Capral Limited and Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union known as the Australian Manufacturing Workers' Union (AMWU)-Queensland Branch and Communications, Electrical,...
[2010] FWA 3818
•19 MAY 2010
[2010] FWA 3818 |
|
DECISION |
Fair Work Act 2009
s.229 - Application for a bargaining order
s.238 – Applications for scope orders
Capral Limited
and
Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union known as the Australian Manufacturing Workers' Union (AMWU)-Queensland Branch
and
Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia - Electrical, Energy and Services Division - Queensland Divisional Branch
and
Australian Workers’ Union (AWU)
and
Singh, Neville
(B2010/2937, B2010/2975, B2010/2978)
COMMISSIONER SPENCER | BRISBANE, 19 MAY 2010 |
Application for bargaining orders and scope orders in relation to the negotiation of a proposed enterprise agreement at Capral Limited, Bremer Park Manufacturing Business.
Introduction
[1] The Applicants in this matter sought an urgent hearing and further requested an urgent decision following the hearing due to the scheduled vote. The decision has been issued within a very limited timeframe, and accordingly, the analysis and reasons are provided commensurate with this timeframe.
[2] This determination relates to various applications filed in Fair Work Australia (FWA). The application filed first in time was made by Capral Limited (the Employer), and was for bargaining orders pursuant to s.229 of the Fair Work Act 2009 (Cth) (the Act). Subsequently, the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU) and the Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (AMWU) (the “Maintenance Unions”) made applications for both bargaining orders as well as for scope orders, pursuant to s.238 of the Act. Prior to the hearing of the five applications, the CEPU and AMWU withdrew the applications for bargaining orders.
[3] Therefore, this determination is in relation to:
- Application for bargaining orders, made by Capral Limited; and
- Application for a scope order, made by CEPU; and
- Application for a scope order, made by AMWU.
[4] Essentially, the CEPU and AMWU seek a scope order which would result in Capral Limited negotiating a separate agreement for ‘maintenance employees’ only. Capral Limited sought orders that the CEPU and AMWU are not bargaining in good faith.
Orders sought
[5] The bargaining orders sought, as amended, by Capral Limited were as follows:
- that picket actions cease immediately pending the completion of a further vote on the proposed enterprise agreement;
- that the AMWU and CEPU be precluded from bringing any applications before Friday, for scope orders or good faith bargaining orders, on the basis that they have not been meeting the good faith bargaining requirements and have not genuinely been trying to reach agreement; and
- that the AMWU and CEPU be precluded from distributing materials relating to the proposed enterprise agreement or terms and conditions of employment at the Capral Bundamba site, other than as is required under the Fair Work Act 2009 (Cth), prior to the completion of a further vote on the proposed enterprise agreement.
[6] The scope orders sought by the Maintenance Unions were essentially that a separate agreement covering and applying to maintenance employees be bargained, and a second agreement for production workers.
[7] Capral Limited was represented by Mr Michael Harmer, the AWU by Mr Derek Broanda, the CEPU by Mr Michael Wright and the AMWU by Mr Tim McCauley. Sworn evidence was tendered by Mr Sven Gade (Extrusion Business Manager for the Bremer Park Manufacturing Business), Ms Marina Williams (an official of the AWU), Mr Garry Rogers (Organiser with the CEPU), Mr Clinton Smith (Electrical Fitter/Mechanic employed by Capral Limited, as well as a member of the CEPU), Mr William Dann (Systems Maintenance Engineer employed by Capral Limited as well as member and delegate of the AMWU), and Mr Steven Franklin (Organiser with the AMWU).
Background
[8] The vote of employees is scheduled for Friday 21 May 2010. Accordingly, these matters were listed urgently, firstly for a Directions hearing on Monday 17 May 2010 and then subsequently for Hearing on Wednesday 19 May 2010. The parties filed a significant volume of evidence and submissions at 12.00 pm and 5.00 pm on the day preceding hearing. An urgent determination was required after the hearing; based upon the application by the CEPU and the AMWU for interim orders requesting that Fair Work Australia make orders which, in effect, prevent the proposed enterprise agreement being presented to the employees for vote.
