"Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union" known as the Australian Manufacturing Workers' Union (AMWU)-Western Australian Branch v Airflite Pty Ltd
[2010] FWA 1723
•2 MARCH 2010
[2010] FWA 1723 |
|
DECISION |
Fair Work Act 2009
s.238 - Application for a scope order
v
Airflite Pty Ltd
(B2010/19)
COMMISSIONER CLOGHAN | PERTH, 2 MARCH 2010 |
Application for a scope order.
[1] On Tuesday 23 February 2010, the Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (AMWU) (“the Applicant”) made application for a Scope Order pursuant to s.238 of the Fair Work Act 2009 (“the Act”).
[2] The Order is sought against Airflite Pty Ltd (“the Employer”).
[3] The Applicant is seeking that the proposed enterprise agreement between the Applicant and Employer cover employees located at the Pearce Airbase in Western Australia and exclude those employees at the East Sale Airbase, Victoria.
[4] This application, together with an application for a Bargaining Order pursuant to s.229 of the Act, by the same Applicant, against the same Employer, was first heard on Wednesday 24 February 2010. The matter was brought on for hearing expeditiously as a vote on the proposed agreement was to take place on Thursday 25 February 2010.
[5] At the hearing on 24 February 2010, the matter was adjourned into conference. At the conclusion of the conference, it was agreed that the application for the scope order would be heard on Friday 26 February 2010 with a commitment by myself to provide the parties with a decision by close of business, Tuesday 2 March 2010 (as 1 March 2010 was the Labour Day public holiday).
BACKGROUND
[6] The Employer has a Maintenance Support Contract with the Royal Australian Air Force with an estimated duration to 2016.
[7] The proposed enterprise agreement is in respect to work relating to the contract by employees in the positions and classification eligible to be members of the Applicant.
[8] The Airflite-Aerospace Maintenance Award 1999 1 is the “parent award”. The Award applies to the relevant employees at the Pearce Airbase and East Sale Airbase.
[9] The Airflite-Aerospace Maintenance Collective Agreement 2007 is the current enterprise agreement which nominally expired on 1 December 2009. The 2007 Agreement applies to the relevant employees at the Pearce and East Sale airbases. The number of employees to be covered by the proposed agreement are approximately:
| 138 |
| 48 |
NEGOTIATIONS FOR REPLACEMENT AGREEMENT
[10] The Applicant provided the Employer with a “log of claims” on 7 October 2009 2. Having examined the log of claims, it is more akin to a series of proposals (18) in dot point fashion.
[11] The Respondent replied on 23 October 2009 and a meeting was held on 28 October 2009. While it was not specified in the log of claims, the Employer acknowledged that the Applicant proposed that Pearce Airbase employees, “would warrant a different level of increase to that that should be awarded possibly to East Sale employees because of different economic circumstances” 3. Between 28 October 2009 and 9 December 2009, no further discussions took place except for the Employer attempting to progress discussions by way of emails to the Applicant on 19 and 26 November 2009 and 7 December 20094.
[12] On 9 December 2009, the Applicant responded to the Employer’s correspondence of 23 October 2009 5. For the purpose of this application, the relevant parts of the correspondence of 9 December 2009 are as follows:
“An issue that was raised at the face to face negotiation meetings we had had, and which have not made it into the Company’s correspondence is the issue of the scope of the agreement. I received feedback from the membership that they believe that bargaining for a new Enterprise Agreement is not proceeding efficiently or fairly because of the Company’s current insistence on negotiating a single Agreement to cover two separate workforces, namely employees in Pearce, Western Australia and East Sale, Victoria.”
“To test whether this view was widely held, our Union created a petition which I have enclosed with this letter. You will see from the enclosure that one hundred and thirty two (132) of your Pearce based workforce hold this view. In their petition they have asked that the Company continue bargaining for an Enterprise Agreement that covers their enterprise, namely the company’s operations in RAAF Peace, Bullsbrook.”
“The membership has indicated that they do not have any contact or community of interest with the Company’s employees in RAAF East Sale, Victoria; that different economic and employment conditions prevail between each State; that there is considerable geographic separation of the workforces; and that the Company has not sought to facilitate representation from the Victorian employees at the bargaining table.”
