Construction, Forestry, Mining and Energy UnionvDowner EDI Mining Pty Ltd T/A Boggabri Open Cut Coal Mine and Downer Mining Regional NSW Pty Ltd T/A Boggabri Open Cut Coal Mine
[2017] FWC 4350
•21 AUGUST 2017
| [2017] FWC 4350 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.437—Protected action
Construction, Forestry, Mining and Energy Union
v
Downer EDI Mining Pty Ltd T/A Boggabri Open Cut Coal Mine & Downer Mining Regional NSW Pty Ltd T/A Boggabri Open Cut Coal Mine
(B2017/688 & B2017/689)
COMMISSIONER SAUNDERS | NEWCASTLE, 21 AUGUST 2017 |
Proposed protected action ballot of employees of Downer EDI Mining Pty Ltd t/as Boggabri Open Cut Coal Mine and Downer Mining Regional NSW Pty Ltd T/A Boggabri Open Cut Coal Mine – genuinely trying to reach an agreement – ballot ordered
[1] The Construction, Forestry, Mining and Energy Union (CFMEU) has made two applications under s.437 of the Fair Work Act 2009 (Cth) (Act) for the Fair Work Commission (Commission) to make protected action ballot orders in relation to certain employees of Downer EDI Mining Pty Ltd (Downer EDI) and Downer Mining Regional NSW Pty Ltd (Downer Regional) (collectively, Downer).
[2] Downer Regional is a wholly owned subsidiary of Downer EDI. Downer EDI is the contract operator of the Boggabri Open Cut Coal Mine (Boggabri Mine), which is owned by Idemitsu Australia Resources Pty Ltd (Idemitsu). The mining services contract between Downer EDI and Boggabri Coal Pty Limited (Boggabri Coal), a wholly owned subsidiary of Idemitsu, for the provision of mining services to the Boggabri Mine expires on 30 November 2017.
Hearing
[3] I heard this matter on 17 August 2017. At the hearing the CFMEU adduced evidence from Mr Jeffrey Drayton, Vice President of the CFMEU Northern Mining & NSW Energy District. Downer adduced evidence from Mr Jarrott Goos, Employee Relations Manager.
Statutory framework
[4] The relevant statutory provisions governing this application are set out at s.443 of the Act as follows:
“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.
(2) The FWC must not make a protected action ballot order in relation to a proposed enterprise agreement except in the circumstances referred to in subsection (1).
(3) A protected action ballot order must specify the following:
(a) the name of each applicant for the order;
(b) the group or groups of employees who are to be balloted;
(c) the date by which voting in the protected action ballot closes;
(d) the question or questions to be put to the employees who are to be balloted, including the nature of the proposed industrial action.
(3A) For the purposes of paragraph (3)(c), the FWC must specify a date that will enable the protected action ballot to be conducted as expeditiously as practicable.
(4) If the FWC decides that a person other than the Australian Electoral Commission is to be the protected action ballot agent for the protected action ballot, the protected action ballot order must also specify:
(a) the person that the FWC decides, under subsection 444(1), is to be the protected action ballot agent; and
(b) the person (if any) that the FWC decides, under subsection 444(3), is to be the independent advisor for the ballot.
(5) If the FWC is satisfied, in relation to the proposed industrial action that is the subject of the protected action ballot, that there are exceptional circumstances justifying the period of written notice referred to in paragraph 414(2)(a) being longer than 3 working days, the protected action ballot order may specify a longer period of up to 7 working days.
Note: Under subsection 414(1), before a person engages in employee claim action for a proposed enterprise agreement, a bargaining representative of an employee who will be covered by the agreement must give written notice of the action to the employer of the employee.”
Issues in dispute
[5] Before I can make the protected action ballot orders sought by the CFMEU, one of the matters about which I must be satisfied is that the CFMEU has been, and is, genuinely trying to reach an agreement with Downer. 1
[6] Downer contends that the CFMEU has not been, and is not, genuinely trying to reach an agreement with Downer.
[7] Apart from the contested matter referred to in the previous paragraph, there is no dispute between the parties and I am satisfied on the evidence that the statutory requirements for the protected action ballot orders sought by the CFMEU have been met.
Genuinely trying to reach an agreement
[8] As to the question of whether a bargaining representative has been, and is, genuinely trying to reach an agreement, Flick J said the following in J.J. Richards & Sons Pty Ltd v Fair Work Australia: 2
“58. It is ultimately concluded that s 443(1)(b) is to be construed such that Fair Work Australia cannot reach a state of satisfaction that an “applicant ... is ... genuinely trying to reach an agreement with the employer” unless:
- an applicant has approached the employer and informed the employer of the general ambit of that for which agreement is sought; and
- the employer has foreshadowed – even in the most general of terms – its attitude as to the proposed agreement.
More may be required. Much may well depend upon the factual scenario in which the terms of s 443(1)(b) are to be applied. But such a minimum statement of that which is required is sufficient to dispose of the present Application. Contrary to the submissions advanced on behalf of the Applicants, the terms of s 443(1)(b) do not require:
- bargaining to have commenced within the meaning of and for the purposes of s 173, found within Part 2-4, of the Fair Work Act.
59. So much, it is concluded, follows from the natural and ordinary meaning of the phrase “trying to reach an agreement ...”. It is difficult to conclude that any person can try to reach an agreement with another in the absence of a disclosure of that for which consensus is sought. One person may wish to reach an agreement with another. But, until the general content of the proposed agreement is disclosed, it cannot be said that he has even attempted to reach an agreement. Until disclosed, it is not known whether the other person will readily embrace the proposed agreement or shun it or (perhaps) embrace the concept of an agreement but wish to vary one or other of its terms. Until disclosed, the person seeking agreement has not even tried to solicit the response of the other. Unless the disclosure is genuinely with a view to reaching agreement, it could well be said that the attempt to reach an agreement falls short of a person even trying to reach agreement. The addition of the word “genuine” – on one approach to construction – perhaps adds little. But the addition of that term serves to emphasise the importance of a person actually trying to solicit agreement. Until a proposed agreement has been disclosed to the prospective parties, and a response solicited, an applicant has not even tried to reach agreement – let alone genuinely tried to reach agreement.
