Construction, Forestry, Mining and Energy Union; and Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union known as the Australian Manufacturing Workers' Union

[2015] FWC 4697

[2015] FWC 4697

FAIR WORK COMMISSION

DECISION

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

Construction, Forestry, Mining and Energy Union; and
Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union known as the Australian Manufacturing Workers' Union
(B2015/465)

COMMISSIONER CLOGHAN PERTH, 17 JULY 2015

Proposed protected action ballot of employees of CB&I Constructors Pty Ltd.

[1] On 20 April 2015, the Construction, Forestry, Mining and Energy Union (CFMEU) and the Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union known as the Australian Manufacturing Workers’ Union (AMWU) made application to the Fair Work Commission (Commission) for a protected action ballot order (PABO) pursuant to s.437 of the Fair Work Act 2009 (FW Act). The CFMEU and AMWU will be referred to collectively as the Unions or the Applicants.

[2] The employees to be balloted are employed by CB&I Constructors Pty Ltd (CB&I or Employer), who will be covered by a proposed enterprise agreement and are eligible to be, and are members, of either the CFMEU or the AMWU.

[3] The proposed enterprise agreement is to replace the CBI Constructors Pty Ltd – CFMEU – Gorgon Project – Barrow Island Greenfields Agreement 2010, and the CBI Constructors Pty Ltd – AMWU – Gorgon Project – Barrow Island Greenfields Agreement 2010, which both nominally expired on 20 January 2015. Collectively these enterprise agreements will be referred to as the Gorgon Project Agreements.

[4] Separately, the Employer on 17 April 2015, made application pursuant to s.240 of the FW Act, for the Commission to deal with a bargaining dispute (B2015/459) (bargaining application). The dispute relates to bargaining for the proposed replacement agreement for the Gorgon Project Agreements.

[5] Both applications were the subject of proceedings in the Commission on 24 April 2015. Following discussions between the parties, and by consent, the parties agreed to the issuance of Procedural Orders (PR566581) on 29 April 2015.

[6] As part of the Procedural Orders, the parties agreed, with the assistance of the Commission, and separately, to work towards finalising the terms of a proposed enterprise agreement to replace the Gorgon Project Agreements.

[7] The PABO application was adjourned to enable the parties to continue bargaining. The Employer agreed, subject to certain provisions in the Procedural Orders being complied with, that it would not raise any issues relating to the provisions in s.443(1) of the FW Act, regarding the PABO application.

[8] Bargaining recommenced.

[9] There is no dispute between the parties that following the Procedural Orders of 29 April 2015, bargaining led to an agreed proposed replacement agreement being put to a ballot of employees. The essence of the replacement agreement was set out in my Recommendation and Procedural Orders dated 21 May 2015 (PR567649).

[10] As part of the Procedural Orders, the parties agreed that the PABO application be further adjourned until the outcome of the ballot was known.

[11] The proposed replacement agreement was not endorsed by a majority of employees in a ballot which closed on 12 June 2015. Approximately 43% voted to approve the proposed replacement agreement.

[12] There is also no dispute between the parties that the key determinant of a successful ballot outcome is the roster.

[13] Following further bargaining between the parties, another Recommendation and Procedural Orders was issued by the Commission on 15 June 2015 (PR568318). The Recommendation and Procedural Orders contained a further proposed agreed replacement enterprise agreement with a differently configured roster.

[14] Again, the parties agreed that the PABO application be adjourned until the outcome of the ballot was known.

[15] The proposed agreed replacement enterprise agreement was not endorsed by a majority of employees in a ballot which closed on 26 June 2015. On this occasion, 42% voted to approve the agreed replacement enterprise agreement.

[16] Put shortly, employees have, by a relatively small majority, not endorsed two negotiated and agreed proposed replacement enterprise agreements.

[17] As a result of the employees not endorsing the two agreed proposed replacement enterprise agreements, the Unions requested that the PABO application be set down for hearing.

[18] At the hearing on 9 July 2015, the CFMEU was represented by Mr K Sneddon, Lawyer. The AMWU was represented by Ms P Lim, Industrial Officer. Evidence on behalf of the CFMEU was given by Mr G Pallot, Assistant State Secretary. Evidence on behalf of the AMWU was given by Mr A Hall, State President.

[19] The Employer was represented by Mr D Fletcher of counsel.

[20] At the conclusion of the hearing, I gave permission for the Employer to submit written submissions and further documentary material to be incorporated into proceedings.

