Australian Mines and Metals Association v Maritime Union of Australia

[2016] FWC 738

[2016] FWC 738

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.229 - Application for a bargaining order

Australian Mines and Metals Association
v
Maritime Union of Australia
(B2014/786, B2014/787, B2014/788 and B2014/795)

COMMISSIONER CLOGHAN PERTH, 31 OCTOBER 2016

Applications for Bargaining Orders.

[1] Interim Decisions have been made in relation to applications by the Australian Mines and Metals Association (AMMA) as bargaining representatives for:

● Mermaid Marine Vessel Operations Pty Ltd (Mermaid Marine) (B2014/786);
● Swire Pacific Ship Management (Australia) Pty Ltd (Swire) (B2014/787);
● Offshore Marine Services Pty Ltd (OMS) (B2014/788); and
● Tidewater Marine Australia Pty Ltd (Tidewater) (B2014/795).

[2] The Interim Decisions concerned the AMMA’s applications, pursuant to s.229 of the Fair Work Act 2009 (FW Act), for bargaining orders (Good Faith Bargaining Orders (GFBOs)) against the Maritime Union of Australia (MUA).

[3] I have been advised by AMMA that Tidewater has ceased operating in Australia and application B2014/795 is discontinued. By consent, I have issued an Order which reflects agreement between Tidewater and the MUA with respect to this matter.

[4] Mermaid Marine, Swire and OMS are referred to as Vessel Operators.

[5] In an Interim Decision, I make the observation that, “the context and particular circumstances of these applications is unusual in a number of respects.” Following a further conference, I now consider it appropriate to bring the applications to finality.

BACKGROUND

[6] Briefly,

• the Vessel Operators are vessel operators in the maritime offshore oil and gas industry in Australia;



• the offshore oil and gas enterprise agreements have a nominal expiry date of 30 or 31 July 2013;



• each of the Vessel Operators appointed AMMA as the bargaining representative in relation to bargaining for replacement enterprise agreements;



• AMMA is bargaining with the MUA as the bargaining representative for the employees; and



• bargaining for the replacement offshore oil and gas enterprise agreements commenced in December 2012/January 2013.

[7] This background is but a fraction of what has occurred leading up to and subsequent to the GFBO applications. Bargaining has been marked by negotiations in the Commission and by the MUA with AMMA, or with individual vessel operators. There have been a significant number of proceedings in the Commission and Courts. All of the proceedings have been accompanied by acrimonious public comment.

RELEVANT LEGISLATIVE FRAMEWORK

[8] I consider it useful to start with the statutory context and, in particular, Part 2-4 of the FW Act, which deals with enterprise agreements.

[9] The objects of Part 2-4 of the FW Act at s.171 are:

(a) to provide a simple, flexible and fair framework that enables collective bargaining in good faith, particularly at the enterprise level, for enterprise agreements that deliver productivity benefits; and

(b) to enable the FWC to facilitate good faith bargaining and the making of enterprise agreements, including through:

(i) makingbargaining orders; and
(ii) dealing with disputes where the bargaining representatives request assistance; and
(iii) ensuring that applications to the FWC for approval of enterprise agreements are dealt with without delay.

[10] It can be seen that the primary object of Part 2-4 of the FW Act is to “provide”, that is equip, the relevant parties with a flexible and fair framework for the making of enterprise agreements that deliver productivity benefits.

[11] The word “at” in s.171(a) of the FW Act indicates where collective bargaining is to take place - at “the enterprise level”.

[12] Having identified that Part 2-4 of the FW Act is the framework which enables collective bargaining to take place in good faith, it is necessary to ask “for what purpose?” That purpose is contained in the words, “for enterprise agreements that deliver productivity benefits”.

[13] The flexible and fair framework enshrines “collective bargaining in good faith” at the enterprise level. Put simply, the objective of Part 2-4 is to enable collective bargaining at the enterprise level through the various provisions in Part 2-4 of the FW Act.

[14] The use of the word “for” in s.171(a) of the FW Act, is to describe the prospective objective of making enterprise agreements. Put differently, the framework in Part 2-4 of the FW Act, exists for the purpose of making a prospective enterprise agreement.

[15] The design of Part 2-4 is directed towards the “destination” of an enterprise agreement – the destination is not optional, and the provisions in Part 2-4 of the FW Act are not for purposes unrelated to the making of an enterprise agreement.

