Australasian Meat Industry Employees Union, The v Coles Supermarkets Australia Pty Ltd

[2016] FWC 4870

[2016] FWC 4870

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.437 - Application for a protected action ballot order

Australasian Meat Industry Employees Union, The
v
Coles Supermarkets Australia Pty Ltd
(B2016/681)

COMMISSIONER PLATT ADELAIDE, 19 JULY 2016

Proposed protected action ballot of employees of Coles Supermarkets Australia Pty Ltd– notification time – when notification time ceases to have effect – impact of making agreement – notification time ceases to have effect upon making of agreement – application dismissed - requirements for genuinely trying to reach agreement discussed.

[1] On 5 July 2016, an application was made by the Australasian Meat Industry Employee’s Union (the AMIEU) seeking a protected action ballot order (PABO) pursuant to s.437 of the Fair Work Act 2019 (the Act) in relation to employees of Coles Supermarkets Australia Pty Ltd (Coles) to determine whether eligible employees wish to engage in specified protected industrial action for a proposed enterprise agreement.

[2] It is important to understand the recent bargaining history between Coles and the AMIEU. This application was preceded by a lengthy agreement negotiation process which concluded in May 2015. The resultant Agreement was approved by the Commission in July 2015 and commenced to operate. Later that month a single employee lodged appeal against the approval decision. The appeal was determined in May 2016 and the decision to approve the Agreement was quashed with effect from 5 July 2016. The AMIEU have sought to “re-start” the Agreement negotiations. Coles assert that the Act requires the bargaining process start again from scratch.

[3] A directions conference was held on 7 July 2016 and a hearing was conducted on 12 July 2016.

[4] Ms Kirsten Rogers appeared for the AMIEU along with Mr Graham Smith. Coles was represented by Mr Matthew Follett and Mr Chris Gardner of counsel. A grant of permission was made pursuant to s.596 with the consent of the AMIEU.

[5] Coles advanced four propositions in relation to the application:

“(a) there has not been a “notification time” in relation to the proposed enterprise

agreement within the meaning of section 437(2A) of the FW Act, such that the

application is invalid;

(b) in the alternative to (a) above, the AMIEU has not been, and is not, genuinely trying to reach an agreement with Coles in relation to that proposed enterprise agreement, for the purposes of section 443(1)(b) of the FW Act;

(c) in the further alternative to (a) and (b) above, should the Commission decide to make a PABO, it should not extend to questions 4 and 5 in the proposed draft order, as those questions are not capable of amounting to “industrial action”; and

(d) further and in any event, the Commission should extend the period of written notice required for some forms of industrial action to five (5) working days in some operations in some jurisdictions, pursuant to section 443(5) of the FW Act.”

[6] The AMIEU contended that the PABO application should be granted on the grounds that:

• it is a bargaining representative of employees who will be covered by a proposed enterprise agreement;

• the notification time for the enterprise agreement occurred in April 2014, when Coles invited the AMIEU to commence bargaining for a proposed enterprise agreement;

• the notification time was not displaced by the successful ballot, the Commission’s Approval of the agreement at first instance, or the later quashing of the approval decision. The quashing of the decision had the effect of reinstating the original bargaining period;

• the AMIEU has been genuinely trying to reach agreement based on their conduct in lead up to the making of the Agreement which was approved and subsequently quashed, and that conduct is a relevant basis for this application;

• the content of the questions contained in the draft proposed order constitute industrial action within the meaning of s.19 of the Act.

[7] Although the parties were initially in dispute regarding the need for and the length of an extended notice period to be given prior to the taking of protected industrial action, an agreed position (subject to my being satisfied that the requirements of s.443(5) are met) was submitted by the parties.

