Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia - Electrical, Energy and Services Division v Stowe Australia Pty Ltd

[2019] FWC 3258

[2019] FWC 3258

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.229—Bargaining order

Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia - Electrical, Energy and Services Division
v
Stowe Australia Pty Ltd
(B2019/371)

DEPUTY PRESIDENT DEAN SYDNEY, 13 MAY 2019

Application for an urgent bargaining order.

[1] This decision determines an urgent application for an interim bargaining order made pursuant to s.229 of the Fair Work Act 2009 by the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU). The application was made on the evening of 8 May 2019, and heard on 9 May 2019. The CEPU were given until 10am today to file further submissions, but subsequently advised (well after 10am) that it did not intend on filing anything further.

[2] The application arises from negotiations for a new enterprise agreement (the proposed Agreement) with Stowe Australia Pty Ltd (Stowe) to replace its existing enterprise agreementwhich has a nominal expiry date of 9 October 2019. The application seeks, amongst other things, to restrain Stowe from having its employees vote on the proposed Agreement. The vote is scheduled to take place on 15 May 2019.

[3] For the reasons set out below, I decline to make the interim order sought by the CEPU.

BACKGROUND

[4] The bargaining history dates back to November 2018. The history includes that Stowe, along with four other employers, initially sought a multi-enterprise agreement. The CEPU subsequently made an application for a majority support determination, and a majority support determination was made by the Commission on 29 January 2019.

[5] On 29 January 2019 the CEPU wrote to Stowe requesting its availability to meet to bargain for a single enterprise agreement.

[6] On the following day Mr Marshall of FCB Lawyers advised the CEPU that he had been appointed bargaining agent for Stowe, and provided a number of dates he was available to meet the following week to commence bargaining. His correspondence also requested that the CEPU provide its log of claims.

[7] The CEPU provided its log of claims on 5 February 2019 and the parties met on 6 February 2019. At the meeting, Mr Marshall indicated that he was not in a position to provide a substantive response to the CEPU’s claims, given the list of claims were only received the day prior. There was a discussion at the meeting about the approximate cost of some of the CEPU’s claims, being $500,000 in the first year and $650,000 per annum thereafter (the Preliminary Costings). The CEPU subsequently asked Stowe to provide the basis for the Preliminary Costings. Stowe did not do so, because it said these were initial, “back of the envelope” estimations which were made redundant by virtue of subsequent claims and discussions between the parties.

[8] On 6 February 2019, Stowe sent a letter outlining its ‘concerns’ about the CEPU’s conduct in bargaining, and a reply was provided by the CEPU on 7 February 2019.

[9] On 26 February 2019, Mr Marshall provided a proposed agreement to the CEPU by email.

[10] The parties held their second bargaining meeting on 27 February 2019. The proposed agreement was discussed at the meeting. No further meetings were scheduled for the ensuing period, however Mr Marshall wrote to Mr Allen Hicks, National Secretary of the CEPU, the following day to clarify one aspect of its position.

[11] In addition to what has been transpired above, there has been extensive correspondence between the parties since bargaining commenced which is referred to in, or annexed to, the statements of Mr Hicks and Mr Marshall. I have taken account of all of the correspondence in coming to my decision.
[12] During the hearing, Mr Wright for the CEPU confirmed there was no criticism levelled at Stowe in relation to its conduct in bargaining up until this time.

[13] On 12 April 2019, Mr Freddie Barbin of the CEPU wrote to Mr Scott Gandy, General Manager of Stowe. Unusually, the letter (attached to Mr Hicks’ statement at AH38) was not on CEPU letterhead. The letter raised concerns about a meeting Mr Gandy held with Stowe employees and proposed that Mr Gandy and Mr Barbin meet to continue bargaining on 24 April 2019. It is unclear why such a request was not directed to Stowe’s nominated bargaining representative, being Mr Marshall. Mr Gandy replied to the concerns raised by Mr Barbin by letter dated 24 April 2019, but did not respond to the request to meet.

