Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Grange Resources (Tasmania) Pty Ltd

[2017] FWC 279

[2017] FWC 279

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.437—Protected action

Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia
v
Grange Resources (Tasmania) Pty Ltd
(B2016/1340)

DEPUTY PRESIDENT WELLS HOBART, 13 JANUARY 2017

Proposed protected action ballot of employees of Grange Resources (Tasmania) Pty Ltd

[1] Grange Resources (Tasmania) Pty Ltd (Grange) operates in the resources industry, mining iron ore at Savage River which is then partially processed and pumped via pipeline to its pelletizing operations at Port Latta on Tasmania’s North West coast. An enterprise agreement called Grange Resources Tasmania Pty Ltd Enterprise Agreement 2013 (Current Agreement) applies to Grange and its employees performing work at both the Savage River and Port Latta sites. The nominal expiry date of the Current Agreement is 31 December 2016.

[2] On 23 December 2016, the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU) made application pursuant to s.437 of the Fair Work Act 2009 (the FW Act) for a protected action ballot order (PABO).

[3] Grange opposes the making of the PABO, arguing that the application is premature and that the CEPU cannot establish the prerequisite criterion contained in s.443 of the FW Act, in that the CEPU is not genuinely trying to reach an agreement. In the alternative, if the order is issued, Grange argues that almost all of the actions contained in the questions proposed in the PABO, raise occupational health and safety concerns, should the industrial action be authorised and subsequently taken. Grange seeks that the questions be amended to exclude certain actions from being protected. Further, Grange says that due to the complex nature of their operations, the period of written notice for the taking of industrial action referred to in s.414(2), should be extended to seven working days.

[4] At the hearing of this matter, Mr Aaron Hagen appeared for the CEPU. Mr Bill Fitzgerald of the Australian Mines and Metals Association Inc (the AMMA) appeared for Grange. The application was heard on 4 and 11 January 2017. Mr Hagen gave evidence, both written 1 and verbally, in support of the CEPU’s application. Grange provided witness evidence in opposition to the PABO application through Mr Andrew Walsh,2 Human Resources Manager and Mr Grant Bramich,3 Senior Processing Manager.

[5] I have determined that a PABO be made as I am satisfied that an application has been made pursuant to s.437 of the FW Act and that the CEPU is genuinely trying to reach an agreement with Grange, the employer of the employees who are to be balloted. The PABO I make is modified slightly from the draft order submitted by the CEPU on 23 December 2016.

[6] I am not satisfied that I should exercise my discretion to order that the period of notice for protected industrial action referred to in s.414(2) (a) be longer than three working days. I am not satisfied that the evidence provided by Grange has established exceptional circumstances which would justify such an extension. Following are the reasons for my decision to make the PABO.

Background

[7] The CEPU is currently bargaining (together with other bargaining agents) for a proposed agreement. The CEPU is a bargaining agent for its members who are electricians employed by Grange and who are carrying out work at both the Savage River and Port Latta sites. These employees are remunerated through an annualised salary. The evidence establishes that the make-up on the annualised salary is complex and it is difficult to ascertain the exact ‘base rate’ of pay.

[8] The parties to the proposed agreement have met on six occasions throughout October, November and December 2016. The last meeting was held on 9 December 2016. The CEPU provided its log of claims to Grange in October 2016 and provided specific clauses in relation to those claims via email on 27 October 2016.

[9] Whilst there was a contest of the evidence as to the CEPU’s request for a breakdown of the annualised salary to show a base rate of pay, what was confirmed by both parties is that the CEPU conducted its own calculation to identify a base rate of pay for electricians, which showed a figure of $25.40 per hour. The CEPU provided Grange with electrical wage rates from other companies who employed maintenance electricians and also some electrical contracting rates of pay. The CEPU’s log of claims sought, inter alia, an increase to electrician’s base rate of pay at Grange to $34.50, in line with other wage rates provided.

