Construction, Forestry, Mining and Energy Union v LCR Mining Group Pty Ltd

[2015] FWC 7970

[2015] FWC 7970 [Note: An appeal pursuant to s.604 (C2015/8035) was lodged against this decision - refer to Full Bench decision dated 4 February 2016 [[2016] FWCFB 400] for result of appeal.]

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.229 - Application for a bargaining order

Construction, Forestry, Mining and Energy Union
v
LCR Mining Group Pty Ltd; IRIQ Pty Ltd
(B2015/1396)

COMMISSIONER SAUNDERS NEWCASTLE, 20 NOVEMBER 2015

Application for bargaining orders.

[1] The Construction, Forestry, Mining and Energy Union, Northern Mining and NSW Energy District (CFMEU) made an application under section 229 of the Fair Work Act 2009 (Cth)(Act) for bargaining orders against LCR Mining Group Pty Ltd (LCR) and IRIQ Pty Ltd (IRIQ).

[2] LCR is contracted by Boggabri Coal Pty Ltd to operate the Coal Handling Preparation Plant and Train Loading Facility (CHPP) at the Boggabri open cut mine. The CFMEU has members who are employed by LCR to work at the CHPP. Until recently (12 November 2015), IRIQ was LCR’s bargaining representative in relation to a proposed enterprise agreement for LCR’s employees who work at the CHPP.

[3] LCR’s employees who work in the CHPP are not covered by an enterprise agreement. The CFMEU sought to negotiate an enterprise agreement for those employees in 2014. LCR initially refused to commence negotiations for such an agreement. As a result, the CFMEU filed an Application for a Majority Support Determination on 11 August 2014. Prior to the conclusion of the hearing before the Fair Work Commission (Commission) on 26 August 2014 for a Majority Support Determination, LCR agreed to commence bargaining for an enterprise agreement.

[4] On 2 September 2014, LCR issued a Notice of Representational Rights to its employees who work in the CHPP.

[5] The parties bargained for some time in late 2014 and early 2015 for an enterprise agreement. In about May 2015, the CFMEU alleged that LCR had ceased bargaining in good faith. On 8 May 2015, the Commission heard an application by the CFMEU for bargaining orders against LCR. Such orders were made by Senior Deputy President Hamberger on 8 May 2015.

[6] In the period from 8 May 2015 until 28 September 2015 there were a number of bargaining meetings held in person at the Newcastle airport between the CFMEU and representatives of LCR. The CFMEU accepts that LCR bargained in good faith in that period of time, but contends that it has not done so since that time. Further, the CFMEU contends that IRIQ, in its capacity as LCR’s bargaining representative from 19 October 2015 until 12 November 2015, has failed to satisfy its good faith bargaining requirements under section 228(1) of the Act.

Agreed matters

[7] It is not in contest and I am satisfied on the evidence that:

(a) an application for bargaining orders has been made by the CFMEU (s.230(1)(a) of the Act);

(b) the CFMEU has concerns that LCR and IRIQ have not met, or (in the case of LCR) is not meeting, the good faith bargaining requirements (s.229(4)(a)(i) of the Act);

(c) the CFMEU has given a written notice setting out its concerns to the relevant bargaining representatives (s.229(4)(b) of the Act);

(d) the CFMEU has given the relevant bargaining representatives a reasonable time within which to respond to its concerns (s.229(4)(c) of the Act);

(e) the CFMEU considers that the relevant bargaining representatives have not responded appropriately to its concerns (s.229(4)(d) of the Act);

(f) the CFMEU has complied with the requirements of subsection 229(4) of the Act (s.230(3)(b) of the Act); and

(g) LCR has agreed to bargain for an enterprise agreement (s.230(2) of the Act).

Issues

[8] The issues I need to determine in this matter are as follows:

(a) whether IRIQ should continue to be a respondent to the proceedings, given that its appointment as a bargaining representative was revoked by LCR on 12 November 2015;

(b) whether LCR and/or IRIQ have not met, or (in the case of LCR) is not meeting, the good faith bargaining requirements set out in section 228 of the Act;

(c) whether I am satisfied that it is reasonable in all the circumstances to make a bargaining order against LCR and/or IRIQ (s.230(1)(c) of the Act);

(d) whether any bargaining orders can be made against IRIQ, given that its appointment as a bargaining representative was revoked by LCR on 12 November 2015; and

(e) the terms of any order to be made.

Should IRIQ continue to be a respondent to the proceedings?

[9] IRIQ contends that it “can no longer be a respondent to the proceedings, or at the very least, orders cannot be issued against IRIQ” because its appointment as a bargaining representative for LCR was revoked on 12 November 2015.