[14] There was no further correspondence or meetings of the parties until 6 May 2019, when Mr Marshall wrote to the CEPU advising that Stowe intended to circulate the proposed agreement to its employees for the purpose of requesting that the employees approve the agreement. This correspondence also indicated that while there had been no direct correspondence between Mr Marshall and Mr Hicks since February 2019, Stowe was prepared to agree to increase its offer in response to a number of CEPU claims as follows:

a. paid leave for domestic violence;

b. inclusion of clause dealing with women in the industry and mature age workers;

c. inclusion of Profit Share for all employees covered by the EA;

d. increase in Meal Allowance;

e. increase in First Aid Allowance;

f. all overtime paid at double time (public holiday overtime at double time and a half);

g. annual increases ranging between 3.5% to 5%;

h. an immediate increase to the fare and travel allowances;

i. increase casual loading;

j. increased boot allowance; and

k. increased tool replacement.

[15] The percentage increase and/or dollar amount for each allowance etc was included in Mr Marshall’s email, however it is unnecessary to set out the quantum in this decision.

[16] The correspondence also included a copy of the proposed Agreement, with the inclusion of the items listed above.

[17] On 7 May 2019, the CEPU wrote to Stowe detailing its concerns that it did not consider Stowe was genuinely committed to bargaining with the CEPU, and it had not given genuine consideration to the CEPU’s proposals (the Concerns Letter). The Concerns Letter (which I note does not reference Mr Marshall’s correspondence of 6 May) also sought that Stowe withdraw its correspondence to employees issued earlier that day seeking they vote on the proposed Agreement. Once again, the letter was sent to Mr Gandy rather than Stowe’s nominated bargaining representative, Mr Marshall, and requested a response by close of business on 8 May 2019.

[18] At 4.57pm on 8 May 2019, a response was provided on behalf of Stowe to the CEPU, in which Stowe categorically denied any allegations that it was not engaged in good faith bargaining with respect to a proposed single enterprise agreement (the Response Letter). The Response Letter included reference to Mr Marshall’s correspondence of 6 May, and also referenced some attachments which were inadvertently not included with the email, and were subsequently sent at 5.57pm, noting the error that had occurred.

[19] At 5.07pm, some 10 minutes after Stowe sent its Response Letter, the CEPU filed this application.

RELEVANT LEGISLATIVE PROVISIONS

[20] The relevant statutory provisions are found at sections 228 - 231 of the Act as follows:

228 Bargaining representatives must meet the good faith bargaining requirements

(1) The following are the good faith bargaining requirements 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 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.

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.

Multi-enterprise agreements

(2) An application for a bargaining order must not be made in relation to a proposed multi-enterprise agreement unless a low-paid authorisation is in operation in relation to the agreement.

Timing of applications

(3) The application may only be made at whichever of the following times applies:

(a) if one or more enterprise agreements apply to an employee, or employees, who will be covered by the proposed enterprise agreement:

(i) not more than 90 days before the nominal expiry date of the enterprise agreement, or the latest nominal expiry date of those enterprise agreements (as the case may be); or

(ii) after an employer that will be covered by the proposed enterprise agreement has requested under subsection 181(1) that employees approve the agreement, but before the agreement is so approved;

(b) otherwise—at any time.

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).

231 What a bargaining order must specify

(1) A bargaining order in relation to a proposed enterprise agreement must specify all or any of the following:

(a) the actions to be taken by, and requirements imposed upon, the bargaining representatives for the agreement, for the purpose of ensuring that they meet the good faith bargaining requirements;

(b) requirements imposed upon those bargaining representatives not to take action that would constitute capricious or unfair conduct that undermines freedom of association or collective bargaining;

(c) the actions to be taken by those bargaining representatives to deal with the effects of such capricious or unfair conduct;

(d) such matters, actions or requirements as FWA considers appropriate, taking into account subparagraph 230(3)(a)(ii) (which deals with multiple bargaining representatives), for the purpose of promoting the efficient or fair conduct of bargaining for the agreement.