[10] Following the negotiation meeting held on 11 November 2016, Mr Hagen the organiser for the CEPU, together with his delegate, met separately with Mr Walsh, Grange’s Human Resources manager. Mr Walsh is a member of Grange’s negotiating team. This meeting involved a further discussion of the CEPU’s claims. Mr Hagen’s evidence was that he articulated to Mr Walsh that, based on the CEPU’s calculations, they were seeking a 34% increase to the current base rate of pay. Mr Walsh’s recollection of the discussion was less detailed, with Mr Walsh stating he did not recall Mr Hagen mentioning a percentage increase.

[11] Mr Walsh’s evidence was that Mr Hagen did not detail the CEPU’s wages claim in a percentage amount until the negotiation meeting held on 9 December 2016. However, Mr Walsh did confirm that at some time over November 2016 he became aware that the CEPU’s wages claim was large and somewhere in the vicinity of 30% plus.

[12] At the meeting of 9 December 2016, the last negotiation meeting before the CEPU filed its PABO application, Grange reiterated a wage offer it had made at previous meetings. That offer included a wage increase of .5% per annum over four years. Mr Walsh’s evidence was that Grange advised the bargaining representatives that it would present a response to all claims at the next negotiation meeting which was to be held on 13 January 2017.

[13] Grange essentially argues that the CEPU could not genuinely be trying to reach agreement, due to the quantum of its wage claim; lack of understanding of annualised wages; and that the application was premature because Grange had not responded to the CEPU’s claim. There was also further argument about the appropriateness of the questions to be posed in any PABO, which I will deal with later.

Statutory framework

[14] It is common ground between the parties that they are currently in negotiation for a proposed enterprise agreement and that the CEPU is a bargaining representative for some employees who are to be covered by the agreement.

[15] Section 437 of the FW Act enables a bargaining representative to make application for a PABO and s.437(1) states:

“(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.”

[16] Other than the exception provided for in s.438(1) of the FW Act, the Commission must make a PABO in the circumstances set out in s.443. That section relevantly provides:

443 When FWC must make a protect action ballot order

(1) 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) 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) 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).

Consideration

[17] I now consider the arguments advanced by Grange against the making of the PABO.

The CEPU is not genuinely trying to reach agreement and application is premature

[18] When considering the question of whether a bargaining representative has been and is genuinely trying to reach an agreement, it was relevantly held by Flick J in JJ Richards & Sons Pty Ltd v Fair Work Australia [2012] FCAFC 53 as follows:

“58. It is ultimately concluded that s 443(1)(b) is to be construed such that Fair Work Australia cannot reach a state of satisfaction that an “applicant … is … genuinely trying to reach an agreement with the employer” unless:

● An applicant has approached the employer and informed the employer of the general ambit of that for which agreement is sought; and
● The employer has foreshadowed – even in the most general of terms – its attitude as to the proposed agreement.

More may be required. Much may well depend upon the factual scenario in which the terms of s 443(1)(b) are to be applied. But such a minimum statement of that which is required is sufficient to dispose of the present Applicant. Contrary to the submissions advanced on behalf of the Applicants, the terms of s 443(1)(b) do not require:

● Bargaining to have commenced within the meaning of and for the purposes of s 173 found within Part 2-4, of the Fair Work Act.

59. So much, it is concluded, follows from the natural and ordinary meaning of the phrase “trying to reach an agreement …”. It is difficult to conclude that any person can try to reach an agreement with another in the absence of a disclosure of that for which consensus is sought. One person may wish to reach an agreement with another. But, until the general content of the proposed agreement is disclosed, it cannot be said that he has even attempted to reach an agreement. Until disclosed, it is not known whether the other person will readily embrace the proposed agreement or shun it or (perhaps) embrace the concept of an agreement but wish to vary one or other of its terms. Until disclosed, the person seeking agreement has not event tried to solicit the response of the other. Unless the disclosure is genuinely with a view to reaching agreement, it could well be said that the attempt to reach an agreement falls short of a person even trying to reach agreement. The addition of the word “genuine” – on one approach to construction – perhaps adds little. But the addition of that term serves to emphasise the importance of a person actually trying to solicit agreement. Until a proposed agreement has been disclosed to the prospective parties, and a response solicited, an applicant has not even tried to reach agreement – let alone genuinely tried to reach agreement.

