Construction, Forestry, Mining and Energy Union v Northern SEQ Distributor Retailer Authority T/A Unitywater

[2016] FWC 5218

[2016] FWC 5218

FAIR WORK COMMISSION

REASONS FOR DECISION

Fair Work Act 2009
s.238—Scope order; s.229—Bargaining order; s.589—Interim order

Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia; “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU); Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia – Plumbing Division, Queensland Divisional Branch; Australian Municipal, Administrative, Clerical and Services Union; Construction, Forestry, Mining and Energy Union
v
Northern SEQ Distributor - Retailer Authority T/A Unitywater
(B2016/597, B2016/599, B2016/601, B2016/602 and B2016/612)

(B2016/616, B2016/617, B2016/619, B2016/622 and B2016/623)

COMMISSIONER BOOTH BRISBANE, 1 AUGUST 2016

Application for an Interim Order.

Introduction

[1] This interim decision is made under s.589 of the Fair Work Act 2009 (the Act) in respect of applications for scope and bargaining orders sought under s.238 and s.229 of the the Act by the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU), Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia - Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia- Plumbing Division, Queensland Divisional Branch (Plumbers), “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU), Australian Municipal, Administrative, Clerical and Services Union (ASU) and Construction, Forestry, Mining and Energy Union (CFMEU) (the Unions or the five Unions). The Australian Workers’ Union (AWU) was not a party to this proceeding but is a bargaining representative for the proposed agreements.

[2] The interim order sought was that:

The Northern SEQ Distributor - Retailer Authority T/A Unitywater ceases and refrains from making any requests to employees to approve a proposed enterprise agreement until the scope of the proposed enterprise agreement has been determined by order of the Fair Work Commission, and until the Respondent has bargained in good faith with all bargaining representatives.

[3] These applications for interim orders were subject to a hearing on 13 and 14 June 2016. The applications made by the Unions seek to restrain Northern SEQ Distributor - Retailer Authority T/A Unitywater (Unitywater) from conducting a proposed ballot of employees in respect of a proposed enterprise agreement known as the Unity Water Industry Field/Outdoor Employees (Operations and Maintenance-Non-trade) Agreement (the O & M Agreement).

[4] Unitywater proposed to open the ballot for relevant employees on 15 June 2016.

[5] Amended applications as to scope and bargaining orders were made on 14 June 2016, on the second day of the hearing of the interim applications by the CFMEU, the CEPU, the AMWU and the Plumbers.

[6] In these circumstances, it was highly desirable that the matter be determined without delay and that the parties be advised of the outcome of the Interim Order prior to the beginning of the ballot.

[7] At the conclusion of the hearing on 14 June, I formed the view that at least one Interim Application satisfied the requirements for the issue of an interim order. I concluded that the ASU’s scope application satisfied the requirement for the issue of an interim order.

[8] I issued a decision-in-transcript. In so doing, I indicated that written reasons for the Decision would also be published, which I now do.

[9] The Interim Order was as follows:

“The Fair Work Commission orders that:

The Northern SEQ Distributor - Retailer Authority t/a Unitywater ceases and refrains from making any requests for employees to approve an enterprise agreement until my further decision and any subsequent orders made on 17 June 2016.”

[10] Another member of the Commission made directions about the substantive scope and bargaining applications. These matters are progressing and the hearing of that matter will begin before me on 3 August 2016.

[11] Since the hearing of the Interim Applications, the AMWU, the Plumbers and the CEPU have discontinued the Applications for Bargaining Orders on the basis that the primary objective of the bargaining orders sought in these particular applications have been met, by virtue of the order made in response to the similar application filed by the ASU. That is, to prevent Unitywater from making any requests for employees to approve an enterprise agreement until scope has been determined.

Background to the dispute

[12] The five Unions made applications for scope orders to have all employees covered by single enterprise agreement. That was initially Unitywater’s position 1 but as bargaining progressed a different position emerged and Unitywater’s current position is that three separate enterprise agreements should cover its employees. This is also the AWU’s position.

