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

[2015] FWC 2686

[2015] FWC 2686

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
(B2015/61)

COMMISSIONER BULL SYDNEY, 20 APRIL 2015

Proposed protected action ballot of employees employed in Coles Supermarket meat departments in the State of New South Wales and the Australian Capital Territory; application to extend minimum period of notice; whether exceptional circumstances exist.

[1] This is an application for a protected action ballot order pursuant to s.437 of the Fair Work Act 2009 (the FW Act) made by the Australasian Meat Industry Employees’ Union (the Union) to ballot employees of Coles Supermarkets Australia Pty Ltd (Coles). The employees concerned are employed in meat departments employed in Coles’ stores in the state of New South Wales and the Australian Capital Territory who are members of the Union and for whom the Union is their bargaining representative.

[2] Following the filing of the application, the law firm Seyfarth Shaw Australia advised the Commission that it represented Coles and wished be heard on the terms of the draft order it then proposed some hearing dates. The Union was agreeable to this and Directions were issued for the parties to provide any written material to support their respective positions.

[3] The Commission duly received written material from Coles submitting that there were exceptional circumstances justifying an extension of the minimum written notice requirement pursuant to s.443(5) of the FW Act and argued that 7 working days notice was reasonable. A witness statement was attached from Mr Eric Daffy, the Meat Operations Manager.

[4] The Union in their written submissions argued that no extension should be granted on the basis that it had not been demonstrated that exceptional circumstances existed justifying an increase to the standard notice period.

[5] The matter was listed for hearing on 17 April 2015 in Sydney. Mr Gardner of counsel sought leave to appear for Coles; Mr Buckley appeared for the Union. There was no objection from the Union to Mr Gardner’s representation and leave to appear was granted pursuant to s.596(2)(a) of the FW Act, with the Commission being satisfied that Mr Gardner’s representation would enable the matter to be dealt with more efficiently.

[6] The proposed protected industrial action to be taken is set out in the Union’s draft ballot order, which appears to be identical to the protected industrial action sought and granted in matter [2015] FWC 1567, the question(s) to be put are:

“For the purpose of supporting or advancing claims made in respect of the proposed enterprise agreement with your employer, do you authorise the following types of industrial action being taken, whether separately, concurrently or consecutively:

● An unlimited number of stoppages of the performance of work for 20 minutes?

● An unlimited number of stoppages of the performance of work for 2 hours?

● An unlimited number of stoppages of the performance of work for 4 hours?

● An unlimited number of stoppages of the performance of work for 10 hours?

● An indefinite ban on the performance of overtime prior to and/or after the ordinary span of hours?”

[7] There are a number of issues for the Commission to determine when considering an application for a protected ballot order that are prescribed by s.443 of the FW Act.

“443 When the FWC must make a protected action ballot order

(1) The FWC must make a protected action ballot order in relation to a proposed enterprise agreement if:

(a) an application has been made under section 437; and

(b) the FWC is satisfied that each applicant has been, and is, genuinely trying to reach an agreement with the employer of the employees who are to be balloted.

(2) The FWC must not make a protected action ballot order in relation to a proposed enterprise agreement except in the circumstances referred to in subsection (1).

(3) A protected action ballot order must specify the following:

(a) the name of each applicant for the order;

(b) the group or groups of employees who are to be balloted;

(c) the date by which voting in the protected action ballot closes;

(d) the question or questions to be put to the employees who are to be balloted, including the nature of the proposed industrial action.”

Genuinely trying to reach agreement

[8] As required by s.443(1)(a) I am satisfied that the application made by the Union has been made in accordance with s.437. I must next consider whether s.443(1)(b) is satisfied.

[9] Section 443(1)(b) requires the Commission to be satisfied that the applicant (the Union) has been, and is, genuinely trying to reach an agreement with the employer. Coles did not submit that the application should be rejected on the basis of any lack of genuineness on behalf of the Union in trying to reach an agreement.

[10] The background to the enterprise bargaining between the parties revolves around Coles seeking to have a single national retail enterprise agreement which covers all store employees including employees otherwise eligible to be members of the Shop Distributive and Allied Employees Association (SDA). The Union initially sought a separate national meat agreement, and subsequently reverted to pursuing state based agreements that cover Coles’ meat department employees.

[11] The Union attached two witness statements made by its officials involved in negotiating the proposed enterprise agreements.

[12] Mr Grant Courtney, Secretary of the Newcastle and Northern New South Wales Branch of the Union attested to numerous meetings held between April and December 2014 most of which he attended 1 and that the Union genuinely wished to reach agreement with Coles for its members employed in meat departments in NSW and the ACT.

