Construction, Forestry, Maritime, Mining and Energy Union v Mackenzie Marine & Towage Pty Ltd

[2019] FWC 5963

[2019] FWC 5963

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.437—Protected action

Australian Maritime Officers’ Union, The; Australian Institute of Marine and Power Engineers, The; Construction, Forestry, Maritime, Mining and Energy Union
v
Mackenzie Marine & Towage Pty Ltd
(B2019/706)

DEPUTY PRESIDENT BEAUMONT PERTH, 29 AUGUST 2019

Proposed protected action ballot of employees of Mackenzie Marine & Towage.

[1] This decision concerns an application by the Australian Maritime Officers’ Union, (AMOU), the Australian Institute of Marine and Power Engineers (AIMPE); and the Construction, Forestry, Maritime, Mining and Energy Union (CFMMEU) pursuant to s 437 of the Fair Work Act 2009 (the Act) for a protected action ballot order. The application was made on Monday, 26 August 2019, and relates to employees who are members of the Unions employed by Mackenzie Marine & Towage Pty Ltd (Mackenzie).

[2] Mackenzie opposed the making of a protected action ballot order, and provided a written submission explaining the basis of its opposition. The matter was allocated to my chambers and I listed the application for hearing at 2.00pm on Wednesday, 28 August 2019. Mr Glen Walsh, Industrial officer of the AMOU, and Mr Luke Edmonds on behalf of the CFMMEU, appeared on behalf of the Unions collectively. Mr Walsh confirmed that that AMOU spoke in common for AIMPE and the CFMMEU. Permission was granted to Mr Sieg Mare, to appear on behalf of Mackenzie.

[3] At the conclusion of the hearing I advised the parties that I would reserve my decision. Mr Mare, noting the expedient listing of the matter and his late notification of the same (not by chambers), referred to providing additional submissions on Mackenzie’s objection that the Unions were pursuing a non-permitted matter. The parties were provided with additional time in which to make further submissions limited to this particular objection.

[4] Having considered the materials filed and the evidence given in this matter, as well as the submissions of the parties, I was satisfied at the time of making the Order 1 that the Unions had been, and are, genuinely trying to reach agreement with Mackenzie. I have therefore concluded that the requirements for the issuing of an order were satisfied. My reasons follow.

Background

[5] Mackenzie is currently contracted to provide towage services in the Port of Bunbury and employs tugboat crews. The ‘proposed agreement’ is set to displace the current common law contracts that set the terms and conditions for the relevant employees.

[6] In February 2019, Mr Paul Mulholland, Manager of Mackenzie, was informed that some Mackenzie employees wanted to commence bargaining for an enterprise agreement. 2

[7] Initially, Mackenzie declined to bargain, but on 20 March 2019, it reconsidered its position and informed the AMOU of its willingness to do so. 3 It did so after the Unions made an application to the Commission for a majority support determination, which was later discontinued.4

[8] Notices of employee representational rights were issued on 28 March 2019. 5

[9] By email dated 8 April 2019, Mr Walsh requested a meeting with Mackenzie in order to discuss bargaining protocols and to set future meeting dates. Representatives from the CFMMEU (Mr Falcone) and AIMPE (Mr Carroll) requested to participate in the bargaining process. 6

[10] The first meeting took place on 12 April 2019 in Bunbury. 7 The bargaining protocol and process was discussed, and the parties agreed that Mr Walsh would provide Mackenzie with a draft log of claims by no later than 12 April 2019.8 The next meeting was scheduled for 3 May 2019.9

[11] On 29 April 2019, Mr Walsh emailed Mackenzie a draft enterprise agreement (Draft Agreement). The covering email stated ‘[I]n order to continue with the meeting scheduled for this Friday, we submit that you need only identify a few key / outstanding concerns as starting point. We don’t expect an exhaustive list at this stage as we will only be able to address a few items at this meeting due to time constraints’. 10 The Unions’ correspondence included a request for Mackenzie to provide names of all nominated bargaining representatives.11 The request was made, according to the Unions, as it had concerns that Mackenzie had encouraged all non-union employees to attend the bargaining meeting.12

[12] In response, Mackenzie’s representative sent an email on 30 April 2019 requesting further time to enable Mackenzie to consider the matters and topics contained in the Draft Agreement. The Unions agreed to the request, but were said to have insisted that the next meeting be set for 9 May 2019 notwithstanding that Mackenzie had informed the Unions it was not available on that date. 13

[13] The meeting on 9 May 2019 took place although the Unions perceived that the meeting was derailed by the belligerent behaviour of Mackenzie’s representative. 14 At the conclusion of it, the parties agreed that Mackenzie was to provide written observations by 24 May 2019, and a further meeting was scheduled for 30 May 2019.

