"Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union" known as the Australian Manufacturing Workers' Union (AMWU) v Coates Hire Operations Pty Limited T/A Coates Hire Limited

[2012] FWA 3357

[2012] FWA 3357

FAIR WORK AUSTRALIA

DECISION

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

"Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union" known as the Australian Manufacturing Workers' Union (AMWU)
v
Coates Hire Operations Pty Limited T/A Coates Hire Limited
(B2012/687)

COMMISSIONER MACDONALD SYDNEY, 19 APRIL 2012

Coates Hire Limited - application for a bargaining order - good faith bargaining requirements - ballot process - bargaining orders issued

INTRODUCTION

[1] This decision relates to an application by the Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (the AFMEPKIU) for orders under section 229 of the Fair Work Act 2009 (the Act), arising from a proposed enterprise agreement between Coates Hire Operations Pty Limited trading as Coates Hire Limited (Coates Hire / the company) and its employees engaged throughout Australia.

[2] The section 229 application was made on Friday 13 April after 5:00pm and allocated to myself on Monday 16 April 2012.

[3] A related file (B2012/688) was lodged by the AFMEPKIU on Friday 13 April after 5:00pm and also allocated to myself on Monday 16 April. This file was made pursuant to section 240: application to deal with a bargaining dispute. The company was also named as the respondent to this file.

[4] Correspondence from the AKMEPKIU sought an urgent listing of both matters.

[5] The application to deal with a bargaining dispute was set down for a conference at noon on Tuesday 17 April. Conciliation was unsuccessful and concluded at 2:30pm. Following a luncheon adjournment, the application for bargaining orders proceeded as a hearing just after 3:00pm and concluded around 10:00pm.

[6] At the hearing, the AFMEPKIU was represented by Mr T McCauley, National Research Officer, who called a witness, Mr G Thompson, Assistant National Secretary. This union is also a bargaining representative for the enterprise agreement negotiations.

[7] At the Hearing, Mr A Kentish of the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (the CEPU) appeared as an advocate. The CEPU is also a bargaining representative.

[8] Mr Glen Nightingale, union official of the Transport Workers Union (the TWU) did not appear in the hearing proceeding but was present for the prior conference. The TWU is also a bargaining representative.

[9] At the hearing, the company was represented by Mr D Lloyd, solicitor, who called Mr A Williamson, Group Manager - Employee Relations of the company, as a witness. There were other company officers present during the hearing.

[10] I note for the record, that in respect of the related application to deal with a bargaining dispute, that an employee bargaining representative, Mr M Ellwood had been advised of the conference listing for noon but did not appear.

BACKGROUND

[11] Coates Hired Limited has held bargaining meetings with the four bargaining representatives on a number of occasions: between 10 October 2011 and 8 March 2012 inclusive. The bargaining representatives are the AFMEPKIU, the CEPU, the TWU and Mr M Ellwood. Those meetings discussed the various logs of claims concerning a replacement enterprise agreement. The current enterprise agreement has a nominal expiry date of 31 March 2012. There are some 1210 employees, working over about 210 sites throughout Australia, covered by the existing enterprise agreement.

[12] The last negotiating meeting took place on 8 March 2012. The evidence showed that an impasse had been reached at this meeting between the company and, at least the AFMEPKIU, over the company’s position to include an Opt Out clause in the replacement enterprise agreement. That provision allows an employee, at their initiative, to seek other work arrangements tailored to their own particular circumstances as opposed to what would otherwise apply in the replacement enterprise agreement. There are other outstanding issues between / amongst the various parties but the Opt Out clause seemed to be the issue that brought about an impasse to negotiations on 8 March 2012.

[13] Mr Williamson, Group Manager - Employee Relations for the company sent to the bargaining representatives on 26 March 2012, an email attaching a draft proposed enterprise agreement (the 26 March draft / and referred to as the “first draft” during the hearing but it appears it was not actually the first draft).  1

[14] The next day, 27 March, Mr Williamson wrote to Mr Thompson, Assistant National Secretary. That correspondence inter alia, suggested again enlisting the assistance of Fair Work Australia (FWA) as a conciliator. (That assistance was not sought).

