Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union known as the Australian Manufacturing Workers’ Union (AMWU)
[2011] FWA 1328
•4 MARCH 2011
[2011] FWA 1328 |
|
DECISION |
Fair Work Act 2009
s.437 - Application for a protected action ballot order
Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union known as the Australian Manufacturing Workers’ Union (AMWU)
(B2011/2589)The Australian Workers' Union
(B2011/2590)
v
Premium Wine Brands Pty Ltd
COMMISSIONER HAMPTON | ADELAIDE, 4 MARCH 2011 |
Applications made for protected action ballots of employees of Premium Wine Brands Pty Ltd - related applications joined - whether applicants genuinely trying to reach an agreement - approach discussed - whether significant claim or failure to change and/or fully disclose positions means not genuine - whether ballot applications premature.
The Background
[1] The Australian Workers’ Union (the AWU) and the Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union known as the Australian Manufacturing Workers’ Union (the AMWU) (collectively the applicant unions) have each made application pursuant to s.437 of the Fair Work Act 2009 (the Act) for a protected action ballot to be undertaken by their members at Premium Wine Brands Pty Ltd (Premium Brands or the employer).
[2] The applications generally rely upon the same circumstances and have been joined and heard together.
[3] During the course of a hearing conducted in relation to this application on 1 March 2011, the employer opposed the granting of the proposed orders. The employer contended in particular that the applicant unions were not genuinely trying to reach an agreement and that the applications were premature. There was no contest however that the applicant unions were otherwise eligible to bring these applications.
[4] In light of the statutory directive in s.441 of the Act, and having considered the matter and all of the material as filed 1, on 2 March 2011 I advised the parties of my determination and issued a protected action ballot order (PR507186). In so doing, I indicated that I would subsequently issue reasons for decision, which I now do.
The immediate statutory provisions
[5] The Act provides relevantly as follows:
“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 FWA 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) Subsection (1) does not apply if the proposed enterprise agreement is:
(a) a greenfields agreement; or
(b) a multi-enterprise agreement.
Matters to be specified in application
(3) The application must specify:
(a) the group or groups of employees who are to be balloted; and
(b) the question or questions to be put to the employees who are to be balloted, including the nature of the proposed industrial action.
(4) If the applicant wishes a person other than the Australian Electoral Commission to be the protected action ballot agent for the protected action ballot, the application must specify the name of the person.
Note: The protected action ballot agent will be the Australian Electoral Commission unless FWA specifies another person in the protected action ballot order as the protected action ballot agent (see subsection 443(4)).
(5) A group of employees specified under paragraph (3)(a) is taken to include only employees who:
(a) will be covered by the proposed enterprise agreement; and
(b) are represented by a bargaining representative who is an applicant for the protected action ballot order.
Documents to accompany application
(6) The application must be accompanied by any documents and other information prescribed by the regulations.
438 Restriction on when application may be made
(1) If one or more enterprise agreements cover the employees who will be covered by the proposed enterprise agreement, an application for a protected action ballot order must not be made earlier than 30 days before the nominal expiry date of the enterprise agreement, or the latest nominal expiry date of those enterprise agreements (as the case may be).
(2) To avoid doubt, making an application for a protected action ballot order does not constitute organising industrial action.
…
440 Notice of application
Within 24 hours after making an application for a protected action ballot order, the applicant must give a copy of the application to the employer of the employees who are to be balloted, and:
(a) if the application specifies a person that the applicant wishes to be the protected action ballot agent—that person; or
(b) otherwise—the Australian Electoral Commission.
441 Application to be determined within 2 days after it is made
(1) FWA must, as far as practicable, determine an application for a protected action ballot order within 2 working days after the application is made.
(2) However, FWA must not determine the application unless it is satisfied that each applicant has complied with section 440.
…
443 When FWA must make a protected action ballot order
(1) FWA 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) FWA 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) FWA 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.
(4) If FWA decides that a person other than the Australian Electoral Commission is to be the protected action ballot agent for the protected action ballot, the protected action ballot order must also specify:
(a) the person that FWA decides, under subsection 444(1), is to be the protected action ballot agent; and
(b) the person (if any) that FWA decides, under subsection 444(3), is to be the independent advisor for the ballot.
(5) If FWA 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.
Note: Under subsection 414(1), before a person engages in employee claim action for a proposed enterprise agreement, a bargaining representative of an employee who will be covered by the agreement must give written notice of the action to the employer of the employee.”
The cases presented by the parties
[6] Mr Peter Lamps, National Vice President and Organiser with the AWU represented that union and also gave evidence 2 as to the bargaining process and the basis of its application.
