of both Ms Radisic and Mr Stevens. There is standing to apply for the making of an order under section 418 (2)(b)(i).
I have considered this matter within the framework of the statutory scheme relating to the making of enterprise agreements and the taking of industrial action. That statutory scheme must be read as a whole, including provisions relating to bargaining for enterprise agreements and their relationship to provisions concerning protected action. It is self-evident that a party must be “genuinely trying to reach an agreement” for industrial action to be protected. This is mandatory requirement provided for by section 413(3). It is a common requirement for industrial action to be protected industrial action.
I do not consider that a construction of the relevant provisions of the FW Act permits industrial action to be protected once an agreement has been voted upon and made and is the subject of an application for approval. On the evidence before me an enterprise agreement was made between the employer and its employees on 19 October 2017. Whether that agreement is approved by the Commission is a separate question. It is the process leading up to the making of an agreement which is the subject of a protected action ballot order. The object of the protected action ballot Division of the FW Act (section 436) refers to a “proposed enterprise agreement”. Once an agreement has been “made” under section 182(1) it is no longer proposed. Rather, it is a reality. Nor is not consistent with the ordinary meaning of the phrase “genuinely trying to reach agreement” in section 413(3) for it to apply to a time frame or process beyond the date that an agreement is made. There is no agreement to reach once an agreement is made.
In this respect I note that under the statutory scheme enterprise agreements involving established employing enterprises are agreements between an employer and its employees or a relevant cohort of its employees.[14] They are not agreements between an employer and an employee association (trade union). An employee association can be a bargaining agent for employees or a group of employees under the agreement and can request that the agreement, once made, cover it.[15] Even where an agreement covers an employee association the agreement remains between the employer and the relevant employees, not the employee association. It is further noted that the statutory scheme provides that agreements are (quote) “made” by employees once a proposal is voted up by a majority of those employees.[16] These considerations support the conclusion that once an agreement is voted up by a majority then it is made. Whilst the operation of the agreement and its consequential legal effect does not take effect unless and until approved by the Commission it nonetheless reflects a meeting of minds and constitutes an agreement that is capable of being (and in this case has been) submitted to the Commission for approval.
If there remains unmet ambition by one or more bargaining representatives, that is ambition for a new or separate agreement, not one that has been the subject of the preceding protected action ballot order.
In drawing these conclusions I rely on the construction of sections 418 and 413 (and in particular the phrase “genuinely trying to reach an agreement” in section 413(3)) according to the established precepts of statutory construction. The natural and ordinary meaning of this phrase contemplates that an agreement has not yet been made but that a genuine endeavour or aspiration for the making of an agreement is being pursued in some active manner. I note that the legislature uses the present tense in this phrase. The natural meaning of the verb “to reach” in its present tense means that its object (an agreement) has not yet been attained. These principles of interpretation are consistent with the approach to interpretation of the statutory scheme concerning industrial action recently taken by the High Court in Esso Australia Pty Ltd v The Australian Workers Union.[17]
I also rely on the ordinary and natural construction of the language of section 437 concerning protected action ballot orders. The subject of that section is (quote) “a proposed enterprise agreement”. Under the terms of that section a protected action ballot only concerns “protected industrial action for the agreement”. This reference to “the agreement” is a reference to the “proposed enterprise agreement”. In other words, there is only a singular agreement that is the subject of protected action and that agreement is the proposed agreement. Once that proposed agreement is “made” protected action taken under the auspices of a ballot authorised by section 437 cannot apply to a second, alternative or preferred agreement. To do so would also be at odds with the overall statutory objective that “clear rules governing industrial action” be provided (section 3(f)).
The proposition that industrial action taken by a bargaining agent after an agreement is made can continue to be taken for the purposes of trying to reach that objective is, in my view, incompatible with those very circumstances.[18]
The CFMEU submit that whilst an agreement was made it has not yet been approved by the Commission and thus a second or replacement agreement is capable of being made. This submission misses the point. The issue is not whether a second or replacement agreement is capable of being made or whether bargaining for that is sought or is occurring. The issue is whether industrial action in support of a second or replacement agreement is protected industrial action within the meaning of section 408 of the FW Act. In my view it cannot be protected because the instruments that create that protection (the ballot order and the successful ballot in consequence of that order together with statutory notifications) and the preconditions on which those instruments are established (which include genuinely trying to reach agreement) have ceased to have continuing operation once an agreement is made.
