Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Kuiper Australia Pty Ltd
[2024] FWC 2561
•18 SEPTEMBER 2024
| [2024] FWC 2561 |
| 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
Kuiper Australia Pty Ltd
(B2024/1175)
| DEPUTY PRESIDENT O’KEEFFE | PERTH, 18 SEPTEMBER 2024 |
Application for protected action ballot order for employees of Kuiper Australia Pty Ltd – application granted.
This is an application by the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU) made under s.437 of the Fair Work Act 2009 (Act) for a protected action ballot order (PABO) in relation to certain employees of Kuiper Australia Pty Ltd (Kuiper).
Kuiper advised the Fair Work Commission (FWC) that it objected to the making of the order sought in this application on the grounds that the CEPU had not been and was not genuinely trying to reach an agreement. Kuiper also sought an order that the notice period required under s.414(2)(a) be extended to seven working days pursuant to s.443(5) if it were to be the case that the FWC granted the PABO.
The parties were directed to provide submissions to my Chambers, and I held a hearing on Wednesday 11 September 2024, being the first date that my Chambers could conduct a hearing.
The hearing
In its written submissions, Kuiper sought to have the matter adjourned pending the outcome of the compulsory s.448A conference that was being held later in the day of the hearing and also the outcome of Kuiper’s appeal against my decision in B2024/1087 where I granted a PABO to the Australian Workers’ Union (AWU). It also contended that holding the hearing on 11 September 2024 could create logistical issue for its chief witness Mr Follett, who was due to attend both the s.448A conference and a bargaining meeting with the unions held the following day. The CEPU made it clear that they objected to the matter being adjourned.
It is clear that the Act requires PABO applications to be dealt with quickly, and as far as practicable within two days. Given that the applicant in the matter did not agree to any adjournment and given that I was not persuaded that the outcome of an appeal against another PABO decision was necessarily relevant to this application, I did not grant the request for an adjournment. I did, however, make arrangements that would facilitate Mr Follett’s appearance at the s.448A conference being conducted the same day as the hearing.
Submissions and Evidence – Genuinely Trying to Reach an Agreement
The relevant section of the Act regarding the granting of a PABO is s.443. Section 443(1) sets out the requirements for the making of a PABO:
“443 When the FWC must make a protected action ballot order
(1) [When FWC must make a protected action ballot order] 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 ; 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.”
Consistent with previous findings, the words genuinely trying are to be given their natural and ordinary meaning. The Respondent submitted that the Applicant had not met the standard required for the FWC to be satisfied that it had been, and was, genuinely trying to reach an agreement. The Applicant submitted that its actions demonstrated that it had been and was genuinely trying to reach an agreement.
By way of what is uncontested factual background, the CEPU responded to an invitation from Kuiper dated 9 August 2024 to attend a meeting on 16 August 2024 to discuss a process for conducting negotiations for an agreement to replace the Kuiper Australia Pty Ltd Western Australia and Northern Territory Offshore Construction Projects Greenfields Agreement 2020-2024 (the Agreement). The CEPU then attended this meeting at which it was agreed that the first bargaining meeting would take place on 28 August 2024 albeit this was later changed to 29 August 2024.
On 22 August 2024 the CEPU sent Kuiper what was in essence a log of claims - being a re-titled version of Kuiper’s Victorian Offshore Construction Agreement - and subsequently attended the first bargaining meeting for a new agreement on 29 August 2024. At that meeting the claims were discussed and Kuiper undertook to create a “claims tracker” document that would outline the claims from the CEPU and other unions and indicate the status of those claims from company’s perspective. This document was prepared and sent to the CEPU on 5 September 2024. Kuiper also provided its initial assessment of the costs of the claims by the CEPU. The CEPU lodged its PABO application on 8 September 2024.
The CEPU submits that it both is and has been genuinely trying to reach agreement with Kuiper. In written submissions the CEPU stated as follows:
“The parties met, and the employer, by their own admission met (in substance responding to the claims) and did not agree to any of the claims.
That is, frankly, the end of the matter. The authorities are one-way traffic on this. The employers’ submissions give the game away a little when they say: ‘they have barely begun to bargain.’ That is more than enough.”[1]
The CEPU further submitted that at the current point of bargaining, the onus was on the employer to demonstrate that the union was not genuine in its intention to reach agreement. Citing JJ Richards & Sons Pty Ltd v Fair Work Australia[2](JJ Richards) the CEPU noted that bargaining need not have commenced for a PABO to be issued and that as such it submitted that the status of bargaining need not have reached some particular threshold. The CEPU concluded its written submissions by observing as follows:
“It is not a factor that points to a lack of genuineness that:
a. a party is taking a hard line or a robust approach.
b. a claim could be characterised as containing some ambit. c. another party refuses to accept a claim.”[3]
In submissions provided at hearing, the CEPU drew upon and reiterated its written submissions as set out above. It conceded that the FWC needed to look at a range of factors when making an assessment of the genuineness of a party’s efforts to reach agreement. However, in terms of the requirements in JJ Richards[4], the CEPU submitted that it had made a claim, Kuiper had been given an opportunity to respond and had given a general indication of its attitude to the claim.
