Construction, Forestry, Mining and Energy Union v Bulga Underground Operations Pty Limited

[2017] FWC 3723

[2017] FWC 3723

FAIR WORK COMMISSION

DECISION

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

Construction, Forestry, Mining and Energy Union
v
Bulga Underground Operations Pty Limited
(B2017/586)

COMMISSIONER SAUNDERS NEWCASTLE, 21 JULY 2017

Proposed protected action ballot of employees of Bulga Underground Operations Pty Limited – genuinely trying to reach an agreement – ballot ordered

[1] The Construction, Forestry, Mining and Energy Union (CFMEU) has made an application under s.437 of the Fair Work Act 2009 (Cth) (Act) for the Fair Work Commission (Commission) to make protected action ballot orders in relation to certain employees of Bulga Underground Operations Pty Limited (Bulga). Bulga is part of the Glencore group of companies.

Hearing

[2] The CFMEU filed its application for protected action ballot orders on 13 July 2017, following the discontinuance of an earlier application because there was an issue as to whether a copy of the earlier application had been given to Bulga within 24 hours of the application having been made. 1

[3] I heard this matter on 20 July 2017.

[4] At the hearing the CFMEU adduced evidence from Mr Jeffrey Drayton, Vice President of the CFMEU Northern Mining & NSW Energy District. Bulga adduced evidence from Mr Charles Spence, Bulga Operations Manager.

Issues in dispute

[5] Before I can make the protected action ballot orders sought by the CFMEU, one of the matters about which I must be satisfied is that the CFMEU has been, and is, genuinely trying to reach an agreement with Bulga. 2

[6] Bulga contends that the CFMEU has not been, and is not, genuinely trying to reach an agreement with Bulga.

[7] 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 orders sought by the CFMEU have been met.

Principles re genuinely trying to reach an agreement

[8] 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: 3

“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).”

[9] In Total Marine Services Pty Ltd v Maritime Union of Australia 4, 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.”

[10] The Full Bench in Esso Australia Pty Ltd v AMWU & Ors 5made 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).”

[11] The majority of the Full Bench in J.J. Richards & Sons Pty Ltd v Transport Workers’ Union of Australia 6 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.”7 This principle was applied by Senior Deputy President Richards in CFMEU v Brookfield Multiplex Australasia Pty Ltd,8 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.”

[12] 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. 9 No one factor is necessarily determinative of the question of whether an applicant has been, and is, genuinely trying to reach an agreement.10 No alternative test or criteria to the words of s.443(1)(b) should be applied.11 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.12

[13] The expression “has been, and is” in paragraph 443(1)(b) imports temporal considerations. 13 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.14

Relevant Facts and Circumstances

[14] Various entities within the Glencore group of companies operate and/or manage, either solely or as part of a joint venture, the following seven coal mines in the Hunter Region:

(a) Bulga underground mine;

(b) Bulga open cut mine;

(c) Mangoola open cut mine;

(d) Ravensworth open cut mine;

(e) Liddell open cut mine;

(f) Glendell open cut mine; and

(g) Integra underground mine.

[15] Each of the seven mines is operated by a separate entity and is a separate employer.

[16] In addition, an entity within the Glencore group of companies owns the Mt Owen open cut mine. That mine is operated by Thiess. The coal handling and preparation plant at the Mt Owen mine is operated by an entity within the Glencore group of companies. Entities within the Glencore group of companies also operate coal handling and preparation plants at the Ravensworth mine and the Liddell mine.

[17] The present application for protected action ballot orders relates to an enterprise agreement which the CFMEU is seeking to negotiate, on behalf of its members, with Bulga (Proposed Agreement) to replace the Bulga Underground Operations Enterprise Agreement 2014 (Bulga Underground EA). The Bulga Underground EA covers production and engineering employees who work in the Bulga underground mine. The nominal expiry date of the Bulga Underground EA is 21 July 2017.

[18] The CFMEU has what is referred to as a “Lodge” at the Bulga underground mine. Members of the CFMEU who work at the Bulga underground mine elect members to fulfill the roles of President, Vice President, and Secretary of the Lodge. The elected representatives of the Lodge represent CFMEU members, in their capacity as CFMEU delegates, in relation to a range of industrial issues, including enterprise bargaining. In addition, district officials from the CFMEU are called in, from time to time, to deal with various industrial issues at the Bulga underground mine. Mr Jeff Drayton is one such official. He is the officer of the CFMEU who has responsibility for representing the industrial interests of members of the CFMEU employed at the Bulga underground mine, including in relation to enterprise bargaining.

