Construction, Forestry, Maritime, Mining and Energy Union v CSR Limited T/A CSR Gyprock

[2019] FWC 7149

[2019] FWC 7149

FAIR WORK COMMISSION

REASONS FOR DECISION

Fair Work Act 2009
s.229 - Application for a bargaining order

Construction, Forestry, Maritime, Mining and Energy Union
v
CSR Limited T/A CSR Gyprock
(B2019/1184)

COMMISSIONER HUNT BRISBANE, 23 OCTOBER 2019

Application for an interim order pursuant to a bargaining order application.

Introduction

[1] On 11 October 2019 the Construction, Forestry, Maritime, Mining and Energy Union (CFMMEU) applied to the Fair Work Commission (the Commission; FWC) pursuant to s.229 of the Fair Work Act 2009 (the Act) for a bargaining order in relation to negotiations that have commenced between CSR Limited T/A CSR Gyprock (CSR) and the Australian Workers’ Union (AWU) at the Coopers Plains, Queensland operations of CSR.

[2] The application arose from the refusal by CSR to recognise the CFMMEU as a bargaining agent where Mr Brock Stanfield, CSR Warehouse Operator is a member of the CFMMEU and elected delegate at the site.

[3] CSR disputed, supported by the AWU that Mr Stanfield is eligible to be a member of the CFMMEU given his role of Warehouse Operator.

[4] The CFMMEU pressed for an urgent hearing, seeking interim orders until the hearing and determination of the substantive application. The interim orders sought by the CFMMEU were:

“..until the hearing and determination of this application the respondent take no further steps in respect of the Proposed Agreement including:

(a) holding any further bargaining meetings to negotiate the Proposed Agreement;

(b) making, considering and/or responding to any claims in respect of the Proposed Agreement; and

(c) proposing any enterprise agreement to the employees at the Coopers Plains site for approval.”

Hearing

[5] A hearing to determine the application for interim orders was held on 15 October 2019.

[6] Mr Charles Massy of Counsel appeared for the CFMMEU, instructed by Mr Joe Kennedy of Hall Payne Lawyers. Mr Kenneth Bennett of Counsel appeared for CSR instructed by Mr John Stanton of AFEI Legal Pty Ltd. Mr Barry Watson, Senior Industrial Officer appeared for the AWU. Leave was granted to the applicant and respondent to be represented pursuant to s.596(2)(a) of the Act on account of the complexity of the matter, and I determined that granting leave would enable the matter to be dealt with more efficiently.

[7] Witness statements of Mr Stanfield, Mr Arturo Menon, CFMMEU Southern Co-ordinator, and Ms Paola Tornatore, CSR Group Human Resources Manager were admitted into evidence. None of the witnesses were required for cross-examination.

Recent bargaining

[8] The CSR Limited Coopers Plains QLD Enterprise Bargaining Agreement 2017 nominally expired on 2 October 2019. The first bargaining meeting for a proposed agreement to replace the nominally expired agreement was held on 17 September 2019. Mr Stanfield attended the meeting and announced that he was in attendance as a bargaining representative of the CFMMEU. Ms Tornatore informed the meeting that the CFMMEU had not provided CSR with proof that it was entitled to represent employees at the site. The meeting participants agreed that Mr Stanfield could remain in the first meeting, but the issue with CFMMEU representation would need to be sorted by the next meeting, or else he would not be able to take part in further bargaining meetings.

[9] The second bargaining meeting was to occur on 24 September 2019. CSR had not received information from the CFMMEU to demonstrate how it could represent employees at CSR, despite requesting in writing evidence of such since March 2019. Ms Tornatore telephoned Mr Stanfield to inform him that he could not attend the bargaining meeting.

[10] Mr Menon and Mr John Tucker, CFMMEU Organiser attended the premises on the same day and were subsequently informed that the second bargaining meeting was to be cancelled on account of the CFMMEU having failed to provide appropriate information in writing to assist its assertion that Mr Stanfield was eligible to be a member of the CFMMEU.