[21] Pursuant to s.441 of the FW Act, I advised the parties that I would provide a decision, and reasons for decision, on the Unions’ PABO application, in the week commencing 13 July 2015.

[22] This is my decision and reasons for decision.

RELEVANT LEGISLATIVE FRAMEWORK

[23] There is no dispute that the provisions of sections 437, 438 and 440 of the FW Act have been met.

[24] The relevant legislative provisions to be satisfied in s.443 of the FW Act, are as follows:

“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.

(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.”

CFMEU/AMWU SUBMISSIONS AND EVIDENCE

[25] Mr Pallot gave evidence that bargaining for a replacement enterprise agreement to the Gorgon Project Agreements have occurred in three stages. Firstly, with the Chamber of Commerce and Industry, Western Australia (Inc) (CCIWA) between January 2014 and November 2014. Secondly, between December 2014 and April 2015, with the Employer directly. Thirdly, with CB&I directly pursuant to the Employer’s bargaining application to the Commission.

[26] Mr Pallot’s uncontested evidence sets out: the initial log of claims of 107 items which have been refined over time; key items of discussions; numerous meetings; communication between the parties; consideration of the Employer’s responses and the overwhelming rejection of the proposed enterprise agreement during the first and second stage discussions with CCIWA and CB&I directly.

[27] During the third stage, Mr Pallot gave evidence of his role in addressing employees directly on Barrow Island. Mr Pallot highlighted the positives of the proposed replacement agreement made under the auspices of the Commission and “made it very clear that this was the best agreement that would be reached around the negotiating table” 1.

[28] Mr Pallot acknowledges that the rejection of both recent proposed replacement enterprise agreements was much closer, and the key “sticking point” to an agreement being approved, is the “roster question” 2.

[29] Finally Mr Pallot states that, notwithstanding the close non-approval of most recent replacement agreements, both Unions have continued to meet with CB&I, and will continue to meet, should a PABO be made by the Commission.

[30] Mr Hall’s evidence is similar to Mr Pallot’s. Both Mr Pallot and Mr Hall are the lead negotiators in bargaining.

[31] Mr Hall concludes his evidence by stating that, notwithstanding further discussions with CB&I since the non-approval of the two most recent proposed agreements, the parties have been unable to agree on a replacement enterprise agreement.

[32] In the circumstances outlined above, both Unions submit that they have been and are genuinely trying to reach agreement with CB&I on a replacement enterprise agreement pursuant to s.443(1)(b) of the FW Act.

CB&I SUBMISSION AND EVIDENCE

[33] CB&I object to the granting of the PABO application due to its assertion that the Applicants have breached the Commission’s Procedural Orders of 15 June 2015 arising from the bargaining application pursuant to s.240 of the FW Act.

[34] Alternatively, should the PABO application be granted, CB&I submit that:

• only the Employer’s employees who are currently members of the Unions and are included on the roll of voters eligible to vote, are authorised to take protected industrial action, should the ballot be supportive of taking industrial action; and further



• should the ballot be supportive of taking industrial action, exceptional circumstances exist to extend the period of notice of employee claim action from three (3) to seven (7) days.

[35] I propose to deal with CB&I’s substantive objection to the PABO application, the list of eligible voters and whether there are exceptional circumstances to extend the period of notice of employee claim action. I consider the issue of who is eligible to take industrial action, should the PABO application be successful, a matter best dealt with in other proceedings, if necessary.

[36] The Employer submits that the Applicants have engaged in conduct in breach of the Commission’s Procedural Orders of 15 June 2015. The Employer refers, in particular, to paragraph [25] of the Procedural Orders which reads as follows:

“Having reached an agreed outcome for the second time, it will be necessary for CB&I, the Unions and Bargaining Representatives to discuss the proposed agreement with the employees. The parties will make arrangements for this to occur. This will be done as a continuation of good faith bargaining which has occurred, and I require that there be no disparagement by either party of what has been agreed to.”

[37] The Employer refers to four (4) instances of conduct by Mr Pallot or Mr Hall which, it asserts, fails to comply with paragraph [25] of the Commission’s Procedural Orders.

[38] The Employer submits that the common requirements for industrial action to be protected industrial action are contained in s.413 of the FW Act. Relevantly, CB&I refer to s.413(5) of the FW Act which provides as follows:

“Compliance with orders

(5) The following persons must not have contravened any orders that apply to them and that relate to, or relate to industrial action relating to, the agreement or a matter that arose during bargaining for the agreement:

(a) if the person organising or engaging in the industrial action is a bargaining representative for the agreement—the bargaining representative;

(b) if the person organising or engaging in the industrial action is an employee who will be covered by the agreement—the employee and the bargaining representative of the employee.”

