Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU) and “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known...
[2022] FWC 1936
•25 JULY 2022
| [2022] FWC 1936 |
| FAIR WORK COMMISSION |
| REASONS FOR DECISION |
Fair Work Act 2009
s.437—Protected action
Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU) and “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU)
v
Ensign Services (Australia) Pty Ltd T/A Linen Services Australia
(B2022/715, B2022/716)
| COMMISSIONER PLATT | ADELAIDE, 25 JULY 2022 |
Proposed protected action ballots of employees of Ensign Services (Australia) Pty Ltd
The following reasons relate to my decision to issue two protected action ballot orders[1] on Friday, 22 July 2022.
On 20 July 2022, two separate applications (the Applications) were made by 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” known as the Australian Manufacturing Workers’ Union (AMWU) (together, the Unions), seeking protected action ballot orders (PABOs) pursuant to s.437 of the Fair Work Act 2009 (the Act) in relation to employees of Ensign Services (Australia) Pty Ltd T/A Linen Services Australia (Linen Services or the Respondent) to determine whether eligible employees wish to engage in specified protected industrial action for a proposed enterprise agreement.
The applications were identical save for the group of employees that was to be balloted.
On 21 July 2022, the Respondent advised the Commission that the Applications were opposed on the basis that the Commission could not be satisfied that the Unions are, or have been, genuinely trying to reach agreement
Linen Services also sought, if the Applications were granted, that the period of notice of protected industrial action be extended to 7 days.
The matters were jointly listed for conference at 3.00pm on 21 July 2022. The parties were notified that if the matters did not resolve through conciliation, they would proceed to a Hearing at 4.00pm on 21 July 2022. The matters did not resolve at conciliation and the Hearing commenced at 4.00pm. A Digital Court Book was compiled and distributed to the parties prior to the Hearing, and I received the entirety of the Digital Court Book into evidence, giving appropriate weight to any evidence that was tainted by hearsay, opinion or irrelevance.
The AMWU was represented by Mr Ben Martin whilst the CEPU was represented by Mr Paul Scudds. The Respondent was represented by Mr Maurice Addison, who was granted permission, unopposed, on the basis of complexity and efficiency. The representatives of each of the Unions filed witness statements. Neither Mr Martin nor Mr Scudds was required for cross-examination by the Respondent. The Unions also filed email correspondence between the parties outlining the attempts at bargaining which had preceded the PABO applications. The Respondent filed witness statements from Mr John Douglas (Employer Bargaining Representative) and Mr Peter Williamson (State General Manager).
There was no submission that the requirements of s.437(2A) or s.440 of the Act had not been met, and there was evidence on file that the Australian Electoral Commission had been served by the Applicants.
The remaining issues in dispute were whether the Unions were genuinely trying to reach an agreement as per s.443(1)(b), and if I was minded to grant the Applications, whether exceptional circumstances existed such that it was necessary to extend the period of notice to a period longer than 3 working days as per s.443(5).
Genuinely trying to reach agreement
Section 443(1) of the Act states that:
“The FWC must make a protected action ballot order in relation to a proposed agreement if:
(a) an application has been made under section 437; and
(b) the FWC is satisfied that each applicant has been, and is, genuinely trying to reach an agreement with the employer of the employees who are to be balloted.”
The essence of the Respondent’s objection was that they had not been given an opportunity to respond to the Unions’ most recent proposal, and the Applications represented a failure to comply with the good faith bargaining requirements of the Act. The Respondent contended that the Unions failed to respond to the company’s proposals in a timely manner and failed to give genuine consideration to the company’s proposals in contravention of ss.228(c)-(d) of the Act. Furthermore, the Respondent contended the Unions’ most recent claim, which included wage increases with an incorporated CPI protection, was a “new claim” and as such represented capricious conduct which breached s.228(e) of the Act.
The Respondent contended that these alleged breaches of the good faith bargaining principles should weigh in favour of a finding that the Unions had not been genuinely trying to reach an agreement, and as such the Applications should be dismissed.
The Respondent brought my attention to a number of Decisions[2] which recognised a connection between the good faith bargaining principles and the requirements of s.443(1)(b) of the Act and noted that the good faith bargaining principles could be a relevant consideration when determining whether the parties were genuinely trying to reach an agreement.
Whilst the Decisions relied upon by the Respondent recognised a connection between good faith bargaining principles and the parties genuinely trying to reach an agreement, they also emphasised the importance of assessing s.443(1)(b) on its own merits. In TWU v CRT Group Pty Ltd[3], Hamburger DP stated:
“[26] While there is a relationship between ‘genuinely trying to reach an agreement’ and ‘bargaining in good faith’ it would be wrong simply to conflate the two terms. Even if I had found that the TWU was not bargaining in good faith – something I have not done – that would not necessarily mean that the TWU was not genuinely trying to make an agreement.”
Similarly, in Total Marine Services Pty Ltd v Maritime Union of Australia,[4] a Full Bench of the Commission stated:
“[31] In our view the concept of genuinely trying to reach an agreement involves a finding of fact applied by reference to the circumstances of the particular negotiations. It is not useful to formulate any alternative test or criteria for applying the statutory test because it is the words of s.443 which must be applied. In the course of examining all of the circumstances it may be relevant to consider related matters but ultimately the test in s.443 must be applied.” (emphasis added)
When determining whether the Unions have been genuinely trying to reach an agreement, whilst I may consider whether the good faith bargaining principles have been complied with, it is not a determinative factor.