“We await the Company’s considered reply to our request.” 6
The introduction to the petition reads:
“We, the undersigned petitioners, employed by Airflite Pty Ltd (the Company) at Pearce Airbase in Bullsbrook, Western Australia, give notice of our concern that bargaining for a new Enterprise Agreement is not proceeding efficiently or fairly because of the Company’s insistence on negotiating a single Agreement to cover two separate workforces, namely employees in Bullsbrook in Western Australia and Sale in Victoria. We believe that it is not appropriate for the proposed Agreement to cover employees from the Company’s Victorian operations.”
“We give formal notice that we wish to negotiate an Enterprise Agreement with Airflite Pty Ltd for our enterprise, the enterprise in which the Company employees us, which is the Company’s operations in the Pearce Airbase in Bullsbrook, Western Australia. We trust that the Company will agreed to our request and notify our bargaining agents that this is the case.” 7
[13] Subsequently, an undated and on a “without prejudice” memo to the Applicant from 34 employees rescinded their signature from the original petition. For completeness, the rescinding petition introduction reads as follows:
“Please be advised that I wish to remove my signature from the petition to exclude East Sale from Pearce in the Enterprise Agreement negotiations, as I now regret my decision to sign it. Most importantly, I believe that East Sale and Pearce should remain on the same collective agreement.”
[14] On 21 January 2010 a further meeting of the parties occurred. The Employer considered the splitting of the proposed enterprise agreement into WA and Victoria components as proposal 19 (there were 18 in the initial log of claims). For the Employer, it was submitted that this was the first time they formally acknowledged the Applicant’s proposal.
[15] Mr Okely, for the Employer, described the discussion on the Applicant’s request to change the scope as follows:
“It was primarily based – from the discussion we had, it was primarily based that the applicant was trying to obtain a greater share of the wage increase to the Pearce contingent rather than the East Sale contingent and used economic conditions between the two sites as the main reason for that.” 8
[16] On 29 January 2010, the Employer forwarded to the Applicant, on a “without prejudice” basis, its response to the log of claims 9. The relevant part is as follows:
“Claim 19: Removal of East Sale Employees from the EA. In correspondence from the Union dated 09 December 2009, the Union requests, as an addition to the log of claims, that the EA be altered to cover the Pearce workforce only and remove the East Sale workforce from the document. Discussion on this issue on the 21 January 2010 clarified the Union’s rationale for this change which is largely based on the results of a Union sanctioned petition from the Pearce workforce. Acknowledging the results of the petition, the Company’s believes the petition results are not accurate due to the way the reasons for the petition was presented as outlined during the discussion on the 21 January 2010. Therefore, the Company does not support the removal of East Sale from the EA and will proceed with the EA development including both sites. Ultimately, the majority vote by the employees will determine the final makeup of the EA and the company will abide by the resultant outcome.”
[17] Subsequent to this correspondence, there was a series of email exchanges between the parties and minutes of a site AMWU meeting on 18 February 2010.
[18] For the purposes of this application, the relevant material is an email from Mr Constantinides (Respondent) to Mr Wilson (Applicant) on 16 February 2010 which states:
“Your statement about the Victorian employees is also noted but I personally find it difficult to understand why you want them excluded. You were the organisation that wanted them engaged in these discussions a few years ago and the same organisation who visited them recently to gain their vote. If you were not interested in backing them why did the AMWU visit them last week?? Your right to apply for a scope order before Fair Work Australia is also understood and we are happy to respond to the order is successful.” 10
Mr Wilson responds on the same day:
“With regard to the scope order issue, our reasons are simple:
1) The two workforces are geographically, operationally and organisationally distinct;
2) The two workforces have not bargained together and have no interaction or history of interaction;
3) In spite of the different economic conditions and costs of living which apply to each workforce, the Company wants to give both workforces the same pay rise;
4) If ‘the bucket’ is only so big, then there is no reason why it can not be apportioned according to the different economic conditions and costs of living which apply to each workforce; and
5) It is what the workers at RAAF Pearce want.” 11
[19] On or around 16 February 2010, the Applicant forwarded to the Employer a further draft proposed agreement which excluded East Sale employees.