[8] The following facts were agreed between the parties:

“1. The terms and conditions of the relevant Australasian Meat Industry Employees Union (AMIEU) members employed by Coles Supermarkets Australia Pty Ltd (Coles) throughout Australia, are regulated by the following enterprise agreements:

a. Coles Supermarkets Australia Pty Ltd and Bi-Lo Pty Limited Retail Agreement 2011;

b. Coles Supermarkets (Australia) Pty Ltd and Australasian Meat Industry Employees’ Union Western Australian Agreement 2012;

c. Coles Supermarkets Australia Pty Ltd & AMIEU Victorian Meat Agreement 2011;

d. Coles Supermarkets (Australia) Pty Ltd & Bi-Lo Pty Ltd & AMIEU NSW/ACT Agreement 2012;

e. Coles Supermarkets and AMIEU Tasmania Meat Agreement 2011; and

f. Coles Supermarkets South Australia Meat Agreement 2012.

2. The nominal expiry date of each of the above agreements has passed.

3. On or around 7 April 2014, Coles initiated enterprise bargaining negotiations for an agreement to replace the Coles Supermarkets Australia Pty Ltd and Bi-Lo Pty Limited Retail Agreement 2011 (Proposed Agreement).

4. There were four union bargaining representatives for the Proposed Agreement:

a. the Shop Distributive and Allied Employees’ Association (SDA);

b. the Australian Workers’ Union (AWU);

c. the Transport Workers’ Union of Australia (TWU); and

d. the AMIEU.

5. Coles’ position in the bargaining negotiations for the Proposed Agreement was to agree a national agreement to cover most of its team members in all of its supermarkets (and those of Bi-Lo Pty Ltd) across Australia. This included meat team members eligible to be members of the AMIEU.

6. The AMIEU’s primary position in the bargaining negotiations for the Proposed Agreement was to make separate enterprise agreements covering only meatworkers in each state/territory (other than NSW and ACT which were to be covered by the one agreement).

7. [Redacted by the parties]

8. The AMIEU made a number of applications to the Fair Work Commission for protected action ballot orders during the course of negotiations for the Proposed Agreement, in support of its claims for separate enterprise agreements covering only meatworkers in each state/territory.

9. Ultimately, a number of different protected action ballot orders were made by the Fair Work Commission.

Approval of the Proposed Agreement and subsequent events

10. On 5 May 2015, the Proposed Agreement was made by a majority vote of relevant Coles and Bi-Lo employees, within the meaning of section 182(1) of the FW Act. It was known as the Coles Store Team Enterprise Agreement 2014-2017 (Agreement).

11. On 18 May 2015, Coles and Bi-Lo applied to the Fair Work Commission for approval of the Agreement. On 29 May 2015, the AMIEU filed a statutory declaration in support of the Agreement.

12. On 10 July 2015, the Agreement was approved by Commissioner Bull of the Fair Work Commission ([2015] FWCA 4136) and it commenced operation on 17 July 2015. The Agreement covered the AMIEU, all Coles meat team members across Australia and the other union bargaining representatives.

13. On 31 July 2015, an application was made by a Coles team member for permission to appeal, and if granted, to appeal the decision of Commissioner Bull approving the Agreement. That application was the subject of a contested hearing.

14. On 31 May 2016, a Full Bench of the Fair Work Commission issued a decision ([2016] FWCFB 2887) in which the Commission concluded that the Agreement did not pass the “better off overall test” and as such, could not have been approved by the Commission (absent the provision of specified undertakings).

15. On 17 June 2016, a Full Bench of the Fair Work Commission issued an order quashing Commissioner Bull’s decision to approve the Agreement (PR581624). The quashing order took effect from 5 July 2016.

Correspondence between the parties

16. On 15 June 2016, the AMIEU wrote to Coles requesting that Coles provided suitable dates for meetings to “reconvene the bargaining process as soon as possible”.

17. On 21 June 2016, the AMIEU wrote to Coles setting out its current bargaining position, being a national agreement covering its members in Coles’ meat departments.

18. On 28 June 2016, Coles wrote to the AMIEU declining its invitation to bargain.

19. On 5 July 2016, the AMIEU applied to the Fair Work Commission for a PABO for a proposed enterprise agreement in the form of a single national agreement covering all Coles’ meat team members only.

20. On 6 July 2016, the AMIEU filed an amended application for a PABO that includes an additional form of proposed action, as follows: “indefinite or periodic bans on the use of electronic scanners, including but not limited to, hand held electronic scanners.”