60. The Transport Workers’ Union, in the present proceeding, satisfied that requirement by writing to J.J. Richards on 24 December 2010. Rightly or wrongly, J.J. Richards indicated its response in the terms it did in its letter dated 7 January 2011. That exchange of correspondence was sufficient to satisfy the precondition to the exercise of the power conferred by s 443(1).”

[19] The Full Bench of this Commission held in Total Marine Services Pty Ltd v Maritime Union of Australia [2009] FWAFB 368 (Total Marine), at paragraphs [31] and [32], the following views about the meaning of the term “genuinely trying to reach agreement”:

“[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 applicants, where sufficient steps have not been taken to satisfy the test that the applicant has genuinely tried to reach an agreement, cannot be granted.”

[20] In Esso Australia Pty Ltd v AMWU & Ors[2015] FWCFB 210 (Esso), the Full Bench made its own observations as to the Full Bench decision in Total Marine:

“[35] For our part, for reasons we articulate later, we agree with the observations in paragraph [31] and the first three sentences of paragraph [32] of Total Marine, set out above. We note that the observations which follow the first three sentences in paragraph [32] are obiter and although we do not consider that they should be understood as attempting to establish any binding decision rule, nonetheless they are, with respect, somewhat inconsistent with the earlier expressed proposition (with which we agree) that it is not useful to articulate any alternative test or criteria to the words of s.443(1)(b). We note that similar reservations were expressed by the majority of the Full Bench in JJ Richards and Sons Pty Ltd v TWU (JJ Richards No. 1) and by the Full Bench in Farstad Shipping (Indian Pacific) Pty Ltd v MUA (Farstad).”

[21] Commission Whelan in Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union v H J Heinz Company Australia Ltd (Echuca site) [2009] FWC 322 (H J Heinz) at paragraph [20] held that:

“[20] Last, the Act does not require that bargaining representatives must bargain to a standstill before making a protected action ballot application. A failure to try to reach agreement at all will clearly not be genuinely trying to reach agreement but there is no specific stage in the negotiations which must be reached before an application can be made.”

[22] The evidence provides that the parties, along with another union and other individual bargaining representatives, have met on six occasions to discuss the proposed agreement. Some issues have been resolved; however the main outstanding issues involve wage increases and a 10 hour break between work for electricians at the Savage River site. These are not the only outstanding matters. There is no suggestion that bargaining has included non-permitted matters, or that the CEPU were not bargaining in good faith.

[23] However, the AMMA contend that as the CEPU only articulated the full detail of its wage claim at the meeting of 9 December 2016, and that Grange were to respond fully on 13 January 2016, the CEPU had made the PABO application prematurely. 4 Further, Grange led evidence that it had conducted its own calculation of the base rate and were corresponding with the CEPU about the base rate of pay and the CEPU’s claim. The AMMA argued that this showed that the matter was complex and the CEPU did not fully understand its own claim.

[24] Mr Walsh’s evidence provides that by 9 December 2016, Grange were already of the view that the CEPU wage claim amounted to a 30% or 32% increase to the base wage for electricians. The CEPU clarified at that meeting that they believed the increase to be 34%. At that meeting Grange again put an offer of a .5% per annum wage increase over the life of the proposed agreement. It is clear, in my view, that Grange became aware in November 2016 of the quantum of the CEPU’s wage claim, which was again confirmed by Mr Hagen on 9 December 2016. I am also of the view that Grange responded to the CEPU’s claim, rejecting it when Grange made its counter offer on that day of .5% increase to wages.

