Bosch Chassis Systems Australia Pty Ltd v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union
[2009] FWA 1173
•19 NOVEMBER 2009
[2009] FWA 1173 |
|
DECISION |
Fair Work Act 2009
s.418 - Application for an order that industrial action by employees or employers stop etc.
v
Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union and others
(C2009/10966)
PBR AUSTRALIA PTY LTD (EAST BENTLEIGH) ENTERPRISE AGREEMENT 2006
[AC303222]
Metal industry | |
SENIOR DEPUTY PRESIDENT WATSON | MELBOURNE, 19 NOVEMBER 2009 |
Application to stop industrial action at Bosch Chassis Systems Australia Pty Ltd’s East Bentleigh site.
[1] This is an application by Bosch Chassis Systems Australia Pty Ltd (Bosch) made pursuant to s.418 of the Fair Work Act 2009 (the Act) for an order directed to the Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (AMWU), the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU), and the National Union of Workers (NUW) and their officials, delegates, employees and agents and employees of Bosch eligible to be members of the unions. The order would have the effect that industrial action notified to Bosch on 13 November 2009 by each union in s.414 Notices by Bargaining Representative of Employees of Intention to take Employee Claim Action 1 on 19, 20 and 25 November 2009 not occur.
[2] Yesterday, I made an order under s.418 of the Act. 2 These are my reasons for doing so.
Background
[3] The industrial action relied upon by Bosch is associated with enterprise bargaining negotiations, directed to a replacement agreement following the expiry of the PBR Australia Pty Ltd (East Bentleigh) Enterprise Agreement 2006 3 on 30 June 2009. Negotiations for the replacement agreement commenced on 15 June 2009. On 16 October 2009, Senior Deputy President Acton granted protected action ballot orders4 to each union. Neither of the issues concerning non-permitted or unlawful matter relied on by Bosch in the current application was raised in the proceedings before Her Honour. On 13 November 2009, each of the unions gave Bosch notice, pursuant to s.414 of Intention to take Employee Claim Action.
[4] During the bargaining, the unions pursued, amongst others, claims for:
“Unfair Dismissal
The Company will not dismiss an employee for reasons that are harsh, unjust or unreasonable. The company will reinstate the dismissed employee, or if reinstatement is not feasible, the company pay the dismissed employee reasonable compensation if a dismissal is found to be harsh, unjust or unreasonable” (unfair dismissal claim); and
“Private Health Insurance
The company shall provide Private Health Insurance cover for all employees and their families as determined by the employee. The company shall pay the premium for Private Health Insurance cover in addition to all other prescribed conditions of employment in this agreement.” (health insurance claim).
Relevant legislative provisions
[5] The following sections of the Act are relevant to the submissions of the parties and my decision.
“418 FWA must order that industrial action by employees or employers stop etc.
(1) If it appears to FWA that industrial action by one or more employees or employers that is not, or would not be, protected industrial action:
(a) is happening; or
(b) is threatened, impending or probable; or
(c) is being organised;
FWA must make an order that the industrial action stop, not occur or not be organised (as the case may be) for a period (the stop period) specified in the order.
408 Protected industrial action
Industrial action is protected industrial action for a proposed enterprise agreement if it is one of the following:
(a) employee claim action for the agreement (see section 409);
(b) employee response action for the agreement (see section 410);
(c) employer response action for the agreement (see section 411).
409 Employee claim action
Employee claim action
(1) Employee claim action for a proposed enterprise agreement is industrial action that:
(a) is organised or engaged in for the purpose of supporting or advancing claims in relation to the agreement that are only about, or are reasonably believed to only be about, permitted matters; and
(b) is organised or engaged in, against an employer that will be covered by the agreement, by:
(i) a bargaining representative of an employee who will be covered by the agreement; or
(ii) an employee who is included in a group or groups of employees specified in a protected action ballot order for the industrial action; and
(c) meets the common requirements set out in Subdivision B; and
(d) meets the additional requirements set out in this section.
….
Unlawful terms
(3) The industrial action must not be in support of, or to advance, claims to include unlawful terms in the agreement.
413 Common requirements that apply for industrial action to be protected industrial action
Common requirements
(1) This section sets out the common requirements for industrial action to be protected industrial action for a proposed enterprise agreement.
…
Genuinely trying to reach an agreement
(3) The following persons must be genuinely trying to reach an agreement:
(a) if the person organising or engaging in the industrial action is a bargaining representative for the agreement—the bargaining representative;
(b) if the person organising or engaging in the industrial action is an employee who will be covered by the agreement—the bargaining representative of the employee.
