AMWU v DTS Food Laboratories
[2009] FWA 1854
•21 DECEMBER 2009
[2009] FWA 1854 |
|
INTERIM DECISION |
Fair Work Act 2009
s.229 - Application for a bargaining order
and The Association of Professional Engineers, Scientists and Managers, Australia (APESMA)
vDTS Food Laboratories
(B2009/11210, 11212)
COMMISSIONER SMITH | MELBOURNE, 21 DECEMBER 2009 |
Application for a bargaining order.
Introduction
[1] These are applications by bargaining representatives for bargaining orders pursuant to s.229 of the Fair Work Act 2009 (the Act). The bargaining representatives seeking the orders are the Australian Manufacturing Workers’ Union (AMWU) and the Association of Professional Engineers, Scientists and Managers, Australia (APESMA).
[2] The orders are sought against Dairy Technical Services Limited (DTS) are that it postpone a proposed vote and that it correct statements made and bargain in good faith.
[3] Both AMWU and APESMA argue that DTS has not bargained in good faith, has engaged in capricious and unfair conduct and is about to take unilateral action to put a proposed agreement to employees for a vote on Monday 21 December. In particular it is argued:
- DTS has mislead employees as to the meaning of the agreement,
- The agreement contains provisions which would not pass the no disadvantage test, and
- The agreement seeks to excise from coverage persons who are currently covered by an award and to whom notices have been given pursuant to s.173 of the Act.
[4] DTS oppose the making of an order and argue that it has been seeking to reach agreement with both APESMA and the AMWU for a long period of time. It is submitted that an impasse has been reached and that it now wishes to put the agreement to employees directly to see if it is approved.
The evidence
[5] Evidence was not led by the AMWU although it said that it would lead evidence to establish that employees had been misled and that this meant that DTS was acting capriciously. For reasons I will deal with later it was not necessary to hear that evidence at this stage.
The statutory requirements
[6] To begin it is appropriate to outline who may make agreements under the Act. Subsection 172 (2) provides:
“An employer, or 2 or more employers that are single interest employers, may make an enterprise agreement (a single-enterprise agreement):
a) with the employees who are employed at the time the agreement is made and who will be covered by the agreement; or
b) with one or more relevant employee organisations if:
(i) the agreement relates to a genuine new enterprise that the employer or employers are establishing or propose to establish; and
(ii) the employer or employers have not employed any of the persons who will be necessary for the normal conduct of that enterprise and will be covered by the agreement.”
[7] In relation to agreements which are made in accordance with s. 172(2) (a), section 183 of the Act provides that after the agreement has been made then an employee organisation that was the bargaining representative may give notice stating that it wants to be covered by the agreement.
[8] It can be seen that, with the exception of agreements arising under s.172(2)(b), agreements are made between employers and employees.
[9] An object of this Part of the Act in relation to making enterprise agreements [s.171] includes: to provide a simple, flexible and fair framework for collective bargaining in good faith….
[10] Collective bargaining for agreements may be undertaken by employees at the enterprise or through employee organisations that are bargaining representatives. The process of bargaining is largely a matter for the bargainers but Fair Work Australia (FWA) may make orders to assist or regulate that process to ensure it proceeds fairly and efficiently.
[11] Section 173 of the Act mandates that the employer will take all reasonable steps to give notice of the right to be represented by a bargaining representative to each employee who will be covered by the agreement and who is employed at the notification time.
[12] Section 230 of the Act provides:
“230 When FWA may make a bargaining order
Bargaining orders
(1) FWA may make a bargaining order under this section in relation to a proposed enterprise agreement if:
(a) an application for the order has been made; and
(b) the requirements of this section are met in relation to the agreement; and
(c) FWA is satisfied that it is reasonable in all the circumstances to make the order.
Agreement to bargain or certain instruments in operation
(2) FWA must be satisfied in all cases that one of the following applies:
(a) the employer or employers have agreed to bargain, or have initiated bargaining, for the agreement;
(b) a majority support determination in relation to the agreement is in operation;
(c) a scope order in relation to the agreement is in operation;
(d) all of the employers are specified in a low-paid authorisation that is in operation in relation to the agreement.
Good faith bargaining requirements not met
(3) FWA must in all cases be satisfied:
(a) that:
(i) one or more of the relevant bargaining representatives for the agreement have not met, or are not meeting, the good faith bargaining requirements; or
(ii) the bargaining process is not proceeding efficiently or fairly because there are multiple bargaining representatives for the agreement; and
(b) that the applicant has complied with the requirements of subsection 229(4) (which deals with notifying relevant bargaining representatives of concerns), unless subsection 229(5) permitted the applicant to make the application without complying with those requirements.