[13] Mr Charlie Donzow, Secretary of the Union’s NSW branch referred to more than 20 bargaining meetings held between April 2014 and November 2014 in his witness statement 2, and traversed the bargaining history between the parties. Mr Donzow stated that “Coles has consistently refused to deviate from its bargaining position” and has preferred and pursued an in-principle agreement it has reached with the SDA.

[14] Coles did not seek to cross examine Mr Donzow or Mr Courtney; as such their evidence must be accepted by the Commission as being factual.

[15] Having considered the statements of both Union officials and the fact that Coles did not argue that the Union has not been genuinely trying to reach agreement, I am satisfied that the Union has been, and is, genuinely trying to reach an agreement with Coles.

Extended Period of Notice

[16] Coles has sought an extension to the notice period a bargaining representative must provide before taking protected industrial action.

[17] Section 414(2) of the FW Act requires that written notice of any action to be taken must be provided at least 3 working days prior to the action occurring.

"414 Notice requirements for industrial action

Notice requirements—employee claim action

(1) ...

(2) The period of notice must be at least:

(a) 3 working days; or

(b) if a protected action ballot order for the employee claim action specifies a longer period of notice for the purposes of this paragraph—that period of notice.”

(my underline)

[18] Where the Commission is satisfied that there are exceptional circumstances justifying the minimum period of notice being longer than three working days, the protected action ballot order may specify a longer period of up to seven working days, see s.443(5).

“443(5) If the FWC is satisfied, in relation to the proposed industrial action that is the subject of the protected action ballot, that there are exceptional circumstances justifying the period of written notice referred to in paragraph 414(2)(a) being longer than 3 working days, the protected action ballot order may specify a longer period of up to 7 working days.”

(My underline)

[19] Coles has requested a notice period of seven working days on the basis that there are exceptional circumstances which justify an extension of time to seven days. It is therefore necessary for the Commission to examine whether or not the circumstances demonstrate something exceptional.

[20] Mr Gardner in addition to his written submissions relied on the evidence of Mr Eric Daffy the Meat Operations Manager. Mr Daffy provided a witness statement 3, to demonstrate that without an additional period of notice there is an increased risk of spoilage/wastage of meat products. Mr Daffy explained that it is not possible for Coles to suspend or cancel the livestock slaughter process as it is conducted in accordance with its three month forecast plan. Despite there being notice of protected industrial action, the supply chain continues to supply the primal product. If through protected industrial action orders at stores fall below the forecast, the primal product will then build up particularly at the Eastern Creek Distribution centre as it supplies the majority of Coles’ stores in NSW and the ACT.

[21] Mr Daffy’s witness statement and evidence in chief drew on Coles’ recent experience of protected industrial action taken by the Union in Victoria in the form of 24 hour stoppages.

[22] It was submitted that unlike Victoria there is no “Retail Ready Production Facility” in NSW and the ACT to which Coles can move its primal product to cut or “produce” in the event of a product build up in the Distribution Centre. The only option to diminish meat spoilage is to transport the primal product to Victoria or Queensland subject to these facilities having the capacity and demand to accommodate the extra product.

Conclusion

[23] The Commission hasdealt with s.443(5) applications on a number of occasions. While dealing with the equivalent provision under the Workplace Relations Act 1996 Vice President Lawlerin Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Australian Postal Corporation 4, referred to the decision of Rares J in Ho v Professional Services Review Committee No 295,5andopined the following:

"[10]In this passage his Honour was concerned with the ordinary meaning of the expression "exceptional circumstances" and the approach identified is, in my view, equally applicable to the use of that expression in s.465(3). In summary, the expression "exceptional circumstances" requires consideration of all the circumstances. To be exceptional, circumstances must be out of the ordinary course, or unusual, or special, or uncommon but need not be unique, or unprecedented, or very rare. Circumstances will not be exceptional if they are regularly, or routinely, or normally encountered. Exceptional circumstances can include a single exceptional matter, a combination of exceptional factors or a combination of ordinary factors which, although individually of no particular significance, when taken together are seen as exceptional. It is not correct to construe "exceptional circumstances" as being only some unexpected occurrence, although frequently it will be. Nor is it correct to construe the plural "circumstances" as if it were only a singular occurrence, even though it can be a one off situation. The ordinary and natural meaning of "exceptional circumstances" includes a combination of factors which, when viewed together, may reasonably be seen as producing a situation which is out of the ordinary course, unusual, special or uncommon.

[11]However, it is important to note that when considering whether to make an order pursuant to s.463(5) the Commission is not simply concerned with determining whether there are exceptional circumstances. There must be exceptional circumstances "justifying" the specification of a longer notice period. The notion of justification is critical and calls for a consideration of the purpose of the notice required by s.441."

