“Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU)

[2015] FWC 8610

[2015] FWC 8610

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.229—Bargaining order

“Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU)
(B2015/70)

DEPUTY PRESIDENT KOVACIC MELBOURNE, 15 DECEMBER 2015

Proposed bargaining order against Preshafood Pty Ltd.

[1] On 24 April 2015 The ‘Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union’ known as the Australian Manufacturing Workers’ Union (AMWU – the Applicant) made an application under s.229 of the Fair Work Act 2009 (the Act) seeking a bargaining order against Preshafood Pty Ltd (the Respondent).

[2] The application was the subject of a conference convened by the Fair Work Commission (the Commission) on 6 May 2015. That conference failed to resolve the issues in dispute and as a result the Commission issued Directions on 7 May 2015 for the filing of submissions and evidentiary material. The application was subsequently listed for hearing on 16 June 2015, though that date was vacated as the parties agreed that the matter could be determined on the papers.

[3] The AMWU filed a witness statement by Mr Aaron Malone, an Organiser with the Victorian Food Division of the AMWU, while Preshafood filed witness statements from Mr Christos Giatsis, Preshafood’s Operations Manager, and Mr Alistair McLachlan, Preshafood’s Chief Executive Officer (CEO).

Background

[4] The AMWU is seeking to negotiate an enterprise agreement covering employees (including supervisors) working in Preshafood’s production area. These employees are currently employed under the Food, Beverage and Tobacco Manufacturing Award 2010 1 and the Manufacturing and Associated Industries and Occupations Award 20102 (the Awards).

[5] On 25 February 2015 Mr Malone emailed Mr Giatsis seeking Preshafood’s “agreement to commence bargaining for an enterprise agreement under the Fair Work Act 2009 (Cth).” In his email Mr Malone stated that a majority of employees who would be covered by the proposed agreement support the request and sought a response from Mr Giatsis by 27 February 2015. The email concluded with Mr Malone foreshadowing that in the absence of a response or a refusal to commence bargaining that the AMWU may make an application under s.236 of the Act for a majority support determination 3.

[6] Mr Giatsis responded on 27 February 2015 in the following terms:

“Hi Aaron,

After considering our schedule and reviewing upcoming events

A time scheduled after the Easter Break would be appropriate.

Let’s look at some dates and confirm in a couple of weeks.” 4

[7] The AMWU interpreted this response as agreement to commence bargaining. To that end, Mr Malone responded to Mr Giatsis later that day stating, among other things, that “the next step is that Preshafood needs to put out the Notice of Representational Rights. It’s a requirement. I believe it needs to be up as soon as possible but no later than 14 days from the time bargaining is agreed upon.” 5 The email also included a link to an electronic version of the Notice of Employee Representational Rights (NERR) as set out at Schedule 2.1 of the Fair Work Regulations 2009 (the Regulations).

[8] Mr Malone wrote to Mr Giatsis again on 18 March 2015. The email included the following:

“I’m writing in regards to proposed EBA negotiations.

On 27 February you had confirmed via e-mail that we would begin discussions after Easter. With The Easter Weekend being little more than two weeks away I thought it would be a good time to try and plan some dates.

… it’s also come to my attention that the Notice of Employee Representational Rights has not been posted nor given to employees. This is a breach of the Act.

I would advise you to post them as soon as you can, or we’ll otherwise be forced to seek bargaining orders…

I’ll be working on a draft EBA in the meantime and would be happy to send that through to you once I’ve gotten feedback from the guys on the floor. That could save time for the first meeting or so.

I would appreciate an answer on this issue in the next 48 hours, if possible.” 6

[9] On 19 March 2015 Mr Giatsis responded:

“Hi Aaron,

Please send through the Draft EBA when you can

I will post the notice up today and make copies available to staff.” 7

[10] Sometime that day Mr Giatsis posted a NERR on Preshafood’s employee notice board. The NERR posted was precisely as set out in the Regulations, with key aspects such as the name of the employer, the name of the proposed enterprise agreement and the proposed coverage of the agreement not included 8. The AMWU contends in its application that it was advised by its members that the NERR was removed from the notice board at some time over the period 20-24 March 2015.

