Construction, Forestry, Mining and Energy Union v Brookfield Multiplex Australasia Pty Ltd

[2012] FWA 4579

[2012] FWA 4579

FAIR WORK AUSTRALIA

DECISION

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

Construction, Forestry, Mining and Energy Union
v
Brookfield Multiplex Australasia Pty Ltd
(B2012/136)

SENIOR DEPUTY PRESIDENT RICHARDS BRISBANE, 29 MAY 2012

Summary: whether CFMEU genuinely trying to reach agreement - prior applications - job security - whether change of claims affects requisite finding - JJ Richards Full Court judgment - bargaining representative beholden to consider responses - reciprocal obligations in bargaining - necessary qualitative interactions not in evidence.

[1] On 23 May 2012, the Construction, Forestry, Mining and Energy Union (“CFMEU”) lodged an application under s.437 of the Fair Work Act 2009 (“the Act”) seeking a protected action ballot order by the employees of Brookfield Multiplex Australasia Proprietary Limited (“the Employer”), in relation to a proposed enterprise agreement.

[2] All matters relating to the statutory requirements for the application to succeed were discharged, other than in relation to the requirements of s.443 of the Act, which provides as follows:

443 When FWA must make a protected action ballot order

(1) FWA 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) FWA 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) FWA 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.

(4) If FWA 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 FWA decides, under subsection 444(1), is to be the protected action ballot agent; and

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

(5) If FWA 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.

[3] To date, there have been some five applications seeking a protected action ballot by the CFMEU in respect of the employees of the Employer. To date, none of those applications have been successful. There have also been multiple published decisions (3 April 2012, 28 April 2012, and 16 May 2012) 1  and other decisions are retained on transcript. 2 

[4] In the last of these published decisions, Construction, Forestry, Mining and Energy Union v Brookfield Multiplex Constructions Pty Ltd 3 , I found that the CFMEU could not be genuinely trying to reach agreement for reason that one of its core claims - concerning the pay and conditions to apply to contractors - was not a permitted item for the purposes of s.172(a) of the Act. The core finding in this regard was set out at paragraph 27 of the above-cited decision:

[27] In the factual circumstances before me, the contractors clause sought by the CFMEU does not concern the relationship between the Employer in the Employer's employees will be covered by the agreement. This is because the contractors clause extends to the regulation of the terms and conditions of subcontractors who perform work of a kind that will not be performed by any employee of the Employer covered by the agreement.

[28] Because of its scope, the clause travels beyond any ascertainable nexus with the relationship between the Employer and its employees who will be covered by the agreement.

[...]

[31] In effect, the clause cannot by its terms address employment security concerns of employees employed by the Employer and who are to be covered by the agreement because it regulates the terms and conditions of employment of a set of subcontractors who perform work that is not nor will be performed by any employees of the Employer who will be subject to the agreement. Therefore the direct interests of the Employer's workforce that will be covered by the agreement are not affected by the scope of the clause [sought] by the CFMEU. 4 

[5] Since 16 April 2012, the CFMEU and the Employer appear to have reached an agreement, or at least an in principle agreement, about a number of key provisions in a prospective enterprise agreement. Amongst these was the wages claim, which was based on 2.5% from 1 July 2011; 5% from 1 January 2012: 5% from 1 January 2013: 5% from 1 January 2014 and 5% from 1 January 2015, with the agreement operating for a period of three years. There is also said to have been agreement, in principle, in relation to superannuation (which was to be set at 9% for the employer contribution and 3% for the employee contribution).

[6] Notwithstanding this, on the morning and afternoon of Monday 21 May 2012 the CFMEU directed two e-mails to the Employer changing its claim in relation to various matters about which there had been agreement or in principle agreement. The claims were themselves amended between the two e-mails, the second e-mail representing (apparently) the final amended claims.

[7] The term of the proposed agreement sought by the CFMEU was now five years from the date of approval, a term longer than that permitted by s.186 of the Act. The wage increases have escalated by an additional 2% (to 7%) for the first three wage rises and by 3% (to 8%) for the last two wage rises. The wage rises were to be paid half yearly. Superannuation was to be increased to 18%. A “fare and travel allowance payment of $50” was also included in the claims (and no further detail was provided in the email).

[8] The e-mails stated that the rationale behind the amended claims was to provide the long-term job and financial security sought in the original claims.

[9] The Employer acknowledged receipt of the amended CFMEU claim on the afternoon of 22 May 2012 and indicated that it looked forward to discussing the claims in detail at a meeting scheduled for 23 May 2012.

[10] Mr Kane Pearson, Assistant Divisional Branch Secretary of the CFMEU in relation to the Construction and General Division, Queensland Builders Labourers Divisional Branch gave evidence that he had reminded the Employer on previous enterprise bargaining meetings that if the CFMEU could not pursue the job security provisions it was seeking, that it would be required to amend its claim. The evidence of Mr David Higgon, the Employee Relations Manager for the Employer, was only that the previous contractors clause referred to above was said to be a “deal breaker” (an issue which had been a matter of evidence in the immediately prior proceeding in Construction, Forestry, Mining and Energy Union v Brookfield Multiplex Constructions Pty Ltd 5  and other than that the CFMEU had given no indication of an intention to amend its claims.