[9] To provide context of the employer’s operations, Mr Gade, stated:
“6 The Extrusion Division is the manufacturing division of the business. Within the Extrusion Division, there are five manufacturing sites: Bremer Park in Queensland (Capral’s largest site); …
7 The Bremer Park Extrusion Business comprises 11 business units / cost centres including maintenance, die shop, extrusion, packing, bundling, powder coating, anodising, warehouse, ALF recut operations, despatch, and administration…The numbers of employees in each of these business units range from 15-60 and collectively comprise approximately 320 employees at Bremer Park.
…
9 In addition to the 280 extrusion employees at the Bremer Park site, Capral also employs about 40 clerical and managerial employees which provide “shared services” across the business i.e. Human Resources, Finance etc (“Salaried Employees”).
…
20 The Maintenance Employees make up approximately 8% (ie 20 employees) of the Extrusion Employees at Capral’s Bremer Park site.”
Facts
[10] The negotiations of the proposed enterprise agreement commenced some time in September 2009. There have been various applications filed in Fair Work Australia for assistance with the negotiations and secret ballot applications throughout the negotiation of the proposed enterprise agreement. Other applications for unprotected industrial action etc have been subsequently withdrawn. However it is not necessary to refer to all of these in this determination.
[11] The proposed enterprise agreement has already been to vote. Mr Gade stated that “On 29 March 2010, Capral notified the extrusion employees of its intention to conduct a vote on the New Site Agreement… A vote was conducted on the New Site Agreement on 6 and 7 April 2010… On 8 April 2010, the votes were counted but the vote was not successful.”
[12] It must be noted that the Agreement Mr Gade refers to was a site-wide agreement, that is, an Agreement that included classifications for all extrusion employees, including the ‘maintenance employees’.
[13] Mr Gade further stated, in relation to the upcoming request for employees to approve an enterprise agreement:
“79 Following the meetings on 7 and 10 May 2010, I formed the view that bargaining had reached an impasse in relation to the Outstanding Issues set out in paragraph 75 above.
80 As a result of this view, on 12 May 2010 Capral sent a copy of the final version of the proposed New Site Agreement to the Extrusion Employees (including Maintenance Employees) along with a memo indicating that Capral would be conducting a vote on the agreement on 21 May 2010.”
Legislation
[14] The relevant sections of the Act in relation to applications for bargaining orders and scope orders are as follows:
229 Applications for bargaining orders
Persons who may apply for a bargaining order
(1) A bargaining representative for a proposed enterprise agreement may apply to FWA for an order (a bargaining order) under section 230 in relation to the agreement.
…
Prerequisites for making an application
(4) The bargaining representative may only apply for the bargaining order if the bargaining representative:
(a) has concerns that:
(i) one or more of the bargaining representatives for the agreement have not met, or are not meeting, the good faith bargaining requirements; or
(ii) the bargaining process is not proceeding efficiently or fairly because there are multiple bargaining representatives for the agreement; and
(b) has given a written notice setting out those concerns to the relevant bargaining representatives; and
(c) has given the relevant bargaining representatives a reasonable time within which to respond to those concerns; and
(d) considers that the relevant bargaining representatives have not responded appropriately to those concerns.
Non-compliance with notice requirements may be permitted
(5) FWA may consider the application even if it does not comply with paragraph (4)(b) or (c) if FWA is satisfied that it is appropriate in all the circumstances to do so.
230 When FWA may make a bargaining order
Bargaining orders
(1) FWA may make a bargaining order under this section in relation to a proposed enterprise agreement if:
(a) an application for the order has been made; and
(b) the requirements of this section are met in relation to the agreement; and
(c) FWA is satisfied that it is reasonable in all the circumstances to make the order.
Agreement to bargain or certain instruments in operation
(2) FWA must be satisfied in all cases that one of the following applies:
(a) the employer or employers have agreed to bargain, or have initiated bargaining, for the agreement;
(b) a majority support determination in relation to the agreement is in operation;
(c) a scope order in relation to the agreement is in operation;
(d) all of the employers are specified in a low-paid authorisation that is in operation in relation to the agreement.
Good faith bargaining requirements not met
(3) FWA must in all cases be satisfied:
(a) that:
(i) one or more of the relevant bargaining representatives for the agreement have not met, or are not meeting, the good faith bargaining requirements; or
(ii) the bargaining process is not proceeding efficiently or fairly because there are multiple bargaining representatives for the agreement; and
(b) that the applicant has complied with the requirements of subsection 229(4) (which deals with notifying relevant bargaining representatives of concerns), unless subsection 229(5) permitted the applicant to make the application without complying with those requirements.