[14] On 23, 24 and 27 May 2019, the Unions contacted Mackenzie’s representative in relation to obtaining Mackenzie’s observations as per the agreement reached at the meeting on 9 May 2019.

[15] On 23 May 2019, Mr Walsh, in addition, informed Mackenzie of his unavailability for the 30 May meeting and hence the meeting was rescheduled to 14 June 2019. 15

[16] On 27 May 2019, Mackenzie provided to the Unions a letter in response to the main bargaining topics and requested information to clarify what it considered to be vital matters. 16 In the letter of 27 May 2019, Mackenzie asked the following question under a title ‘General Observations’ - ‘How would the employer be legally entitled to force a part-time employee to convert to full-time? Is this a permitted matter?’.

[17] Also, on 27 May 2019, Mackenzie emailed the Unions with notices received from other bargaining representatives. In response to the email dated 27 May 2019, Mr Walsh emailed Mackenzie stating:

Given that enterprise bargaining commenced some weeks ago, and that no self-appointed bargaining representatives were nominated, appointed or attended any of our meetings, AMOU reiterates its absolute refusal to now engage with any new /self-appointed bargaining representatives at this advanced stage. As far as the AMOU is concerned, the opportunity for self-appointed bargaining representatives to be involved ended at our last bargaining meeting. Their involvement now would serve only to further delay and exacerbate what has already been a drawn out process.

Please ensure that they do not attend the next bargaining meeting scheduled for June 14 2019. 17

[18] Mackenzie responded to Mr Walsh’s email dated 27 May 2019 stating that it was not prepared to exclude other bargaining representatives from the process. 18 Mr Walsh responded to Mackenzie’s email reiterating that enterprise bargaining would continue without the involvement of any additional bargaining representatives after that meeting.

[19] By letter of 12 June 2019, Mackenzie informed the Unions that a further bargaining meeting would be held on 14 June 2019 in Bunbury. 19 The Unions stated that in the correspondence from Mackenzie’s representative, a request was made for an agenda that included matters which the Unions considered were best described as bargaining protocols. Mr Walsh responded by email dated 13 June 2019, noting that the agenda was not agreed.20

[20] The meeting of 14 June took place albeit that Mr Carroll was unable to attend. 21 According to Mr Mulholland the parties constructively discussed the matters in the Draft Agreement.22 At hearing the parties appeared to agree that there were discussions about various terms of the Draft Agreement at the meeting.

[21] On 2 July 2019, the parties exchanged their available dates for the next meeting. 23 Mr Walsh insisted that the next meeting be held at the AMOU’s offices in Fremantle. This was the case notwithstanding that Mackenzie, its employees and the non-Union bargaining representatives are based in Bunbury.24

[22] On 8 July 2019, Mackenzie provided the Unions with a letter outlining its observations and proposals concerning the Draft Agreement. There was no reference in the letter of 8 July 2019 concerning non-permitted matters. By way of explanation, Mr Mare explained other topics had been discussed at the meeting and the letter of 8 July 2019 reflected this. In the letter of 8 July 2019, Mackenzie again requested that the Unions provide their preferred dates for the next meeting.

[23] It is the Unions’ view that in the letter of 8 July 2019, Mackenzie repudiated virtually all of the claims made by the Unions, including: proposed changes to the number of tug crews; proposed changes to the rostering of tug crews; remuneration for tug crews; superannuation; termination of employment clause; disciplinary procedures; redundancy clause; training; certification; meal allowances; and the disputes settlement procedure. 25

[24] Regarding the period between the letter of 8 July 2019 and the making of the application, the Unions expressed that they were considering their position given what they considered to be the repudiation of all claims. Of concern was the offer by Mackenzie to offer pay to the employees in the Draft Agreement that was less than the employees’ salaries in their common law contracts. Further, the Unions were made aware that Mr Mulholland had informed an employee that Mackenzie would offer enhanced common law contracts with improved terms and conditions in lieu of an enterprise agreement. 26 Mr Mulholland refuted that this was the case and stated that he had talked to some employees about the Draft Agreement providing a minimum set of entitlements that are greater than the relevant modern award.