(2) The kinds of bargaining orders that FWA may make in relation to a proposed enterprise agreement include the following:

(a) an order excluding a bargaining representative for the agreement from bargaining;

(b) an order requiring some or all of the bargaining representatives of the employees who will be covered by the agreement to meet and appoint one of the bargaining representatives to represent the bargaining representatives in bargaining;

(c) an order that an employer not terminate the employment of an employee, if the termination would constitute, or relate to, a failure by a bargaining representative to meet the good faith bargaining requirement referred to in paragraph 228(1)(e) (which deals with capricious or unfair conduct that undermines freedom of association or collective bargaining);

(d) an order to reinstate an employee whose employment has been terminated if the termination constitutes, or relates to, a failure by a bargaining representative to meet the good faith bargaining requirement referred to in paragraph 228(1)(e) (which deals with capricious or unfair conduct that undermines freedom of association or collective bargaining).

(3) The regulations may:

(a) specify the factors FWA may or must take into account in deciding whether or not to make a bargaining order for reinstatement of an employee; and

(b) provide for FWA to take action and make orders in connection with, and to deal with matters relating to, a bargaining order of that kind.

[21] The Commission is now asked to determine whether or not to make an interim order. The general approach to such a question is to consider whether the applicant, in this case the CEPU, has established that there is a serious question to be tried, and that the balance of convenience favours the grant of the order.

THE CASE FOR THE CEPU

[22] In its application, the CEPU seeks that Stowe be ordered to:

a. withdraw its correspondence to employees dated 7 May;

b. be restrained from having its employees vote on the proposed agreement for at least 28 days;

c. provide the CEPU with the calculations of the Preliminary Costings;

d. provide a response, and a reason for the response, to each of the CEPU’s claims;

e. meet with the CEPU at least four times in the next 28 days; and

f. make a senior management representative of Stowe, such as Mr Gandy, attend the bargaining meetings with the CEPU.

[23] At the hearing, the CEPU relied on two aspects of what it said was conduct by Stowe that was in breach of the good faith bargaining requirements of the Act.

[24] The first was that Stowe had failed to provide the calculations behind the Preliminary Costings. It argued that by failing to particularise the Preliminary Costings, Stowe breached its obligation to disclose relevant information in a timely manner.

[25] The second was that Stowe had failed to respond to (or ignored) the CEPU’s request to meet, made by Mr Barbin to Mr Gandy on 16 April 2019.

[26] The CEPU also contended that Stowe had failed to respond to its claims made on 27 February 2019.

[27] It was this conduct, contended the CEPU, that provided an arguable case to support the making of the interim order it sought. In other words, the conduct amounted to a serious question to be tried.

[28] The CEPU’s application was supported by a detailed statement of Mr Hicks and which included some 44 annexures. The annexures were primarily made up of the correspondence between the parties in the course of their bargaining.

[29] In terms of the balance of convenience, the CEPU contended that the effect of allowing the vote to proceed may amount to “final relief” in that the substantive proceedings would be otiose if employees voted in favour of the proposed agreement. To this end, the CEPU argued there was no prejudice to Stowe if the vote were postponed however there would be prejudice to the CEPU if there was a vote in favour of the proposed agreement.

THE CASE FOR STOWE

[30] Stowe opposed the application for an interim order and denied that it had breached its good faith bargaining obligations. In support of its position, Stowe relied on statements of Mr Marshall, Ms Renee Kasbarian, Senior Associate with Henry William Lawyers, and Mr Scott Gandy, Managing Director of Stowe, in addition to a number of annexures to the statement of Mr Hicks.

[31] Stowe argued that the application must fail because the prerequisite in s 229(4)(d) was not met. In this regard, it said that the CEPU could not contend that it genuinely considered Stowe’s response to its Concerns Letter and formed a view that the response was not appropriate prior to filing the application, because the application was made only 10 minutes after the Stowe’s lawyers sent the Response Letter, which was missing its enclosures (sent one hour later). Stowe argued that the CEPU did not take any steps to obtain the enclosures prior to filing the application. It argued it could be inferred that the CEPU either did not read the Response Letter in detail or alternatively, elected not to fully inform itself of Stowe’s responses.

[32] Stowe also relied on the fact that the statement of Mr Hicks was dated 8 May 2019, and is 193 pages in total. Stowe contended that it was evident that the CEPU intended on filing the application irrespective of Stowe’s response, and did so without considering the appropriateness of the Response Letter.

[33] This contention that the CEPU had not considered (or properly considered) its response was also supported, said Stowe, by the numerous examples set out in its written submissions where the CEPU’s application did not reflect or take into account responses which had been provided by Stowe (which are not set out here).