[7] Mr Derek Winter, State Organiser of the AMWU, represented that union and also gave evidence 3 confirming the negotiations and positions of the parties leading to the application.
[8] The applicant unions contended that they were at all times, and remained, genuinely trying to reach an agreement with Premium Brands. They argued that bargaining had been commenced under the Act and been undertaken over numerous meetings with the employer.
[9] The applicant unions further contended that all parties had advanced positions on a range of issue and whilst many had been agreed in principle, certain key “threshold” matters remained unresolved. These issues included the extent of wage increases, rostered days off and the disciplinary procedure. The proposals made by the employer on those matters have not been accepted by the unions’ members and despite the genuine endeavours of all parties, an agreement had not been achieved. On that basis, the applicant unions argued that they were entitled to seek a ballot order to pursue protected action as contemplated by the Act.
[10] Premium Brands was represented by Mr Bernie McCallum its Human Resources Director and Ms Sonia Kannally, Human Resources Advisor. The employer opposed the granting of the applications on the basis that the applicant unions were not genuinely trying to reach an agreement. That proposition was in turn based essentially upon two related grounds.
[11] Firstly, that the authenticity of the applicant unions’ motivation and intentions was in doubt as a result of certain developments and actions. In particular:
- There had been an earlier dispute as to representation of the AMWU in negotiations and that the union had not acted appropriately in that regard;
- The wages claim made by the applicant unions was considered to be excessive and there had been no compromise on that claim or sufficient exploration of the employer’s counter proposal;
- The applicant unions had failed to mention the decision to make these applications during recent bargaining meetings and the exchange of positions; and
- There was an apparent attempt by the applicant unions to “punish” Premium Brands as part of the positioning of the AMWU within negotiations with this employer for the first time.
[12] The second related ground of opposition was that these applications were premature in that the negotiations on the key points were not yet exhausted and what was said to be the apparent lack of consideration of the employer’s wages proposal was also an indication that this was so.
[13] A comprehensive package of materials 4 was provided to Fair Work Australia by the employer and this included a chronology of events and notes of the various bargaining meetings held between the parties. Mr McCallum relied upon elements of the recent decision of the Full Bench in JJ Richards and Sons Pty Ltd v Transport Workers’ Union of Australia[2010] FWAFB 99635 (JJ Richards) to support his contentions.
[14] Other than for the specific basis for its opposition as outlined by Premium Brands, it is not otherwise disputed that the unions are eligible to make this application and have done so in accordance with the relevant statutory requirements.
The facts of the matter
[15] I have carefully considered the material before Fair Work Australia and I find that it establishes the following.
[16] Premium Brands is a major wine producer with significant manufacturing facilities in the Barossa Valley of South Australia.
[17] The current enterprise agreement applying to the employer and the employees in question was made in 2005 and has a nominal expiry date of 28 February 2007. It is common ground that the negotiations are concerned with the remuneration and employment conditions of the employer’s engineering department at its Rowland Flat and Richmond Grove sites.
[18] The applicant unions wrote to Premium Brands in May 2010 seeking to bargain for a new Enterprise Agreement. There were some discussions about the extent of on-site representation proposed by the AMWU and some initial meetings were conducted primarily in that context.
[19] Premium Brands has agreed to bargain and provided a s.173 (Schedule 2.1) notice of employee representational rights to employees on 31 August 2010.
[20] The first round of negotiations for the proposed agreement took place on 2 September 2010. Four bargaining meetings were conducted in September and October 2010 prior to the parties attending a conference before Fair Work Australia. During the course of those meetings, all parties provided “logs of claims”, the employer provided a first draft of a proposed agreement and the applicant unions responded to that draft. That response included the categorisation of proposals into “agreed in principle” or “requiring further discussions”.
[21] A s.240 conference before Fair Work Australia was convened in the context of the dispute as to the composition of the AMWU representation in the bargaining process and in particular, the number of on-site delegates or representatives to attend. This was compounded by the fact that two AMWU members had also individually nominated themselves as bargaining representatives pursuant to s.176 of the Act.
[22] As a result of discussion between the parties as facilitated by Fair Work Australia, the issue of the AMWU representation was resolved in early November 2010. This included the subsequent withdrawal of the individual bargaining representative notifications.
[23] During the course of the fifth round of negotiations on 10 November 2010, the applicant unions submitted a wages claim for a particular commencement rate with subsequent five percent annual adjustments. The claim was said not be an ambit position. It is clear that the commencement rate would represent a very significant increase on existing rates. I will return to the consequences of this position in due course.