Bargaining order must be in accordance with section 231
(4) The bargaining order must be in accordance with section 231 (which deals with what a bargaining order must specify).”
[13] It is plain that the technical prerequisites have been met: there is an application, employees who will be covered by the agreement have been notified and the parties have initiated bargaining for the agreement. DTS raised a jurisdictional issue which, in the end, was not pressed. The next issue is whether or not DTS is bargaining in good faith and, if not, it is reasonable in all the circumstances to make the order sought.
Matters for consideration and interim conclusion
[14] In this case DTS argue that negotiations have reached an impasse and it is reasonable for it to put an agreement to employees for their acceptance or rejection. Whilst it is true that bargaining in good faith does not require an agreement to be reached or concessions to be made 1, sending an agreement out for a vote prior to a failure of negotiations would not be dealing openly and honestly with those who have been charged with the responsibility of seeking to reach agreement. It would be going behind the authorised bargainers in circumstances where no challenge is made to their bona fides2. Such conduct, in my view, would be a failure to bargain in good faith as there would be no genuine intention to find a basis for agreement.
[15] In American Federation of Television and Radio Artists v the National Labor Relations Board 3 the United States Court of Appeals District of Columbia Circuit did not disturb a finding of the NLRB that there was no realistic possibility that continuation of discussion at that time would have been fruitful as being a proper factor to weigh in the balance when deciding if an impasse in negotiations had occurred.
[16] In my view the relevant question to be asked is has the stage been reached where further discussions would simply represent activity rather than any possible achievement? This is often a difficult matter because bargaining, particularly hard bargaining often has a quality which doesn’t often lend itself to perhaps sterile notions of how many meetings, what meeting notes may say or how difficult the bargainers have been. They may be an aid but they can also be used to mask rather than inform what the true situation is. Needless to say, bargaining in good faith must not be contrived but must be genuine.
[17] However, in these circumstances there are a number of common facts:
- The bargaining has taken place over a significant period of time
- The position of the bargainers has changed where concessions have been made
- The bargaining has achieved a number of areas of agreement
- DTS advised the unions that it had reached a stage where its final offers were now made, and
- The agreement which DTS wishes to put to employees is its final offer to the bargaining representatives and there has been no change 4
[18] I am satisfied that an impasse has been reached where ordinarily it would be reasonable for the employer to put the proposed agreement directly to employees for a vote.
[19] I now turn to the two argument advanced as to why DTS is not bargaining in good faith.
[20] The first argument is raised by the AMWU. It submits that there are errors and irregularities in the agreement. Further, it would not pass the no disadvantage test and finally information sent to employees did not reflect the true contents of the agreement.
[21] These are serious matters, but in my view do not give rise to a conclusion that DTS has not been bargaining in good faith. The time to examine those complaints is at the time when the agreement, if made, is presented for approval. Those issues referred to by the AMWU are then highly relevant.
[22] However, the issue raised by APESMA requires deeper consideration. These are said to be the factual circumstances:
- DTS forwarded a notice to all employees advising of their representational rights.
- DTS did not seek to limit the class of person to whom the notice was sent
- The employees who were advised of their representational rights are covered by an award 5
At all times during the negotiations APESMA sought to include all persons it represented into the proposed agreement and DTS sought to exclude a class of person categorised as section leader or above and other management
DTS now seek to put the agreement with the coverage it seeks.
[23] APESMA drew attention to the decision of a full bench in Ford Motor Company of Australia v Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia and others 6(Ford). It submitted that this decision was authority for the proposition that as the bargaining unit had not been settled by either agreement or a scope order it was not possible to put the proposed agreement out for a vote.
[24] The circumstances surrounding the Ford matter were that bargaining commenced seeking to cover all employees but subsequently one class of person was found not to be capable of coverage because of an existing certified agreement. The unions then discarded those persons from a protected ballot order and “excommunicated” them from the agreement. The unions abandoned a class of person and Ford sought to cover them. At first instance a protected ballot order was made but the appeal bench took the view that because the bargaining unit was not properly identified no such order could be made.