[11] On 2 April 2015 Mr Malone emailed Mr Giatsis seeking to set some dates to begin the agreement negotiations. The email subject was titled “Proposed EBA negotiations” 9. This was followed by a further email on 8 April 2015 which had attached to it a draft enterprise agreement developed by the AMWU following consultation with members. The email also reiterated the request for Mr Giatsis to suggest proposed times for the negotiations10.

[12] In the absence of a response from Mr Giatsis to Mr Malone’s emails, Mr Malone sent a further email to Mr Giatsis on 10 April 2015 which stated:

“I have yet to hear back from you in regards to potential days for EBA negotiations. The next step for me is to go to Fair Work to get bargaining orders …” 11

[13] Mr Giatsis responded later that day seeking more time to absorb the draft agreement provided by Mr Malone before proposing a meeting time. Mr Malone responded to that email almost immediately. Mr Malone’s email indicates a level of frustration with the delays, stating that “… if the process isn’t given some priority I will go through Fair Work …” 12

[14] Mr Giatsis responded to Mr Malone’s email on 20 April 2015. Mr Giatsis’ response stated:

“… I have not intentionally delayed anything and have answered your emails accordingly.

…

As you know, the process of bargaining for an enterprise agreement is new to me and to Preshafood.
We have now had an opportunity to consider our rights and obligations and also obtain the views of our employees.

We believe that a majority of employees who are covered by the Food, Beverage and Manufacturing Award 2010 do not want an enterprise agreement.

On that basis, we advise that Preshafood does not agree to bargain.” 13

[15] Mr Malone responded on 21 April 2015. His response stated, among other things, that:

“… the AMWU takes the view that bargaining has in fact already commenced in accordance with the relevant provisions of the Fair Work Act. We note in your response to our earlier correspondence re our proposal to apply for a majority support determination under s236 of the Fair Work Act that you proposed to set dates to meet with the AMWU and that you subsequently posted a Notice of Employee Representational Rights (NERR) on your employee’s noticeboard. As such, our view is that the time has passed for you to refuse to bargain.” 14

[16] Mr Malone’s response also:

• drew Mr Giatsis’ attention to the good faith bargaining requirements set out in s.228 of the Act;



• set out the AMWU’s view that Preshafood was in breach of those requirements for several reasons;



• requested that Preshafood agree to meet on 28 April 2015;



• sought a response by 22 April 2015; and



• reserved the AMWU’s right to make an application to the Commission for bargaining orders.

[17] Mr Giatsis responded the following day indicating that Preshafood would respond by close of business on 24 April 2015.

[18] The AMWU states in its application that on 23 April 2015 it received reports that members of Preshafood’s management team had been “attempting to secure signatures on a document purporting to indicate that employees … did not wish to bargain for an enterprise agreement.” Also on that day, Mr David Vroland, an Industrial officer with the AMWU, wrote to Mr Giatsis drawing his attention to ss.343 and 344 of the Act which deal with coercion and undue influence or pressure respectively. Mr Vroland sought an “immediate assurance that no action will be taken to coerce any Preshafood employee with respect to their industrial rights and/or place any undue influence or pressure on any Preshafood employee to make or not make an enterprise agreement.” 15

[19] On 24 April 2014 Preshafood’s solicitors wrote to the AMWU stating, inter alia, that “Our client’s position is that it has not agreed to bargain at any time.” 16 The letter also refuted the suggestion that Preshafood had breached ss.343 and 344 of the Act.

[20] As previously noted, the AMWU lodged its application with the Commission on 24 April 2015.

The Statutory Framework

[21] Part 2-4 of the Act is concerned with enterprise agreements. Division 8 of Part 2-4 of the Act deals with the Commission’s general role in facilitating bargaining, including bargaining orders. The relevant provisions are set out below.

“229 Applications for bargaining orders

Persons who may apply for a bargaining order
(1) A bargaining representative for a proposed enterprise agreement may apply to the FWC for an order (a bargaining order) under section 230 in relation to the agreement.