[15] On 10 April 2012, the Australian Electoral Commission (the AEC) counted the protected action ballot order initiated by the AFMEPKIU. The declaration of the AEC showed that only 42% of that union’s membership had voted in the ballot. That union has some 408 members working for the company. Section 459(1) of the Act lists several requirements for industrial action by employees to be authorised. One of those requirements is that at least 50% of the employees on the roll of voters for the ballot voted in the ballot. In this instance, that was not so and therefore the AFMEPKIU could not utilize authorised industrial action as a leverage in its enterprise agreement negotiations. A like result was had for the TWU. However, the CEPU application for a protected action ballot was successful.

[16] On that same day of 10 April at 4:50pm, the AFMEPKIU sent an email to Mr Williamson proposing a further bargaining meeting for either 18 or 19 April.

[17] The following day, 11 April, Mr Williamson sent correspondence to the three unions / bargaining representatives, agreeing to a meeting and advising that the company was actioning the process to hold a ballot of the 1210 employees to seek sufficient support for the approval of the proposed enterprise agreement. 2 Also attached to that correspondence was a copy of the enterprise agreement to be put to a vote (the 11 April draft / second draft). The correspondence advised that the ballot would be by way of a show of hands (“attendance ballot”) and would be held on 19 April.

[18] On that same day of 11 April, but an hour later, at 3:00pm, Mr Thompson of the AFMEPKIU emailed Mr Williamson and sought an earlier meeting for 16 April but also asking if the company would, in turn, defer the 19 April ballot. Neither the meeting or the deferral of the ballot in turn took place. (There was a deferral of the ballot but for another reason).

[19] On that same day of 11 April, the company put out a “flyer” to its branch managers, throughout Australia, titled: “Get Ready to Vote”. The flyer advised of the failure of the two unions to get the necessary support from their membership to take authorised industrial action. It also summarised the changes proposed for the replacement enterprise agreement. Relevantly, it also said: “Should the Agreement be approved on this date, we will back pay the first 4.5% increase to 1 April 2012, so as to not disadvantage our employees because of the views of external parties”. This flyer was signed by Leigh Ainsworth, Chief Executive Officer. 3

[20] Mr Williamson gave evidence that the company received feedback from some employees of a preference for a secret ballot. The company decided to do so. This required a deferral of the show of hands ballot of 19 April to a secret ballot for Monday, 23 April. 4 Changing the date of the ballot reflected a change in the voting process, and the new ballot date was then in accord with the “access period” concept found in section 180(4).

[21] On Friday, 13 April, the AFMEPKIU lodged its two applications: B2012/688 - application to deal with a bargaining dispute and B2012/687 - application for a bargaining order.

[22] The bargaining orders sought are twofold: (a) deferral of the 23 April ballot until meetings are held to bargain about changes to the draft agreement proposed by the company subsequent to 26 March 2012; and (b) any vote undertaken pursuant to section 181 of the Act, be conducted by secret ballot portal vote by the AEC.

[23] Those two files were dealt with on 17 April by FWA. At the conclusion of the hearing around 10:00pm, I indicated to the advocates that my decision was reserved.

[24] This decision has been made without the benefit of transcript but relies upon very extensive notes taken during the hearing.

FINAL SUBMISSIONS

For the AFKEPKIU

[25] Mr McCauley for the AFMEPKIU gave extensive submissions which are summarised below:

a) The union sought the two bargaining orders described in a previous paragraph of this decision.

b) The basis for those orders was that the company had breached the good faith bargaining requirements set out in the Act.

c) On the issue of the proposed enterprise agreement (the 11 April / second draft) to be put to a ballot, the union raised matters of concern which matters it was put, infringed the good faith bargaining requirements. The union, in that regard, referred to the back pay incentive given by Mr Ainsworth, the Chief Executive Officer. This was a new matter, not previously raised with the bargaining representatives. During negotiations, there was an agreement for standardisation of rates of pay of workers and as to its implementation date, the company had changed implementation date and that was first advised to the unions when they read the second draft. The electrician rates of pay, listed in the second draft showed three of the eight electricians’ classifications losing money.