Bargaining order must be in accordance with section 231
(4) The bargaining order must be in accordance with section 231 (which deals with what a bargaining order must specify).
238 Scope orders
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.
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.
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.
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.
Matters which FWA must take into account
(4A) If the agreement proposed to be specified in the scope order will not cover all of the employees of the employer or employers covered by the agreement, FWA must, in deciding for the purposes of paragraph (4)(c) whether the group of employees who will be covered was fairly chosen, take into account whether the group is geographically, operationally or organisationally distinct.
Scope order must specify employer and employees to be covered
(5) The scope order must specify, in relation to a proposed single-enterprise agreement:
(a) the employer, or employers, that will be covered by the agreement; and
(b) the employees who will be covered by the agreement.
Scope order must be in accordance with this section etc.
(6) The scope order:
(a) must be in accordance with this section; and
(b) may relate to more than one proposed single-enterprise agreement.
Orders etc. that FWA may make
(7) If FWA makes the scope order, FWA may also:
(a) amend any existing bargaining orders; and
(b) make or vary such other orders (such as protected action ballot orders), determinations or other instruments made by FWA, or take such other actions, as FWA considers appropriate.
Submissions – scope orders
[15] The Employer submitted that it wrote to the Maintenance Unions on 30 April 2010 with regard to the Maintenance Unions’ comments on potential scope order applications. The following are extracts from correspondence between the Maintenance Unions and the Employer:
• On 12 January 2010, Mr Smith emailed Ms Emma Pollard, the then Capral Limited primary Human Resource manager involved in the negotiations:
“Hi Emma
As you would probably be aware now that the members of the ETU/AMWU have agreed to negotiate their EBA through the site wide agreement.
Because of this we would like to commence meaningful negotiations with Capral as soon as possible.
If you could let me know your intended plan for an initial meeting so that we can organise ourselves that would be great.
Thaks [sic]
Clinton Smith”
• On 14 April 2010 Andrew Dettmer on behalf of the AMWU wrote to Ms Mary-Anne Ridgell (HR Consultant with Capral Limited) with the subject line ‘NOTIFICATION OF CONCERNS FAIR WORK ACT s.238(2). The following is extracted:
“…
In view of the inefficient and unfair bargaining position of Capral, the AMWU formally requests that you reconsider entering into negotiations for an appropriate and separate agreement to cover maintenance employees. The AMWU seeks an urgent meeting with Capral to specifically discuss this issue.
Otherwise, in order to address the above concerns and in the interests of facilitating fair and efficient negotiations, we request that Capral respond in writing and in that response:
1. Provide reasons for the refusal to enter into negotiations for an appropriate and separate agreement to cover maintenance employees; and
2. Set out what circumstances, if any, exist to now justify the inclusion of maintenance employees into the production employees agreement, in light of the traditional separation of industrial instruments, differences in work, classification, shift arrangements and so forth.
Please provide a response to the above concerns by no later than close of business on Friday 16 April 2010. In the event Capral fails to respond appropriately to this correspondence, the AMWU will make application for a Scope Order before Fair Work Australia, in accordance with s.238(4) of the Act.”
• On 15 April 2010, Mr Peter Simpson on behalf of the CEPU wrote to Ms Ridgell in the same terms as set out above in correspondence from Mr Dettmer.
• On 20 April 2010, Capral Limited responded, extracted as follows:
“…
We note that since your correspondence this topic has been the subject of further discussions on site involving your Mr Franklin and Mr Rogers on 16 and 19 April 2010.
…
[W]e refer to a meeting between Martin Haszard and Emma Pollard from Capral and Mr Franklin and Mr Rogers of your organisations which occurred on 16 December 2009 (minutes attached). As you will see from the minutes of that meeting, during the meeting Ms Pollard discussed Capral’s response to the then request of the maintenance employees for a separate agreement to cover the maintenance employees from the attached document entitled “Capral’s Position on Separate Agreement for some Bremer Park Maintenance Employees”.