Multi-enterprise agreements
(2) An application for a bargaining order must not be made in relation to a proposed multi-enterprise agreement unless a low-paid authorisation is in operation in relation to the agreement.

Timing of applications
(1) The application may only be made at whichever of the following times applies:

(a) if one or more enterprise agreements apply to an employee, or employees, who will be covered by the proposed enterprise agreement:

(i) not more than 90 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); or
(ii) after an employer that will be covered by the proposed enterprise agreement has requested under subsection 181(1) that employees approve the agreement, but before the agreement is so approved;

(b) otherwise—at any time.

Note: An employer cannot request employees to approve the agreement under subsection 181(1) until 21 days after the last notice of employee representational rights is given.

Prerequisites for making an application
(2) The bargaining representative may only apply for the bargaining order if the bargaining representative:

(a) has concerns that:

(i) one or more of the bargaining representatives for the agreement have not met, or are not meeting, the good faith bargaining requirements; or
(ii) the bargaining process is not proceeding efficiently or fairly because there are multiple bargaining representatives for the agreement; and

(b) has given a written notice setting out those concerns to the relevant bargaining representatives; and
(c) has given the relevant bargaining representatives a reasonable time within which to respond to those concerns; and
(d) considers that the relevant bargaining representatives have not responded appropriately to those concerns.

Non-compliance with notice requirements may be permitted
(3) The FWC may consider the application even if it does not comply with paragraph (4)(b) or (c) if the FWC is satisfied that it is appropriate in all the circumstances to do so.

230 When the FWC may make a bargaining order

Bargaining orders
(1) The FWC may make a bargaining order under this section in relation to a proposed enterprise agreement if:

(a) an application for the order has been made; and
(b) the requirements of this section are met in relation to the agreement; and
(c) the FWC is satisfied that it is reasonable in all the circumstances to make the order.

Agreement to bargain or certain instruments in operation
(2) The FWC must be satisfied in all cases that one of the following applies:

(a) the employer or employers have agreed to bargain, or have initiated bargaining, for the agreement;
(b) a majority support determination in relation to the agreement is in operation;
(c) a scope order in relation to the agreement is in operation;
(d) all of the employers are specified in a low-paid authorisation that is in operation in relation to the agreement.

Good faith bargaining requirements not met
(3) The FWC must in all cases be satisfied:

(a) that:

(i) one or more of the relevant bargaining representatives for the agreement have not met, or are not meeting, the good faith bargaining requirements; or
(ii) the bargaining process is not proceeding efficiently or fairly because there are multiple bargaining representatives for the agreement; and

(b) that the applicant has complied with the requirements of subsection 229(4) (which deals with notifying relevant bargaining representatives of concerns), unless subsection 229(5) permitted the applicant to make the application without complying with those requirements.

Bargaining order must be in accordance with section 231
(4) The bargaining order must be in accordance with section 231 (which deals with what a bargaining order must specify).”

The AMWU’s case

[22] In its submissions the AMWU addressed the various elements of s.230 of the Act, contending that:

• the requirements of ss.230(1)(a) and (b) had been satisfied;



• with respect to s.230(2)(a), Preshafood had agreed to bargain;



• ss. 230(2)(b) and (c) were not relevant to these proceedings; and



• with regard to s.230(3)(a)(i), Preshafood had not met or is not meeting the good faith bargaining requirements set out in s.228 of the Act.

[23] In respect of the last point, the AMWU submitted that Preshafood had breached:

• s.228(1)(a) of the Act by refusing to participate in meetings at reasonable times;



• s.228(1)(b) of the Act by not responding to Mr Malone’s proposals with respect to arranging meeting times and the content of the proposed enterprise agreement;



• s.228(1)(d) of the Act by failing to give genuine consideration to the AMWU’s proposals; and



• s.228(1)(e) of the Act by first agreeing to bargain and then attempting to retract that agreement, by failing to issue a NERR until more than 14 days after agreeing to bargain and by attempting to secure the signatures of employees on a document indicating that they did not wish to bargain for an enterprise agreement despite Preshafood having already agreed to bargain.

