Construction, Forestry, Maritime, Mining and Energy Union v Wilson Mining Services Pty Ltd

[2018] FWC 7114

[2018] FWC 7114

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.437—Protected action

Construction, Forestry, Maritime, Mining and Energy Union
v
Wilson Mining Services Pty Ltd
(B2018/1038)

COMMISSIONER SAUNDERS NEWCASTLE, 20 NOVEMBER 2018

Proposed protected action ballot of employees of Wilson Mining Services Pty Ltd – genuinely trying to reach an agreement – ballot ordered.

[1] The Construction, Forestry, Maritime, Mining and Energy Union (CFMMEU) has made an application under s 437 of the Fair Work Act 2009 (Cth) (Act) for the Fair Work Commission (Commission) to make a protected action ballot order (Application) in relation to certain employees of Wilson Mining Services Pty Ltd (Wilson).

Hearing

[2] I heard this matter on 19 November 2018. At the hearing the CFFMEU adduced evidence from Mr Jeremy McWilliams, Vice President of the CFMMEU Northern Mining & NSW Energy District, who was not cross examined. Wilson adduced evidence from Mr Mark Levey, Chief Executive Officer of Wilson. Mr Levey was cross examined by Mr Endacott, who appeared for the CFMMEU.

Statutory framework

[3] The relevant statutory provisions governing this application are set out in s 443 of the Act as follows:

“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.

(4) If the FWC decides that a person other than the Australian Electoral Commission is to be the protected action ballot agent for the protected action ballot, the protected action ballot order must also specify:

(a) the person that the FWC decides, under subsection 444(1), is to be the protected action ballot agent; and

(b) the person (if any) that the FWC decides, under subsection 444(3), is to be the independent advisor for the ballot.

(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.

Note: Under subsection 414(1), before a person engages in employee claim action for a proposed enterprise agreement, a bargaining representative of an employee who will be covered by the agreement must give written notice of the action to the employer of the employee.”

Issues in dispute

[4] Before I can make the protected action ballot orders sought by the CFMMEU, one of the matters about which I must be satisfied is that the CFMMEU has been, and is, genuinely trying to reach an agreement with Wilson. 1

[5] Wilson contends that the CFMMEU has not been, and is not, genuinely trying to reach an agreement with Wilson.

[6] Apart from the contested matter referred to in the previous paragraph, there is no dispute between the parties and I am satisfied on the evidence that the statutory requirements for the protected action ballot order sought by the CFMMEU have been met.

Genuinely trying to reach an agreement

[7] As to the question of whether a bargaining representative has been, and is, genuinely trying to reach an agreement, Flick J said the following in J.J. Richards & Sons Pty Ltd v Fair Work Australia: 2

“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).”

[8] In Total Marine Services Pty Ltd v Maritime Union of Australia 3, 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.”

[9] The Full Bench in Esso Australia Pty Ltd v AMWU & Ors 4made the following observations about paragraphs [31] and [32] of the earlier Full Bench 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).”

[10] The majority of the Full Bench in J.J. Richards & Sons Pty Ltd v Transport Workers’ Union of Australia 5 held that if it is established on the evidence that an applicant for a protected action ballot order had “in truth … some other, extraneous intention, object or purpose or is seeking something other than an enterprise agreement under the FW Act”, then the applicant would not satisfy the requirement of “genuinely trying to reach an [enterprise] agreement”. By way of example, the majority of the Full Bench referred to circumstances where the applicant’s “true motivation is to apply pressure in pursuit of political or environmental goals or simply to punish the employer for some perceived wrong doing.”6 This principle was applied by Senior Deputy President Richards in CFMEU v Brookfield Multiplex Australasia Pty Ltd,7 where his Honour held that the “CFMEU is motivated to manufacture a preferred environment in which to negotiate an agreement, as opposed to genuinely trying to reach agreement in its own right.”