[20] On 16 February 2010, the Employer issued a “without prejudice” memorandum to all employees covered by the proposed agreement, advising: where the proposed agreement would be displayed; the voting arrangements and general discussion sessions to take place on 18 and 23 February 2010 in East Sale and Pearce.
[21] On 18 February 2010 the site AMWU employees unanimously endorsed the Applicant seeking a scope order to exclude East Sale employees.
[22] With regards to the negotiations, it was acknowledged by the Respondent that in negotiations for the current (2007) enterprise agreement, the Applicant had raised with the Employer the possibility of two separate agreements for Western Australian and Victorian employees.
LEGISLATIVE FRAMEWORK
[23] Section 238(1) provides:
“Bargaining representatives may apply for scope orders
(1) A bargaining representative for a proposed single‑enterprise agreement may apply to FWA for an order (a scope order) under this section if:
(a) the bargaining representative has concerns that bargaining for the agreement is not proceeding efficiently or fairly; and
(b) the reason for this is that the bargaining representative considers that the agreement will not cover appropriate employees, or will cover employees that it is not appropriate for the agreement to cover.”
Firstly, I am satisfied that the Applicant is a bargaining representative with the ability to apply for a scope order. I am satisfied, from submissions and evidence produced at the hearing, that the Applicant has concerns that bargaining for the agreement is not proceeding efficiently or fairly and that the proposed agreement will not cover appropriate employees that is not appropriate for the agreement to cover These concerns have been articulated verbally and in writing during the course of bargaining as highlighted above in pargraphs 10 to 22.
[24] Section 238(2) provides:
“No scope order if a single interest employer authorisation is in operation.
(2) Despite subsection (1), the bargaining representative must not apply for the scope order if a single interest employer authorisation is in operation in relation to the agreement.”
A single employer authorisation is not present and, consequently, the Applicant has standing to make application pursuant to s.238(1).
[25] Section 238(3) provides:
“Bargaining representative must have given notice of concerns
(3) The bargaining representative may only apply for the scope order if the bargaining representative:
(a) has given a written notice setting out the concerns referred to in subsection (1) to the relevant bargaining representatives for the agreement; and
(b) has given the relevant bargaining representatives a reasonable time within which to respond to those concerns; and
(c) considers that the relevant bargaining representatives have not responded appropriately.
[26] The Applicant asserts that it gave written notice to the Employer of its concerns on 9 December 2009 setting out that bargaining is not proceeding fairly or efficiently. Further, reasonable time elapsed for the Employer to respond to those concerns and that the response from the Applicant’s perspective was not appropriate.
[27] The Employer argues that the initial log of claims, received on 7 October 2009, does not request two separate agreements for Western Australia and Victoria. Consequently, the correspondence and petition of 9 December 2009 stating that bargaining was not proceeding efficiently or fairly came as a “surprise” 12. Notwithstanding it was a surprise, the matter of differential conditions between Western Australian and Victorian employees was raised at the meeting on 28 October 2009.
[28] Putting aside what happened prior to 9 December 2009, from this date onwards, the Employer was aware that almost its entire workforce in Western Australia, as a result of the petition, did not want a single agreement to cover the workforce in Western Australia and Victoria.
[29] The Employer submitted that written notice of its concerns, as set out in s.238(1), did not occur verbally until the meeting of 21 January 2010 (when it was considered to be proposal 19) and not in written form, until on or around 16 February 2010, in either the email by Mr Wilson to Mr Constantinides or in the draft proposed enterprise agreement.
[30] I am satisfied that formal written notice was given on 9 December 2009 and that it was formally responded to on 29 January 2010.
[31] The Employer also submitted that subsection 238(3)(a) had not been met in that the Applicant had not given written notice setting out those concerns to the “other duly appointed bargaining representatives” 13. In this bargaining process, there are four (4) self appointed employees as bargaining representatives.
[32] The proposition put by the Employer is tenuous, for at least two reasons. While the Applicant was aware of other bargaining representatives, their names were unknown as they did not form part of its bargaining process with the Employer. The Employer “took the position of protecting…privacy” 14. As the Applicant pointed out, it had requested that other bargaining representatives be at the “negotiating table” but the Employer chose not to adopt that course of action and held discussion separately15. Further, up until 9 December, there were no other nominated bargaining representatives.
