Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Engie Fire Services Australia Pty Limited
[2018] FWC 5000
•29 August 2018
| [2018] FWC 5000 |
| FAIR WORK COMMISSION |
| REASONS FOR DECISION |
Fair Work Act 2009
s.437 - Application for a protection action ballot order
Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia
v
Engie Fire Services Australia Pty Limited
(IA2018-4592)
| Commissioner Hampton | ADELAIDE, 29 August 2018 |
Proposed protected action ballot of employees of Engie Fire Services Australia Pty Limited – whether applicant union genuinely trying to reach an agreement – change in bargaining position – requirements satisfied – order issued.
Introduction
An application has been made by the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU) under s.437 of the Fair Work Act 2009 (the Act) for a protected action ballot order in relation to certain employees of Engie Fire Services Australia Pty Limited (Engie). The relevant employees are the CEPU members who are presently covered by the Spectrum Fire & Security SA Electrical Enterprise Agreement 2011 - 2014 (the 2011 Agreement).
The CEPU and Engie are presently engaged in bargaining under the Act in relation to an enterprise agreement which is designed to replace the 2011 Agreement.
On 24 August 2018, the Commission wrote to Engie seeking an indication of its position on the application and requested advice if the matter was to be contested. Engie advised that it opposed the application and provided reasons in support of its position.
The application was heard on 27 August 2018. Having heard from the parties and considered the matter, I advised that a Protected Action Ballot Order (PABO) would be issued and that reasons for my decision would subsequently be issued, which I now do.
The Statutory context
The Act relevantly provides as follows in relation to an application for a PABO:
“436 Object of this Division
The object of this Division is to establish a fair, simple and democratic process to allow a bargaining representative to determine whether employees wish to engage in particular protected industrial action for a proposed enterprise agreement.
Note: Under Division 2, industrial action by employees for a proposed enterprise agreement (other than employee response action) is not protected industrial action unless it has been authorised in advance by a protected action ballot.
Subdivision B—Protected action ballot orders
437 Application for a protected action ballot order
Who may apply for a protected action ballot order
(1) A bargaining representative of an employee who will be covered by a proposed enterprise agreement, or 2 or more such bargaining representatives (acting jointly), may apply to the FWC for an order (a protected action ballot order) requiring a protected action ballot to be conducted to determine whether employees wish to engage in particular protected industrial action for the agreement.
(2) Subsection (1) does not apply if the proposed enterprise agreement is:
(a) a greenfields agreement; or
(b) a multi-enterprise agreement.
(2A) Subsection (1) does not apply unless there has been a notification time in relation to the proposed enterprise agreement.
Note: For notification time, see subsection 173(2). Protected industrial action cannot be taken until after bargaining has commenced (including where the scope of the proposed enterprise agreement is the only matter in dispute).
Matters to be specified in application
(3) The application must specify:
(a) the group or groups of employees who are to be balloted; and
(b) the question or questions to be put to the employees who are to be balloted, including the nature of the proposed industrial action.
(4) If the applicant wishes a person other than the Australian Electoral Commission to be the protected action ballot agent for the protected action ballot, the application must specify the name of the person.
Note: The protected action ballot agent will be the Australian Electoral Commission unless the FWC specifies another person in the protected action ballot order as the protected action ballot agent (see subsection 443(4)).
(5) A group of employees specified under paragraph (3)(a) is taken to include only employees who:
(a) will be covered by the proposed enterprise agreement; and
(b) either:
(i) are represented by a bargaining representative who is an applicant for the protected action ballot order; or
(ii) are bargaining representatives for themselves but are members of an employee organisation that is an applicant for the protected action ballot order.
Documents to accompany application
(6) The application must be accompanied by any documents and other information prescribed by the regulations.
438 Restriction on when application may be made
(1) If one or more enterprise agreements cover the employees who will be covered by the proposed enterprise agreement, an application for a protected action ballot order must not be made earlier than 30 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).
(2) To avoid doubt, making an application for a protected action ballot order does not constitute organising industrial action.
439 Joint applications
Without limiting section 609, the procedural rules may provide for the following:
(a) how a provision of this Act that applies in relation to an applicant for a protected action ballot order is to apply in relation to joint applicants for such an order;
(b) the joinder, with the consent of each existing applicant, of one or more bargaining representatives to an application for a protected action ballot order;
(c) the withdrawal of one or more applicants from a joint application for a protected action ballot order.
440 Notice of application
Within 24 hours after making an application for a protected action ballot order, the applicant must give a copy of the application to the employer of the employees who are to be balloted, and:
(a) if the application specifies a person that the applicant wishes to be the protected action ballot agent—that person; or
(b) otherwise—the Australian Electoral Commission.