[34] In relation to the specific conduct relied upon by the CEPU, Stowe submitted that:

a. subsection 228(1)(b) expressly provides that a bargaining representative is not required to disclose confidential or commercially sensitive information. The costings sought by the CEPU, in some part or depending on the extent to which it requires details, may include confidential or commercially sensitive information that Stowe is not required to disclose;

b. in any event, the costings of which the CEPU sought further information are no longer relevant and are redundant. This was explained by Mr Marshall to Mr Hicks on 27 February 2019;

c. Mr Hicks and Mr Marshall were engaging in bargaining for the CEPU and Stowe respectively. Accordingly, any request for a bargaining meeting should have been sent to Mr Marshall as Stowe’s bargaining representative and not Mr Gandy. A failure on Mr Gandy’s to respond to a meeting request from Mr Barbin does not give rise to Mr Marshall failing to meet the good faith bargaining requirements as Stowe’s bargaining representative. In any case, Mr Gandy did respond to Mr Barbin (at AH39) and neither has the CEPU not progressed bargaining meetings with Mr Marshall.

[35] Further, Stowe said it could not be found to be ‘surface bargaining’ when it was seeking to put a proposed agreement to the vote.

[36] Stowe also contended that the CEPU had not established there was a serious question to be tried, nor that the balance of convenience favoured the granting of the order.

CONSIDERATION

[37] In respect of Stowe’s contention that the prerequisite in s 229(4)(d) has not been met, given the application was filed only 10 minutes after the Response Letter was sent, and had not included the enclosures which formed part of the response, I am satisfied that the CEPU could not reasonably have formed a view that Stowe had not responded appropriately to its concerns. It is not sufficient simply to assert that one bargaining representative considers that another bargaining representative has not responded appropriately to its concerns. There needs to be some objective basis for forming such a view. In this regard, it would seem obvious that there needs to be proper consideration of the entirety of the response. This was not the case here. Within a 10 minute period, the CEPU has received the response (minus the enclosures), finished its application including having it signed, attached the response with a number of annexures to an email, and sent it to the Commission.

[38] Accordingly, I am not satisfied that this prerequisite has been met. However if I am wrong about this, I do not consider that there is any other basis upon which to make an interim order against Stowe.

[39] The legislative purpose of the good faith bargaining requirements is not simply to require parties to bargain in good faith, but to bargain to achieve an enterprise agreement if possible.

[40] In Public Sector Professional Scientifica Research, Technical, Communications, Aviation and Broadcasting Union v Australian Commission(ABC case) 1 it was held that:

“… the determination of whether or not a negotiating party is “negotiating in good faith” may depend on the conduct of the party when considered as a whole. For example if a party is only participating in negotiations in a formal sense, but not bargaining as such then they may not be “negotiating in good faith”. Negotiating in good faith would generally involve approaching negotiations with an open mind and a desire to reach an agreement as opposed to simply adopting a rigid predetermined position and not demonstrating any preparedness to shift.”

[41] It is not a breach of the good faith bargaining provisions for a party to adopt a position, on reasonable grounds, that it can make no further concessions because of its financial position. This was made clear by the Full Bench of the Commission in Endeavour Coal Pty Ltd v Association of Professional Engineers, Scientists and Managers, Australia (Collieries' Staff Division) 2 as follows:

‘[48] The good faith bargaining requirements in s.228 require bargaining representatives to “bargain” but do not require them to make concessions or to reach agreement. An order would be beyond power if it required a party to put a different negotiating position to that which it wished to put. However it is not beyond power to require a party to put its negotiating position. Such an order requires no concessions to be made.’

[42] In The Broken Hill Town Employees’ Union v Barrier Social Democratic Club Ltd 3 (‘Broken Hill Town Employees’ Union’) Vice President Watson said:

‘[23] I turn to the circumstances following the first vote. The Club contends that it only held one negotiation meeting between the first vote and the second vote. It also consulted with employees separately. It proposed a revised enterprise agreement and distributed it to all bargaining representatives well in advance of the negotiation meeting. It invited claims from other bargaining representatives in advance of the meeting. The BHTEU provided its claims and they were discussed at the meeting on 22 November 2011. Claims inconsistent with the Club’s draft were rejected.