It is Capral’s view that the discussion noted in the minutes and the attached document clearly canvass in some substance the justification for Capral not wishing to agree to a separate agreement for the maintenance employees at Capral’s Bremer Park site and indeed responds to the majority of the concerns expressed in your above letters. As such, we do not seek to re-iterate our response to those issues as it remains unchanged since that time.
However should you continue to have further concerns after consideration of the responses in the attached documents please do not hesitate to raise them with us.
Separate Agreement – Alleged “Sustained” / “Consistent” position of AMWU and CEPU
Your correspondence also asserts that your “sustained” and/or “consistent” position has been that employees working in maintenance classifications would be appropriately covered by a separate agreement.
We again do not believe that this allegation is borne out by the facts of the matter including the following:
• Capral acknowledges that your organisations did not seek a separate agreement for the period preceding mid December 2009 and the discussions that we have outlined above.
• At or about that time, through various discussions and also email correspondence your organisers and also delegates confirmed that they agreed to pursuing their claims through a single agreement covering Capral’s Bremer Park production and maintenance employees.
• Since that time negotiations have taken place on the basis that a single agreement was being negotiated and this is reflected in the minutes of the negotiations. During those discussions prior to the vote conducted on or about 8 April 2010 the issue of a separate agreement was not raised. In this regard, we note that the issue of a separate agreement was not canvassed in the applications by your organisations to FWA to deal with a bargaining dispute and indeed your applications relevantly stated, consistent with the above that:
“Maintenance employees met in late December and determined that the CEPU and the AMWU should meet with Capral Limited and other negotiating parties to attempt to reach an agreement that would take their issues into account.”
• Further, the applications made by your organisations for Protected Action Ballots in or about early March 2010 do not reflect that the issue of a separate agreement remained one that was outstanding as an issue for your members.
• Indeed, the issue of a separate agreement for the maintenance employees had not been substantively canvassed by your organisations between mid December when we were advised by your members that they were prepared to participate in the negotiation of a single agreement and the period subsequent to the vote for the proposed enterprise agreement on or about 8 April 2010.
In light of the above, we are very concerned about this substantial change in the negotiating position of your members and the implications that it may have for the negotiations at this late stage.
Obviously we will seek to adduce the relevant evidence in relation to the above should that become necessary in any application that may be made by your organisations.
…
Delay in formally re-raising separate agreement
Finally, should your organisations seek to make a Scope Order application, Capral will seek to raise the fact that such has been available to your organisations and their members Capral provided its reasons for not wishing to have a separate agreement in mid December 2010.
An application made at that time would not necessarily have had adverse impact for the negotiation of a single agreement, whereas clearly such an application made at this time will potentially significantly impact on the other employees proposed to be covered by the single agreement. As such, Capral considers that this is a matter that should be given substantial weight by Fair Work Australia and will make submissions accordingly.
…”
• On 23 April 2010, Capral wrote to Mr Dettmer and Mr Simpson, stating, in part:
“…
Capral responded to your correspondence on 20 April 2010.
Obviously, applications for a Scope Order have the potential to further delay that voting process.
In the context therefore Capral is concerned that:
1 your organisations switch from a joint to a separate agreement is not bargaining in good faith; and
2 foreshadowing the potentiality of such an application at this late stage of negotiations and then not making those applications in a timely manner in the event that they do not consider Capral’s response is appropriate, is not bargaining in good faith.
As such, we seek that you confirm in writing by no later than 1pm on Tuesday, 27 April 2010 whether your organisation intends to further pursue a Scope Order application in relation to these negotiations.
…”
• Capral Limited then again wrote to Mr Dettmer and Mr Simpson on 30 April 2010, stating:
“…
We note that we wrote to the AMWU and CEPU on 23 April 2010 setting out Capral’s concerns in relation to the AMWU and CEPU’s conduct in seeking a separate enterprise agreement for maintenance employees at this late stage in the negotiations. As at the date of this letter we have not yet received a substantive response from the AMWU or CEPU in relation to this correspondence and therefore, the question of whether or not the AMWU and/or CEPU intend to make an application to Fair Work Australia for a scope order remains outstanding.
Capral is of the view that both the AMWU and the CEPU have had sufficient time to decide whether or not they will make an application for a scope order and that to deliberately delay communicating its intentions in this respect and/or filing such an application (in circumstances where both organisations know that Capral intends to put the agreement to vote shortly after the conference on 6 May 2010) is in breach of the good faith bargaining requirements (in particular subsection 228(1)(e)).