[16] The objective of Part 2-4 of the FW Act in s.171(a), is complemented in s.171(b) which enables the Commission to facilitate good faith bargaining “and” the making of enterprise agreements. This facilitation includes, but is not limited to, the making of “bargaining orders”.

CONSIDERATION

[17] With respect to these applications, I am satisfied that:

• AMMA is able to make the applications for a bargaining order pursuant to the provisions of s.229(1) of the FW Act;



• AMMA has met the prerequisites to make the applications pursuant to s.229(4) of the FW Act.

[18] AMMA’s case for the GFBOs can, for convenience, be broken down into the following grounds:

• misrepresentation;



• gaming the scope clause;



• MUA pursuit of unlawful and/or non-permitted matters; and



• “surface” bargaining.

[19] Details of each ground can be found in [2015] FWC 773. I rely upon and refer, where appropriate, to that Interim Decision and [2015] FWC 8479. I now turn to each ground and whether, as asserted by AMMA, the MUA have breached the GFB requirements in s.228 of the FW Act.

Misrepresentation

[20] At paragraphs [40] to [51] of [2015] FWC 773, I set out the facts and evidence relating to wage offers put by the Vessel Operators to the MUA before concluding that I was satisfied that the “MUA strayed from reality and gave a false impression to both its members and the media as to the status of the Vessel Operators’ wage offer…” 1 Further, what is notable about the MUA misrepresentation is that it was the Union’s rationale for its members being “forced” to take proposed industrial action.

[21] At paragraphs [53] to [63] of [2015] FWC 773, I set out the facts and evidence relating to the MUA’s claim regarding foreign labour. In conclusion, I was satisfied that the MUA misrepresented the Vessel Operators’ position in bargaining. In particular, I was satisfied that the MUA projected to its members an image that did not truly reflect the factual position regarding the extent to which agreement had been reached by the parties in relation to the foreign labour claim.

[22] With respect to the movement and progress in relation to bargaining, I was satisfied that the MUA, on some, but not all occasions, misrepresented the progress and status of bargaining; see paragraphs [65] to [71] of [2015] FWC 773.

[23] Finally, at paragraphs [73] to [76] in [2015] FWC 773, I was satisfied that the MUA made judgements concerning the conduct of AMMA and the Vessel Operators which were not representative of the facts – they were a misrepresentation of the facts.

[24] In summary, having considered the evidence, I was satisfied that the MUA as bargaining representative had misrepresented the facts in a number of areas relating to bargaining between the parties.

[25] I now turn to the threshold issue of whether the MUA’s actions were consistent with its obligation to meet the GFB requirements in s.228 of the FW Act.

[26] At this point, it is useful to set out the provisions of s.228 of the FW 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.”

[27] At paragraph 228(e) of the FW Act, bargaining representatives are required to:

“refraining from capricious or unfair conduct that undermines freedom of association or collective bargaining”.

[28] The verb “refrain” means to “abstain from doing” or to “curb”; essentially, to not do something. Consequently, a bargaining representative is to not do something which is “capricious” or “unfair”.

[29] Capricious is essentially an action which is “unpredictable” or “irregular”.

[30] I now turn to whether “misrepresentation” is unfair conduct. Before doing so, it is relevant to refer to the Explanatory Memorandum (EM) to the Fair Work Bill 2008 which, at paragraph 951, states:

“951. The good faith bargaining requirements are generally self-explanatory. The last requirement, ‘refraining from capricious or unfair conduct…’ is intended to cover a broad range of conduct.”

[31] “Misrepresentation” is essentially to give a false account or impression. The falsehood occurs in speech or narrative and is usually dictated by the portrayer’s self-interest. The unmasking of this falsehood is evidence to the contrary, as in this case.

[32] The MUA submit that its communication with its members and the media is a matter for it and not the AMMA or the Vessel Operators. I disagree.

[33] The MUA’s comments are within the context of being a bargaining representative and related to bargaining with the Vessel Operators for replacement enterprise agreements.

[34] I am satisfied that misrepresentation is unfair conduct.

[35] I now turn to whether the misrepresentation engaged in by the MUA relevantly undermines collective bargaining.