Kuiper submitted that the CEPU has not been genuinely trying to reach agreement. Citing a range of cases, it noted that:
Whether or not a bargaining representative is genuinely trying to reach an agreement with the employer of the employees who are to be balloted is a contextual assessment[5], which requires an assessment of the relevant circumstances of the particular negotiations[6] and the steps taken in order to reach agreement[7]… (w)hilst there are no “rigid rules” and each case is to be determined on its own facts, there are certain thresholds or steps one would ordinarily expect to have seen occur, before it could (ordinarily) be said that an applicant for a protected action ballot order has been, and is, genuinely trying to reach agreement”.[8]
Kuiper submitted that the CEPU PABO application was “premature”. The CEPU had not initiated bargaining but rather had left that to Kuiper. There had only been one bargaining meeting and Kuiper had not yet properly analysed the claims. While Kuiper took issue with the decision in B2024/1087 it nevertheless contrasted the position of the CEPU with the AWU and proposed that unlike the AWU, the CEPU had not taken any steps to get Kuiper to bargain. Kuiper proposed that the CEPU:
“…have barely made an effort to bargain. Wherever the line might be drawn on prematurity in the circumstances of this bargaining process, the CEPU and AMWU are clearly at the very “premature” end of the spectrum at present.”[9]
Kuiper took further issue with the claims advanced by the CEPU, describing them as operationally and commercially unviable, fanciful and not authentic. Given this, Kuiper proposed that the CEPU could not be genuinely trying to reach agreement.
In its submissions made at hearing, Kuiper repeated the essence of its submissions set out above. It also rejected the implication from the CEPU that the bar to clear for the granting of a PABO was set very low and that some onus fell to Kuiper to argue against granting the PABO. It cited John Holland v AMWU[10] (John Holland) as support for the proposition that the onus falls to the applicant to demonstrate the conditions for making a PABO have been met.
Kuiper also cited the decision in Coles Supermarkets (Australia) Pty Ltd v AMIEU[11](Coles) to make clear the relevance of the two distinct temporal elements in the requirement, being “has been” and “is”. Kuiper submits that the Coles decision makes it clear that the applicant must be genuinely trying to reach agreement at the time of determination and have been genuinely trying prior to that time. Following on from this, Kuiper drew my attention again to JJ Richards[12] where Flick J commented on the use of “genuine” and proposed that more than a perfunctory or preliminary engagement by an applicant would be required to be satisfied of this requirement.
Kuiper also drew on Total Marine[13] to support the notion that there is no fixed criteria for deciding whether an applicant is genuinely trying but that progress in negotiations is one issue that is frequently assessed. Given the CEPU had “barely got started” with negotiations then it was Kuiper’s submissions that the process was only in a preliminary stage. The parties had not really “grappled” with the issues and in any case, what had transpired to date had been driven by Kuiper rather than the CEPU.
Kuiper further proposed in considering this issue there was a spectrum upon which applicants might be found. At one end was those applicants who clearly had been and are genuinely trying to reach agreement with bargaining well progressed and the applicant pressing for an outcome. At the other end was the applicant who had told someone that they wanted an agreement. Kuiper submitted that the CEPU were to be found at the latter.
Consideration
It is clear from the Act that the task of the FWC is to reach a state of satisfaction that the applicant party is and has been genuinely trying to reach agreement, where agreement takes the form of an enterprise agreement capable of being approved by the FWC. It is also clear from the language of the precedent cases that there is not one single hard and fast approach that must be universally applied, but that what is important are the facts and circumstances of each case.
In this case, while it is true that the CEPU did not seek to initiate bargaining, they have served a log of claims upon Kuiper, attended a bargaining meeting and been advised that their proposal for the Victorian Kuiper Construction Agreement would involve wage increases that would not be viable[14]. It would appear to me that this clears the bar set by JJ Richards. A claim has been advanced, and a response sought. Further, a response - albeit not comprehensive - has been given. It is clear from that response that the claim is unlikely to be accepted in its present form. While in his decision Flick J in JJ Richards does consider the use of genuine, I note that in the paragraph where he does so he concludes with respect to “genuine” as follows:
““the addition of that term serves to emphasize the importance of a person actually trying to solicit agreement. (my emphasis) 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.”[15]
Given this observation, I am comfortable that the CEPU meets the standard set out in JJ Richards. However, JJ Richards does not stand alone and I am mindful that Kuiper drew upon other cases. I agree with Kuiper that John Holland establishes that the onus falls to the applicant to demonstrate that it has been and is genuinely trying to reach agreement. However, I am also mindful of the finding of the majority in JJ Richards & Sons Pty Ltd v TWUA[16] (TWUA) who stated as follows:
“In the ordinary course of events where an applicant for a protected ballot order calls (acceptable) evidence that their intention, object or purpose is to reach an enterprise agreement under the FW Act, what may be described as an evidentiary onus shifts to the party or parties opposing the application to demonstrate why that evidence ought not be accepted sufficient to shift the evidentiary onus back to the applicant.
