“Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers' Union (AMWU) v Armstrong Flooring Pty Ltd T/A Armstrong Flooring

[2019] FWC 5189

[2019] FWC 5189

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.437—Protected action

“Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU)
v
Armstrong Flooring Pty Ltd T/A Armstrong Flooring
(B2019/578)

COMMISSIONER WILSON MELBOURNE, 26 JULY 2019

Proposed protected action ballot of employees of Armstrong Flooring Company Pty Ltd.

[1] This matter concerns an application by the “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) for a protected action ballot order in relation to certain employees of the Armstrong Flooring Pty Ltd (Armstrong Flooring) whose employment is presently covered by the Armstrong Flooring Pty Ltd (Braeside Site) Agreement 2016, 1 (the Agreement) the nominal expiry of which is 30 June 2019. The application is made pursuant to Part 3 – 3 of the Fair Work Act 2009 (the Act) and is opposed by Armstrong Flooring.

[2] The application was made pursuant to s.437 of the Act.

[3] The AMWU seek to ballot all employees of Armstrong Flooring who will be covered by the proposed enterprise agreement and for whom the AMWU is their bargaining representative. The material filed in this application by the AMWU asserts that it is a bargaining representative for the purposes of s.176(1) of the Act.

[4] The AMWU proposes 14 separate questions with a short preamble to which respondent employees will need to answer with a ‘yes’ or ‘no’ response to each question. The questions and preamble proposed to be put are as follows:

“In support of reaching an enterprise agreement with Armstrong Flooring Pty Ltd, do you authorise protected industrial action against your employer separately, concurrently and/or consecutively, in the form of:

1. An unlimited number of stoppages of work for the duration of 1 hour?

YES [ ] NO [ ]

2. An unlimited number of stoppages of work for the duration of 2 hours?

YES [ ] NO [ ]

3. An unlimited number of stoppages of work for the duration of 3 hours?

YES [ ] NO [ ]

4. An unlimited number of stoppages of work for the duration of 4 hours?

YES [ ] NO [ ]

5. An unlimited number of stoppages of work for the duration of 6 hours?

YES [ ] NO [ ]

6. An unlimited number of stoppages of work for the duration of 8 hours?

YES [ ] NO [ ]

7. An unlimited number of stoppages of work for the duration of 12 hours?

YES [ ] NO [ ]

8. An unlimited number of stoppages of work for the duration of 24 hours?

YES [ ] NO [ ]

9. An unlimited number of stoppages of work for the duration of 48 hours?

YES [ ] NO [ ]

10. An unlimited number of stoppages of work for the duration of 72 hours?

YES [ ] NO [ ]

11. An unlimited number of stoppages of work for the duration of one week?

YES [ ] NO [ ]

12. An unlimited number of indefinite strikes?

YES [ ] NO [ ]

13. An unlimited number of indefinite or periodic bans on overtime?

YES [ ] NO [ ]

14. An unlimited number of indefinite or periodic bans on call backs?”

YES [ ] NO [ ]

[5] Armstrong Flooring opposes the application on the basis that the AMWU has not “been negotiating in good faith”.

[6] In considering this application I must apply s.443 of the Act which provides:

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

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

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

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

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

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

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

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

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

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

(4) If the FWC 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 the FWC decides, under subsection 444(1), is to be the protected action ballot agent; and

(b) the person (if any) that the FWC decides, under subsection 444(3), is to be the independent advisor for the ballot.

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

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.”

CONSIDERATION

[7] Armstrong Flooring objected to the making of the order, arguing that the Commission could not be satisfied of the second limb of s.434(1) which requires the Commission to be satisfied that an applicant for a Protected Action Ballot Order has been, and is genuinely trying to reach an agreement. Its arguments in this and other regards are set out succinctly in an email from Mr Alex Gifford, Human Resource Manager of Armstrong Flooring on 24 July 2019, shortly after the AMWU’s application was made. The correspondence was to Deputy President Gostencnik who was then dealing with the matter:

“Deputy President Gostencnik,

This email is to confirm that Armstrong Flooring Pty Ltd, objects to the application for a protected action ballot order, made by the Australian Manufacturing Workers Union (AMWU) on the grounds that:

Armstrong Flooring does not believe that the AMWU has been negotiating in good faith, by reason of:

1. Apart from the initial serving of the log of claims, the AMWU has not provided any detailed written responses or recommendations to any of the offers made by Armstrong Flooring in respect to the original claims.

a. All responses, apart from one, received have been verbal and amounted to no more than a rejection of the offer made, and

b. With respect to Claim number 5 (implementation of income insurance through the provider Wage Guard) which the company has consistently maintained presents an unfeasible cost impost on the company, the AMWU has made several verbal suggestions regarding delaying implementation by 12 months or choosing a marginally lower level of cover.

c. No detailed responses have been received for any of the other disputed claims.

2. The AMWU has not made any application to the company to hold meetings with all the affected employees (those working under the Armstrong Flooring Pty Ltd (Braeside Site) Maintenance Agreement 2016) and has only attended site to participate in the negotiation meetings.

3. Armstrong Flooring believes it’s latest and final offer made is fair, reasonable, sustainable and consistent with all wage increases across the company.

We would request that the application be denied and the AMWU a) demonstrate that it has been consulting with all affected employees and b) return to the negotiations with a fair and reasonable counter offer for the company to consider.

Yours sincerely”

[8] Although Armstrong Flooring have couched its objection as relating to a failure by the AMWU to negotiate in good faith, such is not the test which must be applied in this matter. Instead, consideration must be given to whether the AMWU has been, and is, genuinely trying to reach an agreement. The Full Bench in Esso Australia Pty Ltd v AMWU; CEPU; AWU 2 has cautioned against conflating the two requirements:

“[33] A number of Full Bench decisions have considered the meaning of ‘genuinely trying to reach an agreement’ in s.443(1)(b), particularly in the context of an applicant pursuing a claim in respect of a non-permitted matter. We propose to refer, in chronological order, to the relevant parts of some of the decisions which have considered this issue.