441 Application to be determined within 2 days after it is made
(1) The FWC must, as far as practicable, determine an application for a protected action ballot order within 2 working days after the application is made.
(2) However, the FWC must not determine the application unless it is satisfied that each applicant has complied with section 440.
442 Dealing with multiple applications together
The FWC may deal with 2 or more applications for a protected action ballot order at the same time if:
(a) the applications relate to industrial action by:
(i) employees of the same employer; or
(ii) employees at the same workplace; and
(b) the FWC is satisfied that dealing with the applications at the same time will not unreasonably delay the determination of any of the applications.
443 When the FWC must make a protected action ballot order
(1) The FWC must make a protected action ballot order in relation to a proposed enterprise 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.
(2) The FWC must not make a protected action ballot order in relation to a proposed enterprise agreement except in the circumstances referred to in subsection (1).
(3) A protected action ballot order must specify the following:
(a) the name of each applicant for the order;
(b) the group or groups of employees who are to be balloted;
(c) the date by which voting in the protected action ballot closes;
(d) the question or questions to be put to the employees who are to be balloted, including the nature of the proposed industrial action.
(3A) For the purposes of paragraph (3)(c), the FWC must specify a date that will enable the protected action ballot to be conducted as expeditiously as practicable.
(4) If the FWC decides that a person other than the Australian Electoral Commission is to be the protected action ballot agent for the protected action ballot, the protected action ballot order must also specify:
(a)the person that the FWC decides, under subsection 444(1), is to be the protected action ballot agent; and
(b) the person (if any) that the FWC decides, under subsection 444(3), is to be the independent advisor for the ballot.
(5) 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.
Note: Under subsection 414(1), before a person engages in employee claim action for a proposed enterprise agreement, a bargaining representative of an employee who will be covered by the agreement must give written notice of the action to the employer of the employee.”
What is not in dispute
It is not in dispute that the CEPU:
· Is a bargaining representative and entitled to make this application;
· Has made a proper application as required by the Act and has met the documentary and notice requirements for the application; and
· Is not prevented from bringing the application by virtue of s.438 of the Act given the nominal expiry of the current enterprise agreement applying to the parties.[1]
I also find that these requirements are satisfied. Further, the notification time provided by s.437(2A) of the Act has occurred with Engie providing a notice of employee representational rights on 5 August 2016 and the formal commencement of bargaining.
It also appears to be common ground that negotiations have been underway since mid-2017 and that the CEPU and Engie have been engaged in constructive bargaining for a replacement enterprise agreement. This has included multiple meetings between each of the bargaining representatives and between the CEPU and its members. The negotiations have also included an agreement in principle between the bargaining representatives to a significant change in the agreement terms (the ordinary hours of work) and two separate ballots for a proposed agreement, with each of those rejected by a majority of the voting employees. There have been further discussions, with potentially more meetings to come; however, an agreed outcome endorsed by a valid majority of the employees has not yet been reached.
I note that Engie did not seek an extended period of notice as contemplated by s.443(5) of the Act.
The positions of the parties
The CEPU provided oral submissions confirming its position that it has bargained in good faith throughout negotiations, was genuinely seeking an agreement, and will continue to do so. However, an impasse had been reached, in particular in relation to the hours of work issue, prompting the making of this application. It was contended that all of the other statutory requirements had been met for a PABO to be issued. This was supported by a Statutory Declaration of Ms Erin Hennessy, Union Organiser of the CEPU.
The objection advanced by Engie in relation to the application may be summarised as follows:
· Engie has continued to engage with the CEPU and negotiate in good faith;
· The market has changed since the previous enterprise agreement was negotiated and the current expired agreement does not allow Engie to remain competitive in the market such that it has been attempting to change the hours of work in the new agreement;
· In July 2017, agreement was reached in principle and a good faith increase to pay rates was applied in anticipation that the agreement would be approved;
· In December 2017, an agreement was put out to vote and rejected by the majority of employees;
· In April 2018, for the second time, an agreement was put out to vote and rejected by the majority of employees;
· Following the second failed ballot, Engie requested that those covered by the agreement put forward a proposal outlining their claims. The CEPU only communicated this in August 2018; and
· Given all of the above, Engie considers that there has not been sufficient, if any, time to respond to and discuss the varied agreement terms given the change in the CEPU’s position – prior to the making of this application.
Engie did not contest the factual assertions set out in the Statutory Declaration of Ms Hennessy.
