Chief Commissioner of Victoria Police T/A Victoria Police v Police Federation of Australia
[2025] FWC 1
•3 JANUARY 2025
| [2025] FWC 1 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.234 - Application for an intractable bargaining declaration
Chief Commissioner of Victoria Police T/A Victoria Police
v
Police Federation of Australia & Ors
(B2024/1282)
| COMMISSIONER ALLISON | MELBOURNE, 3 JANUARY 2025 |
Application for an intractable bargaining declaration – whether bargaining is intractable – whether no reasonable prospects of making an agreement without the declaration – contested application
The Chief Commissioner of Victoria Police T/A Victoria Police (Victoria Police) and the Police Federation of Australia (Victorian Branch) (PFA) have been engaged in a long and difficult bargain around a new enterprise Agreement (the Proposed Agreement). The Proposed Agreement will cover the employment conditions and wages of over 17,800 members of the Victorian police force.
Bargaining to date has taken place in a very challenging context. The Victorian Government is currently facing a very tough financial situation. Keeping public sector wages within budget is fundamental to the Government’s fiscal strategy. At the same time, the PFA seeks a wage increase that recognises the important work done by the police force and other claims to address concerns around rostering and alleged out of hours work. There are also several Independent Bargaining Representatives (IBRs) involved in the bargaining, seeking bespoke claims on behalf of smaller units of employees.
In June 2024, after a year of negotiations, Victoria Police and the PFA reached an in-principle agreement including agreement on wages, allowances and a significant roster change which would transition the police force to a 9-day fortnight (the 9x9 roster). On 26 July 2024 the in-principle agreement was voted down by members of the police force, 57% to 43% (the No Vote).
The No Vote was a significant blow to the bargaining. Following the No Vote, the PFA revised its position and issued several new claims, including a significantly increased wage claim and a new roster position. Victoria Police responded by confirming the entire content of the rejected in-principle agreement was “now not agreed”.
Since the No Vote very little bargaining has occurred between the parties. The parties attended a s.240 bargaining dispute conference before me and despite both parties engaging in discussion about potential ways forward, no progress was made. Since early September 2024, PFA members have been engaging in protected industrial action of various form, with the intention of escalating.
It is in these circumstances that Victora Police have applied for an intractable bargaining declaration (Declaration) pursuant to s.234 of the Fair Work Act 2009 (Cth) (the FW Act). Victoria Police contends that the bargaining is now intractable and that it is rationally improbable that the parties will reach agreement. Victoria Police contends it is time for the Commission to make a Declaration so that a Full Bench can arbitrate the matters in dispute between the parties.
The PFA and the IBRs contend that bargaining is not intractable. The PFA has started an industrial action campaign to pressure the Government to change its position, and the PFA claims it is ready, willing and able to engage in further discussions, including a willingness to compromise.
I held a hearing on Monday 18 November 2024 to determine the application for a Declaration.
The evidence before the Commission included a comprehensive Statement of Agreed Facts (SAF) with attachments providing the agreed background and context of the bargaining.
In addition, Victoria Police relied on witness statements made by Assistant Commissioner Luke Cornelius[1] and Mr Christopher Samuel Barrett, Secretary, Department of Treasury and Finance.[2] The PFA relied on witness statements of Mr Christoper Gerard Kennedy, Executive Officer of the PFA (Victorian Branch) and Assistant Secretary of the Police Association of Victoria.[3] Two IBRs also provided witness evidence to support their submissions, namely Inspector Michael J Glinski, Protective Services Unit and Leading Senior Constable Thomas Lazarus, Technical Surveillance Unit.
Victoria Police raised objections to several sentences and paragraphs in Mr Kennedy’s witness statements on the basis that the content was opinion and/or submissions as opposed to evidence, or hearsay. Similarly, the PFA raised objections regarding opinion in relation to Assistant Commissioner Cornelius’s evidence. It is clear that the witness evidence of Assistant Commissioner Cornelius and Mr Kennedy includes some opinion evidence. It is also clear Mr Kennedy’s evidence in relation to certain comments made by Mr Wayne Gatt, CEO of the PFA, is hearsay. In addition, the witness evidence of the IBRs include a mixture of submissions and evidence.
I allowed the content of all witness evidence into the hearing but indicated that appropriate weight would be afforded to matters that were hearsay, opinion or submissions and not evidence. In relation to findings of fact, I have determined to treat opinion evidence as submissions. However, in coming to the requisite state of satisfaction under s.235(2)(b) and (c), the views and attitudes of the bargaining representatives may be important, and I have had regard to these views in relation to understanding different bargaining positions.
Otherwise, all witness statements and their accompanying attachments were accepted into evidence uncontested, except for Assistant Commissioner Cornelius who was subject to cross-examination regarding some of his evidence. I also accepted into evidence two documents tendered by Victoria Police relating to the NSW police enterprise bargaining outcome.[4]
Statutory Framework and Legal Principles
Section 234(1) provides that: “a bargaining representative for a proposed enterprise agreement may apply to the FWC for a declaration (an intractable bargaining declaration) under section 235 in relation to the agreement.” The note to s.234(1) relevantly provides as follows:
“Note: The consequence of an intractable bargaining declaration being made in relation to the agreement is that the FWC may, in certain circumstances, make an intractable bargaining workplace determination under section 269 in relation to the agreement.”
In other words, if a Declaration were made, bargaining would generally be taken out of the hands of the parties and the Commission would arbitrate the matters remaining in dispute. Furthermore, protected industrial action would no longer be available to the parties if a Declaration were made.[5]
Section 235 sets out when the Commission may make an intractable bargaining declaration, what the declaration must include, and when the declaration comes into operation. Section 235(1) provides the threshold requirements that must be met before the Commission may make an intractable bargaining declaration. The three threshold requirements (as relevant to this matter) are:
a.That a valid application has been made.
b.That the Commission is satisfied of the matters set out in s.235(2)
c.That the application has been made after the end of the minimum bargaining period, which in circumstances where there is an existing enterprise agreement, is the latter of 9 months after the nominal expiry date of the existing agreement or 9 months after the day bargaining started.[6]
The key issues in contest in the present matter relate to s.235(2), which provides as follows:
“Matters of which the FWC must be satisfied before making an intractable bargaining declaration …
(2) The FWC must be satisfied that:
(a) the FWC has dealt with the dispute about the agreement under section 240 and the applicant participated in the FWC’s processes to deal with the dispute; and
(b) there is no reasonable prospect of agreement being reached if the FWC does not make the declaration; and
(c) it is reasonable in all the circumstances to make the declaration, taking into account the views of all the bargaining representatives for the agreement.”
In the event the Commission makes a declaration, s.235A provides that the Commission may, if it considers appropriate to do so, specify in the declaration a post-declaration negotiating period to enable the parties a further time for negotiations prior to the Commission making an intractable bargaining determination.
1.1Section 235 considered by recent Full Benches of the Commission
The Full Bench of the Commission in United Firefighters Union of Australia v Fire Rescue Victoria[7] (UFU v FRV) considered the application of s.235 in detail in 2023. I quote from that case extensively below as it outlines the approach I have taken in this matter. The Full Bench in UFU v FRV held:
“[27] The precondition in s 235(1)(b) requires the Commission to be ‘satisfied’ as to each of the matters in paragraphs (a)-(c) of s 235(2). The process by which a tribunal does, or does not, reach a state of satisfaction about a prescribed matter involves the making of an evaluative judgment of a discretionary nature. The exercise of discretion involved will be wider where the prescribed matter is one of ‘opinion or policy or taste’ (as is the case with paragraphs (b) and (c) of s 235(2)) than one of ‘objective fact’ (paragraph (a)).
[28] As indicated, satisfaction as to s 235(2)(a) simply requires a finding of fact that the Commission has dealt with the dispute about the agreement under s 240 and the applicant for the intractable bargaining declaration has participated in the Commission’s processes to deal with the dispute. Section 240 is a provision by which a bargaining representative for a proposed enterprise agreement may apply to the Commission for it to deal with a dispute about the agreement which the bargaining representatives are unable to resolve. Under ss 240(4) and 595, the Commission may deal with such a dispute by mediation, conciliation, making a recommendation or expressing an opinion, and by consent arbitration, and these may be understood as the Commission’s ‘processes to deal with the dispute’ referred to in s 235(2)(a)….