d) On the issue of the secret ballot, the union put submissions that it was a flawed process. In that regard, the union had been provided with a copy of a ballot paper from an employee - before voting day; further, it had been advised that four employees in Western Australia had already voted. The union put other submissions about the ballot process.

e) The union took FWA to the relevant sections of the Act and handed up case law in support of its submissions: Endeavour Coal Pty Ltd v Association of Professional Engineers, Scientists and Managers, Australia (full bench) 5; Construction, Forestry, Mining and Energy Union - Mining and Energy Division v Tahmoor Coal Pty Ltd (full bench)6; Advanced Foundation Solutions (Australia) Pty Ltd.7

For the CEPU

[26] Mr Kentish, for the CEPU, made submissions about the flaws in the ballot process and generally supported the submissions of the AFMEPKIU.

For the Company

[27] Mr D Lloyd, solicitor, for the company put the following in final submissions:

a) The company had not breached the good faith requirements under the Act: section 230(3)(a). Even if FWA held that the company had breached the good faith requirements, there was then a requirement for FWA to consider its discretionary power as to whether a bargaining order should be so ordered: section 230(1)(c)

b) As to the ballot of employees, the company was not in breach of the good faith bargaining requirements, as the company had reached an impasse with the unions. The bargaining representative (Mr Ellwood) for 25 employees advised Mr Williamson that the employees wanted to vote on the proposed enterprise agreement. Two of the unions / bargaining representatives had failed to obtain authorisation for industrial action and those two unions did not represent a majority of the employees. In those circumstances, it was proper for all the employees to express their view.

c) The conduct of the ballot process is not unfair or capricious conduct: section 228(1)(e).

d) The issue of the ballot process is ultimately a matter for the approval process when the enterprise agreement comes before FWA for approval - assuming the ballot supports the adoption of the second draft.

e) As to the second draft to be voted upon by the employees, there is no breach of the good faith bargaining requirements. The back pay issue does not disadvantage employees. The wage rates set out in table B of the second draft were raised by Mr Williamson at the 21 February negotiation meeting. The aberration in the electricians’ rates is due to typographical errors in the first draft.

f) Mr Lloyd took FWA to the relevant sections of the Act, handed up an extract from the Explanatory Memorandum of the Fair Work Bill 2008 and took FWA to case law: Australian Municipal, Administrative, Clerical and Services Union v Global Tele Sales Pty Ltd 8and Waterdale Enterprises Pty Ltd as Trustee for the Boag Family Trust trading as Peel Finance Brokers.9

Further submissions

[28] Both union officials put submissions in reply and Mr Lloyd was given opportunity to respond to those submissions. All advocates fielded questions from the bench throughout final submissions.

CONSIDERATION

[29] Before dealing with the merits of the claim for bargaining orders, FWA sets out below the relevant legislation under consideration.

The Relevant Legislation

[30] Division 8 of Part 2-4 sets out the bargaining sections of the Act for consideration: ss 228 to 232 inclusive.

‘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.

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 FWA 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

(3) 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

(4) 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

(5) FWA may consider the application even if it does not comply with paragraph (4)(b) or (c) if FWA is satisfied that it is appropriate in all the circumstances to do so.

230 When FWA may make a bargaining order

Bargaining orders

(1) FWA 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) FWA is satisfied that it is reasonable in all the circumstances to make the order.

Agreement to bargain or certain instruments in operation

(2) FWA 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) FWA 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).

231 What a bargaining order must specify

(1) A bargaining order in relation to a proposed enterprise agreement must specify all or any of the following:

(a) the actions to be taken by, and requirements imposed upon, the bargaining representatives for the agreement, for the purpose of ensuring that they meet the good faith bargaining requirements;

(b) requirements imposed upon those bargaining representatives not to take action that would constitute capricious or unfair conduct that undermines freedom of association or collective bargaining;

(c) the actions to be taken by those bargaining representatives to deal with the effects of such capricious or unfair conduct;

(d) such matters, actions or requirements as FWA considers appropriate, taking into account subparagraph 230(3)(a)(ii) (which deals with multiple bargaining representatives), for the purpose of promoting the efficient or fair conduct of bargaining for the agreement.

