Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union known as the Australian Manufacturing Workers' Union v Brockman Engineering Pty Ltd

[2021] FWC 5038

[2021] FWC 5038

FAIR WORK COMMISSION

REASONS FOR 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
v
Brockman Engineering Pty Ltd
(B2021/625)

The Australian Workers' Union
v
Brockman Engineering Pty Ltd
(B2021/647)

DEPUTY PRESIDENT GOSTENCNIK MELBOURNE, 17 AUGUST 2021

Proposed protected action ballot of employees of Brockman Engineering Pty Ltd.

[1] On 13 August 2021 I decided ex tempore to make protected action ballot orders on application by the Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union known as the Australian Manufacturing Workers’ Union (AMWU) and by The Australian Workers’ Union (AWU) in relation to bargaining for a proposed enterprise agreement with Brockman Engineering Pty Ltd (Brockman). These are my reasons for deciding to make the orders.

[2] On 4 and 9 August 2021 respectively the AMWU and AWU applied under s 437(1) of the Fair Work Act 2009 (Act) for a protection action ballot order. The requirements for making a protected action ballot order are set out in Part 3-3, Division 8 of the Act.

[3] A protected action ballot order may only be made in limited circumstances and the Commission does not have the discretion, other than to make an order, if it is satisfied that there has been a valid application made under s 437 and that the applicant has been and is genuinely trying to reach an agreement with the employer of the employees who are to be balloted.

[4] As is evident from the above an order will only be made on application relevantly, by a bargaining representative of an employee who will be covered by a proposed enterprise agreement. It is common ground that the AMWU and the AWU is each a bargaining representative for the proposed agreement of at least some of the employees who will be covered by the proposed agreement. It is also not in dispute that the nominal expiry date of the current agreement has passed and that the AMWU and the AWU has each served a copy of its application on Brockman and the Australian Electoral Commission, within 24 hours of making the application. It is also not disputed that there has been a notification time for the proposed agreement, and that the notification time preceded the applications. Nor is it in contest that each application specifies the group of employees who are to be balloted and the questions to be put to employees who are to be balloted including the nature of the proposed industrial action. Accordingly on the materials I am satisfied as to each of these matters. It follows that the applications for a protection action ballot order may be made and have been validly made under s 437.

[5] Although separate applications for a protected action ballot order were made by the AMWU and AWU, as the bargaining concerns making a single agreement with Brockman and as the parties agreed that the most efficient way to deal with the applications was to hear and determine them together, I heard and determined them concurrently.

[6] It is uncontroversial that since early May 2021 the bargaining representatives and Brockman have been engaged in bargaining for a proposed enterprise agreement to cover certain of its employees. It is also uncontroversial that since bargaining began the bargaining parties have made and advanced various claims in relation to the proposed agreement. Although a number of items which will be included in the proposed agreement have been agreed in principle, there remain several issues in dispute including claims related to the quantum of wage increases and the introduction and payment of a site allowance.

[7] Brockman opposed the making of an order in respect of each application on the ground that the Commission cannot be satisfied that in each case the applicant has been, and is, genuinely trying to reach an agreement with Brockman, the employer of the employees who are to be balloted. Brockman also contended in the event that a protection action ballot order is made in either or both cases, then in relation to the proposed industrial action the subject of a protected action ballot, there are exceptional circumstances justifying the period of written notice referred to in paragraph 414(2)(a) of the Act being longer than three working days. Brockman contended that any protected action ballot order made should specify a period of seven working days for such notice.

[8] As to the question whether each applicant has been and is genuinely trying to reach an agreement, Brockman advances two contentions. First, it says that the applications are premature because bargaining is progressing and further bargaining may yield an agreement. Second, Brockman contends that it is evident that the applicants are not genuinely trying to reach an agreement when account is taken of the quantum of their wages claims and the changes the unions have made to claim items during bargaining. In essence Brockman says that the increase sought by the applicants is in the order of an average of 7.7%, which it contends is excessive and is not a realistic claim taking into account the current economic conditions. Brockman also contends that the claim made during bargaining for a site allowance is a new claim not advanced in the Unions’ logs of claim and is evidence of the changing nature of the applicants’ position which also points to the fact that the applicants are not genuinely trying to reach an agreement.