[29] Section 235(2)(b) requires the Commission to make an evaluative judgment as to whether there is ‘no reasonable prospect of agreement being reached’ if an intractable bargaining declaration is not made. ‘No reasonable prospect’ is obviously not the same as ‘no prospect’ in that it does not require a ‘certain and concluded determination’ that an agreement cannot be reached if a declaration is not made but rather, on the ordinary meaning of the words used, requires an evaluative judgment that it is rationally improbable that an agreement will be reached. Paragraph [846] of the Revised Explanatory Memorandum (REM) for the Fair Work Legislation Amendment (Secure Jobs, Better Pay) Bill 2022 (SJBP Bill), which explains this provision, is consistent with this approach:
… This does not require the FWC to be satisfied that an agreement could never be reached but rather that the chance of the parties reaching agreement themselves is so unlikely that it could not be considered a reasonable chance. It is unlikely that the FWC would reach such a state of satisfaction unless the parties had been bargaining for an extended period and had exhausted all reasonable efforts to reach agreement, but the provision leaves it up to the FWC to determine, in all the circumstances, whether it is satisfied that there is no reasonable prospect of the parties reaching agreement if the FWC does not make the declaration. …
[30] Satisfaction in respect of s 235(2)(c) requires the Commission to make a further evaluative judgment, namely that it is reasonable in all the circumstances to make the declaration sought, taking into account the views of the bargaining representatives for the agreement. The ‘reasonable in all the circumstances’ criterion requires an assessment of what is ‘agreeable to reason or sound judgment’ in the context of the relevant matters and conditions accompanying the case. The REM for the SJBP Bill gives examples of potentially relevant circumstances as follows:
This would provide scope for the FWC to, for example, consider the dispute in the context of the whole of the relationship of the parties, the history of the bargaining, the conduct of the parties, the prevailing economic conditions, and the bargaining environment.
[31] The requirement to take into account the views of the bargaining representatives means that their views must be treated as a matter of significance, but not necessarily a determinative consideration, in the assessment of whether it is reasonable in all the circumstances to make the determination sought.
[32] Where the Commission is satisfied as to each of the matters in paragraphs (a)-(c) of s 235(1), it retains a residual discretion (‘may make’) as to whether an intractable bargaining declaration is actually made. However, it is difficult to identify what discretionary matters might remain for consideration if the Commission has already satisfied itself as to the criteria in s 235(2).”
(references omitted, emphasis added)
In 2024 another Full Bench provided further guidance as to the application of s.235(2) in Transport Workers’ Union v Cleanaway Operations Pty Ltd T/A Cleanaway Operations Pty Ltd[8] (Cleanaway). After citing UFU v FRV, the Full Bench in Cleanaway stated:
“[11] We add to these observations the following matters:
(a) Each application for an intractable bargaining declaration will turn on its own facts, notwithstanding that a declaration may or may not have been made in other (even related) proceedings…
(b) In assessing whether there is no reasonable prospect of agreement being reached if the Commission does not make a declaration, it is necessary to have regard to the history of negotiations and any developments or negotiations which take place up until the time of the assessment.
(c) Consideration as to whether there is no reasonable prospect of agreement being reached does not require any assessment of the merits of possible alternative provisions that might be arbitrated in a later determination.
(d) The subjective views of parties, employees, union officials or any other individuals involved in bargaining as to the criteria in paragraphs 235(2)(a), (b) and (c) of the Act are not determinative. The test is objective. The task involves the Commission having regard to all the relevant circumstances and then deciding whether or not it is satisfied of the statutory criteria in s.235(2) of the Act.”
(references omitted).
Background, Bargaining Context and Bargaining to Date
The background and context to the bargaining is fundamental to understanding this matter. The following background is based on the Statement of Agreed Facts and other evidence provided by the parties.
2.1.Important Background Information
The wages and employment conditions of approximately 17,886 members of the Victorian police force (engaged as police officers, police recruits, protective services officers and police reservists) are currently covered by The Victoria Police (Police Officers, Protective Services Officers, Police Reservists and Police Recruits) Enterprise Agreement 2019 (2019 Agreement). The 2019 Agreement nominally expired on 30 November 2023. The key bargaining representatives for the replacement agreement, the Proposed Agreement, are Victoria Police, as the employer, and the PFA. The PFA represents approximately 98% of the Victorian police force.[9]
Wages Policy and Public Sector Bargaining Requirements
Victoria Police is bound by the Victorian Public Sector Wages Policy (Wages Policy), which places significant restrictions and obligations on Victoria Police during a bargain. The Wages Policy has three pillars. Pillar 1 and Pillar 3 are particularly important and relevantly provide as follows:[10]
“While there is no cap on overall agreement outcomes, Pillar 1 increases to wages and conditions cannot exceed the funded allocation and Pillar 3 improvements must be funded from appropriate cash offsets and/or a government approved funding strategy.
…
Pillar 1: Wages
Increases in wages and conditions will be funded at a rate of growth of 3.0 per cent per annum over the life of the agreement. In practice this means employee wages and conditions will be allowed to grow at this rate.
In addition to annual wage increases, a separate lump sum, cash payment will be available equivalent to an additional 0.5 per cent of overall agreement costs which for the purposes of this policy means a per annum amount calculated on wages and wage-related conditions.
…
Pillar 3: Additional strategic changes
Additional changes to allowances and other conditions (not general wages) will only be allowed if Government agrees that the changes will address key operational or strategic priorities for the agency, and/or one or more of the Public Sector Priorities and provided the associated costs are funded through appropriate cash offsets or a government approved funding strategy.
In addition, Wages Policy requires that:
·all agreements must be fiscally sustainable and funded from indexation, revenue, appropriate cost offsets or a Government approved funding strategy.
·enterprise agreements must not contain retrospective payments. This means that the first pay increase in any agreement must be forward looking and cannot be prior to the date the agreement has been submitted to the portfolio department for approval…”
The Wages Policy specifically identifies ‘promote gender equity’ as one of the Public Sector Priorities. The Policy also identifies a range of other matters that may be operational or strategic priorities, or public sector priorities, including, amongst other things, “measures to address specific workforce challenges (for example, workforce attraction and retention).”[11]
Victoria Police is also subject to the Enterprise Bargaining Framework, which sets out the approval requirements a government agency must meet before commencing bargaining, as well as during bargaining and before seeking employee approval of a proposed agreement. The Victoria Police enterprise agreement is considered a “Major Agreement” and has additional requirements, where Government will oversee and approve the strategy and negotiations.[12] Major Agreements require approval “at a high level of Government.”[13]
Finally, Victoria Police is bound by the Standing Directions 2018 under the Financial Management Act 1994 which imposes obligations including requirements to meet budget neutrality.[14]
2.2.Bargaining Context
Challenges facing Victoria Police
The Victoria Police operating budget is tight. Victoria Police predominantly receives funding from the Victorian Government through the annual budget process. During the 2023/2024 financial year Victora Police recorded a budget deficit of 33.1 million.[15] Victoria Police faces some challenges in relation to recruitment and retention. Currently Victoria Police is delivering services with 90.3% of its potential capacity, based on funded profile targets, or 89.7% capacity based on current full time equivalent positions.[16] In 2024, recruitment efforts did not keep up with attrition rates.[17]
State Government facing financial troubles
The Victorian Government debt is historically high[18] and significantly higher than other states.[19] The Auditor-General’s Report 2022/2023 notes that if the debt is not managed “this presents long-term financial sustainability risks.”[20] Employee costs are the State’s largest single operating expense.[21] Employee expenses make up approximately 31.6% of the total operating expenses[22] and 42% of the Victorian Budget.[23] Victoria Police employees account for approximately 7.5% of the entire Government’s employee expenses – or over $3 billion.[24]
Other Public Sector Agreements
During the police bargain a range of other Victorian public sector bargains have taken place and have reached agreement. These include, but are not limited to, a bargain covering Nurses and a bargain covering Paramedics.