60. The Transport Workers’ Union, in the present proceeding, satisfied that requirement by writing to J.J. Richards on 24 December 2010. Rightly or wrongly, J.J. Richards indicated its response in the terms it did in its letter dated 7 January 2011. That exchange of correspondence was sufficient to satisfy the precondition to the exercise of the power conferred by s 443(1).”
[9] In Total Marine Services Pty Ltd v Maritime Union of Australia 3, the Full Bench expressed the following views about s.443(1)(b):
“[31] In our view the concept of genuinely trying to reach an agreement involves a finding of fact applied by reference to the circumstances of the particular negotiations. It is not useful to formulate any alternative test or criteria for applying the statutory test because it is the words of s 443 which must be applied. In the course of examining all of the circumstances it may be relevant to consider related matters but ultimately the test in s 443 must be applied.
[32] We agree that it is not appropriate or possible to establish rigid rules for the required point of negotiations that must be reached. All the relevant circumstances must be assessed to establish whether the applicant has met the test or not. This will frequently involve considering the extent of progress in negotiations and the steps taken in order to try and reach an agreement. At the very least one would normally expect the applicant to be able to demonstrate that it has clearly articulated the major items it is seeking for inclusion in the agreement, and to have provided a considered response to any demands made by the other side. Premature applications, where sufficient steps have not been taken to satisfy the test that the applicant has genuinely tried to reach an agreement, cannot be granted.”
[10] The Full Bench in Esso Australia Pty Ltd v AMWU & Ors 4made the following observations about paragraphs [31] and [32] of the earlier Full Bench decision in Total Marine Services Pty Ltd v Maritime Union of Australia:
“[35] For our part, for reasons we articulate later, we agree with the observations in paragraph [31] and the first three sentences of paragraph [32] of Total Marine, set out above. We note that the observations which follow the first three sentences in paragraph [32] are obiter and although we do not consider that they should be understood as attempting to establish any binding decision rule, nonetheless they are, with respect, somewhat inconsistent with the earlier expressed proposition (with which we agree) that it is not useful to articulate any alternative test or criteria to the words of s.443(1)(b). We note that similar reservations were expressed by the majority of the Full Bench in JJ Richards and Sons Pty Ltd v TWU (JJ Richards No.1) and by the Full Bench in Farstad Shipping (Indian Pacific) Pty Ltd v MUA (Farstad).”
[11] The majority of the Full Bench in J.J. Richards & Sons Pty Ltd v Transport Workers’ Union of Australia 5 held that if it is established on the evidence that an applicant for a protected action ballot order had “in truth … some other, extraneous intention, object or purpose or is seeking something other than an enterprise agreement under the FW Act”, then the applicant would not satisfy the requirement of “genuinely trying to reach an [enterprise] agreement”. By way of example, the majority of the Full Bench referred to circumstances where the applicant’s “true motivation is to apply pressure in pursuit of political or environmental goals or simply to punish the employer for some perceived wrong doing.”6 This principle was applied by Senior Deputy President Richards in CFMEU v Brookfield Multiplex Australasia Pty Ltd,7 where his Honour held that the “CFMEU is motivated to manufacture a preferred environment in which to negotiate an agreement, as opposed to genuinely trying to reach agreement in its own right.”
[12] In light of these authorities, I will proceed on the basis that whether an applicant “has been, and is, genuinely trying to reach an agreement” is a question of fact to be decided having regard to all of the facts and circumstances of the particular case, including the motivation of the applicant. 8 No one factor is necessarily determinative of the question of whether an applicant has been, and is, genuinely trying to reach an agreement.9 No alternative test or criteria to the words of s.443(1)(b) should be applied.10 In addition, no specific stage must be reached in the negotiations in order for there to be a finding that an applicant has been, and is, genuinely trying to reach an agreement with the employer.11
[13] The expression “has been, and is” in paragraph 443(1)(b) imports temporal considerations. 12 It is necessary for the Commission to reach the requisite level of satisfaction both (a) at the time the application for a protected action ballot order is determined and (b) prior to the time of determination, in the course of the negotiations.13
Relevant facts
[14] The present applications for protected action ballot orders relate to an enterprise agreement which the CFMEU is seeking to negotiate, on behalf of its members, with Downer (Proposed Agreement) to replace the Downer EDI Mining Boggabri Enterprise Agreement 2014 (Downer Agreement). The Downer Agreement covers production and engineering employees who are employed by either Downer EDI or Downer Regional and who work at the Boggabri Mine (Employees). The evidence did not reveal which of the Employees are employed by Downer EDI and which are employed by Downer Regional. It is common ground that both Downer entities operate the Boggabri Mine as a single operation. The nominal expiry date of the Downer Agreement was 19 June 2017.
[15] Downer issued a notice of employee representational rights to the Employees who would be covered by the Proposed Agreement. The CFMEU was the default bargaining representative for each of its members who would be covered by the Proposed Agreement. There were also 10 individual employees who were nominated as employee bargaining representatives.
[16] On 16 March 2017, the first bargaining meeting was held in relation to the Proposed Agreement. At that meeting Downer was represented by Mr Goos. The CFMEU was represented by Mr Drayton, and a number of employee representatives were also in attendance. At the first bargaining meeting Mr Goos outlined Downer’s position in relation to the Proposed Agreement, which included a three year enterprise agreement, a wage freeze for the life of the Proposed Agreement, a reduction in the maintenance allowance for trades/servicepersons, modifying the production allowance to take into account unapproved leave and removing mandatory training requirements.14
[17] On 2 April 2017, the CFMEU provided Downer with a log a claims document in the following terms:
“The CFMEU proposes to use the Downer EDI Mining Boggabri Open Cut Enterprise Agreement 2014 as the basis for the new Enterprise Agreement and advise that during the negotiations, the document undergo a review for the purposes of identifying any issues that the parties identify and to ensure compliance with the Fair Work Act.