[10] The prerequisites for making an application for bargaining orders do not include a requirement that a party continue to be a bargaining representative at the time of the hearing of the application for bargaining orders (s.229(4) of the Act).

[11] The CFMEU maintains its contention that IRIQ failed to meet the good faith bargaining requirements set out in section 228(1) of the Act when IRIQ was a bargaining representative of LCR. The CFMEU adduced evidence to support its case. IRIQ did not challenge that evidence, nor did it seek to adduce any evidence to support its case.

[12] Whether bargaining orders should or can be made against IRIQ is a separate question to the maintenance of IRIQ as a respondent to the proceedings, although the utility of IRIQ being a respondent to the proceedings is brought into focus if no orders can be made against it. I will deal with the issues concerning whether bargaining orders should or can be made against IRIQ later in this decision.

[13] In the circumstances, I reject IRIQ’s contention that it can no longer be a respondent to the proceedings simply because its appointment as a bargaining representative of LCR was revoked shortly before the hearing of this application.

Have the good faith bargaining requirements been met by LCR and/or IRIQ?

[14] The CFMEU contends that LCR and IRIQ have failed to meet the good faith bargaining requirements set out in section 228 (1) of the Act, principally by failing to provide the CFMEU with the documentation LCR agreed to provide at the meeting on 28 September 2015 and failing to continue to bargain after 28 September 2015.

Failure to provide documentation

[15] During the course of the bargaining negotiations, the CFMEU and LCR have made offers and counter offers. The negotiations commenced by the CFMEU providing to LCR the form of clauses it wished LCR to agree to. LCR responded generally to those clauses. Mr Drayton gave evidence that “LCR then indicated a preference that the parties work through a document prepared by them that they wished to be their proposed form of an enterprise agreement”. This approach was agreed between the parties. As a consequence, from about late June 2015 the parties negotiated for an enterprise agreement on the basis of documents prepared by LCR.

[16] At a bargaining meeting on 15 July 2015 LCR produced 17 pages of a 36 page document entitled “Boggabri Operation & Maintenance Coal Handling and Preparation Plant 2015”. The parties discussed the draft clauses on pages 1 to 17 at that bargaining meeting.

[17] At a further bargaining meeting on 28 September 2015 LCR produced pages 18 to 31, together with a signature page, of the document entitled “Boggabri Operation & Maintenance Coal Handling and Preparation Plant 2015”. The parties discussed the draft clauses on pages 18 to 31 of the draft document and LCR gave the CFMEU a report on the issues raised at the previous bargaining meeting in relation to pages 1 to 17 of the draft document.

[18] Mr Jeffrey Drayton, a Vice President of the CFMEU, gave uncontested evidence that, at the conclusion of the bargaining meeting on 28 September 2015, LCR “stated their intention to prepare a final document. This document was to be in a form close enough to that which both parties may be able to agree on, although there may be some outstanding issues … The document was to be provided by 6 October 2015”. 1

[19] There is no dispute that LCR informed the CFMEU during the meeting on 28 September 2015 that LCR was going to seek some advice in relation to the agreement being negotiated before providing the documentation to the CFMEU.

[20] Neither LCR nor IRIQ has provided a draft enterprise agreement or any other bargaining documentation to the CFMEU since 28 September 2015, notwithstanding a number of attempts by Mr Drayton to follow up LCR and IRIQ for this material.

[21] By email dated 14 October 2015, IRIQ informed the CFMEU that “at this stage, LCR is weeks away from hearing if they will continue on the job or not. Given this, there appears to be little utility in continuing to bargain at this point.” 2

[22] By letter dated 19 October 2015, IRIQ informed the CFMEU that they had “identified a number of issues with regards to the content of the Agreement”. 3 IRIQ proposed “a meeting at 1pm on 4 November or alternatively at 8am on 5 November 2015 for the purpose of progressing good faith bargaining discussions in relation to this Agreement. This meeting will be conducted by teleconference.”4

[23] By email dated 20 October 2015, Mr Keenon Endacott, CFMEU Industrial Research Officer, informed Ms Theresa Moltoni, Managing Director of IRIQ, amongst other things, that:

“… To date we have not received a copy of the final document we were to receive after you reviewed it and the last changes discussed were to be inserted by Ms Micairan. Therefore, we require you to provide that document within seven (7) days of today’s date so we can meet with our members and be able to respond to the company in accordance with the arrangements that were understood to occur after the 28 September 2015.