The Nurses and Midwives (Victorian Public Health Sector) Single Interest Employer Enterprise Agreement 2024-2028 (Nurses Agreement) includes a wage increase of 28.4%[25] over the life of the agreement, as well as a number of other improved conditions and allowances. The significant wage increase is delivered in the context of anticipated increases to nursing-related modern awards following the Commission’s Work Value Case in Aged Care, and the impending review of the Nurses Award resulting from the Commission’s gender equity review. The increase will maintain relativities within current classifications, and importantly, the increase will help address gender undervaluation in nursing and promote gender equity.
The proposed Ambulance Victoria Agreement includes, in addition to a 3% wage increase, a 1% “all-purpose allowance”. It also includes wage uplifts for senior paramedics and MICA[26] paramedics.
In addition, in November 2024, NSW Police reached agreement with the Police Association of NSW on an offer including significant wage increases, reportedly up to 39.4% for some employees.[27] These increases are tied to reforms to the Police Blue Ribbon Insurance Scheme.[28]
2.3.Bargaining to Date between Victoria Police and the PFA
Bargaining June 2023 – December 2023 – Deed of Agreement
Bargaining for the Proposed Agreement formally commenced on 16 June 2023, the date on which Victoria Police issued a Notice of Employee Representational Rights. The first bargaining meeting on 16 June 2023 included Victoria Police, the PFA and Independent Bargaining Representative Erik Woods.
Both Victoria Police and the PFA had substantial logs of claims.[29] One particularly significant claim sought by the PFA was the transition to a 9x9 roster. This claim was initially strongly opposed by Victoria Police.[30]
The parties engaged in active bargaining, meeting regularly, with some 56 meetings between Victoria Police and the PFA between 16 June 2023 and 19 December 2023.[31]
In early December 2023, members of the PFA commenced 16 days of protected industrial action in support of their agreement claims.
On 20 December 2023, Victoria Police, the Government and the PFA entered into a Deed of Agreement. The Deed of Agreement relevantly provided:
From 1 December 2023, employees covered by the 2019 Agreement would receive a 1.75% administrative salary adjustment increase to wages in the 2019 Agreement.
In recognition of the payment, protected industrial action would pause until 31 May 2024.[32]
The Parties intend to reach an in-principle agreement on a proposed agreement by 31 May 2024.
That any amounts in addition to Pillar 1 and any roster reform would need to be consistent with Wages Policy outcomes. In particular, roster reform needed to be at no net cost to Government.[33]
The parties intend to reach an agreed outcome in relation to rostering reform. The “primary objective” was to develop a 9x9 roster that could be achieved within current resourcing.
Under 5(e) and (h) of the Deed of Agreement, rostering experts would be engaged to assist the parties reach agreement.[34]
Bargaining January 2024 – June 2024, mediation by former Commissioner Roe, Proposed Agreement reached
Following the Deed of Agreement, the parties entered into further bargaining, attending 13 meetings between 10 January and 4 April 2024.[35] After failing to reach agreement on the 9x9 roster, the parties engaged former Commissioner and mediator Julius Roe to assist in accordance with 5(e) and (h) of the Deed. Between 19 April to 20 May Victoria Police and the PFA attended a series of mediations with Mr Roe, who issued a recommendation on 29 May 2024 (the Recommendation) regarding the implementation of the 9x9 roster.
After further negotiations, Victoria Police and the PFA executed a Heads of Agreement document on 31 May 2024. Following the signing of the Heads of Agreement, there were a further 12 meetings to finalise a draft proposed enterprise agreement. The proposed agreement was finalised on 18 June 2024 (Proposed June Agreement).
The most significant items in the Proposed June Agreement included:
3% wages increases per annum commencing 1 June 2024.
A fortnightly allowance equivalent to 0.5% of the overall Agreement costs.
An all-purpose Roster Reform Allowance of 0.5%.
Amendments to provide for transition to 9x9 roster as provided in the Recommendation, including conditions for this transition.
July 2024 to Present – the No Vote, further Bargaining, the s.240 dispute and further protected industrial action.
The Proposed June Agreement was circulated amongst police members for vote. A Yes vote was encouraged by both the Victoria Police and the PFA. The ballot opened on 19 July 2024 and closed on 26 July 2024. On 26 July 2024, the ballot results were declared. A majority of the 16,189 employees who participated in the ballot voted against the Proposed June Agreement with 9,158 No votes (57%) and 7,031 Yes votes (43%).
Both Victoria Police and the PFA conducted surveys to understand why the Proposed June Agreement was voted down. On a broad level both surveys delivered similar results. When ‘No Voters’ were asked to identify the main reason they voted no, dissatisfaction with the wage offer was identified by the largest number of ‘No Voters’ as their primary issue. This was followed by the 9x9 roster proposal.[36]
On 19 August 2024, the PFA wrote to Victoria Police. The letter relevantly stated:
The PFA now sought a wage increase of 6%, back dated to 1 December 2023.
The PFA no longer sought the 9x9 roster, but instead sought the introduction of an 8.5-hour roster, and payment of an allowance in compensation for unpaid work until the 8.5 hour roster was implemented.
In addition to these key claims, “a range of other matters” had not been satisfactorily resolved.
In a reply letter dated 20 August 2024, Victoria Police responded, advising the PFA of their position that “the content of the rejected agreement is now not agreed.”[37] In other words, from that point forward, nothing was agreed between the parties.
On 21 August 2024, Victoria Police and the PFA met to resume bargaining. While there is some contest between the parties about the content of that meeting, particularly in relation to Mr Gatt’s comments about trade-offs, it appears clear that both parties in effect, reconfirmed positions set out in their respective letters.
Shortly following this meeting, the PFA notified Victoria Police that it intended to recommence protected industrial action. The PFA also applied for a further protected action ballot order to broaden the scope of industrial action (the September PABO), which was granted on 3 September 2024. Also on 3 September 2024, Victoria Police lodged an application for the Commission to deal with a bargaining dispute pursuant to s.240 of the FW Act.
I listed the September PABO for s.448A conference on 6 September 2024 and the s.240 dispute on 24 September 2024 respectively. Little was achieved in the s.448A conference, although all parties acknowledged they would attend the s.240 conference.
On 16 September 2024, the September PABO results were declared. Out of 14,543 voters, 14, 210 (97.71%) voted in favour of taking protected industrial action. Only 333 (2.29%) voted against. Protected industrial action authorised by the September PABO commenced on 20 September 2024.
On 24 September 2024, the s.240 conference ran the entire day from 9:30am to 4:00pm. While the parties engaged in discussions, no agreement on any matter was reached. At the end of the conference, I told the parties I would hold the file open for two days for them to consider their positions.
On 26 September 2024, Victoria Police emailed my chambers as follows:
“Good afternoon Chambers,
Following the s.240 conference on Tuesday, this email is to confirm that Victoria Police remains of the view that the matters in dispute between the parties are unable to be resolved through bargaining, and an intractable bargaining declaration is now the appropriate way forward.
There are no further matters in our view that necessitate the section 240 (B2024/1144) process remaining open…”
On 30 September 2024, I wrote to the parties closing the s.240 dispute. My email relevantly stated:
“All parties participated in the conciliation conference and engaged in discussions in good faith with a view to trying to reach resolution of the dispute.
However, at the end of the conference the parties were still a considerable way apart and it appeared, at least at this stage, there was no further room to move from Victoria Police or the Police Federation.
I asked the parties at the end of the conference if they wished to have another conference before the FWC. None of the parties thought this would be worthwhile unless the other side significantly shifted their position.”
Later in the day on 30 September 2024, the Victoria Police lodged this current application. Since the application was lodged, further industrial action has been notified, including stoppages of work and/or stop work meetings at Broadmeadows Police Station, Victoria Police Academy, and Keilor Downs Police Station, on 6 November and 7 November 2024. [38]
When PFA members have taken action to date, it has been on the expressed caveat that it is subject to it being safe to do so and that it will not impact on the delivery of essential police services.
Independent Bargaining Representatives
In addition to the PFA, there have been several independent bargaining representatives (IBRs) involved in the bargain, representing themselves and groups of workers with bespoke claims.
