“Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers' Union (AMWU) v Kuiper Australia Pty Ltd
[2024] FWC 2587
•19 SEPTEMBER 2024
| [2024] FWC 2587 |
| 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
Kuiper Australia Pty Ltd
(B2024/1177)
| DEPUTY PRESIDENT O’KEEFFE | PERTH, 19 SEPTEMBER 2024 |
Application for protected action ballot order for employees of Kuiper Australia Pty Ltd – application granted.
This is an application by the Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union known as the Australian Manufacturing Workers’ Union (AMWU) made under s.437 of the Fair Work Act 2009 (Act) for a protected action ballot order (PABO) in relation to certain employees of Kuiper Australia Pty Ltd (Kuiper).
Kuiper advised the Fair Work Commission (FWC) that it objected to the making of the order sought in this application on the grounds that the AMWU had not been and was not genuinely trying to reach an agreement. Kuiper also sought an order that the notice period required under s.414(2)(a) by extended to seven working days pursuant to s.443(5) if it were to be the case that the FWC granted the PABO.
The hearing
The hearing of this matter was originally to be held on 11 September 2024, concurrently with the application made by the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU) in B2024/1175. In its written submissions, Kuiper sought to have the matters adjourned pending the outcome of the compulsory s.448A conference that was being held later in the day of the hearing and also the outcome of Kuiper’s appeal against my decision in B2024/1087 where I granted a PABO to the Australian Workers’ Union (AWU). It also contended that holding the hearing on 11 September 2024 could create logistical issue for its chief witness Mr Follett, who was due to attend both the s.448A conference and a bargaining meeting with the unions held the following day. The CEPU did not consent to any delays and its application was heard on 11 September 2024. The AMWU indicated that they were agreeable to an adjournment of two days so that both the s.448A conference convened as a result of the AWU PABO and a further bargaining meeting scheduled for 12 September 2024 could proceed. On that basis, the hearing of B2024/1177 was adjourned until 13 September 2024.
Submissions and Evidence – Genuinely Trying to Reach an Agreement
The relevant section of the Act regarding the granting of a PABO is s.443. Section 443(1) sets out the requirements for the making of a PABO:
“443 When the FWC must make a protected action ballot order
(1) [When FWC must make a protected action ballot order] 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 ; 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.”
Consistent with previous findings, the words genuinely trying are to be given their natural and ordinary meaning. The Respondent submitted that the Applicant had not met the standard required for the FWC to be satisfied that it had been, and was, genuinely trying to reach an agreement. The Applicant submitted that its actions demonstrated that it had been and was genuinely trying to reach an agreement.
By way of what is uncontested factual background, the AMWU responded to an invitation from Kuiper dated 9 August 2024 to attend a meeting on 16 August 2024 to discuss a process for conducting negotiations for an agreement to replace the Kuiper Australia Pty Ltd Western Australia and Northern Territory Offshore Construction Projects Greenfields Agreement 2020-2024 (the Agreement). The AMWU then attended this meeting at which it was agreed that the first bargaining meeting would take place on 28 August 2024 albeit this was later changed to 29 August 2024.
On 22 August 2024 the AMWU sent Kuiper its log of claims for a new agreement. In the preamble to that document, the AMWU stated as follows:
“AMWU members are generally supportive of the adoption of the recently negotiated Bass Straight (sic) Offshore Construction Agreement where it provides for a greater benefit however AMWU members are wishing to maintain a 3/3 roster cycle.
All other claims items below are premised and based on the current WA/NT Offshore
Construction Agreements which expire 16 august (sic) 2024.”[1]
The log then listed a number of separate claims under five broad category headings.
The AMWU subsequently attended the first bargaining meeting for a new agreement on 29 August 2024. At that meeting the claims were discussed and Kuiper undertook to create a “claims tracker” document that would outline the claims from the AMWU and other unions and indicate the status of those claims from company’s perspective. This document was prepared and sent to the AMWU on 5 September 2024. Kuiper also provided its initial assessment of the costs of the claims by the AMWU. The AMWU lodged its PABO application on 8 September 2024. On 11 September 2024 the AMWU attended the s.448A conference convened as a result of the AWU PABO and then on 12 September attended a further bargaining meeting with Kuiper and the other unions.