[19] One relevant contextual consideration is the fact that the Bulga underground mine is scheduled to cease production in April 2018. As a result, time is of the essence from the employees’ perspective in negotiating the Proposed Agreement. The CFMEU first became aware of the planned closure of the Bulga underground mine about 18 months ago. I accept Mr Drayton’s evidence that he has had a number of discussions with Bulga representatives since he became aware of the planned closure of the Bulga underground mine about the proposed closure of the mine.

[20] A number of the claims made by the CFMEU in bargaining for the Proposed Agreement relate to payments or benefits which the CFMEU seeks be provided to employees if they are dismissed on the ground of redundancy, which may occur if the mine is closed. Other claims relate to the possibility that the Bulga underground mine may remain in operation after April 2018, which the CFMEU believes is possible in light of the recent improvement in market conditions within the coal industry.

[21] On 28 April 2017, Bulga issued a notice of employee representational rights to employees who would be covered by the Proposed Agreement. Bulga has not been given a copy of any instrument appointing a bargaining representative for the Proposed Agreement. Bulga recognises the CFMEU as the default bargaining representative for each of its members who would be covered by the Proposed Agreement.

[22] Mr Spence attempted to arrange bargaining meetings with the CFMEU and site delegates over the weeks following 28 April 2017. Those attempts were not successful, because Mr Drayton and Mr Spence were not available at different times.

[23] The first bargaining meeting was held in relation to the Proposed Agreement on 14 June 2017. At that meeting Bulga was represented by Mr Spence, Mr Craig Findley, Bulga Commercial Manager, and Ms D’Alessandri, Bulga Human Resources Co-ordinator. The CFMEU was represented by Mr Drayton, Mr Brad Hafey, Operator and President of the CFMEU Bulga Lodge 15, Mr Glenn Anderson, Operator and site delegate for the CFMEU, and Mr Kyle Watters, Electrician and site delegate for the CFMEU.

[24] Prior to the first bargaining meeting, representatives of the CFMEU Bulga Lodge sought the views of CFMEU members employed at the Bulga underground mine as to what they wanted included in the Proposed Agreement. Mr Drayton and the representatives of the CFMEU Bulga Lodge used that information to prepare a log of claims. The log of claims was formulated on the footing that the Bulga Underground EA would provide the basis for the Proposed Agreement, subject to the CFMEU pursuing in bargaining the 10 claims set out in the log of claims. Bulga took a similar approach, in that it was content with the terms of the Bulga Underground EA, subject to two amendments which it discussed with the CFMEU during the bargaining negotiations. Those discussions are referred to below.

[25] At the first bargaining meeting on 14 June 2017, which ran from approximately 7:15am until 8:20am:

• Mr Spence indicated that it was Bulga’s position that little change was required from the Bulga Underground EA;



• the CFMEU tabled a log of claims dated 13 June 2017, which included 10 claims relating to increased rates of pay, bonus payments, security of employment, rosters, redundancy payments, training, transfer of employment, personal leave, superannuation, and arbitration;



• Mr Drayton explained each of the claims included in the CFMEU log of claims, including the basis for the claims, and responded to questions asked by Bulga in relation to the claims;



• as to the first claim, Mr Drayton explained that his preference was to negotiate in relation to each of the other nine claims and return to the claim for wage increases at a later time. Mr Spence agreed with that approach;



• in addition to the claims in the log of claims, Mr Hafey informed Bulga that the employees also desired a reduction in the production bonus threshold from 360,000 tonnes back to 240,000 tonnes;



• Mr Spence asked questions when it was not clear to him what was being sought by the CFMEU on behalf of its members in their claims. By the end of the first meeting Mr Spence understood what the employees were seeking in the bargaining negotiations;



• Mr Spence formed the view that what was being claimed by the CFMEU was “a significant increase on the terms of the Current Agreement, without anything being proposed in exchange for those additional terms”;



• the appropriateness of some of the CFMEU’s claims were queried during the meeting, including the payment of a maximum bonus on redundancy when there is no prescribed maximum. The CFMEU explained that the reference to the “maximum bonus amount” in the log of claims was intended to be the “average bonus amount”;



• Mr Drayton said it was his belief that the employees working at the Bulga underground mine were the lowest paid of the Glencore employees in the Northern District and had the highest proportion of their bonus “at risk”;



• Bulga did not present or communicate a list of any changes it wanted to the Bulga Underground EA; and