[24] The employer expressed significant concerns as to the nature and extent of the wages claim. Further negotiations continued during November 2010 and January and February 2011. During the course of the ninth round on 18 January 2011, the company presented its proposed wage outcome (10.5 percent over the life of a three year agreement).
[25] The applicant unions consulted with their members on 31 January 2011 and apparently rejected the employer’s wage proposal and authorised the making of these applications.
[26] The rejection of the wages offer was communicated to the employer during the course of the tenth round of negotiations on 9 February 2011 and some discussions on other outstanding proposals were also held. There were also some subsequent discussions between the representatives of the parties regarding one other outstanding matter and a further negotiation meeting date of 9 March 2011 was also agreed. The applicant unions did not advise Premium Brands of the impending ballot applications during this period.
[27] These applications were filed on 24 February 2011 and provided to the employer on 24 and 25 February 2011 respectively.
Consideration
[28] Mr McCallum for Premium Brands referred to elements of the majority decision in JJ Richards. In so doing he sought to emphasise the need to consider the genuine motivation of the applicant unions based upon their conduct. In that context he relied, amongst other elements, upon the following:
“[58] The expression “genuinely trying” in s.443(1)(b) is, clearly enough, concerned with the genuineness of the “trying”, the efforts, to reach the stated goal, namely an enterprise agreement that meets the requirements of the FW Act. It is directed at the authenticity of the applicant’s efforts to reach that goal. The genuineness or authenticity of an applicant’s efforts to reach that goal will turn on its motivation - the intention, object or purpose.
[59] The evident purpose of section 443 is to ensure that a bargaining representative has no access to a protected action ballot, and therefore to protected industrial action, unless that bargaining representative “has been, and is, genuinely trying to reach an [enterprise agreement]”.
[60] The expression “genuinely trying to reach an agreement” appears in three sections in the FW Act: s.412, s.413 and s.443. As was held by the Full Bench in John Holland Pty Ltd v AMWU (John Holland), it is clear from s.412(5) that the legislature intended that expression to have a particular meaning in s.412 that should not affect the proper construction of the expression as it appears in other provisions of the Act. The requirement that an employee bargaining representative (union) be “genuinely trying to reach agreement” is imposed not only as a precondition to obtaining a protected action ballot, it is also a precondition to actually taking protected industrial action: this is one of the “common requirements” specified in s.413.
[61] As was noted by the Full Bench in Woodside Burrup, “[p]rotected industrial action in support of claims for an enterprise agreement, as authorised by the FW Act, is the only lawful mechanism available to employees to achieve improvements to wages and conditions that an employer is not otherwise prepared to agree to.” Price inflation, to a greater or lesser extent, is part of the usual state of affairs in the economy (that is, inflation is the norm and deflation the exception). The effects of inflation mean that employees need to obtain wage increases periodically if they are to avoid a decrease in the real value of their wages. It follows that a union acting as an employee bargaining representative will almost invariably have a genuine reason for seeking an enterprise agreement to cover members who have not had the benefit of a wage increase for some time.”
[29] The central issue in JJ Richards was whether a party could be genuinely trying to reach an agreement within the meaning of s.443 of the Act when the employer had refused to bargain. This did involve the consideration of the approach to be taken to that concept however, the matter was not ultimately determined on that basis. 6 In this case, there is no question that bargaining has been formally commenced under the Act and that detailed positions and negotiations on various elements of the proposed agreement have been exchanged over many months.
[30] The discussion as to an application of this nature being premature as relied upon by Mr McCallum from the JJ Richards decision was in fact a reference to the decision of the earlier Full Bench of Fair Work Australia in Total Marine Services Pty v Maritime Union of Australia 7(TMS).
[31] In that matter the Full Bench considered the question of the interrelationship between the protected action ballot provisions and the good faith bargaining requirements of the Act, and the approach to the immediate question more broadly. It concluded in part as follows:
“[30] The requirement that an applicant for a ballot order genuinely try to reach an agreement and be continuing to do so at the time an application for a ballot order is made was a requirement in the Workplace Relations Act 1996. The wording of the relevant section has been altered because of the removal of a process of establishing a bargaining period during which protected action may be taken. The concept of genuinely trying to reach an agreement was dealt with in other parts of the Workplace Relations Act 1996, specifically in relation to the grounds for terminating a bargaining period.
