Construction, Forestry, Maritime, Mining and Energy Union v Gbar (Australia) Pty Ltd

[2019] FWC 3957

[2019] FWC 3957

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.437—Protected action

Construction, Forestry, Maritime, Mining and Energy Union
v
GBAR (Australia) Pty Ltd
(B2019/443)

DEPUTY PRESIDENT DEAN SYDNEY, 6 JUNE 2019

Proposed protected action ballot of employees of GBAR (Australia) Pty Ltd.

[1] On 4 June 2019 the Construction, Forestry, Maritime, Mining and Energy Union (CFMMEU) made an application under s.437 of the Fair Work Act 2009 (the Act) for a protected action ballot order (PABO) in relation to its members who are employees of GBAR (Australia) Pty Ltd (GBAR). On 5 June 2019 GBAR advised the Commission that it opposed the PABO sought by the CFMMEU.

[2] Having regard to the requirement for the Commission to, as far as practicable, determine an application for a PABO within two working days after the application is made, this application was heard on 6 June 2019.

[3] At the hearing, the CFMMEU was represented by Mr B Kruse, Industrial Officer of the CFMMEU, and Ms L Shanahan appeared, with permission, for GBAR.

[4] Mr Robert Kera, Assistant Secretary of the CFMMEU, gave oral evidence and also provided a statutory declaration which accompanied the application. Mr Maki Danalis, an official of the CFMMEU, also gave oral evidence.

[5] Mr Vince Manning, General Manager and Director of GBAR, gave oral evidence on behalf of GBAR.

[6] For the reasons set out below, I am satisfied that the requirements of s.443 of the Act have been met and so I must grant the CFMMEU’s application for a PABO.

Relevant legislation

[7] Section 443(1) of the Act sets out the circumstances in which the Commission must make a PABO:

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).

Issue to be determined

[8] There is no dispute between the parties, and I am satisfied on the evidence, that:

(a) the PABO application was made by the CFMMEU in accordance with s.437 of the Act; and

(b) the CFMMEU has been genuinely trying to reach an agreement with GBAR (being the employer of the employees who are to be balloted) prior to Monday 3 June 2019.

[9] Ms Shanahan emphasised that controversy arose as a result of the conduct of the CFMMEU from Monday 3 June 2019. No issue was taken with respect to the negotiations that occurred prior to that date. So, the issue between the parties that I need to determine is whether the CFMMEU “is” genuinely trying to reach an agreement with GBAR, within the meaning of s.443(1)(b) of the Act.

What does “is genuinely trying” mean?

[10] There have been a number of decisions that have considered the meaning of “is genuinely trying”.

[11] The question of whether a bargaining representative has been and is genuinely trying to reach an agreement was considered in JJ Richards & Sons Pty Ltd v Fair Work Australia, where Flick J said: 1

“[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 Application. 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 even 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).”

[12] In Total Marine Services Pty Ltd v Maritime Union of Australia 2, the Full Bench expressed the following views about s.443(1)(b):

“[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.”

[13] The Full Bench in Esso Australia Pty Ltd v AMWU & Ors 3 made the following observations about the decision in Total Marine Services Pty Ltd v Maritime Union of Australia:

“[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).”

[14] It is clear from these authorities that 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. 4

[15] Importantly in relation to this application, there is no specific stage in the bargaining or negotiations that must be reached in order for there to be a finding that an applicant is, and has been, genuinely trying to reach an agreement with the employer. 5

Relevant facts and circumstances leading up to the PABO application

[16] Overall, the chronology of events leading up to the PABO application was not contested, although the dates on which certain events occurred was not particularly clear.

[17] It is not disputed that bargaining for a new enterprise agreement commenced in or around January 2019. On 17 and 18 January 2019, the CFMMEU provided by email to GBAR a copy of its log of claims. A preliminary meeting was held between the parties on or around 27 February 2019.

[18] A Notice of Employee Representational Rights was issued in March 2019 and since that time discussions have taken place between CFMMEU officials and GBAR management representatives on or around 18 April and 25 May 2019.

[19] At some point during the meetings, the parties discussed the CFMMEU’s log of claims, and a draft agreement proposed by GBAR. The CFMMEU provided a verbal response to the proposal by GBAR, although it is unclear whether this was to some or all of GBAR’s proposal.