Recent correspondence

[11] On 30 September 2019 the CFMMEU wrote to CSR asserting that it was entitled to represent members employed by CSR as follows:

(a) members who operate forklifts and other mobile plant pursuant to Rule 2(E)(a) of the rules; and

(b) members who are involved in the manufacture of the gypsum plasterboard, pursuant to Rule 2(A)(A)(3)(ii), noting, without limitation, the references to ‘plasterer’, ‘shophand and caster’ and ‘the casting of plain or ornamental plaster sheets by mechanical or manual means’.

[12] The letter reminded CSR of its good faith bargaining obligations pursuant to s.228(1) of the Act, and stated that the CFMMEU held concerns that CSR is not meeting its requirements, and excluding the CFMMEU from bargaining meetings for the proposed agreement. The breaches were said to include:

(a) a failure to disclose relevant information to the CFMMEU about the bargaining process, in breach of s.228(1)(a), however the Commission notes that it should read s.228(1)(b);

(b) engaging in capricious or unfair conduct that is undermining both the freedom of association of the CFMMEU members and of collective bargaining in breach of s.228(1)(e); and

(c) failing to recognise and bargaining with the CFMMEU as a bargaining representative in breach of s.228(1)(f).

[13] On or around 1 October 2019, CSR received a document with the names and signatures of nine employees nominating Mr Stanfield as their bargaining representative.

[14] On 8 October 2019, AFEI Legal acting for CSR wrote to the CFMMEU, asserting that relevant to employees who operate a forklift, they might operate it from time to time, but such employees are not employed exclusively to operate that equipment; it does not represent the totality of their duties. The decision of the Full Court of the Federal Court in CFMEU v CSBP [2012] FCAFC 48 (CSBP) was cited as authority that Rule 2(E) is connected with “the production or utilisation of power…”, and while the forklifts and mobile plant at the site user power in order to be operated, the duties of the employees are not directed to the generation or utilisation of power.

[15] Further, it was asserted that relevant to employees in production of the gyprock, the references made by the CFMMEU at [11(b)] in this decision is not replicated in Rule 2(O) which is a specific rule concerning additional eligibility for admission to membership in Queensland, and in CSR’s view, it does not support the assertion that the CFMMEU is entitled to represent the industrial interests of employees involved in, or in connection with, the manufacture of gypsum plasterboard products in Queensland.

[16] It was also put by CSR that it does not employ employees in the positions of plasterer or shophand and caster. CSR maintained that the CFMMEU does not qualify as a bargaining representative under s.176(1)(b) of the Act, and therefore CSR is not required by s.228 to recognise the CFMMEU as a bargaining representative. It was put that the letter of 30 September 2019 does not constitute a valid written notice pursuant to s.229(4)(b) of the Act.

[17] On 9 October 2019, Hall Payne Lawyers acting for the CFMMEU wrote to CSR’s representative, countering the position put by CSR. It was asserted that the decision of CSBP supported that it was necessary to examine the primary purpose of an employee’s work, and accordingly the test was not whether an employee is employed exclusively to drive a forklift, or that the forklift duties represent the totality of their duties.

[18] The CFMMEU cited Rule 2(E)(a) as the FEDFA rule, stating that the High Court had determined in Re Coldham; Ex Parte Australian Workers’ Union [1984] HCA 62 (Re Coldham) the following at [5]:

“5. Once the structure of the clause is understood it becomes evident that the eligible membership of the FEDFA consists of three groups:

(1) All classes of enumerated drivers, firemen and pump attendants;

(2) Attendants, greasers, cleaners, trimmers, and any other workers who answer the general description contained in the second part of the clause; and

(3) Boiler attendants who answer the description contained in the third part of the clause.

It is not possible to treat the limiting description governing the second group of eligible members as having application to the first group, without doing violence to the structure and the language of the clause.”

[19] It was put by the CFMMEU that even if the issue of the manufacturing employees involved in the production of gyprock was put to one side, it maintained it could cover employees whose primary purpose is to operate forklifts or other mobile plant.

Key Statutory Provisions

[20] Section 589 of the Act provides that:

“589 Procedural and interim decisions

(1) The FWC may make decisions as to how, when and where a matter is to be dealt with.

(2)  The FWC may make an interim decision in relation to a matter before it.

(3)  The FWC may make a decision under this section:

(a)  on its own initiative; or

(b)  on application.