Your position that there be a telephone meeting on 4 or 5 November 2015 does not rectify the breach of the good faith bargaining requirements. It has been the practice of the parties to meet in person and therefore we insist that any future meetings occur the same way….”

[24] By letter dated 22 October 2015, Ms Moltoni responded to Mr Endacott, stating (amongst other things):

“… There was a genuine intention to provide the CFMEU with a copy of the Agreement subject to the review that you encouraged. However, following that review it is clear that it is unreasonable and premature to provide a copy of a draft agreement without resolution of the issues at the heart of the bargaining process. We are seeking to meet with you to discuss those issues.

… We have raised our concerns with you, specifically that we believe your repeated refusal to meet with us and your repeated refusal to discuss matters that are substantive in relation to any Agreement, are actions that are not consistent with the provisions of good faith bargaining. We have made it clear that we are ready and willing to continue the bargaining discussions. We have proposed 2 alternate times for a teleconference meeting to progress the negotiations and we await your confirmation as to which date will suit you.”

[25] On 23 October 2015, the CFMEU filed the present application for bargaining orders against LCR and IRIQ.

[26] On 30 October 2015, Ms Moltoni informed the CFMEU in writing that LCR had been unsuccessful in its tender for work at the CHPP, and that its current contract to do that work would terminate on 31 January 2016.

[27] At a directions hearing in the Commission on 2 November 2015 LCR informed the Commission and the CFMEU that it would like a short period of time to consider whether it wished to bargain at all for an enterprise agreement to cover its employees in the CHPP. I then made the following direction:

“By 5:00pm on Thursday, 5 November 2015, the respondents are directed to inform the Commission and the CFMEU as to their position concerning:
(a) participation in future bargaining; and
(b) participation in future face to face bargaining meetings and the location of such meetings.”

[28] On the afternoon of 4 November 2015, LCR notified the Commission and the CFMEU that it wished to continue to participate in bargaining on certain terms. 5 By letter dated 16 November 2015, the CFMEU rejected IRIQ’s offer to continue to participate in bargaining on certain terms.6

[29] In Endeavour Coal Pty Ltd v Association of Professional Engineers, Scientists and Managers, Australia (Endeavour Coal) 7, Justice Flick made the following observations in relation to the failure by a bargaining representative to put forward for consideration a proposal or counterproposal or suggested terms which may be acceptable:

“[34] … It is further concluded that a “bargaining representative” may be held to have fallen short of the “requirements” set forth in s 228(1) if there is a failure to put forward for consideration a proposal or a counter–proposal or suggested terms which may be acceptable…

[35] The putting of a proposal or a counter–proposal, or the suggestion of terms for the purpose of “bargaining” or advancing the “bargaining” process, does not irrevocably commit Endeavour Coal to ultimately agree to the proposal or to those terms and limit the “bargaining” solely to matters which have not yet been agreed upon. To impose such a constraint upon the bargaining process would be contrary to s 228(2). But, in the course of “bargaining”, if Endeavour coal sits “mute” and merely reject proposals or terms which are being advanced for its consideration, it may fail to meet the “requirements” set forth in s 228(1)...

…

[43] … But at some stage during the process there may come a time when the combined effect of the “good faith bargaining requirements” requires the proffering of a counter–proposal. To progress “bargaining” in compliance with s 228, a participant may be required to disclose what they may be prepared to tentatively accept – even if all that has so far been put to them for consideration has been rejected. A party may be required to advance for consideration a proposal which it may be prepared to accept, albeit a proposal which may well be subject to qualifications or reservations. The point in time when a “bargaining representative” may be required to positively respond to proposals being advanced for its consideration – or to put its own proposals – will vary from case to case. It is both impossible and imprudent to devise a set course which all bargaining must follow. The manner in which one party may approach bargaining may, in some situations, such that a failure to put a counter – proposal may not be a failure to meet the requirements imposed by s 228 (1).”

[30] I am satisfied on the evidence in the present case that LCR and the CFMEU agreed on 28 September 2015 that LCR would communicate a written bargaining proposal to the CFMEU by 6 October 2015. Although the proposal was referred to as a “final document” at the meeting on 28 September 2015 8, it is clear from:

(a) the fact that LCR needed to obtain advice from its consultants before putting the proposal; and

(b) the acknowledgement by the parties on 28 September that the “document was to be in a form close enough to that which both parties may be able to agree on” but “there may be some outstanding issues” [emphasis added]

that the bargaining proposal LCR agreed to put to the CFMEU would not necessarily be in the form of a finalised draft enterprise agreement.

