Australian Manufacturing Workers' Union v Gilbarco Australia Pty Ltd

[2022] FWC 2581

[2022] FWC 2581

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

s.739—Dispute resolution

Australian Manufacturing Workers’ Union
v

Gilbarco Australia Pty Ltd

(C2022/3843)

DEPUTY PRESIDENT COLMAN MELBOURNE, 27 SEPTEMBER 2022

Dispute arising under an enterprise agreement – whether renegotiation clause requires negotiations for an agreement with the same geographic coverage as current agreement – dispute determined

1. The Australian Manufacturing Workers’ Union (AMWU) has referred to the Commission a dispute for determination under s 739 of the Fair Work Act 2009 (Act) and the dispute resolution procedure in the Gilbarco Australia Pty Ltd (Victorian Branch) Service Fitters, Calibrators and Installers Enterprise Agreement 2021 (2021 Agreement). The dispute is about the application of clause 21, which concerns the commencement of negotiations for a new agreement. The AMWU contends that the effect of clause 21 is that the respondent, Gilbarco Australia Pty Ltd (Gilbarco), must negotiate for a replacement agreement that, like the 2021 Agreement, applies only to employees in the state of Victoria. Gilbarco contends that clause 21 does not say anything about the scope of a new agreement, and that it has complied with the clause by commencing negotiations for a proposed new agreement with national coverage.

1. The 2021 Agreement was approved on 22 October 2021 and will reach its nominal expiry date on 31 December 2022. The AMWU is covered by the 2021 Agreement because, as noted in the approval decision, it was a bargaining representative for the agreement and gave notice to the Commission under s 183 of the Act that it wanted to be covered by it. The dispute resolution procedure is found in clause 18 of the 2021 Agreement. It applies to ‘any issue in dispute’. Clause 18(k) states that, if the matter is not resolved in conciliation, the Commission shall resolve the matter by arbitration. It is common ground, and I am satisfied, that the Commission is authorised to determine the present dispute.

1. The application was the subject of conciliation before Deputy President Clancy however the dispute was not resolved and the matter was referred to me for arbitration. I directed the parties to file submissions and any evidence on which they sought to rely, and the parties complied with my directions. The evidence contained in the witness statement of Ms Bunting, Gilbarco’s human resources director, largely comprised correspondence. The evidence of Mr Sezai, the AMWU’s organiser responsible for negotiating a new agreement with Gilbarco, was not contentious. The parties did not seek to cross-examine each other’s witnesses. They requested that the Commission determine the application on the papers. I consider that it is appropriate to do so.

1. Clause 21 is titled ‘Renegotiation of Agreement’ and states:

“All parties to this Agreement commit to commencing the negotiation process for any subsequent Agreement at least 2 months prior to the expiry of this Agreement.”

1. The AMWU considers that the effect of clause 21, when read in conjunction with the coverage provision in clause 3, is to require Gilbarco to commence negotiations for an enterprise agreement that will apply only to employees in Victoria. Clause 3 of the 2021 Agreement states that it applies to ‘Gilbarco Australia Pty Ltd (Victorian Branch) … and all employees employed in Victoria, engaged as service fitters, calibrators and installers in classifications within the Manufacturing and Associated Industries and Occupations Award 2020’ (emphasis added). The AMWU submits that clause 21 requires Gilbarco to commence negotiations ‘as the Victorian Branch’ of the company, and that instead Gilbarco has sought to commence negotiations as a ‘national entity’. The AMWU contends that it is open to Gilbarco to negotiate for a national agreement later, but that first negotiations must commence ‘between the parties’. It contends that these parties are the AMWU and the Victorian branch of Gilbarco, and that therefore negotiations must relate to a proposed agreement covering employees in Victoria only.

1. The AMWU asked the Commission to answer the following question in the affirmative, in resolution of the dispute:

“Do the parties, as defined by clause 3 of the Agreement, have an obligation to commence the negotiation process for any subsequent Victorian Agreement?”

1. This question is defective, because it makes false assumptions. Nevertheless, I will answer it. The answer is ‘no’. Clause 3 does not define the ‘parties’. It specifies to whom the 2021 Agreement applies. Even if clause 3 did define the ‘parties’, the employer party is Gilbarco Australia Pty Ltd. The Victorian branch of the company is not a legal entity. It is an internal organisational unit of the company. It cannot engage in enterprise bargaining or undertake any other kind of legal activity under the Act. The Victorian branch of Gilbarco can no more be ‘party’ to an enterprise agreement than the company’s human resources department.  

