Construction, Forestry, Mining and Energy Union v CUB Pty Ltd

[2015] FWC 4556

[2015] FWC 4556

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.437—Protected action
s.238—Scope order
s.229—Bargaining order

Construction, Forestry, Mining and Energy Union
v

CUB Pty Ltd

(B2015/685, B2015/690, B2015/697)

DEPUTY PRESIDENT KOVACIC CANBERRA, 6 JULY 2015

Proposed bargaining order against CUB Pty Ltd, proposed scope order regarding a proposed enterprise agreement at CUB Pty Ltd and a proposed protected action ballot of employees of CUB Pty Ltd

[1] On 1 July 2015 the Fair Work Commission (the Commission) announced its decision 1 (the Decision) regarding applications made by the Construction, Forestry, Mining and Energy Union (CFMEU – the Applicant) under sections 229, 238 and 437 of the Fair Work Act 2009 (the Act) for a bargaining order, a scope order and a protected action ballot order (PABO) respectively. The applications relate to negotiations for enterprise agreements at Carlton & United Breweries Pty Ltd (CUB – the Respondent). In the Decision, the Commission stated that its reasons for decision would be issued in the coming days. This decision sets out those reasons for decision.

[2] By way of background, the applications were heard by the Commission on 30 June 2015. Ms Siobhan Kelly of Counsel and Mr Richard Dalton of Counsel appeared with permission for the CFMEU and CUB respectively. Mr David Robson appeared for United Voice (UV). Witness statements were provided by Mr Joe Myles, an organiser with the CFMEU, and Mr Felix Blackler, CUB’s HR Business Partner at the Abbotsford Brewery.

Background

[3] In December 2014 CUB issued separate Notices of Employee Representational Rights (NoERRs) giving notice of its intention to negotiate separate agreements with the CFMEU and UV to replace the Foster’s Australia Limited Abbotsford Brewery and CFMEU (FEDFA) Enterprise Agreement 2012-2015 2(the FEDFA agreement) and the Foster’s Australia Limited Abbotsford Brewery and United Voice Enterprise Agreement 2012-20153 (the UV agreement) both of which passed their nominal expiry dates on 31 March 2015. Negotiations for those replacement agreements commenced in February 2015. On 30 March 2015, CUB lodged an application with the Commission under s.240 of the Act in respect of a bargaining dispute with UV. That application was the subject of a number of conferences before Commissioner Blair.

[4] On 13 May 2015 UV put a proposal to CUB which involved a rollover of the existing UV agreement with no wage increases for the life of the replacement agreement. In return CUB would not pursue the proposed changes it had sought in the negotiations to date. CUB met with the CFMEU shortly after 13 May 2015 to advise of its revised approach. On 20 May 2015 CUB wrote to Commissioner Blair providing a copy of the agreement agreed in principle with UV. On 21 May 2015, Commissioner Blair wrote to CUB raising an issue regarding the scope of the proposed replacement UV agreement. As a result, CUB decided that it would alter the scope of its proposed agreements such that the replacement UV agreement (hereafter referred to as the proposed rollover agreement) covered all operational employees other than employees working in the boiler house. The practical effect of that decision would see employees who were employed as forklift drivers under the CFMEU agreement covered by the proposed rollover agreement.

[5] On 26 May 2015 CUB issued new NoERRs which reflected the revised scope of the replacement agreements which it now sought.

[6] On 28 May 2015, CUB wrote to the CFMEU regarding the negotiations. The letter included the following:

“Our historical approach to coverage is however unsustainable under the Fair Work Act 2009 (FW Act). Under s58(1) of the FW Act, only one enterprise agreement can apply to an employee at a particular time in respect of the same work. Further in approving an enterprise agreement, the Fair Work Commission (FWC) must be satisfied the group covered was fairly chosen. If the agreement does not cover all employees of the employer, FWC must take into account whether the group is geographically, operationally or organisationally distinct.

We have therefore needed to revise our approach to bargaining for the Abbotsford Brewery to ensure compliance with the FW Act.

…

The Company is seeking to meet with the bargaining representatives of our employees to continue negotiations and ensure we are able to give genuine consideration to any of the proposals raised by the bargaining representatives in relation to the proposed agreement.” 4

[7] CUB met with both the CFMEU and UV on 2 June 2015 and subsequently wrote to both unions on 4 June 2015. That letter stated the following, among other things:

“The two appointed bargaining representatives advised that the unions would be meeting separately to discuss issues that had arisen over the application and scope of the Agreement through the different responses provided by the unions in relation to the Company’s offer communicated on 7 May 2015.

