Association of Professional Engineers, Scientists and Managers, Australia, The v Peabody Energy Australia Coal Pty Ltd
[2015] FWCFB 1451
•3 MARCH 2015
| [2015] FWCFB 1451 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.604 - Appeal of decisions
v
Peabody Energy Australia Coal Pty Ltd
(C2014/1776)
JUSTICE BOULTON, SENIOR DEPUTY PRESIDENT | SYDNEY, 3 MARCH 2015 |
Appeal against decision [2014] FWC 6061 of Senior Deputy President in matter number B2014/827 - application for bargaining order - good faith bargaining requirements - refusal to grant bargaining order - error in finding that employer met good faith bargaining requirements - failure by employer to meet and consider substantially revised proposal - failure to disclose relevant information - requirements for making bargaining order - permission to appeal granted - appeal allowed - whether appeal bench should determine application for bargaining order - bargaining order made
[1] This is an application by the Association of Professional Engineers, Scientists and Managers, Australia (APESMA) for permission to appeal and, if granted, an appeal under s.604 of the Fair Work Act 2009 (the Act) against a decision of Senior Deputy President Hamberger made on 4 September 2014. 1 In the decision, the Senior Deputy President found that Peabody Energy Australia Coal Pty Ltd (Peabody Coal) had not breached its good faith bargaining obligations in relation to a proposed enterprise agreement with APESMA and accordingly dismissed an application by APESMA for a bargaining order to be made under s.229 of the Act.
[2] The background to the appeal may be set out briefly as follows.
[3] APESMA has been seeking to negotiate an enterprise agreement with Peabody Coal since around October 2013. The agreement proposed sought to cover deputies, on shift staff, and technical services and engineering staff employed by Peabody Coal at the Wambo coal mine which is located about 30 km from Singleton, New South Wales. The agreement would cover approximately 52 of the 132 salaried staff at the mine.
[4] Commissioner Stanton made a majority support determination on 6 December 2013, 2 and thereafter there were some 10 meetings held between APESMA and Peabody Coal in an endeavour to negotiate an agreement.
[5] The Senior Deputy President summarised the facts of the matter before him as follows:
“[13] ... The respondent indicated in October 2013 that it did not wish to bargain for an enterprise agreement to cover the employees in question. On 6 December 2013 Commissioner Stanton made a majority support determination. On 29 January 2014 the first bargaining meeting occurred and APESMA tabled its first draft agreement. On 25 February 2014 the respondent responded to aspects of APESMA’s claim. On 9 March 2014 APESMA presented a second draft agreement. On 11 March 2014 the respondent tabled a draft enterprise agreement. On 24 April 2014 APESMA gave notice of its concerns that the respondent was not bargaining in good faith and requested certain information. On 30 May 2014 the application for a good faith bargaining order was made. On 25 June 2014 a conciliation conference was conducted by Commissioner Stanton. On 27 June 2014 APESMA presented a further draft agreement. On 4 July 2014 the respondent rejected the draft agreement.”
[6] The developments in relation to those meetings and the correspondence between the parties during this time are referred to in the Senior Deputy President's decision. 3 In brief terms, they were as follows:
• APESMA put forward a draft agreement at a meeting on 29 January 2014.
• Peabody Coal advised APESMA in a meeting on 13 February 2014 that it had no interest in having both staff employment contracts and an enterprise agreement.
• On 25 February Peabody Coal wrote to APESMA putting its position on a number of matters in the draft agreement, e.g. clauses dealing with redundancy, probation and retrenchment.
• On 9 March 2014, APESMA provided a second draft agreement for consideration by the company.
• On March 2014 Peabody Coal provided a draft agreement to APESMA setting out the conditions that the company might be willing to enter into an agreement about. It included a clause that would terminate all existing contractual arrangements, and provisions for rates of pay based on the Black Coal Mining Industry Award 2010 which were significantly less than the actual rates being paid to staff. The draft agreement was discussed at a meeting of the parties on that day.
• At a meeting on 27 March 2014, APESMA confirmed its earlier advice that the company’s proposal was unacceptable. Peabody Coal suggested that APESMA should put forward its proposed rates of pay and that these could then be the subject of negotiation between the parties. The Senior Deputy President noted that no rates of pay were provided by APESMA. The Senior Deputy President accepted the evidence from Mr Jason Davis, General Manager, Wambo Coal Mine, to the effect that the company had no intention of cutting the actual remuneration paid to staff and that the draft agreement put forward was a "starting document" to be worked through collectively with APESMA.