[31] In our view the concept of genuinely trying to reach an agreement involves a finding of fact applied by reference to the circumstances of the particular negotiations. 8 It is not useful to formulate any alternative test or criteria for applying the statutory test because it is the words of s 443 which must be applied. In the course of examining all of the circumstances it may be relevant to consider related matters but ultimately the test in s 443 must be applied.
[32] We agree that it is not appropriate or possible to establish rigid rules for the required point of negotiations that must be reached. All the relevant circumstances must be assessed to establish whether the applicant has met the test or not. This will frequently involve considering the extent of progress in negotiations and the steps taken in order to try and reach an agreement. At the very least one would normally expect the applicant to be able to demonstrate that it has clearly articulated the major items it is seeking for inclusion in the agreement, and to have provided a considered response to any demands made by the other side. Premature applications, where sufficient steps have not been taken to satisfy the test that the applicant has genuinely tried to reach an agreement, cannot be granted.
[33] Arising from the submissions of the parties in the matter before him, Commissioner Thatcher considered a number of questions relevant to s 443(1)(b). He considered whether the MUA tried to get as far as it could in the negotiations but fell short of reaching a conclusion on the matter because the test involved a different question. In our view he was correct in that approach. He considered whether the MUA was bargaining in good faith as a relevant consideration to whether the MUA was genuinely trying to reach an agreement and again correctly in our view fell short of equating the concepts.”
[32] The majority in JJ Richards expressed some reservations 9 on what it described as the comments in Para [32] of TMS. In this case it is not necessary to deal with the tension between those approaches given the factual circumstances evident here and my findings on the central question.
[33] It is clear that the AWU and AMWU, as the applicant bargaining representatives, bear the onus to demonstrate that they have been and are genuinely trying to reach an agreement with the employer. This is evident from the Act and is reinforced by the directive in s.443(2) that I must not make the ballot order unless I am so satisfied. In addition, although the concept of good faith bargaining is a different consideration, in my view the conduct of an applicant union in that context might in some circumstances be such as to cast doubt upon whether they were in fact genuinely trying to reach an agreement with the relevant employer.
[34] The central question is therefore whether the overall circumstances of the matter and the conduct of the unions as confirmed in the material before Fair Work Australia are sufficient to meet the onus cast by s.443 of the Act. In TMS, the Full Bench took the view that as a general rule sufficient progress in the negotiations must be present in order to establish the necessary intent. It is also clear that the Full Benches in both TMS and JJ Richards expressly rejected the notion that some form of ridged rules or threshold should be established for this purpose and accordingly, each case needs to be considered on its merits.
[35] In this case there have been extensive meetings and leaving aside the wages claim for the moment, there has been detailed discussions and consideration of many elements of a proposed agreement. There has been joint consideration given to each of the respective logs of claims, the points of difference on the major issues have been articulated and considered, and concessions and/or counterproposals have been made on some issues.
[36] Against that background I turn now to consider the major elements of the opposition posed by Premium Brands.
[37] The earlier dispute as to the composition of the bargaining group did raise issues as to the conduct of reasonable negotiations in the context of the need to continue production during the course of negotiations. That matter was resolved in good faith and does not in my view suggest, in that case, that the AMWU was not genuinely trying to reach an agreement.
[38] The wages claim as made by the unions has also been raised as being an indicator that the unions do not genuinely seek an agreement with Premium Brands. There is no doubt that the claim is extensive and potentially very expensive, and based upon the material before me there has been little objective justification provided to date for the proposition. However, I have considered this in the context of these negotiations and having regard to the nature of the good faith bargaining obligations established by s.228 of the Act as follows:
“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.”
[39] The wages outcome is for both parties a major part of a package that ultimately needs to be considered as such. Claims and proposals have been articulated and in the case of the unions, presented to the members for their consideration and a response given. It may well be that in subsequent discussions, a more extensive basis for the unions’ claim and more fulsome reasons for the rejection of the employer’s proposal would be needed in order to meet the good faith bargaining requirements. However, the present approach of the applicant unions on this issue is not as such an indication of a lack of a genuine desire to reach an agreement and it is also clear that a “failure” to make concessions or to reach agreement is not in itself a lack of good faith as defined within the Act. The fact is that the applicant unions and their members have a different view to the employer as to the appropriate future wages outcome. This is a matter for bargaining.
[40] As foreshadowed by Mr McCallum in closing submissions, should Premium Brands consider that the subsequent conduct of the unions in this, or any other regard, is not consistent with the good faith bargaining obligations of the Act, an application can be brought and would be dealt with on its merits. In that regard I note under the Act that even where a protected action ballot is granted and action then authorised, the parties remain subject to the statutory good faith bargaining obligations.