If there are any claims the Union has made that the Company believes are not permitted, we request that these concerns be brought to our attention.
The CFMEU reserves the right to add additional claims based on the outcomes of the negotiations.
In addition, the Union advises of the following claims (including proposed draft words) for discussion during the negotiations and for inclusion in the new Enterprise Agreement.
Log of Claims
1. Wage increases depend on the outcome of negotiations
2. Change current redundancy clause to read total earnings rather than classification rate.
3. Redundancy clause to contain a provision for voluntary redundancies
4. Wage increases to apply from date of expiry of the current EA
5. Bonus to stay the same.
6. A retention bonus as per the outcomes of negotiations
7. Paid union meetings on site in training room?
8. Union delegates allowed time with new employees at induction
9. Discuss procedures to simplify grievance procedure clause
10. A clause determining crib windows. First breaks not taken before 4-5hrs
11. Flexibility to change starting and finishing times 6am /6pm NSW fatigue recommendations. Daylight saving time 7am/7pm.
12. Job share and flexibility around rostering. eg 10 hour shifts available/family roster
13. Rostering clause .Ability to do all night or all dayshifts
14..Night shift allowance change from 15% to 25%
15.Natural disaster policy- i.e. floods, bushfire, paid as if at work if employees cannot access site (direct/normal route only) .
16. Leave without pay on rain delays/access to A/L
17.Christmas holiday roster to avoid the same people having time off every year. Conduct Holiday draw.
18. Drug testing on site to be mouth swab not urine test
19.Gate Seniority
20.Production bonus paid weekly not monthly
21. Clarification of warning timeframe in the discipline procedure. Eg How long it stays on your record (12 months)
22. Clear tooling requirements for fitters
23. Include maintenance bonus in base pay rate
24. Washing facilities for heavily soiled clothing”
[18] On 3 April 2017, a further bargaining meeting was held in relation to the Proposed Agreement. At that meeting Downer was represented by Mr Goos, the CFMEU was represented by Mr Drayton, and a number of employee representatives were also in attendance. During the course of that meeting:
(a) the CFMEU tabled the log of claims that was emailed to Downer on 2 April 2017;
(b) Mr Drayton went through each of the claims listed in the log of claims and explained why the changes were being sought and how the Downer Agreement could be changed to reflect them. Following Mr Drayton explaining those claims, two non-union employee representatives presented their positions to Downer;
(c) there was then a 40 minute break in which Downer considered what Mr Drayton had explained regarding the log of claims;
(d) following the break, Mr Goos responded to each of the claims in the CFMEU log of claims as follows:
● as to claim 1, Downer’s position was 0% the first year, the greater of 2% or CPI the second year and the greater of CPI or 2% the third year;
● as to claim 2, Downer’s response was that it would consider this further and get back to the CFMEU on its position;
● as to claims 3 to 9, Downer’s response was that it would not agree to those changes;
● as to claim 10, Downer’s response was that it would consider this further and get back to the CFMEU on its position;
● as to claims 11 to 14, Downer’s response was that it would not agree to these changes;
● as to claims 15 and 16, Downer’s response was that it would consider them together and get back to the CFMEU on its position;
● as to claims 17 to 19, Downer’s response was that it would not agree to these changes;
● as to claim 20, the CFMEU decided to withdraw this claim; and
● as to claims 21 to 24, the Downer’s response was that it would consider them together and get back to the CFMEU on its position;
(e) at the end of the meeting a further meeting was scheduled for 20 April 2017. 15
[19] On 20 April 2017, a further bargaining meeting was held in relation to the Proposed Agreement. At that meeting Downer was represented by Mr Goos, the CFMEU was represented by Mr Drayton, and a number of employee representatives were also in attendance. During the course of that meeting Mr Goos provided further responses to the claims in the CFMEU log of claims as follows:
(a) as to claim 2, Downer agreed to replace the classification rate in the redundancy clause with aggregated annualised wage;
(b) as to claim 10, Downer agreed to change the crib break gap to 4 hours from the current 3 hours;
(c) as to claims 15 to 16, Downer’s response was that it would not agree to these changes;
(d) as to claim 23, Downer’s position changed from seeking to completely remove the maintenance allowance to reducing it; and
(e) as to claims 21, 22 and 24, Downer’s response was that it would not agree to these changes. 16
[20] After the 20 April 2017 bargaining meeting Mr Drayton had a telephone conversation with Mr Goos regarding pay increases in the Proposed Agreement. During the telephone conversation, Mr Goos informed him that Downer were confident they would obtain the extension of the mining services contract with Idemitsu if they were in a position where there were no wage increases for the first year. Mr Goos indicated he needed an answer from Mr Drayton during that call. Mr Drayton confirmed that if Downer was successful in its tender for the contract extension there would be no claim for pay rises in the first year. 17
[21] On 9 May 2017, Downer became aware that it had not been successful in its tender for an extension to the mining services contract for the Boggabri Mine. 18 The successful tenderer for the mining services contract for the Boggabri Mine was BGC Contracting.