• A further meeting was held on 15 April and a number of agreement clauses were discussed including those dealing with redundancy, scope and accident pay. Peabody Coal suggested that further bargaining should be put on hold for 12 weeks while a task force conducted a review of costs and implemented changes at the mine. This was not agreed to by APESMA.
• On 24 April 2014, APESMA wrote to Peabody Coal expressing concern that, in light of its proposals with respect to rates of pay and redundancy and there being no proposed improvements to existing conditions, the company had failed to put a genuine bargaining position and thus was not bargaining in good faith. In the letter, APESMA referred to requests previously made for information considered relevant to bargaining, including the salary range for classifications to be covered by the proposed agreement. Concern was also expressed that Peabody Coal had delayed meetings, repeatedly sought to change meetings at short notice and was now proposing to suspend bargaining. APESMA sought a commitment from the company that it would attend and participate in the next planned meetings and would agree to other meeting dates.
• There was a further negotiation meeting on 28 April where a number of agreement clauses were discussed. There was also discussion on that day about the salary information requested by APESMA.
• On 1 May 2014 Peabody Coal wrote to APESMA rejecting the assertion that it wasn’t bargaining in good faith and reiterating its position that there was no advantage to it or its salaried staff in having an enterprise agreement.
• Further meetings were held on 7 and 20 May 2014. On 30 May APESMA made an application for a good faith bargaining order.
• At a meeting on 3 June, Peabody Coal accepted that agreement had been reached on several matters but indicated that a range of other issues had been ‘parked’. It was said that the company would not attend further bargaining meetings until APESMA’s application to deal with the bargaining dispute was resolved.
• On 25 June 2014, pursuant to the s.229 application, a conciliation conference was conducted by Commissioner Stanton. This did not result in any agreement being reached between the parties.
• On 27 June 2014 APESMA presented a third draft agreement to Peabody Coal. This was rejected by the company on 4 July.
[7] In his decision, the Senior Deputy President refers to the above-mentioned developments and the relevant provisions of the Act relating to the making of bargaining orders (ss.228-232). The Senior Deputy President said that, in the circumstances of the case before him, the main matter to be determined was whether Peabody Coal was meeting the good faith bargaining requirements. 4 In this regard, reference was made to the decision of Flick J. of the Federal Court in Endeavour Coal Pty Ltd v Association of Professional Engineers, Scientists and Managers, Australia5 (Endeavour Coal No 3).
[8] The Senior Deputy President considered the evidence and submissions in the case and concluded that Peabody Coal had not failed to meet the good faith bargaining requirements under s.228. The conclusions reached by the Senior Deputy President are set out in his decision as follows:
“Has Peabody failed to meet the good-faith bargaining requirements?
[36] Mr Taylor submitted that the respondent had engaged in ‘surface bargaining’. Its proposals were so far from existing conditions in the industry as to be not genuine proposals. It had therefore failed to meet the good-faith bargaining requirements.
[37] I do not agree. There is no obligation to put a position that might be acceptable to the other side in bargaining - nor is there any obligation to act against your own interests in the bargaining process. The position adopted by the respondent was certainly a ‘hard’ one. I am satisfied on the evidence that it did not intend to reduce the actual terms and conditions of its current staff employees (as opposed to what it might put in an enterprise agreement). Nor on the evidence do I consider that it was unwilling to negotiate at least some modification to its proposed agreement. However, it was determined to maintain maximum flexibility and therefore was not willing to include in an enterprise agreement much more than was already provided in the Award. It was entitled to take that position. APESMA appears to have offered nothing that would have assisted the respondent deal with the challenging economic circumstances that it currently faces, in the form of productivity improvements or otherwise. It is understandable that the respondent could see no reason why it was in its interests to negotiate an agreement of the type sought by APESMA.
[38] The position adopted by respondent can be contrasted with that in Endeavour. The respondent did indicate what type of enterprise agreement it would find acceptable. Its offer was a genuine one. APESMA could have agreed to the respondent's proposed agreement; it could have sought to negotiate based on that agreement rather than simply rejecting it as unacceptable. It is nevertheless understandable why APESMA chose not to do so. However I do not find based on the facts that the respondent failed to comply with the good-faith bargaining requirements in the manner described by Justice Flick in Endeavour.
