Construction, Forestry, Maritime, Mining and Energy Union v Trustee for the Crane Services Trust T/A Crane Services

[2018] FWC 4067

[2018] FWC 4067

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
Section 437 - Application for a protected action ballot order

Construction, Forestry, Maritime, Mining and Energy Union
v
Trustee for the Crane Services Trust T/A Crane Services
(B2018/560)

DEPUTY PRESIDENT ANDERSON ADELAIDE, 13 JULY 2018

Proposed protected action ballot of employees of the Trustee for the Crane Services Trust T/A Crane Services

[1] This is an application made to the Fair Work Commission (the Commission) on 6 July 2018 by the Construction, Forestry, Maritime, Mining and Energy Union (CFMMEU) (the Applicant) under section 437 of the Fair Work Act 2009 (the FW Act) for a protected action ballot order in relation to certain employees of the Trustee for the Crane Services Trust (Trading as Crane Services) (Crane Services or the Respondent employer). It is noted that, by consent, I granted permission to the Applicant to amend the name of the Respondent employer from Crane Services Pty Limited to the aforementioned.

[2] This application concerns a protected action ballot order relating to the negotiation of a proposed agreement for the construction workforce of Crane Services.

[3] On 9 July 2018 the Respondent employer advised the Commission that it opposed an order being made.

[4] I conducted a hearing of the matter on 10 July 2018. I issued directions for the filing of material in advance of the hearing, which were complied with by both parties. I reserved my decision.

[5] The Applicant says that it has complied with all formal requirements in the FW Act concerning the making of applications for a protected action ballot order. It says that it is and has been genuinely trying to reach an agreement with the employer over a prolonged period of time on behalf of its members who work as riggers and crane operators in the construction arm of the employer’s business. It says that the statutory scheme in Part 3-3 Division 8 of the FW Act requires the making of an order irrespective of whether the employer opposes it or considers it to be undesirable or unhelpful to negotiations.

[6] The Respondent employer, represented by the Master Builders Association of South Australia, contends that the CFMMEU has not satisfied the requirement in section 443 of the FW Act that it is and has been genuinely trying to reach an agreement. It refers to conduct during and in the course of bargaining, including an assertion that the CFMMEU is pattern bargaining contrary to the provisions of section 412 of the FW Act.

[7] In the alternative, the Respondent employer contends that if an order is to be made then exceptional circumstances exist warranting an extension of the notification period for the taking of protected action from 3 days to 7 days under section 443(5) of the FW Act.

[8] I have both oral and documentary evidence before me. I received sworn evidence from a CFMMEU organiser Mr Colin Fenney in the form of a statutory declaration of 6 July 2018 accompanying the application, and a further witness statement of 10 July 2018. I received sworn evidence from two company officers, Mr Phillip Sanders (General Manager) and Mr Andrew Munckton (Operations Manager).

Consideration

History of bargaining between the parties

[9] Crane Services operate a business supplying cranes to support the construction industry in South Australia, including on major infrastructure projects. It employs crane operators and riggers (its construction workforce) and persons in its workshop (the workshop workforce).

[10] In 2016 Crane Services commenced, of its own volition, negotiations with both arms of its workforce for a single enterprise agreement.

[11] In November 2016 the CFMEU (as it was then) notified Crane Services that it had been appointed as a bargaining representative of members employed by Crane Services. Until then, the employer was unaware that the CFMEU had membership amongst its workforce.

[12] A dispute arose over the CFMEU’s status as a bargaining representative. In April 2017 the CFMEU commenced proceedings in the Commission seeking a bargaining order under section 229 of the FW Act. The dispute was settled when the CFMEU’s status was confirmed after the Commission was satisfied that the union had such membership.

[13] Between September and November 2017 correspondence was exchanged between the employer, the CFMEU and other bargaining representatives concerning a single enterprise agreement covering both the construction workforce and the workshop workforce. Both the employer and the CFMEU exchanged draft agreements but negotiations stalled.

[14] In late 2017 the employer decided to pursue negotiations for two separate agreements; one with its construction workforce (where the CFMEU was the bargaining representative) and one with its workshop workforce.