[36] The EM states at r.169 that:

“Good faith bargaining requirements aim to ensure that all bargaining representatives act in an appropriate and productive manner when working towards a collective agreement. The requirements also facilitate improved communication between bargaining representatives, which is expected to reduce the likelihood of industrial action.” (my emphasis).

[37] I am satisfied from the facts and evidence relating to the instances of MUA misrepresentation set out in detail in [2015] FWC 773 was neither appropriate nor productive, and undermined collective bargaining to achieve replacement enterprise agreements.

[38] Misrepresentation to the extent set out above was not proper. The misrepresentation was false or materially incorrect. The misrepresentation, in my view, destabilised and impaired the trust and confidence necessary in negotiations to achieve replacement agreements.

[39] Having been satisfied that the instances of misrepresentation by the MUA were a breach of the good faith bargaining requirements in s.228 of the FW Act, it is necessary to consider the provisions of s.230 of the FW Act.

[40] I am satisfied that the application has been properly made (s.230(1)(a)). I am satisfied that the requirements in s.230 have been met (s.230(1)(b)). Consequently, it is necessary to consider whether it is reasonable in all the circumstances to make a bargaining order as sought by AMMA (s.230(1)(c)).

[41] In [2015] FWC 773, I advised the parties that I had not come to a conclusive view, because the lapse in time, on whether to make a bargaining order and sought the parties’ submissions on the issues.

[42] AMMA submitted that the orders are necessary to redress the impact of the MUA’s misrepresentation and to re-establish AMMA’s position in bargaining as a result of the MUA failing to adhere to its GFB obligations.

[43] The MUA adopted the view that, in view of the lapse of time, there is no utility in the Commission making bargaining orders.

[44] This application has similar parallels with TWU v Veolia Transport Queensland Pty Ltd [2011] FWA 569 in which the TWU sought to correct misinformation distributed by the employer. In that Decision, it was said that any bargaining representative, including an employee organisation making incorrect or misleading statements, runs the risk of breaching the GFB requirements of the FW Act.

[45] In CFMEU-Mining Division v Tahmoor Coal Pty Ltd (Tahmoor)[2010] FWAFB 3510, the CFMEU sought a bargaining order that the employer cease sending material to employees unless agreed to by the parties. The reason for the CFMEU seeking such an order was that:

“…such a communication is capricious or unfair conduct that undermines collective bargaining if it is designed to encourage a different view within that group of employees than that put forward by a bargaining representative on behalf of that group of employees”. 2

[46] The same argument is now being advanced by AMMA for the same reason. While the Full Bench in Tahmoor came to the finding that the communication by the employer “does not appear to have been misleading or inconsistent with anything said in the bargaining meetings” 3, the same cannot be said of the MUA’s correspondence to its members. Further, I detect from the Full Bench decision that it may have taken a different view if the communication had been misleading and/or inconsistent with the bargaining meetings.

[47] While Commissioner Asbury, as she then was, dismissed an application by the employer in Junipers Limited v United Voice[2011] FWA 8317, she made the following observation:

“[38] As a general proposition, I accept that a union as bargaining representative for its members has an obligation to accurately and fairly report to them on the progress of bargaining, including various offers that may be conveyed by the employer and that this is encompassed by the good faith bargaining obligations. I also accept that this is a significant obligation, given that members of Unions generally have trust and confidence in the integrity of officials and employees of Unions who are representing them in bargaining for an enterprise agreement.”

[48] I agree.

[49] Commissioner Asbury went on to say:

“[40] Accordingly a deliberate misrepresentation made by an employee or official of a union that is a bargaining representative, in relation to the negotiations, or the position of another party in those negotiations, could trigger FWA’s discretion to make a bargaining order to correct the misrepresentation, on the basis that it has unfairly undermined collective bargaining.”

[50] Having considered all the circumstances relevant to this application, I am satisfied that it is reasonable to make a bargaining order.

[51] I now turn to the form of the order.

[52] I make the preliminary observation that bargaining orders by the Commission should facilitate the GFB requirements and the making of enterprise agreements.

[53] In my view, it is also necessary to consider, if appropriate, the consequences associated with a bargaining representative not meeting the GFB requirements.

[54] The consequences of the misrepresentation by the MUA to its members and others has done, at least, two things Firstly, on any reasonable conclusion, the misrepresentation has led MUA members to believe, wrongly, the position of Vessel Operators, on certain claims and the status and progress in bargaining. Secondly, MUA members, in all likelihood, will have a propensity to consider future positions of Vessel Operators from this untruthful starting point. For this reason, I consider it necessary that any order address both the initial cause of a breach of the GFB requirements, its probable consequences and the necessity to avoid such a situation in the future.