In the event that the AMWU and CEPU do not confirm their intentions in relation to the issue of scope prior to 4pm today (that is Friday 30 May [sic] 2010), as foreshadowed in our correspondence of 23 April 2010, Capral intends to make an application to Fair Work Australia for bargaining orders.
We look forward to hearing from you shortly.
Yours faithfully
Capral Limited”
[16] I note that the Maintenance Unions referred to some trouble receiving the correspondence of 23 April 2010, and they expressed difficulty in responding in time, but note that the matters were discussed in any event.
[17] The Employer had said they wanted to enter the last negotiations (at that time) and then they would be requesting employees to vote on the proposed enterprise agreement. The Employer said the inquiries to the Maintenance Unions were to avoid the very situation the parties currently find themselves in. The Employer submitted that the Maintenance Unions did not then respond with Scope order applications, but waited until one hour after the proposed enterprise agreement was offered to the employees for vote to file such. The Employer submitted that such conduct is capricious, against the background of these notifications between the parties and as such the conduct was deliberately taken at the latest time to delay the vote and cannot be considered to be good faith bargaining.
[18] Despite the Employer’s attempts to confirm the Maintenance Unions’ intention as to scope orders in an orderly manner the Employer said the Maintenance Unions’ underlying agenda was to force the negotiation of a roster change and to resist a single site-wide agreement. They stated their late application for scope orders was also a tactic to attempt to head off the whole of workplace agreement. That is, it was submitted the Maintenance Unions were using scope orders as a device to stop the vote for the rest of the workforce and therefore also delay the associated wage increase.
Bargaining orders
[19] I concur with the submissions of the Maintenance Unions, provided by Mr McCauley and Mr Wright that whilst there was a voluminous amount of material provided in evidence, there is an insufficient evidentiary basis to be satisfied that the amended bargaining orders one and three as sought be issued.
[20] In relation to the alleged picketing and distribution of materials (the first and third orders sought), there is no evidence that the picket that occurred in April 2010 involved coercion in relation to employees placing a vote in the ballot. There are provisions in the legislation that allow for applications to be filed as to the specific nature of the action. Whilst such an application in relation to the alleged picketing was made (at the time they occurred) by Capral, it was withdrawn. The refusal of this order does not preclude a further urgent examination of any subsequent conduct pursuant to an appropriate application.
[21] At this time there is no substantive evidence of the prior conduct related to Orders 1 and 3 nor is there any action of the type complained of actually happening, threatened or organised to form a basis on which the orders sought can be issued at this time. If there is further action taken which is against a relevant provision of the Act, this determination does not preclude future consideration if an application is filed. The Maintenance Unions consider that restraining lawful protest or further communications to their members regarding the agreement is without foundation and is not lawful to restrain the Unions in this way. Any further conduct may be considered on its merits, against the good faith bargaining requirements or industrial action provisions
[22] In addition, in relation to the third order sought, there is insufficient evidence to suggest that the nature and distribution of flyers by the Maintenance Unions was to influence or mislead the employees. No such definitive inference can be made, on the material before me, as to the Unions’ intention, and thus the making of the orders to effectively stop any communication regarding the proposed agreement is unwarranted.
Scope orders
[23] The bargaining order 2 will be considered in conjunction with the scope orders sought pursuant to s.238 by the CEPU and AMWU. The relevant provision is set out above. Relevant to the consideration of these orders is an assessment of the bargaining that has occurred between the parties against the good faith bargaining requirements in s.228 as set out:
228 Bargaining representatives must meet the good faith bargaining requirements
(1) The following are the good faith bargaining requirements that a bargaining representative for a proposed enterprise agreement must meet:
(a) attending, and participating in, meetings at reasonable times;
(b) disclosing relevant information (other than confidential or commercially sensitive information) in a timely manner;
(c) responding to proposals made by other bargaining representatives for the agreement in a timely manner;
(d) giving genuine consideration to the proposals of other bargaining representatives for the agreement, and giving reasons for the bargaining representative’s responses to those proposals;
(e) refraining from capricious or unfair conduct that undermines freedom of association or collective bargaining;
(f) recognising and bargaining with the other bargaining representatives for the agreement.