[24] The Vice President went on to state:

"[21]Essentially, what is required in determining whether exceptional circumstances justify an extension of the required notices period is a weighing of the interests of the employer and third parties in the employer having a greater opportunity to take appropriate defensive action as against the diminution in the effectiveness of the employees' bargaining power that results from such an extension. The fact that the legislature has seen fit to condition the ordering of an extension of the required notice period on the presence of exceptional circumstances justifying it, as distinct from merely conferring a simple discretion to extend the required notice period, indicates that ordinarily there should be no extension.

[22] The first example provided in Davids Distribution provides an illustration of where exceptional circumstances may justify an extension of the required notice period. A sophisticated piece of plant, such as a smelter, may take many days to shut down without damage. The employer is exposed to wholly disproportionate damage if it is prevented by too limited a notice period from undertaking an orderly shutdown of the plant. A further example may be afforded by a strike by teachers where the school needs to be able to notify parents of the strike so as to give them an opportunity to make alternative arrangements for the care of their children on the days of the strike. Typically, three working days will be insufficient for this purpose…"

[25] The Union is entitled toobtain the maximum impact from its proposed protected industrial action within the regime of the FW Act. A three day notice period has been deemed by Parliament to be sufficient notice for an employer to take any necessary defensive action. Section 463(5) is not to be used to nullify a union’s bargaining strength, it is only where “exceptional circumstances” exist, justifying a longer period, should an extension of the notice period be ordered.

[26] Extension of notification periods have been granted on application by Coles by the Commission in previous protected ballot applications made by the Union. 6

[27] The Union argues that the spoilage of meat in itself is not an “exceptional circumstance” and must be linked to the additional spoilage of meat due to protected industrial action that occurs on a scale that warrants it being described as exceptional.

[28] Whereas Coles submits on the basis of the circumstances of supply and operation of Coles’ meat departments and the perishable nature of the product, failure to grant the extended notification period would potentially result in spoilage of primal product. This is because it is not possible to cease the livestock slaughter process on notification of protected industrial action resulting in a build up of primal product that runs the risk of becoming spoilt due to the limited shelf life of the product.

[29] It was submitted a public interest existed on the basis of the unnecessary slaughter of livestock. It was put that this damage was over and above the normal economic harm resulting from industrial action. The primary position of Coles is that there is a real risk of unnecessary wastage of product depending on the nature of the protected industrial action taken. I am satisfied that where this risk exists the circumstances are exceptional.

[30] The employees to be balloted are involved in the management of a product with a limited shelf life which is required to be delivered and processed expediently. The proposed industrial action listed in the draft ballot order is unlimited in the number of stoppages that may occur.

[31] On the evidence before the Commission, including the cross examination of Mr Daffy, I am satisfied that it is not regular, routine or normal for the unnecessary slaughter of livestock. I consider that the risk of spoilage and wastage of meat products that cannot be avoided within the standard three day notice period exists to justify an extension of the notice period. However, I am not satisfied that an extension from three to seven days is required in the circumstances. While the three day notice period may be too short a period to mitigate the unnecessary wastage of product and ultimately the unnecessary slaughter of livestock, I consider an extension from three to five days to be sufficient for Coles to take the appropriate operational action.

[32] Mr Daffy’s evidence was that there are various means of communication available to Coles to commence the process of avoiding unnecessary waste and on that evidence, a five day notice period would be sufficient.

[33] An extension of the notice period from three days to five days will be reflected in the ballot order sought.

[34] Coles has requested that the statement and evidence of Mr Eric Daffy, the Meat Operations Manager, be kept confidential for commercial reasons which the Union do not oppose. This will be recorded on the Commission’s file.

[35] A separate Order [PR563219] for a protected action ballot will issue.

COMMISSIONER

Appearances:

C Buckley for the Australasian Meat Industry Employees Union

C Gardner of Counsel, for Coles Supermarkets Australia Pty Ltd

Hearing details:

2015

Sydney

April 17.

 1   Witness Statement of Mr Courtney at (8) Exhibit A2

 2   Witness Statement of Mr Donzow at (12) Exhibit A1

 3   Witness Statement of Mr Daffy Exhibit R1

 4   [2007] AIRC 848

 5 [2007] FCA 388 (27 March 2007)

 6   AMIEU v Coles Supermarkets Australia Pty Ltd and Bi-Lo Pty Ltd [2012] FWA 2730 AMIEU v Coles Supermarkets Australia Pty Ltd[2014] FWC 8871 AMIEU v Coles Supermarkets Australia Pty Ltd [2015] FWC 1567; AMIEU v Coles Supermarkets Australia Pty Ltd [B2015] FWC 381

Printed by authority of the Commonwealth Government Printer

<Price code C, PR563231>