[9] For clarity, the proposed enterprise agreement will be referred to as the “2014 Proposed Enterprise Agreement” and the agreement that was made from the bargaining process that resulted in the Coles Store Team Enterprise Agreement 2014-2017 as the“2014 Enterprise Agreement.”

[10] The AMIEU called one witness, Mr Graham Smith, Federal Secretary of the AMIEU. Mr Smith’s evidence consisted of:

• a statement which was tendered;
• two exhibits;
• a Form F17 employer’s statutory declaration in support of an application for approval of an enterprise agreement; and
• a Form F18 statutory declaration of an employee organisation in relation to an application for the approval of an enterprise agreement which had been submitted in respect of the approval of the 2014 Enterprise Agreement.

[11] Ms Lauren Kaye Murphy, Employee Relations Manager – Retail, Human Resources and Mr Michael Mackenzie, General Manager, Central Operations tendered statements and gave evidence on behalf of Coles.

[12] Ms Murphy was cross examined in relation to of the conduct of negotiations in respect of the 2014 Proposed Agreement and the proceedings that were on foot to terminate the Coles Supermarkets Australia Pty Ltd and Bi-Lo Pty Limited Retail Agreement 2011.

[13] Mr Mackenzie gave evidence regarding:

• the wearing of uniforms;
• PPE; and
• the impact of the dissemination of union enterprise agreement material on the workplace and Coles’ likely response to that conduct.

[14] The initial issues for me to consider are:

• has the making of the 2014 Enterprise Agreement extinguished the “notification time” in relation to the 2014 Proposed Enterprise Agreement;
• in the event that the Commission finds that a notification time exists, does the conduct of the AMIEU and the circumstances of the case mean that the AMIEU is genuinely trying to reach agreement.

[15] I have had regard to the principles of statutory construction which are conveniently discussed by Justice Flick in JJ Richards. 1

Notification time

Section 437 of the Act provides as follows (emphasis added);

“437 Application for a protected action ballot order

Who may apply for a protected action ballot order

(1) A bargaining representative of an employee who will be covered by a proposed enterprise agreement, or 2 or more such bargaining representatives (acting jointly), may apply to the FWC for an order (a protected action ballot order) requiring a protected action ballot to be conducted to determine whether employees wish to engage in particular protected industrial action for the agreement.

(2) [not relevant to this matter]

(2A) Subsection (1) does not apply unless there has been a notification time in relation to the proposed enterprise agreement.

Note: For notification time, see subsection 173(2). Protected industrial action cannot be taken until after bargaining has commenced (including where the scope of the proposed enterprise agreement is the only matter in dispute).

[16] Section 173(2) provides;

“Notification time

(2) The notification time for a proposed enterprise agreement is the time when:

(a) the employer agrees to bargain, or initiates bargaining, for the agreement; or

(b) a majority support determination in relation to the agreement comes into operation; or

(c) a scope order in relation to the agreement comes into operation; or

(d) a low paid authorisation in relation to the agreement that specifies the employer comes into operation.

Note: The employer cannot request employees to approve the agreement under section 181 until 21 days after the last notice is given (see subsection 181(2)).

[17] The proposed agreement is not a greenfields agreement or a multi-enterprise agreement and no low-paid authorisation has been made.

[18] In Maritime Union of Australia v Maersk Crewing Australia Pty Ltd 2 the Full Bench accepted that s.437(2A) read with s.437(1) meant that an application for a PABO cannot be made before the commencement of the notification time for the proposed enterprise agreement.

[19] No majority support determination, scope order or low-paid authorisation has been made in relation to the 2014 Proposed Enterprise Agreement or after that agreement was made. Therefore, the existence of a notification time must be based on the time when Coles agreed to bargain or initiated bargaining for the agreement.