(2) The good faith bargaining requirements do not require:
(a) a bargaining representative to make concessions during bargaining for the agreement; or
(b) a bargaining representative to reach agreement on the terms that are to be included in the agreement.
[24] Further to this, the Employer submitted that s.255 provides a limitation on FWA’s power to make certain orders. Section 255 is as follows:
255 Part does not empower FWA to make certain orders
(1) This Part does not empower FWA to make an order that requires, or has the effect of requiring:
(a) particular content to be included or not included in a proposed enterprise agreement; or
(b) an employer to request under subsection 181(1) that employees approve a proposed enterprise agreement; or
(c) an employee to approve, or not approve, a proposed enterprise agreement.
(2) Despite paragraph (1)(a), FWA may make an order that particular content be included or not included in a proposed enterprise agreement if the order is made in the course of arbitration undertaken when dealing with a dispute under section 240.
Note: FWA may only arbitrate a dispute under section 240 if arbitration has been agreed to by the bargaining representatives for the agreement (see subsection 240(4)).
[25] Mr McCauley explained that historically, the maintenance employees were on common law contracts when the site commenced and that they were not covered by the current agreement. Mr McCauley stated that perhaps due to this they had perhaps “unfortunately misplaced optimism” in the bargaining outcomes. Mr McCauley refuted that the scope applications were filed as a tactical device. He stated that it was obvious that an impasse had been reached and that the response of the Employer was to take the Agreement to vote and the response of the Maintenance Unions was to file applications for scope orders, and that they were only an hour apart, but were legitimate responses.
[26] The Employer has sought the second bargaining order predominantly on the basis that the Maintenance Unions had breached the good faith bargaining requirements by acting capriciously in terms of s.228(1)(e) in resiling, at a late stage, from the negotiations to progress with a single site-wide agreement. The Employer referred to their discussions with the Unions in December 2009, seeking to confirm whether the Unions’ intended to progress their scope of agreement issues. They relied upon the Unions’ response, and consent to the site-wide enterprise agreement, and progressed negotiating a single site-wide agreement. The Employer further tested the scope issue with these Unions in April 2010 and the further site-wide collective bargaining continued, and also continued further to two conferences this year, before the Fair Work Australia, for assistance with this bargaining dispute.
[27] Section 228(2) of the good faith bargaining requirements does not require parties to make concession or to reach agreement. However, given my previous involvement in the bargaining disputes before me, it was obvious that the issues raised by the Maintenance Unions in scope orders now, and their criticism of the Agreement in delivering separate conditions for their members, were evident from early in the bargaining with these parties. The Maintenance Unions had sufficient time to make application for scope orders without offending the good faith bargaining provisions by filing for scope orders four days prior to the scheduled vote.
[28] The statutory requirements for a scope order are, taken into account the considerations of the Full Bench in United Firefighters’ Union of Australia v Metropolitan Fire & Emergency Services Board; Metropolitan Fire & Emergency Services Board v United Firefighters Union of Australia; Mr W Crossley, Mr P. Swain and Mr P. Holmes 1, at paragraph 54 and 55:
“[54] In its submissions AiGroup sought to limit the circumstances in which an order might be made. We refer in particular to the submission that a scope order should not be made against the opposition of a bargaining representative unless one of the bargaining representatives is pursuing a scope for negotiations which is unfair. That submission must be rejected. It involves adding an additional requirement to those specified in ss.238(4)(b) and (c). If two parties to an application for a scope order advance alternative positions neither of which is objectively unfair but the tribunal is satisfied of the relevant matters and is disposed to make an order, it would be an error not to do so.
[55] The relevant consideration under s.238(4)(b) is whether the order will promote the fair and efficient conduct of bargaining. The implication is that the tribunal should be satisfied that if an order is made the bargaining will at least be fairer or more efficient or both than it would be if no order were to be made. The relevant consideration under s.238(4)(c) is whether the specified group is fairly chosen. It may be that a number of groupings might be fair – what this criterion requires is that the group which is included in the scope order is fairly chosen. This issue is also dealt with in s.238(4A), which we discuss shortly.”
[29] The Maintenance Unions have not satisfied the test they relied upon that (as set out in paragraph [55] of the United Firefighters Decision, supra) the scope order, if made, will promote the fair and efficient conduct of bargaining. That is, they must demonstrate that the bargaining will be fairer or more efficient or both than if no order were to be made. They have not demonstrated this.