[11] When the parties met on 23 May 2012 in relation to the amended claims, they were at odds about the merit of the claim. Mr Pearson stated that the Employer considered the claims extravagant and out of kilter with the industry and was otherwise confused by the claims. Mr Pearson also gave evidence that the CFMEU explained each point and that it was prepared to consider any offers or proposals put by the Employer. According to Mr Pearson the meeting concluded with the Employer undertaking to come back to the CFMEU with a counterclaim, to which the CFMEU undertook to give consideration.

[12] Mr Higgon’s evidence was that Mr Pearson insisted that he provide a response to the new claims during the course of the meeting by insisting that the Employer respond to the claim point by point, and seeking an immediate response. According to Mr Higgon, the Construction and General Divisional Branch of the CFMEU was represented by its Legal Officer, Mr Travis O'Brien. Mr Higgon stated that Mr O'Brien said that it may be necessary to review all of the issues which had previously been agreed between the parties.

[13] Mr Higgon agreed that Mr O'Brien had indicated that he was happy to consider any proposals in the alternative. Mr Higgon claimed that Mr O'Brien's conduct was at variance with that of Mr Pearson (noting that they were representatives of different divisional branches of the CFMEU) and that this had contributed to the general confusion about the claims and the approach to be adopted in responding to them. Mr Higgon’s evidence is that there was little discussion about any of the claims or other matters that arose in the course of the meeting, including how there could be any genuine nexus between the amended claims and the job security of employees (given that the Employer had already proposed a clause dealing with such concerns which was directed at its workforce - a matter addressed in the decision as cited above).

[14] On the same day as the above-described meeting, at 4.25pm in the afternoon, the CFMEU lodged the current application under s.437 of the Act.

CONSIDERATION

It appears to me that the enterprise bargaining claims were changed considerably by the CFMEU’s e-mails of 21 May 2012. The previous claims that had been agreed, or agreed in principle, had come to nothing because of the amended claims. New claims were introduced as well. These included a claim, curiously, for a five year duration for the agreement instead of the previously agreed term of three years (which had provided the basis for wage adjustments in the original claim), an enhanced superannuation claim and a new fares and travel claim.

Mr O'Brien added uncertainty to these amended claims by suggesting all issues may be under review in relation to the agreement as a whole.

Over the course of the bargaining process, bargaining representatives reasonably may amend their claims in light of changing circumstances. Where the bargaining process had progressed in the ordinary manner, there might be no adverse inference to be drawn about the bargaining representative’s motivation or purpose in amending its claim. Such an approach also may be strongly suggestive of a desire to reach agreement as it may facilitate the bargaining process.

The circumstances before me, however, are not of the ordinary kind.

Here, while there had been no developments in the bargaining process other than a finding by Fair Work Australia that a contractors clause was impermissible, the CFMEU notified important changes to its claim in relation to the wages structure, the quantum of the wage increases, the duration of the agreement, superannuation obligations and fares and travel allowances. The claims represented a uniform advance on the claims which have been previously agreed. It was said that these claims emanated from the CFMEU’s membership. How this occurred, by reference to Mr Pearson's evidence as opposed to various bar table exchanges, is dubious given that the amended claims were advised prior to the meeting of the CFMEU members.

That said, there was one meeting about the CFMEU’s new claims, on 23 May 2012.

I only have Mr Higgon’s direct evidence (taken under oath and subject to cross examination) about the interactions over the course of that meeting.

In the course of that meeting, any discussion appears to have been, at most, perfunctory in kind, and the Employer (on the evidence of both Mr Pearson and Mr Higgon) expressed confusion about the basis of the claims and the attendant processes.

Mr Pearson sought an immediate response from the Employer in respect of each of the claims. Notwithstanding this, there was a concession further discussion might follow an agreement that the Employer would be permitted to respond to the new claims.

Before such time as the CFMEU had received any such response to the new claims, the CFMEU filed the current application later that afternoon after the enterprise bargaining meeting of 23 of May 2012.

It appears to me in circumstances where the claims made by a bargaining representative are significantly amended and widened, the bargaining representative which has introduced the enhanced claims is beholden to provide the other bargaining representative(s) an opportunity to respond to the new bargaining agenda. The bargaining representative advancing the amended and widened claims must then give genuine consideration to the counterclaims or response by the other bargaining representatives. In a practical sense, because of the new and amended claims and the short period the Employer had to consider them in the current context, bargaining was only at a very preliminary stage.

Until such time as the CFMEU had received and considered the responses of the Employer to the new and amended claims, it appears to me that it could not be said to be genuinely trying to reach agreement.