The AMWU submits that it both is and has been genuinely trying to reach agreement with Kuiper. In written submissions the AMWU noted that it had articulated its claims prior to the first bargaining meeting, met with Kuiper and remains ready, willing and able to continue negotiations for a new agreement. The AMWU disagreed with the submission of Kuiper that the PABO application was premature because there had only been one meeting. It submitted that:
“There is nothing in the Fair Work Act 2009 (Cth) or any of the case law that suggests that a PABO cannot be made simply because the employer has not yet provided a clear position of its own. If the bar was set that low, employers could indefinitely frustrate the PABO process by refusing to provide its response to a union’s log of claims. The simple fact that the AMWU has applied for a PABO before Kuiper has provided its own claims does not lead to a conclusion that the AMWU is not genuinely trying to reach an agreement.”[2]
The AMWU also took issue with the claim by Kuiper that it had not had a chance to analyse the AMWU claims, citing Kuiper’s email dated 5 September where it provided some costings of the AMWU claims. The AMWU further submitted that Kuiper’s concerns regarding its claims being fanciful were not relevant to the process of determining whether good faith bargaining is occurring, and neither was Kuiper’s observation that the AMWU had not taken the same steps as the AWU to get the Company to bargain.
In further submissions provided at hearing, the AMWU noted the findings in JJ Richards & Sons v Fair Work Australia[3] to the effect that for the purposes of s.443(1) bargaining need not be well advanced or indeed have even begun, provided that a union has articulated its claims and sought a response. The AMWU submitted that the evidence of Mr Glenn McLaren demonstrated that a comprehensive log of claims had been provided to Kuiper prior to the issuing of the Notice of Employee Representational Rights (NERR). Further, the union had attended two bargaining meetings and it submitted that some progress had been made towards securing an agreement. Given this, the FWC could be satisfied that the AMWU was genuinely trying to reach agreement.
Kuiper submitted that the AMWU has not been genuinely trying to reach agreement. Citing a range of cases, it noted that
Whether or not a bargaining representative is genuinely trying to reach an agreement with the employer of the employees who are to be balloted is a contextual assessment[4], which requires an assessment of the relevant circumstances of the particular negotiations[5] and the steps taken in order to reach agreement[6]… (w)hilst there are no “rigid rules” and each case is to be determined on its own facts, there are certain thresholds or steps one would ordinarily expect to have seen occur, before it could (ordinarily) be said that an applicant for a protected action ballot order has been, and is, genuinely trying to reach agreement”.[7]
Kuiper submitted that the AMWU PABO application was “premature”. The AMWU had not initiated bargaining but rather had left that to Kuiper. There had only been one bargaining meeting and Kuiper had not yet properly analysed the claims. While Kuiper took issue with the decision in B2024/1087 it nevertheless contrasted the position of the AMWU with the AWU and proposed that unlike the AWU, the AMWU had not taken any steps to get Kuiper to bargain. Kuiper proposed that the AMWU:
“…have barely made an effort to bargain. Wherever the line might be drawn on prematurity in the circumstances of this bargaining process, the CEPU and AMWU are clearly at the very “premature” end of the spectrum at present.”[8]
Kuiper took further issue with the claims advanced by the AMWU, describing them as operationally and commercially unviable, fanciful and not authentic. Given this, Kuiper proposed that the AMWU could not be genuinely trying to reach agreement. I note that in the costing document it prepared, Kuiper appears to have based its calculations – and presumably this objection - on the AMWU’s expressed preference for the Kuiper Bass Strait Agreement rather than the separate claims the AMWU made, which were based on improvements to the current agreement.
In its submissions made at hearing, Kuiper noted that it relied on its written submissions and also the oral submissions made at the hearing of the CEPU PABO application. In those oral submissions Kuiper cited the decision in Coles Supermarkets (Australia) Pty Ltd v AMIEU[9](Coles) to make clear the relevance of the two distinct temporal elements in the requirement, being “has been” and “is”. Kuiper submits that the Coles decision makes it clear that the applicant must be genuinely trying to reach agreement at the time of determination and have been genuinely trying prior to that time. Following on from this, Kuiper drew my attention again to JJ Richards[10] where Flick J commented on the use of “genuine” and proposed that more than a perfunctory or preliminary engagement by an applicant would be required to be satisfied of this requirement.
Kuiper also drew on Total Marine[11] to support the notion that there is no fixed criteria for deciding whether an applicant is genuinely trying but that progress in negotiations is one issue that is frequently assessed. Given the AMWU had “barely got started” with negotiations then it was Kuiper’s submissions that the process was only in a preliminary stage. The parties had not really “grappled” with the issues and in any case what had transpired to date had been driven by Kuiper rather than the AMWU.