[30] Mr McCauley stated that if the scope orders were made and there were separate negotiations made for maintenance workers, they could vote down their own separate unsatisfactory agreement; but that currently their numbers don’t give them the influence on the vote as against the majority production workers. However, there is nothing to suggest that the bargaining on the issues raised by the maintenance employees even if a scope order was in place, would proceed any more fairly or efficiently due to a separate vote. I add that there is no requirement for either party to make concessions on the issues that formed the impasse, as per s.228(2). In addition their position as a minority group has always been in play in the bargaining.
[31] In “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU)- Western Australian Branch v Airflite Pty Ltd, 2 Cloghan C stated that the making of scope order was an appropriate response to an impasse in negotiations, but in that decision, Cloghan C was satisfied that making the order would promote fair and efficient bargaining. I am not similarly convinced in the current circumstances.
[32] There was no evidence to suggest that either party simply by resuming bargaining under the auspices of a separate agreement (provided by the scope order) would make concessions; that is, that simply because they had separate negotiations and a separate vote that there would be a different result. I note that no such evidence was provided with the applications, but such evidence could have been collected prior to filing the applications in relation to the fairness or efficiency of the proposed separate bargaining stream for maintenance employees.
[33] Furthermore, the Employer has, in the current circumstances, urged the Maintenance Unions, on more than one occasion, to resolve their issue of scope so that the bargaining could proceed on a fair and efficient basis. These Unions did not seek scope orders and instead responded by engaging in collective bargaining for a single site-wide enterprise agreement.
[34] Additionally, when the parties came before Fair Work Australia, as currently constituted, at all times the Maintenance Unions raising their concerns at the negotiations not being resolved in their favour, yet, in the knowledge that their members were in the minority they pressed on with further bargaining in a collective basis for a single site-wide enterprise agreement. At the eleventh hour they have sought the scope orders in circumstances which were envisaged as an option in September 2009. To reverse their position at this late stage with no evidence that the bargaining would promote or proceed in a fairer or more efficient basis is a sudden act that undermines the good faith bargaining provisions, given the early notification of this course to the Unions.
[35] The granting the scope orders would in effect prevent the vote occurring this Friday. The proposed enterprise agreement has been communicated to employees as a site-wide enterprise agreement. To change the agreement or the nature of the proposed agreement, as would be the result of a scope order, undermines the conveyance of the agreement to the employees at the site. To not communicate the changed circumstances as such, and to not change the proposed enterprise agreement would be an act of deceit to those employees being asked to vote on the agreement, and an act of bad faith bargaining, where employees had formed a view as a result of the bargaining that there would be one site-wide agreement.
[36] Section 238(3) provides a mandatory provision regarding the necessity when pursuing a scope order to provide written notice setting out the concerns by the bargaining representatives to the agreement. Furthermore, the provision dictates whether there has been a reasonable time to respond and whether the bargaining representative considers the relevant bargaining representative has not responded appropriately. Little reliance was placed in the submissions of the Unions as to the notifications and material as to whether the response was appropriate.
[37] The notices and correspondence provide no further articulation of the difficulties than what were present late last year. There are no cogent reasons for the sudden reversal in their position, but that the circumstances of the scope order would delay the vote.
[38] The Maintenance Unions’ application for scope orders pursuant to s.238(1) is based on their concern that the bargaining is not proceeding efficiently or fairly; and that the whole of workplace agreement will cover maintenance employees in circumstances where the bargaining has not delivered the provisions they were seeking. Their bargaining position was not a new position.
[39] In addition, they were concerned that their members are in the minority in comparison to the total workforce to be covered by the proposed enterprise agreement. These concerns, however, were held by these Unions from the commencement of the bargaining. The matters are relevant to s.238(4) wherein the provision of the scope orders is dependent on satisfaction that the good faith bargaining requirements have been met and that the order will promote the fair and efficient conduct of bargaining.
[40] There is no contest that the groups of maintenance employees covered by the scope orders sought in the agreement is fairly chosen.