[11] In light of these authorities, I will proceed on the basis 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, including the motivation of the applicant. 8 No one factor is necessarily determinative of the question of whether an applicant has been, and is, genuinely trying to reach an agreement.9 No alternative test or criteria to the words of s 443(1)(b) should be applied.10 In addition, no specific stage must be reached in the negotiations in order for there to be a finding that an applicant has been, and is, genuinely trying to reach an agreement with the employer.11

[12] The expression “has been, and is” in s 443(1)(b) imports temporal considerations. 12 It is necessary for the Commission to reach the requisite level of satisfaction both (a) at the time the application for a protected action ballot order is determined and (b) prior to the time of determination, in the course of the negotiations.13

Outline of relevant facts

[13] The Application relates to an enterprise agreement which the CFMMEU is seeking to negotiate, on behalf of its members, with Wilson (Proposed Agreement) to replace the Wilson Mining Services Pty Ltd – NSW Enterprise Agreement 2015 (Wilson Agreement). The Wilson Agreement covers production and engineering employees who are employed by Wilson and who undertake work in Northern New South Wales (Employees). 14 The nominal expiry date of the Wilson Agreement was 10 July 2018.

[14] On 5 May 2018, Wilson issued a notice of employee representational rights to the Employees who would be covered by the Proposed Agreement. The CFMMEU is the default bargaining representative for each of its members who would be covered by the Proposed Agreement.

[15] In accordance with its usual practice, the CFMMEU has a Lodge structure in place at Wilson. That is, members of the CFMMEU who work for Wilson form a Lodge, known as the Wilson Mining Lodge, and elect officials for the purpose of pursuing their industrial interests.

[16] On 11 May 2018, the first bargaining meeting was held in relation to the Proposed Agreement. Prior to that meeting, Mr McWilliams was informed by members of the Wilson Mining Lodge of the terms and conditions of employment which CFMMEU members working at Wilson desired. At the first bargaining meeting, Mr McWilliams gave Wilson a general explanation of the claims being made by members of the Wilson Mining Lodge. Mr McWilliams also undertook to communicate these claims in writing to Wilson by way of a written Log of Claims.

[17] Mr McWilliams gave uncontested evidence, which I accept, that there was a bargaining meeting on 8 June 2018, but no evidence was given as to what was discussed at that meeting.

[18] Mr McWilliams met with members of the Wilson Mining Lodge on 22, 25 and 26 June 2018. Members of the Wilson Mining Lodge endorsed a written Log of Claims, which was presented to Wilson at the second bargaining meeting on 29 June 2018. Mr McWilliams explained the Log of Claims to Wilson on 29 June 2018 and answered a number of questions from representatives of Wilson about the Log of Claims. Representatives of Wilson indicated that they would provide feedback on the Log of Claims at a subsequent bargaining meeting.

[19] At the bargaining meeting on 29 June 2018, Wilson provided the CFMMEU and the Employees with a document entitled “WMS Considerations NSW EA 2018”, in which it set out the principal elements of its proposal for a new enterprise agreement. Representatives of Wilson explained its proposal during the bargaining meeting on 29 June 2018.

[20] On 14 August 2018, another bargaining meeting took place. There was discussion and negotiation of the respective proposals put by the CFMMEU and Wilson. In particular, Wilson communicated its response to the proposals put by the CFMMEU in its Log of Claims. Wilson also tabled a revised written proposal, which was discussed. Mr Haigh, a former Wilson Mining Lodge official, was invited to, and did, communicate what he understood may be the minimum position the Employees may agree to in bargaining. Mr Haigh set out his views in that regard on the topics of seniority, travel, training assessor’s allowance, wages and minimum bonus payments. A representative of Wilson then responded, indicating that Wilson could not agree to most of those proposals. As a result, Mr McWilliams formed the view that negotiating the Proposed Agreement was “going to be a hard and difficult task”.

[21] On 3 September 2018, a further bargaining meeting took place in relation to the Proposed Agreement. At that meeting a representative of Wilson gave further feedback on the position put on behalf of members of the Wilson Mining Lodge at the previous meeting. Wilson also presented a further document setting out its revised proposal. A representative of Wilson explained its revised proposal and stated that Wilson intended to meet with Employees directly to inform them of its proposal in relation to bargaining for the Proposed Agreement. That meeting with the Employees took place, at which time Wilson provided the Employees with a document entitled “NSW EA Proposal – Increase Summary”.