[33] Secondly, the legislation refers in s.238(3)(a) “relevant bargaining representatives”. While I may be wrong in my interpretation and all bargaining representatives should be aware of concerns (see paras 34-45 below), the fact is the principal bargaining representative able to agree to the Applicant’s request is the Employer, and the Employer was aware of these concerns on 9 December 2009.
[34] The Employer referred me to LHMU v Coca Cola Amatil [2009] FWAFB 668 with the following commentary:
“Where it is specifically stated and covered that there can be no inherent unfairness in alternate coverage propositions and that these are the subject rightly of bargaining in their own right which the applicant was free to do if they wished and we have led evidence conclusively and they have not dispute that, that besides one letter which contains a vague reference to the views of some of their members, or at best could be interpreted that that is their view, there were no further attempts made to progress that discussion up until 21 January, some six weeks later, and again no further attempt to progress that discussion until the lodgement of the scope order application. So there has been no bargaining from the side of the applicant so they cannot attempt to ask this commission to order that a scope order should be awarded on the grounds that it has proceeded inefficiently.” 16
[35] Firstly, as an observation, the commentary is not factual – the letter of 9 December 2009 is certainly more than “vague”.
[36] With respect to the Full Bench decision [2009] FWAFB 668, it does little to advance the submission put by the Employer. For example, the Full Bench at paragraph 39 states:
“Once bargaining has commenced, s.238 is available to deal with disputes about the scope which impede bargaining. Unlike a majority support determination, a scope order can limit or extend the scope of bargaining, through a requirement to include or exclude a class of employees in bargaining for a proposed agreement or requiring bargaining collectively with different classes of employees in relation to separate agreements.”
[37] This is what is happening in this application. Simply put, the parties disagree on the scope of the proposed enterprise agreement and this is impeding bargaining.
[38] The Employer also referred me to the decision of Senior Deputy President Richards in [2009] FWA 849 with the following commentary 17:
“…in that submission Deputy President Richards deals with the principles that we’ve alluded to in terms of the applicant’s obligations to meet the good faith bargaining requirements and the provision of notice to relevant bargaining representatives”.
[39] While the Employer particularise reference to the Senior Deputy President’s decision in very broad terms, I will refer to the principal issue raised, that is, notice to the relevant bargaining representatives.
[40] The decision of SDP Richards deals with an application by the Australian Meat Industry Employees Union (“the AMIEU”) for scope orders. The orders seek to excise those employees who work in meat units from a national enterprise agreement for Woolworths supermarkets’ non-salaried employees.
[41] The decision sets out the extensive historical context involving the AMIEU, Woolworths Ltd, the Shop, Distributive and Allied Employees Association (“the SDA”) and the Australian Workers’ Union of Employees (“the AWU”) and the proposed national agreement.
[42] His Honour has the following sub-heading in relation to s.238(3)(a), (b) and (c):
“To whom should be AMIEU have given notice of its concerns (s.238(3) of the Fair Work Act)?”
At paragraph 81, SDP Richards states:
“[81] I concede that this is an area in which there is considerable scope for confusion to arise.”
In the context of the legislation, His Honour poses the question:
“[82] Is an applicant required, therefore, to give notice of its concerns to all bargaining representatives or just relevant bargaining representatives, and if the latter, how are they to be distinguished from all the bargaining representatives involved in the bargaining process?”
SDP Richards immediately alerts the reader to the difficulty of an applicant not knowing the other bargaining representative, as it is not prescribed in the Act for all parties to be notified pursuant to s.176 (para [83]).
[43] Further, in the decision, His Honour poses another question as a sub-heading:
“Who is a ‘relevant bargaining representative’ for the purposes of s.238(3) of the Fair Work Act?”
His Honour’s tentative finding is found at paragraph 115 where he states:
“[115] Whilst the basis for distinguishing “relevant” bargaining representatives from all bargaining representatives in the bargaining process might be fraught, in my view it would at least extend to those bargaining representatives who are complicit (directly or indirectly) in the “concerns” which have been the subject of the written notice under s.238(3) of the FW Act. It is because they are complicit in manner I have described that a bargaining representative is ascribed the identity as a “relevant bargaining representatives” for the purpose of the section”.