[39] Nor do I find that the respondent failed to meet the good-faith bargaining requirements in any other way. While there is an obligation to disclose relevant information, that does not apply to confidential or commercially sensitive information. I accept Mr Davis's proposition that the salary information sought by APESMA is confidential and indeed commercially sensitive information. Moreover I do not consider that the respondent failed to meet its obligation to attend, and participate, in meetings at reasonable times. It attended and participated in ten meetings. The minutes of the meetings clearly reveal that there were genuine negotiations taking place. Unfortunately those negotiations did not achieve an enterprise agreement that was mutually satisfactory. The Act recognises that sometimes parties will be unable to conclude an enterprise agreement. In this case the positions of both parties were so far apart that such an agreement was always somewhat unlikely. It is hard to see that there would be any benefit in any further negotiations taking place at this stage.
Conclusion
[40] I am not satisfied that the respondent has failed, or is failing, to meet the good-faith bargaining requirements in s.228 of the Act. Accordingly, APESMA’s application for a bargaining order is dismissed.”
The appeal
[9] An appeal under s.604 of the Act may only be pursued with the permission of the Commission. This would normally require an appellant to demonstrate an arguable case of appealable error and refer to other considerations which would justify the granting of permission to appeal. Subsection 604(2) requires the Commission to grant permission to appeal if it is satisfied that it is in the public interest to do so. Where permission to appeal is granted, the appeal proceeds by way of rehearing, with the powers of the Full Bench being exercisable only if there is error on the part of the primary decision-maker: see Coal and Allied Operations Pty Ltd v Australian Industrial Relations Commission. 6
[10] In its notice of appeal, APESMA contended that the Senior Deputy President made errors in law and fact in determining that Peabody Coal had not breached its good faith bargaining obligations. The errors are particularised in the notice of appeal as follows:
“1. An error in finding that Peabody genuinely attempted to make an agreement in circumstances where it had at all times maintained an in-principle objection to the making of an enterprise agreement of any kind.
2. An error in finding that Peabody had put a genuine proposal in circumstances where:
(a) its only proposal would have the effect of reducing the employees’ relevant salary entitlements by two-thirds; and
(b) it never intended to make an agreement in terms of its own proposal.
3. An error in failing to consider the submission that Peabody’s refusal to engage in any discussions after APESMA had put a substantially revised proposal was a breach of its obligation to bargain in good faith.
4. An error in finding that the employee salary information sought by APESMA was confidential and commercially sensitive information.”
[11] In the proceedings before the Full Bench, Mr Taylor SC for APESMA referred at length to the evidence before the Senior Deputy President as well as to the relevant statutory provisions and relevant authorities, including the decision of Flick J in Endeavour Coal No 37 and the decision of a Full Bench of Fair Work Australia (FWA) in Endeavour Coal Pty Ltd v Association of Professional Engineers, Scientists and Managers, Australia (Collieries’ Staff Division)8 (Endeavour Coal No 2).
[12] It was submitted that, when the company's conduct was considered as a whole and in context, it should have resulted in the Senior Deputy President recognising that Peabody Coal was engaged in a process of sham bargaining and had not met its good faith bargaining requirements. It was said that Peabody Coal maintained at all times an in-principle objection to the making of any enterprise agreement. Consistent with that approach, it refused to bargain until a majority support determination was made and thereafter engaged in the process of sham or surface bargaining in which it went through the motions of bargaining without any genuine attempt to make an agreement. This was said to be most clearly demonstrated by the company’s only proposed agreement – an agreement that would reduce remuneration significantly and which the company in fact did not ever intend to put to a vote. It was submitted by APESMA that the proper consideration of the evidence should have led to a finding that Peabody Coal had failed to bargain in good faith.
[13] Further, it was submitted that the Senior Deputy President failed in his decision to address Peabody Coal’s refusal to meet or discuss APESMA’s substantially revised proposal which was put forward on 27 June 2014. The company’s decision to withdraw from discussions following the conciliation before Commissioner Stanton on 25 June 2014 was confirmed by its response on 4 July 2014 to APESMA’s revised proposal. This response acknowledged that APESMA had shifted its position and that there was the potential for further movement, but noted the company’s reluctance to enter into an enterprise agreement on the basis that it would conflict with its needs. It was submitted that the Senior Deputy President's conclusion that the parties’ positions were so far apart to not to justify further negotiations, despite the evidence of APESMA’s significant shift, was not a finding that was reasonably open.