Kuiper further proposed in considering this issue there was a spectrum upon which applicants might be found. At one end was those applicants who clearly had been and are genuinely trying to reach agreement with bargaining well progressed and the applicant pressing for an outcome. At the other end was the applicant who had told someone that they wanted an agreement. Kuiper submitted that the AMWU were to be found at the latter.
In further submissions at hearing, Kuiper emphasised its view that the AMWU had an onus to demonstrate that it both has been and is genuinely trying to reach agreement. While not conceding the point, Kuiper acknowledged that the continuation of bargaining in the days immediately prior to hearing may have assisted the AMWU with respect to “is” trying, the history of bargaining in the matter suggested that they could not satisfy the second limb of “has been” trying. Kuiper emphasised that the AMWU had not sought to initiate bargaining and had merely responded to Kuiper’s invitation and contrasted this with the position of the AWU – albeit that again Kuiper did not concede that the outcome of that matter was correct.
Kuiper also submitted that assertions by the AMWU that it was genuinely trying were not sufficient to satisfy the FWC, nor were the AMWU’s motives. Instead, the FWC needed to look at all of the relevant circumstances and factors. It also noted that the word “genuine” in the Act must have some work to do and submitted that it implied that an active rather than a reactive approach was required.
Consideration
I should firstly note that I have not accorded any weight to the AMWU submission – referred to in paragraph 9 above – that authenticity of claims and the steps taken in the bargaining process are not relevant to good faith bargaining. The requirement to bargain in good faith has been found to be an issue that should not be conflated with genuinely trying to reach agreement and it has also been found that a party can be in breach of certain good faith bargaining requirements and still be genuinely trying to reach agreement.[12]
It is clear from the Act that the task of the FWC is to reach a state of satisfaction that the applicant party is and has been genuinely trying to reach agreement, where agreement takes the form of an enterprise agreement capable of being approved by the FWC. It is also clear from the language of the precedent cases that there is not one single hard and fast approach that must be universally applied, but that what is important are the facts and circumstances of each case.
In this case, while it is true that the AMWU did not seek to initiate bargaining, they have served a log of claims upon Kuiper, attended two bargaining meetings and been advised that their initial proposal - for the Bass Strait Construction Agreement - would involve wage increases that would not be viable[13]. It would appear to me that this clears the bar set by JJ Richards. A claim has been advanced and a response sought. Further, a response - albeit not comprehensive - has been given. It is clear from that response that the claim is unlikely to be accepted in its present form. While in his decision Flick J in JJ Richards does consider the use of genuine, I note that in the paragraph where he does so he concludes with respect to “genuine” as follows:
“the addition of that term serves to emphasize the importance of a person actually trying to solicit agreement. (my emphasis) Until a proposed agreement has been disclosed to the prospective parties, and a response solicited, an applicant has not even tried to reach agreement, let alone genuinely tried.”[14]
Given this observation, I am comfortable that the AMWU meets the standard set out in JJ Richards. However, JJ Richards does not stand alone, and I am mindful that Kuiper drew upon other cases. I agree with Kuiper that John Holland establishes that the onus falls to the applicant to demonstrate that it has been and is genuinely trying to reach agreement. However, I am also mindful of the finding of the majority in JJ Richards & Sons Pty Ltd v TWUA[15] (TWUA) who stated as follows:
“In the ordinary course of events where an applicant for a protected ballot order calls (acceptable) evidence that their intention, object or purpose is to reach an enterprise agreement under the FW Act, what may be described as an evidentiary onus shifts to the party or parties opposing the application to demonstrate why that evidence ought not be accepted sufficient to shift the evidentiary onus back to the applicant.
In circumstances where an applicant for a protected ballot order calls (acceptable) evidence that their intention, object or purpose is to reach an enterprise agreement under the FW Act a finding that the applicant was not “genuinely trying to reach an [enterprise] agreement” within the meaning of s 443(1)(b) will necessarily involve accepting evidence establishing that the applicant had some other, extraneous purpose in seeking the ballot. Indeed, when there is evidence from an applicant for a protected action ballot order that they have been and are “genuinely trying to reach an [enterprise] agreement” under the FW Act, it is difficult to conceive of circumstances where it could properly be found they were not, unless there is cross-examination or other evidence establishing that the applicant in truth has some other, extraneous intention, object or purpose or is seeking something other than an enterprise agreement under the FW Act.”