[31] LCR and its bargaining representative, IRIQ, have refused to provide a written bargaining proposal to the CFMEU. They seek to rely on two principal grounds to support their refusal:

(a) First, IRIQ “identified a number of issues with regards to the content of the Agreement”. 9 IRIQ “found there are a number of matters that reflect a position that has not yet been put to you. Further those matters need to be properly explained, with reasons, as is required by the good faith bargaining provisions of the Fair Work Act”;10 and

(b) Secondly, LCR’s loss of the contract for work at the CHPP from 31 January 2016 is a material change in circumstances which is likely to result in a change in (at least some aspects of) LCR’s bargaining position for a new enterprise agreement.

[32] As to the first ground identified by LCR and IRIQ, there is no reason why the matters identified by IRIQ could not have been put forward and explained, with reasons, in the written bargaining proposal which LCR agreed on 28 September 2015 to put to the CFMEU. Accordingly, in my view, the first ground is not a proper justification for refusing to comply with the agreement to communicate a written bargaining proposal to the CFMEU.

[33] As to the second ground identified by LCR and IRIQ, in circumstances where LCR was informed in late October 2015 that it was not successful in winning the contract to undertake work at the CHPP after 31 January 2016, it is understandable that LCR may wish to take a different bargaining position in relation to a number of matters, including those previously “agreed” in bargaining, to the position it adopted prior to being informed of the loss of the contract. However, that change in circumstance does not, in my view, justify an ongoing refusal by LCR and IRIQ to comply with its agreement to provide a written bargaining proposal to the CFMEU.

[34] Having regard to the duration and stage of bargaining between LCR and the CFMEU for a proposed enterprise agreement, and in particular the agreement reached between them on 28 September 2015, I am of the view that LCR is required, in order to progress bargaining in compliance with section 228 of the Act, to “advance for consideration a proposal which it may be prepared to accept, albeit a proposal which may well be subject to qualifications or reservations”. 11 I am satisfied that LCR and IRIQ (while it was a bargaining representative of LCR) have not met, and (in the case of LCR) is not meeting, the following requirements in section 228(1) of the Act by reason of their failure (which is ongoing in LCR’s case) to advance such a bargaining proposal at any time after 6 October 2015:

(a) disclosing relevant information in a timely manner (s.228(1)(b) of the Act);

(b) responding to proposals made by other bargaining representatives for the agreement in a timely manner (s.228(1)(c) of the Act);

(c) refraining from unfair 12 conduct that undermines collective bargaining (s.228(1)(e) of the Act); and

(d) bargaining with the other bargaining representatives for the agreement (s.228(1)(f) of the Act).

Failure to bargain after 28 September 2015

[35] Apart from the refusal to put a written proposal to the CFMEU in accordance with the agreement made on 28 September 2015, the other reason bargaining ceased after 28 September 2015 was because the bargaining representatives were unable to agree on where and how future bargaining meetings should be conducted.

[36] The CFMEU proposed that future bargaining meetings (ie after 28 September 2015) take place in person in the Newcastle area, as had been the practice in relation to all four bargaining meetings in which the parties participated in the period from 20 May 2015 until 28 September 2015. 13

[37] IRIQ and LCR initially proposed that “it is simply not possible for us to meet face to face” and that future bargaining meetings should proceed by way of a teleconference. 14 IRIQ and LCR later proposed to meet with the CFMEU in person at Newcastle airport (the location of all four prior bargaining meetings), but only on certain conditions, including that “the CFMEU discontinue or withdraw its application for a bargaining order” and the following bargaining “meeting be arranged in Brisbane, or via teleconference or videoconference”.15

[38] Section 228(1) of the Act provides that bargaining representatives must “attend, and participate in, meetings at reasonable times”. The word “meeting” in section 228(1)(a) of the Act is not defined. LCR and IRIQ contend that a teleconference or videoconference is a “meeting” within the meaning of section 228(1)(a) of the Act. The CFMEU submit that meetings must be in person to satisfy the requirements of section 228(1)(a) of the Act.

[39] The word “meeting” is defined in the Macquarie dictionary 16 as follows:

“1. a coming together. 2. an assembling, as of persons for some purpose. 3. an assembly or gathering held.”

[40] Although bargaining representatives may, in one sense, “come together” if they speak on the telephone, I am of the view that the ordinary meaning of “meeting” requires the participants in the meeting to be present in person. The context and purpose of section 228(1)(a) also support a construction of the word “meeting” which involves the participants being present in person. In particular, section 228(1) of the Act sets a number of standards or requirements which bargaining representatives must meet when they negotiate for a proposed enterprise agreement. In view of the nature of enterprise bargaining negotiations, they are far more likely to be productive and beneficial to the parties if they involve face to face meetings where views can be expressed, documents and other material exchanged, and issues debated.