[15] On 14 February 2018 the employer provided a fresh Notice of Employee Representational Rights to its construction workforce which it proposed be covered by a yet to be agreed Crane Services Construction Enterprise Agreement 2017 (the proposed Agreement).

[16] Bargaining meetings were held concerning the proposed Agreement on 21 February 2018, 7 March 2018, 23 March 2018, 18 April 2018, 30 May 2018 and 28 June 2018. I have received into evidence minutes of these meetings, save that the minutes of the meeting of 28 June 2018 have not yet been confirmed at a subsequent meeting. I treat those minutes as draft.

[17] I was advised at the hearing that the next scheduled bargaining meeting was 12 July 2018.

[18] In each of these bargaining meetings (pertaining to the construction workforce) the CFMMEU was the sole bargaining representative on behalf of employees.

Compliance with formal requirements

[19] Part 3-3 Division 8 of the FW Act imposes a detailed statutory scheme concerning protected action in support of bargaining. That scheme prescribes formal obligations on an Applicant including the form and content of its application (section 437), when an application may be made (section 438) and notice and service of requirements (section 440).

[20] The statutory scheme also imposes formal requirements on the Commission including the content of an order (section 443(3)), the time in dealing with applications (section 441) and the giving of notice of a protected action ballot order where one is made (section 445).

[21] Aside from these formalities, the substantive provisions governing the determination of such applications by the Commission are set out in section 443 of the FW Act. Section 443 does not confer on the Commission a broad discretion. It provides that a protected action ballot order “must” be made if an application is made in proper form and “if 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.”

[22] I am satisfied that the CFMMEU’s application is made under section 437 and that the Applicant has complied with the formalities required under the FW Act.

[23] In particular, I am satisfied that:

•  The CFMMEU is a bargaining representative of employees who will be covered by the proposed Agreement;

•  That bargaining has commenced and there is thus a notification time;

•  That the application specifies the group of employees to be balloted, and the questions to be put;

•  That the application was accompanied by a statutory declaration in the prescribed form as required by the Fair Work Regulations 2009 and Fair Work Commission Rules 2013; and

•  That the CFMMEU did, within 24 hours after making the application, give a copy to the employer and to the ballot agent (the Australian Electoral Commission).

Is the CFMMEU genuinely trying to reach an agreement?

[24] A substantive issue requiring determination is whether the CFMMEU is and has been genuinely trying to reach an agreement with the employer.

[25] The employer submitted seven grounds on which it contested the proposition: 1

1. The Applicant has not sought to negotiate in respect of, or provide the Respondent with a formal log of claims or other correspondence, the matters identified in the Application as being unresolved (wage increases; productivity and travel allowance increase; income protection insurance coverage; and expiry date), at recent negotiation meetings;

2. The Applicant has not sought to negotiate in respect of wage increases or productivity allowances at any of the recent negotiation meetings. The Applicant and Respondent had agreed to enter into negotiations in respect of wage rates and allowances once other terms of the Agreement had been resolved (which would have an effect on wage rates and allowances);

3. At the last negotiation meeting on 28 June 2018, the Respondent resolved to obtain quotations in respect of income protection insurance, with a view to negotiating the inclusion of this in the Agreement. The Applicant did not express any objection to this proposed course of action at the meeting or subsequent to it;

4. The Applicant has not indicated to the Respondent that it is dissatisfied with the Respondent’s response to the matters raised by the Applicant and employees during negotiations for the Agreement, or that it intended to pursue a protected action ballot order. To the contrary, the parties had reached agreement with respect to how they would deal with the outstanding matters;

5. The Respondent is actively considering matters that have been raised by employees and the Applicant in respect of hours of work, redundancy and income protection insurance, and intend to formulate a position in respect of these matters shortly;

6. .he Applicant has made the Application less than 7 days prior to the next scheduled negotiation meeting, without any warning or prior correspondence to the Respondent;

7. The Applicant has not formulated its position in respect of matters raised at recent negotiation meetings, as requested by the Respondent.

[26] I do not consider that these grounds individually or collectively permit a conclusion that the CFMMEU has not been and is not seeking to genuinely reach an agreement.