Consideration
The role of the PABO, and consequently the role of the Commission in considering any such application, is established by the terms of the Act. Essentially, a PABO is a necessary step for a bargaining representative to ultimately seek the capacity to take protected industrial action in support of bargaining for a single enterprise agreement.
The PABO is part of the bargaining regime of the Act. The scheme of the Act is outlined in various decisions of the Commission including in John Holland v “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) and The Australian Workers’ Union[2010] FWAFB 526 and by the Federal Court in J.J. Richards & Sons Pty Ltd v Fair Work Australia [2012] FCAFC 53.
The taking of protected industrial action by both employees and employers, that is designed to advance claims and to persuade the other party to change their position, is part of that scheme.
Whether any proposed industrial action becomes protected will ultimately depend on compliance with the statutory parameters including whether a relevant question is supported by the ballot,[2] whether the action is notified in accordance with the requirements of the Act,[3] and whether it is industrial action within the meaning of the Act.[4] Further, an employer who is subject to threatened, impending or probable industrial action may seek to have such action suspended or terminated on various grounds including whether it endangers the life, the personal health or safety, or the welfare, of the population or of part of it or causes significant damage to the Australian economy or an important part of it,[5] or causes significant economic harm.[6] Industrial action that is not protected industrial action may be prevented.[7]
Given the undisputed facts of this matter, there is no contest that a valid application has been made by the CEPU.
It is apparent from the terms of the Act that in order to succeed with this application the CEPU must satisfy the Commission that it has been, and is, genuinely trying to reach an agreement with Engie as required by s.443(1)(b) of the Act. It is also apparent from s.443 of the Act, that where this requirement is met (along with the other prerequisites that are not in dispute here) the Commission must make a PABO.
In Total Marine Services Pty Ltd v The Maritime Union of Australia[8] (Total Marine) the Full Bench said:
“[30] The requirement that an applicant for a ballot order genuinely try to reach an agreement and be continuing to do so at the time an application for a ballot order is made was a requirement in the Workplace Relations Act 1996. The wording of the relevant section has been altered because of the removal of a process of establishing a bargaining period during which protected action may be taken. The concept of genuinely trying to reach an agreement was dealt with in other parts of the Workplace Relations Act 1996, specifically in relation to the grounds for terminating a bargaining period.
[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.
[32] We agree that it is not appropriate or possible to establish rigid rules for the required point of negotiations that must be reached. All the relevant circumstances must be assessed to establish whether the applicant has met the test or not. This will frequently involve considering the extent of progress in negotiations and the steps taken in order to try and reach an agreement. At the very least one would normally expect the applicant to be able to demonstrate that it has clearly articulated the major items it is seeking for inclusion in the agreement, and to have provided a considered response to any demands made by the other side. Premature applications, where sufficient steps have not been taken to satisfy the test that the applicant has genuinely tried to reach an agreement, cannot be granted.”
In JJ Richards & Sons Pty Ltd v Fair Work Australia[9] the Federal Court was dealing with a circumstance where the employer had refused to bargain. Flick J determined, in effect, that the Commission cannot reach a state of satisfaction that an “applicant ... is ... genuinely trying to reach an agreement with the employer” unless:
1. an applicant has approached the employer and informed the employer of the general ambit of that for which agreement it sought; and
2. the employer has foreshadowed - even in the most general terms - its attitude as to the proposed agreement.[10]
Flick J also went on to observe in the same decision that the above “minimum statement” was “sufficient to dispose of the present application however more may be required and much may well depend on the factual scenario in which the terms of s.443(1)(b) are to be applied.”[11] I note further that Flick J also observed that the addition of the term “genuine” in the phrase genuinely trying to reach agreement “serves to emphasise the importance of a person actually trying to solicit agreement.” [12]
In National Union of Workers, The Australian Workers’ Union and “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) v Ricegrowers Limited trading as SunRice[13] (Ricegrowers) Watson VP was dealing with circumstances where a proposed agreement arising from the bargaining representatives was rejected by the employees. He observed:
“[9] The determination of whether the applicant unions are genuinely trying to reach an agreement involves a finding of fact based on all of the relevant circumstances. In this case there have been extensive negotiations and two failed ballots. The negotiations are well advanced. Ricegrowers relies on the rejection of the Agreement in the face of endorsement by the bargaining representatives and what it sees as unreliable or unrepresentative statements as to positions put by bargaining representatives on behalf of their members.
[10] In my view a bargaining representative may not be genuinely trying to reach an agreement if it puts positions which are at odds with the views of those it purports to represent. However on the evidence before me I am unable to reach such a conclusion. The negotiations have obviously been difficult and protracted. I am satisfied that the endorsement of the Agreement by bargaining representatives was bona fide but obviously reflected a fine balance. It is also clear that some employees, including those involved in, or close to the negotiations did not endorse the Agreement.