[41] Further, the word “meeting” in section 228(1)(a) of the Act is part of the expression “attending … meetings”. “Attend” is defined as follows in the Macquarie dictionary: 17

“1. to be present at: to attend school or a meeting. 2. to go with as a concomitant or result; accompany: a cold attended with fever. 3. to minister to; devote one’s services to. 4. to wait upon or accompany as a servant. 5. to take charge of; tend. 6. Obsolete to wait for; expect. 7. to give attention; pay regard or heed. 8. Obsolete to wait.”

[42] I am of the view that the first definition of “attend” (to be present at) is the appropriate definition of “attend” in the context of bargaining representatives “attending, and participating in, meetings” within the meaning of section 228(1)(a) of the Act.

[43] Accordingly, having regard to the language used in section 228(1)(a), its context and the purpose of the provision, I am of the view that bargaining representatives must attend, and participate in, face to face meetings to comply with the requirement in section 228(1)(a) of the Act.

[44] For the reasons set out above, I am satisfied that LCR and IRIQ (while it was a bargaining representative of LCR) have not met, and (in the case of LCR) is not meeting, the requirement in section 228(1)(a) of the Act by reason of their refusal (which is ongoing in LCR’s case) to meet in person with the CFMEU, other than on certain conditions, including that “the CFMEU discontinue or withdraw its application for a bargaining order”.

Is it reasonable in all the circumstances to make bargaining orders against LCR and/or IRIQ?

[45] Even though I have found that LCR and IRIQ (while it was a bargaining representative of LCR) have not met, and (in the case of LCR) is not meeting, their good faith bargaining requirements for the reasons set out above, I retain a discretion as to whether a bargaining order should be made. 18 In exercising the discretion I will have regard to the conduct of the parties and the purpose for which bargaining orders are made, namely to facilitate bargaining by directing things to be done to ensure compliance by one or more of the bargaining representatives with the good faith bargaining requirements.19

[46] LCR and IRIQ submit that I should exercise my discretion not to make a bargaining order having regard to the following alleged conduct on the part of the CFMEU, which LCR and IRIQ contend constitutes a failure by the CFMEU to meet its good faith bargaining requirements under the Act and means the CFMEU has come to the Commission in the present application without “clean hands”:

(a) First, the CFMEU has refused to attend, let alone participate, in meetings that have been proposed by LCR and IRIQ at reasonable times;

(b) Secondly, the CFMEU’s refusal to meet denies LCR and IRIQ the opportunity to disclose information which they wish to disclose;

(c) Thirdly, the CFMEU took nearly two weeks to respond to the written proposal by LCR and IRIQ to advance bargaining (correspondence pursuant to direction one in these proceedings dated 4 November 2015). The CFMEU has rejected that proposal based on its continued assertion that the only way forward in bargaining is via a “final document” that must be produced by LCR; and

(d) Fourthly, the CFMEU has made, and continues to make, repeated demands for the LCR to produce a “final document” in circumstances where it knows no “final document” exists.

[47] I reject these submissions for the following reasons:

(a) As to the first contention, the only meetings the CFMEU has refused to attend are (i) those which LCR and IRIQ have proposed take place by teleconference or videoconference and (ii) an offer to meet in person, which offer was conditional on the CFMEU withdrawing its application for good faith bargaining orders. Having regard to my conclusion set out above as to the proper construction of the expression “attending … meetings” in section 228(1)(a) of the Act, the CFMEU’s refusal to participate in meetings by teleconference or videoconference is not a breach of its good faith bargaining requirements. Similarly, rejecting an offer to meet in person in circumstances where the offer is conditional on the bargaining representative withdrawing its application for bargaining orders is not, in my view, a failure to attend, or participate in, a meeting within the meaning of section 228(1)(a) of the Act;

(b) As to the second contention, LCR and IRIQ have not been denied an opportunity to disclose information which they wished to disclose. They could, at any time, have disclosed information in writing to the CFMEU. Alternatively, they could have met with the CFMEU in person and disclosed the information orally;