(2) The kinds of bargaining orders that FWA may make in relation to a proposed enterprise agreement include the following:

(a) an order excluding a bargaining representative for the agreement from bargaining;

(b) an order requiring some or all of the bargaining representatives of the employees who will be covered by the agreement to meet and appoint one of the bargaining representatives to represent the bargaining representatives in bargaining;

(c) an order that an employer not terminate the employment of an employee, if the termination would constitute, or relate to, a failure by a bargaining representative to meet the good faith bargaining requirement referred to in paragraph 228(1)(e) (which deals with capricious or unfair conduct that undermines freedom of association or collective bargaining);

(d) an order to reinstate an employee whose employment has been terminated if the termination constitutes, or relates to, a failure by a bargaining representative to meet the good faith bargaining requirement referred to in paragraph 228(1)(e) (which deals with capricious or unfair conduct that undermines freedom of association or collective bargaining).

(3) The regulations may:

(a) specify the factors FWA may or must take into account in deciding whether or not to make a bargaining order for reinstatement of an employee; and

(b) provide for FWA to take action and make orders in connection with, and to deal with matters relating to, a bargaining order of that kind.

232 Operation of a bargaining order

A bargaining order in relation to a proposed enterprise agreement:

(a) comes into operation on the day on which it is made; and

(b) ceases to be in operation at the earliest of the following:

(i) if the order is revoked—the time specified in the instrument of revocation;

(ii) when the agreement is approved by FWA;

(iii) when a workplace determination that covers the employees that would have been covered by the agreement comes into operation;

(iv) when the bargaining representatives for the agreement agree that bargaining has ceased.’

Jurisdictional Prerequisites

[31] The AFMEPKIU must first establish that it had complied with the prerequisites for making an application for a bargaining order: section 229(4). The union relied upon section 229(4)(a)(i) to say it had concerns that the company had not met or were not meeting the good faith bargaining requirements. I am satisfied that this criterion has been met.

[32] Sections 229(4)(b) and (c) had not been met by the union. That was a submission made by Mr Lloyd but he conceded that section 229(4)(5) allowed FWA to still consider the application for a bargaining order if the formal requirement of (b) and (c) were not met. I adopt that concession given my understanding of the merits of the case before me.

[33] Section 229(4)(d) was not addressed specifically, on my recollection, by any advocate, but the union’s overall case was that the company had not responded appropriately to its concerns. I am satisfied that this criterion has been met.

[34] Accordingly, for the reasoning set out above, I am satisfied that the prerequisite requirements of section 229(4) have been met by the union, in order to make an application for a bargaining order.

[35] The other section of the Act going to jurisdictional prerequisites is section 230(2). I am satisfied that this section has been met in that the company has agreed to bargain for an agreement: section 230(2)(a).

Good Faith Bargaining Requirements

[36] The two unions / bargaining representatives (AFMEPKIU and CEPU) submitted that Coates Hire Limited had not complied with the good faith bargaining requirements of section 228 of the Act. Unless one of the unions establishes that at least one of those requirements has not been met, then no good faith bargaining order can be made. The unions raised two issues of concern which they say showed the good faith requirements had not been met: a) the second draft issue and b) the ballot process.

The Second Draft

[37] Having considered all of the evidence and submissions, I find that the unions have made out a case that one or more of the good faith bargaining requirements has / have not been met by the company. My reasoning is set out below.

The Back Pay Inducement

[38] The company put to FWA that it had bargained in good faith and cited the number of negotiation meetings that had taken place. It was not the company, it was put, that had brought the negotiations to an end, but rather the AFMEPKIU when it said that the Opt Out Clause had to be withdrawn from the bargaining table. This caused the impasse that brought the negotiations to an end and justified the company in then seeking the views of the employees through a ballot process. Having put that argument to justify that negotiations between / amongst the bargaining representatives had come to an end, the company can not, in my view, then put to the employees at a ballot process, a new bargaining item (back pay).