[55] While I will make an order which requires the MUA, when communicating with its members and the media, to refrain from misrepresenting the position of the Vessel Operators of its claims or the status and progress of bargaining, I emphasise to the AMMA that my order does not prevent the MUA communicating with its members or the media. Further, it does not prevent the MUA from making fair comment on bargaining, however, misrepresentation or false statements by the MUA are contrary to the GFB requirements. This difference, hopefully in the future, will not become a source of dispute
[56] I now turn to the issue of gaming the scope clause.

Gaming the scope clause

[57] In the MUA’s submission relating to Interim Decision [2015] FWC 8479, the MUA submit that in the absence of any findings in relation to this ground for the GFBOs, I have no power to make a bargaining order for any purpose.

[58] With respect to this ground, I refer to paragraphs [91] to [118] of Interim Decision [2015] FWC 773.

[59] My conclusion at paragraph [99] of [2015] FWC 773 is that the MUA, by narrowing the scope clause, is not engaging in capricious and unfair conduct contrary to the GFB requirement in s.228 of the FW Act.

[60] While I am of the view that AMMA and the Vessel Operators have good reasons to doubt the veracity of the MUA’s justification for narrowing the scope, I am not prepared to make an order with respect to this issue. I now turn to the next matter.

[61] AMMA submit that compliance with the GFB requirements cannot exist if the MUA require Chevron be involved in bargaining for the replacement agreements.

[62] The parties met on 3 and 8 April 2014. Among those present were Mr Cain, Western Australian Branch Secretary, Mr Tracey and Mr Webber, the then Chief Executive Officer of Mermaid Marine.

[63] On 11 April 2014, Mr Webber sent correspondence to Mr Cain. The correspondence is entitled “Offshore Enterprise Agreement Negotiations”. The correspondence contains the following statement:

“… I confirm that the vessel operators will honour the CEO’s commitment to explore solution(s) to that issue (MUA’s scope claim). We are already progressing our considerations of any possible solution(s) to that issue, including engagement with the necessary stakeholders…” 4

[64] Four (4) days later on 15 April 2014 Mr Cain replied to Mr Webber. The reply included the following:

“… Unfortunately your letter does not reflect our understanding of the outcomes of recent meetings…

…As discussed at the meetings, the MUA remain of the view that the only solution to its scope claim is to exclude the downstream component of the Gorgon project from the scope of the offshore agreement, but as indicated we are willing to give genuine consideration to any alternative solution that the employers may develop in consultation with the necessary stakeholders. Indeed, it was on this basis that the process going forward was agreed …” (My emphasis)

[65] Further,

“The negotiation process going forward…

Our understanding of the outcomes of the meetings of 3 and 8 April 2014 in terms of the negotiation process going forward is as follows:

1. A smaller group of VO CEO’s will meet with CC, Will Tracey and Mick Doleman to discuss and narrow down the outstanding matters.
….
At the meeting on 8 April the “smaller group” referred to in Point 1.1 (with the exception of Mick Doleman) met with a view to narrowing down the outstanding matters.

2. The parties identified that the scope claim is a significant barrier to reaching agreement and that it will be difficult for the parties to find a resolution on without the client, Chevron, in the room.

3. The parties therefore agreed to defer any further negotiations (whether between the smaller group or in the Fair Work Commission (FWC) until discussions were held between the smaller group and Chevron.” 5

[66] Mr Webber in his correspondence of 11 April 2014 indicated that, notwithstanding their intention to engage with “necessary stakeholders”, discussions with Mermaid Marine’s stakeholders were not intended to replace the negotiation process in the Commission.

[67] Mr Cain in his response of 15 April 2014 accuses Mermaid Marine of withdrawing from the commitment to the process involving the “smaller group”.

