Construction, Forestry, Mining and Energy Union v Asurco Contracting Pty Ltd

[2015] FWC 5532

[2015] FWC 5532 [Note: An appeal pursuant to s.604 (C2015/5864) was lodged against this decision - refer to Full Bench decisions dated 9 September 2015 [[2015] FWC 6270] and 4 November 2015 [[2015] FWCFB 7498] for result of appeal.]

FAIR WORK COMMISSION

DECISION

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

Construction, Forestry, Mining and Energy Union
v
Asurco Contracting Pty Ltd
(B2015/761)

SENIOR DEPUTY PRESIDENT O'CALLAGHAN ADELAIDE, 12 AUGUST 2015

Proposed protected action ballot of employees of Asurco Contracting Pty Ltd – genuinely trying to reach agreement – bargaining practices.

[1] On 24 July 2015 the Construction, Forestry, Mining and Energy Union (CFMEU) applied for a protection action ballot order pursuant to s.437 of the Fair Work Act 2009 (the FW Act). That Order was sought in relation to employees of Asurco Contracting Pty Ltd who will be covered by a proposed agreement to replace the Asurco Contracting Pty Ltd CFMEU Enterprise Agreement 2010-2013, and for whom the CFMEU is a bargaining representative. That current Agreement achieved its nominal expiry date on 25 January 2014.

[2] The application was the subject of hearings on 7 and 11 August 2015. In these hearings Ms Dooley appeared for the CFMEU and Mr Richter, of counsel appeared for Asurco pursuant to a grant of permission made under s.596(2)(a), (b) and (c).

[3] Attached to the application was an affidavit 1 made out by Mr Bolton, an organiser with the CFMEU. In this affidavit Mr Bolton advised that negotiations since 19 February 2014 had not achieved an agreed position and that the issues currently in dispute were:

● Wage Rate Increase
● 38 hour week
● Inclement Weather changes
● Work start times
● JLT Income Protection.

[4] The CFMEU position was that it was genuinely trying to reach an agreed position such that the requirements of s.443 of the FW Act meant that the Fair Work Commission (FWC) must make a protected action ballot order.

[5] The Asurco position was that the CFMEU was not genuinely trying to reach agreement in that it had not provided a log of claims and that, following a vote by employees on an agreement proposal prepared by Asurco, it had not provided any further advice about what employees sought. Asurco initially provided two statements which I now understand were both made by Mr Pawelski, a Director of Asurco. Mr Pawelski was not ultimately called to give evidence and Asurco asserted that I should conclude that the requirements necessary to make a protected action ballot order had not been met were apparent solely from the evidence of Mr Bolton. In this respect Asurco argued that the material before me established that the CFMEU application for a protected action ballot order was premature in that it’s actions did not permit a conclusion that it was genuinely trying to reach an agreement.

[6] Before setting out my conclusions relative to this application, I have briefly summarised Mr Bolton’s evidence. At the outset I note that I consider his evidence to be plausible but that this evidence raises issues of credibility and competence.

[7] Mr Bolton advised that he assumed carriage of the negotiations for the Asurco agreement in June 2014. He was unable to confirm if formal claims had actually been made on Asurco prior to that time but assumed that this was the case. He provided handwritten notes of what was characterised as a “Prelim Claim” 2 from his first meeting with Mr Pawelski in June 2014. I have significant doubt about whether this material actually reflects the matters discussed in that meeting and think it more likely that this document was prepared at some later time. It has been extracted from an otherwise blank notebook and is, in a number of respects, somewhat inconsistent with the evidence of subsequent negotiations. For instance, it refers to “JLT/BIRST Amount/method ie: deductions for payment for income protection” which is a matter which I have concluded arose in that form later in the negotiations.

[8] Mr Bolton’s evidence was that he was involved in various negotiations with Mr Pawelski which were directed at achieving an agreed position. I was provided with copies of draft versions of the agreement, email exchanges between the parties, 3 and handwritten notes made by Mr Bolton.4 That material represents evidence of a negotiation process which was founded on an agreed position with respect to wage increases but disagreement over various changes to the existing agreement which were sought by Asurco. The Asurco agreement proposal was put to employees for their endorsement on 1 June 2015. That proposal was rejected by a majority of the employees. Discussions since that time appear to have been limited. It seems that Mr Bolton understands that Asurco has responded to the rejection of the agreement proposal by indicating that the previously agreed wage increase will not apply. Mr Bolton’s evidence does not allow me to conclude that there have been any constructive discussions since that employee vote.