[39] CB&I submit that the Unions “have breached an order which related to a matter that arose during bargaining for the agreement, namely, CB&I’s section 240 application (B2015/459). Therefore, the PABO Applicants have not satisfied the common requirement set out at section 413(5) for the proposed industrial action to be “protected” industrial action pursuant to the FW Act.” 3

CONSIDERATION

[40] Part 3-3 of the FW Act deals with industrial action. Division 2 of Part 3-3 sets out when industrial action for a proposed enterprise agreement is protected industrial action. Protected industrial action for a replacement enterprise agreement is defined in s.408 of the FW Act. One source of protected industrial action is “employee claim action”.

[41] The meaning of employee claim action is set out in s.409(1) of the FW Act. Paragraph 409(1)(c) includes within the definition of employee claim action, that the action meet the common requirements set out in Subdivision B of Part 3-3 of the FW Act and the additional requirements set out in s.409 of the FW Act. I shall return to Subdivision B later in this Decision.

[42] The additional requirements in s.409 of the FW Act include that employee claim action must be authorised by a PABO (ss.409(2)). Simply put, this means that before employee claim action can be taken, it must be authorised by a protected action ballot.

[43] Obviously, in this application, there is no industrial action, protected or otherwise. The Unions’ application is simply for the relevant employees to consider, by a ballot, whether they wish to endorse the ability to take industrial action. It is also obvious, that if the employees do not endorse the ability to take industrial action in the ballot, any industrial action by employees would be unprotected (save certain circumstances, which are not relevant).

[44] I now return to Subdivision B of Part 3-3 of the FW Act.

[45] Subdivision B contains the common requirements for any industrial action to be protected industrial action. These common requirements are in addition to the requirements in s.409 of the FW Act. The common requirements are relevantly set out below.

“Subdivision B—Common requirements for industrial action to be protected industrial action

Common requirements that apply for industrial action to be protected industrial action

Common requirements

(1) This section sets out the common requirements for industrial action to be protected industrial action for a proposed enterprise agreement.

Type of proposed enterprise agreement

(2) …

Genuinely trying to reach an agreement

(3) The following persons must be genuinely trying to reach an agreement:

(a) if the person organising or engaging in the industrial action is a bargaining representative for the agreement—the bargaining representative;

(b) if the person organising or engaging in the industrial action is an employee who will be covered by the agreement—the bargaining representative of the employee.

Notice requirements

(4) The notice requirements set out in section 414 must have been met in relation to the industrial action.

Compliance with orders

(5) The following persons must not have contravened any orders that apply to them and that relate to, or relate to industrial action relating to, the agreement or a matter that arose during bargaining for the agreement:

(a) if the person organising or engaging in the industrial action is a bargaining representative for the agreement—the bargaining representative;

(b) if the person organising or engaging in the industrial action is an employee who will be covered by the agreement—the employee and the bargaining representative of the employee.

No industrial action before an enterprise agreement etc. passes its nominal expiry date

(6) The person organising or engaging in the industrial action must not contravene section 417 (which deals with industrial action before the nominal expiry date of an enterprise agreement etc.) by organising or engaging in the industrial action.

...”

[46] Subsection 413(5) of the FW Act states that the “following persons must not have contravened any orders that apply to them”. There is no dispute that the Procedural Orders of 15 June 2015 apply to the CFMEU and AMWU. However, paragraph 413(5)(a) of the FW Act specifies that the bargaining representative [CFMEU or AMWU] must be “organising or engaging in the industrial action”.

[47] In my view, subparagraph 413(5)(a) of the FW Act, which CB&I rely upon in opposing the PABO application, is not enlivened until and unless the CFMEU and AMWU “are organising or engaging in industrial action”.

[48] Neither the CFMEU nor the AMWU are “organising or engaging in industrial action”. At this point in time, the Unions are seeking a ballot to determine whether the relevant employees wish to endorse their ability to take particular industrial action in pursuit of a proposed replacement enterprise agreement.

[49] Circumstances would be different if a PABO had been made and employees had endorsed their ability to take protected industrial action. If the employees had endorsed their ability to take industrial action and the CFMEU and AMWU have given written notice to CB&I of employee claim action, I consider it safe to say that the bargaining representatives would be “organising…industrial action”.