[20] In Transport Workers' Union of Australia v Hunter Operations Pty Ltd 3 (endorsed by the Full Bench in Maersk), Vice President Hatcher observed that “whether an employer has agreed to bargain or has initiated bargaining in relation to a proposed enterprise agreement is a question of fact.”⁴

[21] The term “proposed enterprise agreement” in s.437(1) refers to the enterprise agreement proposed at the time the PABO application is made. 5

[22] In the matter before me, the AMIEU has asserted that the PABO application is made in relation to the continued negotiations for the 2014 Proposed Agreement enlivened as a result of the quashing of the Commission’s approval decision.

[23] The notification time must be “in relation to” the proposed agreement. The decision in Maersk states that the expression “in relation to” requires no more than a relationship (direct or indirect) between the two subject matters. 6 The subject matter of the enquiry (in this case the PABO application), the legislative history and the facts of the case will be relevant to the determination of this relationship.7

[24] In April 2014, bargaining for a proposed agreement commenced between Coles, Bi-Lo Pty Ltd and their employees covered by six agreements detailed in paragraph [7] above. The Notice of Employee Representational Rights was distributed in April 2014. In April 2014, Coles were seeking a national ‘four walls” agreement which included the work performed by AMIEU members. It appears that the bargaining activities of the AMIEU described by Mr Smith, including the agreement scope fell within the breadth of the Coles position. There has not been any other notification time relied upon by the AMIEU.

[25] Based on the material before me, I find that the notification time commenced on 7 April 2014. 8  This notification time related to the 2014 Proposed Agreement.

Has the notification time ceased?

[26] My next consideration is whether this notification time has ceased. The Act does not contain a provision which explicitly states when the notification time ceases, and the topic is not directly discussed in the Explanatory Memorandum to the Fair Work Bill 2009. There does not appear to be judicial consideration of this topic.

[27] Its predecessor, the Workplace Relations Act 1996, contained a similar concept, termed the “bargaining period” which commenced 7 days after the service of a written notice 9 and concluded when an agreement was made or when the initiating party advised that it no longer wished to bargain.10

[28] The Fair Work Act removed the concept of a bargaining period although industrial action continued to be protected during bargaining for an enterprise agreement. The Explanatory Memorandum indicated that Parliament intended that protected industrial action be available only during negotiations for an enterprise agreement. 11

[29] The Parliament intended that the Act promote “productivity and fairness through enterprise agreements that are tailored to suit the needs of businesses and the needs of employees.” 12

[30] Provisions concerning the making of enterprise agreements are found in Part 2-4 of the Act. The objects of this part of the Act include the provision of a “simple, flexible and fair framework that enables collective bargaining in good faith, particularly at the enterprise level, for enterprise agreements.” 13 Section 172 describes how an enterprise agreement must be about certain matters, and describes the various types of enterprise agreements.

[31] The Act provides three stages in the enterprise agreement process. Bargaining for an enterprise agreement, making an enterprise agreement and the approval of an enterprise agreement.

Proposed enterprise agreements

[32] The Act has a large number of provisions that concern the regulation of proposed enterprise agreements including general conduct agreements, 14 good faith bargaining requirements and orders,15 single interest employer authorisations,16 workplace determinations17 and industrial action.18 

Enterprise agreements

[33] With respect to enterprise agreements, s.180 of the Act requires that proposed enterprise agreements and related material be distributed for a minimum period prior to a vote, s.181 allows an employer to request employees who will be covered by a proposed enterprise agreement to approve the agreement by a vote. An agreement is made when a proposed agreement is approved by a majority of employees who cast a valid vote. 19 Section 185 requires that one of the bargaining representatives apply to the Commission for approval of the Agreement.

Agreement approval

[34] Division 4 details the requirements which must be met for approval.

[35] As can be seen from a review of the provisions referred to above, the existence of a proposed enterprise agreement is a prerequisite for a range of requirements and bargaining powers. It appears that the Commission’s powers to regulate bargaining cease at the time the proposed Agreement is made and becomes an enterprise agreement.

[36] Absent a proposed enterprise agreement, there is no capacity to take protected industrial action under the Act. The Act requires that “employee claim action” must be in respect of a proposed enterprise agreement. 20 In addition, the common requirements for industrial action also require it to be in support of a proposed enterprise agreement (but not a greenfields or a multi-employer agreement).21

[37] The final step involves the Commission determining whether to approve the agreement subject to the requirements contained in Division 4 of the Act.