[44] In my view, His Honour’s approach is sensible in that Parliament could have inserted the word “all” before “bargaining representatives” and not the word “relevant”. The word “all” would encompass each and every bargaining representative, whereas the word “relevant” relates to those bargaining representatives who are pertinent to the concerns of the Applicant. While there may be scope for confusion, His Honour’s approach enables a case by case examination of who is “relevant”, and in this case, while he considered Woolworths (South Australia) or the AWU to be “bargaining representatives”, their interests, were for all practical purposes subsumed in Woolworths and were not relevant for the purposes of s.238(3) of the Act, However, His Honour found the SDA “relevant” and that it “was not notified in its won right of those concerns, nor given an opportunity to respond to those concerns (let alone within a reasonable period) (paragraph 100). Consequently, the AMIEU did not comply with s.238(3) of the Act.
[45] In this application, I am satisfied that the relevant bargaining representatives were notified of the Applicant’s concerns. I am also satisfied that the period between 9 December 2009 and 29 January 2010 (or the meeting of 21 January 2010) was a reasonable time to respond to the Applicant’s concerns. Finally, I am satisfied that the Applicant considers that the Employer has not responded appropriately in view of all the material provided at the hearing.
[46] I reach this conclusion for, at least, three reasons. Firstly, until the day before this hearing, the Applicant was unaware of those bargaining representatives who had self nominated pursuant to s.176(4) of the Act despite requesting the Employer to have them at the negotiating table. Secondly, no evidence was presented that the four (4) self appointed bargaining representatives were “complicit” in the Applicant’s concerns. Finally, as the proposed enterprise agreement is one between the Employer and its employees, the determination of the “concerns” is essentially for the Employer and not the four self appointed bargaining representatives.
[47] I now turn to when the Tribunal can make an order as sought by the Applicant.
[48] Section 238(4) provides:
“When FWA may make scope order
(4) FWA may make the scope order if FWA is satisfied:
(a) that the bargaining representative who made the application has met, or is meeting, the good faith bargaining requirements; and
(b) that making the order will promote the fair and efficient conduct of bargaining; and
(c) that the group of employees who will be covered by the agreement proposed to be specified in the scope order was fairly chosen; and
(d) it is reasonable in all the circumstances to make the order.”
The Applicant put the position that it has, as a bargaining representative, met the good faith bargaining requirements as set out in s.228 of the Act. The Employer, in contrast, asserted in his opening submission that the good faith requirements had not been met by the Applicant. Apart from highlighting issues within the bargaining process, the Employer did not put anything substantial to the Tribunal with the exception of s.228(1)(f).
[49] The fact that there are delays, lack of feedback and hiatus in negotiations does not automatically reflect bad faith bargaining by any party. The fact that one party does not set out “up front” all the issues for negotiations does not preclude matters being raised at a later date – the genuineness of such actions, will be determined on a case by case basis, and it does not mean “anything goes”. Finally, where a document is produced by others (in this case two (2) petitions of employees), unless I can be persuaded that it was created under duress or inducement, I will take it as reflective the views of the employees and not dismiss them on the basis of a view taken by a third party.
[50] To return to paragraph 48 where the Employer put the proposition that the Applicant had not met the requirement of ss.228(1(f) in that it failed to recognise and bargain with other bargaining representatives to the agreement.
[51] Without being too critical of the Employer, to raise this issue when the Applicant encouraged the Employer to have the other bargaining representative at the negotiating table, and it chose not to do so, is disingenuous. Secondly, to put the proposition, when the Applicant Union was unaware of the names of the other bargaining representatives, is a fiction. I have dealt with the matter in paragraphs above, especially 34-45.
[52] It is noteworthy that, with the exception of the Applicant’s application for a bargaining order on 23 February 2010 (B2010/2701) neither party had made any statement regarding a lack of good faith bargaining.
[53] I am satisfied that the Applicant has met and continues to meet the good faith bargaining requirements.