[22] Mr Drayton gave evidence, which I accept, that following Downer not succeeding in the extension of its mining services contract with Idemitsu for the Boggabri Mine, the paramount concerns of members of the CFMEU at the Boggabri Mine were the terms that regulated their redundancy, how much they would receive on redundancy, and whether or not they would be getting employment with Idemitsu or a new contractor at the Boggabri Mine. I also accept Mr Drayton’s evidence that members of the CFMEU employed at the Boggabri Mine wish Downer to agree to a new enterprise agreement to regulate their terms and conditions of employment. It is in the interests of the Employees to have a new enterprise agreement in place at the Boggabri Mine with improved conditions especially related to termination of employment. 19
[23] On 17 May 2017, Mr Drayton attended a meeting with representatives of Idemitsu. Following the meeting, Mr Drayton understood that Idemitsu considered potential redundancies to be Downer's responsibility and that they had nothing to do with Idemitsu. Further, Mr Drayton understood that Idemitsu intended on employing all the production workers who operate on coaling, which would be approximately one third of the employees at the Boggabri Mine, and the remaining production employees, including those Employees in the maintenance department, would be employed by BGC Contracting. 20
[24] On 18 May 2017, a short meeting was held between Mr Goos and Mr Drayton. At the meeting:
(a) the parties discussed Downer’s loss of the mining services contact with Idemitsu for the Boggabri Mine, recent communications from Mr Ray Balks, General Manager of Boggabri Coal, and Downer’s likely demobilisation strategy;
(b) the parties did not discuss the Proposed Agreement;
(c) Mr Drayton advised Mr Goos that he would engage with Idemitsu to determine whether the Employees would be offered continued employment following the expiry of Downer’s mining services contract on 30 November 2017; and
(d) no further bargaining meetings were scheduled at the conclusion of the meeting on 18 May 2017. 21
[25] On 2 June 2017, a meeting was held between Mr Goos, another Manager of Downer Blasting, Mr Drayton and Mr Peter Jordan, CFMEU President – Northern Mining & NSW Energy District at the CFMEU’s office in Cessnock. At the meeting:
(a) the parties discussed the negotiation of a greenfields agreement that would cover blasting work carried out by Downer employees in New South Wales;
(b) the parties did not discuss the Proposed Agreement, although Mr Goos did say that Downer’s strategy at the Boggabri Mine was to “work through to the end of the contract either with an expired agreement or roll-over of the current agreement with minimal changes”; and
(c) no further bargaining meetings were scheduled at the conclusion of the meeting on 2 June 2017. 22
[26] Mr Goos gave evidence, which I accept, that on 14 June 2017 he telephoned Mr Drayton and during the conversation Mr Drayton said words to the effect: "Neither Idemitsu nor BGC have agreements which can cover mine workers. Ray Balks told me that both Idemitsu and BGC will apply the same terms and that they may even bargain together". When Mr Goos asked Mr Drayton about what needed to happen about the Proposed Agreement, Mr Drayton responded in words to the effect: “Let’s hold off (on a further meeting) until I speak further with Ray”. 23 Mr Drayton does not recall this conversation.24
[27] Also of relevance to the present applications is the fact that the CFMEU has been involved in bargaining negotiations with Boggabri Coal in relation to potential variations to the Boggabri Coal Operations Pty Ltd CHPP 2016 Enterprise Agreement (CHPP Agreement). The CHPP Agreement covers employees of Boggabri Coal who work at the Boggabri Coal Handling Preparation Plant (CHPP), which is located at the Boggabri Mine.
[28] On 20 June 2017, Mr Goos received an email from Mr Paul Oram, a Project Manager in Downer's Mining Division. It contained a presentation from Idemitsu which outlined its intention to vary the CHPP Agreement. 25 The presentation relevantly provides as follows:
“Boggabri Coal Enterprise Agreement
Boggabri Coal plans to directly employ Operators required for the coal mining function (approx. 1/3)
Boggabri Coal options to do this are:
• Boggabri Coal directly employs approx. 1/3 operators as new employees
• Enter into interim/secondary contract with BGCto supply 1/3 operators
• Contract with another contractor/labour hire provider to supply 1/3 operators
…
• Boggabri Coal directly employs approx. 1/3 operators as new employees
If BCO employs the operators directly, a variation of the current CHPP Enterprise Agreement is required
• CHPP EA does not cover employees in the mining operation - only employees in the CHPP
• If BCO employed new employees directly from the Downer workforce, the Downer EA would transfer and apply to them
• BCO does not wish to have two EAs
• One EA covering 24 CHPP employees
• One EA covering 1/3 mining operator employees
• Different terms and conditions for employees, payroll set up etc
• Regular renegotiation of two EAs
For Operators
Boggabri Coal plan to provide current Operators, who apply and are selected, the opportunity to be permanently employed under a Boggabri Coal Enterprise Agreement
We have commenced a process of consultation with our CHPP employees to vary our current CHPP EA to provide additional coverage for employees as follows
"...to operate equipment at the Boggabri open cut mine"
We have met and are discussing this process with the CFMEU”
[29] On 30 June 2017, Mr Goos gave evidence that he had a telephone conversation with Mr Drayton, during which:
- they discussed Boggabri Coal's proposed industrial strategy;
- Mr Drayton said words to the effect: “The union will oppose any variation to the CHPP agreement"; and
- Mr Goos asked Mr Drayton what he expected from Downer and in response Mr Drayton said words to the effect: "At the moment we want to continue to work with Idemitsu". 26
[30] Mr Drayton does not recall this telephone conversation. Mr Drayton denies that the CFMEU opposed any variation to the CHPP Agreement; rather its position was that if the variations were sufficient then the employees may agree. I accept this evidence given by Mr Drayton and do not accept that Mr Drayton told Mr Goos “the union will oppose any variation to the CHPP agreement”, because (a) it is consistent with what the CFMEU actually did, namely, try to negotiate acceptable variations to the CHPP with Idemitsu, and (b) it would not make industrial sense for the CFMEU to oppose any variation to the CHPP Agreement; the details of, and benefits associated with, any proposed variations would, in my view, be likely to dictate the CFMEU’s response thereto.