The Unions’ evidence is summarised below:
· The notification time for the proposed new agreement was 31 May 2022, and the employees met on that day to discuss bargaining.
· On 10 June 2022, the Unions met with Linen Services, and the Unions put forward their initial wage proposal.
· On 24 June 2022, the Unions met with Linen Services again. Linen Services put forward their position on wages, and Mr Douglas said words to the effect of “there will be no need for any further meetings as the wage offer is final”.
· On 27 June 2022, the employee delegates confirmed with the Unions the counter-offer they wished to put back to the company, and Mr Martin communicated that counter-offer by email on 28 June 2022. A keystone to the Unions’ position was that wage increases under the proposed agreement were underpinned by CPI.
· On 29 June 2022, the Mr Williamson rejected the Unions’ offer, and reiterated the offer put forward by the company on 24 June 2022. Mr Williamson noted that the company would not be incorporating CPI protection into any offer.
· On 6 July 2022, Mr Martin sent an email to Mr Williamson requesting that the company reconsider its position in respect of CPI protection.
The Unions both contended that the meetings and correspondence as outlined above illustrated their appetite for genuinely trying to reach an agreement. The Unions also contested the connection drawn by the Respondent between the good faith bargaining principles and the requirements of s.443(1)(b).
As outlined above, the parties have been meeting for the last couple of months and exchanging positions. The principal issue between the parties appears to be the issue of wage improvements. The Respondent’s argument in relation to genuine agreement appears to mainly revolve around the Unions’ modification of the employee’s wage claim on 28 June 2022 such to include CPI protection. The Respondent suggests that this conduct is capricious.
I am not persuaded that this conduct is capricious. The parties are entitled to vary their positions prior to agreement being reached. It appears that the CPI reference was inserted at or around the time that a significant increase in CPI occurred in Australia.
Whilst parties may have strong views in relation to bargaining for the proposed agreement, hard bargaining should not be confused with a failure to bargain in good faith, nor a failure to genuinely be trying to reach an agreement. There is no obligation on a party to resile from negotiating a particular wage claim or not to engage in hard bargaining.[5]
The Unions’ involvement in the above bargaining meetings and subsequent offers put forward by email indicates to me that each of the Applicants have been, and are, genuinely trying to reach an agreement. I am satisfied that the requirements of s.443(1) have been met.
Period of notice
Section 443(5) of the Act states that:
“If the FWC is satisfied, in relation to the proposed industrial action that is the subject of the protected action ballot, that there are exceptional circumstances justifying the period of written notice referred to in paragraph 414(2)(a) being longer than 3 working days, the protected action ballot order may specify a longer period of up to 7 working days.”
The onus is on the Respondent to demonstrate that exceptional circumstances exist.
During the Hearing, Mr Williamson gave evidence as to the effect that industrial action would have on the Respondent’s business. His evidence is summarised as follows:
· The Respondent provides linen services to the state hospital sector, some private hospitals and the aged care sector. SA Health accounts for 75% of the Respondent’s business. The state hospital sector occupancy rate is currently slightly over nominal capacity.
· The Respondent’s maintenance team (to which the PABOs would apply) currently has nine employees.
· The team conducts general maintenance on the Respondent’s laundry equipment, which is relatively outdated and requires regular attention and specialised knowledge to maintain.
· The Respondent had previously been unable to utilise labour hire employees to cover shortages in the maintenance team.
· A stoppage of work by all or most of the maintenance team for a period of greater than 24 hours would require the Respondent to order laundry from one of its interstate branches in order to meet its obligations to SA Health.
· It would take seven calendar days for the required laundry to be delivered from one of the Respondent’s interstate branches.
I accept Mr Williamson’s evidence that a stoppage of work for greater than 24 hours would require the Respondent to arrange a delivery from interstate, and that such a delivery would take approximately seven calendar days.
It is reasonable to infer that a shortage of clean linen provided by the Respondent to public and private hospitals and the South Australian aged care sector could result in significant consequences. Whilst the Unions did not agree to an extension of the notice period, they indicated they could work with a provision confined to stoppages of work of more than 24 hours.
I am satisfied that exceptional circumstances exist such that in the event that the proposed action includes or results in a stoppage of work for a period exceeding 24 hours, it is appropriate to extend the notice period to five working days (seven calendar days). For the avoidance of doubt, this extended notice period would apply to both:
· A single stoppage of work for a period greater than 24 hours; and
· Multiple consecutive stoppages of work which result in a stoppage of work which, in total, extends beyond 24 hours.
COMMISSIONER
Appearances:
B Martin for the AMWU
P Scudds for the CEPU
M Addison for the Respondent
Hearing details:
2022.
Adelaide (by telephone):
July 21.
Final written submissions:
Respondent, 22 July 2022
[1] PR744069, PR744070
[2] Transport Workers’ Union of Australia v CRT Group Pty Ltd [2009] FWA 425 at [26], Total Marine Services Pty Ltd v Maritime Union of Australia [2009] FWAFB 368 at [31], Application by Liquor, Hospitality and Miscellaneous Union [2009] FWA 930 at [56], Farstad Shipping (Indian Pacific P/L) v MUA [2011] FWAFB 1686 at [11].
[3] [2009] FWA 425.
[4] [2209] FWAFB 368.
[5] National Union of Workers v DHL Supply Chain (Australia) Pty Ltd [2013] FWC 4746 at [21].
Printed by authority of the Commonwealth Government Printer
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