[54] In relation to s.238(b), I have to be satisfied that in making the order, it will promote fair and efficient conduct of bargaining. It is noticeable, firstly, that the word “fair” precedes “efficient”. For the Applicant, the conduct of bargaining will be improved from a fairness perspective if the employees in Western Australia, primarily due to economic reasons, be treated differently to the employees in Victoria. For them, fairness is not being treated in the same agreement as Victorian employees. This belief has been reflected by a petition of 132 employees, which was later rescinded by 34 employees at the Pearce Airbase. Notwithstanding the fact that some employees did not sign the petition and some rescinded their decision later, it is a fact that a majority of Western Australian employees appear not to want to be part of an agreement with Victorian employees. I suspect the prevailing economic conditions are responsible, to a large extent, for that decision.
[55] With regards to promoting the efficient conduct of bargaining, it would be fair to say that the bargaining process has reached a stalemate until this issue of scope, which has been “live” since, at least, 9 December 2009 is resolved.
[56] In contrast, the Employer has drawn my attention to the historical context of the parent award and agreement made since the late 1990s. For the Employer, fairness is a continuation of the “status quo”. Commercially, the Employer put the view that these employees are employed to service one Commonwealth contract and there is no “compelling fact or commercial rationale” to make a distinction between the terms and conditions between Western Australian and Victorian employees.
[57] For the reason set out below in addressing s.238(4)(c), I am satisfied that the making of the order will promote fair and efficient bargaining.
[58] Due to the orders sought by the Applicant do not cover all of the Employer’s employees, s.238(4A) is relevant to the finding of satisfaction by the Tribunal related to s.238(4)(c).
[59] Simply put, I have to be satisfied that the group of employees chosen by the Applicant was fairly chosen, taking into account whether the group is geographically, operationally or organisationally distinct. It should be noted that this provision in the Act is in the separate and alternative, and not in the connective.
[60] It goes without saying that geographically, the group of employees is distinct. Further, it is not uncommon for organisations that cross state boundaries to separate out employees on the basis of regions. Similarly, organisations also seek not to differentiate on the grounds of state boundaries. The provision of two separate agreements for Western Australian and Victorian employees cannot be said to be fatal or dysfunctional to the Employer’s operations by having separate agreements for Western Australian and Victorian employees as it currently has a variety of industrial instruments in place 18.
[61] Operationally and organisationally both sites operate independently and, as one would expect, administratively they are brought together through head office functions. From evidence, there appears to be no mobility between the sites and, to all intent and purposes, are as separate as their geographical location, except to say that they have a common employer and Commonwealth contract to service.
[62] I am satisfied that the group of employees was fairly chosen.
[63] I consider that it is reasonable, in all the circumstances, to make the order. In reaching this conclusion, I have taken into account:
- all the preceding matters;
- the orders, as sought by the Applicant will assist in the bargaining process particularly to resolve the stalemate which currently exists;
- the Applicant has met the requirements of the Act in seeking the order;
- there is nothing in the Support Contract with the Royal Australian Air Force which precludes the making of the orders as suggested by the Employer;
- the fact that the Applicant raised the issue of differential conditions of employment at the time of making the previous enterprise agreement 19;
- in this bargaining process, similar to previous agreements, no employees from East Sale have been involved 20; and
- the objectives of that part of the Act dealing with disputes where the bargaining representatives request assistance in the making of enterprise agreements.
[64] In view of these conclusions, and the matters contained in the Decision, the application is granted and an Order to this effect is issued.
COMMISSIONER
Appearances:
Mr J Wilson, for the "Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union" known as the Australian Manufacturing Workers' Union (AMWU)-Western Australian BranchMr M Haylett, for Airflite Pty Ltd
Hearing details:
2009
Perth
26 February
1 Exhibit R1
2 PN 153
3 PN 154
4 Exhibit R4
5 Exhibit A1
6 Exhibit A1
7 Exhibit A1
8 PN 211
9 Exhibit A4
10 Exhibit A5
11 Exhibit A5
12 PN 156
13 PN 158
14 PN 319
15 PN 266
16 PN 360
17 PN 358
18 PN 294-297
19 PN 251
20 PN 99
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