[27] Ground 1 is an incomplete narrative. The evidence before me is that the CFMMEU did submit a log of claims to the employer on 7 March 2018 and that log remains active in the negotiations. The minutes of meeting of 18 April 2018 itemise CFMMEU claims under consideration, and they were discussed at that time and since. Crane Services point to the fact that the CFMMEU at the meeting on 7 March 2018 advised that it would not negotiate on the employer’s draft agreement and would do so only on its draft log. Whether this is a reasonable or unreasonable posture or bargaining tactic for a union to adopt in negotiations is not to the point; the CFMMEU has been advocating terms it considers appropriate and is exchanging views with the employer on the position it is adopting and on any contrary positions put by the employer.

[28] Ground 2 is no bar to granting the application. That an employer and a union have agreed to defer consideration of certain matters until other matters are discussed or finalised is neither remarkable nor evidence that parties are not genuinely trying to reach agreement on those matters.

[29] Grounds 3, 4 and 5 essentially advance the argument that because negotiations are well advanced and matters raised by the union are being genuinely considered in good faith by the employer then a protected ballot action order should not be made. These grounds misconstrue section 443(1). The Commission does not have discretion to refuse an application simply because negotiations are well advanced or the employer is or has been responsive or is or has been acting in good faith. The statutory scheme requires the Commission to make an order if the Applicant is and has been genuinely trying to reach an agreement. It is the conduct of the Applicant under consideration. The evidence before me is that Crane Services are bargaining in a responsible and responsive manner, and considers an agreement with its employees to be close. That alone however does not provide a basis to lawfully refuse the application.

[30] Ground 6 is no bar to granting the application. As undesirable and unnecessary as the application may be from the employer’s perspective, and whilst the employer may consider it a setback to finalising an agreement, the statutory time frames that would provide a basis for rejection of the application are if there had been no notification time for bargaining (section 437) and if time frames concerning the nominal expiry of an existing enterprise agreement were not met (section 438). Neither apply in this instance. The fact that the CFMMEU has made the application less than 7 days prior to the next scheduled meeting is no lawful basis to refuse the application. Nor is the fact that the employer was not pre-warned. Section 440 requires notice to the employer within 24 hours once an application is made, not prior to the application being made.

[31] Ground 7 claims that the CFMMEU is non-responsive to recent issues raised by the employer.

[32] I accept that section 443(1)(b) requires the Commission to be satisfied that an Applicant union is genuinely trying to reach an agreement in two temporal contexts : the recent past, and the present:

“The temporal elements in s.443(1)(b) require that an applicant is trying to reach agreement at the time of determination (reflecting the evidence at the time of hearing) and that the applicant had been trying to reach an agreement before that time, determined by the application of the approach set out in Swire and JJ Richards. That gives purpose to the two temporal requirements within s.443(1)(b) of the Act.” 2

[33] Whilst the evidence before me does suggest that most of the running in these negotiations is being made by Crane Services, it is not the case that the CFMMEU is or has been entirely non-responsive or non-responsive to such an extent that it could be said to no longer be genuinely trying to reach an agreement. Although the minutes of the meeting of 28 June 2018 are draft, they suggest that the CFMMEU representative expressed certain points of view and made certain demands. The CFMMEU also held meetings of its members on 5 July and 6 July. The CFMMEU indicated its intention to attend the next scheduled meeting on 12 July.

[34] The Respondent employer advanced a further ground of objection contending that the CFMMEU was not genuinely trying to reach an agreement as it was engaging in pattern bargaining contrary to section 412 of the FW Act. It contended that the CFMMEU was acting as bargaining representative in relation to proposed enterprise agreements covering two of the Respondent employer's competitors (Fleurieu Cranes and Samaras) and advancing a common log of claims against all three.

[35] I am satisfied that, as a matter of fact, Mr O'Connor of the CFMMEU advised the Respondent employer at a bargaining meeting on 7 March 2018 that the CFMMEU's claims in respect of the proposed Agreement would be sought “on a pattern basis” in respect of Crane Services, Fleurieu Cranes and Samaras.

[36] However, it was also apparent from the evidence of Mr Fenney that the CFMMEU had not yet been appointed as a bargaining representative of employees at either Fleurieu Cranes and Samaras. In these circumstances pattern bargaining within the meaning of section 412 cannot be said to be occurring (see section 412(1)(a)).