[38] It appears to me that the Parliament intended that the making of an Agreement would conclude the bargaining process. That can be inferred from the considerable reliance on the existence of a proposed agreement as detailed above. If the making of an agreement did not stop the bargaining process, then parties would be able to (for example) take industrial action in support or opposition to the Commission approving the Agreement. Such an approach would be inconsistent with the objects in Part 2-4 of the Act.

[39] If the employer determines not to commence bargaining and thus enliven the notification time, a bargaining agent may pursue alternative methods to commence the notification time as provided in s.193(2)(b)-(d).

[40] I have considered if this construction would result in unintended consequences. I note that Part 2-4, Division 4 provides the Commission with a range of options to address deficiencies in enterprise agreements that have been made. I recognise that this construction of the Act will require parties to an agreement that has been made and which cannot be approved, start the entire bargaining process afresh. Fortunately, as a result of the Commission’s powers to remedy deficient agreements, the cases where this occurs are few.

[41] In my view, the statutory construction which best achieves the purpose and objects of the Act is that at the point the bargaining processes ceases (by the making of an Agreement) the notification time under the Act must cease to have effect in relation to the specific proposed agreement.

[42] Applying that approach to the facts in this case, the notification time in respect of the 2014 Proposed Agreement between Coles and the AMIEU (and other parties) ceased at 10.00 pm on 5 May 2014 when the a majority of employees who cast a valid vote approved the Coles Store Team Enterprise Agreement 2014-2017. 22

[43] I therefore find that there is no notification time that the AMIEU can rely on.

[44] Absent notification time in relation to the 2014 Proposed Agreement, the pre-requisites for the approval of the application are not met and the application must fail.

Genuinely trying to reach agreement

[45] In the alternative, if the notification time in respect of the 2014 Proposed Agreement continues to apply, I would need to be satisfied that the AMIEU are genuinely trying to reach agreement.

[46] Section 443(1)(b) requires that the Commission be satisfied that each Applicant for a PABO “has been, and is genuinely trying to reach agreement with the employer of the employees who are to be balloted.”

[47] On the basis of the material before me, it appears that the 2014 Enterprise Agreement was made on 5 May 2015 by Coles and the AMIEU. At that point in time, I accept that the AMIEU were genuinely trying to reach agreement, within the meaning of the Act.

[48] The question is whether the AMIEU has continued and is genuinely trying to reach agreement. It is the conduct of the AMIEU that is relevant in this determination.

[49] In J.J Richards & Sons Pty Ltd v Fair Work Australia 23JusticeFlick held that at a minimum, the applicant for a PABO must have:

“approached the employer and informed the employer of the general ambit of that for which agreement is sought, and the employer has foreshadowed – even in the most general of terms – its attitude as to the proposed agreement.

…

It is difficult to conclude that any person can try and reach an agreement with another in the absence of a disclosure of that for which consensus is sought. One person may wish to reach an agreement with another. But, until the general content of the proposed agreement is disclosed, it cannot be said that he has even attempted to reach an agreement.”

[50] Coles submit that the circumstances in this case are novel, relying upon the following facts:

• the 2014 Enterprise Agreement was approved by the Commission and operated for almost a year before it was quashed;
• approximately 77,500 employees covered by the agreement were paid in accordance with its terms for a year;
• while the approved agreement no longer exists, the 2016 base rate wage increases provided by the agreement continue to be honoured by Coles;
• Although the pre-existing agreements now apply, an application to terminate the Coles Supermarkets Australia Pty Ltd and Bi-Lo Pty Limited Retail Agreement 2011 has been made;
• the last bargaining meeting occurred in December 2014 and since that time the parties have not met or exchanged positions; and
• the business environment has changed in the period between December 2014 and July 2016.