[13] At the time of this Interim Application, neither the employer nor the AWU had filed a scope application, but both have subsequently done so, reflecting their shared position. Those scope applications will be dealt with at the substantive hearing. 2

History of bargaining

[14] Bargaining commenced around August 2015. A Notice of Employee Representational Rights was issued to all employees. It proposed one agreement to cover all non-supervisory employees. By January 2016 Unitywater proposed that there should be two separate enterprise agreements to cover the employees of Unitywater: an indoor agreement and an outdoor agreement.

[15] There was no agreement from the various Unions to this proposal. Nevertheless, bargaining continued, including over scope.

[16] In April 2016, the AWU employee bargaining representative indicated that the AWU would like a separate agreement, creating the potential for three agreements.

[17] The various unions submit in their scope applications that the employer had not been disclosing relevant information to bargaining representatives about this third agreement. Further, apart from the AWU, the other unions assert that bargaining representatives had been excluded from participating in discussions about this third agreement.

[18] Unitywater contends that this application should be dismissed. This is on the basis that there is prejudice to Unitywater not being able to put its preferred agreement to its employees and further that the Unions cannot demonstrate that they can succeed in their Scope Applications nor that they have satisfied the requirements of the Act as it applies to scope applications.

The Law

[19] In the Health Services Union v Victorian Hospitals Industrial Association and Others 3 the Full Bench of the Commission held that the test for making an interim order was the test set out by the High Court in Australian Broadcasting Corporation v O’Neill:

The relevant principles in Australia are those explained in Beecham Group Ltd v Bristol Laboratories Pty Ltd. This Court (Kitto, Taylor, Menzies and Owen JJ) said that on such applications the court addresses itself to two main inquiries and continued:

“The first is whether the plaintiff has made out a prima facie case, in the sense that if the evidence remains as it is there is a probability that at the trial of the action the plaintiff will be held entitled to relief ... The second inquiry is ... whether the inconvenience or injury which the plaintiff would be likely to suffer if an injunction were refused outweighs or is outweighed by the injury which the defendant would suffer if an injunction were granted.”

By using the phrase "prima facie case", their Honours did not mean that the plaintiff must show that it is more probable than not that at trial the plaintiff will succeed; it is sufficient that the plaintiff show a sufficient likelihood of success to justify in the circumstances the preservation of the status quo pending the trial. That this was the sense in which the Court was referring to the notion of a prima facie case is apparent from an observation to that effect made by Kitto J in the course of argument. With reference to the first inquiry, the Court continued, in a statement of central importance for this appeal:

“How strong the probability needs to be depends, no doubt, upon the nature of the rights [the plaintiff] asserts and the practical consequences likely to flow from the order he seeks.” 4

[20] This test is often summarised as:

• there is a serious question to be tried; and



• the balance of convenience favours making the order.

The Unions’ case

[21] The five unions seek to have their Scope Applications determined prior to a vote. 5 Further, if the vote proceeds and is successful the scope application based on one agreement will never arise.

[22] In support of the Interim Applications on the matter of a serious question to be tried, the Unions make two arguments.

[23] First, the Unions argued that there is a merit in the substantive claims around the scope and bargaining orders. The applications claim the following:

(a) the employer unilaterally decided to change the scope of the proposed agreement;
(b) bargaining representatives, including the ASU, AMWU, Plumbers, CEPU and CFMEU, have been deliberately excluded from negotiations for the proposed Unitywater Industry Field/Outdoor Employees (Operations and Maintenance Nontrade) Agreement;
(c) the employer failed to provide information to bargaining representatives in a reasonable timeframe;
(d) bargaining is not proceeding efficiently or fairly because of the scope advanced by the respondent;
(e) the respondent has engaged in capricious and unfair conduct.

[24] The Unions consider these are not trivial concerns and on the available evidence there are serious issues to be tried.

[25] Further, the Unions suggested that by pursuing a ballot, Unitywater is in substance pursuing a scope application and notwithstanding there was no scope application from the employer at the time of the Interim Order, the process of taking the agreements to ballot would be of the same effect.