[37] In any event, it has been established by the Commission that a union can, depending on the circumstances, be genuinely trying to reach agreement for the purposes of section 443(1)(b) even where it is pattern bargaining within the meaning of section 412 of the FW Act. In John Holland Pty Ltd v AMWU a Full Bench of the Commission said: 3

“We have come to the conclusion that the expression “genuinely trying to reach agreement” in s.443(1)(b) should be given its ordinary meaning unaffected by the terms of s.412(3). It is clear from our analysis of the statutory provisions that the term “genuinely trying to reach an agreement” is given a particular or specialised meaning for the purpose of the definition of pattern bargaining. That definition is only relevant to the question of whether industrial action is protected under Division 2 of Part 3 of Chapter 3. To the extent that paragraph 1172 of the Explanatory Memorandumsuggests that the factors in s.412(3) should affect the meaning of s.443(1)(b), it is clearly inconsistent with the express words of s.412(5). We have no doubt we should give effect to the express stipulation in s.412(5).

We also find no implication in the terms of s.443(1)(b) that a bargaining representative engaged in pattern bargaining is thereby not genuinely trying to reach an agreement. There is no fundamental reason why a bargaining representative engaged in pattern bargaining would not be genuinely trying to reach an agreement. Furthermore the section contains no reference to pattern bargaining and the application must be granted if the prescribed conditions are fulfilled. The opening words of paragraph 1172 of the Explanatory Memorandum, if they are relevant, leave open the possibility that a bargaining representative engaged in pattern bargaining might also be genuinely trying to reach agreement. While there might be circumstances in which the terms of the pattern agreement sought are so much in conflict with the employer’s operations that the conclusion can be reached that the bargaining representative is not genuinely trying to reach an agreement, that conclusion would be reached without reference to or reliance on the terms of s.412.”

[38] For these reasons, I conclude that the CFMMEU is and has been genuinely trying to reach an agreement with Crane Services since February 2018.

[39] I note that at the hearing there was a disagreement between the parties as to whether bargaining conduct during 2016 and 2017 (when the employer was seeking a single agreement for both its construction workforce and its workshop workforce) is relevant to the current proceedings. Although there is some force in the employer’s submissions that such conduct is not relevant given that a new Notice of Employee Representational Rights was issued in February 2018 for what is a different proposed Agreement applying to a differently defined group of employees, I need not decide that question. Having found that the CFMMEU is and has been genuinely trying to reach an agreement with Crane Services since February 2018 with respect to its construction workforce, the bargaining conduct of parties prior to that date, even if irrelevant, does not preclude the making of an order based on the findings that have been made.

Notification period: Do exceptional circumstances exist?

[40] Crane Services submit, in the alternative, that if the Commission is minded to grant the Application, the period of notice required to be given in respect of industrial action taken pursuant to the protected action ballot order “be increased from 3 to 7 working days to enable the Respondent to ensure it can continue to operate safely by appropriately training and inducting an alternate workforce as and when is required.” 4

[41] Section 443(5) of the FW Act provides as follows:

“(5) 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 414(2)(a) being longer than 3 working days, the protected action ballot order may specify a longer period of up to 7 working days.”

[42] The issue which arises is whether there are exceptional circumstances justifying a longer period, and if so what longer period is so justified.

[43] The approach required to be adopted by the Commission in considering this question was recently summarised by a Full Bench of the Commission in National Tertiary Education Union v Charles Darwin University in the following terms: 5

“The determination of whether the circumstances in a particular case are ‘exceptional’ involves an evaluative judgement. A proper approach to the exercise of the Commission’s discretion under s.443(5) requires first that a member identify or make findings about the particular facts or circumstances in relation to the proposed industrial action which are said inform the evaluative judgement that such factors or circumstances are exceptional circumstances. The phrase “exceptional circumstances” carries its ordinary meaning.

Secondly, there must be a consideration whether the identified exceptional circumstances are circumstances “justifying” a longer notice period. This also involves an evaluative judgement made on the basis of probative material. The use of the verb “justifying” in s.443(5) signifies that the identified exceptional circumstances must show or prove that it is reasonable or necessary or the circumstances warrant or provide good reason to require a longer period of written notice.