Nor do I consider that the protection accorded to industrial action by the FW Act applies to the objective of trying to reach more than one agreement. Section 413(3) refers to “an agreement”; section 413(1) refers to “a proposed enterprise agreement”; and section 408(a) refers to “the agreement”. Each provision is expressed in the singular. Section 58(1) provides that only one enterprise agreement can apply to an employee at a particular time. It is a statutory scheme that accords rights to the making of an agreement, singular. In this respect, and whilst decided on a different issue, I concur with the observations of the Commission in Sucrogen Australia Pty Ltd v AMWU and Others[19]:
“It would be inconsistent, for the agreement to be concluded, and then put to employees for their vote; but at the same time for industrial action to be permitted in relation to an alternative ‘agreement’ – an ‘agreement’ that is conceptually different from that put to the employees, for the vote.”
Nor do I consider that the period of protected action extends until an agreement, even if made, is approved. Such an outcome is inconsistent with the natural and ordinary meaning of the phrase “a proposed enterprise agreement” in sections 408, 413(1) and 409(1). Further, the legislature uses the words “an agreement” in section 413(3) and does not use words such as ‘an approved agreement’. Such an outcome would also be inconsistent with the statutory scheme of the protected action provisions of the FW Act in Division 2 of Part 3-3 of Chapter 3 and the purpose of protected action. Protected action is intended to provide a collective bargaining right for statutory immunity from civil suit for certain of the consequences of industrial action as part of a statutory scheme which contemplates hard bargaining in specific periods of time only (being the making of agreements and the renegotiation of agreements). Otherwise the statutory scheme prohibits industrial action in pursuit of employee claims. As noted by the High Court in Esso[20], this is a statutory scheme which provides a specified form of protection for conduct that would otherwise be unlawful at common law.
Section 418(4) is also relevant to the proper construction of “protected industrial action” in section 418(1). It contemplates that an order to stop unprotected action could be made in circumstances where a protected industrial action ballot has authorised the industrial action but some or all of it had not been taken before the beginning of the stop period. This provision supports the construction of Division 2 of Part 3-3 that a protected industrial action ballot authorising industrial action has a duration that is limited by time. While it does not directly assist the determination of whether authorised protected action can extend beyond the making of an agreement it does support an interpretation which limits the window in which protected action is taken, given that it empowers the Commission (in its discretion) to determine whether the requirement for another protected action ballot could be set aside for fresh protected action to be taken after the expiry of the stop period.
For these reasons and in the circumstances of this matter I consider the proposed industrial action which is threated, impending and probable and which is being organised to be unprotected industrial action.
I will make an Order under section 418 to stop unprotected industrial action.
In circumstances where I consider it to be impermissible, as a matter of law, for any industrial action taken now that the agreement has been made to be protected action by virtue of the ballot order made on 17 October 2017, my order will be framed broadly to preclude industrial action purporting to be made under the terms of that order.
The Order shall come into effect at 4.00pm Thursday 7th December 2017 and shall remain in force for a period of one calendar month or until varied or otherwise ordered by the Commission.
The parties have liberty to apply for an extension or variation of the Order.
I publish these reasons for decision, as supplemented, and the Order of the Commission.
DEPUTY PRESIDENT
Appearances:
Mr T. Earls, with permission, for the Applicant
Ms L. Dooley, for the CFMEU
Hearing details:
2017.
Adelaide.
7 December.
[1] Decision [2017] FWC 3104 per Commissioner Platt; Determination PR 593547
[2] Exhibit RR1
[3] Decision [2017] FWC 5351 per Deputy President Anderson; Order PR 596844
[4] Affidavit of Rada Radisic paragraph 9
[5] Exhibit RR3 and Exhibit RR4
[6] Witness Statement of David Kirner paragraphs 8 and 10; Exhibit DK1 and Exhibit DK2
[7] Exhibit RR5
[8] Exhibit RR6
[9] Exhibit RR7
[10] Affidavit of David Stevens paragraph 6
[11] Exhibit RR8
[12] Exhibit RR9
[13] Affidavit of David Stevens paragraph 9
[14] Section 172(2)(a) FW Act
[15] Section 183 FW Act
[16] Section 182(1) FW Act
[17] [2017] HCA 54 at [52], 6 December 2017
[18] A similar principle advanced in a different factual scenario can be found in Teekay Shipping (Australia) Pty Ltd v Australian Institute of Marine and Power Engineers[2014] FWC 8465 at [33] per Commissioner Cloghan
[19] [2010] FWA 3905 at [12] per Commissioner Spencer
[20] [2017] HCA 54 at [30]
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