[68] Finally, Mr Cain states:

“Without the referral of the outstanding matters to that forum of the key decision makers, being the smaller group and Chevron (where discussions relate to the scope claim), we are concerned that the prospect of successful negotiations are significantly diminished and question the utility of further industry negotiations”. 6

[69] From the exchange of correspondence, any fair reading is that Mr Webber had agreed to discuss the MUA’s scope claim with “necessary stakeholders”, which presumably would include Chevron. However, for the MUA, its understanding of the process was:

• bargaining would now take place within the “smaller group” and replace “industry negotiations”;



• further industry negotiations would be deferred “until discussions were held between the smaller group and Chevron”; and



• it would be difficult for the parties to find a resolution to the MUA’s scope claim without “Chevron in the room”.

[70] Mr Cain, in his correspondence of 15 April 2014, uses the expression “I understand”. When considering what “I understand” means, it is necessary to consider the circumstances in which his correspondence was written and its entire content.

[71] Firstly, the use of the word “understand” is intended to reflect what was agreed between the parties at the meetings. However, as the parties differ on what was agreed at the meetings, it cannot be said that there was a common understanding.

[72] In the absence of common understanding of what was agreed, it is not unusual for a party to substitute its desired outcome with the prefix “I understood”. The expression “I understood” is a substitute for the desired “outcome” sought by that party. Simply put, “I understood” is often a reformulation of what the party is seeking.

[73] In these circumstances, I am satisfied that Mr Cain was describing, in his correspondence of 15 April 2014, what conditions would attach to progressing negotiations. The conditions were: a “smaller group” replacing industry negotiations in the Commission. Secondly, further negotiations on replacement agreements be deferred until Chevron is in the same room for discussions on the MUA’s scope claim.

[74] I do not consider restructuring the bargaining group or having discussions take place outside the Commission, a failure to meet the requirements of s. 228 (1) of the FW Act. However, I am satisfied that the MUA was making Chevron a “key decision maker” and its attendance necessary at bargaining meetings on the MUA’s scope claim. In its attribution of Chevron as a key decision maker, and making their attendance necessary, I am satisfied that the MUA was “not refraining from unfair conduct that undermines collective bargaining”.

[75] It is not in dispute that Chevron has an interest in these negotiations. However, they are not a party to the bargaining for the replacement enterprise agreements. In my view, it is a reasonable inference from Mr Cain’s correspondence that, for the MUA, on the issue of its claim regarding scope, Chevron had to be present and have a role of decision maker. In the circumstances, Chevron representatives would have inevitably become involved, as a third party, in the scope claim for the replacement agreements but possibly on discussions concerning the conditions of employment for the Gorgon Project downstream employees.

[76] Why was the MUA’s condition of Chevron becoming part of the bargaining group and decision maker regarding scope, contrary to the GFB requirements? Simply because the Vessel Operators no longer have the freedom to bargain unrestrained but conditioned by a third party, not directly related to these negotiations and not a bargaining representative, being in attendance. Such conduct is inimical to Part 2-4 of the FW Act.

[77] In conclusion, with respect to this conduct, I am satisfied that MUA did not meet the GFB requirements in s. 228(1)(e) of the FW Act. However, in view of the fact that the “smaller group” and Chevron did not meet, I am satisfied that although the MUA’s condition may have breached the GFB requirements, any consequence of that breach was inconsequential and it is not necessary to make any order pursuant to s.230 of the FW Act.

[78] I now turn to the issue of whether the MUA are pursuing unlawful and/or non-permitted matters.

Is the MUA pursuing unlawful and/or non-permitted matters?

[79] For the reasons set out in paragraphs [117] to [124] in [2015] FWC 773, I am not satisfied that the MUA is pursuing unlawful and/or non-permitted matters.

“Surface” bargaining

[80] The Vessel Operators allege that the MUA has been “surface” bargaining as a result of the following conduct:

• seeking to change negotiating forums on the purported basis that this would lead to “real progress” being made but which, in reality, delays progress;



• reneging on a commitment to narrow or package its claims;



• reneging on “in-principle” agreements reached between the parties;



• failing to give genuine consideration to proposals put by or on behalf of the Vessel Operators and failing to give proper reasons for responses;



• engaging in an attempt to delay, derail and/or protract negotiations; and



• key decision makers and negotiators failing to attend or properly participate in Commission conferences and or bargaining meetings with little, if any, notice.