Findings

[9] There is no dispute that the application was made consistent with s.437 of the FW Act. Section 443 relevantly states:

“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.”

[10] The requirement, in s.443(1)(b) that the CFMEU “has been, and is, genuinely trying to reach an agreement” cannot be taken to be synonymous with the requirements for bargaining representatives to meet the good faith bargaining requirements specified in s.228 of the FW Act. Were that to be the case the FW Act would have been framed differently. That said, it may be the case that a failure to bargain in good faith might result in a finding that a union was not genuinely trying to reach an agreement. In Total Marine Services Pty Ltd v Maritime Union of Australia 5a Full Bench addressed the concept of genuinely trying to reach an agreement in the following terms:

“[30] The requirement that an applicant for a ballot order genuinely try to reach an agreement and be continuing to do so at the time an application for a ballot order is made was a requirement in the Workplace Relations Act 1996. The wording of the relevant section has been altered because of the removal of a process of establishing a bargaining period during which protected action may be taken. The concept of genuinely trying to reach an agreement was dealt with in other parts of the Workplace Relations Act 1996, specifically in relation to the grounds for terminating a bargaining period.

[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. 2 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.”

[11] In the circumstances here, and on the basis of the evidence before me, I have concluded that there were negotiations between the parties, that these negotiations fixed on a proposed wage increase, but did not resolve the CFMEU concerns about various changes to the existing agreement which were sought by Asurco. These include changes to working hours arrangements, inclement weather provisions and contributions to income protection insurance costs.

[12] It was, and is open to Asurco to seek bargaining orders pursuant to s.229 of the FW Act. However, the evidence presented by the CFMEU, and the absence of evidence on the part of Asurco, must lead to a conclusion that there were various discussions which led to a proposal being put to, and rejected by, the Asurco employees. The agreement proposal that was put to employees was a detailed and sophisticated proposition which reflected matters which were both agreed with the CFMEU and were not agreed. That situation was quite different to that which was addressed in Total Marine Services in the following terms:

“[36] In this conclusion we believe that the Commissioner fell into error. It is clear on the evidence that the negotiations involved limited face to face meetings and limited articulation of many of the claims. Certain matters were being dealt with in concurrent industry negotiations. Many items were only set out in a list of headings and were not explained or discussed. The wage claim had not been specified. There is nothing to suggest that in taking the steps that it did, the MUA was other than genuine. Nevertheless, in our view it cannot be said in these circumstances that the MUA had genuinely tried to reach an agreement. The steps it had taken were preparatory to developing an agreement but in our view insufficient to satisfy the test its application needed to meet. The error made by the Commissioner involves both a mistake of fact and an error of principle.”

[13] I am not satisfied that the behaviour of the CFMEU since that employee ballot was conducted was such that it requires that I conclude that the CFMEU is no longer genuinely trying to reach an agreement. Again, the manner of the negotiation process may give rise to questions relative to good faith bargaining obligations and issues of competence but falls substantially short of establishing that the CFMEU is not genuinely trying to reach an agreement. If Asurco had compelling evidence in this respect it should have been provided to me.

[14] Consequently, I am satisfied that the requirements of s.443(1) have been met such that the FWC must make a protected action ballot order. An Order (PR569838) which generally reflects the terms sought by the CFMEU will be issued accordingly.

[15] Two final comments are appropriate. On the material before me, it appears that the differences between the parties in this matter are so limited that there is no good reason why an “in principle agreement” cannot be reached very quickly. In my assessment, that would simply require a commitment to quick and competent negotiation so that a series of relatively trivial issues could be put to rest. Consistent with the recommendations I made in the course of the hearing of this matter, I urge both the CFMEU and Asurco to adopt such an approach.

[16] Finally, to the extent that more detailed information confirming the approach followed by the CFMEU in the negotiations may have enabled this agreement to be finalised and may have protected the CFMEU from the concerns expressed by Asurco, this should be self-evident.

Appearances:

L Dooley representing the Construction, Forestry, Mining and Energy Union.

S Richter counsel for Asurco Contracting Pty Ltd.

Hearing details:

2015.

Adelaide:

August 7 and 11.

 1   Exhibit CFMEU1

 2   Exhibits CFMEU6 and CFMEU8

 3   Exhibits CFMEU7 and CFMEU10

 4   Exhibit CFMEU9

 5   [2009] FWAFB 368

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