[25] In light of the authorities reproduced above, it is clear that the matter of whether an applicant “has been, and is, genuinely trying to reach an agreement” is a question of fact to be decided having regard to all of the facts and circumstances of the particular case (see Esso) and that no one factor is necessarily determinative of the question to whether a bargaining representative is, or has been, genuinely trying to reach an agreement. The authorities also establish that there is no specific stage of negotiations that must be reached before a finding can be made that the applicant is, and has been, genuinely trying to reach an agreement with an employer (see H J Heinz) 5.

[26] Section 443(1)(b) contains the expression “has been, and is”. These words require a time-based consideration. It is therefore necessary for the Commission to reach the required level of satisfaction both at the time the application for the PABO is made and determined and also at an earlier time. The evidence in this matter provides that the CEPU and Grange are continuing with their discussions on the make-up of Grange’s base rates of pay. Negotiation meetings are planned for the future and there is no indication by either party that they do not intend to continue bargaining in good faith.

[27] The parties are at a stage in the bargaining where they have each put a proposal to the other. There have been numerous bargaining meetings. The claims are clearly articulated with the exchange of information and written clauses. Some matters have been agreed. However, the parties are obviously a significant way away from reaching an agreement.

[28] Both parties have criticised the other for the quantum of their wage claim. The CEPU claim is high, although still to be decided through adequate identification of the base rate of pay. Likewise Grange’s wage offer would be considered low. I do not criticise either party for making such claim or offer as there is no suggestion that either is final. In any event, it is not unusual that a bargaining representative would take the step of applying for a PABO.

[29] I have determined that CEPU had not made its PABO application prematurely and that it has been, and is, genuinely trying to reach an agreement with Grange.

PABO questions to be amended due to work health and safety considerations and longer period for notice requirements for industrial action

[30] The AMMA submitted that in the event the Commission make a PABO, it is appropriate that it vary the form of the questions to be posed in the PABO, due to the “complex and dangerous nature” of Grange’s worksites. Mr Bramich’s evidence was that the operations and electrical functions carried out by the employees to be balloted were inherently dangerous and subject to “a particularly onerous legislative health and safety regime”. 6

[31] Grange proposed a number of exclusions to be identified in the PABO questions which it said were required to ensure:

● Grange’s Safety and Environmental Management Systems were considered, to avoid any possible breaches of legislation;
● employees met their legislative duty of care through being able to attend to emergency situations (such as First Action Response situations).

[32] Mr Bramich’s witness statement also provided at paragraph 4:

“I have read the application in this matter and I am of the view that a number of the ballot questions posed in 2.2 pose significant health and safety risks to the employees at large and consequently the questions should either be amended or deleted and the period of notice of the taking of the individual forms of protected action be increased from 3 to 7 days or other periods specified in this statement.”

[33] There was very little in the way of evidence of specific health and safety concerns or the complex nature of Grange’s operation, except for the reference to the considerable work health and safety legislation which is relevant to this industry. However, this is not unusual in many industries. Most of Mr Bramich’s evidence was that his concerns were “self-evident and relates to the legislative duty of care the Company and employees have emanating from the legislation…”. 7

[34] The Full Bench decision of this Commission in Skilled Offshore Pty Ltd v Australian Manufacturing Workers’ Union; Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia; and The Australian Workers’ Union [2015] FWCFB 7399 (Skilled Offshore), an appeal against a decision 8 of Deputy President Gostencnik, has relevance to the question of the appropriateness or otherwise of the proposed industrial action, as argued by Grange. Whilst the Full Bench in Skilled Offshore were concerned with the question of whether the proposed industrial actions described in the PABO questions was “industrial action” for the purposes of the Act, the Full Bench’s findings in that decision are relevant to the current matter before me. The Full Bench in Skilled Offshore held at [36]-[37]:

[36] We do not accept that the questions in the PABO made by the Deputy President seek approval for any form of industrial action that is beyond the scope of what is industrial action under the FW Act. The expression “protected industrial action” appears in the preamble to the questions in the PABO and is used to encompass the categories of action specifically identified in the questions and we see no reason to assign a meaning to that expression which is different to or broader than the same expression used in the FW Act. Indeed, the application of the principle of legality would require the PABO to be read as if incorporating the proper construction of the expression “industrial action” within the meaning of the FW Act. Accordingly, regardless of whether the expression “industrial action” in the FW Act, on its proper construction, excludes action which would be in breach of occupational health and safety law, as contended by Skilled Offshore, or does not, as found by the Deputy President, we reject Skilled Offshore’s argument that the Application failed to specify the “nature of the industrial action” as required by s.437(3)(b) of the FW Act.