[11] As the result of the ballot indicates, the campaign against the Agreement carried more weight than the endorsement of it by the bargaining representatives. The employees made a decision which was open to them and effectively rebuffed the position of their representatives. In my view these circumstances do not amount to the bargaining representatives not genuinely trying to reach an agreement.
[12] After the ballot result was declared the unions conveyed a position for a new agreement which was a departure from the approach taken in the negotiations to date insofar as it sought a rollover of existing provisions rather than a completely revised agreement. Ricegrowers contends that this casts further doubt on the efforts being made by the unions to reach an agreement.
[13] In my view the position does not amount to the unions not genuinely trying to reach an agreement. The second rejection of the Agreement was a major setback for Ricegrowers - but also for the bargaining representatives. In order to continue to bargain effectively they needed to proceed with considerable caution.
[14] The position advanced by the applicant unions and CEPU in their letter of 6 December 2010 appears to be a reversion, and makes it very hard for Ricegrowers to address particular issues of concern within the previous agreement framework. However given the recent history the approach is to an extent understandable. It proposed one way forward. It did not preclude others. From Ricegrowers perspective it was unhelpful. However it did not mean that the unions were not genuinely trying to reach an agreement.”
In the original Total Marine decision,[14] Thatcher C stated as follows:
“[126] I agree with the MUA submission that there is nothing in Division 8 that would require FWA, in determining applications for protected action ballot orders, to supervise the conduct of bargaining representatives in relation to the employees they represent.
[127] The absence on the part of TMS of knowledge of the contact between MUA officials and the relevant employees is not a relevant consideration in dealing with this application.
[128] The process of allowing bargaining representatives to determine whether employees wish to engage in particular protected industrial action for the purpose of supporting or advancing claims is far different to the process for the approval of enterprise agreements, which includes the requirement (s.180(5)) that the employer take all reasonable steps to ensure that the terms of the agreement and the effect of those terms are explained to the employees. Also, the employer gives affected employees a copy of, or access to, the proposed agreement and certain other material prior their approving the agreement.”
On appeal in Total Marine, the Full Bench stated:
“[34] Commissioner Thatcher considered whether the MUA was impermissibly mixing its claims for an enterprise agreement with claims for other types of agreement and found that it was not. He considered whether there was a need to demonstrate that the MUA was representing the views of employees it purported to represent and determined that the Act did not require that type of supervision. We believe he was correct in this view.”
When seen in context, I do not understand the Total Marine Full Bench to be suggesting that the conduct of a bargaining representative in properly representing its members cannot be a relevant consideration. Rather, it was not necessary for the Commission to supervise the internal processes of a bargaining representative, or seek evidence in order to confirm that it was representing the views of its members.
I would respectfully agree with the approach evident in Ricegrowers. That is, in some, but probably rare cases, it may be appropriate to consider whether a bargaining representative has been putting forward proposals that it knows are at odds with its members’ position. That conduct, in appropriate circumstances, may indicate that the bargaining representative is not genuinely seeking an agreement, and may for instance, be negotiating with an ulterior motive.
In approaching any such assessment, it must also be borne in mind that the expression “genuinely trying” in the present context is concerned with the genuineness of efforts by the bargaining representative to achieve the goal of an enterprise agreement that meets the approval requirements of the Act. This will turn upon the applicant’s motivation; its intention, object or purpose.[15]
The Act in s.228 establishes the obligations on bargaining representatives to act in good faith in the following terms:
“228 Bargaining representatives must meet the good faith bargaining requirements
(1) The following are the good faith bargaining requirements that a bargaining representative for a proposed enterprise agreement must meet:
(a) attending, and participating in, meetings at reasonable times;
(b) disclosing relevant information (other than confidential or commercially sensitive information) in a timely manner;
(c) responding to proposals made by other bargaining representatives for the agreement in a timely manner;
(d) giving genuine consideration to the proposals of other bargaining representatives for the agreement, and giving reasons for the bargaining representative’s responses to those proposals;
(e) refraining from capricious or unfair conduct that undermines freedom of association or collective bargaining;
(f) recognising and bargaining with the other bargaining representatives for the agreement.
(2) The good faith bargaining requirements do not require:
(a) a bargaining representative to make concessions during bargaining for the agreement; or
(b) a bargaining representative to reach agreement on the terms that are to be included in the agreement.”