During the meeting, CFMEU confirmed its log of claims submitted at the commencement of bargaining remained unchanged. The Company has reviewed the Log of Claim provided by the CFMEU at the commencement of negotiations and continues to consider them having regard to the position that has been put by UV on behalf of the majority of employees to be covered by the proposed Agreement. Should there be additional issues that the CFMEU would seek the Company consider, we would ask that these be provided to the Company by 9 June 2015 to enable the Company to provide its response at our next meeting on 11 June 2015.

Attached for your consideration is a copy of the proposed agreement that has been drafted to reflect the terms of the proposal put forward by United Voice.” 5

[8] CUB again wrote to the CFMEU on 12 June 2015 with the latter’s response on 16 June 2015 stating, inter alia:

“An argument that the FWC cannot approve two agreements applying in the warehouse on the basis of s 186 (3) and s 186 (3A) is capricious and unfounded …

The groups have been ‘fairly chosen’ because there is no illegitimate ground for selection by CUB and employees under the United Voice Agreement and the CFMEU Agreement wish to continue with the current practice and maintain two agreements …” 6

[9] The CFMEU and CUB met on 17 June 2015 with CUB writing to the CFMEU on 19 June 2015 in the following terms:

“We confirm that the CFMEU have also indicated to us its position, which you reiterated to us in your letter dated 16 June and in discussions yesterday. This position is that the CFMEU would prefer to maintain two separate agreements. We understand your reasons for this but, as previously communicated, it is one that the Company rejects. This is for the following reasons:

A. The Fair Work Commission (FWC) cannot approve the proposed agreement unless it is satisfied that the group of employees was fairly chosen. As you point out in your letter, this is required under sections 186(3) and 186(3A) of the FW Act.

B. The Company believes that it is fair that the employees who will be covered by the agreement will be essentially all employees who perform operational work (other than supervisors) at the Abbotsford site. This scope is chosen fairly and is based on a clear operationally and organisationally distinct group.

C. You would have to accept that the Company is not able to put to the FWC for approval two separate agreements covering employees who do the same work in the same work area, with the Company choosing the scope of each agreement by reference to union membership of the relevant employees.

D. The FWC cannot approve such a proposed agreement or agreements – union membership is an “extraneous characteristic” of the type which would preclude such approval (e.g. John Holland Pty Ltd v Construction, Forestry, Mining and Energy Union [2014] FCA 286). We reject the CFMEU’s assertion in your letter that this argument is unfounded, and consider that your interpretation of the law in respect of this point is misconceived.

E. The Company accepts the CFMEU’s point that negotiations commenced for two separate agreements. However this position was based on a historic demarcation which it is no longer appropriate or possible for the Company to accommodate. Commissioner Blair made clear in conference on 25 May 2015 that the Company needed to clarify this issue and, as requested, the Company re-issued the Notices of Representational Rights, for what is now the proposed agreement, to all employees who would be covered by it. This is required by section 173(1) of the FW Act.

F. Unlike previous legislation the FW Act requires that an enterprise agreement is made between the employer and the employees (section 172), with the requisite requirement that the employees are fairly chosen by the employer. It is no longer possible for the Company to make separate agreements directly with both the CFMEU and the UV, as was provided for under the Workplace Relations Act 1996 (section 170LJ).

G. Accordingly the Company does not agree to the CFMEU’s request to negotiate with it for a separate agreement based on the scope of the current Foster’s Australia Limited Abbotsford Brewery and CFMEU (FEDFA) Enterprise Agreement 2012-2015. To agree to this would mean that negotiations would be taking place for two agreements, neither of which the FWC would be able to approve because it would not be able to satisfy itself that either group of employees was fairly chosen. It could also result in the unacceptable position that employees doing the same work in the same area receive different rates of pay, dependent on which union they are a member of.

It is for these reasons that the Company rejects the CFMEU’s position that it would like to revert to the previous position of negotiating two separate agreements, and rejects the CFMEU’s log of claims. In the absence of any additional information or views the Company considers that negotiations with the CFMEU have therefore reached an impasse.

It is also for these reasons that the Company rejects the CFMEU’s assertion that its conduct in seeking to bargain with all operational employees for one agreement is capricious.