[39] Mr Lloyd described this back pay item as an administrative action by the Chief Executive Officer. I do not concur with this characterisation. This back pay inducement is to be characterised as a bargaining item that would otherwise be put on the bargaining table as an inducement (perhaps amongst other bargaining items) to seal a deal. It was an item that should have been put to the other bargaining representatives (union and non-union representatives) for their consideration.

[40] The failure of the company to put this back pay issue on the bargaining table was a breach of section 228(1)(e): capricious or unfair conduct that undermines collective bargaining.

Standardisation of Rates

[41] The AFMEPKIU submitted that there was an agreement reached during negotiations to standardise the rates of pay for employees within each C-classification. For example: there may be three hundred C-10 classification employees amongst the 1210 employees of the company. Currently there are varying rates of pay for those C-10 employees. There was an agreement to have a standard rate, below which no C-10 employee would be paid. The AFMEPKIU asserted that this standardisation process was to take place in the first pay increase when the enterprise agreement was approved by the FWA - say in April 2012.

[42] The second draft (11 April) showed that the standardisation process is not to take place until April 2015, being three years later. Mr Williamson gave evidence that that was so and clause 10.1 of the second draft (last paragraph) is to be read as the same confirmation. 10

[43] I find that the AFMEPKIU submission that there was an agreement to have standardisation in say April 2012 (three years earlier than the company claimed) is the correct conclusion to draw from the evidence. Mr Williamson said in oral evidence that he had advised the bargaining representatives at one of the negotiation meetings of a change in date for the implementation of the standardisation process. The last such negotiation meeting took place on 8 March 2012. But at a later date, Mr Williamson sent the first draft (26 March draft) to the AFMEPKIU and that draft has a table of rates of pay (Appendix B). It shows a rate of $29.10 for the C-10 classification. This is a rate that is only five cents less than the standardisation rate proposed by the union ($29.15). That submission of the union on its standardisation rate proposal of $29.15 was not challenged. The company proposed rate of $29.10 shown in the first draft is virtually identical to the union’s proposal and gives weight to the union’s claim that the first draft Appendix B has a wage structure reflecting an agreed standardisation rate to be implemented as soon as the proposed agreement was endorsed by FWA.

[44] Finally, if Mr Williamson’s evidence is correct that he raised at the 21 February 2012 meeting that the standardisation process would take place in April 2015, then why did he produce subsequently the first draft of March 2012 which has no reference to the standardisation wording found in the second draft of April 2012 ?

[45] For the foregoing reasoning, I find that the AFMEPKIU has made out its case that the standardisation issue is a bargaining issue that has been breached by the company by not complying to the agreed implementation date of 2012 (instead of 2015). Accordingly, I find that the company’s conduct is capricious or unfair conduct that undermines collective bargaining: section 228(1)(e).

Rates of Pay - Electricians

[46] Mr Kentish for the CEPU raised concerns about the rates of pay for electricians set out in the second draft. After some discussion involving the advocates and myself, I accept the company’s explanation that any anomalies in the rates of pay for all classes of electricians can be explained by typographical errors or otherwise.

[47] However, Mr Kentish also submitted that the second draft did not set out how the April 2015 rates were derived for electricians. He also asserted that there had been no discussions on the basis / method for deriving those 2015 rates.

[48] It seemed to me, that Mr Kentish’s assertions were not dealt with satisfactorily. Thus, the second draft only sets out a table of rates of pay being the final wage adjustment under the proposed enterprise agreement, for April 2015. The proposed agreement provides for four wage adjustments during its life. Be that as it may, there are no wage tables set out in the second draft, for the first three wage adjustments: date of approval by FWA (say April 2012), 2013 and April 2014 (clause 10 Wage Increases).

[49] I am not in a position to make a conclusive finding that the company has breached the good faith bargaining guidelines in respect of the method of calculation of the rates for all categories of electricians. I note that Mr Kentish did not give evidence from the witness box but what he put instead came from the bar table. Although I have formed the view that his submission was not dealt with satisfactorily, I decline to find a breach of good faith bargaining guidelines.