• after hearing all of the CFMEU’s claims, Mr Spence alleges that he said to Mr Drayton words to the effect: “What do you think we have to negotiate with? There isn’t much in the EA to move around”, and Mr Drayton responded in words to the effect: “You don’t think you can find anything? Where are we going then? We may as well just wait for it to expire.” Mr Drayton does not recall having such a conversation and points to the fact that, in his view, it was Mr Spence’s job to bring items Bulga sought to the negotiating table. On the balance of probabilities I find that Mr Spence and Mr Drayton did not have such a conversation in the first bargaining meeting. At the time this discussion allegedly took place Bulga had not provided any substantive response to the CFMEU’s claims and had not communicated the two changes it sought to the Bulga Enterprise Agreement. Those matters were communicated in the second bargaining meeting. In my view, that sequence of events makes it unlikely that such a conversation took place at this time. Further, the CFMEU’s conduct in participating in three bargaining meetings over the following four weeks suggests that it did not intend to “just wait for it [the Bulga Underground EA] to expire”.

[26] On the same day as the first bargaining meeting, 14 June 2017, the CFMEU held a mass meeting of members who work at various Glencore mines in the Hunter Region. That meeting was held at the Singleton Showground. Video evidence was adduced of part of an address given by Mr Peter Jordan, CFMEU District President, to members at the mass meeting. I have viewed that video footage. At that meeting Mr Jordan expressed frustration at the fact that the CFMEU had not been able to negotiate new enterprise agreements with Glencore in relation to mines in the Hunter Region, notwithstanding that many of the enterprise agreements in operation at those mines had passed their nominal expiry date some years earlier. In that context Mr Jordan referred to a “strategy to bring all these Lodges together, co-ordinated for ongoing industrial action”. Mr Jordan referred to a number of particular Glencore mines in the Hunter Region, including the Bulga underground mine, in respect of which his statements included the following:

“Bulga Underground are not that far away from joining the rest of yous.

I understand some of the Beltana Lodge members are here today, who have come on rostered days off to join in and be part of listening to reports about Glencore’s strategy in bargaining because no doubt they are going to be confronted with it themselves soon and I understand that they are heavily in the negotiations. Their agreement expires on the 21st of July and come 21 July I can assure you that through Jeff Drayton and the Lodge officials there that they will have it primed, ready for those to join any industrial action, if we are continuing to still bargain with Glencore as a District when that time comes.

So that is the outcome of what we are confronted with as a District in trying to renew enterprise agreements on behalf of our members.

As far back as 2012 through to March this year we have been continuing to bargain without success…”

[27] Mr Jordan has not been involved in any of the bargaining negotiations for the Proposed Agreement at the Bulga underground mine and he was not involved in the preparation of the CFMEU’s log of claims for that mine. I accept Mr Drayton’s evidence that he has not provided any detailed information to Mr Jordan about the status of bargaining negotiations with Bulga for the Proposed Agreement.

[28] On about 16 June 2017, the CFMEU published on its website information in relation to the mass meeting held of members on 14 June 2017, including the following statements:

“In the most determined show of strength and the solidarity seen in our NSW Northern Mining and NSW Energy District in recent years, well over 1,000 members of the CFMEU employed at various Glencore open cut mining operations in the Hunter Valley unanimously resolved to continue their fight for fair workplace agreements when they met in Singleton yesterday.

The Glencore Mineworkers return to work today after a 48–hour stoppage. They unanimously endorsed taking further industrial action if necessary in the campaign for a Fair Go in the new EA agreements to replace those that have already expired…”

[29] The second bargaining meeting took place on 28 June 2017. It ran from approximately 7:15am until 8:30am. During the second bargaining meeting:

• Mr Spence, on behalf of Bulga, responded to each of the claims in the CFMEU log of claims, other than claim 1 (wages increase), which the negotiating parties had agreed to put off until a later time:

○ as to claim 2, Bulga agreed there was a need for a flexible bonus system that is fair when conditions at the mine change. Bulga proposed the continuation of the bonus scheme after coal production ceased at the mine on the basis that the bonus would reduce by 2% each week employees remained at the mine after the cessation of production of coal at the mine. With respect to the other bonus claims, Bulga’s response was “no”;

○ as to claim 3, Bulga’s position was “no change to current EA position”;

○ as to claim 4, Bulga’s position was they would give consideration to the claim but it would not be included as a term of the Proposed Agreement and would be something they would deal with outside the enterprise agreement;

○ as to claim 5, Bulga’s position was there would be no change to any redundancy payment calculation;

○ as to claim 6, Bulga’s response was there would be no clause in the Proposed Agreement dealing with any training guarantees;

○ as to claim 7, Bulga’s response was it would not include any term in the Proposed Agreement that required any mandatory transfer of employment; the best they would do would be to look for opportunities;