… the Company intends to suggest to Commissioner Blair on Monday that an appropriate way forward is to commence the process for putting the agreement to a vote.” 7

[10] On 22 June 2015 a further conference of the parties was convened by Commissioner Blair. Also on that day CUB wrote to both the CFMEU and UV advising that the proposed rollover agreement would be voted upon on 2 July 2015. The CFMEU wrote to CUB on 23 June 2015 requesting that the parties meet to recommence negotiations for a replacement for the FEDFA agreement. CUB responded the following day stating “… On reviewing the information provided in your email, the CFMEU has not raised any additional information and therefor [sic] as stated in the above letter, the Company’s position remains that negotiations have reached an impasse and the proposed agreement will now be put to employees to vote on.” 8As noted above, the CFMEU’s applications were lodged with the Commission over the period 25 to 29 June 2015.

[11] For the purposes of this decision I will deal with each of the applications separately. However before doing so I will briefly outline UV’s submissions and key aspects of Mr Myles’ and Mr Blackler’s evidence.

UV’s Submissions

[12] UV submitted that it wished the vote on the proposed rollover agreement scheduled for 2 July 2015 to proceed, with that view reaffirmed by UV in discussions with its members at CUB on 29 June 2015.

Mr Myles’ Evidence

[13] Mr Myles’ witness statement 9 largely set out the background to the bargaining at CUB, including the correspondence exchanged between the CFMEU and CUB regarding the proposed rollover agreement which is to be voted on by employees on 2 July 2015.

[14] At the hearing Mr Myles attested that the CFMEU’s members are disgusted by the proposed rollover agreement and that the CFMEU’s position is that CUB should continue to negotiate an agreement with it which covers both forklift drivers previously covered by the FEDFA agreement and boiler house employees. Mr Myles further stated that the proposed rollover agreement had more to do with factors regarding CUB’s previously proposed manning changes in production areas, adding that those changes had nothing to do with forklift drivers working in the logistics area under the FEDFA agreement. Mr Myles also attested that the forklift driving duties performed under the UV agreement were different to those performed by CFMEU members under the FEDFA agreement.

Mr Blackler’s Evidence

[15] Mr Blackler in his witness statement 10 set out, inter alia, the historical context and scope of the current agreements operating at CUB and an outline of the negotiations to date for replacement agreements. With regard to the CFMEU’s proposed scope, Mr Blackler attested that it would be messy and unfair and would raise uncertainty as to who within the logistics area is primarily performing forklift duties such that they may be characterised as a forklift driver and therefore within the CFMEU’s proposed carve out. This Mr Blackler contended had the potential to lead to disputes. As to the CFMEU’s PABO application, Mr Blackler attested that due to the nature of beer making and the various forms of proposed protected industrial action by CFMEU members, CUB would be unable to adopt any reasonable mitigation measures on less than seven days’ notice of the industrial action.

[16] Key aspects of Mr Blackler’s evidence at the hearing were that:

• he had informed the CFMEU on either 14 or 15 May 2015 of CUB’s rollover agreement proposal, with the CFMEU indicating that it would need to consider its position on the proposal;



• the CFMEU subsequently did convey its view to CUB;



• as at the time of the abovementioned meeting, CUB was still bargaining separately with both the CFMEU and UV, with that continuing to be the case until the Commission raised its concerns regarding the scope of the proposed UV replacement agreement;



• the retention of manning levels in the production area in the proposed rollover agreement is of no benefit to forklift driver classifications currently employed under the FEDFA agreement;



• prior to the proposed rollover agreement being put to the CFMEU, CUB had never put a proposal relating to manning to the CFMEU; and



• there were about 190 employees covered by enterprise agreements at the Abbotsford Brewery of which over 100 worked in the two packaging areas with about 40 of those employees being CFMEU members who worked in the packaging hall.

The Scope Order Application

Relevant Statutory Framework

[17] Section 238 of the Act deals with scope orders and provides as follows:

“238 Scope orders

Bargaining representatives may apply for scope orders
(1) A bargaining representative for a proposed single-enterprise agreement may apply to the FWC for an order (a scope order) under this section if:

(a) the bargaining representative has concerns that bargaining for the agreement is not proceeding efficiently or fairly; and
(b) the reason for this is that the bargaining representative considers that the agreement will not cover appropriate employees, or will cover employees that it is not appropriate for the agreement to cover.

No scope order if a single interest employer authorisation is in operation
(2) Despite subsection (1), the bargaining representative must not apply for the scope order if a single interest employer authorisation is in operation in relation to the agreement.

Bargaining representative to give notice of concerns
(3) The bargaining representative may only apply for the scope order if the bargaining representative:

(a) has taken all reasonable steps to give a written notice setting out the concerns referred to in subsection (1) to the relevant bargaining representatives for the agreement; and
(b) has given the relevant bargaining representatives a reasonable time within which to respond to those concerns; and
(c) considers that the relevant bargaining representatives have not responded appropriately.