[24] In his witness statement, Mr Malone set out his interactions with Preshafood and the background to the AMWU’s approach regarding bargaining. Mr Malone deposed that in late January or early February 2015 he provided a petition to Preshafood employees intended to determine whether a majority of employees wanted to commence enterprise agreement negotiations. Mr Malone further deposed that the petition was returned to him with seven signatures on it, six of which were dated 27 January 2015 and the other signature dated 2 February 2015. Mr Malone attested that he understood this to represent a majority of employees employed by Preshafood performing work under the Awards. Mr Malone also set out the chronology of events that led up to the application being lodged with the Commission. That chronology is consistent with the background outlined at paragraphs [4] to [20] above.

[25] In response to Preshafood’s submissions, the AMWU submitted in broad terms that it does not take issue with Preshafood’s characterisation of the issues to be determined. As to Preshafood’s reliance on the decision of Vice President Hatcher in TWU v Hunter Operations Pty Ltd (Hunter) 17 in which the Vice President recognised that agreement to bargain may be inferred through the conduct of the parties, the AMWU submitted that Preshafood was relying too heavily on the subjective intention of its witnesses as being determinative of the issue. Further, relying on the decision of the Full Court of the Federal Court of Australia in Damevski v Giudice and Ors (Damevski)18, the AMWU submitted that the correct test to be applied in the current circumstances was to ask the question: “what would a reasonable bystander have objectively inferred based on the conduct of the parties?” In this regard, the AMWU contended that a reasonable bystander would interpret Mr Giatsis’ response to Mr Malone’s email of 27 February 2015, together with the posting of NERR by Mr Giatsis as indicating an agreement to commence bargaining after Easter, to be consistent with Preshafood having agreed to bargain. Preshafood seeking to resile from this agreement to bargain was not relevant according to the AMWU.

[26] On the issue of Mr Giatsis’ authority to agree to bargain on Preshafood’s behalf, the AMWU drew on s.793(1) of the Act and contended that it was entitled to rely on Mr Giatsis’ apparent or ostensible authority to agree to bargain and that by virtue of s.793(1) his actions could be attributed to Preshafood. By way of background, s.793(1) of the Act provides:

“793 Liability of bodies corporate

Conduct of a body corporate
(1) Any conduct engaged in on behalf of a body corporate:

(a) by an officer, employee or agent (an official) of the body within the scope of his or her actual or apparent authority; or
(b) by any other person at the direction or with the consent or agreement (whether express or implied) of an official of the body, if the giving of the direction, consent or agreement is within the scope of the actual or apparent authority of the official;

is taken, for the purposes of this Act and the procedural rules, to have been engaged in also by the body.”

[27] Further, in accordance with that provision of the Act, Mr Giatsis’ lack of actual authority did not change this. The AMWU also contended that it was apparent on the evidence that Mr Giatsis was charged by Mr McLachlan with dealing with the AMWU and that accordingly it should be allowed to rely on Mr Giatsis’ apparent authority to engage with it on relevant matters.

[28] As to Preshafood’s submission that the issuing of a valid NERR was an essential step without which an enterprise agreement cannot be validly approved, the AMWU submitted that the Act did not require that a NERR be issued before a bargaining order may be issued and nor was the absence of a NERR material to the utility of issuing a bargaining order. The AMWU further submitted that the decision in Hunter should not be followed to the extent that the Vice President declined to issue a bargaining order on these grounds, contending that the Vice President was in error on this point.

[29] Finally, the AMWU submitted that it is quite possible to agree to bargain prior to actually initiating bargaining at a later point in time and that as such a finding that Preshafood had agreed to bargain would not preclude the Commission from making an Order that Preshafood initiate bargaining and issue a NERR.

[30] The AMWU sought orders in the following terms:

(a) Preshafood Limited is ordered to initiate bargaining for an enterprise agreement under the Fair Work Act 2009 (Cth) (the “proposed agreement”) to cover its employees who perform work covered by either the Food Beverage and Tobacco Manufacturing Award 2010 or the Manufacturing and Associated Industries and Occupations Award 2010.