172 Making an enterprise agreement
Enterprise agreements may be made about permitted matters
(1) An agreement (an enterprise agreement) that is about one or more of the following matters (the permitted matters) may be made in accordance with this Part:
(a) matters pertaining to the relationship between an employer that will be covered by the agreement and that employer’s employees who will be covered by the agreement;
(b) matters pertaining to the relationship between the employer or employers, and the employee organisation or employee organisations, that will be covered by the agreement;
(c) deductions from wages for any purpose authorised by an employee who will be covered by the agreement;
(d) how the agreement will operate.
194 Meaning of unlawful term
A term of an enterprise agreement is an unlawful term if it is:
….
(c) if a particular employee would be protected from unfair dismissal under Part 3-2 after completing a period of employment of at least the minimum employment period—a term that confers an entitlement or remedy in relation to a termination of the employee’s employment that is unfair (however described) before the employee has completed that period; …..”
Submissions
Bosch
[6] Bosch submitted that the industrial action notified to it, in the 13 November 2009 s.414 notices, was industrial action which had been organised and was threatened, impending or probable. It submitted that the industrial action was not protected action, which attracted theimmunity provision in s.415 of the Act.
[7] Bosch submitted that the industrial action was not employee claim action for a proposed industrial agreement, which constitutes protected industrial action. It submitted that the industrial action does not meet the requirements for employee claim action in s.409 of the Act in that:
1. it had not been organised for the purpose of supporting or advancing claims in relation to the agreement that are only about, or are reasonably believed to only be about, permitted matters (s.409(1)(a)) – permitted matters;
2. it does not meet meets the additional requirements set out in this section, specifically s.409(3) - unlawful terms - (s.409(1)(d)); and
3. it does not meet the common requirements set out in Subdivision B, specifically s. 413(3) - genuinely trying to reach an agreement - (s.409(1)(c)).
[8] In relation to the permitted matters point, Bosch submitted that the unions, as bargaining representatives, were pursuing the health insurance claim when the industrial action was organised, leading to the 13 November 2009 s.414 notices. It submitted that this claim continued to be pursued, in the form set out above, until 3.00 pm on 17 November in respect of the CEPU and 4.00 pm in respect of the other unions. It submitted that this is a non-permitted matter having regard to Australian Maritime Officers Union v Sydney Ferries Corporation 5 (Sydney Ferries), insofar as the claim is for the payment of a premium to satisfy an obligation outside the employment relationship and relates to persons who are non-employees. It submitted that there is no basis upon which union negotiators could reasonably believe the claim was only about permitted matters in light of the Ferries case and the decision in Australian Postal Corporation v CEPU6(Australia Post).
[9] On the unlawful terms point, Bosch submitted that the unfair termination claim was an unlawful term (s.194(c)). 7 It submitted that the unfair termination claim, in a form which was unlawful, had been persisted with until the morning of 17 November 2009 in the case of the NUW and until late on 16 November 2009 in the case of the other unions, when the claim was amended.
[10] On the genuinely trying to reach an agreement point within the common requirements, Bosch submitted that to the extent that the unions have been pursuing claims for matters not permitted, then they are not and have not been genuinely trying to reach agreement for the purposes of s.413 of the Act. Bosch submitted that there have been no negotiations on the amended claims. The unions cannot be said to have genuinely tried to reach an agreement, either at the time that the s.414 notices were issued or at the time of the hearing in the current matter.
[11] Bosch submitted that the amendment of the unfair termination claim and the withdrawal of the health insurance claim do not affect the legal position. It submitted that the employee claim action in s.409 is engaged in for the purpose of supporting or advancing claims that satisfy the requirements of that section, including that such claims are for permitted matters, only contain lawful terms and that the bargaining representatives are genuinely trying to reach agreement. A person proposing to engage in such an employee claim action must first issue a s.414 notice. It follows that s.414 can only refer to industrial action in respect of claims in existence at the time the notice was issued.
The Unions
[12] The CEPU, supported by the other unions, submitted that the proposed industrial action was protected industrial action and there is no ability for Fair Work Australia to make a s.418 order in relation to that action.
[13] It submitted, without conceding the point, that if the health insurance claim was not a permitted matter or the unfair termination claim was unlawful, those claims were no longer being pursued. It submitted that the Bosch contentions, if accepted, would artificially constrain negotiations. 8 Those claims did not constitute an impediment to the taking of protected industrial action.