[26] The Unions submit that it is necessary to break that impasse, relying on the authority of AWU v BP Refineries Kwinana Pty Ltd 6.

[27] Second, all five Unions assert that they have complied with the requirements for such a scope order to issue and that there is sufficient likelihood of success in the substantive scope application to justify preserving the status quo.

[28] As to this issue of evidence and the onus, the Unions rely on their substantive applications and cross examination of Unitywater’s witnesses.

[29] The issue of a scope order as sought by the Unions requires compliance with s.238 (1)-(4) of the Act. The Unions assert that they complied with all of these requirements, including s.238(3):

(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.

[30] While the various unions largely make the same case for a single enterprise agreement, on the matter of compliance with s.238 (3) in particular the manner of giving notice differed.

ASU

[31] The ASU wrote a two-page letter to Mr Theo of Unitywater on 1 June 2016 arguing for a single agreement, seeking assurances and reconsideration of the intent to negotiate multiple agreements.

[32] On 2 June 2016, the ASU wrote separate letters to the various bargaining representatives. Although those letters were in similar terms to the letter to Unitywater, they were letters directly written to the various bargaining representatives asking if they have any questions and inviting a response to the matters raised in the letter. For example, the letter to Unitywater directly requested that it reconsider its decision, whereas the letter to the bargaining representatives stated “as such we have written to Unitywater on 1 June asking it to reconsider its decision to negotiate multiple agreements.” It concludes: “... If you have any questions, or wish to provide a response in regards to these matters, please direct these to ...James Mattner ..”

AMWU, Plumbers and CEPU

[33] These three unions wrote letters of concern in identical terms to Unitywater each dated 27 May 2016. It set out the concerns of the various Unions. The Scope Applications indicate that a copy of this letter was sent to employee bargaining representatives and individual bargaining representatives.

CFMEU

[34] The CFMEU wrote to Mr Theo on 27 May 2016. It wrote in identical terms to the three unions letters setting out its concerns. It did not copy that letter to other bargaining representatives including the AWU.

Amended applications by AMWU, Plumbers, CEPU and CFMEU

[35] On the second day of the hearing of the Interim Application, 14 June, the AMWU, Plumbers, CEPU and CFMEU sought to file amended applications referring to further notices of concerns that were sent to all bargaining representatives, separate from the letter of concern to Unitywater. This letter of concerns required a response the same day, just over two hours after the letter was sent by email.

[36] The letter explained that the Unions considered the timeframe to be reasonable in the circumstances by reference to the earlier letters of concern dated 27 May 2016 and the notice received from other bargaining representatives in identical terms. A number of other reasons were given including participation in a conference.

[37] The Unions maintained their original application satisfied the requirements of s.238(4) but made the following submissions in support of the amended applications.

[38] Mr Borg, for the CFMEU, on the Concerns Notice and the Amended Application submitted that while it was a mandatory requirement, the obligation on the bargaining representative is to take all reasonable steps to give written notice. Nevertheless he added if there had been a misapprehension as to the relevance of the AWU they had sought to remedy that situation by the filing of the amended application 7 noting that the contents of the Notice would have been no novelty to the AWU.

[39] He further pointed out that the CFMEU, AMWU, Plumbers and CEPU set out concerns virtually identical to those of the ASU.

[40] The Unions sought to distinguish Australasian Meat Industry Employees Union v Woolworths Limited 8 (Woolworths) where the union, having applied for a scope order, purported to give notice to another bargaining representative the Shop, Distributive and Allied Employees Association (SDA) by way of simply providing a copy to SDA of the letter they had sent to Woolworths. On the facts of that matter the Full Bench found it could not reasonably be read to be a notice to the SDA of the AMIEU’s concerns.