The CFMEU has contended that an approach of this kind is inconsistent with the judgement of the Full Court of the Federal Court of Australia in JJ Richards & Sons Pty Ltd v Fair Work Australia. 6 

The CFMEU contended, in effect, that the judgement of Flick J was demonstrative of the level of satisfaction required by Fair Work Australia to reach a finding that an applicant is genuinely trying to reach an agreement with an employer for purposes of s.443(1)(b) of the Act. In this respect, the CFMEU took me to the observations of Flick J to the effect 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 it sought; and
● the employer has foreshadowed - even in the most general terms - its attitude as to the proposed agreement. 7 

I am not satisfied that these observations alone exhaust the discretionary scope vested in Fair Work Australia by s.443 of the Act.

Flick J went on to observe in the same judgment that “[m]ore may be required” [and] “[m]uch may well depend on the factual scenario in which the terms of s.443(1)(b) are to be applied”, and the above “minimum statement” was “sufficient to dispose of the present Application” (in which an employer had refused to bargain for an enterprise agreement in light of its then prevailing contractual arrangements). 8

I note further that Flick J also observed that the addition of the term “genuine” in genuinely trying to reach agreement “serves to emphasise the importance of a person actually trying to solicit agreement.” His Honour continued that:

“[u]ntil a proposed agreement has been disclosed to the prospective parties, and that response elicited, an applicant has not even tried to reach agreement - let alone genuinely tried to reach agreement.” 9 

These circumstances are apropos to those currently before me.

The CFMEU had engaged in one meeting (23 May 2012) with the Employer in relation to its new and amended claims. On the direct evidence of Mr Higgon any discussions were perfunctory in that there appears to be little productive exploration of the relevant issues. The CFMEU was not in receipt of the Employer’s response or counterclaims before such time as it filed its application under s.437 of the Act (which was later in the afternoon after the meeting of 23 May 2012).

Amongst other matters, it appears to me that conduct of this kind, which is redolent of a bargaining representative's obligations under s.228 of the Act, is relevant to a finding in respect of whether the requisite conditions under s.443 of the Act have been met. That is, where a bargaining representative resorts to an application under s.437 of the Act before such time as it has received and considered the other bargaining representative’s response to its claim (as they were at first instance or as they were added to or amended), a question will arise as to whether the applicant bargaining representive is genuinely seeking to solicit an agreement. The answer to that question, of course, will turn on the circumstances of the particular case (as the judgements in JJ Richards & Sons Pty Ltd v Fair Work Australia 1  attest).

I add that a preparedness to consider seriously offers and proposals made by the other side and to take account of arguments, as Senior Deputy President Hancock put it in Re Australian Rail, Tram and Bus Industry Union 11 in 1994, remains a tenet of bargaining in good faith in the Australian context. That tenet today is embodied, or reflected in s.228(c) of the Act and s.228(d) of the Act, and applies to all bargaining representatives in a bargaining process. These provisions read as follows:

228 Bargaining representatives must meet the good faith bargaining requirements

(1) The following are the good faith bargaining requirements that a bargaining representative for a proposed enterprise agreement must meet:

[...]

(c) responding to proposals made by other bargaining representatives for the agreement in a timely manner;

(d) giving genuine consideration to the proposals of other bargaining representatives for the agreement, and giving reasons for the bargaining representative’s responses to those proposals;

[...]

It is reciprocal conduct of this kind that is absent from the CFMEU's approach to the bargaining process with the other bargaining representative (the Employer).

In this circumstantial setting, I am not able to conclude for the purposes of s.443 of the Act that the CFMEU has been genuinely trying to reach agreement with the Employer. The necessary qualitative interactions in relation to the new claims are not in evidence. The discussion about the new claims over the course of the one meeting held in relation to the new claims on 23 May 2012 were truncated (if they existed at all), and the CFMEU had not been in receipt of the Employer's counterclaims or responses to its new and amended claims (let alone having had the opportunity to genuinely consider those counterclaims or responses) before it made its application under s.443 of the Act.

As I observed in my earlier decision regarding the same bargaining representatives in Construction, Forestry, Mining and Energy Union v Brookfield Multiplex Constructions Pty Ltd, 12  the steps taken to date (at that time) to reach agreement by the CFMEU were largely preparatory or preliminary to the process of reaching an agreement as such, or else it is representative of only an embryonic moment along that process. The current circumstances warrant similar characterisation in the context of the new claims.

I add finally that this is not a case in which the Employer bargaining representative has declined to participate in the bargaining process towards a new enterprise agreement. Quite the contrary is the case.

CONCLUSION

In light of the above, the application by the CFMEU for a protected action ballot order under s.437 of the Act is dismissed.

SENIOR DEPUTY PRESIDENT

Appearances:

Mr T. O’Brien, Legal Officer for the CFMEU

Mr D. Williams, Solicitor, Minter Ellison for the Respondent

Hearing details:

2012.

25 May.

Brisbane.

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