When the FWC may make scope order
(4) The FWC may make the scope order if the FWC is satisfied:

(a) that the bargaining representative who made the application has met, or is meeting, the good faith bargaining requirements; and
(b) that making the order will promote the fair and efficient conduct of bargaining; and
(c) that the group of employees who will be covered by the agreement proposed to be specified in the scope order was fairly chosen; and
(d) it is reasonable in all the circumstances to make the order.

Matters which the FWC must take into account
(5) If the agreement proposed to be specified in the scope order will not cover all of the employees of the employer or employers covered by the agreement, the FWC must, in deciding for the purposes of paragraph (4)(c) whether the group of employees who will be covered was fairly chosen, take into account whether the group is geographically, operationally or organisationally distinct.

Scope order must specify employer and employees to be covered
(6) The scope order must specify, in relation to a proposed single-enterprise agreement:

(a) the employer, or employers, that will be covered by the agreement; and
(b) the employees who will be covered by the agreement.

Scope order must be in accordance with this section etc.
(7) The scope order:

(a) must be in accordance with this section; and
(b) may relate to more than one proposed single-enterprise agreement.

Orders etc. that the FWC may make
(8) If the FWC makes the scope order, the FWC may also:

(a) amend any existing bargaining orders; and
(b) make or vary such other orders (such as protected action ballot orders), determinations or other instruments made by the FWC, or take such other actions, as the FWC considers appropriate.”

The CFMEU’s Submissions

[18] The CFMEU submitted that the Commission should have regard to the history of bargaining at CUB, in particular that the employees it represents in the logistics area have had a separate agreement since 2003. Further, the CFMEU submitted that the initial NoERRs given to employees by CUB proposed two separate agreements and that the s.240 application brought by CUB was in respect of its negotiations with UV only. The CFMEU contended that the UV proposal for a rollover agreement arose out of those proceedings and reiterated that it opposed the proposal.

CUB’s Submissions

[19] CUB opposed the CFMEU’s application for a scope order on two grounds – first, that the CFMEU had not complied with its obligations under the Act and second that the application lacks merit.

[20] With regard to the first ground, CUB submitted that the CFMEU does not have a valid scope application before the Commission because it has not complied with s.238(3)(a) of the Act. More particularly, CUB submitted that the CFMEU could only lodge its application if it has first notified the relevant bargaining representatives of its concerns and given them a reasonable opportunity to respond to those concerns, adding that the CFMEU did this in respect of CUB but not UV. CUB, relying on the decision in Australasian Meat Industry Employees Union v Woolworths Ltd (AMIEU) 11, characterised this as a fatal deficiency in the application.

[21] As to the second ground, CUB submitted that the CFMEU’s proposed scope is not fairly chosen and that the proposed scope order will not produce a fairer or more efficient bargaining process as per United Firefighters’ Union of Australia v Metropolitan Fire & Emergency Services Board 12.

Consideration

[22] Section 238 of the Act sets out the circumstances in which a bargaining representative may apply for a scope order. In this case it is not disputed that the CFMEU is a bargaining representative. However, as noted above, CUB contends that the CFMEU has not complied with the requirements set out in ss.238(3)(a)-(c) of the Act. This is a threshold issue which needs to be determined before the Commission can consider the merits of the application.

[23] A key question which arises in that regard is whether or not UV should be considered a ‘relevant bargaining representative’ for the purposes of s.238(3) of the Act. From the material before the Commission it is clear that the issue of scope is in dispute between the CFMEU and CUB. The CFMEU’s stated preference is to retain two separate agreements, both of which would cover employees performing forklift driver duties. CUB’s preferred approach, on the other hand, is reflected in the proposed rollover agreement and would see all employees who perform forklift driver duties covered by a single agreement, i.e. the rollover agreement. That approach is supported by UV. From this, it is apparent that the CFMEU’s preferred approach has implications for finalisation of the proposed rollover agreement which UV supports. This supports a finding that in this case UV is a ‘relevant bargaining representative’ for the purposes of s.238(3) of the Act. Accordingly, the Commission must satisfy itself that the CFMEU has complied with its obligations under s.238(3) of the Act.