[25] Mr Mulholland stated that prior to the Unions filing the application on 26 August 2019, none of the Unions had communicated with Mackenzie or its representative. The Unions similarly submitted that there had been no further contact from Mackenzie since the letter of 8 July 2019.

[26] Neither party had sought bargaining orders.

Mackenzie’s submissions

[27] Mackenzie submitted that there were requirements under the Act for bargaining representatives to engage in good faith bargaining. Mackenzie submitted that Mr Carroll had not attended the last meeting and therefore had failed to consider the proposals made by Mackenzie. Further, the Unions had failed to provide available dates for the next meeting.

[28] According to Mackenzie the application was premature and without merit because negotiations were continuing, and both the Unions and Mackenzie were working toward a timetable.

[29] In addition, it was Mackenzie’s view that the Unions were seeking that the Draft Agreement be linked to the Union’s demands for non-permitted matters. The example provided was that Mackenzie would ‘be compelled to convert part-time employees to full-time’.

Unions’ submissions

[30] The Unions submitted that they have genuinely tried to reach agreement with Mackenzie. Negotiations have involved three face to face meetings, numerous phone calls and emails sent. The Unions’ wage claim is said to have been clearly specified and substantiated via industry benchmarking. Regarding the Draft Agreement, items have been clearly set out and explained in varying levels of detail to Mackenzie’s representatives.

[31] The Unions submitted that the steps taken went well beyond preparatory to developing an enterprise agreement, and clearly satisfy the test for the application.

Legislative framework

[32] Section 437 of the Act enables a bargaining representative to apply for a protected action ballot order. Subject to the restrictions in ss 437(2A) and 438(1) the Commission must make an order in relation to employees who will be covered by a proposed agreement in the circumstances set out in s 443. Section 443 relevantly provides:

443 When the FWC must make a protected action ballot order

(1) The FWC must make a protected action ballot order in relation to a proposed enterprise agreement if:

(a) an application has been made under section 437; and

(b) the FWC is satisfied that each applicant has been, and is, genuinely trying to reach an agreement with the employer of the employees who are to be balloted.

(2) The FWC must not make a protected action ballot order in relation to a proposed enterprise agreement except in the circumstances referred to in subsection (1).

(3) A protected action ballot order must specify the following:

(a) the name of each applicant for the order;

(b) the group or groups of employees who are to be balloted;

(c) the date by which voting in the protected action ballot closes;

(d) the question or questions to be put to the employees who are to be balloted, including the nature of the proposed industrial action.

(3A) For the purposes of paragraph (3)(c), the FWC must specify a date that will enable the protected action ballot to be conducted as expeditiously as practicable.

…

[33] The legislation as expressed at s 443(1) clearly requires that the Commission must make a protected action ballot order if satisfied the applicant has been, and is, genuinely trying to reach an agreement with the employer.

[34] A Full Bench in Total Marine Services Pty Ltd v Maritime Union of Australia 27 refrained from adopting a formulaic approach when applying the statutory test under s 443(1)(b) stating:

[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. 28 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. ....

[35] It is not necessary to show that negotiations on the agreement or an item of the agreement have been exhausted and it is not necessary to show that the making of an application for a protected action ballot order is a last resort. 29

[36] While there is a relationship between s 443(1)(b) and the need to bargain in good faith under s 228 of the Act, a Full Bench in Esso Australia Pty Ltd v AMWU 30cautioned against conflating the two requirements. It stated that ‘a party may not meet a particular good faith bargaining requirement but may nevertheless be genuinely trying to reach agreement’.31 Ultimately, it is the test in s 443(1) that must be applied.

Threshold requirements

[37] I am satisfied that the threshold requirements have been met. Pursuant to s 437(1), I find that the Unions are bargaining representatives and are entitled to make the application being considered in this matter.

[38] Considering the evidence and other material provided, I am further satisfied that the application has been properly made under s 437 of the Act and the application was not made earlier than 30 days before the nominal expiry date of a previous enterprise agreement – given there is not one.

[39] It was confirmed that Mackenzie was provided with a copy of the application within 24 hours of it being made as required by s 440 of the Act. 32

Consideration

[40] Essentially, although not exclusively, it seems Mackenzie’s objection amounted to an allegation that the Unions were not meeting the good faith bargaining requirements which are set out in s 228 of the Act and therefore, given the nature of the Unions’ conduct, they were not genuinely trying to reach agreement with Mackenzie.