Leading Senior Constable Erik Woods was appointed as an independent bargaining representative on behalf of himself and another employee on 15 June 2023. Mr Woods was involved in some bargaining meetings from this time until he stepped down from being a bargaining representative on 14 November 2024.
Inspector Michael Glinski was appointed as an independent bargaining representatives on behalf of other Senior Sergeants in the Protective Service Unit on 4 August 2023. Mr Glinski has been involved in some bargaining meetings since this time. Mr Glinski seeks a wage increase for four Protective Service Senior Sergeants to bring their rate closer to that of Police Senior Sergeant.
Senior Sergeant Stuart Browne, Leading Senior Constable Eric MacDonald and Leading Senior Constable Thomas Lazarus were appointed bargaining representatives for some employees in the Technical Surveillance Unit (TSU) following the No Vote. On 23 August 2024, Victoria Police met with IBRs Browne and MacDonald to discuss their log of claims. A similar meeting occurred with IBR Lazarus on 1 October 2024.
The IBRs for the TSU seek the following claims on behalf of TSU employees:
Access to a recall allowance
An increase in Disturbance Allowance from Level 1 to Level 2
On 29 September 2024, IBR MacDonald wrote to Victora Police requesting a further bargaining meeting. On 30 September 2024, Victora Police wrote to IBRs MacDonald, Brown and Lazarus stating that an application for a Declaration had been made, and Victoria Police would await the directions hearing to inform next steps of future engagement with them as a collective.[39] On 2 October 2024, Victora Police wrote to IBR Lazarus stating that the matter was before the Commission to consider an application for a Declaration, but subject to any outcome from the Declaration process, Victoria Police could not support the TSU claims because it involved financial funding above the Wages Policy.[40] On 4 October 2024, IBR Lazarus wrote to Victoria Police, providing further details of the TSU claim, including options that IBR Lazarus states do not rely on Pillar 3 funding.[41]
Consideration
For the purposes of s.235(1)(a) and (c), I am satisfied that Victoria Police, as a bargaining representative for the proposed agreement, made a valid application under s.234 of the FW Act on 30 September 2024. I am also satisfied that the application was made after the end of the minimum bargaining period, being in this case, 9 months after the nominal expiry date of the 2019 Agreement, or 31 August 2024.
3.1. Has the Commission dealt with the dispute about the agreement under section 240, and has the applicant participated in the Commission’s processes to deal with the dispute? – s.235(2)(a)
Victoria Police, PFA and the IBRs attended a s.240 conciliation conference before me on 24 September 2024. My email to parties dated 30 September 2024 records that all parties participated in the day-long conference, the parties remained a considerable way apart, no bargaining representative sought a further conference to progress the bargain, and that the Commission had dealt with the matter.
The PFA contends that Victoria Police did not participate in the Commission’s processes because they did not agree with a proposal I mooted at the Conference – namely I was prepared to make a recommendation on an agreement outcome, but only if the parties were of the view it would assist in resolving the bargaining dispute. Victoria Police considered the proposal, but did not think it would assist in resolving the bargaining dispute. I find that Victoria Police’s actions during the s.240 conference in considering a proposal and then making a decision to accept or reject a proposal were consistent with participating in a s.240 conference.
The s.240 conference was not particularly fruitful in progressing the bargain for several reasons including, but not limited to, that Victoria Police were actively considering whether bargaining was now intractable, and that the PFA had only just recently commenced a protected industrial action campaign. These are both legitimate pathways open to the parties. Despite these factors, I am of the view that both parties participated in the s.240 conference. The fact that matters are not resolved in a s.240 conference does not mean the dispute has not been dealt with by the Commission.[42] Accordingly I find that the Commission dealt with the dispute about the agreement under s.240 and Victoria Police participated in the Commission’s process to deal with the dispute.
I am satisfied s.235(2)(a) has been met. I turn next to the requirements of s.235(b) and s.235(c).
3.2.Is there no reasonable prospect of agreement being reached if the Commission does not make the Declaration? – s.235(2)(b)
3.2.1.Reaching Agreement with whom?
Section s.235(2)(b) requires an analysis as to whether there is “no reasonable prospect of an agreement being reached” if the Commission does not make the Declaration. Such enquiries may be principally directed towards the potential prospect of agreement as between the bargaining representatives, while acknowledging that no agreement can be reached without a majority employee vote. In written submissions, Victoria Police initially highlighted the disparity between the PFA’s support of the Proposed June Agreement and the outcome of the No Vote, positing that, “in some cases however, including this one, that enquiry will be equally directed towards agreement between the employer and the employees.”[43]
While not fully developed, this appears to be a submission that the Commission should consider whether there is no reasonable prospect of agreement being reached between Victoria Police and its employee cohort. While I acknowledge the submission, there is minimal evidence before me to draw conclusions on such prospects. The only indicators of the greater workforce’s views currently in evidence are the results of the No Vote and the surveys following the vote. The surveys identified the wage increase and the 9x9 roster as the key reasons employees voted no. However, even with these two matters, there was a wide disparity of opinions on the specific nature of these concerns. Regarding the 9x9 roster, some employees were unwilling to transition to the 9x9 roster system, while others did not believe the roster would be implemented properly or in a timely fashion. Even amongst those who identified the wage increase as being too low as the main reason they voted no, there was a disparity of views relating to what would be an appropriate wage increase and how this may be achieved.[44] At their highest, these surveys are an illustrative snapshot of the views of the workforce at a specific time in the bargaining. This falls far short of establishing that there are no reasonable prospects of agreement being reached with the employees.
Returning to the principal approach of considering the prospects of agreement between the bargaining representatives, the PFA represents approximately 98% of the workforce to be covered by the Proposed Agreement. Notwithstanding the results of the No Vote, there is nothing in evidence before me which suggests that the PFA is not properly representing its members’ views. Accordingly, I have focused this inquiry on whether there is no reasonable prospect of agreement being reached between Victoria Police and the PFA. I observe that even if Victoria Police were to agree with the IBRs about their bespoke claims, without reaching agreement with the PFA there is little prospect of an overall agreement.
For completeness, I note that in oral submissions at hearing, Victoria Police revisited the submissions noted at [64] above. At this stage, Victoria Police appeared to recharacterise this submission as an enquiry into the extent and limitations of the PFA’s authority to bargain on behalf of its members. This is a separate consideration which I will address below.
3.2.2.Case Advanced by Victoria Police – No Reasonable Prospect of Agreement
The Victoria Police put forward numerous arguments why the Commission should be satisfied that it is rationally improbable that the parties will reach agreement. These arguments can be broadly categorised under the following three themes:
a)Bargaining is exhausted and Victoria Police has been stretched to its absolute limit.
In this respect Victoria Police relies on the following points:
The parties have engaged in extensive bargaining for approximately 16 months, with approximately 117 bargaining meetings.
The parties have been assisted by former Commissioner and mediator Julius Roe and this should weigh strongly towards a finding that bargaining has been exhausted. In this regard Victoria Police relies on Deputy President Hampton’s observations in Ventia Australia Pty Ltd v United Firefighters’ Union of Australia that assistance from the Commission (or in this case a former Commissioner) “is supportive of the notion that the bargaining has become intractable in a general sense.”[45]
Evidence from Assistant Commissioner Cornelius that the June Proposed Agreement was Victoria Police’s best offer and the “outer limit of what the Government could fund.”[46]
Despite the PFA and Victoria Police mutually supporting the June Proposed Agreement, the Agreement was voted down by a substantial number of employees.
After the No Vote, the parties’ positions moved even further apart.
b)The positions of the PFA and Victoria Police are irreconcilable
In summary Victoria Police argues the parties’ positions are irreconcilable because:
The PFA is seeking wage increases and other financial conditions in excess of Pillar 1 of the Wages Policy and/or the Proposed June Agreement. In addition, the PFA will not consider any offsets.
Victoria Police cannot offer any more than Pillar 1 Wage Increases and/or the Proposed June Agreement because:
o Victoria Police is bound by the Wages Policy and the Financial Management Act, and/or
o Victoria Police and the State Government face extremely challenging financial circumstances.