[31] I accept Mr Goos’ evidence that Mr Drayton told him on 30 June 2017 that, “At the moment we want to continue to work with Idemitsu.” I also accept Mr Goos’ evidence that following the telephone conversation with Mr Drayton on 30 June 2017 he understood that there was no requirement to immediately recommence bargaining negotiations for the Proposed Agreement. 27 Mr Goos’ understanding in this regard is consistent with the evidence that the CFMEU was at the time engaging in meetings with Idemitsu to ascertain their intentions,28 including in relation to varying the CHPP Agreement, and the fact that no further bargaining meetings were scheduled following 18 May 2017.
[32] There is no dispute that on 6 July 2017 that there was a telephone conversation between Mr Goos and Mr Drayton. There is a dispute as to what was said during that conversation:
(a) Mr Goos gave evidence that he received a phone call from Mr Drayton at 4:02pm on 6 July 2017. Mr Goos gave evidence that Mr Drayton sounded agitated during the phone call, Mr Drayton advised that he had recently spoken with Mr Balks, Mr Drayton was not happy with Idemitsu’s intention to vary the CHPP Agreement to cover production mine workers, and Mr Drayton had informed Mr Balks that the CFMEU would oppose the use of the CHPP Agreement for transferring employees from Downer. Mr Goos says he then had a conversation with Mr Drayton in words to the following effect: 29
Mr Drayton said:
“I want to meet with Downer representatives in Boggabri on Tuesday, 11 July. We might need to start applying the pressure on Idemitsu. We will have to give them a kick. The crews have all voted for it.”
Mr Goos said:
“It's Downer that will suffer because we will be unable to fulfil on contractual production obligations. The cost will be borne by Downer.”
Mr Drayton said:
“Yeah, but Idemitsu will suffer as well and that's the aim. Look we'll talk through this on Tuesday.”
(b) Mr Drayton agrees that he spoke to Mr Goos on 6 July 2017. He says he did so for the purpose of organising a meeting with Downer at the Boggabri Mine on 11 July 2017. Mr Drayton denies being agitated on 6 July 2017 during a phone call with Mr Goos. The basis for Mr Drayton’s denial that he was agitated is that he did not attend a meeting with Idemitsu regarding its position concerning variations to the CHPP Agreement until 10 July 2017, 30 and therefore did not have any reason to be agitated on 6 July 2017. Mr Drayton denies the conversation alleged by Mr Goos, as set out in the previous subparagraph.
[33] Mr Goos also gave evidence that he had real concerns following his telephone conversation with Mr Drayton on 6 July 2017 that the CFMEU may seek to take industrial action at the Boggabri Mine. As a result, Mr Goos gave evidence, which I accept, that he immediately telephoned Mr Oram, Mr Ian Briggs, Chief Legal Counsel at Downer, Mr Hilton Hurst, Executive General Manager at Downer, and Mr Jack de Flamingh, solicitor of Corrs Chambers Westgarth Lawyers, in relation to this issue.
[34] On 7 July 2017 at 11:25am, Mr Goos sent an email to Mr Oram, Mr Briggs, Mr Kurt Baumgart, COO of Downer, Mr Hurst and Mr David Overall, CEO of Downer, in the following terms:
“Good morning
Yesterday afternoon (4:00pm 6 July) I returned a call to Jeff Drayton, CFMEU. We spoke for 5 minutes.
During this phone call, Jeff advised that he had recently spoken with Ray Balks (Idemitsu) and that he was not happy with their intention to vary the Idemitsu CHPP EA to cover production coal mining. Jeff advised that he had informed Ray that the union would oppose the use of the EA for transferring employees (former Downer employees).
Jeff further advised that he wanted to meet with Downer representatives in Boggabri on Tuesday 11 July. He stated words to the effect that the union might need to pressure Idemitsu via Downer’s expired enterprise agreement. He said that his members had voted unanimously to take industrial action. This is despite the fact that Downer and the CFMEU had not sought to bargain.
I replied that Downer would suffer from industrial action because we would be unable to fulfil on contractual production obligations and the cost would be borne by Downer. Jeff replied that Idemitsu would suffer as well, and that was the aim. He indicated that we would talk through this issue on Tuesday.
My firm belief is that Jeff has indicated that it is considering to take industrial action against Downer to influence Idemitsu. I immediately phoned Paul Oram, Hilton Hurst and Ian Briggs regarding the phone conversation. I then telephoned Jack de Flamingh from Corrs to arrange a meeting to discuss our concerns and to prepare a strategy.
Jack is coming in to meet Ian and myself at 3pm today and will possibly be in Boggabri on Tuesday where he can meet with Paul and myself following our union discussions.
Regards
Jarrett” 31
[35] The email is consistent with Mr Goos’ oral evidence, together with the evidence in his witness statement, in relation to his conversation with Mr Drayton on 6 July 2017, even though it does not record that Mr Drayton said, in reference to Idemitsu, words to the effect: “We will have to give them a kick”.
[36] I find, on the balance of probabilities, that Mr Goos had a conversation with Mr Drayton in words to the effect of those set out in paragraph [32(a)] above because (a) Mr Goos’ evidence of his conversation with Mr Drayton on 6 July 2017 is supported by his contemporaneous email sent on 7 July 2017 and his immediate calls to other Downer managers and Downer’s solicitor on 6 July 2017, (b) Mr Drayton was in regular communication with Mr Balks from Idemitsu at about this time in relation to Idemitsu’s intentions for the Boggabri Mine, including potentially varying the coverage of the CHPP Agreement to include production and maintenance workers at the Boggabri Mine, (c) Mr Drayton gave evidence in cross examination that in almost every conversation he had with Mr Goos at about this time Mr Goos asked him how things were going with Idemitsu, (d) I am satisfied that Mr Drayton was aware before he spoke to Mr Goos on 6 July 2017 that he would be unlikely to be able to negotiate variations to the CHPP Agreement which would be acceptable to his members covered by that enterprise agreement, and (e) Mr Drayton gave evidence in his witness statement that he “may have spoken to Mr Goos on 6th July I can’t specifically recall that conversation”, but he did not expressly deny Mr Goos’ version of the conversation above in his witness statement in reply.