[81] The Vessel Operators submit that it is an “inescapable” conclusion that the MUA has been maintaining an external impression of trying to conclude an agreement, while at the same time, frustrating and delaying the conclusion of an agreement. 7

[82] AMMA rely upon the Full Bench decision in Endeavour CoalPty Ltd
v Association of Professional Engineers, Scientists and Managers, Australia (Collieries’ Staff Division) [2012] FWAFB 1891 (Endeavour Coal)for the meaning of surface bargaining. Surface bargaining it submits is “bad faith bargaining” (ref) The Full Bench in Endeavour Coal stated:

“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.” 8

[83] To begin consideration of this ground for making bargaining orders, I make two observations. Firstly, Mr Tracey’s written evidence that bargaining for the replacement agreement is one of his “vital responsibilities” 9. Secondly, that the parties to the current agreements, agreed that bargaining for replacement agreements would commence eight (8) months prior to their nominal expiry dates; this reasonably demonstrates a commitment to finalise a replacement enterprise agreement prior to its nominal expiry date.

[84] I now turn to the matters alleged.

Different negotiating forums

[85] It would be fair to say that bargaining has occurred with individual vessel operators, collectively with vessel operators, collectively within the Commission and by selected CEOs with national and state MUA officials. Further, as I have already found, an attempt was made to have discussions involving a “third” party, Chevron. Finally, it could be said that bargaining has been attempted through the media.

[86] An examination of the current enterprise agreements reveals what could be described as an “industry framework”. However, for good reasons, there are individual differences with different employers. Consequently, there is the inevitability of a small component of individual discussions necessary between different vessel operators. However, that is not the primary complaint of the Vessel Operators.

[87] The essence of the Vessel Operators’ complaint is “forum shopping” of the MUA. The Vessel Operators are of the view that if bargaining is not progressing consistent with the MUA’s desired objectives in one forum, it moves to another forum. While this relocation comes under the MUA’s “tag line” of achieving real progress, the compelling outcome is that it has led to delays in finalising replacement enterprise agreements.

[88] The Vessel Operators submit that “forum shopping” delays and frustrates the making of replacement enterprise agreements. The MUA assert that by relocating bargaining, it will enhance the prospects of achieving replacement agreements.

[89] The Vessel Operators’ bargaining representative is AMMA. An essential feature of the GFB requirements is recognising and bargaining with the other bargaining representative. Any attempt to involve a third party in bargaining is not in compliance with the GFB requirements. Bargaining should occur in a forum where, as in this case, the MUA and AMMA are in attendance.

[90] Bargaining is at the “heart” of the process of making replacement agreements. Posturing that “real progress” will be made in another forum has certainly not led to the outcome suggested by the MUA. For this reason, the Vessel Operators complain that such conduct is simply a strategy to frustrate and delay the creation of replacement agreements.

[91] The frustration is best illustrated by the MUA’s position as set out on 3 December 2013 which, after nearly 12 months of negotiations, reads:

“Enterprise – level negotiations

…We understand that “the agreement and wage proposal dated 7 November 2013 is the exhaustive position put on behalf of each of the VOs that AMMA represents in this bargaining”. Of course we do not have to accept that position…

We are comfortable with the VOs’ position as per paragraphs (a) to (c) of your email below…That said, the MUA is not required to submit totally to an industry-level negotiation and the Act discourages us from doing so (I refer to the pattern bargaining provisions). The purpose of my email was simply to reiterate [the MUA is] responding to the proposals put forward by AMMA on behalf of its clients collectively, ultimately the MUA is required to reach agreement with reach of the employers on an individual basis (with the AMMA as their bargaining representative where applicable) and we will continue to seek to do so.

On that note, we are disappointed that progress that we had made with individual employers on particular claims appears to have been undone in the draft AMMA draft. Hence a number of our comments in the attachment refer to discussions with individual employers indicating that in regard to those matters we understood that we had agreement with individual employers and we assume that their agreement was given in good faith and will not be retraced as part of this collective drafting process.” 10 (my emphasis)

[92] Essentially, the MUA is asserting that it is comfortable with industry negotiations but at the same time having individual enterprise level negotiations. When AMMA, as bargaining representative, puts the collective position on behalf of all Vessel Operators, the MUA responds with what it understands to be the position of an unnamed vessel operator and what has been agreed with that unnamed vessel operator which “will not be retracted as part of this collective drafting process”.

[93] It is difficult to conclude that such a process is not unfair and undermines collective bargaining. For the MUA to commit to industry negotiations and then respond to employer collective proposals, with individual enterprise understandings, is akin to AMMA asserting that the MUA’s position is what AMMA has agreed to, with an individual employee.