[14] In relation to the Senior Deputy President’s finding that the salary information sought by APESMA from Peabody Coal was confidential and commercially sensitive 9 (see s.228(1)(b)), it was submitted that this finding was not open having regard to the nature of information sought (salary ranges as distinct from individual salary information) and the evidence given by Mr Davis during cross-examination. It was said that in failing to acknowledge or deal with this evidence, the Senior Deputy President did not have regard to relevant matters and/or provide adequate reasons for his finding and thus fell into error.
[15] With respect to permission to appeal, APESMA submitted that the appeal raises important questions regarding the nature of a genuine proposal in the context of good faith bargaining as well as the nature of engagement in the bargaining process and the appropriate approach in dealing with applications alleging breach of good faith bargaining obligations.
Consideration
[16] The main question for consideration in the appeal concerns the determination by Senior Deputy President that Peabody Coal was meeting its obligations to bargain in good faith. In the circumstances of the present matter, a bargaining order could not be made unless the Commission was satisfied that the company had not met, or was not meeting, the good faith bargaining requirements (see s.230(3)(a)(i)).
[17] The good faith bargaining requirements are set out in s.228 of the Act:
“228 Bargaining representatives must meet the good faith bargaining requirements
(1) The following are the good faith bargaining requirements that a bargaining representative for a proposed enterprise agreement must meet:
(a) attending, and participating in, meetings at reasonable times;
(b) disclosing relevant information (other than confidential or commercially sensitive information) in a timely manner;
(c) responding to proposals made by other bargaining representatives for the agreement in a timely manner;
(d) giving genuine consideration to the proposals of other bargaining representatives for the agreement, and giving reasons for the bargaining representative’s responses to those proposals;
(e) refraining from capricious or unfair conduct that undermines freedom of association or collective bargaining;
(f) recognising and bargaining with the other bargaining representatives for the agreement.
(2) The good faith bargaining requirements do not require:
(a) a bargaining representative to make concessions during bargaining for the agreement; or
(b) a bargaining representative to reach agreement on the terms that are to be included in the agreement.”
“[29] Where a majority support determination is made, there is an expectation that the employer will recognise the wishes of its employees to bargain collectively for an agreement, and enter into negotiations in an endeavour to reach an agreement. Where this does not happen, a bargaining order may be sought to ensure that the obligation to bargain is fulfilled.
[30] The main question in the present case concerns whether the Company was meeting its obligation to bargain in good faith. This involved a consideration as to whether there was a real or serious endeavour being made by the Company to negotiate an agreement, having regard to the finding by FWA that a majority of its staff employees want to bargain for an agreement. If the conduct of an employer in engaging in the bargaining process is a mere sham or pretence, such as going through the motions of bargaining without any real intention to enter into an agreement, then this would be contrary to the good faith bargaining requirements. In particular, such conduct might involve a failure to give genuine consideration to the proposals of other parties (s.228(1)(d)) or it might constitute capricious or unfair conduct that undermines freedom of association or collective bargaining (s.228(1)(e)). Such conduct might also amount to a failure to recognise and “bargain” with other parties (s.228(1)(f)).
[31] In the ABC case it was said that the determination of whether or not a negotiating party is “negotiating in good faith” may depend upon the conduct of the party when considered as a whole. The Full Bench gave the following example:
‘... if a party is only participating in negotiations in a formal sense but not bargaining as such then they may not be “negotiating in good faith”. Negotiating in good faith would generally involve approaching negotiations with an open mind and a genuine desire to reach an agreement as opposed to simply adopting a rigid predetermined position and not demonstrating any preparedness to shift.’ 10”
[19] The decision of the Full Bench was considered by the Federal Court in Endeavour Coal No 3. 11In that caseFlick J considered the bargaining provisions of the Act. His Honour said:
“[33] The ‘requirements’ set forth in s.228(1) which a ‘bargaining representative ... must meet’ are thus the touchstone - or the condition precedent for the purposes of s.230 - and the touchstone against which the conduct of a ‘bargaining representative’ is to be assessed.