(b) Preshafood Limited is ordered to recognise and bargain with the AMWU as a bargaining representative for its employees who are members of the AMWU for the proposed agreement.

(c) Preshafood Limited is ordered to attend ongoing weekly meetings for the purpose of negotiating the proposed agreement under the Fair Work Act 2009 Cth. The parties may agree to a different timeframe after the first four meetings.

(d) Preshafood Limited is ordered to refrain from negotiating directly from an enterprise agreement with any of its employees who are members of the AMWU.

(e) Preshafood Limited is ordered to give proper consideration to the proposals of the AMWU for the terms and conditions to be contained in an enterprise agreement and is required to respond to the AMWU’s proposals in writing at the second of the weekly negotiation meetings. The parties may agree to a different timeframe for this response.

(f) Preshafood Limited’s response must include a list of items that it would be prepared to consider including in an enterprise agreement.

Preshafood’s case

[31] Preshafood objected to the AMWU’s application on the following grounds:

• Preshafood had not agreed to bargain;



• in the alternative, the Commission should not exercise its discretion to make the orders sought by the AMWU in circumstances where such orders would be of no utility because Preshafood had not issued a valid NERR, Mr Giatsis did not have the authority to agree to bargain on behalf of Preshafood and a clear majority of relevant employees do not wish to bargain for an agreement; and



• there was no evidence that the AMWU has any members amongst relevant employees.

[32] Preshafood subsequently accepted that the AMWU does have members amongst current employees and therefore had standing to bring the application.

[33] In support of its submissions, Preshafood relied on the decision in Hunter and the Federal Court’s decision in Australian Nursing and Midwifery Federation v Kaizen Hospitals (Essendon) Pty Ltd (Kaizen) 19.

[34] In his witness statement Mr Giatsis set out the chronology of communications between him and Mr Malone on the issue of bargaining (see paragraphs [4] to [20] above). Other significant aspects of Mr Giatsis’ witness statement were that:

(i) apart from the CEO, Preshafood did not employ any other persons responsible for human resource matters;
(ii) since about October 2014, Preshafood had been suffering due to a severe shortage in the supply of apples which required him to deal with many of the flow on issues;
(iii) the apple supply issues were unfolding at the time he was corresponding with Mr Malone in relation to his proposal for an enterprise agreement and reduced the time he spent considering and the importance he attached to that correspondence;
(iv) around 22 April 2015 he provided each of the 13 employees working in production, warehouse, maintenance and quality assurance with a form asking them to indicate whether or not they supported an enterprise agreement;
(v) in doing so he made it clear to employees that they were under no pressure to complete the form in a particular way or at all; and
(vi) over the next week ten forms were returned to him, with all indicating that the employees in question did not support an enterprise agreement (copies of the completed forms were appended to Mr Giatsis’ witness statement 20).

[35] Mr McLachlan in his witness statement attested that he would prefer not to have an enterprise agreement as, in his view, it was likely to reduce Preshafood’s flexibility around pay and the use of labour hire employees. Mr McLachlan also deposed that on 25 February 2015 Mr Giatsis forwarded Mr Malone’s email of that day to him and that he subsequently spoke with Mr Giatsis and told him that it was not Preshafood’s desire to enter into any agreement with the AMWU and to find out more about the issues raised in the email. Mr McLachlan further attested that he reiterated in that conversation that Preshafood did not want an enterprise agreement with the AMWU.

[36] Mr McLachlan also set out in his witness statement the environment in which the AMWU’s bargaining request had been made, deposing that Preshafood:

• was in damage control as for the first time in six years Preshafood was not going to have enough apples to meet its supply obligations; and



• did not start returning to anything near its full range and normal volumes until late April 2015.