○ as to claim 8, Bulga’s response was there would be no change;

○ as to claim 9, Bulga’s response was there would be no change;

○ as to claim 10, Bulga’s response was it would not agree to mandatory arbitration;

• Mr Spence accepted that between the first and second bargaining meetings he had time to consider each of the claims made by the CFMEU on behalf of its members. Mr Spence discussed those claims with other managers and formulated their response to each claim prior to the second bargaining meeting;



• Mr Spence explained that Bulga wanted two things changed from the current Bulga Enterprise Agreement: (1) removing ambiguity from the bonus provisions and (2) a one year term. The CFMEU understands the two changes being sought by Bulga to the current Bulga Underground EA, but does not agree with them;



• Mr Hafey said words to the effect: “If you don’t give guarantees and we don’t get a figure today, there’s going to be a backlash.” I accept Mr Drayton’s evidence that those comments were made by Mr Hafey in connection with a discussion at the meeting about a bonus issue that had arisen in connection with a longwall move that was about to take place, which was not part of the claims made by the CFMEU in connection with the negotiation of a Proposed Agreement;



• Mr Spence contends that “the company was only just taking the CFMEU through its preliminary views on the first few matters raised in the CFMEU log of claims and we were indicating to the CFMEU that many matters they had raised would be subject to further consideration by the company”. Mr Drayton denies Mr Spence made any reference to matters being “subject to further consideration by the company” and refers to the actual responses made by Mr Spence, which in many cases were to reject the claim. I prefer Mr Drayton’s evidence in relation to this issue and find that Bulga did not, at the second bargaining meeting, “just take the CFMEU through its preliminary views on the first few matters raised in the CFMEU log of claims”, nor did it indicate “to the CFMEU that many matters they had raised would be subject to further consideration by the company”. It is apparent from Mr Spence’s response to each claim, as set out above, that Bulga had considered and formed a clear response to each claim; those responses were communicated by Mr Spence in the second bargaining meeting; and



• Mr Spence alleges that Mr Drayton said words to the effect that Bulga should “be careful” because the expiry of the Bulga Underground EA was “going to come around quickly”. Mr Drayton denies making such a statement. I prefer Mr Spence’s evidence in relation to this issue because (a) it was true that the nominal expiry date of the Bulga Underground EA was fast approaching, and (b) the fact that the nominal expiry date of the Bulga Underground EA was fast approaching was at the forefront of Mr Drayton’s mind by reason of Mr Drayton’s discussions with employees at the mine in connection with their desire to negotiate a new agreement before the cessation of coaling at the Bulga underground mine in April 2018.

[30] The third bargaining meeting was scheduled to take place on 5 July 2017. Prior to that meeting, Mr Drayton was informed by Mr Hafey that the CFMEU members employed at the Bulga underground mine had unanimously decided that due to the lack of agreement on what was to be included in the final form of the enterprise agreement from the 28 June 2017 meeting that they should have available to them protected action as soon as possible because they wished for an enterprise agreement to be finalised as quickly as possible given the mine was scheduled to cease production in April 2018. Mr Drayton informed the Bulga Lodge representatives that they should would wait and see how the negotiations at the next bargaining meeting on 5 July 2017 progressed. That advice was obviously accepted, because no application for protected action ballot orders was made prior to the 5 July 2017 bargaining meeting. I accept Mr Drayton’s evidence that although he provides advice to the Lodge representatives about matters such as taking protected industrial action, the Lodge ultimately has the authority to decide whether such action will be taken.

[31] The third bargaining meeting took place on 5 July 2017. It ran from approximately 7:20am until 8:30am. At that meeting:

• the participants again discussed the claims in the CFMEU’s log of claims, other than the claim for a wage increase;



• Bulga’s responses to the claims were unchanged from the previous meeting, apart from an agreement by Bulga not to reduce the bonus payable to employees after the cessation of production of coal by 2% a week and instead to maintain average bonus payments. Mr Spence also indicated they were willing to consider (a) changes to the production threshold for bonuses and (b) the CFMEU’s roster claim but it would not form part of the Proposed Agreement;



• Mr Drayton said words to the effect: “There are some issues on our claims that you should easily be able to agree to. What is the problem if you make an employee redundant that you pay them out the roster for the majority of the time they had been working and training you keep on saying how good a workforce you have well when these people finished up they want all their training up to date, caber [sic] and the like - why would you have a problem with that?”;



• Mr Spence’s response was that Bulga would “not put it in an enterprise agreement and will not guarantee it”;



• Mr Hafey again raised that employees were not happy with an ex-gratia payment that had been offered by Bulga in connection with an unrelated matter;



• Mr Drayton said words to the effect that the employees were “pissed off, they want to apply for protected action”. Mr Drayton made that comment in relation to the enterprise bargaining negotiations because he had been told prior to the meeting that the employees felt that way in view of the lack of progress in bargaining negotiations;



• Mr Spence asked Mr Drayton to consider what pay increase the employees would seek if they were not pressing any of the other nine claims in the log of claims. Mr Drayton said he would consider the request; and



• at the end of the meeting a further meeting was scheduled for 12 July 2017.