[41] If Mackenzie was concerned about the Unions not meeting the good faith bargaining requirements, then it was open to it to pursue the remedies available for such a contravention under the Act. There is no evidence before me to suggest that such an application either was made or was in contemplation. In the circumstances, I am not persuaded that the evidence regarding the good faith bargaining concerns, supports a finding that there has been a failure to genuinely try to reach agreement either during the course of the negotiations or currently.

[42] There have been three enterprise bargaining meetings, two of which have included discussion about the terms of the Draft Agreement. Further, there has been correspondence between the parties in addition to phone calls about the negotiations and Draft Agreement content. The parties are not in agreement on key conditions that are to be included in the Draft Agreement. However, the current positions of the parties are known to all and this therefore supports a conclusion that genuine bargaining for an agreement is and has been taking place. As was stated by Mr Mulholland regarding the meeting on 14 June 2019, ‘during the meeting, the parties constructively discussed the matters in the draft EBA’. 33

[43] While there has been a hiatus in the negotiations since 8 July 2019, there was a cogent reason provided by the Unions for this. The Unions appeared to have been somewhat taken aback by the approach adopted by Mackenzie to the Draft Agreement. Having considered that all claims had been repudiated, and that Mackenzie had repeatedly used the relevant modern award point of reference for employment terms rather than industry standards in what the Union considered to be comparative ports, the Unions explained that its members were compelled to take the action that they had. According to the Unions it remained the case that they were willing to continue negotiations.

[44] While I find that the last communication between the parties was from Mackenzie on 8 July 2019 concerning a request for further meeting dates, I observe that neither party communicated with each other again from this point to the time of making the application. Mackenzie made no further request of the Unions and did not follow up when a response was not forthcoming. In short, I do not consider in the circumstances of this matter, that the lack of response from the Unions to Mackenzie’s request evinces that the Unions had not been and were currently not genuinely trying to reach agreement.

[45] Mackenzie submitted that the Unions have not been and are not genuinely trying to reach agreement because the application had been made prematurely. I am not satisfied that the application has been made prematurely in the light of the current state of negotiations. It is true on the evidence that the negotiations appear to have been frustrated by Mackenzie’s response in its letter of 8 July 2019. However, the evidence also establishes that the Unions have, since in or around April 2019, notwithstanding the recent hiatus, been seeking to negotiate an agreement with Mackenzie.

[46] Mackenzie submitted that the Unions are seeking that the Draft Agreement be linked to its demands for non-permitted matters. I have assumed that Mackenzie is contending that the Unions are pursuing a claim for a non-permitted matter, namely, ‘[T]he Respondent be compelled to convert part-time employees to fulltime’ (Conversion Term). While the parties filed materials in this matter, the ‘offending’ Conversion Term within the context of the Draft Agreement, or the actual clause, was not provided.

[47] Notwithstanding, I consider that the submissions of Mackenzie are misconceived when one considers the meaning of ‘permitted matters’. 34

[48] The Full Bench in Esso Australia Pty Ltd v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union 35 (Esso) stated:

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. Such a construction of s.443(1)(b) is consistent with the judgment of the Full Court in JJ Richards and with a number of Full Bench decisions of the Commission (see Total Marine; Pelican Point Power Limited v ASU ; JJ Richards No.1; Alcoa; JJ Richards No.2; and Farstad).

In our view the adoption of a decision rule or principle of the type proposed in Australia Post No.1 and Airport Fuel Services would be an inappropriate fetter on the exercise of what the legislature clearly intended would be a discretionary decision. As Bowen LJ observed in Gardner v Jay,:

“When a tribunal is invested by Act of Parliament or by Rules with a discretion, without any indication in the Act or Rules of the grounds upon which the discretion is to be exercised, it is a mistake to lay down any rules with a view to indicating the particular grooves in which the discretion should run, for if the Act or the Rules do not fetter the discretion of the Judge why should the court so do.”