1. The issue that is in dispute is whether clause 21 requires Gilbarco to commence negotiations for a new enterprise agreement that applies to its Victorian operations only. This is the question that should be answered to resolve the dispute. The answer to this question is also ‘no’. Nothing in the text of clause 21 or its context supports the AMWU’s contention. Clause 21 simply does not say that Gilbarco must commence negotiations for an enterprise agreement with a scope that is confined to Victoria. The clause places no limitation on the scope or content of negotiations for a new agreement. It is concerned with the commencement of the ‘negotiation process’ for ‘any subsequent Agreement’. The parameters of future negotiations are wide open.

1. Clause 21 states that the ‘parties’ will commence negotiations for any new agreement at least 2 months before the nominal expiry date. The word ‘parties’ is not defined, nor does it have any recognised technical meaning. Under the Act, there are no ‘parties’ to non-greenfields enterprise agreements, unlike the arrangements that applied under the Workplace Relations Act 1996. Rather, an enterprise agreement is made with employees when they vote to approve the agreement under s 182. An agreement covers the relevant employer and employees and applies to them, pursuant to ss 52 and 53. The reference to ‘parties’ in clause 21 is plainly just a lay reference to those who are covered by the 2021 Agreement: Gilbarco Australia Pty Ltd, the AMWU and employees. Why do the words ‘Victorian branch’ appear in clause 3(a) after the name of the company? Probably to reflect the fact that the 2021 Agreement only applies to Gilbarco’s operations at Keilor Park Drive in Tullamarine in Victoria.

1. The AMWU contended that its argument was supported by a decision of the Full Bench of the Australian Industrial Relations Commission in Re Australasian Meat Industry Employees Union (2004) PR952544. In that case, the Full Bench quashed a decision of a single member to terminate a collective agreement because the member had failed to consider the significance of a clause in the agreement which stated that the wages and conditions in the agreement would continue to apply following the expiry date, and that the parties would commence negotiations for a new agreement no later than six months prior to the expiry date. This decision has no relevance to the present matter. 

1. The AMWU submitted that the 2021 Agreement is replete with references to Victoria and that this is a contextual matter that assists its interpretation. I reject this contention. Of course the 2021 Agreement has references to Victoria. It applies only in Victoria.

1. The AMWU contended that it would be contrary to the public interest not to give effect to its interpretation of clause 21. This is not the case. The AMWU’s interpretation is plainly wrong. It would be contrary to the public interest to ignore the text of the 2021 Agreement and instead to strain for an outcome that the instrument does not deliver.

1. Mr Sezai said in his witness statement that the entire Victorian workforce had endorsed bargaining for a new agreement that covers Victoria only, and that employees had rejected the proposal to commence negotiations at the national level. I accept his evidence. But this does not mean that the company is required by clause 21 to commence negotiations for a new Victorian agreement. Mr Sezai said that the workforce believes that the 2021 Agreement does require this. They are very much mistaken. Mr Sezai said that Gilbarco had provided the union and employees with a proposed national classification structure, but that it was unclear how the current Victorian structure would translate into the new structure. He said that negotiations at the national level would be complicated by the involvement of other branches of the AMWU and another union. But these are arguments about the industrial merit of the employees’ desire to negotiate a Victorian agreement. They are not relevant to the present application because they do not affect the objective meaning of clause 21 of the 2021 Agreement.

1. I make two final observations. First, clause 21 requires the commencement of negotiations ‘at least 2 months prior to the expiry of this Agreement.’ The nominal expiry date is 31 December 2022. There can be no question of a contravention of this clause until 1 November 2022. Secondly, if the AMWU believes that bargaining for a new agreement is not proceeding efficiently or fairly, and that the reason for this is that the agreement will not cover appropriate employees or will cover employees that it is not appropriate for the agreement to cover, it may apply for a scope order under s 238.

Conclusion

1. The question for determination, properly framed, is whether clause 21 requires Gilbarco to commence negotiations for a new agreement that applies only in Victoria. The answer to this question is ‘no’. The dispute is so determined.

DEPUTY PRESIDENT

Determined on the papers

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