(4)  This section does not limit the FWC's power to make decisions.”

[21] Section 229 of the Act provides that:

“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 the FWC for an order (a bargaining order) under section 230 in relation to the agreement.

Note: See also section 255A (limitations relating to greenfields agreements).

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.

Note:          An employer cannot request employees to approve the agreement under subsection 181(1) until 21 days after the last notice of employee representational rights is given.

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)  The FWC may consider the application even if it does not comply with paragraph (4)(b) or (c) if the FWC is satisfied that it is appropriate in all the circumstances to do so.

[22] Section 228 of the Act provides that:

“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.

Note:          See also section 255A (limitations relating to greenfields agreements).

(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.”

Decision to issue Interim Order

[23] On 16 October 2019, following the hearing I issued an Interim Order [PR713390].

[24] During the hearing both the CFMMEU and CSR were in agreement that the matter should be dealt with on an interim basis only, and that each of them wished to call further evidence in a substantive hearing.

[25] Directions were issued for the filing of further material, and the substantive hearing has been listed for 6 and 7 November 2019.

Reasons for issuing an Interim Order

[26] The power granted under s.589(2) of the Act to make an interim decision in relation to a matter also incorporates a power to make an interim order. 1 

[27] The power to make an interim order is discretionary. In determining whether to exercise that discretion the Commission applies principles substantially similar to those applied by the Courts in determining whether interlocutory relied ought to be granted. 2 

[28] Those principles require the Commission, in determining whether or not to make an interim order, to determine whether: 3

(a) there is a serious question to be tried; and

(b) the balance of convenience favours the granting of the interim order sought. 4 

Is there a serious question to be tried?

[29] The prerequisites for making an application for a bargaining order are set out in s.229 of the Act. The question for determination following a substantive hearing is whether the CFMMEU is a bargaining representative for the proposed agreement. If the CFMMEU is found to be a bargaining representative for the prosed agreement it will be necessary for CSR to ensure that it:

(a) discloses relevant information to the CFMMEU about the bargaining process pursuant to s.228(1)(b);

(b) refrains from capricious or unfair conduct that undermines freedom of association or collective bargaining pursuant to s.228(1)(e); and

(c) recognise and bargain with the CFMMEU as a bargaining representative pursuant to s. 228(1)(f).

[30] In the exchange of correspondence between the parties, they each asserted their respective position, citing the CFMMEU’s rules that support their position, and citing relevant authorities.

[31] Without finally deciding the issue, there is persuasive authority in the decision in Re Coldham that a forklift driver may be covered by the CFMMEU Rules. Whilst the parties will require the Commission to determine if manufacturing/production employees are eligible to be covered in order to potentially expand the number of eligible employees beyond forklift drivers, if it is determined by the Commission that Mr Stanfield is eligible to be a member of the CFMMEU, the union becomes a bargaining representative to the negotiations.

[32] On the limited amount of evidence before me, I do not consider the CFMMEU’s case to be hopeless or without merit; I put its case at a much higher likelihood of success than being hopeless or without merit. The CFMMEU’s application does not require the CFMMEU to show that it is more probable than not that is substantive application would succeed; it is to show a sufficient likelihood of success to justify, in the circumstances, the preservation of the status quo pending the determination of its substantive application. 5

[33] It was put by CSR that the practical consequences of an order being made is to invade 30-odd years of industrial regulation at the site where CSR has made agreements with the AWU. 6

[34] Relevant to the status quo, I considered the status quo to be CSR bargaining and wanting to bargain with the AWU, with the CFMMEU asserting that it has a right to be a bargaining representative. Criticism of the CFMMEU’s reluctance to formally put its position in writing until recently is warranted; but it has at least done so since 30 September 2019, preceding the date of this application.

[35] In the circumstances I was satisfied that there exists a serious question to be tried.

Does the balance of convenience favour the granting of the interim order sought?

[36] CSR was critical of the CFMMEU, submitting that it had many months to provide to CSR information sought by CSR demonstrating the CFMMEU’s assertion that its rules allowed it to cover CSR employees at the relevant site. CSR had allowed representatives of the CFMMEU to enter the premises after issuing right of entry notices, but on each occasion CSR maintained that it was granting permission on a without prejudice basis.