In addition, Victoria Police submits the Commission should reject the PFA’s argument that other public sector negotiations, in particular the Nurses Agreement, reveal there is room to move on the Wages Policy. Mr Barrett’s evidence shows all public sector bargains are within the Wages Policy. The Nurses Agreement was exceptional because of the foreshadowed changes to nursing related awards resulting from the Commission’s work value and gender equity review, and it also addressed the Public Sector priority of addressing gender inequity.
c)Industrial action will not change the position of Victoria Police
Victoria Police contends that protected industrial action has already been occurring for two months (as at the time of the hearing) and has not been effective to pressure Victoria Police to change its bargaining position. Victoria Police points out that there is historically an understanding between the PFA and Victoria Police that any protected industrial action by police will not impact on the delivery of essential police services or create a risk to community safety. Assistant Commissioner Cornelius gives evidence that given this understanding, protected industrial action will not change Victoria Police’s position.[47]
3.2.3.Case Advanced by the PFA – Reasonable Prospect of Agreement
The PFA submits that the application for a Declaration has been made prematurely and it is not rationally improbable that an agreement would be reached if bargaining were allowed to continue. To support this position the PFA makes submissions under the following three themes:
a) Bargaining is not exhausted
The PFA contends a proper and fair analysis of bargaining shows bargaining has not been exhausted. The PFA makes the following points in support of this position:
The period and number of bargaining meetings does not in itself establish bargaining is exhausted. Other public sector negotiations have gone for a longer time. These include the Ambulance Victoria bargain which took 19 months and 117 meetings, and the Victorian Fire Fighters bargain which continued for over three years before an intractable bargaining declaration was made on 4 October 2023.[48]
The bargain properly analysed should be seen as having developed in multiple stages. In particular, considerable time was spent developing the 9x9 roster proposal and once the Proposed June Agreement was rejected (and Victoria Police responded by taking all agreed matters off the table), bargaining was in effect, “reset.”
After the bargain was “reset” there have been only three meetings, including the s.448A conference and the s.240 conference. Victoria Police has not genuinely engaged in any of these meetings as they were seeking a Declaration.
The No Vote does not support an argument that the bargaining is intractable. The PFA argues that the No Vote in this matter is minor and can be distinguished from significant “No Votes” that have been considered relevant in other Declaration decisions.
Victoria Police did not properly explore whether the State Government would approve further negotiations or additional funding after the No Vote.
The fact Victoria Police seeks a post declaration bargaining period reveals there is more bargaining to be done.
In addition, the PFA contends that the history of bargaining between the parties shows that bargaining is not intractable. The PFA relies on the evidence of Mr Kennedy, who has been involved in the PFA’s bargains since 2001, that previous bargains have been complex, protracted and involved escalating protected industrial action, but have always eventually resulted in an agreement.
b) The Parties have not reached irreconcilable positions
The PFA submits that Victoria Police’s reliance on the wages policy is a “straw man” and the Victoria Police is not restricted by the Wages Policy in bargaining. Mr Kennedy gives evidence that previous police agreements have exceeded the wages policies in force at the time the agreements were made.[49] PFA further relies on evidence from Kennedy detailing other public sector bargains that he says have exceeded wages policy.[50]
The PFA contends that it is ready, willing and able to engage in negotiations and make compromises and consider trade-offs. In making this submission the PFA relies on evidence about its willingness during the s.240 conference to take a proposed recommendation from the Commission to its members, as well as Mr Kennedy’s statement that the PFA is “willing to negotiate on all matters, including wages.”[51]
c) PFA members should be given the opportunity to exercise Protected Industrial Action
The PFA contends the Victoria Police’s application for a Declaration is designed to stop the union from taking protected industrial action and putting pressure on Victoria Police and the State Government. Mr Kennedy’s evidence in this regard is that protected industrial action to date has been limited, has not encompassed all actions authorised by the protected action ballots, and that it is likely to escalate. [52] Mr Kennedy states similar patterns of escalating industrial actions have occurred in the bargaining for previous police enterprise agreements. The PFA argues that the granting of a declaration would effectively deprive the PFA and its members from having a reasonable opportunity to exert lawful pressure through taking protected industrial action.
3.2.4.Consideration – is there no reasonable prospect of agreement being reached if the Commission does not make the Declaration?
As set out above, to reach the requisite state of satisfaction in relation to s.235(2)(b) “requires an evaluative judgment that it is rationally improbable that an agreement will be reached.”[53]
The parties have been bargaining for a long time in a very challenging financial environment. The parties have been actively trying to reach agreement with 117 bargaining meetings and have utilised assistance from external parties including both former Commissioner Mr Roe, and the Commission. There has been at least two months of protected industrial action in 2024, and the parties remain significantly apart.
I can understand the frustration of the bargaining parties in these circumstances. This is illustrated by the evidence of Assistant Commissioner Cornelius at the hearing:
“We certainly have done everything we can to reach agreement, and that is reflected in everything that has occurred over the past 16 months. Indeed, we got to a point where we did reach agreement in relation to a proposed agreement. It was put to a ballot of members, and was rejected. I don’t know what more could be asked of an employer in those circumstances.”[54]
On the face of it, extensive negotiations, use of external experts to assist negotiations, a proposed Agreement being rejected and significant differences in the positions of the bargaining parties are all matters that may well weigh in favour of a finding that bargaining is intractable.
However, while I have taken all these matters into account, when I consider all the circumstances before me – on balance – I find that it is not rationally improbable that an agreement will be reached. In making this evaluative judgment I have had regard to a combination of the following factors:
a)The parties have previously reached agreement in challenging circumstances
Victoria Police and the PFA have already reached an agreement in-principle in very challenging circumstances. The parties reached agreement on the Proposed June Agreement, even though the 9x9 roster was a highly contested claim. Victoria Police was initially strongly opposed to the 9x9 roster. This is illustrated by the fact that in November 2023 the Chief Commissioner notified the workforce that Victoria Police could not agree to the 9x9 roster because of the cost,[55] and as late as April 2024, Victoria Police claimed it would not commit to a 9x9 roster because the “risks” were too great.”[56] The fact that in the face of this significant difference of views the parties were able to navigate an agreement in-principle supports a view that they will be able to do so again.
I have also considered the long history of these parties being able to reach agreement in previous bargains. I have taken into account the particularly difficult financial circumstances facing the parties during this current bargaining round. Notwithstanding these circumstances, I am of the view that the long history of reaching agreement - including established relationships, open lines of communication between the parties and co-operative practices (such as the articulated understanding between the parties that protected industrial action will not impact on the delivery of essential police services, or work related to an emergency), supports the finding that further progress can be made through bargaining.
b)The 9x9 roster
Considerable time and resources were dedicated to negotiating the 9x9 roster. Bargaining between January to May 2024 was dominated by the 9x9 roster, with former Commissioner Roe specifically engaged to assist the parties with this matter.[57] This is important because when the bargaining relating to the 9x9 roster is removed from consideration, the bargaining around alternative proposals does not appear to be “extensive” or exhausted.
In addition, the 9x9 roster is no longer sought by the PFA.[58] This is a significant revision.
I understand Victoria Police’s argument that the PFA’s current claim for 8.5 hours shift is no more palatable than the 9x9 roster, and is not acceptable because the PFA has removed ‘safeguards’ that were in the Proposed June Agreement. However, on the evidence before me it does not appear that there has been any meaningful discussion since the No Vote on what an agreement without a 9x9 roster could look like, or alternatives to address the PFA’s claim regarding out of hours work.
c)The No Vote is not indicative of intractable bargaining
The No Vote in the circumstances before me is not indicative of intractable bargaining. In other cases where the Commission has considered a No Vote relevant to the determination of whether reaching an agreement is improbable, the No Vote has usually been substantial (a “resounding rejection”[59] of the agreement) and/or there have been multiple No Votes.[60]
In this case, 2,127 votes separated the No majority from the Yes voters. While numerically this is a large number, (bigger than many private sector workforces), when the vote is considered as a percentage, it is relatively close being 57% to 43%. While 9,158 employees voted against the agreement, a considerable 7031 employees believed the bargaining parties got it right.