[37] On 11 July 2017, a further bargaining meeting was held in relation to the Proposed Agreement. This was the first bargaining meeting held in relation to the Proposed Agreement since 20 April 2017, given the Proposed Agreement was not discussed at the meetings on 18 May 2017 and 2 June 2017. At the meeting Downer was represented by Mr Goos, Mr Oram and Ms Emma Richards, HR Advisor. The CFMEU was represented by Mr Drayton, and a number of employee representatives were also in attendance. During the course of the bargaining meeting:
(a) Mr Drayton explained the CFMEU’s revised claims for the Proposed Agreement, being:
- a variation to the redundancy exemption clause which provides greater certainty that employees made redundant would receive a redundancy payout;
- a variation to the definition of a weeks' pay as it relates to the severance pay portion of redundancy payment only (1 week/year of service) from base hourly rate x 35 hours to "as if at work"; and
- an agreement term beyond the contract end date of 30 November 2017, being a minimum of 12 months; 32
(b) As to the claim for a Proposed Agreement with a minimum term of 12 months, Mr Drayton said words to the effect: "We don't believe that BGC will have enough equipment on the mine or be ready to go come 1 December and you guys will have to stay on and continue to work". Mr Goos did not agree with Mr Drayton’s view but did say they would have a crew of employees at the site after 1 December still removing machinery and equipment that belonged to Downer. Mr Drayton said words to the effect: "You will need an agreement then" and Mr Goos replied in words to the effect: "We will have to find out another way to employ them". 33 I also accept that Mr Goos asked Mr Drayton why they needed to make an agreement “if Downer’s services contract finishes on 30 November?”;
(c) When discussing Boggabri Coal’s offer Mr Drayton said words to the effect: "The base salary is about $5,000 00 less per annum as they are on about $3.00 less per hour, the bonus structure is 100% at risk, that workers will be about $4,000.00 worse off in personal carers leave as it is paid for ordinary hours, not as if at work. There are about 10 issues in the Downer Enterprise Agreement that aren't included in the CHPP EA such as public holidays, salary sacrifice and training";
(d) Mr Goos gave evidence that during the meeting Mr Drayton said words to the effect: "We want to send a message to Idemitsu. We're not going to be fucked over by them [Boggabri Coal] on our wages and conditions. We have had no industrial action here [on this site] since Downer have been here. My members are not going to sit around and be fucked over by Idemitsu. Now Downer Mining might get caught up in that";
(e) Mr Goos gave evidence that he responded to Mr Drayton in words to the effect: "Why would you do that to us? We are stuck in the middle";
(f) Mr Goos gave evidence that Mr Drayton responded in words to the effect: "I agree. I don't think there will be any disadvantage to you. Downer Mining has been really good and really helpful in the last month. I've told all my members that. But it's Idemitsu that's kicking them in the guts now. It's not the fault of Downer"; and
(g) At the end of the meeting a further meeting was scheduled for 24 July 2017.
[38] Mr Drayton denied the conversations referred to in subparagraphs [37(d), (e) and (f)] above in his oral evidence. I prefer Mr Goos’ evidence in relation to these disputed parts of the conversation on 11 July 2017, because (a) Mr Drayton accepts that he was not happy on 11 July 2017 with the attitude taken by Idemitsu on 10 July 2017 to the bargaining negotiations for variations to the CHPP Agreement, (b) the comments Mr Goos attributes to Mr Drayton on 11 July 2017 are consistent with those I have found were made by Mr Drayton on 6 July 2017, and (c) Mr Drayton did not deny the conversations referred to in subparagraphs [37(d), (e) and (f)] above in his witness statement in reply.
[39] On 13 July 2017, the CFMEU filed applications for protected action ballot orders relating to the Employees at the Boggabri Mine.
[40] On 17 July 2017, Mr Goos sent a letter to Mr Drayton in the following terms:
“We write to you in regards to your bargaining claims in relation to the proposed Downer EDI Mining Boggabri Enterprise Agreement 2017 (the proposed Boggabri EA). We urgently seek clarification on the claims for the proposed Boggabri EA in the context of the Protected Action Ballot Order (PABO) filed on 13 July 2017.
Downer EDI Mining Pty Ltd (Downer) met with you and a number of bargaining representatives on 11 July 2017. This was the first bargaining meeting since 18 May 2017, and the first bargaining meeting after notification that Downer's mining services contract with Idemitsu had not been renewed with the effect that the contract would end on 30 November 2017.
During last week's meeting the CFMEU outlined a number of claims in relation to the proposed Boggabri EA which included:
a) Changes to severance pay exemption rules to further restrict Downer's ability to avoid severance payments except where employment with an alternative employer provides the same 'total earnings';
b) An increase in the value of severance payment portion of redundancy payments by changing the definition of 'weeks' pay' from 35 ordinary hours to 'total earnings'; and
c) A term of 12 or more months.
These claims had not been previously raised. Indeed, prior to the announcement of the award of the mining services contract, the parties bargained for terms to apply in the future. For instance, a three (3) year term, annual wage reviews and a Christmas / Easter lottery for the purposes of allocating annual leave.
These terms are no longer of relevance to Downer as our contract ends on 30 November 2017.
Downer has not had sufficient opportunity to assess the value or impact of these new and additional claims. It is unclear whether these claims are an alternative to previous claims made in respect of the enterprise agreement or the union is still pressing other claims made prior to the recent hiatus in bargaining.
It cannot be argued that the CFMEU is genuinely trying to reach agreement when we do not know what agreement you are seeking. We therefore seek a further meeting with you to understand the claims now made.”