[22] Mr McWilliams met with members of the Wilson Mining Lodge on 30 October 2018 and 2 November 2018. Members of the Wilson Mining Lodge informed Mr McWilliams that they did not agree with Wilson’s latest bargaining proposal. At that meeting there was also discussion about the avenues that were available “to encourage Wilson to offer a better proposal”. A resolution was passed at that meeting instructing Mr McWilliams to make an application for a protected action ballot order.

[23] There was a further bargaining meeting on 9 November 2018. Mr McWilliams provided Wilson with feedback from members of the Wilson Mining Lodge in relation to Wilson’s latest bargaining proposal. In short, Mr McWilliams explained that Wilson’s latest proposal was not acceptable to members of the Wilson Mining Lodge and those members had indicated they wished for an application to be made for a protected action ballot order. Ms Meg Campbell, a representative of Wilson, initially indicated that she had a revised bargaining position to communicate. Mr McWilliams stated that he was happy to go through the revised position, but if it was in a similar form to the previous proposal and did not offer any additional money, then it would not be acceptable to members of the Wilson Mining Lodge. Ms Campbell ultimately decided not to communicate the revised position at the meeting and instead said she would email the revised proposal to Mr McWilliams later in the day. Later on 9 November 2018, Mr McWilliams received an email from Ms Campbell, informing him that the revised proposal would not be sent until early the next week.

[24] The Application was filed in the Commission on 9 November 2018.

[25] On 13 November 2018, Ms Campbell informed Mr McWilliams that Wilson would not be communicating a further proposal to the CFMMEU until the outcome of the Application was known.

Consideration

[26] Section 443(1)(b) of the Act requires satisfaction that “each applicant has been, and is, genuinely trying to reach an agreement”. In the present case, the only applicant is the CFMMEU.

[27] There is no dispute between the parties and I am satisfied on the evidence that the CFMMEU’s state of mind in connection with the question of whether it is genuinely trying to reach an agreement is to be determined by Mr McWilliams’s state of mind. In particular, Mr McWilliams is an official and an employee of the CFMMEU and his conduct in negotiating the Proposed Agreement with Wilson was conduct within the scope of his actual or apparent authority (s 793(1)&(2) of the Act). Mr McWilliams’s state of mind includes his intention, purpose or motivation (s 793(3) of the Act).

[28] Wilson contends that the CFMMEU is not, and has not been during negotiations, genuinely trying to reach an agreement. In particular, Wilson submits that:

• no “meaningful genuine attempts to negotiate sincerely” have occurred;

• the CFMMEU’s conduct has been “in order to not reach an agreement, but to further the CFMMEU agenda and is trying to increase the influence of the applicant [CFMMEU] in the industrial landscape”;

• the CFMMEU has refused to consider genuine and appropriate proposals from Wilson;

• the CFMMEU is not working in the best interests of its members and is attempting to raise its “profile, push the CFMMEU agenda and cause premature, avoidable disruption”;

• the CFMMEU has put forward an unreasonable log of claims, seeking wage increases which equate to an average of 44.25%. By comparison, Wilson has proposed wage increases which equate to an average of 11.58% plus annual CPI increases. The wage increases sought by the CFMMEU are, so Wilson contends, “unreasonable when compared to competitors in the local NSW underground coal mining market”;

• the CFMMEU has not raised in bargaining meetings “genuine feedback raised by employees during enterprise agreement information sessions”;

• the CFMMEU’s Application is premature; the CFMMEU is “aiming to take industrial action, simply to raise its profile with members and the wider public, not to attempt to get a positive EA outcome”; and

• by failing to undertake genuine negotiations, the CFMMEU is “not trying to genuinely reach agreement and is more interested in causing disruption” to Wilson’s operations.