[37] Although it is not therefore necessary for us to decide the point, we are of the view that the expression “industrial action” in the FW Act does not, on its proper construction, exclude action which might or would result in a breach of occupational health and safety law. There are three primary reasons for our opinion in that regard:

(a) First, Parliament clearly had in mind risks to occupational health and safety when the definition of “industrial action”, and the exceptions to “industrial action”, were drafted for inclusion in the FW Act (see s.19(2)(c)(i) and (ii) of the FW Act). It would have been a simple matter for a further exception to be included in s.19(2)(c) of the FW Act for action that would or might result in an employee breaching an occupational health and safety obligation, had that been the intention of Parliament;

(b) Secondly, as was found by the Deputy President, other provisions of the FW Act, particularly ss.424, 431 and (to some extent) 415 tell against the construction advanced by Skilled Offshore. There would be little or no point in empowering the Commission to make an order (s.424), or the Minister to make a declaration (s.431), terminating protected industrial action on the basis that such action has “threatened,… is threatening, or would threaten… to endanger the life, the personal safety, or the welfare, of the population or of part of it” if the proper construction of “industrial action” excluded action which might or would result in a breach of occupational health and safety law; and

(c) Thirdly, in our view, there is no inconsistency between, on the one hand, the definition of “industrial action” in the FW Act and the provisions of the FW Act that give employees the right to take protected industrial action in particular circumstances and, on the other hand, the obligations imposed on employees under Federal and State legislation to maintain a safe workplace.

[35] Sections 424 and 431 of the FW Act provide:

424 FWC must suspend or terminate protected industrial action—endangering life etc.
Suspension or termination of protected industrial action

(1) The FWC must make an order suspending or terminating protected industrial action for a proposed enterprise agreement that:

(a) is being engaged in; or
(b) is threatened, impending or probable;
if the FWC is satisfied that the protected industrial action has threatened, is threatening, or would threaten:
(c) to endanger the life, the personal safety or health, or the welfare, of the population or of part of it; or
(d) to cause significant damage to the Australian economy or an important part of it.

431 Ministerial declaration terminating industrial action

(1) The Minister may make a declaration, in writing, terminating protected industrial action for a proposed enterprise agreement if the Minister is satisfied that:

(a) the industrial action is being engaged in, or is threatened, impending or probable; and
(b) the industrial action is threatening, or would threaten:

(i) to endanger the life, the personal safety or health, or the welfare, of the population or a part of it; or
(ii) to cause significant damage to the Australian economy or an important part of it.

(2) The declaration comes into operation on the day that it is made.
(3) A declaration under subsection (1) is not a legislative instrument.’

[36] Questions posed in the PABO must be precise so an employee is able to make an educated choice about whether to vote in the affirmative to the industrial action identified in that question. In John Holland Pty Ltd v AMWU and AWU [2010] FWAFB 526, when dealing with the questions describing industrial action, a Full Bench observed at paragraph [19]:

“…seen in its statutory context, all that the section requires is that the questions should describe the industrial action in such a way that employees are capable of responding to them. If the questions are ambiguous or lack clarity there may be consequences for the bargaining representative and the employees if reliance is placed on the result of the ballot in taking industrial action. If the question or questions give rise to ambiguity, the conclusion may be reached that the industrial action specified in a notice under s.414 was not authorised by the ballot and that the action is not protected for the purposes of s.409(2). It is true that ambiguity or lack of clarity in the description of the industrial action is undesirable, but these are matters more appropriate for consideration under other provisions. It follows that in most cases the drafting of the questions will be a matter for the applicant.”