[41] On 18 July 2017, the CFMEU withdrew the applications for protected action ballot orders filed on 13 July 2017.
[42] On 19 July 2017 at 10:07pm, Mr Drayton sent an email to Mr Goos and Mr Oram in response to Mr Goos’ letter dated 17 July 2017. The email was in the following terms:
“Jarrett
I will again clarify our bargaining position as per the latest EA negotiating meeting. See claims as follows. I will respond directly to the items you raise in the correspondence.
1. Clause 2.10.7 (ii). As was raised at the very first meeting after some lengthy discussion, the base rate of pay in the exemption clause was highlighted as an issue. As you are aware this discussion was a direct result of concerns about whether members would be entitled to redundancy if Downer did not gain the ongoing contract. Rafe Ritchie and Adam Lain spoke at length about their concerns in regards after I raised the issue. As you are also aware this item was not included in the log of claims which was presented at the next meeting due to the knowledge everyone at that first meeting, including yourself, could be in no doubt about our concerns members had in regards to this clause.
2. As per item 2 in the log of claims document (redundancy paid at total earnings rather than classification rate) we have made a concession in the interests of getting agreement to our latest position that only one week of the three (severance) is paid at the "as if at work" rate.
3. The term of the agreement has been raised on a number of occasions by both the company and the union. It is our position that the term exceeds the 30thNovember as it is the unions belief that the mine will not be able to continue to operate as it does currently due to the fact we believe the incoming contractor doesn't have the ability operate the mine as has been explained by the mine owner. We therefore seek a term of 12 months as you again are inherently aware of.
The final claim raised and progressed by the union is that on termination (redundancy) personal leave accruals will be paid "as if at work". This is an increase on the current base rate payment. This issue again was discussed at length, particularly by myself. To jog your memory about this issue, I raised it was my belief that a recent decision may indicate that personal leave had to be paid at this rate regardless of negotiation. You denied you believed that this was the case.
Finally, I am astonished you claim that you have not the chance to assess the value or impact of the changes you raise in your correspondence. I along with each member of our bargaining team clearly recall your comments that "Downer will not agree with any claim that will impact directly on our profits when we will no longer be at Boggabri Coal” This was a clear indication to us you were not interested in agreeing to any claim that may result in an added cost to Downer. It is our expectation that you will now formally respond at the next negotiation meeting on Monday 24th.”
[43] On 24 July 2017, a further bargaining meeting was held in relation to the Proposed Agreement. At the meeting Downer was represented by Mr Goos, Mr Oram and Ms Richards, the CFMEU was represented by Mr Drayton, and also in attendance were Mr Saul Burke, Mr Zeph Pryer, Mr David Boxsell, Mr Barry Picton, Mr Rafe Ritchie and Mr Andrew Bates. During that bargaining meeting:
(a) The CFMEU focused on its four claims:
● change to severance pay exemption rules to restrict Downer's ability to avoid severance payments except where employment with an alternative employer provides the same 'Aggregated Annualised Wage';
● an increase in the value of severance payment portion of redundancy payments by changing the definition of 'weeks' pay' from 35 ordinary hours to 'Aggregated Annualised Wage';
● a term of 12 months for the Proposed Agreement; and
● payment of unused personal/carer's leave on termination at the Aggregated Annualised Wage; 34
(b) As to the claim regarding the severance pay exemption, Downer agreed to this claim;
(c) As to the claim regarding an increase to the value of severance pay, Downer agreed to this claim;
(d) As to the claim regarding a 12 month term, Downer’s position was: "I am unsure of whether or not it's within Downer's ability to offer an agreement term beyond our commercial contract. Downer can agree to an expiry of 30 November 2017 but we'll commit to work with the representatives to address the continuation of employment for any employees engaged beyond 30 November 2017 for the demobilisation";
(e) As to the claim regarding the payment of unused personal/carer’s leave, Downer’s position was that: "The cost of this claim is prohibitive. Downer is prepared to offer a $1,000 retention payment for employees engaged as of 30 November, which will be extended to those employees who transfer internally with Downer." There was no discussion about considering Downer’s offer despite the addition of the retention payment. Instead, Mr Drayton said words to the effect: "The position we put to you was our base position. We can't go any lower than that. Our log of claims, in writing to you, is the position we want”; and
(f) At the end of the meeting no further meetings were scheduled.
[44] The present applications for protected action ballot orders were filed on 3 August 2017.
Consideration
[45] Section 443(1)(b) of the Act requires satisfaction that “each applicant has been, and is, genuinely trying to reach an agreement”. In the present case, the only applicant is the CFMEU.
[46] There is no dispute between the parties and I am satisfied on the evidence that the CFMEU’s state of mind in connection with the question of whether it is genuinely trying to reach an agreement is to be determined by Mr Drayton’s state of mind. In particular, Mr Drayton is an official and an employee of the CFMEU and his conduct in negotiating the Proposed Agreement with Downer, including his discussions with Mr Goos, was conduct within the scope of his actual or apparent authority (s.793(1)&(2) of the Act). Mr Drayton’s state of mind includes his intention, purpose or motivation (s.793(3) of the Act).
[47] Downer contends that Mr Drayton’s, and therefore the CFMEU’s, sole motivation or purpose is to put industrial pressure on a third party, namely Idemitsu, and that Mr Drayton, and therefore the CFMEU, is not genuinely trying to reach an agreement with the employer of the employees who are to be balloted.
[48] The CFMEU contends that Mr Drayton’s motivation or purpose is not to place industrial pressure on any third party, and the CFMEU is genuinely trying to reach an agreement with Downer to benefit the CFMEU members who work at the Boggabri Mine.