I also note that the nurses voted No to a proposed agreement endorsed by the ANMF, prior to the parties renegotiating an improved position. While I am cautious to draw any comparison between the nurses and the police bargain, and, for reasons set out below at [119], I consider the nurse’s bargain and Agreement is special, this renegotiation does at least show that a No Vote does not automatically equate to intractable bargaining.
d)There have only been three bargaining meetings since the No Vote
I do not accept the PFA’s submission that the No Vote (and the subsequent position of Victoria Police) “wiped the slate clean.” A No Vote does not necessarily indicate that all bargaining to date is now irrelevant. However, I do consider a No Vote means the parties have to take stock of their position and discuss alternatives that may secure a Yes Vote.
There have been only three bargaining meetings since the No Vote. At the first meeting on 21 August 2024, the parties in effect restated, or amplified, the positions they had taken in writing immediately after the No Vote – namely, the PFA sought significantly revised claims and no trade-offs and Victoria Police confirmed it was bound by the Wages Policy. As a result, nothing was agreed. The following two meetings were before me at the s.448A conference and the s.240 conference. These meetings took place in the context of an impending industrial action campaign and a potential intractable bargaining application.
It does not appear that at any of these meetings the parties have had meaningful discussions around alternative positions that might be put to the employees to secure a yes vote. Accordingly, it does not appear to me that bargaining has been exhausted.
I understand Victoria Police’s submission that the PFA’s position on 21 August 2024 was so far removed from the Wages Policy that bargaining was from that point ‘intractable’. I consider this argument under the next heading.
e)The PFA’s position is not entrenched
When parties become entrenched in their position with no willingness to compromise, this may be an indication that bargaining is intractable.[61] I do not find that the PFA’s current position meets this description and/or supports a finding of intractable bargaining.
Following the No Vote, the PFA substantially revised its position, seeking, amongst other things, wage increases of 6%, back pay and a shift away from the 9x9 roster to an 8.5 hour roster. At the meeting on 21 August 2024, Mr Gatt confirmed (and added to) the PFA’s revised claims and stated words to the effect that the PFA did not intend to engage in trade-offs. A key matter of contest between the parties has been whether the position articulated by the PFA on 21 August 2024 is the PFA’s current position (and therefore, Victoria Police argues, indicative of intractable bargaining as Victoria Police cannot agree with a position so far removed from the Wages Policy), or whether the PFA was putting an initial position after the No Vote, and is actually willing to shift from its 21 August 2024 position.
Victoria Police contends that the PFA has not done anything concrete to show that it is willing to move away from the 21 August position – for example, it has not had a further delegates meeting to revise its wage position. Victoria Police submits that the Commission should reject statements from Mr Kennedy that PFA is willing to negotiate or consider offsets as mere speculation.[62]
Part of the difficulty in assessing the PFA’s position is that there have been so few bargaining meetings since the No Vote so there is not a lot of evidence that goes either way. This in itself suggests the current application may be premature.
However, on the evidence before me, the PFA did meaningfully participate in the s.240 conference, and was prepared to consider my proposal for a recommendation to move the bargain forward. This suggests it is not bound to its 21 August position. Furthermore, Mr Kennedy has given witness evidence that the PFA is “willing to negotiate on all matters including wages”[63] and that trade-offs may be considered in future negotiations.[64]
Mr Kennedy is the Assistant Secretary of PFA (Victoria Branch) and has been a lead negotiator in this bargain. The PFA is a significant union, represented by Counsel, and it has advanced a formal position to the Commission that it is willing to negotiate on all matters including wages. I have no reason not to take Mr Kennedy’s statement on face-value as a statement of the PFA’s intention.
I am also satisfied, based on the history of the bargaining to date, that the PFA is authorised to bargain on behalf of its members (not just restate static positions).
The finding that the PFA is willing to negotiate is important because Assistant Commissioner Cornelius gave evidence that a Government approved funding strategy was not sought by Victoria Police because it was understood that the PFA’s “revised position” was too far outside wages policy[65] and Victoria Police was therefore not authorised to bargain.[66] If the 21 August position does not represent the PFA’s “final position” it appears there may be room for further discussion.
f)Victoria Police’s position – the impact of Wages Policy and the Financial Context
It is uncontested that Victoria Police is bound by the Government Wages Policy, the Enterprise Bargaining Framework, and Financial Management Act.
Victoria Police argues that it is rationally improbable that the parties will reach agreement because the PFA’s claims are above and beyond what can be authorised by the Wages Policy. In particular Victoria Police points to wage increases of 3% authorised in Pillar 1 vs the PFA’s claim for 6% and back pay.
Firstly I address the argument between the parties around whether the Wages Policy allows any wage increase above 3%. Assistant Commissioner Cornelius in his statement for Victoria Police claims the PFA has consistently sought a wages outcome that is beyond Pillar 1.[67] In comparison, Mr Kennedy in his statement for the PFA claims that the Wages Policy provides “almost infinite flexibility to obtain unspecified wages outcomes over and above the prescribed minimum, based on generalised concepts directed to Government/Agency or workforce objectives.”[68]
The difference between the parties is largely semantics. It is clear that Pillar 1 is capped at 3% for “general” wage increases with an additional lump sum payment of 0.5%. However, under Pillar 3 there may be access to additional financial outcomes – subject to meeting the requirements of Pillar 3 - which can include financial compensation that for all intents and purposes is the same as a wage increase.
The fact that Pillar 3 offers bargaining parties flexibility to negotiate financial outcomes above Pillar 1 is made explicit in the Wages Policy which states:
“While there is no cap on overall agreement outcomes, Pillar 1 increases to wages and conditions cannot exceed the funded allocation and Pillar 3 improvements must be funded from appropriate cash offsets and/or a government approved funding strategy.” (emphasis added)
This is also acknowledged by Mr Barrett who gives evidence that “Whilst general wages are capped at 3 per cent per annum, consistent with Wages Policy, Pillar 3 allows varied outcomes depending on the operational and strategic priorities of the department or agency.”[69] Barrett gives a number of examples of public sector bargains that include additional outcomes under Pillar 3, including at least two examples where Pillar 3 outcomes have led, in effect, to wage increases above 3%. For example, Barrett describes the outcome of the Nurses Agreement as a 3% wage increase under Pillar 1, with an “additional wage uplift of 16.4 per cent over the life of the agreement...” under Pillar 3.[70] I also note that Government representatives have referred to this Pillar 3 “uplift”, as a “pay rise”.[71]
Therefore, the Wages Policy, in and of itself, does not “ban” the parties negotiating financial outcomes that have the same effect as wage increases above and beyond the 3% general wages identified in Pillar 1. However, Pillar 3 does place substantial conditions on the provision of additional funding which I now consider in relation to this matter.
First, Government needs to agree that the changes will address key operational or strategic priorities for the agency, and/or one or more of the Public Sector Priorities. During the hearing the PFA and the IBRs have raised numerous issues that may well be considered key operational or strategic priorities such as recruitment and retention of police[72] (an issue that is confirmed by Assistant Commissioner Cornelius[73]) and claims relating to out of hours work. Whether the Government agrees that these are matters to be addressed by additional funding under Pillar 3 may be a matter for bargaining.
Second, the associated costs are funded through appropriate cash offsets or a
government approved funding strategy. Victoria Police argues that given the PFA is seeking an increased offer, the current financial difficulties facing Victoria Police and the Government mean it is rationally improbable an agreement will be met.
In relation to Victoria Police – it appears on the evidence that Victoria Police have a very tight operating budget with very limited ability to reallocate funds. Victoria Police recorded a deficit last year and has no additional operational funding to fund any increases above and beyond the Proposed June Agreement.[74] Any additional funding for the bargain will either need to come from offsets or from a Government approved funding strategy.
As noted above I have accepted the PFA’s evidence that they are willing to negotiate on all matters, potentially including offsets. However, both parties in submissions and evidence focussed on the availability (or not) of a Government approved funding strategy to progress the bargain.