[24] Section 238(3)(a) of the Act requires as a prerequisite that an applicant for a scope order “has taken all reasonable steps to order give a written notice setting out the concerns … to the relevant bargaining representatives for the agreement”. In this case, this requires the CFMEU to have given written notice of its concerns to both CUB and UV. While correspondence between the CFMEU and CUB in which the CFMEU set out its concerns was put before the Commission, no such correspondence between the CFMEU and UV was put before the Commission. Further, an examination of the correspondence before the Commission between the CFMEU and CUB indicates that the correspondence was not copied to UV. While I note that the CFMEU and UV were to meet at Trades Hall Council on 17 June 2015 to discuss the bargaining at CUB, no submissions or evidence was put before the Commission regarding those discussions and their outcome. Nevertheless, those discussions do not appear to have involved the CFMEU giving written notice to UV setting out its concerns as required by s.238(3) of the Act.

[25] As noted above, CUB relied on the decision in AMIEU in support of its submission that the CFMEU had not complied with its obligations under the Act. In AMIEU Senior Deputy President Richards dismissed an application by the AMIEU on the basis that it had not complied with the requirements set out in s.238(3) of the Act. That decision was upheld on appeal by a Full Bench of Fair Work Australia 13.

[26] Consistent with the decision in AMIEU, as the CFMEU has not met the requirements in s.238(3) of the Act, its application for a scope order must be dismissed. In those circumstances, there is no need for the Commission to deal with the merits of the CFMEU’s application.

[27] Finally, I would note that on the afternoon of 30 June 2015, the CFMEU sent an email to UV setting of its concerns regarding the proposed rollover agreement. The Commission was copied into that email. Given that the email was sent after the CFMEU’s applications had been heard and a decision reserved by the Commission, I have had no regard to this correspondence in deciding the CFMEU’s scope order application.

The Bargaining Order Application

Relevant Statutory Framework

[28] Part 2-4 of the Act is concerned with enterprise agreements. Division 8 of Part 2-4 of the Act deals with the Commission’s general role in facilitating bargaining, including bargaining orders. The relevant provisions are set out below.

“229 Applications for bargaining orders

Persons who may apply for a bargaining order
(1) A bargaining representative for a proposed enterprise agreement may apply to the FWC for an order (a bargaining order) under section 230 in relation to the agreement.

Multi-enterprise agreements
(2) An application for a bargaining order must not be made in relation to a proposed multi-enterprise agreement unless a low-paid authorisation is in operation in relation to the agreement.

Timing of applications
(3) The application may only be made at whichever of the following times applies:

(a) if one or more enterprise agreements apply to an employee, or employees, who will be covered by the proposed enterprise agreement:

(i) not more than 90 days before the nominal expiry date of the enterprise agreement, or the latest nominal expiry date of those enterprise agreements (as the case may be); or
(ii) after an employer that will be covered by the proposed enterprise agreement has requested under subsection 181(1) that employees approve the agreement, but before the agreement is so approved;

(b) otherwise—at any time.

Note: An employer cannot request employees to approve the agreement under subsection 181(1) until 21 days after the last notice of employee representational rights is given.

Prerequisites for making an application
(4) The bargaining representative may only apply for the bargaining order if the bargaining representative:

(a) has concerns that:

(i) one or more of the bargaining representatives for the agreement have not met, or are not meeting, the good faith bargaining requirements; or
(iii) the bargaining process is not proceeding efficiently or fairly because there are multiple bargaining representatives for the agreement; and

(b) has given a written notice setting out those concerns to the relevant bargaining representatives; and
(c) has given the relevant bargaining representatives a reasonable time within which to respond to those concerns; and
(d) considers that the relevant bargaining representatives have not responded appropriately to those concerns.

Non-compliance with notice requirements may be permitted
(5) The FWC may consider the application even if it does not comply with paragraph (4)(b) or (c) if the FWC is satisfied that it is appropriate in all the circumstances to do so.

230 When the FWC may make a bargaining order

Bargaining orders
(1) The FWC may make a bargaining order under this section in relation to a proposed enterprise agreement if:

(a) an application for the order has been made; and
(b) the requirements of this section are met in relation to the agreement; and
(c) the FWC is satisfied that it is reasonable in all the circumstances to make the order.

Agreement to bargain or certain instruments in operation
(2) The FWC must be satisfied in all cases that one of the following applies:

(a) the employer or employers have agreed to bargain, or have initiated bargaining, for the agreement;
(b) a majority support determination in relation to the agreement is in operation;
(c) a scope order in relation to the agreement is in operation;
(d) all of the employers are specified in a low-paid authorisation that is in operation in relation to the agreement.