Looking broadly at the circumstances of the current matter, I note the unchallenged witness statement of Mr Glenn McLaren from the AMWU where Mr McLaren states as follows:
“There is a sense of urgency to the negotiations due to the end of project fast approaching. For that reason, the AMWU, on behalf of its members who it represents in the bargaining, has decided to apply for a PABO. The AMWU’s members want to take industrial action to put pressure on Kuiper to reconsider its rejection of the items on the AMWU’s log of claims. It is the only meaningful way that the AMWU and its members can put pressure on Kuiper to reach agreement before the end of the project.”[16]
Both the AMWU and its members are aware of the time pressures placed upon them by the imminent completion of the project. As I found in both the AWU matter and the CEPU matter, this is a significant contextual issue. The AMWU and its members are pursuing a strategy of securing future conditions for the industry. They presumably have a view of Kuiper’s strategy and how that impacts their own. In any case, the AMWU strategy can only be secured with an agreement that can be approved by the FWC. Put simply, that the AMWU would be genuinely trying to reach agreement makes clear sense. In addition, they have provided a log of claims, attended two bargaining meetings and had their claims subjected to an initial negative response from Kuiper. In my view, this is acceptable evidence that the AMWU is genuinely trying to reach agreement. If Kuiper wished to challenge this, it is arguable that they ought to point to some other intention, which they have not done and further, indicated that they did not wish to do.
They have, however - consistent with the findings in TWUA - looked to the authenticity of the claims made by the AMWU. Kuiper regards them as commercially and operationally unviable. They are free to take that view. However, I note firstly that there are in effect two sets of claims. One is a direct copy of conditions applying elsewhere in the Kuiper business in Australia and thus not without precedent. The other set is based on the current agreement and while it may appear to be ambitious there is no prohibition on ambition. Secondly, there is no requirement for union claims to be operationally and commercially viable. That is a matter for the parties to argue in bargaining. Making ambitious claims does not suggest that a party is not genuinely trying to reach agreement. This is an artificial barrier that Kuiper has tried to erect.
I also take issue with the notion of a spectrum. If there is a spectrum and unions can be at different points, then logically there must be movement along the spectrum. As I expressed in the AWU case, I accept that there are preparatory steps that a union might take prior to bargaining. However, once the bargaining is underway, I struggle – in the absence of any evidence about other agendas – to accept that there is a “Road to Damascus” moment where the union shifts from not genuinely trying to reach agreement to genuinely trying. I struggle even harder to envisage the catalyst that prompts this change.
I am also not persuaded by the notion – albeit that it was drawn from Total Marine – that progress in bargaining must be assessed. Firstly, I note that the case itself says “frequently assessed” which is consistent with the idea that there is no hard and fast rule in these matters. I am also mindful that there is no exact standard proposed by the majority in that case. That is to say that there is no suggestion that – for example – three bargaining meetings does not represent good progress but four meetings does. The notion also seems to run counter to the finding in JJ Richards that bargaining does not even need to have begun for the FWC to find that a union is genuinely trying to reach agreement. As such, I am not persuaded that there is anything of significance to be found in the number of meetings held to date.
It is clear to me that the AMWU is genuinely trying to reach agreement. This leaves the matter of whether they have been genuinely trying. Drawing on Coles I find that it can be said that the AMWU has – prior to the hearing and determination of this matter – been genuinely trying to reach agreement. I concede that it has only been doing so for a short period. However, the Act does not impose a minimum time frame for “has been” and so a short period meets the requirement.
In summary, a proper application has been made by the AMWU under s.437 of the Act and I find that the AMWU has been and is genuinely trying to reach agreement with Kuiper. As a consequence, I am required to make the requested PABO, and an order will issue.
Extension of period of notice
In its submissions, Kuiper sought orders that if the PABO was granted, then pursuant to s.443(5), the notice period as set out in s.414(2)(a) of the Act be extended from three working days to seven working days. In its written submissions, the AMWU chose not to address this issue. However, in further submissions made at hearing it opposed the extension, on the basis that the evidence provided by Kuiper did not establish exceptional circumstances.
Section 443(5) of the Act provides as follows:
“(5) [When protected action ballot order may specify extended period] 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 being longer than 3 working days or 120 hours (whichever is applicable), the protected action ballot order may specify a longer period of up to 7 working days.”
From this it can be seen that the threshold issues are that the circumstances must be exceptional, and they must also justify extending the notice period. Even if this is the case, the FWC still has discretion over the making of an order to extend the notice period.
The Respondent provided evidence from Mr Shameer Shroff, project manager for Saipem Australia Pty Ltd (Saipem) who is project manager for the project where the relevant employees of Kuiper are operating. Mr Shroff provided a witness statement that gave details of the processes involved with completing the work and in particular the operations of the pipe-laying vessel the Castorone. Of particular relevance is Mr Shroff’s evidence regarding “abandonment”, being the process where the Company needs to shut down the pipe-laying work due to prediction about adverse sea conditions. For the safety of the crew and to protect the vessel and its equipment, Mr Shroff’s evidence is that such abandonment needs to be undertaken in favourable sea conditions.