[32] By the end of the third bargaining meeting Mr Drayton formed the view that Bulga had no intention to approach the negotiation seriously, and had decided to adopt a position of simply saying “no” outright to the vast majority of issues the CFMEU desired changed in the Proposed Agreement. Mr Drayton was also critical of Bulga for not developing a list of items in respect of which it sought agreement from the employees. Mr Drayton formed the view that Bulga was intending to take a hard line to the negotiations and that protected industrial action would be needed to assist in getting Bulga to agree to a number of the CFMEU’s bargaining claims.

[33] On 6 July 2017, Mr Drayton gave instructions for the preparation of an application for protected action ballot orders. On the afternoon of 7 July 2017, the CFMEU filed its first application for protected action ballot orders, which was subsequently withdrawn because of concerns about providing a copy of the application to Bulga within the 24 hour period required by s.440 of the Act.

[34] On 10 July 2017, the CFMEU held another mass meeting of members who work at various Glencore mines in the Hunter Region. That meeting was held at the Singleton Showground. Video evidence was adduced of part of an address given by Mr Jordan, to members at the mass meeting. I have viewed that video footage. At that meeting Mr Jordan referred to a number of issues the CFMEU was pursuing in bargaining with Glencore at mines across the Hunter Region, including the extent to which Glencore uses casual contract labour at its mines in the Hunter Region. Mr Jordan went on to say the CFMEU has the “same problem at other mines owned by Rio, BHP and Yancoal”. Mr Jordan implored the CFMEU members to stay united and “take on” Glencore, Rio and BHP and “return the coal industry to the respect we deserve”.

[35] Mr Drayton also addressed the mass meeting on 10 July 2017. He gave a report in relation to each of the enterprise agreement negotiations he has been involved in with companies in the Glencore group of companies. As to the negotiations for the Proposed Agreement at the Bulga underground mine, Mr Drayton said words to the effect: “Negotiations [are] continuing and typical Glencore like they are at their other operations they are not interested in resolving any issues”.

[36] The CFMEU published on its website the following statement in relation to the mass meeting held of members on 10 July 2017:

“Well over 1000 members attended a mass meeting at Singleton Showground to make a stand against mining giant and union buster Glencore. For decades the likes of the Glencore have been pushing to weaken the union. The push to use casual contract labour drives down wages and conditions and is destructive to local jobs and local economy.

This fight is important not only for today’s miners but for the next generation. Let’s take on Glencore to protect our jobs and our community.”

[37] The fourth bargaining meeting took place on 12 July 2017. That meeting ran from approximately 7:10am until 7:35am. At that meeting:

• the CFMEU tabled, for the first time, the claim for wage increases being sought by the CFMEU, on behalf of its members, namely 4% for the first year and 2% for the second year. The CFMEU put this proposal on the basis that it was still pressing its other nine claims and did not put any wages proposal on the basis that the other nine claims would not be pressed;



• Mr Spence said it was a shame “the Lodge is going to join the anti-Glencore stuff”;



• in response, Mr Hafey said: “That’s bullshit Charlie, if you give us a deal good enough we will take it. I was instructed to apply for the protected action ballot from my members when I met with them and I then instructed Jeff from the Union to make the application”;



• Mr Spence indicated that he needed to go away and crunch the numbers in relation to the CFMEU’s wages claim and he would get back to the CFMEU. I accept Mr Drayton’s evidence that Mr Spence then went to close up his file. This was about five minutes into the meeting. Mr Drayton alleges he then a discussion with Mr Spence in the following terms: Mr Drayton said: “What about the rest of the items we want in the Enterprise Agreement, are we going to go through and discuss those?” Mr Spence responded by saying: “No, I have already told you that we will not accept them and that’s where we are.” Mr Drayton said: “So you have decided we are not getting them and we’re just to drop them are we?” Mr Spence responded by saying: “Yes, I have told you our position.” Although Mr Spence does not recall Mr Drayton saying that they needed to discuss the rest of the claims, I accept on the balance of probabilities that he did so, because (a) they did go on to discuss a number of those claims, and (b) the meeting, according to Mr Spence, lasted about 25 minutes. Mr Spence went on to make clear that Bulga had responded to the CFMEU’s other claims and was not going to alter its position in relation to those claims in respect of which it had responding by saying “no”;