Consideration

[37] Section 229(4) of the Act requires as a prerequisite to an application for a bargaining order that the applicant has given written notice to relevant bargaining representatives that it has a concern that “one or more of the bargaining representatives for the agreement have not met, or are not meeting, the good faith bargaining requirements”. As noted at paragraphs [15] and [16] above, Mr Malone emailed Mr Giatsis on 21 April 2015 setting out a number of concerns, including his view that Preshafood was not complying with the Act’s good faith bargaining requirements. I am satisfied that Mr Malone’s email satisfies the requirements of s.229(4) of the Act.

[38] Having established that the AMWU has met the prerequisites for making an application for bargaining orders, the threshold issue to be determined in this matter is whether or not Preshafood had agreed to bargain as per s.230(2)(a) of the Act. A related issue is whether Mr Giatsis had the authority to agree to bargain on Preshafood’s behalf. I deal with these issues below.

Did Preshafood agree to bargain?

[39] As noted by Vice President Hatcher in Hunter:

“[50] The first issue which needs to be considered is whether Hunter Operations agreed to bargain for the purpose of s.230(2)(a). What constitutes an agreement to bargain is not defined in the Act. Applying conventional contractual principles, I consider that an employer may agree to bargain expressly in writing or orally, or that an employer may be inferred to have agreed to bargain through its conduct (such as by commencing to actually engage in bargaining in relation to a proposed enterprise agreement).

[51] Section 173 is of significance in understanding what constitutes an employer agreeing to bargain. The section provides as follows:

173 Notice of employee representational rights

Employer to notify each employee of representational rights

(1) An employer that will be covered by a proposed enterprise agreement that is not a greenfields agreement must take all reasonable steps to give notice of the right to be represented by a bargaining representative to each employee who:

(a) will be covered by the agreement; and

(b) is employed at the notification time for the agreement.

Note: For the content of the notice, see section 174.

Notification time

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

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

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

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

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

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

When notice must be given

(3) The employer must give the notice as soon as practicable, and not later than 14 days, after the notification time for the agreement.

Notice need not be given in certain circumstances

(4) An employer is not required to give a notice to an employee under subsection (1) in relation to a proposed enterprise agreement if the employer has already given the employee a notice under that subsection within a reasonable period before the notification time for the agreement.

How notices are given

(5) The regulations may prescribe how notices under subsection (1) may be given.

[52] It can be seen that the requirement in s.173(1) upon an employer who will be covered by a proposed enterprise agreement to take all reasonable steps to give a notice of representational rights (Notice) operates by reference to all employees who will be covered by the agreement and who are employed at the “notification time”. The requirement in s.173(3) to issue such a notice not later than 14 days also operates from the “notification time”. The expression “notification time” is, for relevant purposes, defined in s.173(2)(a) to mean the time when the employer agrees to bargain or initiates bargaining for the agreement. This definition indicates that an employer's agreement to bargain is a single event which happens at a particular time. Applying the principle of statutory construction that words and expression in an Act are presumed to have the same meaning throughout an Act, and proceeding on the basis that the provisions concerning enterprise agreements contained in Part 2-4 of the Act constitute an internally consistent and coherent scheme, I consider that the agreement of an employer to bargain as referred to in s.230(2)(a) is likewise to be understood as referring to a single event occurring at a particular time. It is not therefore necessary for an employer, once having initially agreed to bargain, to have maintained at all times thereafter its agreement to bargain in order to be regarded as having agreed to bargain for the purpose of s.230(2)(a). Thus, for example, if an employer decides to cease negotiating because it decides that an enterprise agreement no longer suits its interests, that will not alter the fact that it agreed to bargain at an earlier point in time.

[53]Section 173(3) requires the Notice to be issued as soon as practicable and not later than 14 days after the notification time. Thus the requirement to issue the Notice arises once the employer has agreed to bargain or has initiated bargaining; it is not a prerequisite for bargaining. Therefore the fact that no Notice was ever issued by Hunter Operations cannot be decisive on the question of whether it agreed to bargain.” (Citations not included)

[40] One obvious difference between the circumstances in this case and those existing in Hunter is that no NERR was issued in Hunter, whereas in this case a NERR was posted on Preshafood’s employee notice board for several days from 19 March 2015. While that NERR did not comply with the requirements set out in the Act and Regulations, it nevertheless points to a willingness to bargain.