In his statement, Mr Shroff details the usual practice for abandonment as follows:
“…Saipem seeks to avoid abandoning the pipeline in adverse sea states. Saipem accordingly attempts to identify (through modelling) the most favourable sea state in which to undertake the abandonment work, in order to reduce the safety risks for the vessel and its crew. This modelling is most accurately undertaken by Saipem’s engineering team in Italy. Undertaking that modelling can take up to 2 days (depending on the availability of engineers), and it can then take a further 48 hours to communicate the outcome of that modelling to relevant stakeholders, and achieve the requisite sign-offs from, the client, the Marine Warranty Surveyor, and finally the Castorone. The Castorone then requires 12 hours to perform the necessary preparatory steps before it can start the abandonment work.”[17]
Based on this evidence, it could take four and a half days to get to a state where the ship and crew are safely detached from the undersea pipeline.
I note that Mr Shroff conceded that it was possible in emergency situations where it was necessary to protect the crew to shut down the operations in twelve hours. However, such a shutdown would still present a risk to the ship and equipment and as such the only way to protect both crew and equipment was to use a planned shutdown which could take up to four and a half days.
In further written evidence Mr Shroff stated that stoppages of work by the AMWU members – clarified at hearing to be those engaged as barge welders - which extended for four or more hours could require a halt to the laying of the pipeline.[18]
In my decision in the AWU PABO application referred to above ([2024] FWC 2376) I found that given the nature of the operation being undertaken, I was satisfied that there were exceptional circumstances to the case. Those circumstances are the same in this matter and so I repeat my observations here:
“The operation is a major and complex capital work being undertaken in difficult conditions where there appears to be potential for risks to safety and to equipment if activities such as abandonment are not carried out according to protocols. Again, given the circumstances, I am satisfied that there is justification for an extension of the notice time. As conceded by Kuiper, the mere fact of economic loss for an employer will not justify an extension. Industrial action by its nature involves inconvenience, loss of production and economic impact for the employer. However, caution needs to be exercised where there is also potential for serious safety risks to employees and damage to equipment, which I accept is the case here.”[19]
As in the AWU matter, I will exercise my discretion to order that where industrial action will involve the stoppage of work for four or more hours - be that a single action or a number of consecutive actions – then the AMWU must give Kuiper five working days’ notice of such action. Such notice is consistent with the evidence of Mr Shroff found at paragraph 47 of his witness statement. Where industrial action will not involve a stoppage of work for four or more hours, then the usual notice period of three working days will apply.
DEPUTY PRESIDENT
Appearances:
Milo Bronleigh of Fogliani Lawyers
Nicholas Ellery of Counsel
Hearing details: 13 September 2024
[1] Glenn McLaren Statement Attachment GM1 page 1
[2] AMWU Submissions page 3 paragraph 15
[3] JJ Richards & Sons Pty Ltd v Fair Work Australia (2012) 201 FCR 297
[4] JJ Richards & Sons Pty Ltd v Fair Work Australia (2012) 201 FCR 297 at [58].
[5] Total Marine Services Pty Ltd v Maritime Union of Australia (Total Marine) [2009] FWAFB 368 at [31].
[6] Total Marine Services Pty Ltd v Maritime Union of Australia [2009] FWAFB 368 at [32].
[7] JJ Richards at [58]-[59] and Total Marine at [31]-[32] and [35]-[36]
[8] Kuiper Submissions page 6 paragraph 28
[9] Coles Supermarkets (Australia) Pty Ltd v AMIEU [2015] FWCFB 379 at [45]-[49]
[10] JJ Richards at [58]-[59]
[11] Total Marine at [31]-[32]
[12] See Esso Australia Pty Ltd v AMWU [2015] FWCFB 210 at [18]
[13] Email from Craig Follett to bargaining representatives dated 5 September.
[14] JJ Richards at [59]
[15] JJ Richards & Sons Pty Ltd v TWUA [2010] FWAFB 9963 at [62]-[63]
[16] Witness Statement of Glenn McLaren page 2 paragraph 11
[17] Witness statement of Mr S Shroff page 8 paragraph 47.
[18] Ibid pages 7-8 paragraphs 41-43.
[19] Australian Workers’ Union v Kuiper [2024] FWC 2376 at [49].
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