[41] In terms of the suggestion that the employer is somehow being punished following the involvement of the AMWU 10, this relied upon the following passage in JJ Richards:
“[63] In circumstances where an applicant for a protected ballot order calls (acceptable) evidence that their intention, object or purpose is to reach an enterprise agreement under the FW Act a finding that the applicant was not “genuinely trying to reach an [enterprise] agreement” within the meaning of s.443(1)(b) will necessarily involve accepting evidence establishing that the applicant had some other, extraneous purpose in seeking the ballot. Indeed, when there is evidence from an applicant for a protected action ballot order that they have been and are “genuinely trying to reach an [enterprise] agreement” under the FW Act, it is difficult to conceive of circumstances where it could properly be found they were not, unless there is cross-examination or other evidence establishing that the applicant in truth has some other, extraneous intention, object or purpose or is seeking something other than an enterprise agreement under the FW Act. For example, the evidence may demonstrate that the applicant is pursuing an agreement that it knows or ought reasonably knows would not be an enterprise agreement within the meaning of the FW Act because it contains non-permitted matters contrary to s.172(1) or that the true motivation is to apply pressure in pursuit of political or environmental goals or simply to punish the employer for some perceived wrong doing.”
[42] The proposition made by Mr McCallum in this regard was, with respect, little more than speculation. There was no reliable suggestion that some political, environmental or extraneous objective was motivating the negotiations or these applications. It may well be that the unions have adopted a more robust position in these negotiations than in the past, however even if that be the case, this is not indicative of a lack of a genuine desire to make an agreement. In any event, the motivation that is apparent from the material before me is to seek an agreement with the employer.
[43] The failure to advise Premium Brands of the decision to seek a protected action ballot may well be discourteous and perhaps somewhat unusual given that its purpose is to encourage the employer to change its bargaining position. However, it could not be considered to be a lack of bona fides for present purposes.
[44] It is clearly the case that additional negotiations may well further advance an agreement. The fact that the positions of the parties in relation to some of the outstanding issues are not yet fixed would support that view. Indeed, it is evident that the applicant unions (and Premium Brands) anticipate ongoing negotiations and further dates have been set in that regard. However, it is not a prerequisite of the Act for the making of a protected action ballot order that the negotiations have been exhausted or that such action is a matter of last resort.
[45] Although not in dispute, I have considered all of the other prerequisites for the granting of a protected action ballot and I am satisfied that these have been met. These include that the applications have been made following the expiry of the present agreement’s nominal life (s.438(1)) and there is no suggestion that the applicant unions are pursuing non permitted terms as part of the negotiations.
Conclusions
[46] Having had regard to the material before Fair Work Australia and considered the submissions made in this matter, I was satisfied that the AWU and AMWU have been and are genuinely trying to reach an agreement with Premium Brands. Accordingly, the requirements of s.443(1)(b) of the Act had been met.
[47] Given my satisfaction that all other statutory prerequisites had been met in relation to this application I have issued an order for the conduct of protected action ballots in this matter.
[48] I would also advise that should one or both parties (as bargaining representatives) consider that the assistance of Fair Work Australia would facilitate the resolution of any dispute arising in the context of these negotiations, an application could be made pursuant to s.240 of the Act.
COMMISSIONER
Appearances:
P Lamps on behalf of The Australian Workers’ Union.
D Winter on behalf of the Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union known as the Australian Manufacturing Workers’ Union (AMWU).
B McCallum with S Kannally on behalf of Premium Wine Brands Pty Ltd.
Hearing details:
2011
Adelaide
March 1
1 All parties provided evidence in the form of written statements and/or material and that evidence was not challenged.
2 In the form of a witness statement: Exhibit AWU 1.
3 In the form of a witness statement: Exhibit AMWU 1.
4 Exhibit R1.
5 [2010] FWAFB 9963, 23 December 2010, per the majority Lawler VP and Bissett C; O’Callaghan SDP dissenting.
6 The identity of the union trying to reach an agreement became the critical issue upon which the appeal was upheld by the majority.
7 [2009] FWAFB 368, 9 October 2009 per Watson VP, Hamberger SDP and Roberts C.
8 Australian Industry Group v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union Print T1982; Re Media, Entertainment and Arts Alliance PR928033.
9 [2010] FWAFB 9963 at pars [87] to [90].
10 The AMWU has not previously been involved in negotiations in relation to this group of employees.
Printed by authority of the Commonwealth Government Printer
<Price code C, PR507194>
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