[9] Brockman’s contention that a further period of written notice is required in respect of the kind of industrial action identified in the applications for protected action ballot orders is centred on a concern that industrial action if approved by a ballot might occur on crew changeover or swing days. It says that in the context of projects due to commence shortly in the state of New South Wales and the travel permit requirements implemented in response to the COVID-19 pandemic to facilitate travel in and out of New South Wales, greater notice will be required to facilitate travel on days other than the scheduled swing days should the swing window be affected by industrial action.

[10] In Esso Australia Pty Ltd v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union known as the Australian Manufacturing Workers’ Union); Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia; The Australian Workers’ Union, 1 a Full Bench of the Commission reviewed relevant Full Bench decisions and judgments of the Federal Court of Australia concerning the question of whether a bargaining representative has been and is genuinely trying to reach an agreement with the employer of the employees who are to be balloted. Relevantly for present purposes, extracts of the decision in Esso are reproduced below:

“[33] A number of Full Bench decisions have considered the meaning of ‘genuinely trying to reach an agreement’ in s.443(1)(b) . . .

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

“[31] In our view the concept of genuinely trying to reach an agreement involves a finding of fact applied by reference to the circumstances of the particular negotiations. It is not useful to formulate any alternative test or criteria for applying the statutory test because it is the words of s 443 which must be applied. In the course of examining all of the circumstances it may be relevant to consider related matters but ultimately the test in s 443 must be applied.

[32] We agree that it is not appropriate or possible to establish rigid rules for the required point of negotiations that must be reached. All the relevant circumstances must be assessed to establish whether the applicant has met the test or not. This will frequently involve considering the extent of progress in negotiations and the steps taken in order to try and reach an agreement. At the very least one would normally expect the applicant to be able to demonstrate that it has clearly articulated the major items it is seeking for inclusion in the agreement, and to have provided a considered response to any demands made by the other side. Premature applications, where sufficient steps have not been taken to satisfy the test that the applicant has genuinely tried to reach an agreement, cannot be granted.”

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

…

[47] The Full Bench decisions to which we have referred were all decided prior to the decision of the Full Court of the Federal Court in J.J Richards Sons Pty Ltd and Another v Fair Work Australia and Another. The applicants in that matter had contended that s.443 should be construed in a way which conditioned its operation upon bargaining having commenced. The Full Court rejected this proposition and held that a protected action ballot order under s. 443(1) of the Act may be made even though bargaining between an employer and employees has not commenced. Jessup J held, at [30]-[31]:

“However, notwithstanding that perception, and notwithstanding my disagreement, in one important respect, with the reasons of the Full Bench, it is not possible to construe s 443(1)(b) as the applicants would propose. I agree with the Full Bench that the contrast between the references to bargaining in Pt 2-4 of the Act, and the words actually used in s 443(1)(b) is striking. I accept that, under s 15AA of the Acts Interpretation Act 1901 (Cth), an interpretation should be favoured which would best achieve the purpose or object of the legislation. That is no basis, however, for the introduction of additional requirements or conditions which might have been, but which have not been, enacted. There is every reason to perceive in s 443(1)(b) a departure from the scheme of regulated bargaining set out by Pt 2-4 of the Act and, in that sense, there is a certain tension with the object referred to in s 3(f). Such a perception, however, would relate to the consistency of the implementation of legislative policy. It would contribute little or nothing to the task of construction which confronted the Full Bench.

In sum, the applicants’ case really amounts to no more than the proposition that the legislature ought, consistent with the structure and policy of the Act as a whole, have conditioned the power to make an order under s 443 upon the circumstance of bargaining having commenced. However, that was a step which the legislature did not take, and it is a step which FWA could not take. There was no jurisdictional error in the protected action ballot order made by FWA on 16 February 2011 and confirmed by the Full Bench on 1 June 2011.”