[41] The distinguishing factor on these facts as opposed to Woolworths is that the SDA sought a broader scope and AMIEU sought a narrower scope, which gave rise to the requirement on the part of AMIEU to notify of the concerns to a broader set of bargaining representatives. 9

[42] The Unions also sought orders concerning good faith bargaining. The CFMEU made particular submissions about breach of the prohibition on capricious and unfair conduct in relation to disciplinary action on two occasions against employees who attended bargaining meetings.

[43] Mr Borg stressed the importance of an interim order in light of these allegations about disciplinary action to ensure fair and efficient bargaining.

[44] Mr Mattner for the ASU raised the issue of proper representation at various bargaining meetings. 10

[45] As to the balance of convenience, the Unions submitted that any inconvenience arising out of the cancellation of the vote on 15-17 June 2016 until the substantive applications are determined does not outweigh the significant bargaining rights, including as to scope, which may otherwise be forgone should the vote proceed before the conclusion of the substantive applications.

Unitywater’s case

[46] Unitywater submitted the issue of a serious question to be tried is not based on whether the substantive claim is genuine or important but whether there is merit in the substantive claim. It is a threshold query looking to the case that will be run in the substantive proceedings. The case will have to be proved on evidence not assertion. Unitywater cited authority that in the absence of evidence the Commission will refuse relief. 11

[47] Unitwater’s case is that there is no serious question to be tried on the good faith bargaining order or scope order.

[48] Unitywater argues that it has complied with the good faith bargaining provisions; that the evidence shows there was no exclusions from meetings; other representatives knew when meetings were going on and that Mr Dearling, from Unitywater, had indicated by 4 May that the separate agreement was being pursued.

[49] On the suggestion of capricious and unfair conduct, Unitywater submitted the basis of the disciplinary action against CFMEU members was because the employees absented themselves during work time.

[50] On the issue of the scope order Unitywater submitted that the Unions’ preference for a single agreement does not raise a serious question to be tried.

[51] Unitywater argued that the concerns notices provisions were not compliant with the Act, arguing the notices do not qualify as a concerns notice in relation to other bargaining representatives, and further argued that the amended notice was not compliant. Its case was that a concerns notice must be provided before a party goes to the Tribunal for a remedy, based on the structure of s.238 requiring the recipient to be given a reasonable time to respond.

[52] Further it argued on the basis of Woolworths, the purpose of a concerns notice is to enliven the other party to do something. Merely copying a concerns notice to other bargaining representatives does not require these bargaining representatives to do anything and it was really just by way of information. 12

[53] While Unitywater acknowledged the ASU concerns notice was directly sent to the various bargaining representatives, it was a ‘for information’ letter; it did not ask the AWU to do anything.

[54] Unitywater argued on authority of Woolworths that the AWU is a relevant bargaining representative, and that the Unions merely providing a copy of the notice to the AWU does not mean they have complied with s.238(3)(a) and (b).

[55] On the question of balance of convenience Unitywater argue that there is no absolute right to have a scope application heard, and the serious question must be taken in concert with the balance of convenience.

[56] Unitywater asserted it has a right to invite its employees to vote on its proposed agreements under s.181 that is a competing right to the one asserted by the Unions to have the Scope Applications heard. 13

[57] It also points to delay as a factor. The particular delay argument related to the filing of the interim applications. It was put that there is no reasonable explanation for the delay for the best part of a fortnight between the notices of concern and the 10 June conference.

Consideration

[58] The test to be applied in this matter is whether one or more of the Unions made a prima facie case: did any one of the Unions establish a sufficient likelihood of success to justify the preservation of the status quo, pending the hearing of the claims for scope and bargaining orders?

A serious question to be tried

[59] The Unions submit that they have demonstrated sufficient likelihood of success in the Scope Applications to justify a scope order for a single agreement on the following basis:

• originally there was one agreement;



• bargaining started for one agreement;



• fairness and efficiency can be better accommodated with a single agreement;



• there are serious issues about overlap of function of employees and a fairer grouping with one agreement. 14

[60] Unitywater submitted that these matters do not raise a serious question to be tried and none of them suggest an order in favour of a single agreement. Further the fact that a change in scope was not agreed does not mean bargaining is less efficient.