[34] It is concluded that once a ‘majority support determination’ has been made, Endeavour Coal must thereafter approach ‘bargaining’ with the Association with a genuine (or ‘good faith’) objective or intention of concluding an ‘enterprise agreement’ - if possible. What is required is that those participating in the ‘bargaining’ must keep an ‘open mind’ as to the prospect of ultimately reaching agreement: cf Aiton Australia Pty Ltd v Transfield Pty Ltd (1999) 153 FLR 236 at [156] per Einstein J. It is further concluded that a ‘ bargaining representative’ may be held to have fallen short of the ‘requirements’ set forth in s.228(1) if there is a failure to put forward for consideration a proposal or a counter-proposal or suggested terms which may be acceptable. The manner in which Endeavour Coal approaches ‘bargaining’ is, subject to s.228(1), largely a matter for it to determine. Section 228(1) does not require a party to ‘bargain’ in any particular manner: cf FMG Pilbara Pty Ltd v Cox (2009) 175 FCR 141 at [38] per Spender, Sundberg and McKerracher JJ. But, within the bounds of the ‘good faith bargaining requirements’ set forth in s.228(1), Endeavour Coal is certainly not required to put self-interest to one side. Indeed, s.228(2) clearly contemplates that no party to the bargaining process is required to do so. Albeit in the context of construing a contractual obligation to act in ‘good faith’, it has been recognised that ‘good faith does not require a party to act in the interests of the other party or to subordinate its own legitimate interest to the interests of the other party’: Macquarie International Health Clinic Pty Ltd v Sydney South West Area Health Service [2010] NSWCA 268 at [147] per Hodgson JA. See also: Strzelecki Holdings Pty Ltd v Cable Sands Pty Ltd (2010) 41 WAR 318 at [62] per Pullin JA. Newnes JA agreed with Pullin JA.
[35] The putting of a proposal or a counter-proposal, or the suggestion of terms for the purpose of ‘bargaining’ or advancing the ‘bargaining’ process, does not irrevocably commit Endeavour Coal to ultimately agree to the proposal or to those terms and limit the ‘bargaining’ solely to matters which have not yet been agreed upon. To impose such a constraint upon the bargaining process would be contrary to s.228(2). But, in the course of ‘bargaining’, if Endeavour Coal sits ‘mute’ and merely rejects proposals or terms which are being advanced for its consideration, it may fail to meet the ‘requirements’ set forth in s.228(1). A party who participates in bargaining that is subject to the requirements of s.228(1) must genuinely participate in the bargaining process; it cannot adopt the role of a disinterested suitor, only rejecting offers and proposals made by other ‘bargaining representatives’.
[36] The Full Bench’s reasons do not expose any contrary construction being given to s.228.
…
[45] Within the context of Division 8, it would render nugatory the imposition of “good faith bargaining requirements” and the making of a “bargaining order” if a party to such “bargaining” either:
• did not participate with the objective of ultimately reaching agreement, if possible; and
• did not participate in the bargaining process in “good faith” and in a genuine process of “give and take”, including (if appropriate) the putting forward of matters which it tentatively may indicate could possibly be included in an “enterprise agreement” if other requirements or conditions can be agreed upon.”
[20] In the present matter, the Senior Deputy President had to make an assessment having regard to the conduct of Peabody Coal throughout the bargaining process as to whether he was satisfied that the company had met its good faith bargaining obligations. This involved both a consideration as to whether the particular steps and matters referred to in s.228(1) of the Act had been followed and complied with by the company and the making of a judgement as to whether the overall conduct of the company in the bargaining process was of such nature as to warrant a finding that it was not bargaining in good faith.
[21] We have considered the evidence and material before the Senior Deputy President and the issues which have been raised in the submissions of APESMA and the company on appeal. We consider that the evidence shows that in many respects Peabody Coal complied with the formal requirements of the bargaining process by participating in meetings and responding to proposals put by APESMA. The obligations upon a bargaining representative under s.228(1) of the Act must be understood having regard to the provisions of s.228(2), namely that those obligations do not require a party to make concessions during bargaining or to reach agreement on the terms that are to be included in an agreement.
[22] Most of the matters raised by APESMA in the appeal relate to alleged errors made by the Senior Deputy President in the context of his overall assessment of the conduct of Peabody Coal during the bargaining process. We do not consider that it has been demonstrated on appeal that the conclusions reached by the Senior Deputy President in relation to the company’s compliance with the good faith bargaining requirements during the period to 26 June 2014 were other than reasonably open on the evidence presented. As the Senior Deputy President said in his decision, the position adopted by Peabody Coal was a “hard one” but one which it was entitled to take. The Senior Deputy President found that Peabody Coal did indicate what type of enterprise agreement it would find acceptable 12 and did attend and participate in bargaining meetings and engage in genuine negotiations.13
[23] However we consider that there was error in relation to the consideration of the developments subsequent to 26 June 2014 and the significance placed upon those developments. In this regard we refer, in particular, to the draft agreement put to Peabody Coal by APESMA on 27 June and the company’s response to that proposal by the letter of 4 July 2014.