[25] Whilst there are particular circumstances in the Ford case, it is important to see if any principles can be distilled from the decision. The argument of Ford is put this was:
“[10] At first instance, Mr S Wood, of counsel, refined his submissions by stating that bargaining for an agreement under the Act commences when an employer agrees to bargain, or initiates bargaining for the agreement, or when a majority support determination or a scope order in relation to the agreement comes into operation. Mr Wood submitted that, having regard to the structure of the Act, there cannot be genuine bargaining, or indeed any bargaining, for a proposed agreement that will cover a certain class of employees until there is certainty about that class of employees, either by agreement or by order of Fair Work Australia
[11] At first instance Ford submitted that Fair Work Australia could not be satisfied that the unions had been, and were, genuinely trying to reach an agreement with it as required by s.443(1)(a) because there had been no bargaining about an enterprise agreement that was to exclude power train employees. This was so even after 1 October 2009 because Ford refused to bargain on that basis.”
In the course of its decision, the full bench concluded:
“[21] Because the agreement is made between the employer and its employees it follows that the unions are bargaining with Ford on behalf of, and for, their members who will be covered by the proposed agreement. Ford is bargaining with its employees who will be covered by the agreement through their bargaining representative. As the bargaining representatives on each side are bargaining in respect of the employees who will be covered by the agreement it follows, as a matter of logic, that during bargaining for a particular agreement the employees to be so covered must be ascertainable.
[22] In order that each employee who will be covered by a proposed enterprise agreement may be represented during the bargaining, s.173(1) requires that those employees be given notice of their right to be represented by a bargaining representative within 14 days of the notification time for the proposed agreement. The notification time is one of the circumstances set out in s.173(2). It seems to us to follow that bargaining under the Act commences, at the earliest at the notification time, but more probably when the employer is required to give, or perhaps when it gives, to its employees who will be covered by the agreement the notice of their representational rights. It is not until then that they can decide whether, and if so by whom, they wish to be represented in the bargaining for the agreement that will cover them. It would be odd if bargaining for an enterprise agreement under the Act could commence before such time.
[23] It is not until bargaining has occurred between the employer and those of its employees who will be covered by the agreement and who are represented by a bargaining representative or representatives, and the written text of the agreement is created [s.180(2)(i)] that the employer may request its employees who will be covered by it to approve the agreement by voting on it. [s.181(1)”
[26] It appears that the majority of this full bench took the view that bargaining unit must be established before it can be said that bargaining under the Act can take place. This is unlike the position take by the full bench in Liquor, Hospitality and Miscellaneous Workers Union v Coca-Cola Amatil (Aust) Pty Ltd 7 (Coca-Cola) where a full bench determined that negotiations about the coverage of an agreement might legitimately be had during bargaining.
[27] However, these two decisions appear not to clash when consideration is given to an ultimate outcome. In both instances it appears inherent in the reasoning that a proposed agreement can not be put to a vote unless and until the scope of any such proposal is determined either by negotiation or through the make of a scope order.
[28] In this case DTS has unilaterally decided the scope of the proposed agreement and has disenfranchised a class of employee to who it had given a notice in relation to their representative rights. That class of person would be insignificant in a vote.
[29] During the proceedings the representative of DTS was not able to address on the decision in either Ford or Coca-Cola. Whilst the invitation to consider those decisions and to make submissions was declined so that the vote would not be delayed, nevertheless I would be assisted by such submissions.
[30] I find that the case put forward by APESMA is arguable on the basis that the proposed conduct of the employer in unilaterally deciding the scope of the proposed agreement is both inconsistent with the Act and undermines collective bargaining. Having regard to the balance of convenience, I propose to issue an interim order directing that DTS not put its proposed agreement out to vote until further submissions have been made. For this purpose the matter will again be listed tomorrow at 2:15.
COMMISSIONER
Appearances:
E McGrath and D Vroland for the Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union.
P Elliot for the Association of Professional Engineers, Scientists and Managers, Australia
M Ritchi for the Victorian Employers’ Chamber of Commerce and Industry on behalf of DTS Food Laboratories.
S Pearson and N Reardon for DTS Food Laboratories
T Ho as the employee representative from DTS Food Laboratories.
Hearing details:
2009.
Melbourne:
December 18.
1 See s228 (2) and Asahi Diamond Industrial Australia Pty Ltd v Automotive Food, Metals and Engineering Union (1995) 59 IR 385.
2 See s.228 (f)
3 395 F.2nd 622 (D.C. Cir 1968)
4 If there had been further concessions made in the offer put to employees without putting that to the bargaining representatives that would give rise to a question of whether bargaining in good faith had occurred.
5 A submission was made that they are covered by the Scientific Services Professional Scientists Award 1998 [AP797607]
6 [2009] FWAFB 1240
7 [2009] FWAFB 668
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