[37] CSR led evidence that every enterprise agreement it had entered into between 1993 and 2017 was between it, its employees, and the AWU, with the various agreements covering the AWU, if appropriate, under the respective Acts in place at the time. The CFMMEU or its predecessor (the CFMEU) had never been involved in bargaining.

[38] The CFMMEU submitted that it had been involved in and was covered by the following two agreements:

(a) USG Boral Building Products Pty Limited Pinkenba Enterprise Agreement 2017 [2019] FWCA 924; and

(b) Knauf Plasterboard (Bundaberg) Agreement 2018 [2018] FWCA 4723.

[39] Both agreements cover employees in Queensland. Mr Menon gave evidence that the CFMMEU has members at both USG and Knauf in production and distribution roles. It was conceded by the CFMMEU that there had been no challenge to the CFMMEU in those enterprises as to its right to be a bargaining representative, nor was it argued for determination by the Commission as to the right to be covered by the above agreements.

[40] Ms Tornatore gave evidence that the next bargaining meeting was to be held on 21 October 2019 with the AWU in attendance. Mr Stanfield would not be permitted to attend. The Commission was urged not to disturb the arrangement, and it was submitted that there would be no prejudice to the CFMMEU should the long-standing arrangement of bargaining with the AWU be allowed to continue prior to the substantive application being determined.

[41] The CFMMEU submitted that there would be prejudice to it if CSR was permitted to continue negotiations with the AWU in its absence. Mr Menon gave evidence that as bargaining continues in the CFMMEU’s absence, clauses between CSR and the bargaining representatives will be discussed and agreed. He stated that it was his experience that coming into a bargaining process which has already started is difficult. He considered that “the employer will often refuse to discuss clauses that have already been agreed and that means we have lost our chance to have a say about them.”

[42] During the hearing I informed the parties that my first availability for a two day hearing, as sought by the parties would be the week commencing 4 November 2019. It could be a reasonable number of weeks before the substantive application is finally determined.

[43] In making the Interim Order I determined that there would be significant prejudice suffered by the CFMMEU if an interim order was not made. It might have been possible that bargaining continued between the CSR and the AWU and other individual bargaining representatives, if there are any, in the period it could take to hear and determine the substantive application. Ms Tornatore gave evidence that the “productive bargaining should be allowed to continue without disruption.” 7 Bargaining may even have concluded by the time the substantive application could be determined.

[44] I was satisfied that the balance of convenience favoured the granting of an interim order and I exercised my discretion to do so.

[45] In making the Interim Order, I determined it appropriate to prevent further bargaining meetings occurring, any consideration of claims, and preventing an agreement going to vote of the employees if the CFMMEU is not party to the negotiations. I did not, as sought by the CFMMEU, agree to suspend bargaining until determination of the substantive application. I did not consider it appropriate to do so in the event that CSR did wish to continue bargaining, and could hold such meetings with the CFMMEU in attendance on a without prejudice basis.

[46] During the hearing I flagged this possibility with the parties. The CFMMEU was open to such a potential interim order being made; CSR and the AWU were opposed to an interim order on those terms being made.

COMMISSIONER

Appearances:

Mr Charles Massy of Counsel, instructed by Hall Payne Lawyers.

Mr Kenneth Bennett of Counsel, instructed by AFEI Legal Pty Ltd.

Hearing details:

Brisbane

2019

October 15.

Final written submissions:

Applicant’s outline of submissions, 15 October 2019.

Printed by authority of the Commonwealth Government Printer

<PR713395>

 1   John Holland Queensland Pty Ltd v Construction, Forestry, Mining and Energy Union[2014] FWC 3583.

 2   Telstra Corporation Ltd v CEPU (2003) 125 IR 88 at [88].

 3   Health Services Union v Victorian Hospitals’ Industrial Association[2012] FWAFB 2901at [5].

 4   Where relevant an applicant may be required to give an enforceable undertaking as to damages: Telstra Corporation Ltd v CEPU (2003) 125 IR 88 at [89].

 5   Health Services Union v Victorian Hospitals’ Industrial Association[2012] FWAFB 2901at [9].

 6   PN285.

 7 Witness statement of Ms Paola Tornatore at [109].