(c) As to the third contention, by letter dated 4 November 2015 IRIQ 20 made a proposal to the CFMEU to continue bargaining on certain terms. The terms of the proposal were, in my view, unreasonable. They included (i) a requirement that the CFMEU discontinue or withdraw its application for bargaining orders, (ii) a requirement that a second meeting be arranged in Brisbane, or via teleconference or videoconference, and (iii) a refusal by LCR and IRIQ to give any commitment to put a bargaining proposal to the CFMEU, contrary to the agreement reached between the parties on 28 September 2015. The CFMEU responded to IRIQ’s proposal on 10 November 201521 and after obtaining clarification about various matters provided a further response on 16 November 2015.22 Part of the CFMEU’s response was to make the point that it considered LCR to be in breach of its good faith bargaining requirements so long as it refused to provide the “documentation” LCR agreed to provide on 28 September 2015; and

(d) As to the fourth contention, the CFMEU’s repeated demands for LCR to produce a “final document” is a reference back to the agreement made on 28 September 2015 for LCR to produce a “final document” by 6 October 2015. The reference to a “final document” must be read in context. It was not intended to be a reference to a final enterprise agreement capable of being approved by the Commission. As was explained on 28 September 2015, the “final document” was intended to be “in a form close enough to that which both parties may be able to agree on, although there may be some outstanding issues”. It really meant no more than a bargaining proposal, which may or may not have been in the form of a draft enterprise agreement.

[48] I am satisfied that it is reasonable in all the circumstances to make bargaining orders in this matter. In addition to the reasoning set out in paragraphs [45] to [47] above, I set out in paragraphs [60] to [61] below my further reasons for reaching this conclusion. I am also satisfied, for the reasons set out elsewhere in this decision, that the requirements of section 230 of the Act have been met in relation to the proposed enterprise agreement (s.230(1)(b) of the Act).

Can bargaining orders be made in relation to IRIQ?

[49] Section 231(1) of the Act requires that a bargaining order specify, in a prospective sense, the nature of the action or requirement being imposed on a bargaining representative by the order. For example, a bargaining order may specify various “actions to be taken by” a bargaining representative to ensure they meet the good faith bargaining requirements (s.231(1)(a) of the Act). It follows, in my view, that a bargaining order can only be imposed on a person or entity who is a bargaining representative at a time when the order is in operation. Both parties agreed with this construction of the Act.

[50] It is clear that IRIQ is not currently a bargaining representative appointed by LCR for the proposed enterprise agreement the subject of these proceedings. Provided that IRIQ is not reappointed by LCR as its bargaining representative, no bargaining orders can be made against it. However, for the following reasons, I am of the view that there is a reasonable prospect that IRIQ may again be appointed by LCR as its bargaining representative in relation to the proposed enterprise agreement in the near future:

(a) By email dated 9 October 2015, LCR informed the CFMEU that “any future correspondence in regards to the negotiations for the Boggabri EBA will go through the IR consultants [IRIQ] we mentioned at our last meeting”;

(b) Following LCR’s email dated 9 October 2015, the CFMEU started communicating with IRIQ in relation to the negotiations for an enterprise agreement;

(c) By email dated 14 October 2015, Ms Theresa Moltoni, Managing Director of IRIQ, informed the CFMEU that “there appears to be little utility in continuing to bargain at this point”;

(d) By letter dated 15 October 2015 to LCR, the CFMEU stated: “We are unsure whether Ms Moltoni is the bargaining representative as it appears the company’s indicated position is a desire not to bargain … It is the intention of the CFMEU to write to the company and their appointed bargaining representatives and raise our belief that there has been a breach of the good faith bargaining arrangements”;

(e) On 15 October 2015, Ms Moltoni informed the CFMEU in writing that “LCR has not appointed me or IRIQ Pty Ltd as its bargaining representative under s 178 of the Fair Work Act 2009 at this point in time … We note your view that you believe LCR is in breach of the good faith bargaining arrangements. We ask that you comply with the provisions of section 229(4) in regards to your concerns”;

(f) By letter dated 16 October 2015 to LCR, the CFMEU gave LCR written notice of its concerns that LCR had not met, and was not meeting, the good faith bargaining requirements;

(g) Three days later (19 October 2015) IRIQ informed the CFMEU in writing that it had been appointed by LCR as its bargaining representative and “reject[ed] the allegations that LCR have not bargaining [sic] in good faith”;

(h) On the following day, 20 October 2015, the CFMEU gave IRIQ written notice of its concerns that IRIQ was not meeting its good faith bargaining requirements;

(i) The CFMEU and IRIQ continued to correspond with one another, in their capacity as bargaining representatives for the proposed enterprise agreement, in the period from 20 October 2015 until at least 16 November 2015;

(j) By letter dated 11 November 2015 to the Commission, IRIQ requested that either the directions which had been made in this matter be set aside and the hearing date vacated or the remaining directions and hearing date be varied by adding a period of three weeks to each of the dates. That application was heard and rejected on 12 November 2015. Later that day, 23 LCR revoked IRIQ’s appointment as its bargaining representative for the proposed enterprise agreement;