The Ballot Process

[50] The unions submitted that the flaws in the ballot process represented a breach of the good faith bargaining guidelines.

[51] Mr Lloyd for the company submitted that issues surrounding the ballot process were matters to be raised before FWA if the proposed enterprise agreement was approved by the employees and was then submitted to FWA for approval. I reject that submission. Mr McCauley referred to the full bench decision of Tahmoor Coal Pty Ltd as authority that a ballot of employees could fall within the good faith bargaining guidelines. Thus, the full bench said:

‘Although there may be circumstances in which the conduct of a ballot without the agreement of other bargaining representatives constitutes a breach of good faith bargaining requirements, it will not always be so.’ 11

The view I take is that issues about the ballot process, that are raised before the ballot takes place are issues for consideration under the good faith bargaining guidelines. Issues raised about the ballot process after the ballot has taken place are issues to be raised before FWA during the approval of the voted up enterprise agreement application before FWA.

[52] I have formed the view that there are flaws in the ballot process that satisfy the unions’ claims that those flaws represent a breach of the good faith bargaining requirements. Before dealing with those flaws, I set out the ballot process that is scheduled to take place.

[53] Initially, the ballot was to be by way of a show of hands and set down for Thursday, 19 April. There are 1210 employees to participate in that process - scattered over 210 work sites throughout Australia. The person carrying out the tallying of how an employee(s) voted in each work site, is the site branch manager. Following feedback from some employees for a secret ballot, the show of hands ballot was converted into a secret ballot to take place on Monday, 23 April, between the hours of 9:00am to 5:00pm. Ballot boxes and ballot papers have already been forwarded to the 200 plus work sites. The branch manager and a representative for the employee(s) at each work site will open up the ballot box and tally the vote of the ballot paper(s). The tally and ballot paper(s) is to be then forwarded to the corporate head office in Sydney.

[54] The first flaw in the above secret ballot process, goes to the issue of secrecy. The union’s witness, Mr Thompson gave evidence from the witness box about the ballot process. Through his testimony, a copy of a ballot paper was handed up to FWA as an exhibit (Ex 2). This copy of the ballot paper had been forwarded to him. The obvious question here goes to secrecy. How did some person in the workforce get a hold of a ballot paper before the ballot takes place? Assuming the person was not a branch manager, then that person is an employee who is to cast a vote. How many other employees have already been given a ballot paper before next Monday? Mr Thompson also gave testimony that (as I recall) a delegate had informed him that four employees in Western Australia, had already cast their vote. I accept Mr Lloyd’s submission that that was hearsay evidence but given that I have in my possession an exhibit that is a copy of a ballot paper, then the hearsay evidence may have to be given some weight. The evidence of Mr Thompson (including the exhibit) challenges the concept of secrecy. The ramification of that challenge is to then challenge the integrity of the voting process.

[55] I raised an issue about the secrecy of the ballot process with Mr Williamson when he was in the witness box. I put two scenarios to him. Firstly, where is the secrecy to how an employee voted in the circumstance where there is only one employee working at a site and the branch manager accesses that one vote to record a “Yes” or “No” vote? Secondly, where is the secrecy if four employees voted at a site and all voted the same way? Again the branch manager would know how the four employees voted. Add to those scenarios, that the branch manager can be seen as an extension of management by an employee(s) and the concern that an employee(s) has / have about their voting intention being no longer a secret from management. I form the view that the breach of secrecy surrounding the ballot process is unfair conduct that undermines the collective bargaining process: section 228(1)(e).

[56] Another potential flaw in the process goes to some employees being inadvertently denied the opportunity to vote. The AFMEPKIU raised in that regard a class of workers called Field Technicians who do not work on site but out on the road. There was conflicting evidence as to the number of such workers: 50 to 60 said the company - 170 to 200 said the union. Even on the company’s assessment, this is a large block of employees being denied the opportunity to vote on a particular day between certain hours - if it is the case that the circumstances of their work means that they will not be at the work site on the ballot day.