[51] On 15 June 2016, the AMIEU wrote to Coles and advised that it “remained committed to reaching agreement” and sought to reconvene meetings with Coles. With respect to the content of the agreement the letter states “having had two years or so to consider our claims you are well versed in those and should be ready to reconvene our meetings quickly.” 24

[52] Not having received a reply to the 15 June 2016 correspondence, on 21 June 2016 the AMIEU wrote to Coles to “try and move forward to reaching agreement with Coles.” 25 The letter recounted some of the negotiation history and stated that:

“in seeking to resume negotiations for an enterprise agreement, the AMIEU has carefully considered the approach it should take. We have resolved to extend Coles a further opportunity to achieve uniformity of conditions across meat departments by means of a national meat agreement.”

[53] On 28 June 2016, Coles responded advising that it was in the process of unravelling the 2014 Enterprise Agreement and implementing the Coles Supermarkets Australia Pty Ltd and Bi-Lo Pty Limited Retail Agreement 2011 which it stated was an enormous undertaking. 26 Coles was also expecting to receive an application to terminate this agreement. Coles advised the AMIEU that “no decision has been made in respect to future bargaining.”

[54] On the evidence before me, it appears that the only matter advanced by the AMIEU since the last bargaining meeting prior to the 2014 Enterprise Agreement being made was their position as to scope, namely that the agreement would be a national meatworkers agreement. No position has been conveyed as to the content of the proposed agreement.

[55] On that basis, the process appears to fail the requirements detailed by Justice Flick in JJ Richards. If the conduct of the employer is considered, it has not detailed its attitude at all, simply deferring consideration.

[56] The events following the making of the 2014 Enterprise Agreement reflect a unique set of circumstances, which in my view, require more than the minimalist approach proposed by Justice Flick.

[57] On the facts before me, I am not convinced that the AMIEU’s conduct to date meets the requirements of “genuinely trying to reach agreement” however, as a result of my finding in respect of notification time, I am not required to determine this point.

COMMISSIONER

Appearances:

J Rogers and G Smith on behalf of the AMIEU.

M Follett and C Gardner on behalf of Coles Supermarkets Australia Pty Ltd.

Hearing details:

2016.

Adelaide:

July 12.

 1   J.J Richards & Sons Pty Ltd v Fair Work Australia [2012] FCAFC 53 at [49-53].

 2   [2016] FWCFB 1894.

 3   [2014] FWC 7469 at [50].

4 Ibid at [35].

 5   Maritime Union of Australia v Maersk Crewing Australia Pty Ltd[2016] FWCFB 1894.

 6   O’Grady v Northern Queensland Co Ltd (1990) 169 CLR 356.

 7   Travelex Ltd v Commissioner of Taxation (2010) 241 CLR 510. See Also Maritime Union of Australia v Maersk Crewing Australia Pty Ltd[2016] FWCFB 1894 at [25].

 8   Exhibit A4 – Witness Statement of Graham Smith at [2.3].

 9   Workplace Relations Act 1996 s.170MI.

 10   Workplace Relations Act 1996 s.170MV.

 11 Explanatory Memorandum to the Fair Work Bill 2009 at [275].

 12   Explanatory Memorandum to the Fair Work Bill 2009.

 13   Fair Work Act 2009 (Cth) s.171.

 14   Fair Work Act 2009 (Cth) at Part 2-4 Division 3 and 4 (Subdivision A).

 15   Fair Work Act 2009(Cth) at Part 2-4 Division 8.

 16   Fair Work Act 2009(Cth) at Part 2-4 Division 10.

 17   Fair Work Act 2009(Cth) at Part 2-5.

 18   Fair Work Act 2009(Cth) Part 3-3.

 19   Fair Work Act 2009(Cth) s.182.

 20   Fair Work Act 2009 (Cth) s.409(1)

 21 Fair Work Act 2009(Cth) s.413.

 22 Exhibit A4 at [ 2.8] and decision at [7].

 23   J.J Richards & Sons Pty Ltd v Fair Work Australia [2012] FCAFC 53 at [58] [59].

 24   Exhibit A1 – Witness Statement of Graham Smith - attachment 1.

 25   Exhibit A1 – Witness Statement of Graham Smith - attachment 2.

 26   Exhibit A1 – Witness Statement of Graham Smith - attachment 3.

<Price code A, PR583082>