[29] I do not accept these contentions by Wilson. I am satisfied, on the balance of probabilities, that the CFMMEU is, at the time the Application is determined, and has been, in the course of the bargaining negotiations, genuinely trying to reach an enterprise agreement with Wilson. My reasons for being so satisfied are as follows:

(a) In the period between 11 May 2018 and 9 November 2018, Wilson, the CFMMEU and a number of Employees participated in six bargaining meetings. During those meetings the participants discussed, explained and asked questions in relation to the claims made by the CFMMEU, on behalf of members of the Wilson Mining Lodge, and the various proposals put by Wilson in relation to the Proposed Agreement. After considering such claims, each party also communicated to the other party its attitude to the claims being made;

(b) Notwithstanding the discussions and negotiations between the parties concerning various bargaining proposals, they are still some way apart in bargaining for the Proposed Agreement. One of the major differences between the parties in their negotiations is wage increases. There is an historic element to this issue; Wilson describes the position under the Wilson Agreement as a “pay freeze”, which arose partly as a consequence of economic conditions in the mining industry at the time the Wilson Agreement was made, whereas the CFMMEU contends that Employees suffered a “pay cut” when the Wilson Agreement was made. In either case, the fact that the Employees have not had an increase to their hourly rate of pay since about August 2014, together with a recent general upturn in economic conditions within the mining industry, form part of the rationale for the claims being made on behalf of Employees in the current negotiations. It is also relevant to have regard to the fact that Wilson has been paying the Employees various allowances, such as a weekly attendance allowance, for a period of months. When consideration is given to such allowances, it is apparent that the increases in wages being sought by the CFMMEU on behalf of its members are not as high as otherwise would be the case. I do not consider the current wages proposal being put by the CFMMEU in bargaining to be so unreasonable as to warrant a finding that the CFMMEU is not genuinely trying to reach an agreement with Wilson;

(c) I accept Mr Levey’s evidence that he has attended some but not all of the bargaining meetings and has also attended a number of direct discussions with Employees, including in relation to “standby” rates of pay. I accept Mr McWilliams’s evidence that he is not aware of what was discussed between Mr Levey and various Employees at the workplace, and no particular issues were raised with Mr McWilliams. In addition, I accept Mr McWilliams’s evidence that the position of members of the Wilson Mining Lodge in relation to “standby” rates of pay is set out in the Log of Claims and was endorsed by a majority of members of the Wilson Mining Lodge. The topic of “standby” rates of pay is one of the outstanding matters yet to be resolved in bargaining; and

(d) I accept Mr McWilliams’s evidence that he has been discussing matters relevant to bargaining for the Proposed Agreement with members of the Wilson Mining Lodge, including the various proposals put by Wilson, and Mr McWilliams is acting on the basis of the instructions of the members he represents. The evidence before me does not support a finding that Mr McWilliams, and therefore the CFMMEU, has the intention, objective or purpose of seeking something other than the making of the Proposed Agreement with Wilson.

Conclusion

[30] Having had regard to all the relevant facts and circumstances, I am satisfied that:

(a) an Application has been made by the CFMMEU under s 437 of the Act; and

(b) the CFMMEU is, and has been during bargaining negotiations, genuinely trying to reach an agreement with Wilson as the employer of the Employees who are to be balloted.

[31] Accordingly, I must make a protected action ballot order. 15 An order PR702457 will be issued concurrently with this decision.

COMMISSIONER

Appearances:

K Endacott, Industrial Officer for the CFMMEU

M Campell, HR Consultant for Wilson

Hearing details:

2018.

Newcastle:

19 November.

Printed by authority of the Commonwealth Government Printer

<PR702477>

 1 Sections 443(1)-(2) of the Act

 2 [2012] FCAFC 53

 3   [2009] FWAFB 368

 4   [2015] FWCFB 210

 5   [2010] FWAFB 9963 at [63]

 6   Ibid

 7   [2012] FWA 3374 at [45]

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

 9   Ibid at [55]

 10   Ibid at [35]

 11   Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union v H J Heinz Company Australia Ltd[2009] FWA 322 at [20]

 12   Esso Australia Pty Ltd v AMWU & Ors[2015] FWCFB 210 at [54]

 13   Coles Supermarkets (Australia) Pty Ltd v The Australasian Meat Industry Employees Union[2015] FWCFB 379 at [45]-[51]

 14   Wilson Agreement at clauses 2.0 & 3.3

 15 Section 443(1) of the Act