[24] The proposal removed a number of items from the negotiations, including a claim for increased pay, and, aside from some aspects of the process for retrenchment, did little more than reflect existing conditions at the mine site. Peabody Coal’s letter of 4 July in response to the proposal, which was signed by Mr Davis, outlined the company’s position that it: ‘had difficulty seeing any genuine benefit to the company in entering into an enterprise agreement’; that the company could see no way for it to make a proposal to staff employees which would not have the effect of adding complexity to its employment arrangements or the potential for reduced flexibility within its workforce; and that despite APESMA’s flexibility the company didn’t agree with the proposals and it was not its intention to meet for the purpose of further discussions.
[25] In many respects, the developments might be described as a potential ‘game changer’ so far as the negotiations were concerned, in that APESMA would seem to have conceded many of the matters raised by the company during the negotiations. However the only reference made in the decision of the Senior Deputy President to these developments is to record that APESMA presented a further draft agreement on 27 June 2014 and that the company rejected the draft agreement on 4 July 2014. 14 It is not evident from the decision what consideration was given to the developments or what significance placed upon them. However it is difficult, having regard to the developments, to understand the conclusion reached by the Senior Deputy President that:
“[39] ... In this case the positions of both parties were so far apart that such an agreement was always somewhat unlikely. It is hard to see that there would be any benefit in any further negotiations taking place at this stage.”
[26] In the context of the bargaining between the parties, we consider that the good faith bargaining requirements required the company to do more than simply respond by letter to the significantly revised proposal put by APESMA. At least, there was an obligation to meet and discuss the proposal and to explain in such meeting or meetings whether the proposal or a modified form of it might be acceptable to the company. This is not to say that the company would be obliged to accept the proposed agreement, only that there was an obligation to give further consideration in the bargaining process and through a meeting or meetings with APESMA to put and explain its position and response to a substantially revised proposal which would seem to have addressed the main concerns previously expressed by the company.
[27] In these circumstances we consider that it has been demonstrated in the appeal that there was an error in the decision making process and that such error was of fundamental importance in the making of an assessment as to whether Peabody Coal had met the good faith bargaining requirements in s.228 of the Act. We consider that there was either a failure by the Senior Deputy President to consider the developments we have referred to or to give sufficient weight to them in reaching his conclusions.
[28] We also consider that it has been demonstrated in the appeal that there was error in relation to the finding of the Senior Deputy President regarding the obligation on Peabody Coal to disclose relevant salary information. The consideration of this matter in the Senior Deputy President's decision is short and does not deal with important issues raised by the evidence in the proceedings, including that given by Mr Davis for the company.15
[29] The information sought by APESMA concerned the salary range for the classifications that were the subject of the bargaining and the spread of salaries across the paybands or salary ranges in place at the Wambo mine. It was not information regarding the salary of particular employees, such as might give rise to privacy considerations. The information would assist APESMA in putting forward proposals on salaries as part of its agreement proposal. However it might be difficult for APESMA to obtain such information from employees as the contracts of some staff prohibited them from sharing their salary information. From the evidence presented, it would seem that the company would not have considered the information to be commercially sensitive provided that staff employees gave their consent for it to be provided to APESMA. The company had prepared relevant consent forms although it would seem that these forms were never distributed to staff.
[30] Having regard to the nature of the information sought by APESMA and the evidence given in the proceedings before the Senior Deputy President, we do not consider that the information sought was "confidential or commercially sensitive information" within the meaning of s. 228(1)(b) of the Act.
[31] For the above reasons, we have reached the conclusion that in certain respects Peabody Coal failed to meet the good faith bargaining requirements in s.228 of the Act and that the Senior Deputy President erred in not so deciding. In these circumstances we consider that it is appropriate to grant permission to appeal and to allow the appeal.
[32] In view of this conclusion, we do not need to make a finding as to whether the general approach of the company throughout the bargaining process, which was characterised by APESMA as being one of ‘maintaining at all times an in-principle objection to making an enterprise agreement’, could of itself be found to amount to a failure to bargain in good faith. In this regard, we note what was said in Endeavour Coal No 3 about the need for those participating in bargaining to keep an open mind as to the prospect of ultimately reaching agreement. 16We also note what was put in the appeal proceedings by Mr Williams for Peabody Coal regarding the evidence of the company’s participation in the bargaining process, including by attending meetings with APESMA representatives, putting forward its own draft agreement as an ‘opening gambit with an express invitation to respond’, and changing its position on a number of issues following bargaining meetings.17 In order to make such a finding, the Commission would need to be satisfied on the evidence that the approach of the company demonstrated that it was not open to persuasion about, or that it was not prepared to consider the possibility of, making an enterprise agreement.