Good faith bargaining requirements not met
(3) The FWC must in all cases be satisfied:

(a) that:

(i) one or more of the relevant bargaining representatives for the agreement have not met, or are not meeting, the good faith bargaining requirements; or
(ii) the bargaining process is not proceeding efficiently or fairly because there are multiple bargaining representatives for the agreement; and

(b) that the applicant has complied with the requirements of subsection 229(4) (which deals with notifying relevant bargaining representatives of concerns), unless subsection 229(5) permitted the applicant to make the application without complying with those requirements.

Bargaining order must be in accordance with section 231
(4) The bargaining order must be in accordance with section 231 (which deals with what a bargaining order must specify).”

The CFMEU’s Submissions

[29] The CFMEU submitted that it wished to see bargaining return to a position to proceed, adding that CUB has refused to shift its position on the issue of scope. The CFMEU further submitted that CUB’s position on scope represented a significant departure from the way bargaining had occurred to date and that it wants to hear from CUB as to why its proposed structure is appropriate.

CUB’s Submissions

[30] CUB characterised its submissions on the proposed bargaining order as similar to those in respect of the scope order sought by the CFMEU. In particular, CUB submitted that the requirements of ss.229(4)(a)-(d) of the Act had not been satisfied. With regard to the discretion available to the Commission under s.229(5) of the Act, CUB submitted that it was not appropriate for the Commission to exercise the discretion in this case as there was no basis to assume that UV would not have a position regarding that matter. As to the meeting between the CFMEU and UV which was scheduled to occur on 17 June 2015 at Trades Hall Council, CUB submitted that the CFMEU had not informed it as to whether the meeting had occurred and if so what the outcome of the meeting was.

[31] CUB also contended that there was an inherent lack of merit in the application. To that end it submitted that no capricious bargaining conduct had been demonstrated on the material before the Commission and that to the contrary the correspondence shows that CUB has given bargaining representatives ample opportunity to raise issues regarding scope. In particular, CUB referred to the CFMEU’s correspondence of 16 June 2015 and its response of 19 June which explained its position regarding the issue of scope. Further, CUB did not move to put the proposed rollover agreement to a vote until 23 June 2015, which was the day after a conference had been convened by Commissioner Blair.

[32] In summary, CUB submitted that there was overlap in respect of the coverage of forklift drivers and that there was no clear distinctiveness achieved by the CFMEU’s proposed scope. This, CUB contended, does not support one of the prerequisites for making a bargaining order application and therefore the application should be dismissed.

Consideration

[33] Section 229(4) of the Act is similar to s.238(3) of the Act in that it requires as a prerequisite to an application for a bargaining order that a bargaining representative gives written notice to relevant bargaining representatives that it has a concern that “one or more of the bargaining representatives for the agreement have not met, or are not meeting, the good faith bargaining requirements”.

[34] The requirements in s.229(4) were considered in Australian Municipal, Administrative, Clerical and Services Union v Linfox Armaguard Pty Ltd 14 where a Full Bench of the Commission observed:

“[26] Additionally, on appeal it became apparent that the requirements of s.229(4) had not been complied with. The ASU relied on its letter to Armaguard dated 4 July 2012 as complying with that section. It our opinion it does not. Nowhere in that letter does it identify any of the good faith bargaining requirements in s.228 about which it has concerns and asserts Armaguard had not met. It follows that nowhere in that letter does it set out any relevant concerns nor give Armaguard a reasonable time to respond to those concerns. In our opinion the letter the ASU sent does not adequately comply with the requirements of s.229(4) and accordingly a pre-requisite for an order to issue had not been established. In the absence of relief being granted under s.229(5) of the Act no bargaining order could have been made.” (Underlining added)

[35] An examination of the correspondence sent by the CFMEU to CUB shows that nowhere in that correspondence does the CFMEU set out its concerns as to which of the good faith bargaining requirements in s.228 it has concerns about. While the CFMEU’s correspondence to CUB on 16 June 2015 describes CUB’s approach as “capricious” this is not directly referenced to the good faith bargaining requirements in s.228 of the Act, despite the terms of s.228(1)(e).

[36] This supports a finding that the CFMEU has not met the requirements of s.229(4) of the Act.