[94] The MUA’s bargaining process of combining industry level negotiations with an individual enterprise response, is justified by reference to the pattern bargaining provisions in the FW Act. This appears to “wanting your came and eating it”. The MUA also express justification that the Union is ultimately required to “reach agreement with each of the employers on an individual basis”. While that is certainly true, it leads to the observation that if the MUA is acutely aware of bargaining obligations under the FW Act, why it is not carrying out individual enterprise bargaining with individual vessel operators with AMMA as the bargaining representative, and not seeking comparable conditions across the industry. Collective bargaining across an industry is about uniformity and not a process of pressing for what certain employers are prepared to agree to, on an individual basis.

Reneging on commitment by MUA to narrow or package its claims

[95] Mr Tracey concedes in his evidence that he gave a commitment to both the Vessel Operators and the Commission, that the MUA would narrow or package its key claims. 11

[96] In response to the AMMA’s assertions, his evidence proceeds as follows:

“However, as at the dates of those conferences [where the commitment was given], the meeting with the CEOs had been scheduled and I believed that the meeting would involve the Vessel Operators coming to the table with something that would give the MUA cause to revise its claims…[this] did not happen.” 12

[97] Clearly, Mr Tracey’s evidence is a case of versatility with the MUA’s commitment to narrow or package its claims; little more can be said.

[98] The MUA’s commitment was given without any conditions. Secondly, the commitment, according to the Union, became dependent in an event post the commitment. Thirdly, a commitment which could be reneged upon based on Mr Tracey’s belief of what others would do.

[99] I am not persuaded by Mr Tracey’s suppleness regarding the circumstances which led to the MUA reversing its commitment to narrow and package its claims. I find that such behaviour is inconsistent with the GFB requirements and the actions which undermine collective bargaining.

Reneging on “in-principle” agreement

[100] AMMA have referred to two particular examples: the foreign labour and dispute settlement procedure (DSP) clauses in bargaining.

[101] On the evidence, I am satisfied that the MUA changed its position on where the foreign labour provision would be located in the proposed replacement agreements but did not renege on the content of the proposed clause.

[102] With respect to the DSP, I consider the MUA’s revision more than just “machinery” matters 13 and an unpersuasive rebuttal of the evidence given by Mr Wakelin.14

[103] I am satisfied that recanting on an agreement previously reached in-principle, is an abrogation of a bargaining representative’s obligation under the GFB provisions in the FW Act. Further, it is demonstrative of not meeting the provisions of s.228(1)(e), which is to refrain from unfair conduct undermining collective bargaining.

[104] While I have given focus to the two examples set out by the AMMA and responded to by the MUA, further evidence was given by Mr Wakelin and Mr O’Brien on this issue. 15

Failing to give genuine consideration to proposal put by or on behalf of the Vessel Operators and failing to give proper reasons for responses

[105] AMMA, in making the submission that the MUA failed to give proper consideration to the Vessel Operator’s proposals, concede that the MUA “technically provided responses…However, the [MUA’s] responses have merely reiterated the [MUA’s] previously stated position or added comments on minor and insignificant matters”. 16

[106] The MUA deny the assertion and contend that AMMA did not give genuine consideration to its proposals. 17

[107] While the detail of the evidence is supportive of AMMA’s claim, I am inclined to view that the MUA were passive in their responses to AMMA’s proposals.

[108] The FW Act provides that parties are not required to make concessions and reach agreement on terms to be included in an agreement. This concept of “hard bargaining” invites bargaining representatives to go through the motions and talk each other into paralysis without any progress on an enterprise agreement; what some have described as the “wheel of death”. In my view, this is what has happened.

[109] I am unable to agree that the MUA have breached its GFB obligations in s.228(1)(e) of the FW Act. 18 However, if parties, including the MUA, exercise the option in s.228(2) and resolutely adopt that approach, it appears to me inconsistent with the policy position in Part 2-4 of the FW Act to facilitate the making of enterprise agreements, and is a case of the “tail wagging the dog”.

Unreasonable and unjustifiable delays in negotiations

[110] The GFB requirements do not require a party to bargain at a particular pace. However, once bargaining has commenced, it is reasonable to assume that the bargaining representatives would proceed with a positive purpose to conclude negotiations as early as possible. It is now nearly four (4) years since bargaining commenced. One employer has ceased operations in Australia and the remaining employers have either not reached agreement or, in one case, the replacement enterprise agreement has not completed the approval processes within the Commission.It is reasonable to assume that such a pace was never intended by the legislators.