[41] That view is reinforced by Mr Giatsis’ preparedness to discuss possible dates after Easter 2015 to meet with Mr Malone to discuss an enterprise agreement and his willingness to receive and consider a draft enterprise agreement from Mr Malone. It is further reinforced by the absence of any statement from Preshafood until 20 April 2015 that it did not wish to bargain for an enterprise agreement despite Mr McLachlan’s evidence that on 25 February 2015 he made it clear to Mr Giatsis that he did not want an enterprise agreement with the AMWU.

[42] Taken together, these factors support a finding that, despite no negotiations having occurred to date, Preshafood had agreed to bargain, though Preshafood later sought to rescind that agreement.

Mr Giatsis’ authority to agree bargain

[43] This issue was also explored by Vice President Hatcher in Hunter in the following way:

“[58] The approach taken by Katzmann J to apparent authority under s.793 is consistent with the approach taken by the High Court in Pacific Carriers Ltd v BNP Paribas will to apparent or ostensible authority generally. In that decision the Court said: “Where an officer is held out by a company as having authority, and the third party relies on that apparent authority, and there is nothing in the company’s constitution to the contrary, the company is bound by its representation of authority” The Court made it clear that the representation of authority must come from the company itself and not the officer alone, but went on to say that the requisite “representational conduct” may be constituted by the company's organisational structure:

“In many cases the representational conduct commonly takes the form of the setting up of an organisational structure consistent with the company’s constitution. That structure presents to outsiders a complex of appearances as to authority. The assurance with which outsiders deal with a company is more often than not based, not upon inquiry, or positive statement, but upon an assumption that company officers have the authority that people in their respective positions would ordinarily be expected to have. In the ordinary case, however, it is necessary, in order to decide whether there has been a holding out by a principal, to consider the principal's conduct as a whole ... A kind of representation that often arises in business dealings is one which flows from equipping an officer of a company with a certain title, status and facilities.” (Citations not included, underlining added)

[44] The only material before the Commission which deals with Preshafood’s approach to dealing with human resources issues is Mr Giatsis’ evidence that responsibility for such issues rested with the CEO. However, this is not borne out by the material before the Commission. For instance, the extensive exchange of correspondence between Mr Giatsis and Mr Malone and Mr McLachlan’s lack of direct involvement with Mr Malone do not support Mr Giatsis’ evidence. Further, Mr McLachlan’s direction to Mr Giatsis to find out more about the issues raised in Mr Malone’s email of 25 February 2015 and Mr Giatsis’ subsequent extended email interactions with Mr Malone suggest that Mr McLachlan delegated the task of dealing with Mr Malone to Mr Giatsis. Finally, at no stage did Mr Giatsis indicate to Mr Malone that he had no authority to agree to bargain and/or that only Mr McLachlan could agree to do so or, as previously mentioned, at no stage prior to 20 April 2015 indicate that Preshafood did not wish to barraging for an enterprise agreement.

[45] Taken together, these factors support a finding that Mr Giatsis not only behaved in a fashion which suggested he had authority to enter into negotiations for an enterprise agreement on behalf of Preshafood but that he had actual authority to deal with enterprise bargaining related issues associated on behalf of Preshafood.

Summary

[46] For the purpose of s.230(2) of the Act, I therefore find that, for the reasons outlined above, Preshafood agreed to bargain for an enterprise agreement with the AMWU in late February-early March 2015 but not later than 19 March 2015 (i.e. the date on which Mr Giatsis posted the NERR on Preshafood’s employee notice board).

[47] I turn now to deal with the issues of whether the other requirements of s.230 of the Act are satisfied and the discretionary considerations set out in s.230(1)(c) of the Act.

Whether the other requirements of s.230 are satisfied

[48] As previously noted, no substantive negotiations have occurred to date. Further, Preshafood has not agreed to dates to meet with the AMWU, nor has it provided any feedback on the draft enterprise agreement provided by Mr Malone on 8 April 2015. In those circumstances, I am satisfied that Preshafood has not met the good faith bargaining requirements set out in s.228(1)(a)-(d) of the Act.