• Mr Drayton said words to the effect: “If the meeting is going to be just giving figures, I could have sent an email, I didn’t need to come down”;



• there is no dispute that at the end of this meeting, unlike the other bargaining meetings, there was no discussion about when the next bargaining meeting would take place. Mr Spence believed that the next bargaining meeting would take place on the following Wednesday (19 July 2017) at 7am. Mr Spence’s belief in this regard is based on the fact that the second and third meetings were on Wednesday mornings one week apart, together with a discussion he says took place at an earlier bargaining meeting to the effect that meetings would be weekly each Wednesday at 7am. However, Mr Spence only gave evidence about that alleged discussion for the first time when he was in the witness box. I do not accept that there was such a discussion, arrangement or agreement to meet each Wednesday at 7am. I accept Mr Drayton’s evidence that he could not commit to bargaining meetings at the same time every week because he has a number of commitments in other bargaining matters and in proceedings before the Commission from time to time. I find that the arrangement between the bargaining representatives was for them to discuss at the end of each bargaining meeting when the next bargaining meeting would take place. There was no such discussion at the end of the fourth bargaining meeting. As a result, and on the basis of the findings I have made, there was no failure by the CFMEU to attend a bargaining meeting at 7am on 19 July 2017; no such meeting was agreed or arranged.

[38] Bulga has not provided the CFMEU or any employees at the mine with its response to the claim for wage increases of 4% in the first year and 2% in the second year.

[39] The present application for protected action ballot orders was filed on 13 July 2017.

[40] Early in the week commencing 17 July 2017, Mr Spence observed a trailer parked near the entrance to the Bulga open cut mine. The trailer has the following posters on it:

• “Stop Glencore’s casual-contract con job! CFMEU members in the Hunter Valley are demanding Glencore create more permanent secure jobs”



• “We pay taxes so should Glencore. CFMEU.”



• “Security for the Hunter Valley. Glencore want more casuals and fewer secure jobs. CFMEU members are fighting back.”

[41] Also relevant to the present application is the fact that, in the period since 22 March 2017, protected action ballot orders have been made by the Commission, on application by the CFMEU and without opposition by any of the employers, in relation to each of the Glencore mines in the Hunter Region (referred to in paragraph [14] above), save for the Integra underground mine, which has only recently been purchased an re-opened by Glencore, and uses contractors for all production and engineering work. No allegation was made in connection with any of those applications that the CFMEU was not, or had not been, genuinely trying to reach an agreement. In addition, protected industrial action has been taken at each of the Glencore mines in the Hunter Region (referred to in paragraph [14] above), apart from Integra, in the period since 2 June 2017. The enterprise agreements at some of those mines passed their nominal expiry date many years ago and the parties have not been able to negotiate new enterprise agreements to replace them.

[42] A different approach has been taken in connection with bargaining negotiations for a new enterprise agreement at the Mt Owen coal handling and preparation plant. The CFMEU and its members negotiated with the relevant entity within the Glencore group of companies for a new enterprise agreement at that site for many years. However, no protected industrial action was taken in connection with bargaining for that enterprise agreement because, in Mr Drayton’s view, “no protected industrial action was needed … to finalise the terms of an enterprise agreement” for the Mt Owen coal handling and preparation plant.

[43] Mr Drayton denies the allegation that “the CFMEU has an industrial campaign against Glencore per se”. Mr Drayton gave the following evidence in his witness statement in connection with this allegation:

“Members of the CFMEU and the respective lodges where enterprise agreements have been unable to be reached, have been accessing lawful protected industrial action to progress finalisation of their enterprise agreement. It is general knowledge that there has been a significant downturn in the coal mining industry for a number of years and it has, towards the latter part of last year, bounced back with significant increases in the price of coal. Prior to this increase the taking of protected industrial action to encourage the finalising of an enterprise agreement has been difficult as there was a world over supply of coal and reduced prices. I can’t recall the exact date but I do recall that Glencore at a number of its mines were having mandatory shut down periods so as to reduce coal production. This reduces the effectiveness of protected industrial action; this is no longer the case due to the present improvements in the coal industry.”

[44] Mr Drayton also gave evidence to the effect that the CFMEU and its members at the Bulga underground mine are genuinely bargaining to reach an enterprise agreement to regulate the terms and conditions of employment between the employees at that mine and Bulga.