[57] The unions also raised as a flaw in the process, those employees denied an opportunity to vote because of absence due to annual leave. On one view of it, annual leave absences will be a feature of many a ballot and does not necessarily mean that a company has breached the good faith bargaining guidelines. However, the union did ask of Mr Williamson what steps the company had taken to alert such annual leave absent employees that a ballot was taking place so as to give those employees the opportunity to vote. Ballot flyers had been sent to work sites to be placed in lunch rooms and had not been addressed to domestic addressed of the employees. The view I form is that this does not represent a breach of the good faith bargaining guidelines but is an issue to be addressed by the company.

[58] The Union also raised as a flaw in the ballot process, and hence a breach of the good faith bargaining guidelines, that the company had not discussed with the bargaining representatives, the method for the approval of the vote - show of hands and thence the secret ballot. This was said to breach section 228(1)(b) of the good faith guidelines which goes to the requirement of a bargaining representative to disclose relevant information in a timely manner. I do not concur with this submission, on the facts of this case. Thus, the parties had reached an impasse in the negotiations. At that point, the company was entitled to put the enterprise agreement proposal (being the one negotiated around the bargaining table - but minus the back pay inducement) to employees for a vote. As such, I am not persuaded that that process is one falling within section 228(1)(b). That view also applies to the unions’ submissions that the company did not discuss with the bargaining representatives other ballot processes: annual leave absences, not at the worksite on the day of the ballot, supervision of the ballot process, secrecy of the vote, etc. However, having expressed that view that the company was not required under section 228(1)(b) to disclose / discuss those matters with the other bargaining representatives, there is merit for the company or any company to disclose / discuss such matters with the other bargaining representative(s) in order to have agreement about that process and avoid having the ballot process challenged as to the voting approval process when the voted up enterprise agreement comes before FWA.

[59] The above critique of the secret ballot process may lead to the view that a show of hands ballot cures some ballot process issues. However, I have a concern about a branch manager (perceived no doubt by some employees as an extension of management) carrying out a tally of a show of hands. Having a branch manager carry out that process might be seen as a form of coercion. That practice certainly raises the issue of independence of the person carrying out the tally process. Justice must not only be done, but be seen to be done - so to speak.

Section 230 Requirements

[60] Section 230 sets out those criterion for consideration by FWA as to the issuing of bargaining orders(s). Section 230(1)(a) has been satisfied in that the AFMEPKIU has made an application for bargaining orders. Section 230(1)(b) has been met in that FWA has considered the merit of the case against this section of the Act. Section 230(1)(c) is the discretionary criterion raised by Mr Lloyd for the company. He asked that if FWA came to the view that the company had breached the good faith bargaining guidelines, then FWA should exercise its discretion not to issue the sought after bargaining orders. However, I am satisfied in all the circumstances to make the orders as sought - having reflected on all that was put before me.

CONCLUSIONS

[61] As detailed above, I determine that the AFMEPKIU has established that the company has breached the good faith bargaining requirements set out in section 228(1) of the Act. Those breaches have occurred in the areas of the proposed agreement and in the ballot process put in place by the company. For the reasoning set out above, I will issue the two orders sought as relief in the AFMEPKIU application. The immediate consequence of issuing those orders is the deferring of the ballot set down for Monday 23 April 2012, to a later time.

COMMISSIONER

Appearances:

Mr T McCauley for the “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU)

Mr A Kentish for the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia

Mr G Nightingale for the Transport Workers’ Union of Australia

Mr D Lloyd for Coates Hire, Solicitor

 1 Ex 1, annexure GT1

 2 Ex 1, annexure GT3

 3 Ex 1, paragraph 16-17 / annexure GT5

 4 Ex 1, paragraph 11

 5   [2012] FWAFB 1891

 6   [2010] FWAFB 3510

 7   [2012] FWA 1776

 8   [2011] FWA 3916

 9   [2010] FWA 4509

 10 Ex 1, annexure GT3

 11   [2010] FWAFB 3510 at paragraph 30

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