Victoria Police has put forward a compelling case that given the dire financial situation facing the State, the Victorian Government is not in a position to provide any financial benefits in addition to the Pillar 1 wage increases. Put at its simplest, Mr Barrett gives evidence:
“Funding a wage outcome above 3 per cent per year would put at risk the State’s fiscal sustainability. This could mean tax increases, service reductions, increased debt or some combination of these measures.”[75]
There is an appealing simplicity to this argument: the Victorian Government is in substantial debt, therefore it cannot pay anything above the budgeted 3% (or alternatively the funding “envelope” of the Proposed June Agreement). The difficulty with this argument is that it is clear on the evidence that despite the challenging financial situation, in several other public sector bargains the Government has negotiated financial outcomes under Pillar 3 that go beyond Pillar 1.
Comparisons between bargaining experiences and outcomes should be applied with caution.[76] However, in this instance, where Victoria Police is arguing that bargaining is intractable because of the State’s financial position, other public sector bargains which have happened in the same financial context provide important insight into the Victorian Government’s ability to engage in bargaining in addition to Pillar 1.
There have been considerable submissions made by both sides regarding the Nurses Agreement. The Agreement was reached at a time where hospital administrators reported significant operating budget shortfalls. In response, the State Government announced a supplementation to the health budget to meet shortfalls.[77]
Victoria Police contend that the Nurses Agreement should not be used as a comparator because the Nurses Agreement was extraordinary given the need to address gender inequality and the foreshadowed Fair Work Commission Work Value adjustments. I accept that the Nurses Agreement is special. Wages in female dominated industries have been historically undervalued and the Government should be commended for taking meaningful steps to address this issue. It is important that members of the PFA recognise the wage increases received by Nurses are tied to longstanding gender equity issues which do not apply in their sector.
However, ultimately the Nurses Agreement and other public sector bargains like the Ambulance Agreement show that despite the difficult financial situation facing the Government, there is flexibility in applying the Wages Policy. This is reflective of the fact that despite difficult economic conditions the Government must manage a complex balancing act to meet multiple competing priorities – one of which is bargaining demands relating to the wages and conditions of emergency service workers.
Victoria Police claim that because of the difficult financial position they cannot fund any further financial increase above and beyond Pillar 1 or alternatively the “financial envelope” of the Proposed June Agreement. There is significant merit to this claim. The PFA and IBRs claim the proposed pay rise is inadequate and there are outstanding issues relating to out of hours work and retention. On the face of it, these claims also have merit. However, in assessing whether there is no reasonable prospect of agreement being reached I am not required to assess the merits of possible alternative positions.[78] “Both positions are on face value reasonable bargaining propositions and this tension, of itself, is a normal part of bargaining.”[79]
Having considered all the evidence before me, while I consider the current financial position of the State presents an undeniably significant factor impacting the bargain, I do not find it makes reaching an agreement rationally improbable.
g)Protected Industrial Action
Finally, I have taken into account the possible impact of protected industrial action (PIA) and find that this does not support a finding that it is rationally improbable agreement will be reached.
Employees exercising their right to take protected industrial action in support of their claims is a legitimate feature of the collective bargaining framework established under the FW Act. As stated by Bromberg J in Esso Australia Pty Ltd v Australian Workers’ Union:[80]
“To be successful, bargaining usually involves the making of concessions. Sometimes concessions are freely made, but an inherent feature of a collective bargaining regime is the recognition that concessions may need to be extracted through the application of industrial pressure. Industrial action is an available form of pressure and the capacity to lawfully exert such pressure, including by inflicting loss or damage, is permitted but is subject to certain conditions. As to the last-mentioned characteristic of collective bargaining, the FW Act calls permitted industrial action “protected industrial action”.
Of course, often parties will only resort to industrial action after negotiations have stalled. This situation can be distinguished from an intractable bargaining situation because protected industrial action may lead to bargaining progressing. My role then is to assess the likely impact of protected industrial action in this bargain, including considering whether, despite the protected industrial action, the parties are rationally improbable to reach an agreement. In Ventia Australia Pty Ltd v United Firefighters’ Union of Australia, Deputy President Hampton considered the likely impact of some protected industrial action taken by the United Firefighters Union in assessing whether bargaining was intractable. In that case the United Firefighters Union was engaging in some “low key” industrial action which did not have any impact on Firefighters responding to emergencies or other major fire and rescue functions. The Deputy President held:[81]
“The fact that the PIA has been taken and has not led to an agreement is a relevant consideration in assessing the prospects of an agreement being reached. The fact that the action to date has been as described above is also a relevant consideration. In weighing up whether the bargaining is intractable, I have considered both the capacity for further PIA to be taken (in the absence of a Declaration) and its capacity to facilitate changes in the position of Ventia, and the fact that PIA can (and should) be limited to some degree by the critical safety context in which the services are provided in this particular matter. The first of these aspects recognises that the taking of PIA for this purpose is a part of the very scheme of the Act when bargaining for a relevant enterprise agreement. The second consideration is recognised, at least by implication, by the UFU and places some practical context around the degree to which this aspect would change the bargaining dynamics so as to more readily advance the making of an agreement. In any event, should that limit not be the result, there are avenues available to Ventia under the FW Act.”
The evidence before me establishes the following:
PFA members overwhelmingly endorsed the option to take industrial action in support of their bargaining claims (in the most recent vote in September 2024, 97.71% of voters voted in favour of taking protected industrial action.)
PFA members participated in industrial action from 3 December 2023 – 19 December 2023. Suspending the PIA was a key element of the Deed of Agreement entered into by the parties on 20 December 2023.[82]
PFA members have re-engaged in industrial action since 5 September 2024.
I accept Mr Kennedy’s evidence that the PIA campaign is escalating.
The PFA and Victoria Police have an understanding that PIA will not impact on the delivery of essential police services, or work related to an emergency.[83]
PIA has occurred in previous police bargains before an outcome has been reached in 2001, 2007, 2011, 2019 Agreements.[84]
Industrial action occurred in a range of recent public sector bargains including during the Nurses bargain[85] and the VAU bargain.[86]
I am not persuaded by Victoria Police’s argument that ongoing PIA will have no impact because of the “understanding” regarding essential services and emergency work. While I don’t have the evidence in front of me to determine the extent to which PIA influenced previous agreement outcomes (including the December 23 Deed of Agreement), on the face of the evidence before me it appears that there is some causal connection and PIA has had some impact. It is also clear there is widespread support by PFA members for taking protected industrial action, and such action is likely to be engaged in by the majority of the workforce covered by the proposed Agreement. I am not prepared to discount the potential role PIA may have in pressuring the parties towards an agreement.
In the current circumstances where PIA to date has not been extensive and is still escalating, PIA weighs in favour of a finding that bargaining is not intractable. I have no reason to doubt that the PFA and Victoria Police will continue to ensure that PIA does not impact on essential police services and emergency work. In the unlikely event that this does not occur, there are other avenues open to Victoria Police to address this matter.
Ultimately, after considering all the circumstances of this case, on balance, I do not find that at this stage there are no reasonable prospects of an agreement being reached without the Declaration.
3.3.Reasonable in all the Circumstances – s.235(2)(c)
Given the above finding in relation to s.235(2)(b), there is no need to consider s.235(2)(c). However, had it arisen, the IBRs claims relating to good faith bargaining may have been relevant. The IBRs submit Victoria Police has not genuinely considered their claims. Victoria Police states it has been focused on reaching agreement with the overall workforce rather than dealing with bespoke claims, and in any event has met the good faith bargaining requirements. I hasten to emphasise that I make no finding in relation to this matter. However, I do note, if a Declaration were made in this matter, the Commission would have to spend time hearing and determining the claims of the IBRs when, at least on the face of the evidence before me, the parties have had very little engagement around these matters. Prior to making an application for a Declaration it may be prudent that an Applicant ensures they have properly considered and responded to all bargaining representatives’ claims.
3.4.Residual Discretion
Victoria Police and the PFA provided conflicting submissions regarding whether, in the event the Commission finds that each of the elements in s.235(1) are satisfied, the Commission retains a “residual discretion” to make, or not make the Declaration. The PFA relies on the Full Bench decision in UFU v FRV at [32] to contend the Commission retains such a discretion. Victoria Police argues that, having regard to the context and purpose of s.235, the word “may” should properly be interpreted as meaning “must,” and that therefore no residual discretion exists.