[37] As noted in CUB’s submissions regarding this application, s.229(5) of the Act provides the Commission with a discretion to consider an application for a bargaining order even if it does not comply with ss.229(4)(b) or (c) if the Commission is satisfied that it is appropriate in all the circumstances to do so. However, in the current circumstances I do not consider it appropriate to exercise that discretion. While it is clear that scope is a matter in dispute between the parties, the CFMEU’s main contention was that CUB has refused to shift its position on the issue of scope. This of itself does not establish that CUB is not meeting the good faith bargaining requirements in s.228 of the Act, particularly given s.228(2)(a) of the Act which provides that the good faith bargaining requirements do not require “a bargaining representative to make concessions during bargaining for the agreement”. Further, the material before the Commission indicates that CUB has been willing to engage with the CFMEU to explain its position on the issue of scope. In circumstances where neither party was willing to alter its position on scope, CUB’s characterisation of the negotiations having reached an “impasse” is not unreasonable. In those circumstances, drawing on the Full Bench decision in Construction, Forestry, Mining and Energy Union v Tahmoor Coal Pty Ltd 15, I cannot be satisfied that CUB was acting capriciously or unfairly. This does not support an exercise of the discretion available to the Commission under s.229(5) of the Act.

The PABO Application

Relevant Statutory Framework

[38] Part 3-3 of the Act is concerned with industrial action. Division 8 of Part 3-3 of the Act deals with protected action ballots. The relevant provisions of Division 8 of Part 3-3 are set out below.

“437 Application for a protected action ballot order

Who may apply for a protected action ballot order
(1) A bargaining representative of an employee who will be covered by a proposed enterprise agreement, or 2 or more such bargaining representatives (acting jointly), may apply to the FWC for an order (a protected action ballot order) requiring a protected action ballot to be conducted to determine whether employees wish to engage in particular protected industrial action for the agreement.

(2) Subsection (1) does not apply if the proposed enterprise agreement is:

(a) a greenfields agreement; or
(b) a multi-enterprise agreement.

Matters to be specified in application
(3) The application must specify:

(a) the group or groups of employees who are to be balloted; and
(b) 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 the applicant wishes a person other than the Australian Electoral Commission to be the protected action ballot agent for the protected action ballot, the application must specify the name of the person.

Note: The protected action ballot agent will be the Australian Electoral Commission unless the FWC specifies another person in the protected action ballot order as the protected action ballot agent (see subsection 443(4)).

(5) A group of employees specified under paragraph (3)(a) is taken to include only employees who:

(a) will be covered by the proposed enterprise agreement; and
(b) either:

(i) are represented by a bargaining representative who is an applicant for the protected action ballot order; or
(ii) are bargaining representatives for themselves but are members of an employee organisation that is an applicant for the protected action ballot order.

Documents to accompany application
(6) The application must be accompanied by any documents and other information prescribed by the regulations.

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.”

The CFMEU’s Submissions

[39] The CFMEU submitted that it was not disputed that it was a bargaining representative for the proposed agreement and that the second NoERRs given to employees by CUB were not determinative of the scope of the agreements. The CFMEU contended that all of the evidence before the Commission is that the CFMEU is bargaining in good faith. In support of that view, the CFMEU pointed to its participation in the conferences convened by Commissioner Blair despite the fact that it was not a party to the bargaining dispute notified by CUB.

[40] The CFMEU also contended that just because it presses for a different scope for the proposed agreement it cannot be said that it was not genuinely trying to reach an agreement, adding that to do so would require the Commission to find that there was some extraneous purpose to the CFMEU’s position which is not the case. As to CUB’s argument that the CFMEU was negotiating for an agreement which could not be approved by the Commission, the CFMEU submitted that the argument must fall away as it was not seeking to preserve a union demarcation agreement and that the group of employees to be covered by its proposed agreement had been fairly chosen, adding that the fact that other employees perform forklift driver duties is not relevant. Further, the CFMEU urged the Commission not to be distracted by the overlapping work covered by having two agreements which reflected the coverage of the existing expired agreements. Finally, the CFMEU submitted that its application for a PABO had been properly made under s.437 of the Act.

CUB’s Submissions

[41] CUB submitted that the CFMEU was not genuinely trying to reach an agreement of a kind contemplated under the Act. More particularly, CUB submitted that an agreement which reflected the CFMEU’s preferred scope was not capable of being approved by the Commission because the employees covered by the agreement would not have been fairly chosen. Accordingly, the application for a PABO should be rejected.

[42] CUB also submitted that if the Commission was of my mind to make a PABO that it would wish to have the period of written notice of industrial action extended to seven days.

Consideration

[43] The authorities on issue of genuinely trying to reach agreement are canvassed in detail in the Full Bench decision in Maritime Union of Australia v Swire Pacific Ship Management (Australia) Pty Ltd (Swire) 16. While it is not necessary to repeat that examination here, some particularly relevant authorities are cited below.