[24] I do not consider that the Club breached any good faith bargaining requirement in following this process. Where a bargaining representative has an opportunity to participate in the process and present its position for consideration, the requirements to recognise, meet with and consider proposals of bargaining representatives are likely to be satisfied. The process for approval essentially then became a battle for the hearts and minds of the employees who decide whether to approve the agreement. I do not consider that the agreement reached with employees is tainted by any failure to follow the good faith bargaining requirements in the Act. Even if a valid application was before me I would not make a good faith bargaining order.’

[43] Deputy President Sams in United Voice 4, said:

[22] “……Obviously, there is no requirement for bargaining representatives to reach an agreement before a vote of employees is proposed to be taken. Indeed, there have been numerous examples of vigorous, hard-fought campaigns by Unions to encourage employees to vote against an employer’s proposed agreement. In my view, unless there is a sound basis for believing the vote itself will be tainted by a failure of the Club to properly explain the terms of the agreement or a failure to comply with any of the mandatory pre-approval steps, then I consider it would not be appropriate to cancel the vote of employees. I have no such evidence before me in this case and consequently do not intend to make the order sought.

[23] While I acknowledge that there has only been two meetings between the Club and the Union, it seems an unassailable proposition that the negotiations have reached a stalemate. Given these circumstances, the negotiations for a new agreement have, in my view, reached the point where it is appropriate and desirable for the views of the employees to be sought….

[44] Based on the evidence and applying the decisions referred to above, I am satisfied on a preliminary basis that Stowe is meeting its good faith bargaining obligations, for the reasons set out below.

[45] While the CEPU asserts that Stowe has no intention of reaching an agreement on a single enterprise agreement, this is at odds with the current factual position of Stowe seeking to have employees vote on a proposed single enterprise agreement. Stowe can hardly be found to be surface bargaining when it is seeking its employees vote on a proposed agreement.

[46] The evidence to date demonstrates that the parties have met on two occasions to participate in bargaining meetings, and there has been extensive correspondence between the parties. That Mr Barbin wrote to Mr Gandy (not on CEPU letterhead), who was not Stowe’s nominated bargaining representative, and requested a meeting, is not in my view sufficient to find that Stowe has refused to meet. Clearly, the request for a meeting should have been directed to Stowe’s bargaining representative. Accordingly, I do not accept that Stowe has refused to meet with the CEPU in breach of its good faith bargaining obligations.

[47] The evidence also demonstrates that responses have been provided by Stowe to the CEPU both orally and in writing. It may well be that the CEPU is dissatisfied with those responses, but this does not mean that responses have not been provided.

[48] There is no evidence to support the claim that Stowe has not given genuine consideration to the CEPU’s claims. On the contrary, the evidence demonstrates both that consideration has been given and that Stowe has agreed to a number of claims made by the CEPU. This is particularly evident from Mr Marshall’s email of 6 May 2019, which was not annexed to Mr Hicks’ statement.

[49] In respect to the CEPU’s claim that Stowe be required to have Mr Gandy or another senior manager attend the bargaining meetings, Stowe is entitled to have Mr Marshall represent it as its bargaining representative. There is no evidence that Mr Marshall is in any way impeding bargaining. Stowe’s choice of bargaining representative does not mean it is not bargaining in good faith.

[50] The CPU has failed to demonstrate that that there is a serious question to be tried or that the balance of convenience favours the making of the order. I emphasise that my findings and conclusions, based on currently untested evidence, are necessarily preliminary given the nature of these proceedings.

[51] For these reasons, I am satisfied that it is not appropriate to make the interim order sought by the CEPU. The substantive application will be listed for hearing on a date to be advised.

DEPUTY PRESIDENT

Appearances:

M Wright for the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia.

L Berton for Heyday5 Pty Ltd.

Hearing details:

2019.

Sydney:

May 9.

Printed by authority of the Commonwealth Government Printer

<PR708208>

 1   AILR Vol 36 No.21 374.

 2   [2012] FWAFB 1891.

 3   [2012] FWA 1096.

 4   [2012] FWA 9047.