[34] In Total Marine Services Pty Ltd v Maritime Union of Australia  3 (Total Marine) the Full Bench upheld an appeal from a decision to grant an application for a protected action ballot. The Full Bench held that the member at first instance had erred in concluding that the applicant had genuinely tried to reach an agreement within the meaning of s.443(1)(b) in circumstances where certain claims were ‘put to one side’; the negotiations involved limited face to face meetings and limited articulation of many of the claims; many items were only set out in a list of headings, being neither explained nor discussed; and no wage claim was specified.4 In the course of its decision the Full Bench expressed the following views about s.443(1)(b),:

“[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. 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.”

[35] For our part, for reasons we articulate later, we agree with the observations in paragraph [31] and the first three sentences of paragraph [32] of Total Marine, set out above. We note that the observations which follow the first three sentences in paragraph [32] are obiter and although we do not consider that they should be understood as attempting to establish any binding decision rule, nonetheless they are, with respect, somewhat inconsistent with the earlier expressed proposition (with which we agree) that it is not useful to articulate any alternative test or criteria to the words of s.443(1)(b). We note that similar reservations were expressed by the majority of the Full Bench in JJ Richards and Sons Pty Ltd v TWU (JJ Richards No.1) 5 and by the Full Bench in Farstad Shipping (Indian Pacific) Pty Ltd v MUA (Farstad)6.”

[9] In the hearing conducted by me on 25 July 2019 Mr Gifford reiterated his core objection that the order should not be made for the reasons set out in his correspondence.

[10] It was a feature of the hearing that neither party has agreed the dates of contact with each other. Each party put forward a different version of dates without providing corroborative evidence of when the events they referred to actually occurred. Regardless of the parties’ differing recollections when they met and communicated with each other, the joint evidence and submissions allows the finding that there were, in fact, several meetings and communications over the period between late April and mid July 2019.

[11] What emerges from the evidence and submissions is that there has been firm, if not hard, bargaining between the AMWU and Armstrong Flooring. For its part, the AMWU wants to improve the situation of its members by achieving income protection insurance for them as well as an acceptable and timely pay-rise, and it has been consistent about its core claim, refusing to back down on the claim for income protection insurance when told it would not be agreed to because it could not be afforded. On the other hand, and on the basis only of Mr Gifford’s submissions, Armstrong Flooring appears to have been relatively accommodating in negotiations on key matters but has been consistently very firm in its view of the claim made about income protection insurance. It regards agreement to the claim as unaffordable and Mr Gifford submissions are that he has repeatedly told this to the AMWU officials.

[12] As things stand now, the matter of income protection insurance appears to be the last unresolved claim in bargaining. Mr Gifford confirmed in the hearing that as recently as July 2019 the AMWU had confirmed to him it was prepared to bargain around the possible concessions Mr Gifford indicated in his 24 July 2019 email to the Commission.

[13] The product of all the material before the Commission allows the finding that claims have been made and responses given; further information sought and provided, albeit perhaps slowly and not in as much detail as may be preferred. There have been several bargaining meetings over which the bargaining agenda has narrowed, with tacit agreement being reached on important matters. All this has been to the point at which Armstrong Flooring has said it cannot accede to the AMWU’s claim on income protection insurance, even one that might be further modified in the way recorded in Mr Gifford’s email.

[14] It cannot be regarded against this background that the AMWU is not or has not been genuinely trying to reach agreement. The fact that an impasse in bargaining has been reached is neither unusual or evidence of a lack of willingness to genuinely try to reach agreement. Neither, for that matter, may the impasse or overall circumstances of bargaining be found to have involved a failure by the AMWU to negotiate in good faith, as is claimed by Armstrong Flooring. None of the recorded conduct of either side so far in this matter would reasonably lead to a finding that either had failed to follow the good faith bargaining requirements.

[15] Accordingly, I am satisfied the AMWU has been and is genuinely trying to reach an agreement with Armstrong Flooring.

[16] In respect of the contentions made by Armstrong Flooring regarding the AMWU not having met with some or many of its members working for the company, I note firstly that the contentions were not the subject of formal evidence, and were only made in the company’s submissions to the Commission. Secondly, it is to be noted that even if Armstrong Flooring’s contentions are correct, it is the case that communication with it members does not have to be only through on-site meetings; there are, of course, many other ways that a union can seek to provide information to its members or obtain instructions. Finally, it is to be noted in respect of Armstrong Floorings’ contentions that a failure to meet with members of itself would be insufficient reason to refuse the application made for a protected action ballot order.

CONCLUSION

[17] Having determined these matters and being satisfied that the requirements of s.443(1)(a) and (b) of the Act have been complied with, I am required to make a protected action ballot order, as sought by the AMWU. An order in the form sought by the Applicant will issued by the Commission on receipt of a draft order from the AMWU in Word Format.

COMMISSIONER

Appearances:

R. Wainwright and P. Curcio for the AMWU.

A. Gifford for the Respondent.

Hearing details:

2019.

Melbourne:

25 July.

Printed by authority of the Commonwealth Government Printer

<PR710706>

 1   AE422960.

 2   [2015] FWCFB 210.

 3   [2009] FWAFB 368; (2009) 189 IR 407.

 4   Ibid at [35]-[37].

 5   [2010] FWAFB 9963 at [84]-[90].

 6   [2011] FWAFB 1686 at [6]-[11].