Key decision makers and negotiators failing to attend or properly participate in Commission conferences and/or bargaining meetings with little, if any, notice

[111] My consideration of this “ground” can be briefly disposed of as follows.

[112] It is recognised that over the course of negotiations, circumstances will arise where the parties’ representatives are unable to attend. It is a fact of life and not limited to enterprise bargaining.

[113] The alternative to “putting up” with changes in personnel, is postponement and delay. It is a case of which is the lesser evil.

[114] I am not prepared to find that Mr Tracey’s inability to attend certain meetings contributed to “surface” bargaining. While, on some occasions, his non-attendance may have been convenient to the MUA, in view of the overwhelming evidence of his attendance at meetings, I am not prepared to find it was a deliberate tactic to undermine collective bargaining.

CONCLUSION AND ORDER

[115] For the reasons set out above, I am satisfied that the MUA’s conduct has not met the good faith bargaining requirements set out in s.228 of the FW Act. Accordingly, orders should be made.

[116] A person or organisation having the power of a bargaining representative has obligations. A bargaining representative, whether a person or organisation, must exercise their rights under the FW Act in good faith. It is not necessary to determine whether the party acted in “bad faith”; what is necessary is to determine whether the party conducted themselves in a manner, which the disinterested observer, would see as honest, reasonable and fair. Parties in enterprise bargaining, notwithstanding its adversarial nature, should display conduct directed towards concluding an agreement and not something to the contrary.

[117] Former Prime Minister, R L J Hawke Sr. AC, GCL, said in 1979 that, in maximising the chances of honourably resolving conflict in negotiations, the parties should:

• be honest about one’s own position and a sense of reality in terms of understanding the position of the other side. 19

[118] Our former Prime Minister knew a thing or two about resolving conflict and his guidance remain useful. Guidance which, if adopted, would have assisted in these negotiations.

[119] The Explanatory Memorandum (EM) to the Fair Work Bill 2008 provides assistance regarding the role of the Commission in facilitating bargaining. At paragraph 946 it states:

“946. It is anticipated that most bargaining representatives will bargain voluntarily and cooperatively without the need for assistance or intervention from FWA. In the occasional cases where this is not occurring, the Bill provides mechanisms for FWA to facilitate bargaining and, where necessary, make orders to ensure the integrity of the bargaining process.”

[120] The word “integrity” conveys the notion of “honesty” and “uprightness”. In the context of enterprise bargaining, it is about the parties bargaining without the process being impaired or corrupted by statements which are untrue and which unfairly affect collective bargaining; it is in these circumstances that orders must and should be made.

[121] The MUA’s misrepresentation also has to be seen within the context of the scheme of the FW Act in which, in a practical sense, the Union is the exclusive entity in bargaining. MUA members should be able to rely upon being accurately informed of bargaining, especially as they may take protected industrial action in the future, on the basis of what they have been told leading up to any proposal.

[122] In conclusion, when the above matters are taken together and considered, they provide a sound basis for the Commission being satisfied that the MUA have not met the good faith bargaining requirements in s.228(1)(e) of the FW Act and in accordance with s.230(1)(c) of the FW Act, I am satisfied that it is reasonable to make the orders issued jointly with this Decision.

COMMISSIONER

 1   [2015] FWC 773 at paragraph [52]

 2   CFMEU-Mining Division v Tahmoor Coal Pty Ltd paragraph [19]

 3   Ibid paragraph [31]

 4   Exhibit A6 (46)

 5   Exhibit A6 (50)

 6   Exhibit A6 (49)

 7   Outline of submissions (paragraph 75)

 8   Endeavour Coal paragraph [30]

 9   Exhibit R5 (117)

 10   Exhibit R6 (36)

 11   Exhibit R5 (87)

 12   Exhibit R5 (87)

 13   Exhibit R5 (100)

 14   Exhibit A3 (31(a))

 15   Exhibit A2 and A3

 16   Outline of Submissions (96)

 17   Exhibit R5 (106)

 18   Outline of Submission (98)

 19   The Resolution of Conflict, 1979 Boyer Lectures

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