There is no legislative warrant for the adoption of a decision rule such that if an applicant is, or has been, pursuing a substantive claim which is not about a permitted matter it is not genuinely trying to reach an agreement within the meaning of s.443(1)(b). The fact that an applicant is, or has been, pursuing a claim about a non-permitted matter is relevant to whether the test posited by s.443(1)(b) has been met, but it is not determinative of the issue. A range of factual considerations may potentially be relevant in that context, including but not limited to the subject matter of the claim, the timing of the advancement of the claim, the basis upon which the claim is advanced, the significance of the claim in the course of the negotiations, the claimant’s belief as to whether the claim is about a non-permitted matter or not, where there is legal clarity about the permitted status of the claim, whether the other party has placed in contest whether the claim is about a permitted matter, and whether such a claim has been withdrawn and, if so, when and in what circumstances. The diversity of the factual circumstances and nuances which will be found in different cases means that it is not possible to say that any particular factor or consideration will always be determinative of the result.

(references omitted)

[49] Based on what was put forth on behalf of Mackenzie at the hearing, and in its supplementary submissions, I am not persuaded that it can only be concluded that the Conversion Term concerns a non-permitted matter. Further, if unexpectedly wrong on this point, the fact that the Unions are, or have been pursuing a claim about a non-permitted matter, is relevant to whether the test posited by s 443(1)(b) has been met, but it is not determinative of the issue. 36 A range of factual considerations may potentially be relevant in that context.

[50] Whether the Unions have been, and are, genuinely trying to reach an agreement must be decided by reference to all of the circumstances of the bargaining that has occurred with Mackenzie. The relevant circumstances also include the extent of the progress in the negotiations and the steps taken in order to try and reach agreement; 37 both of which have been traversed.

[51] Mackenzie drew attention to the Conversion Term in its letter of 27 May 2019 to the Unions, asking whether it was a permitted matter and thereafter stating it ‘would appear not to be a permitted matter’. However, there is no evidence before me to suggest that this issue was further agitated, and that the Unions were put on notice that it was a non-permitted matter and as such Mackenzie considered that they were not genuinely trying to reach agreement. Further, it is unknown to me whether the Conversion Term remains in the Draft Agreement.

[52] Mr Carroll gave evidence that it was his belief that there were no non-permitted matters in the Draft Agreement. Furthermore, there appears to be no legal clarity about the permitted status of the claim. Therefore, even if it were the case that the Conversion Term was a non-permitted matter, I am not persuaded that in the circumstances of this application this means the Unions have not been, and are currently not, genuinely trying to reach agreement with Mackenzie.

[53] Having considered the materials filed and the evidence given in this matter, as well as the submissions of the parties, I was satisfied at the time of making the Order 38 that the Unions had been, and are, genuinely trying to reach agreement with Mackenzie.

DEPUTY PRESIDENT

Appearances:

L. Edmonds and G. Walsh for the Applicant

S. Mare for the Respondent

Hearing details:

2019

Perth

August 28

Printed by authority of the Commonwealth Government Printer

<PR711745>

 1   PR711747

 2 Statutory Declaration of Paul Mulholland [3].

 3   Ibid [4] and [5].

 4 Union’s Submissions [3].

 5 Statutory Declaration of Paul Mulholland [6].

 6   Ibid.

 7 Ibid [9].

 8 Ibid [10].

 9   Ibid.

 10   Ibid PM-4.

 11 Union’s Submissions [8].

 12   Ibid.

 13 Statutory Declaration of Paul Mulholland [13].

 14 Union’s Submissions [10].

 15 Statutory Declaration of Paul Mulholland [15].

 16 Ibid [16].

 17   Ibid PM-9.

 18   Ibid PM-10.

 19   Ibid PM-12.

 20   Ibid PM-13.

 21 Ibid [23].

 22 Ibid [24].

 23 Ibid [26].

 24 Ibid [27].

 25 Union’s Submissions [23].

 26 Ibid [29].

 27   [2009] FWAFB 368.

 28   Australian Industry Group v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union Print T1982; Re Media, Entertainment and Arts Alliance PR928033.

 29   CEPU and AMWU v Kraft Foods Ltd (2010) 197 IR 12.

 30   [2015] FWCFB 210.

 31 Ibid [18].

 32   Fair Work Act 2009 (Cth) s 440.

 33 Statutory Declaration of Paul Mulholland [24].

 34   Fair Work Act 2009 (Cth) s 172(1).

 35   Esso Australia Pty Ltd v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union[2015] FWCFB 210 [57]-[59].

 36   Esso Australia Pty Ltd v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union[2015] FWCFB 210.

 37   Total Marine Services Pty Ltd v Maritime Union of Australia[2009] FWAFB 368 [32].

 38   PR711747