[44] In Stuartholme School v The Corporation of the Trustees of the Roman Catholic Archdiocese of Brisbane (Stuartholme)  17 the Full Bench stated:

“[25] ... we would not be inclined to adopt the reasoning of the majority in Ford. There is no reason why questions of scope cannot be included in bargaining in the context of a single interest employer authorisation and the mere fact that a bargaining representative puts scope in issue does not mean the bargaining representative is not genuinely trying to reach an agreement. ...” (Citations not included – underlining added)

[45] As noted above, CUB submitted that the CFMEU was not genuinely trying to reach an agreement of a kind contemplated under the Act. In J.J. Richards & Sons Pty Ltd v Transport Workers’ Union of Australia (J.J. Richards) 18the majority stated:

“[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.
…

[62]In the ordinary course of events 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, what may be described as an evidentiary onus shifts to the party or parties opposing the application to demonstrate why that evidence ought not be accepted sufficient to shift the evidentiary onus back to the applicant.

[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. For example, the evidence may demonstrate that the applicant is pursuing an agreement that it knows or ought reasonably knows would not be an enterprise agreement within the meaning of the FW Act because it contains non-permitted matters contrary to s.172(1) or that the true motivation is to apply pressure in pursuit of political or environmental goals or simply to punish the employer for some perceived wrong doing.” (Underlining added)

[46] In this case, the evidence indicates that the CFMEU met with CUB on eight occasions over the period February to April 2015, with further discussions having occurred in May and June regarding CUB’s revised position on scope. It was not disputed that the CFMEU had been genuinely trying to reach agreement up until CUB altered its position on the issue of scope. As to the position after that point, CUB submitted that the CFMEU had made an application for a PABO to advance claims that include its non-negotiable position on scope. CUB further submitted that the scope advanced by the CFMEU is manifestly not a fairly chosen group of employees. However, as noted in Stuartholme “the mere fact that a bargaining representative puts scope in issue does not mean the bargaining representative is not genuinely trying to reach an agreement.” Further, no evidence was led by CUB which established an “extraneous intention” on the part of the CFMEU as per J.J. Richards. Mr Blackler’s evidence was that the CFMEU’s proposed scope would, among other things, be “messy and unfair”. While that may be the case, that does not of itself equate to an extraneous intention.

[47] These factors do not support a finding that the CFMEU is not genuinely trying to reach agreement with CUB.

[48] With particular regard to the statutory requirements, I am satisfied that the CFMEU is a bargaining representative for the purposes of s.437(1) of the Act and that the matters set out in the CFMEU’s application satisfy the requirements set out in ss.437(3) to (6) of the Act. Further, for the reasons set out at paragraphs [46] and [47] above I am satisfied that the CFMEU has been and is genuinely trying to reach agreement with CUB. Consequently, pursuant to s.443(1) of the Act, the Commission must make a PABO.

[49] As noted in the Decision, at the hearing on 30 June 2015 CUB indicated that if the Commission were of a mind to make a PABO that it wished to have the period of written notice of industrial action extended to seven days. As the CFMEU made no submissions on that issue at the hearing, I indicated in the Decision that the Commission proposed to convene a further hearing to enable the parties to be heard on that issue. In subsequent developments, the CFMEU emailed the Commission on 2 July 2015 advising that it does not object to an Order requiring seven days’ notice of industrial action and requesting that the Order be made as soon as possible. In those circumstances, I consider it no longer necessary to convene a further hearing on that aspect and an order will be issued conjointly with this decision.

Appearances:

S. Kelly of Counsel with J. Maloney for the Construction, Forestry, Mining and Energy Union.

D. Robson for United Voice.

R. Dalton of Counsel with J. Morgan for CUB Pty Ltd.

Hearing details:

2015.

Melbourne:

June 30.

 1   [2015] FWC 4437

 2   AE895016

 3   AE895398

 4   Exhibit K1 at Annexure JM- 8

 5   Exhibit D1 at Annexure FB-6

 6   Exhibit K1 at Annexure JM-9

 7   Ibid at Annexure JM-10

 8   Ibid at Annexure JM-13

 9   Exhibit K1

 10   Exhibit D1

 11   [2009] FWA 849 at paragraphs 94-120

 12 (2010) 193 IR 293

 13   Australasian Meat Industry Employees Union v Woolworths Ltd (2010) 192 IR 23

 14   [2013] FWCFB 968

 15 (2010) 195 IR 58 at paragraph [30]

 16 (2014) 242 IR 366 at paragraphs [57]-[63]

 17 (2010) 192 IR 29

 18 (2010) 202 IR 180

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