Conclusion and orders
[33] For all the reasons given, we have decided to allow the appeal and to set aside the decision of the Senior Deputy President.
[34] It was submitted by APESMA that in such circumstances the Full Bench should determine the s.229 application itself and make a bargaining order as sought by APESMA. An amended draft bargaining order was submitted by APESMA on 21 November 2014. On 25 November 2014 Peabody Coal responded to the proposed draft order setting out its opposition to the making of any order by the Full Bench. The company submitted that if the Full Bench concluded that it had breached one or more of the good faith bargaining requirements, the matter should be referred back to the Senior Deputy President for further consideration.
[35] We have decided that the most appropriate course in the present matter is for the Full Bench to determine APESMA's application for a bargaining order (see s.607(3)(b)). In so deciding, we have taken into account the stage reached in the negotiations and bargaining between the parties and the further delays which might be involved for the parties and the bargaining process should the matter be referred back for further hearing by the Senior Deputy President. We have also considered the relatively straightforward nature of the failures that we have identified and therefore the limited nature of the orders which we envisage might appropriately be made in the present matter. We also note that there is sufficient evidence and material before the Commission to enable us to make a decision on the s.229 application and the orders sought. The parties have also had an opportunity in the course of the appeal to make submissions on the form of the orders, if any, to be made.
[36] Section 230 of the Act sets out when the Commission may make a bargaining order.
230 When the FWC may make a bargaining order
Bargaining orders
(1) The FWC 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) the FWC is satisfied that it is reasonable in all the circumstances to make the order.
Agreement to bargain or certain instruments in operation
(2) The FWC 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) The FWC 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).
[37] We are satisfied that the prerequisites for the making of a bargaining order are met in the present matter. An application for a bargaining order has been made by a bargaining representative (s.230(1)(a)) and a majority support determination in relation to the agreement is in operation (s.230(2)(b)). We are satisfied that Peabody Coal has not met the good faith bargaining requirements (s.230(3)(a)(i)). We are also satisfied that the company was notified in writing about APESMA’s concerns and that, although there was a reasonable opportunity to respond to those concerns, the company did not do so to APESMA’s satisfaction (s.229(4) and s.230(3)(b)). Further we are satisfied, for the reasons set out earlier in this decision, that it is reasonable in all the circumstances of this matter to make a bargaining order to address the failings which we have identified in relation to the bargaining process (s.230(1)(c)).
[38] A bargaining order must be made in accordance with s.231 of the Act. For present purposes, subsection 231(1) is most relevant. It provides as follows:
“231 What a bargaining order must specify
(1) A bargaining order in relation to a proposed enterprise agreement must specify all or any of the following:
(a) the actions to be taken by, and requirements imposed upon, the bargaining representatives for the agreement, for the purpose of ensuring that they meet the good faith bargaining requirements;
(b) requirements imposed upon those bargaining representatives not to take action that would constitute capricious or unfair conduct that undermines freedom of association or collective bargaining;
(c) the actions to be taken by those bargaining representatives to deal with the effects of such capricious or unfair conduct;
(d) such matters, actions or requirements as the FWC considers appropriate, taking into account subparagraph 230(3)(a)(ii) (which deals with multiple bargaining representatives), for the purpose of promoting the efficient or fair conduct of bargaining for the agreement...”
[39] The orders sought by APESMA are for Peabody Coal to be required within 21 days to do the following:
“1. Peabody Energy Australia Pty Ltd (Peabody) is to respond to the proposal of the Association of Professional Engineers, Managers and Scientists Australia (APESMA) dated 27 June 2014 in a genuine manner.
2. Peabody is to meet with APESMA to discuss its response to APESMA’s proposal.
3. Peabody is to provide APESMA with a genuine proposal which includes the matters that it may be prepared to accept in an enterprise agreement.
4. Peabody is to provide to APESMA the following information:
(a) The bottom and top salaries (i.e. the salary range) for each classification which would be covered by Peabody’s proposed enterprise agreement dated 11 March 2014, provided that where there is only one person at the bottom or top of the range Peabody shall instead provide the median point of the range.
(b) The spread of salaries across the paybands or salary ranges applicable to employees in classifications that would be covered by proposed enterprise agreement dated 11 March 2014, identified for each classification as follows: how many (or what percentage) are paid in each quartile within the range.