[20] Further meetings were held on 3 and 4 June 2019. The evidence of Mr Manning, who did not attend the meeting on 3 June, was that the purpose of this meeting was to discuss that GBAR was ‘locked out’ of particular sites to perform work because it did not have an enterprise agreement with the CFMMEU.

[21] GBAR expressed concerns as to the cost of the CFMMEU’s proposed agreement, particularly with respect to some of its existing contracts. This was discussed during the meeting on 4 June 2019. In respect of GBAR’s contract with BlueScope Steel in Wollongong, Mr Manning showed the CFMMEU officials a costing, which demonstrated that the labour costs under its proposed agreement would require an hourly rate of pay considerably in excess of what it was paid under its commercial contract with BlueScope Steel. As a result, the CFMMEU reduced its claim in respect of what was variously referred to as a demolition or productivity allowance, from $5 per hour down to $3 per hour.

[22] The evidence of Mr Manning was that he raised at least one other concern about the cost of the CFMMEU’s proposal around payment for travel, and this was discussed on 4 June 2019. He also gave evidence that he received a 91 pages document from the CFMMEU at the meeting on 4 June 2019, being its proposed agreement, and told the CFMMEU he wanted to obtain advice about it.

[23] Rather than continuing with the discussions, he said, the CFMMEU made this application within a few hours of the conclusion of the meeting on 4 June 2019.

Is the CFMMEU genuinely trying to reach agreement with GBAR?

[24] GBAR’s submissions in support of its argument that the CFMMEU is not genuinely trying to reach agreement at the time this application was lodged focused on the timing of the PABO application in the context of the meeting on 4 June 2019.

[25] It is necessary, in my view, to consider the whole of the bargaining conduct between the parties to determine whether the CFMMEU is trying to reach agreement with GBAR. Both sides have put their respective positions to the other, and so there has been disclosure by both parties of that to which consensus is sought. The CFMMEU has provided a reply to GBAR’s proposed agreement. While it may be a small matter, the CFMMEU did change its position in relation to the allowance applicable to GBAR’s employees working at BlueScope Steel, notwithstanding the wage costs under the CFMMEU’s proposal are still in excess of the rates payable by BlueScope Steel to GBAR.

[26] As was submitted by the CFMMEU, concessions are not required to be made in order for a party to be genuinely trying to reach agreement with the other.

[27] The proposed enterprise agreement given to GBAR by the CFMMEU on 4 June 2019 was said by the CFMMEU to be in identical terms to the log provided in January 2019, although it was not put into evidence during the hearing. While it would have been reasonable for GBAR to have had the opportunity to review the document and obtain advice before making the PABO application, this is not sufficient to support a finding that the CFMMEU is not genuinely trying to reach agreement with GBAR. There is no reason why a bargaining representative may not pursue protected industrial action during the course of bargaining as a legitimate means of furthering its genuine desire to reach agreement. This point was emphasised by a Full Bench of the Commission in Maritime Union of Australia v Swire Pacific Ship Management (Australia) Pty Ltd 6 (at [73]) as follows:

“In and of itself, a bargaining representative making a particular strategic choice which is permissible under the bargaining scheme established by the Act, is not a basis on which to conclude that the bargaining representative is not genuinely trying to reach an agreement or that the bargaining representative has some extraneous intent or purpose. Recourse to protected industrial action and applications to facilitate that action, are an accepted means by which a bargaining representative may further the interests of those it represents”.

Conclusion

[28] I am satisfied that this application has been made in accordance with s.437 of the Act. I am also satisfied that the CFMMEU is genuinely trying to reach an agreement with GBAR in relation to a new agreement.

[29] Accordingly, pursuant to s.443(1) of the Act, the Commission must make a protected action ballot order.

[30] No submissions were made on behalf of GBAR in relation to the terms of order sought by the CFMMEU. An order in the terms sought will be issued separately.

DEPUTY PRESIDENT

Appearances:

B Kruse for the Construction, Forestry, Maritime, Mining and Energy Union.

L Shanahan for GBAR (Australia) Pty Ltd.

Hearing details:

2019.

Sydney:

June 6.

Printed by authority of the Commonwealth Government Printer

<PR709129>

 1 [2012] FCAFC 53

 2   [2009] FWAFB 368

 3   [2015] FWCFB 210

 4   Esso Australia Pty Ltd v AMWU & Ors[2015] FWCFB 210 at [57] & [69]

 5   AMWU v HJ Heinz Company Australia Ltd[2009] FWA 322 at [20]

 6   [2014] FWCFB 2587