Consideration

[45] Four bargaining meetings were held in the period from 14 June 2017 to 12 July 2017. In those meetings the CFMEU put forward its claims in relation to the Proposed Agreement. Those claims were discussed by the participants at the bargaining meetings. Bulga understood the claims being made by the CFMEU and had an opportunity to, and did, consider its response to each claim. Further, Bulga communicated its responses to those claims, other than the wages claim, in the bargaining meetings. Bulga also communicated its bargaining claims to the CFMEU in the bargaining meetings. It follows that during the course of bargaining prior to the making of the present application each of Bulga and the CFMEU has made claims, and understood and responded to the other side’s claims, save that Bulga has not yet responded to the CFMEU’s wages claim.

[46] It is fair to say that Bulga, on the one hand, and its production and engineering employees, on the other hand, are a significant way apart in terms of their negotiations for the Proposed Agreement. There has been some progress on negotiations in connection with a revised bonus regime at the Bulga underground mine, but the parties are, at this stage, otherwise sticking to their original claims.

[47] The context of what is happening at the Bulga underground mine is important. In circumstances where the mine is due to cease producing coal in April 2018 and many of the claims made by the CFMEU in bargaining are relevant to entitlements or benefits employees may have if they are made redundant in connection with the closure of the mine, it is understandable that time is of the essence for employees insofar as negotiating a new enterprise agreement is concerned. If the same amount of time is taken to negotiate the Proposed Agreement as has been taken at a number of other Glencore mines in the Hunter Region, the Bulga underground mine is likely to be closed well before any agreement is reached. I accept that this is part of the reason why the Bulga Lodge has instructed the relevant CFMEU officials to apply for protected action ballot orders prior to the nominal expiry of the Bulga Underground EA. I also accept that part of the reason for taking such action at this time is the perception by the Bulga Lodge, which is understandable in the circumstances, that the parties are “miles apart” in their bargaining negotiations and protected industrial action is required to enhance the prospect of an agreement being reached in a reasonably short period of time. I am satisfied on the evidence that the Bulga Lodge’s eagerness to take protected industrial action is motivated by their desire to negotiate a new enterprise agreement in a reasonably short period of time, and not for some other or ulterior purpose or motivation.

[48] While it is relevant and of some significance that the CFMEU only communicated its wages proposal to Bulga at the fourth bargaining meeting on 12 July 2017 and Bulga has not yet responded to that proposal, I am satisfied that this fact does not, either in isolation or together with the other facts and circumstances, warrant a finding that the CFMEU is not, or has not been, genuinely trying to reach an agreement. The parties agreed to put off the negotiation of pay increases until the other claims had been articulated and discussed. Such an approach is sensible and rational, for the quantum of any wage increases will depend, in part, on the cost of any other claims agreed to by Bulga and the CFMEU. In circumstances where the negotiating parties are a significant way apart on many of the other claims made in the bargaining, Bulga’s response to the CFMEU’s wages claim is unlikely to result in an agreement being reached quickly.

[49] In the bargaining meetings Mr Hafey has raised that employees are not happy in relation to an ongoing dispute between Bulga and its employees about a bonus issue. Although that issue has been discussed in some of the bargaining meetings, it does not form part of any claim being made by the CFMEU for a Proposed Agreement. I am satisfied on the evidence that the CFMEU is not motivated to take industrial action in connection with that issue.

[50] Bulga submits that the CFMEU’s immediate purpose at the time of making its application for protected action ballot orders was to use that fact to pressure Bulga and other employers in the Glencore group of companies to concede to the CFMEU’s broader demands. Further, Bulga contends that industrial action at the Bulga underground mine was a foregone conclusion even on the day of the first bargaining meeting. I do not accept these submissions. It is not surprising that protected industrial action is being taken at a range of Glencore mines across the Hunter Region, having regard to the significant period of time which has passed since the nominal expiry of a number of enterprise agreements at those mines, the inability of the parties to reach agreement during negotiations, and the upturn in the mining industry in recent times. Nor is it surprising that similar claims are being made by the CFMEU and denied by Glencore at a number of those mines, such as the extent to which casual contract labour is used at the mines. I make no comment about the merit or reasonableness of any claim being pursued by the CFMEU or Glencore in any of those bargaining negotiations.