[14] The CEPU submitted that the health insurance claim, even if not a permitted matter, was reasonably believed to be a permitted matter by the union negotiators in circumstances where Bosch had not raised the proposition that it was not until 16 November 2009 in letters to each union. 9 The CEPU submitted that it would set too high a standard to require union negotiators to review or seek legal advice about whether particular claims were permitted matters or lawful matters, particularly in circumstances where the employer had raised no issue about the relevant claims in negotiations over five months or in relation to applications for protected action ballots and there is considerable legal doubt as to whether particular clauses are permitted or unlawful.10
[15] The NUW augmented the CEPU submissions in two respects, noting that:
- the Australia Post decision distinguished between substantial agreement claims and minor, trivial or ancilliary claims; and
- s.460 of the Act provides immunity for persons who act in good faith on protected action ballot results.
Consideration
[16] Bosch submitted that the industrial action proposed by the unions in their s.414 notices is not protected industrial action because it does not meet the requirements for employee claim action in s.409 of the Act on the three bases set out in paragraph 7 above.
[17] Any of the three bases argued by Bosch, if substantiated, would support a finding that the proposed industrial action is not protected action. In circumstances where industrial action has been organised and is threatened, impending or probable, as evidenced by s.414 notices of 13 November 2009, and is not protected, Fair Work Australia is required, under s.418 of the Act, to make an order that the industrial action not occur.
[18] I am satisfied that Bosch has made out its case that the industrial action is not protected action on each of the three grounds advanced by it.
Permitted matters
[19] The industrial action was not organised for the purpose of supporting or advancing claims in relation to the agreement that are only about, or are reasonably believed to only be about, permitted matters. In this respect, whilst the unions did not concede that the health insurance claim was not a permitted matter, it did not contest the Bosch submissions to that effect. Having regard to the judgment in Sydney Ferries, 11 I accept that the health insurance claim was not a permitted matter. The claim requires a payment to satisfy an obligation outside the employment relationship, in part in respect of persons outside of the employment relationship.
[20] The real issue in respect of this argument was whether the unions reasonably believed the claim was a permitted matter. This is a matter to be determined in the particular circumstances of the case. 12 Some guidance is given by the Explanatory Memorandum to the Act, which cites as examples of relevant considerations:
_1642. … For example, a tribunal would expect an official of an employee organisation with extensive experience in enterprise bargaining to have a greater appreciation of the limits of the permitted matters than a novice employee bargaining representative who has been appointed by his or her colleagues to represent them in bargaining with the employer.”; and
“1643. Another factor that is relevant to the question of reasonable belief is whether the employer attempted to advise its employees or its bargaining representatives that they were pursuing claims about non-permitted matters. If the employer did so and the industrial action proceeded nonetheless, then it is much more likely that it would not be found to be protected.”
[21] These considerations pull in opposite directions in the circumstances of this case.
[22] In the present case, however, there is no evidence that the bargaining representatives reasonably believed that the claims which the industrial action is directed to support are only about permitted matters. Whilst the unions asserted this to be case, there is no evidence at all as to the beliefs of the bargaining representatives and no basis for finding that they reasonably believed them all to be about permitted matters. It is not enough to assert such a belief or to argue, as the CEPU did, that the union bargaining representatives should be expected to assess whether claims were permitted and/or obtain legal advice. A failure to consider whether claims are only about permitted matters does not constitute a basis for concluding that a reasonable belief that they did existed. In this matter there is no evidence as to a belief or the reasonableness of it in the circumstances of the case.
[23] The industrial action set out in the s.414 notices of 13 November 2009 was directed to advancing and supporting the claims advanced at that time, which included the health insurance claim. In the circumstances before me, there is no basis to find that the industrial action was organised for the purpose of supporting or advancing claims in relation to the agreement that are only about, or are reasonably believed to only be about, permitted matters.
Unlawful term
[24] I am satisfied that Bosch has made out its case in respect of the unlawful term point. The industrial action set out in the s.414 notices of 13 November 2009 was directed to advancing and supporting the claims advanced at that time, which included the unfair termination claim. It is clear that the unions’ unfair termination claim confers an entitlement or remedy in relation to a termination of employees’ employment that is unfair before the employee has completed a period of employment of at least the minimum employment period within ss.323 and 323 of the Act. It is an unlawful term within the meaning of s.194(1)(c). It does not meet the requirements set out in s.409(3) and does not, therefore, meets the additional requirements set out in s.409(1)(d).