(k) IRIQ and LCR elected not to file any witness statements in accordance with the directions issued by the Commission. On 17 November 2015, IRIQ filed and served submissions on its behalf and on behalf of LCR in relation to the present application. Annexed to those submissions was LCR’s revocation of IRIQ’s appointment as its bargaining representative dated 12 November 2015. That was the only evidence adduced on behalf of LCR or IRIQ at the hearing of the present application;

(l) No evidence was adduced on behalf of LCR or IRIQ as to why LCR had revoked IRIQ’s appointment as its bargaining representative for the proposed enterprise agreement. The submissions filed on behalf of LCR and IRIQ include the following three opening paragraphs:

1. LCR Mining Group Pty Ltd (LCR Mining) has revoked its appointment of IRIQ Pty Ltd (IRIQ) as bargaining representative in relation to the proposed enterprise agreement subject to these proceedings.

2. The instrument of revocation is annexed to these submissions, marked as Annexure A.

3. The revocation gives rise to two preliminary issues. The first is that it would appear IRIQ can no longer be a respondent to the proceedings, or at the very least, orders cannot be issued against IRIQ.”

(m) Peter Ryan, Principal Industrial Relations Consultant of IRIQ, appeared (by telephone) on behalf of IRIQ and LCR (with permission) at the hearing of the present application on 20 November 2015.

[51] On the basis of this sequence of events and the evidence before me (as summarised in paragraph [50] above) I find, on the balance of probabilities, that (a) IRIQ’s appointment as LCR’s bargaining representative for the proposed enterprise agreement has been revoked for the purpose of trying to prevent bargaining orders being made against IRIQ and (b) once this application has been determined, LCR may once again appoint IRIQ as its bargaining representative for the proposed enterprise agreement. In those circumstances, I am of the view that it is appropriate for the bargaining orders to take effect against IRIQ in the event that it is appointed by LCR as its bargaining representative during the period of operation of the orders.

Terms of the bargaining orders

Applicable principles

[52] As Justice Flick observed in Endeavour Coal (at [78]), “the meaning of the requirements imposed by that subsection [s.228(1)] are relatively easy to resolve. The difficulty is in the formulation of orders to give effect to those requirements without trespassing into the prohibited territory created by s 228(2).”

[53] The Commission’s power to make bargaining orders is confined to directing things to be done to ensure compliance by one or more of the bargaining representatives with the good faith bargaining requirements. 24

[54] An order requiring a bargaining representative to propose terms of an enterprise agreement that it would be prepared to enter into would fall foul of section 228(2)(a), because such an order would require the bargaining representative to make a “concession” as to which terms are acceptable and those which are not. 25

Orders sought by the CFMEU

[55] The CFMEU seeks the following orders in its application:

“1. The company either directly or through its Bargaining Representatives prepare the Enterprise Agreement it proposes by (insert date);

2. The CFMEU within seven (7) days of receiving the proposed Enterprise Agreement meet with the persons it represents to gain the final input on the outstanding issues in the proposed Enterprise Agreement; and

3. The CFMEU provide its response, including its reasons as to the response made by the company, by the end of the seven (7) days and both parties hold a subsequent meeting to be conducted in person to see if they can resolve any outstanding issues and agree on an Enterprise Agreement. The subsequent meeting is to be held no later than ten (10) days after the CFMEU has been provided with the proposed Enterprise Agreement as provided for in order 2.”

[56] In my view, the first order sought by the CFMEU is beyond power. It would require LCR to make “concessions” during bargaining as to which terms are acceptable and those which are not. 26 The second and third orders sought by the CFMEU are also problematic because they flow on from the first order.

[57] I raised this issue with Mr Endacott in submissions. He indicated that although the first order sought by the CFMEU refers to an “Enterprise Agreement” what was really intended was a written bargaining proposal or terms of the type referred to by Justice Flick in paragraph [43] of Endeavour Coal. Mr Endacott also submitted that the phrase “Enterprise Agreement” was used in order 1 because that expression had been used by the parties during the bargaining negotiations to describe the proposals being put by each side, rather than as a descriptor of a finalised enterprise agreement capable of being approved by the Commission.

[58] In light of these issues, Mr Endacott indicated that the CFMEU wished to amend its application to seek alternative orders along the following lines, in the event that the Commission concluded that the original orders sought by the CFMEU were beyond power:

Alternative orders

1. Within five business days of the date of this order, LCR Mining Group Pty Ltd (LCR) must provide to the Construction, Forestry, Mining and Energy Union (CFMEU) a written bargaining proposal or terms which it may be prepared to accept, albeit a proposal or terms which may be subject to qualifications or reservations.