Given my finding in relation to s.235(2)(b), I do not need to determine this matter.
Conclusion
For the reasons given above, I am not satisfied that s.235(2)(b) has been met and therefore I am unable to make a Declaration. As a result, I am obliged to dismiss this application.
While I am of the view it is not rationally improbable that the parties will reach agreement, I also recognise that bargaining in the short term will continue to be challenging. The Commission can assist the parties with this. A further s.240 conference – out of the shadow of an impending intractable bargaining application – may well benefit the parties. I encourage the parties to lodge a fresh s.240 application. The Commission will look to accommodate the parties as soon as they are ready.
COMMISSIONER
Appearances:
C O’Grady KC for Victoria Police
J Agius SC for the Police Association of Victoria
T Lazarus, E MacDonald, S Browne, for the Technical Surveillance Unit
M Glinski for the Protected Services Officer Senior Seargeant Unit
Hearing details:
2024
18 November
Melbourne
[1] Exhibit 1, Digital Hearing Book (DHB) 995, Witness Statement of Assistant Commissioner Luke Cornelius (‘Cornelius Statement’); DHB 1632, Witness Statement in Reply of Assistant Commissioner Luke Cornelius (‘Cornelius Reply Statement’).
[2] DHB 1669, Witness Statement of Christopher Samuel Barrett (‘Barrett Statement’).
[3] DHB 1441, Witness Statement of Christopher Gerard Kennedy (‘Kennedy Statement’); DHB 3115, Second Statement of Christopher Gerard Kennedy (‘Kennedy Second Statement’).
[4] Exhibit 2 includes the following article: ‘NSW Police have been offered a massive pay rise. Some will take home nearly 40 per cent more’, Syndey Morning Herald, 11 November 2024, and a NSW government press release dated 12 November 2024.
[5] See s.413(7)(c) of the FW Act
[6] Section 235(5)(a) of the FW Act.. Section 235(6) provides that the day bargaining starts for a proposed agreement (in circumstances not involving a supported bargaining authorisation or single interest employer authorisation) is the notification time pursuant to s173(2) of the FW Act.
[7] [2023] FWCFB 180.
[8] [2024] FWCFB 127.
[9] DHB 997, Cornelius Statement, [21].
[10] DHB 187–188, Wages Policy and the Enterprise Bargaining Framework (’Wages Policy’).
[11] DHB 189, Wages Policy.
[12] DHB 192, Wages Policy.
[13] DHB 194, Wages Policy.
[14] DHB 1634, Cornelius Reply Statement, [16].
[15] DHB 998, Cornelius Statement, [32].
[16] DHB 1010, Cornelius Statement, [97](j).
[17] DHB 1616, Outline of Submissions of Independent Bargaining Representatives Stuart Browne, Thomas Lazarus and Eric MacDonald (’IBR Submissions’), [16].
[18] DHB 1984, Victorian Auditor-General’s Report on the Annual Financial Report of the State of Victoria:2022-23 (’AG Report’).
[19] DHB 1985, AG Report.
[20] DHB 1985, AG Report.
[21] DHB 1989, AG Report.
[22] DHB 1989, AG Report.
[23] DHB 1670, Barrett Statement, [12].
[24] Ibid.
[25] 3% per year and wages uplift of 16.4% over the life of the Agreement.
[26] Mobile Intensive Care Ambulance.
[27] Exhibit 2 Max Madison, ’NSW Police have been offered a massive pay rise. Some will take home nearly 40 per cent more’, Sydney Morning Herald, 11 November 2024.
[28] Ibid.
[29] DHB 197, PFA log of claims; DHB 364, Victoria Police log of claims.
[30] DHB 1603, Email from Chief Commissioner Shane Patton dated 3 November 2023 “News Update from Executive Command”.
[31] DHB 46, Statement of Agreed Facts, [16].
[32] DHB 413, Deed of Agreement, 2(c).
[33] DHB 414 Deed of Agreement at 5(d).
[34] DHB 414 Deed of Agreement 5(e) and (h)
[35] DHB 46, Statement of Agreed Facts, [17(b)].
[36] DHB 1108 – Victoria Police Rejected Agreement Feedback Report; DHB 1590 – TPAV Enterprise Agreement Survey.
[37] DHB 621, SAF Attachment 3.
[38] DHB 1452, Kennedy Statement, [63(c) - (d)].
[39] DHB 50, SAF, [73].
[40] DHB 978, Email from Lardner to Lazarus dated 2 October 2024.
[41] DHB 977, Email from Lazarus to Lardner dated 4 October 2024.
[42] Cleanaway[2024] FWCFB 127, [13].
[43] DHB 990, Victoria Police submissions [39]-[40].
[44] DHB 1109, Victoria Police Rejected Agreement Feedback Report; DHB 1592, TPAV Enterprise Agreement Survey.
[45] [2023] FWC 3041 (‘Ventia’), [85].
[46] DHB 1635, Cornelius Reply Statement, [23].
[47] DHB 1640, Cornelius Reply Statement, [48].
[48] DHB 1450, Kennedy Statement, [53-54].
[49] DHB 1446, Kennedy Statement, [28].
[50] DHB 1447-1450, Kennedy Statement, [29]-[50].
[51] DHB 3116, Kennedy Second Statement, [8].
[52] DHB 1452 Kennedy Statement, [63](b) and (e).
[53] UFU v FRV[2023] FWCFB 180, [29].
[54] Transcript PN332.
[55] DHB 1603, Email from Chief Commissioner Shane Patton dated 3 November 2023 “News Update from Executive Command”.
[56] See Agreed Recommendation DHB 417. Following a workshop on 8/9 April where a tentative 9x9hour roster was developed, “Victoria Police advised they could not commit to the outcome developed at the workshop because they believed that the risks associated with moving to 9x9 shift length within the life of the replacement agreement were too great.”
[57] Under 5(e) of the Deed of Agreement, DHB 414.
[58] DHB 619, Letter from PFA to Victoria Police dated 19 August 2024.
[59] See for example Transport Workers’ Union of Australia v Cleanaway Operations Pty Ltd [2024] FWCFB 127 at [71], where the Agreement was rejected twice, the second time by 100% of voters.
[60] See for example Network Aviation Pty Ltd v Australian Federation of Air Pilots [2024] FWC 685 where proposed Agreements were rejected four times.
[61] Transport Workers’ Union of Australia vCleanaway [2024] FWC 91, [79] – [81].
[62] Transcript PN437.
[63] DHB 3116, Kennedy Second Statement, [8].
[64] DHB 1443, Kennedy Statement, [15].
[65] Transcript PN293.
[66] Transcript PN281.
[67] DHB 1641, Cornelius Reply Statement, [51].
[68] DHB 1452, Kennedy Statement, [66].
[69] DHB 1676, Barrett Statement, [53].
[70] DHB 1675, Barrett Statement, [52].
[71] See for example, Allan government commits extra $1.5 bn to struggling Victorian hospitals, rules out mergers – Shannon Deery, Herald Sun, 8 August 2024 – which reports a Government spokesperson saying “We backed our nurses with a 28 percent pay rise…”
[72] DHB 1616, Statement of Thomas Lazarus, [16].
[73] DHB 1010, Cornelius First Statement, [94(i)].
[74] DHB 1633 Cornelius Reply Statement, [11-12].
[75] DHB 1677, Barrett Statement, [66].
[76] Ventia, [84].
[77] DHB 1448, Kennedy Statement, [32].
[78] Cleanaway[2024] FWCFB 127, [11](c).
[79] Ventia, [100].
[80] Esso Australia Pty Ltd v Australian Workers’ Union [2016] FCAFC 72: 258 IR 396 at [240]
[81] Ventia, [103-104]
[82] DHB 413, Deed.
[83] DHB 1650, Letter from Mr Gatt to Mr Patton dated 7 November 2024.
[84] DHB 1445, Kennedy Statement, [20].
[85] DHB 1522, Article - Vicotria’s nurses and midwives reject new pay offer in shock decision Jewel Topsfield 20 May 2024.
[86] DHB 1569, Article - Paramedics to ramp up industrial action as long-running pay fight heats up Shannon Deery 4 June 2024.
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