[48] As to the question of whether a bargaining representative has been and is genuinely trying to reach an agreement, Flick J said:

“It is ultimately concluded that s 443(1)(b) is to be construed such that Fair Work Australia cannot reach a state of satisfaction that an “applicant … is … genuinely trying to reach an agreement with the employer” unless:

•  an applicant has approached the employer and informed the employer of the general ambit of that for which agreement is sought; and

•  the employer has foreshadowed — even in the most general of terms — its attitude as to the proposed agreement.

More may be required. Much may well depend upon the factual scenario in which the terms of s 443(1)(b) are to be applied. But such a minimum statement of that which is required is sufficient to dispose of the present Application. Contrary to the submissions advanced on behalf of the Applicants, the terms of s 443(1)(b) do not require:

•  bargaining to have commenced within the meaning of and for the purposes of s 173, found within Pt 2-4 of the Fair Work Act.

So much, it is concluded, follows from the natural and ordinary meaning of the phrase “trying to reach an agreement … ”. It is difficult to conclude that any person can try to reach an agreement with another in the absence of a disclosure of that for which consensus is sought. One person may wish to reach an agreement with another. But, until the general content of the proposed agreement is disclosed, it cannot be said that he has even attempted to reach an agreement. Until disclosed, it is not known whether the other person will readily embrace the proposed agreement or shun it or (perhaps) embrace the concept of an agreement but wish to vary one or other of its terms. Until disclosed, the person seeking agreement has not even tried to solicit the response of the other. Unless the disclosure is genuinely with a view to reaching agreement, it could well be said that the attempt to reach an agreement falls short of a person even trying to reach agreement. The addition of the word “genuine” — on one approach to construction — perhaps adds little. But the addition of that term serves to emphasise the importance of a person actually trying to solicit agreement. 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 to reach agreement.” 

[49] Tracey J agreed with Jessup and Flick JJ that on its proper construction s.443(1) could not be construed in the manner contended by the applicants:

“There is simply no warrant to read into the subsection words of limitation which do not appear. The legislature has required that FWA must make a protected action ballot order if the two conditions prescribed by s.443(1) are satisfied even if bargaining between an employer and employees has not commenced.” [Endnotes omitted]

[11] Ultimately, the question whether in a given case a bargaining representative has been and is genuinely trying to reach an agreement with an employer will turn on the facts and circumstances of the bargaining in that case. A consideration of whether there can be satisfaction of the circumstances set out in s 443(1)(b) requires consideration of two elements involving temporal aspects. 2 There is no real contest as the first, that each of the AMWU and the AWU “has been” genuinely trying to reach an agreement with Brockman. The contention is that neither is currently genuinely trying to do so.3

[12] I reject Brockman’s contention for the following reasons.

[13] First, Brockman’s assessment that the wage increase sought by the applicants is unrealistic is based on a conflation of several monetary claims the subject of bargaining to arrive at the average contended. In reality, the current position of the unions, although each had sought wage increases of 5% in each of three years, is that they are now prepared to settle, subject to reaching agreement on other aspects of their claims, on wages increasing by 3% per annum. Not only have the unions shown an inclination to make concessions but their present position of 3% per annum seems to me objectively to be a realistic position taking account the most recent level at which the consumer price index sits.

[14] Second, even taking into account the total average cost of the various monetary claims advanced by the applicants, it cannot objectively be said that the average value of the claims is so unrealistic as to indicate that the claims are not being advanced genuinely for the purposes of reaching agreement. In any event the question posed s 443(1)(b) of the Act is whether an applicant for a protected action ballot order has been and is genuinely trying to reach agreement - it is not whether claims about permitted matters genuinely advanced in pursuit of an agreement have any realistic prospect of being agreed to by the employer.