2. Within five business days of the provision of the written bargaining proposal or terms the subject of order 1, LCR and IRIQ Pty Ltd (IRIQ) (if IRIQ is a bargaining representative of LCR at the time) must meet in person with the CFMEU at the Newcastle airport, or such other location as may be agreed between the parties, to discuss:

a. LCR’s bargaining proposal or terms and any explanation or reasons LCR may wish to provide in connection therewith; and

b. the CFMEU’s response to LCR’s bargaining proposal or terms.

3. Within five business days of the meeting referred to in order 2 above, LCR and IRIQ (if IRIQ is a bargaining representative of LCR at the time) must meet in person with the CFMEU at the Newcastle airport, or such other location as may be agreed between the parties, and participate in further bargaining discussions in relation to a proposed enterprise agreement.

[59] Mr Ryan was given an opportunity to, and did, make submissions in relation to the proposed alternative orders.

[60] I am satisfied that it is reasonable in all the circumstances to make bargaining orders in accordance with the alternative orders set out in paragraph [58] above. In my view, such orders will direct things to be done to ensure compliance by the bargaining representatives with the good faith bargaining requirements. Further, the relatively short timeframe provided for in the alternative orders is reasonable, in my view, in light of the time taken in bargaining to date and the fact that LCR’s contract to undertake work at the CHPP will cease on 31 January 2016, with the result that, absent any change in the current circumstances, there will be no or little utility in the parties negotiating an enterprise agreement after 31 January 2016.

[61] As to the location of future bargaining meetings, given that all four previous bargaining meetings were held with the consent of all parties at the Newcastle airport and Newcastle is the closest major Australian city to Boggabri, the location of the workplace the subject of the proposed enterprise agreement, I am of the view that it is reasonable for the future bargaining meetings to be held at the Newcastle airport or such other location as may be agreed between the parties.

[62] Orders [PR574216] in accordance with this decision will be issued separately.

COMMISSIONER

Appearances:

Mr Keenon Endacott, Industrial Research Officer on behalf of the CFMEU;

Mr Peter Ryan, Principal Industrial Relations Consultant from IRIQ, on behalf of LCR.

Hearing details:

2015.

Newcastle:

November, 20.

 1   Statement of Jeffrey Drayton (Ex A1) at [40]-[41]

 2   Statement of Jeffrey Drayton (Ex A1) at annexure JD-14

 3   Statement of Jeffrey Drayton (Ex A1) at annexure JD-18

 4   Statement of Jeffrey Drayton (Ex A1) at annexure JD-18

 5   Statement of Jeffrey Drayton (Ex A1) at annexure JD-22

 6   Statement of Jeffrey Drayton (Ex A2) at annexure JD-B

 7 [2012] FCA 764

 8   Statement of Jeffrey Drayton (Ex A1) at [40]

 9   Statement of Jeffrey Drayton (Ex A1) at annexure JD-18

 10   Statement of Jeffrey Drayton (Ex A1) at annexure JD-20

 11   Endeavour Coal Pty Ltd v Association of Professional Engineers, Scientists and Managers, Australia [2012] FCA 764 at [43]

 12   The unfairness lies in the ongoing failure to put a proposal in compliance with the agreement made on 28 September 2015.

 13   Statement of Jeffrey Drayton (Ex A1) at annexure JD-21

 14   Statement of Jeffrey Drayton (Ex A1) at annexure JD-20

 15   Statement of Jeffrey Drayton (Ex A1) at annexure JD-22

 16   Revised Third Edition

 17   Ibid

 18   Endeavour Coal at [47]

 19   Endeavour Coal at [62]

 20   Statement of Jeffrey Drayton (Ex A1) at annexure JD-22

 21   Statement of Jeffrey Drayton (Ex A1) at annexure JD-23

 22   Statement of Jeffrey Drayton (Ex A2) at annexure JD-B

 23   I find, on balance, that the revocation took place later on 12 November 2015 (after the directions hearing before the Commission) because Mr Ryan did not seek permission at the directions hearing to appear on behalf of LCR. He would have been required to do so if the revocation had taken effect prior to the directions hearing. Mr Ryan was live to this issue in light of a prior argument as to permission to appear in related proceedings (B2015/1412).

 24   Endeavour Coal at [62]

 25   Endeavour Coal at [64]

 26   Endeavour Coal at [64]

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