[37] With the exclusion of question 8 of the draft PABO, Grange did not dispute the specific nature of the questions. The CEPU confirmed that a wording change to question 8 would make the question clearer for the employees to be balloted and for Grange.

[38] I am satisfied that the proposed questions contained in the draft PABO, adequately describe the nature of the industrial action for which authorisation is sought and that the wording of the questions enables the employees to adequately respond, when incorporating the suggested change to question 8. I am not persuaded by Grange that the questions require any amendment on the grounds of work health and safety, when considering the authority established by Skilled Offshore.

[39] In relation to Grange’s request that an extended notice of industrial action be incorporated into the PABO, I have had regard to the first instance decision of DP Gostencnik in Skilled Offshore, a decision involving work in the offshore gas and oil industry:

“[76] Consequently based on that evidence, the industrial action as currently framed by question 1, could, depending on the nature and duration of the proposed industrial action of which notice is given, require Skilled Offshore and Saipem to take responsive action involving a combination of abandoning the pipeline, removal of crew and transportation of new crew to the vessel, prevailing weather conditions and the availability of transport and crew. Given the remote location at which industrial action would occur and the consequences of that action, I am satisfied that there are exceptional circumstances and I am further satisfied that those circumstances warrant a period of written notice referred to in s.414(2)(a) for protected industrial action contemplated by question 1 being longer than three working days. The PABO that I make will require the notice period to be given to be seven working days.” 9

[40] The consideration of whether exceptional circumstances exist such to warrant the extension of the notice period for the taking of industrial action, requires the Commission to have regard for the evidence before it, the nature of the work to be effected, the ability for the employer to take responsive action and the location of the site. I am not persuaded, on the evidence and arguments before the Commission – that is, health and safety concerns, the location of the worksites, and operational complexity - that there are exception circumstances such as to warrant the extension of the minimum period of written notice prescribed by s.414(2)(a) of the FW Act. Industrial action inherently causes difficulties for an employer; that is the nature and intention of this type of action. However, the concerns raised by Grange appear to be no more onerous than those generally encountered in similar or other industries.

Other matters

[41] During the hearing of this matter the AMMA raised an objection alleging the Commission was giving assistance to the Applicant during the giving of witness evidence; that this was inappropriate; and that such assistance provided the CEPU with an advantage. 10 I consider this a very serious submission. The CEPU’s representative, Mr Hagen, was both a witness and the instructing party for the Applicant. At the hearing I indicated to the AMMA that it is appropriate for the Commission to inform itself, through the gathering of evidence, as to the matters which require determination.11 As such I do not consider that I provided inappropriate assistance to the CEPU or provided them with an unfair advantage.

Conclusion

[42] On all the material before me and having regard to my findings above, I am satisfied that an application has been made by the CEPU under s.437 of the Act and that the CEPU has been, and is, genuinely trying to reach an agreement with Grange, who is the employer of the employees who are to be balloted.

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[43] Accordingly, I am required to make a protected action ballot order. Such order, which has been varied slightly to the draft proposed by the CEPU, will be issued separately.

DEPUTY PRESIDENT

Appearances:

A. Hagen for the Applicant

B. Fitzgerald for the Respondent

Hearing details:

2017

Hobart

4 & 11 September

 1   Exhibit A1 – Witness statement of Aaron Hagen

 2   Exhibit R1 – Witness statement of Andrew James Walsh

 3   Exhibit R2 – Witness statement of Grant Leigh Bramich

 4   Exhibit R3 – Respondent’s outline of submissions

 5   [2009] FWA 322

 6   Exhibit R2, paragraph 2

 7   Ibid, see pages 5, 6, 7 and 8

 8   [2015] FWC 6727

 9   Ibid, paragraph [76]

 10   PN919-923 and PN933

 11   PN930

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