[15] Third, the suggestion that the unions’ site allowance claim is a new claim which arose during bargaining and is evidence of the applicants not genuinely trying to reach an agreement is on the evidence not made out. It is clear from the initial claims made by the applicants that they sought a provision which for present purposes can be described as a “jump up” clause. The effect of such a provision in a concluded and operative enterprise agreement would be to require Brockman to pay its employees rates of pay that are paid to other employees on a site where those employees were entitled to higher rates of pay than those which pertained to Brockman employees. During bargaining Brockman made it clear to the applicants that it could not agree to a jump up clause because as a building industry participant, such a provision would not be compliant with the Code for the Tendering and Performance of Building Work made under s 34 of the Building and Construction Industry (Improving Productivity) Act 2016 and would render Brockman ineligible to tender for projects which included Commonwealth government funding.

[16] The applicants’ site allowance claim is responsive to that concern, by abandoning the claim for a jump up clause and replacing it with a claim for a site allowance which would be payable to employees working on a site but not to those employees working at Brockman’s workshop. It is plain therefore that the applicants had always sought higher payments when work was performed on client sites as opposed to Brockman’s workshop. This was first pursued through a jump up clause and is now pursued through the payment of an allowance. The reformulation of a claim advanced at the outset in response to concerns raised by Brockman is not any evidence that the applicants have advanced a new claim or that they are not genuinely trying to reach an agreement.

[17] Fourth, the contention that the application is premature because bargaining is continuing and further bargaining may yield an agreement must be rejected because the Act contemplates the capacity to engage in continued bargaining as well as the organising and taking of industrial action to support and advance claims for a proposed agreement. Indeed, the good faith bargaining requirements, will oblige the applicants and Brockman to continue bargaining in good faith notwithstanding the organising or taking of industrial action. Furthermore, to the extent that it is implicit in the “premature” submission advanced by Brockman, that there are or have been insufficient steps taken by the applicants to reach an agreement through bargaining, such a proposition was rejected in Esso. 4 An application will generally only be premature if there is no notification time for the proposed agreement. Even then, the application will fail not because of s 443(1)(b) of the Act but because such an application is not permitted because of s 437(2A). What is required is an objective assessment of the facts and circumstances of the bargaining. Protected industrial action and ongoing bargaining are not mutually exclusive. That bargaining is progressing is not a reason to deprive an applicant of a protected action ballot order, to have proposed action authorised, and which might be used as part of the legitimate armoury in bargaining.

[18] The evidence advanced by the applicants in support of their respective applications going to the question whether they have each been and are genuinely trying to reach an agreement with Brockman was not challenged. I accept it and find that the evidence is sufficient to satisfy me that in each case the applicants have been and are genuinely trying to reach an agreement with Brockman, and for the foregoing reasons, Brockman has not persuaded me otherwise.

[19] It follows that I am satisfied that in respect of each application, the AMWU and the AWU, as the case requires, has been and is genuinely trying to reach agreement with Brockman. The other preconditions having been satisfied as indicated earlier, the application for a protected bargaining order in each case must be granted.

[20] It was ultimately unnecessary to deal with the further application for a longer period of written notice because each applicant was prepared to alter the description of the proposed industrial action of concern to Brockman by excluding the possibility of industrial action of that kind occurring on a swing day. Brockman accepted that the alteration alleviated its concern.

[21] Protected action ballot orders reflecting the above-mentioned modifications were made and issued on 13 August 2021 in PR732832 and PR732833.

DEPUTY PRESIDENT

Appearances:

Mr J Gardner for the Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union known as the Australian Manufacturing Workers’ Union
Ms L Aksu for the Australian Workers’ Union
Mr C Bishop of Brockman Engineering Pty Ltd for the Respondent

Hearing details:

2021
Melbourne (by video link)
13 August

Printed by authority of the Commonwealth Government Printer

<PR732850>

 1    [2015] FWCFB 210

 2   Coles Supermarkets (Australia) Pty Ltd v Australasian Meat Industry Employees Union [2015] FWCFB 379 at [45], [48]-[49]

 3   Outline of Respondent’s Submissions at [2]

 4    [2015] FWCFB 210 at [35]