[61] It was submitted that restoration of the status quo is no basis for a scope order unless the Commission is positively satisfied about fairness and efficiency.

[62] In my view while any scope order must be made in consideration of fairness and efficiency, in this matter there are (for all practical purposes) competing scope applications and as a result it is likely that a scope order will issue, subject to technical requirements. 15

[63] In my view consideration of fairness and efficiency is best settled in the substantive scope application. It cannot be said that the Unions’ Scope Applications will succeed, however I am satisfied there is sufficient likelihood of success given the prior history of agreement, early bargaining and the various other issues raised by the Unions. That is, I have concluded there is merit in the applications and the Unions have established the required chance of success at the substantive hearing.

[64] As to the issue of evidence, the Unions seek to rely on their applications and evidence from some of the Unions and cross-examination of Unitywater’s witnesses.

[65] Unitywater submits that there is a lack of evidence and relies on the decision of Senior Deputy President Richards’ in Thiess v Construction, Forestry, Mining and Energy Union and another.

[66] In that case, a dispute about safety issues, His Honour declined to make an order on the basis that there was no evidence adduced at all as to what those safety issues were. The finding of insufficient evidence on which to base an interim order was therefore unsurprising.

[67] In this matter a significant amount of evidence including the history of bargaining, the steps taken by the Unions prior to lodging the Scope Applications and the stated reasons for pursuing a single agreement (while not agreed) are largely uncontested and described in the substantive applications. The Unions also rely on the evidence obtained by cross-examination of Mr Dearling.

[68] In these circumstances I consider there is evidence sufficient to base my decision in this interim order application.

Technical requirements of s. 238

[69] Unitywater asserts that no Union has complied with s.238(3). In particular it asserted that the AWU is a relevant bargaining representative and that no Union properly gave a notice to the AWU. I note that the AWU was not a party this this application and gave no evidence on its own part.

[70] In my view at the substantive hearing the AWU is highly likely to be found to be a relevant bargaining representative and it will be necessary at that hearing for the Unions to demonstrate they have provided valid concerns notices to the AWU.

[71] I turned to each of the Unions’ cases.

[72] The ASU has on the face of the material before the Commission demonstrated the requisite notice. The provision of a separate letter to the bargaining representatives, on a different day, appears to satisfy the requirements of the notices of concern. I am not satisfied that the separate communication was merely ‘for information’ although that may be a matter for more detailed consideration in the substantive hearing.

[73] I note that there is no requirement in the Act as to the wording required to demonstrate concerns, and the letter provided in the form that the ASU has the potential to comply with s.238(3).

[74] Further, it may be that the Plumbers, CEPU and AMWU can demonstrate that the original notice which copied to the bargaining representatives satisfied the requirements of the concerns notice, particularly in the case of the CEPU.

Amended application

[75] Unitywater submitted that the amended notices were too late and cited The Australian Maritime Officers’ Union v Harbour City Ferries Pty Ltd 16 (Harbour City Ferries). Such amendments, it argued, cannot be filed once a substantive hearing has begun but that is not the case here. The order of events was that the Unions served a notice of concerns on Unitywater but may not have done so relevantly on the AWU; the application was filed; applications for an interim orders were filed and hearings in the Interim Orders commenced; further notice was filed on bargaining representatives; then amended applications were filed. On the face of it, the order of events is not inherently objectionable such that any substantive scope application would be certain to fail for want of compliance with s.238(3). That is not to say that I find that the notice period was reasonable for the purposes of s.238(3)(b), but that is a matter the parties may wish to pursue at the substantive hearing.

[76] That is, for the purposes of the Interim Orders, there is merit in the Scope Applications and the Applications, as amended, have the potential to satisfy the technical requirements.

[77] I have therefore concluded there is a serious question to be tried.

Balance of convenience

[78] The Unions argue that any inconvenience arising out of cancellation of the ballot does not outweigh the significant bargaining rights which will be forgone should the vote proceed (and succeed) before the conclusion of the substantive applications: a successful ballot will carve out those employees covered by the non-trades agreement from future consideration.