In circumstances where an applicant for a protected ballot order calls (acceptable) evidence that their intention, object or purpose is to reach an enterprise agreement under the FW Act a finding that the applicant was not “genuinely trying to reach an [enterprise] agreement” within the meaning of s 443(1)(b) will necessarily involve accepting evidence establishing that the applicant had some other, extraneous purpose in seeking the ballot. Indeed, when there is evidence from an applicant for a protected action ballot order that they have been and are “genuinely trying to reach an [enterprise] agreement” under the FW Act, it is difficult to conceive of circumstances where it could properly be found they were not, unless there is cross-examination or other evidence establishing that the applicant in truth has some other, extraneous intention, object or purpose or is seeking something other than an enterprise agreement under the FW Act.”
Looking broadly at the circumstances of the current matter, I note the unchallenged statement of Mr Adam Woodage from the CEPU’s Form F34B, which was sworn into evidence. Mr Woodage states as follows:
“The ETU and ETU members covered by the 2020 Agreement wish to finalise negotiations with the Respondent for a replacement agreement quickly due to the work covered by the 2020 Agreement being likely to cease in October or November of this year.”[17]
Both the CEPU and its members are aware of the time pressures placed upon them by the imminent completion of the project. This is in my view a significant contextual issue. The CEPU and its members are pursuing a strategy of securing future conditions for the industry. They presumably have a view of Kuiper’s strategy and how that impacts their own. In any case, the CEPU strategy can only be secured with an agreement that can be approved by the FWC. Put simply, that the CEPU would be genuinely trying to reach agreement makes clear sense. In addition, they have provided a log of claims, attended bargaining and had their claims subjected to an initial negative response from Kuiper. In my view, this is acceptable evidence that the CEPU is genuinely trying to reach agreement. If Kuiper wished to challenge this, it is arguable that they ought to point to some other intention, which they have not done and further, indicated that they did not wish to do.
They have, however - consistent with the findings in TWUA - looked to the authenticity of the claims made by the CEPU. Kuiper regards them as commercially and operationally unviable. They are free to take that view. However, I note firstly that there are a direct copy of conditions applying elsewhere in the Kuiper business in Australia and thus not without precedent. Secondly, there is no requirement for union claims to be operationally and commercially viable. That is a matter for the parties to argue in bargaining. If there were such a requirement a union might reasonably argue for a reciprocal requirement that an employer must only make offers that are consistent with their employees maintaining or improving their standard of living. Both of those requirements are non-existent. Making ambitious claims does not suggest that a party is not genuinely trying to reach agreement. This is an artificial barrier that Kuiper has tried to erect.
I also take issue with the notion of a spectrum. If there is a spectrum and unions can be at different points then logically there must be movement along the spectrum. As I expressed in the AWU case, I accept that there are preparatory steps that a union might take prior to bargaining. However once the bargaining is underway I struggle – in the absence of any evidence about other agendas – to accept that there is a “Road to Damascus” moment where the union shifts from not genuinely trying to reach agreement to genuinely trying. I struggle even harder to envisage the catalyst that prompts this change.
I am also not persuaded by the notion – albeit that it was drawn from Total Marine – that progress in bargaining must be assessed. Firstly, I note that the case itself says “frequently assessed” which is consistent with the idea that there is no hard and fast rule in these matters. I am also mindful that there is no exact standard proposed by the majority in that case. That is to say that there is no suggestion that – for example – three bargaining meetings does not represent good progress but four meetings does. The notion also seems to run counter to the finding in JJ Richards that bargaining does not even need to have begun for the FWC to find that a union is genuinely trying to reach agreement. As such, I am not persuaded that there is anything of significance to be found in the number of meetings held to date.
It is clear to me that the CEPU is genuinely trying to reach agreement. This leaves the matter of whether they have been genuinely trying. Drawing on Coles I find that it can be said that the CEPU has – prior to the hearing and determination of this matter – been genuinely trying to reach agreement. I concede that it has only been doing so for a short period. However, the Act does not impose a minimum time frame for “has been” and so a short period meets the requirement.