The good faith bargaining obligation is a separate consideration to the assessment of whether a party is genuinely trying to reach an agreement.[16] In any event, it has not been suggested in this case that the CEPU is not bargaining in good faith. I add that there is also every indication that Engie has been bargaining in good faith.
In considering a similar bargaining regime,[17] Lawler VP was discussing the meaning of “genuinely trying to reach agreement” in Liquor, Hospitality and Miscellaneous Union - Western Australian Branch v CSBP Limited[18] and observed:
“[38] Secondly, the notion of “genuinely trying to reach agreement” does not automatically imply continual movement in the same direction by a negotiating party. Depending upon the circumstances, a negotiating party can withdraw a concession or offer on a particular issue in the negotiation, or renew a previously abandoned position, and still be genuinely trying to seek agreement. Such changes of position can legitimately arise for any number of reasons. For example changed trading conditions may provide an entirely reasonable basis for an employer to withdraw or reduce an offer to increase wages by a particular amount without detracting from the genuineness with which the employer is negotiating.”
I would respectfully agree with that approach. I also note that given the negotiating room that parties may include in their opening positions, great care should be taken in considering relative movements in positions as an indication of genuineness.
Given the scheme of the Act, it is not the role of the Commission to determine whether the PABO, or the taking of protected industrial action, is necessary or even a good idea. Provided that the requirements have been met, the Commission is obliged to issue a PABO and it is the members of the Unions that will decide whether any such action is to be endorsed. Further, all parties must continue to bargain in good faith. In terms of the capacity to avoid any negative consequences for all parties, this is of course desirable, and I will return to this aspect as part of the conclusions to this matter.
In this case, I am satisfied that the CEPU has been genuinely seeking to reach an agreement with Engie, and that this remains so. The actions that it has taken are consistent with a party seeking such an outcome in the context of these negotiations. Given that the agreement in principle has not been endorsed, a change in the bargaining position that is now being advanced is not of itself inconsistent with that objective. Further, whilst it is possible that further negotiations may be capable of achieving an agreement without recourse to protected industrial action, this is not inconsistent with genuinely seeking to reach an agreement and the absence of that prospect is not a prerequisite for a PABO to be issued.
Having regard to all of the circumstances evident here, I was satisfied that the CEPU has been, and is, genuinely trying to reach an agreement with Engie Services as required by s.443(1)(b) of the Act.
Conclusions and orders
I found that all of the statutory requirements of s.443 had been met and that the proposed PABO was in order.
Accordingly, I was obliged to issue a PABO. In conformity with the Act, an order in relation to the application by the CEPU[19] was issued by the Commission.
I note the circumstances of this application and the fact that there is only one, albeit significant, outstanding issue and return to my earlier comments about the desirability of avoiding negative consequences for all parties. In that regard, I would observe that it is open to one or more of the parties to lodge an application pursuant to s.240 of the Act seeking the Commission’s assistance to deal with the bargaining dispute.
I also observe that the obligation under s.228 of the Act to bargain in good faith continues even when a PABO application is granted and where protected industrial action is endorsed and taken.
COMMISSIONER
Appearances:
E Hennessy for the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia.
N Biernat for Engie Fire Services Australia Pty Limited.
Hearing (by telephone) details:
2018
Adelaide
27 August.
<PR620295>
[1] The 2011 Agreement reached its nominal expiry date on 1 March 2014.
[2] Sections 437, 408 and 409 of the Act.
[3] Section 414 of the Act.
[4] Section 19 of the Act.
[5] Section 424 of the Act.
[6] Section 423 of the Act.
[7] Section 418 of the Act.
[8] [2009] FWAFB 368, per Watson VP, Hamberger SDP and Roberts C.
[9] [2012] FCAFC 53.
[10] JJ Richards & Sons Pty Ltd v Fair Work Australia [2012] FCAFC 53 at PN 58.
[11] Ibid.
[12] Ibid at PN 59.
[13] [2010] FWA 9822.
[14] The Maritime Union of Australia v Total Marine Services Pty Ltd[2009] FWA 187.
[15] Mermaid Marine Vessel Operations Pty Ltd v The Maritime Union of Australia [2014] FWCFB 1317 in citing the majority in J.J. Richards & Sons v Transport Workers’ Union of Australia[2010] FWAFB 9963.
[16] Alleged breaches of good faith bargaining obligations are dealt with under s.229 of the Act. See also: Esso Australia Pty Ltd v Australian Manufacturing Workers’ Union[2015] FWCFB 210 at [18].
[17] Under the Workplace Relations Act 1996.
[18] [2007] AIRC 112.
[19] PR620228.
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