[50] At this point in time, the CFMEU and AMWU have not, are not, and cannot organise industrial action until a PABO application has been made, and the relevant employees have endorsed their ability to take protected industrial action. Further, if the employees endorse their ability to take protected industrial action, it is then necessary for a decision to be made to exercise that ability to take industrial action. Until the Unions successfully pass through these “doors”, it cannot be said that they are organising or engaging in “industrial action”.

[51] Put shortly, the circumstances in which industrial action, is not protected industrial action, is when the bargaining representative is “organising or engaging in the industrial action”, and the bargaining representative has contravened orders which apply to them in the course of bargaining. To make ss.413(5) of the FW Act operative, two conditions need to exist in relation to a bargaining representative for the industrial action to be protected. In my view, one condition certainly does not exist – that is, the Unions are not organising or engaging in industrial action - the second, regarding a contravention of “bargaining orders”, is at this stage, no more than an assertion.

[52] In the event I am wrong concerning the statutory provisions of s.413(5) of the FW Act set out above, the subsection requires that the CFMEU and AMWU to have “contravened any orders that apply to them”.

[53] At the time of hearing the PABO application, the Employer put the proposition that the actions of Mr Pallot and Mr Hall “raises 4 instances of conduct by the PABO Applicants which fails to comply with paragraph [25] of the Orders” 4. Put differently, in its submission, the Employer describe Mr Pallot’s and Mr Hall’s actions as, “conduct [that] falls short of compliance”5.

[54] While the Employer may have a belief that the Unions have not complied with the Procedural Orders, it would be wrong to consider such a view as sufficient to meet the statutory requirement of a “contravention” of the Procedural Orders of 15 June 2015. For the Commission to take notice of a contravention or breach of the Procedural Orders, it would be necessary for the assertion to be tested and proved in another jurisdiction.

[55] In Mermaid Marine Vessel Operations Pty Ltd v Maritime Union of Australia[2014] FWCFB 1317 (Mermaid Marine), the Full Bench adopted and referred to the majority in J.J. Richards & Sons Pty Ltd v Transport Workers’ Union of Australia. The relevant passages are as follows:

“[87] In J.J. Richards & Sons Pty Ltd v Transport Workers’ Union of Australia Lawler VP and Bissett C gave consideration to evidentiary issues relevant to the question of genuinely trying to reach agreement within the meaning of s.443(1)(b). Lawler VP and Bissett C said:

…
[63] In circumstances where an applicant for a protected ballot order calls (acceptable) evidence that their intention, object or purpose is to reach an enterprise agreement under the FW Act a finding that the applicant was not “genuinely trying to reach an [enterprise] agreement” within the meaning of s. 443(1)(b) will necessarily involve accepting evidence establishing that the applicant had some other, extraneous purpose in seeking the ballot. Indeed, when there is evidence from an applicant for a protected action ballot order that they have been and are “genuinely trying to reach an [enterprise] agreement” under the FW Act, it is difficult to conceive of circumstances where it could properly be found they were not, unless there is cross-examination or other evidence establishing that the applicant in truth has some other, extraneous intention, object or purpose or is seeking something other than an enterprise agreement under the FW Act…

[88] The observations of the majority in J.J. Richards reproduced above should not be taken as meaning any more than in the usual course of events when an applicant leads relevant evidence on the question whether it is generally trying to reach an agreement, prima facie, that will be sufficient to establish that fact… 

[89] The majority in J.J. Richards also said:

[58] The expression “genuinely trying” in s.443(1)(b) is, clearly enough, concerned with the genuineness of the “trying”, the efforts, to reach the stated goal, namely an enterprise agreement that meets the requirements of the FW Act. It is directed at the authenticity of the applicant’s efforts to reach that goal. The genuineness or authenticity of an applicant’s efforts to reach that goal will turn on its motivation - the intention, object or purpose.”

[56] Those passages are apposite to the circumstances of this application.

[57] The question of whether the Unions “have been and are genuinely trying to reach an agreement with CB&I” is to be determined having regard to all the relevant facts and circumstances of the particular application 6.

[58] At the time of the PABO and bargaining dispute applications, there had been 12 bargaining meetings and two (2) unsuccessful ballots on a replacement agreement for the Gorgon Project Agreements.

[59] At the time of both applications, it was asserted that no meaningful progress had been made and it was extremely unlikely that a proposed replacement agreement could be made.