Thirdly, if the member is satisfied there are exceptional circumstances justifying a longer period of notice, there must be a consideration of whether to exercise the discretion and, if so, the additional period of notice that should be given in the circumstances (noting the maximum period).”

[44] I adopt that approach.

[45] The evidence of both Mr Sanders and Mr Munckton establish that Crane Services has significant contracts for the delivery of crane services to time critical and publicly funded road infrastructure projects in Adelaide including the Northern Connector, the Torrens to Torrens Project and Gateway South. Whilst the client with respect to these projects is also sourcing services from its competitors, some of the crane products provided by Crane Services are highly specialised and replacement services of those specialised products in sufficient quantity are not readily sourced from others should they not be supplied by Crane Services.

[46] The evidence also before me establishes that Crane Services has long term contracts with SA Power Networks to provide crane services for the supply of electricity to new and existing commercial and residential customers in South Australia.

[47] Given the significance of these contracts to Crane Services, the employer’s evidence is that it would (if faced with industrial action) take steps to seek to secure and train an alternate workforce to maintain its contractual obligations, to endeavour to not compromise the delivery of publicly needed electricity services, to not impede publicly funded infrastructure road construction and to minimise its exposure to damages claims.

[48] It is not “exceptional” in the sense of being unusual that industrial action in support of bargaining claims may compromise the capacity of a business to deliver on its contractual obligations. Each matter must turn on its own facts. I am satisfied that in the circumstances of this matter the nature of the contractual obligations, including the potential compromise to electricity services and time critical road construction, is exceptional in the sense of being an unusual or uncommon consequence of interference with contractual obligations. The potential dislocation to third parties, including the public is real.

[49] In these circumstances, it is reasonable for Crane Services to seek to secure alternative labour to maintain its contractual obligations and service delivery at least insofar as it is able, should industrial action be taken.

[50] The evidence before me is that the operation of specialist cranes supplied by Crane Services is a technical undertaking that carries safety risks, thus requiring skilled and trained staff. This is acknowledged by both parties; however, the employer considers that it takes up to a month to secure and train a labour force, whilst the CFMMEU consider that an operator could be trained in a matter of hours.

[51] Given that an operator cannot be trained unless and until their labour is secured, given that securing labour itself takes time, and given that the employer’s evidence on this point is more direct than that of the CFMMEU organiser, I am satisfied that it would be a time consuming task should the employer proceed to seek alternative and skilled labour to alleviate the consequences of industrial action.

[52] Whilst the extent to which this is required may depend on the nature and extent of the proposed industrial action, the employer is acting reasonably to consider the contingencies it may wish to put in place.

[53] I consider that these considerations “justify” a longer period of notification time of any proposed industrial action than the statutory provision of three days.

[54] Having regard to all of these considerations, including the nature of the services provided by Crane Services, the potential public impact of industrial action and the reasonable desire by the employer to take steps to plan for contingencies and seek alternative and trained labour to operate specialised equipment, I conclude that exceptional circumstances exist, and that they justify a longer notification period than three days.

[55] I also take into account that the nature and intensity of industrial action to be taken is not certain given that a ballot has not yet been held and the questions to be put postulate a variety of different forms of industrial action ranging from limited bans to indefinite bans on all work. I also take into account the evidence of Mr Munckton that some of the crane services it provides are also provided by competitors albeit the extent to which a competitor could or would substitute for the employer’s services is uncertain and likely to have some limits.

[56] In all of the circumstance, I determine the longer period to be five days.

Conclusion

[57] An order in conformity with this decision is issued in conjunction with this decision.

DEPUTY PRESIDENT

Appearances:

N. Candy and C. Fenney, for the CFMMEU

S. Condon, P. Sanders and A. Munckton for the Trustee for the Crane Services Trust T/A Crane Services

Hearing details:

10 July.

Adelaide; by telephone.

2018.

Printed by authority of the Commonwealth Government Printer

<PR608862>

 1   Respondent’s Outline for Objection paragraph 14

 2   Coles v AMIEU[2015] FWCFB 379 at [49]

 3   John Holland Pty Ltd v AMWU[2010] FWAFB 526 at [38] – [39]

 4   Respondent’s Outline for Objection paragraph 15

 5   National Tertiary Education Union v Charles Darwin University [2018] FWCFB 4011 at [23] – [25]