In summary, a proper application has been made by the CEPU under s.437 of the Act. I find that the CEPU has been and is genuinely trying to reach agreement with Kuiper. As a consequence, I am required to make the requested PABO, and an order has been issued.[18]
Extension of period of notice
In its submissions, Kuiper sought orders that if the PABO was granted, then pursuant to s.443(5), the notice period as set out in s.414(2)(a) of the Act be extended from three working days to seven working days. This extension was opposed by the CEPU. Section 443(5) of the Act provides as follows:
“(5) [When protected action ballot order may specify extended period] 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 being longer than 3 working days or 120 hours (whichever is applicable), the protected action ballot order may specify a longer period of up to 7 working days.”
From this it can be seen that the threshold issues are that the circumstances must be exceptional, and they must also justify extending the notice period. Even if this is the case, the FWC still has discretion over the making of an order to extend the notice period.
The Respondent provided evidence from Mr Shameer Shroff, project manager for Saipem Australia Pty Ltd (Saipem) who is project manager for the project where the relevant employees of Kuiper are operating. Mr Shroff provided a witness statement that gave details of the processes involved with completing the work and in particular the operations of the pipe-laying vessel the Castorone. Of particular relevance is Mr Shroff’s evidence regarding “abandonment”, being the process where the Company needs to shut down the pipe-laying work due to prediction about adverse sea conditions. For the safety of the crew and to protect the vessel and its equipment, Mr Shroff’s evidence is that such abandonment needs to be undertaken in favourable sea conditions.
In his statement, Mr Shroff details the usual practice for abandonment as follows:
“…Saipem seeks to avoid abandoning the pipeline in adverse sea states. Saipem accordingly attempts to identify (through modelling) the most favourable sea state in which to undertake the abandonment work, in order to reduce the safety risks for the vessel and its crew. This modelling is most accurately undertaken by Saipem’s engineering team in Italy. Undertaking that modelling can take up to 2 days (depending on the availability of engineers), and it can then take a further 48 hours to communicate the outcome of that modelling to relevant stakeholders, and achieve the requisite sign-offs from, the client, the Marine Warranty Surveyor, and finally the Castorone. The Castorone then requires 12 hours to perform the necessary preparatory steps before it can start the abandonment work.”[19]
Based on this evidence, it could take four and a half days to get to a state where the ship and crew are safely detached from the undersea pipeline.
I note that Mr Shroff conceded that it was possible in emergency situations where it was necessary to protect the crew to shut down the operations in twelve hours. However, such a shutdown would still present a risk to the ship and equipment and as such the only way to protect both crew and equipment was to use a planned shutdown which could take up to four and a half days.
In further written evidence Mr Shroff stated that stoppages of work by the CEPU members which extended for four or more hours could require a halt to the laying of the pipeline.[20] However, during the hearing he conceded that CEPU members would not necessarily be required for such a shutdown and in any case such electrical work as might be required could be performed by electricians in the employ of Saipem.
Given this, I am not persuaded that there are exceptional circumstances justifying an extension of the notice period and as such the notice period in s.414(2)(a) of the Act will apply.
DEPUTY PRESIDENT
Appearances:
James Fox, Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia; and
Nicholas Ellery of Counsel.
Hearing details: 11 September 2024.
[1] CEPU Submissions page 1 paragraphs 4-5
[2] JJ Richards & Sons Pty Ltd v Fair Work Australia (2012) 201 FCR 297 at [58]
[3] CEPU Submissions page 2 paragraph 11
[4] JJ Richards & Sons Pty Ltd v Fair Work Australia (2012) 201 FCR 297 at [58]-[59].
[5] JJ Richards & Sons Pty Ltd v Fair Work Australia (2012) 201 FCR 297 at [58].
[6] Total Marine Services Pty Ltd v Maritime Union of Australia (Total Marine) [2009] FWAFB 368 at [31].
[7] Total Marine Services Pty Ltd v Maritime Union of Australia [2009] FWAFB 368 at [32].
[8] JJ Richards at [58]-[59] and Total Marine at [31]-[32] and [35]-[36]
[9] Kuiper Submissions page 6 paragraph 28
[10] John Holland v AMWU [2010] FWAFB 526 at [27]-[30]
[11] Coles Supermarkets (Australia) Pty Ltd v AMIEU [2015] FWCFB 379 at [45]-[49]
[12] JJ Richards at [58]-[59]
[13] Total Marine at [31]-[32]
[14] Email from Craig Follett to bargaining representatives dated 5 September.
[15] JJ Richards at [59]
[16] JJ Richards & Sons Pty Ltd v TWUA [2010] FWAFB 9963 at [62]-[63]
[17] CEPU Form F34 part 2.1 item 10
[18] PR779183.
[19] Witness statement of Mr S Shroff page 8 paragraph 47.
[20] Ibid pages 7-8 paragraphs 41-43.
Printed by authority of the Commonwealth Government Printer
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