[60] Adopting Mr Pallot’s characterisation of a “third stage”, the parties have had numerous bargaining meetings where the 107 claims have either been supported, withdrawn, modified, conflated and/or clarified. The parties have considered, and been responsive to, proposals from the other party. The parties have exchanged draft clauses. The parties have protected some current provisions and made concessions in other areas.

[61] In short, there has been a productive process of compromise and co-operation.

[62] There have been assertions, on some occasions, that the Unions were pursuing unlawful or non-permitted claims, however, these assertions have been addressed and clarified.

[63] The result of bargaining has been that the parties have been able to reach agreement on two further proposed replacement agreements which have been put to the relevant workforce; by a small margin, these proposed enterprise agreements have not been approved.

[64] I am satisfied, on the evidence, that the Unions have been and are genuinely trying to reach agreement with CB&I on a replacement enterprise agreement. Accordingly, pursuant to s.443 of the FW Act, I must make a protected action ballot order.

[65] Having determined that a protected action ballot order must be made, it is necessary, in view of the submissions, to consider two further matters.

BALLOT AGENT

[66] The Unions have sought the appointment of RMK Investments Pty Ltd T/A Australian Election Company, as the protected action ballot agent.

[67] Pursuant to s.444(1)(b) of the FW Act, it is necessary for the Commission to be satisfied that:

• the person [RMK Investments Pty Ltd T/A Australian Election Company] is a fit and proper person to conduct the ballot; and



• any other requirements prescribed by the Fair Work Regulations 2009 (FW Regulations) are met.

[68] I have received a Statutory Declaration from Mr Kidd, Principal of the Australian Election Company 7.

[69] The Statutory Declaration informs me that the Australian Election Company was formed in 2006 and Mr Kidd has experience in electoral matters in both the Australian Electoral Commission and in the private sector. Mr Kidd advises the Commission of successful ballots conducted by the Australian Election Company in local government, unions and ballots made pursuant to Commission PABOs. Mr Kidd sets out the capability and capacity of Australian Election Company people and its resources.

[70] I am satisfied that the Australian Election Company is a fit and proper person to conduct the ballot. I am also satisfied that the Australian Election Company is able to meet the requirements set out in Regulation 3.11 of the FW Regulations.

PERIOD OF NOTICE OF INDUSTRIAL ACTION

[71] The Employer, without prejudice to its substantive position that the PABO should not be made, seeks, should a PABO be made, that there are exceptional circumstances to justify the period of notice of industrial action be extended to seven (7) working days pursuant to ss.443(5) of the FW Act.

[72] The Employer’s submission sets out in detail the circumstances which I will refer to in summary form only. They are as follows:

• remote location;



• fly-in-fly-out workforce;



• travel arrangements;



• environmental considerations;



• because Barrow Island is an A class nature reserve, the receipt of goods and materials on a just-in-time basis;



• cyclone consideration;



• contractual and safety considerations;



• consequential impact on other contractors and workforce; and



• the large number of employees (approximately 1,500)

[73] Having considered the approach adopted by Lawler VP in Australian Postal Corporation 8, AMWU v Laing O’Rourke9, the observation of Richards SDP in relation to remoteness in AMWU v Clyde Babcock-Hitachi10 and the “balancing act” nature of the task before the Commission as described by Lawler VP in Australian Postal Corporation11, I am satisfied that there are exceptional circumstances justifying the period of written notice in paragraph 414(2)(b) being extended to seven (7) working days.

CONCLUSION

[74] For the reasons set out above, the Unions’ application for a protected action ballot order is made in the terms of Order PR569510.

COMMISSIONER

Appearances:

K Sneddon on behalf of the CFMEU.

P Lim on behalf of the AMWU.

D Fletcher of counsel on behalf of CB&I.

Hearing details:

2015:

Perth,

9 July.

Final written submissions:

CB&I: 13 July 2015.

 1   Exhibit A1 paragraph 27

 2   Exhibit A1 paragraph 26

 3   Employer’s submission, paragraph 12

 4   Employer’s submission, paragraph 5

 5   Employer’s submission, paragraphs 6 and 26

 6   Esso Australia Pty Ltd v AMWU, CEPU and AWU[2015] FWCFB 210

 7   Exhibit A3

 8   Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Australian Postal Corporation [2007] AIRC 848

 9   AMWU v Laing O’Rourke Australia Construction Pty Limited [2014] FWC 5434.

 10   AMWU v Clyde Babcock-Hitachi (Australia) Pty Limited [2011] FWA 2291.

 11   Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Australian Postal Corporation [2007] AIRC 848

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