5. Peabody refrain to making any changes to the status quo of employment terms and conditions, excluding pay increases, until further order or until an enterprise agreement is made.”
[40] Peabody Coal opposed the making of orders 1 and 2 on the basis that they are unnecessary given the company's response in its letter dated 4 July 2014 to the APESMA proposal of 27 June 2014. In the letter, the company acknowledged that APESMA was prepared to substantially limit its claim to matters of particular concern to members and assumed that there may be some flexibility in the proposal. However the company indicated that it did not agree with the proposals and did not intend to meet with APESMA for the purpose of any further discussions. Although we recognise that there had been some 10 bargaining meetings up until that time, given the substantially revised proposal put by APESMA and the possible flexibility in that proposal, it is appropriate that the parties should meet and discuss the proposal rather than simply correspond about it. The failure of the company to so meet and discuss is not in accord with its good faith bargaining obligations under s.228 of the Act (see in particular s.228(1)(a),(c),(d) and (f)). Accordingly we have decided to make an order to the effect of order 2 sought by APESMA.
[41] We have decided not to make an order in the nature of proposed order 1 as we do not consider that the order sought is in such terms as would impose a clear and meaningful obligation upon a party or identify the action needed to be taken in compliance with the order. We therefore decline to make such order.
[42] In relation to proposed order 3, it was submitted by Peabody Coal that such an order would be beyond jurisdiction having regard to the decision in Endeavour Coal No 3. It was also submitted thatthere was no utility in making the order. However we consider that the making of an order in the terms sought by APESMA would assist the bargaining process and allow the parties to better assess the possibilities of an agreement being made. It does not require the company to make concessions or to reach agreement (s.228(2)) but it might, in a practical way, assist in facilitating further bargaining between the parties having regard to the conduct which has led us to conclude that the good faith bargaining requirements have not been observed. On our reading of the relevant passages in the decision in Endeavour Coal No 3, 18 we do not consider that proposed order 3 is beyond power.
[43] In relation to proposed order 4, we consider that the order should be made. Peabody Coal submitted that it has not unreasonably refused to provide the information and that there is no utility in making such an order given that this issue no longer has relevance to any aspect of the bargaining process. We consider such an order is appropriate given the findings in relation to the non-observance of the good faith bargaining requirement regarding the disclosure of relevant information. We also consider that it would not be appropriate to predetermine what might be the course and progress made by the parties in any future negotiations as to the making or contents of an enterprise agreement.
[44] We have decided not to make an order in terms of proposed order 5. It was put by Peabody Coal that the company has proposed no change to the status quo of employment terms and conditions in relation to the employees proposed to be covered by the scope of the agreement. It would be unreasonable in these circumstances to make an order in the form sought.
[45] Accordingly, and for the reasons given, a bargaining order will be made in the terms we have determined. The order is published together with this decision.
SENIOR DEPUTY PRESIDENT
Appearances:
I Taylor SC and O Fagir, of counsel for APESMA.
D Williams for Peabody Energy Australia Coal Pty Ltd.
Hearing details:
2014
Sydney
19 November
Final written submissions:
21 & 25 November 2014
1 The Association of Professional Engineers, Scientists and Managers, Australia v Peabody Energy Australia Coal Pty Ltd[2014] FWC 6061; PR554989.
2 PR545441.
3 [2014] FWC 6061 at [14] - [35].
4 [2014] FWC 6061 at [7].
5 [2012] FCA 764.
6 (2000) 203 CLR 194.
7 [2012] FCA 764.
8 (2012) 217 IR 131. [2012] FWAFB 1891.
9 [2014] FWC 6061 at [39].
10 For a consideration of the concept of ‘good faith’ negotiation by Australian Courts, see also Aiton Australia Pty Ltd v Transfield Pty Ltd (1999) 153 FLR 236, especially at pars. 145-149 (Einstein J.); Brownley v Western Australia (1999) 95 FCR 152 (Lee J.); Strzelecki Holdings Pty Ltd v Cable Sands Pty Ltd [2010] WASCA 222 especially at par 94 (Murphy JA.).
11 [2012] FCA 764.
12 [2014] FWC 6061 at [38].
13 Ibid at [39].
14 Ibid at [13].
15 Transcript of proceedings 27 August 2014 at PN565-583.
16 [2012] FCA 764 at [34].
17 Witness statement of Mr E.J. Davis, dated 24 July 2014 at [42]- [45].
18 [2012] FCA 764 especially at [63].
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