Discretionary considerations

[49] As noted by Vice President Hatcher in Hunter:

“[64] Under s.230(1), where an application for a bargaining order has been made and the requirements of s.230 are met in relation to a proposed agreement, the Commission “may make” a bargaining order if it is “satisfied that it is reasonable in all the circumstances to make the order”. This effectively involves the exercise of a double discretion. The assessment of what is reasonable in all the circumstances requires a broad evaluative judgment that is in the nature of a discretionary decision.  Even if the Commission is satisfied that it is reasonable in all the circumstances to make a bargaining order, the use of the word “may” in connection with the power to make the order indicates that the Commission retains a residual discretion as to whether to make an order or not.

[65] The question of whether there is any utility in making a bargaining order must be a critical consideration as to whether it is reasonable in all the circumstances to make an order and whether the residual discretion should be exercised in favour of the applicant. I consider that if the making of a bargaining order could not possibly result in the making of an enterprise agreement capable of approval under the Act, then it would not be reasonable in all the circumstances to make a bargaining order and a bargaining order should not be made.” (Citations not included, underlining added)

[50] The circumstances in this case are similar to those in Hunter in that in both cases a valid NERR had not been given to employees. This led the Vice President in Hunter to determine that:

“[79] I conclude therefore that in order for a Notice to be valid, it must be issued in conformity with s.173(3). In respect of the bargaining which has occurred between Hunter Operations and the TWU, no valid Notice can now be issued, and no enterprise agreement which might ultimately emerge from that bargaining would be capable of approval. In those circumstances, the making of a bargaining order could serve no possible purpose. That would be so even if a bargaining order could require that a Notice be issued.

[80] For this reason, I am not satisfied that it would be reasonable in all the circumstances to make a bargaining order, and I would decline to exercise my discretion in favour of making such an order. It would seem to me that if the TWU wishes to obtain an enterprise agreement for the truck drivers at Hunter Operations’ Villawood yard, it would be necessary for it to seek to recommence the bargaining process by making an application for a majority support determination under s.236 of the Act.”

[51] Drawing on the decision in Hunter, in circumstances where the NERR posted on Preshafood’s employee notice board on 19 March 2015 does not meet the requirements of the Act and Regulations, I see no utility in issuing the orders sought by the AMWU as any agreement which relied on that NERR could not be approved by the Commission. Further, even the giving of a new and valid NERR to employees would not overcome this procedural flaw given that, based on the date I have determined when Preshafood agreed to bargain, any such NERR would be given to employees well outside the 14 day period specified in s.173(3) of the Act. I am therefore not satisfied that it would be reasonable in all the circumstances to make a bargaining order and I decline to exercise my discretion in favour of making such an order.

[52] As to next steps, as suggested by the Vice President in Hunter, I would suggest that the most appropriate course of action would be for the AMWU to now make an application under s.236 of the Act for a majority support determination. That approach would appear particularly appropriate in this case given that it is disputed that a majority of employees wish to bargain.

Conclusion

[53] The AMWU’s application for a bargaining order is dismissed. An order to that effect will be issued with this decision.

 1   MA000073

 2   MA000010

 3   Witness Statement of Christos Giatsis at Attachment CG1

 4   Ibid at Attachment CG3

 5   Ibid at Attachment CG4

 6   Ibid at Attachment CG5

 7   Ibid at Attachment CG7

 8   Ibid at Attachment CG6

 9   Ibid at Attachment CG8

 10   Ibid at Attachment CG9

 11   Ibid at Attachment CG10

 12   Ibid

 13   Ibid at Attachment CG11

 14   Ibid at Attachment CG12

 15   Witness Statement of Aaron Malone at Attachment AM-7

 16   Ibid at Attachment AM-8

 17   [2014] FWC 7469

 18 (2003) 129 IR 53

 19 (2015) 248 IR 73

 20   Witness Statement of Christos Giatsis at Attachment CG14

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