[51] A fair reading of the words spoken by Mr Jordan and Mr Drayton at the mass meetings of CFMEU members at the Singleton Showground, to the extent that there is evidence of such addresses before me in these proceedings, suggests that the CFMEU’s strategy with respect to bargaining with Glencore entities in the Hunter Region is to take protected industrial action at each mine for the purpose of seeking to negotiate an enterprise agreement at each individual enterprise (mine). Such a strategy is permitted by the bargaining regime established by the Act. The fact that the Bulga Lodge is desirous of taking protected industrial action at an earlier stage of bargaining negotiations than has been the case at other Glencore mines in the Hunter Region is explicable by reason of the need, from the employees’ perspective, to conclude such negotiations prior to the cessation of coaling at the mine in April 2018.

[52] I am satisfied that industrial action at the Bulga underground mine was not a foregone conclusion on or about the day of the first bargaining meeting. The CFMEU attended that meeting with a clear idea of the claims it wished to pursue in bargaining; it communicated those claims, explained the basis for them, and answered the questions asked by Mr Spence at that meeting. Understandably, Bulga needed time to consider those claims, which it did. At the second bargaining meeting Bulga communicated its considered responses to the CFMEU’s log of claims, save in relation to wage increases. It was only after those responses were given, most of which were simply to deny the claim, that the representatives of the Bulga Lodge spoke to Mr Drayton about preparing an application for protected action ballot orders.

[53] Bulga contends that the CFMEU’s conduct during the bargaining meetings could not be characterised as a “best endeavours” to reach an agreement. But that is not the test, nor is it necessary to find that negotiations are exhausted or the parties have arrived at a state of impasse. The task with which I am faced under the statute is to consider and determine whether, having regard to all the facts and circumstances, I am satisfied that the CFMEU is, and has been, genuinely trying to reach an agreement with Bulga. It involves a measure of subjectivity or value judgment, but must be based on identified facts which are sufficient to induce the necessary state of mind (satisfaction).

[54] Bulga also contends that the CFMEU has made no attempt to explain to Bulga what productivity benefits would be delivered by the Proposed Agreement, 16 in support of its submission that I could not positively find that the stage has yet been reached where the CFMEU has been and is genuinely trying to reach an agreement. I do not accept this submission. One of the objects of Part 2-4 of the Act is to “provide a simple, flexible and fair framework that enables collective bargaining in good faith, particularly at the enterprise level, for enterprise agreements that deliver productivity benefits”.17 However, that provision does not impose a positive obligation on a participant in a bargaining negotiation to identify or explain the productivity benefits that would be delivered by a claim made by them in connection with negotiations for a new enterprise agreement. In any event, the CFMEU has explained the basis of its claims to Bulga and has answered Mr Spence’s questions in relation to them.

[55] It is apparent from my consideration of the relevant facts and circumstances set out above that the present case is distinguishable from the facts and circumstances considered by Senior Deputy President Richards in CFMEU v Brookfield Multiplex Australasia Pty Ltd. In that case there had only been two bargaining meetings, quite a number of matters had been resolved in those two meetings, but the negotiating parties had not exchanged views or discussed a number of critical issues. In those circumstances, his Honour held that the “CFMEU was in an unseemly rush to initiate protected industrial action against BMAPL, rather than genuinely motivated or trying to reach an agreement with it.” In my view and for the reasons set out above, the facts and circumstances of the present case do not justify such a finding. I am satisfied on the evidence before me that the CFMEU does not have some other, extraneous intention, object or purpose for industrial action; its motivation is to reach agreement with Bulga on the Proposed Agreement.

Conclusion

[56] Having had regard to all the relevant facts and circumstances, as summarised above, I am satisfied that:

(a) an application has been made by the CFMEU under s.437 of the Act; and

(b) the CFMEU has been during bargaining negotiations, and is at the time of my determination of this matter, genuinely trying to reach an agreement with Bulga as the employer of the employees who are to be balloted.

[57] Accordingly, I must make a protected action ballot order. 18

[58] Orders PR594575 will be issued concurrently with this decision.

COMMISSIONER

Appearances:

K, Endacott on behalf of the CFMEU.

R, Farrar, solicitorof Corrs Chambers Westgarth, on behalf of Bulga.

Hearing details:

2017.

Newcastle:

20 July.

 1 Section 440 of the Act

 2 Sections 443(1)-(2) of the Act

 3 [2012] FCAFC 53

 4   [2009] FWAFB 368

 5   [2015] FWCFB 210

 6   [2010] FWAFB 9963 at [63]

 7   Ibid

 8   [2012] FWA 3374 at [45]

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

 10   Ibid at [55]

 11   Ibid at [35]

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

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

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

 15   Sometimes called the “Beltana Lodge”, by reason of a former name for the Bulga underground mine

 16 s.171(a) of the Act

 17   Ibid

 18 Section 443(1) of the Act

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