[41] The legislative tests in relation to s.238(1)(a) and (b) are met based on the Maintenance Unions’ concerns, although it is emphasised that these concerns were present from some time and inquiries were made by the Employer as to the continued course of the bargaining and they decided to stay the site-wide course. Section 238(2) is not applicable. With respect to s.238(4) the employer submitted that the conduct of the Maintenance Unions did not meet the good faith bargaining requirements as pursuant to s.228(1)(e) their conduct was capricious or unfair and undermined collective bargaining. The Employer submitted that predominantly the Maintenance Unions had withdrawn from the process at the latest stage in the knowledge that this would undermine the collective bargaining and the ability of the vote to proceed and hence prevent the proposed enterprise agreement. Their conduct must be considered against whether in all the circumstances it is reasonable to make the order as per s.238(4)(a). There was no persuasive evidence in this matter that the scope orders would promote the fair and efficient conduct of bargaining and via s.238(4)(b) that the scope order is reasonable in all the circumstances.
[42] The circumstances are that the current situation was foreseeable at all stages by the Maintenance Unions, and further, the Employer asked the Maintenance Unions to address the potential for scope orders at timely stages. The Employer was transparent in its objective for a site-wide agreement and event put a paper on this position to the Unions. Despite the events being foreshadowed they did not act until they resiled from their position at the latest stage in the bargaining. To provide the scope order now does not provide any certainty that the fairness and efficiency of the bargaining will be promoted.
[43] In fact, it is thought an unfair and inefficient result will be visited on the production employees; as the scope order will, by default, necessarily cause the proposed enterprise agreement from a site-wide agreement and therefore delay their potential associated wage increase.
[44] Furthermore, taking into consideration s.255, providing the scope orders will effectively, via FWA’s intervention, change the bargaining course, as found by Vice President Watson in National Union of Workers v CHEP Australia Limited 3that by deferring the vote by the impact of a scope order will:
“…impact on the bargaining dynamics of a particular agreement making process. The scheme of Part 2—4 appears to guard against such an impact unless the order is clearly necessary to ensure compliance with good faith bargaining requirements or other requirements of the Part.
[49] The essence of the NUW case was that in failing to defer a vote, the company was in breach of those requirements. At the conclusion of the hearing of this matter on 28 August 2009 I indicated my view that the NUW had not established that CHEP had not met or was not meeting the good faith bargaining requirements in the Act.
[50] In my view, the criticisms of the company by the NUW lack substance. CHEP had legitimately commenced a negotiation process with its employees. It progressed negotiations with employee representatives to a point that it wished to put the agreement to a ballot. At about the same time as the company was distributing copies of the proposed enterprise agreement, some employees joined the NUW and sought to obtain its assistance in negotiating changes to the agreement.
[51] The company met with the NUW and gave it a copy of the agreement. It offered to meet again and consider any matter the union put forward. The NUW decided to put all of its efforts into seeking a deferral of the vote. It did not seek to discuss the agreement at the meeting at which it was handed the agreement. It did not seek a further meeting. Nor did it advance any positions or make any claims in relation to the agreement. Its time for doing so was limited, but it was open to it to do so and it decided not to follow that path.
[52] Apart from a general assertion that proceeding with the ballot was inconsistent with the good faith bargaining requirements, the NUW did not explain which requirement had not been met and how it was not met. In my view the case presented by the NUW did not establish the necessary precondition for an order, or a case that any orders be made let alone the orders sought in this matter.”
[45] Accordingly, it is considered that the provision of the scope orders is, in the current circumstances, is inconsistent with the good faith bargaining requirements and the preconditions for the scope orders in terms of the good faith bargaining requirements have not been met.
[46] For the aforementioned reasons, I consider the conduct of the bargaining representatives to be capricious and not in compliance with the good faith bargaining requirements. Further I don’t consider they established concerns via their written notification, or these were not acted upon when the Employer tested them. Similarly, they have not demonstrated the relevant bargaining representatives had not responded appropriately.
[47] Accordingly, the scope orders are refused on the basis of the circumstances as considered at this time; in line with this, Order 2 of the bargaining order sought will be granted.
COMMISSIONER
Appearances:
Mr Michael Harmer, Harmers Workplace Lawyers, for Capral Limited
Mr Derek Broanda, for the AWU
Mr Michael Wright for the CEPU
Mr Tim McCauley for the AMWU.
Hearing details:
2010.
Brisbane:
Wednesday 19 May
1 [2010] FWAFB 3009.
2 [2010] FWA1723.
3 [2009] FWA 202.
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