Genuinely trying to reach an agreement
[25] In light of the pursuit, until the afternoon of 17 November 2009, of a claim in respect of a non-permitted matter, the health insurance claim, I find that the common requirements that apply for industrial action to be protected industrial action within s.413 of the Act have not been met. In particular, I am not satisfied that the bargaining representatives who organised the industrial action were genuinely trying to reach an agreement (s.413(3)) at the time the industrial action in support of the claims was organised. Further, no steps have been taken to pursue an agreement in the terms of the claim, as modified on 16 and 17 November 2009, since that modification.
Conclusion
[26] I find that the industrial action proposed is not an employee claim action because it does not meet the requirements set out in s.409(1)(a), (c) and (d) of the Act. It is not protected industrial action as defined in the dictionary in the Act (s.12) by reference to s.408. The industrial action organised, and reflected in the 13 November 2009 s.414 notices, is industrial action which was organised in support of, or to advance, a claim to include an unlawful term and a term concerning a matter which was not a permitted matter in the agreement. The common requirements that apply for industrial action to be protected industrial have not been met. The industrial action is not an employee claim action within the meaning of s.409. Accordingly, it is not protected action within the meaning of s.408 of the Act.
[27] Given the industrial action which has been organised, as set out in the s.414 notices, is not protected industrial action, I am required, under s.418 of the Act, to make an order that the industrial action not occur.
Form of Order
[28] Whilst I am not required to specify the particular industrial action in the order (s.418(3)), I think it is appropriate to do so in the present circumstances where the industrial action, when organised, was not protected industrial action as a result of, at least in part, of a claim for an unlawful term at the time and that claim has since been amended (and the claim said to be not a permitted matter withdrawn). To issue an order relating to industrial action generically in those circumstances would be inappropriate.
[29] Accordingly, I will:
- amend the definition of industrial action in the draft order provided by Bosch in its application to replace 5.1 (a) to (d) with “the industrial action described in the Notices by Bargaining Representative of Employees of Intention to take Employee Claim Action served by the AMWU, CEPU and NUW on Bosch on 13 November 2009 [Exhibit Bosch 1, in C2009/10966]”;
- replace all references to “employees of Bosch eligible to be members of the AMWU, CEPU and NUW” in the draft order provided by Bosch in its application with “employees of Bosch who are members of the AMWU, CEPU and NUW” to reflect the industrial action described in the 13 November s.414 notices;
- replace all references to “any industrial action”, “industrial action” and “the industrial action” other than in clause 5 in the draft order provided by Bosch in its application with “industrial action as defined in clause 5”;
- I will delete clauses 4.1 and 4.2 in the draft order provided by Bosch in its application. The terms of clause 4.1 will not accurately describe the order as amended. The order itself should be brought to the attention to the relevant employees. Clause 4.3 of the draft order provided by Bosch in its application will have this effect. Bosch management is in a position to provide a copy of the order to its employees; and
- Clause 7 of the draft order provided by Bosch in its application will be amended to include the time 5.00 pm on Wednesday, 18 November 2009, and to remain in force for a period of two weeks, which will encompass the industrial action the subject of the order.
[30] This decision and the order made yesterday have been made in the particular circumstances of the application. The parties are encouraged to continue their negotiations in respect of their now amended claims with a view to concluding a replacement agreement, with the unions having amended the unfair termination claim and withdrawing the health insurance claim.
[31] As indicated in the explanatory memorandum regulatory analysis to the Act, 13 if agreement cannot be achieved the parties jointly walk away, take protected industrial action or jointly seek Fair Work Australia’s assistance in determining a settlement and a bargaining representative can seek Fair Work Australia’s assistance through mediation or conciliation.
SENIOR DEPUTY PRESIDENT
Appearances:
F Parry SC with D Siemensma, of counsel, for Bosch Chassis Systems Australia Pty Ltd.
E McGrath for the Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union.
P Larkins for the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia.
D Mujkic for the National Union of Workers.
Hearing details:
2009.
Melbourne:
November 17.
1 Exhibit Bosch 1.
2 PR990847.
3 AC303222.
4 PR989994, PR989999, and PR990001.
5 [2009] FCAFC 145 at 24.
6 [2009] FWAFB 599.
7 The Australian Workers’ Union v Alcoa World Alumina Australia Limited[2009] FWA 796.
8 Heinemann Electric Pty Ltd, PR974265, at 17.
9 Exhibit Bosch 2.
10 Tyco Australia Pty Ltd trading as Wormald, PR974317, at 20.
11 Para 24 in particular.
12 Explanatory Memorandum to the Act, at item 1642.
13 R.174.
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