[79] Unitywater counters there is a loss of opportunity to put the matter to ballot and a potential for delay for those employees who will be covered by the agreement in the event of a successful ballot.

[80] In my view the Unions’ argument is persuasive. While a delay to the ballot is unfortunate it is not final. Should the ballot proceed and be successful, it is fatal to the Unions’ Scope Applications, the very outcome in Harbour City Ferries and the reason the scope point was abandoned on appeal in that case. To make it plain, the Unions would lose forever the opportunity to seek to obtain their scope order because once the ballot is held and succeeds there is no legal possibility for the Unions’ scope to proceed.

[81] Unitywater says a further factor weighing against the balance of convenience is delay in filing the interim applications.

[82] Yet it would appear on the evidence before me that the Unions acted promptly. From 20 May 2016 when the Unions forwarded their good faith notices concern, followed one week later on 27 May the Concerns Notices about scope, the matter has progressed in a timely manner.

[83] Scope applications were filed on 3 June 2016. The Unions’ evidence was that they knew a ballot was imminent but they were not aware of the date. Mr Dearling’s evidence appears to support this assertion.

[84] The parties raised interim relief at the first conference of the Commission on 10 June 2016.

[85] Any delay arising from an interim order could not be described as inordinate or prejudicial. Inconvenient, maybe, but that inconvenience cannot outweigh the prejudice that would be suffered by the Unions if the ballot were conducted without a decision on scope.

[86] The balance of convenience in issuing an interim order outweighs any prejudice to Unitywater.

[87] I have found therefore that there is both a serious question to be tried and that the balance of convenience favours the issuing of an interim order pending resolution of the substantive scope application for each of the five Unions.

[88] There remains for consideration the question of interim orders about the bargaining order applications. The order sought was to delay the ballot until Unitywater bargained in good faith.

[89] I do not consider that the Applications that seek interim bargaining orders demonstrate a prima facie case for the issue of an interim order. This is because I have concluded that the ballot be delayed pending a decision in the Scope Applications.

[90] The Bargaining Applications’ (and Amended Applications’) question is properly a matter for consideration at the hearing of the substantive matter.

[91] Orders will issue accordingly

COMMISSIONER

Appearances:

A Borg for the Construction, Forestry, Mining and Energy Union.

N Traill for the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia – Electrical, Energy and Services Division, Queensland and Northern Territory Divisional Branch.

J Blundell-Thornton for the “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU).

S Fogarty for the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia – Plumbing Division, Queensland Divisional Branch.

J Mattner for the Australian Municipal, Administrative, Clerical and Services Union.

J Wells on behalf of Unitywater

Hearing details:

2016.

Brisbane:

13 June and 14 June.

 1   Transcript dated 13 June 2016 at PN712.

 2   Additionally, the CEPU, Plumbers and AMWU have filed a further amended scope applications after the conclusion of the Interim hearing.

 3 (2012) 221 IR 1 (footnotes omitted).

 4 [2006] HCA 46

 5   Transcript dated 14 June 2016 at PN2434.

 6   [2014] FWCFB 1476 at paragraph 23.

 7   Transcript dated 14 June 2016 at PN2389.

 8   [2010] FWAFB 1625

 9   Transcript dated 14 June 2016 at PN2365.

 10   Transcript dated 14 June 2016 at PN2456.

 11   Thiess Pty Ltd v Construction, Forestry, Mining and Energy Union[2014] FWC 1769.

 12   Transcript dated 14 June 2016 at PN2585.

 13   Transcript dated 14 June 2016 at PN2517.

 14   Transcript dated 14 June 2016 at PN2467.

 15   This is reinforced by Unitywater and the AWU each filing scope applications since the Interim Order issued.

 16   [2015] FWC 8003. This aspect of the decision was not pursued on Appeal: The Australian Maritime Officers’ Union v Harbour City Ferries Pty Ltd[2016] FWCFB 1151.

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