[49] For reasons which I set out below, I find on the balance of probabilities that Mr Drayton, and therefore the CFMEU:
(a) has, in the course of the bargaining negotiations, been genuinely trying to reach an agreement with the employer of the employees who are to be balloted; and
(b) is, at the time the Applications are determined, motivated by, or acting for the purpose of achieving, two things by seeking to have protected industrial action taken by the Employees:
(i) first, to put industrial pressure on a third party, namely Idemitsu; and
(ii) secondly, to enhance the prospects of negotiating the Proposed Agreement on terms favourable to the Employees.
[50] Mr Warren, counsel for Downer, accepted, correctly in my view, that if I found that Mr Drayton was motivated by both purposes referred to in the previous paragraph, rather than the sole purpose contended for by Downer, then it would follow that Mr Drayton is genuinely trying to reach an agreement with the employer of the employees who are to be balloted.
[51] The idea that a person may be motivated to act for more than one purpose or reason is not unfamiliar to the field of industrial law. The situation is commonly encountered in connection with general protections applications under Part 3-1 of the Act. 35 Although there is no equivalent to s.360 of the Act in Part 3-3 of the Act, it is clear that an applicant for a protected action ballot order may make such an application for a number of different purposes. In my view, provided that the relevant facts and circumstances, including the motivation(s) or purpose(s) of the applicant, satisfy the Commission that the applicant has been, and is, genuinely trying to reach an agreement with the employer of the employees who are to be balloted, it matters not that the applicant may have, or have had, an extraneous intention, object or purpose for the proposed industrial action, in addition to wishing to take the proposed industrial action for the genuine purpose of reaching an agreement with the employer of the employees who are to be balloted.
[52] My reasons for finding, on the balance of probabilities, that the CFMEU has, in the course of the bargaining negotiations, been genuinely trying to reach an agreement with the employer of the employees who are to be balloted are as follows:
(a) In the period between 16 March 2017 and 20 April 2017, Downer, the CFMEU and a number of employee bargaining representatives participated in three bargaining meetings. During those meetings Downer and the CFMEU discussed, explained and were given an opportunity to ask questions and gain an understanding of the claims made by each of them for the Proposed Agreement;
(b) In the first bargaining meeting on 16 March 2017, Mr Goos outlined Downer’s bargaining position in relation to the Proposed Agreement;
(c) The CFMEU submitted its log of claims to Downer on 2 April 2017;
(d) At the second bargaining meeting on 3 April 2017 Mr Drayton explained each of the claims made by the CFMEU. At that meeting Mr Goos gave Downer’s initial response to each of those claims; and
(e) At the third bargaining meeting on 20 April 2017 the parties’ claims were further discussed. There was agreement at that meeting in relation to some of the claims made by each party, while other claims remained in dispute.
[53] My reasons for finding, on the balance of probabilities, that the CFMEU is, at the time the Applications are determined, motivated by, or acting for the purpose of, putting industrial pressure on a third party, namely Idemitsu, are as follows:
(a) I prefer Mr Goos’ evidence of his discussions with Mr Drayton on 6 and 11 July 2017 over the evidence given by Mr Drayton in relation to those discussions. I set out my reasons for so finding in paragraphs [36] and [38] above;
(b) The words spoken by Mr Drayton to Mr Goos on 6 and 11 July 2017 establish to my satisfaction that Mr Drayton does wish protection industrial action to be taken by the Employees to put pressure on Idemitsu. In particular, I rely on the following statements by Mr Drayton:
- “We might need to start applying the pressure on Idemitsu. We will have to give them a kick. The crews have all voted for it.”
- “…Idemitsu will suffer as well and that’s the aim.”
- “We want to send a message to Idemitsu. We’re not going to be fucked over by them [Boggabri Coal] on our wages and conditions. We have had no industrial action here [on this site] since Downer have been here. My members are not going to sit around and be fucked over by Idemitsu. Now Downer Mining might get caught up in that.”
- “Downer Mining has been really good and really helpful in the last month. I’ve told all my members that. But its Idemitsu that’s kicking them in the guts now. It’s not the fault of Downer.”
[54] My reasons for finding, on the balance of probabilities, that the CFMEU is, at the time the Applications are determined, motivated by, or acting for the purpose of, taking of protected industrial action to enhance the prospects of negotiating a favourable enterprise agreement between the Employees and Downer at the Boggabri Mine are as follows:
(a) Prior to the bargaining meeting on 18 May 2017, the CFMEU became aware that Downer had not been awarded the contract extension for the Boggabri Mine. At the bargaining meeting on 18 May 2017, which was short, there was no real discussion in relation to the terms of the Proposed Agreement. Mr Goos spoke about Downer’s concern with safety, completing the current contract at the Boggabri Mine, and Downer’s demobilisation strategy. Mr Drayton spoke of the concern as to whether CFMEU members would be afforded redundancies and what they would be paid if they were terminated. It is not surprising that this meeting progressed in the way that it did, given the significant change in events flowing from the news that Downer had not been awarded the contract extension. It is also not surprising that there was a hiatus for some time in bargaining negotiations for the Proposed Agreement, because the CFMEU needed to find out from Idemitsu what its plans were for the Boggabri Mine post 30 November 2017;
(b) Following the meeting on 18 May 2017, Mr Drayton had a number of discussions with Idemitsu to try to obtain information in relation to their intentions concerning the employment of workers at the Boggabri Mine. Mr Drayton was informed by Idemitsu that it wished to vary the CHPP Agreement to cover production and maintenance workers at the Boggabri Mine. Mr Drayton had a number of discussions with Idemitsu about such a variation. One such discussion took place on 10 July 2017, by which time it became apparent to Mr Drayton that it would be difficult for Idemitsu and the CFMEU, as bargaining representative for the employees covered by the CHPP Agreement, to reach agreement on variations to the CHPP Agreement. Mr Drayton was agitated by the position taken by Idemitsu in relation to bargaining for variations to the CHPP Agreement. Had such variations been agreed, that may have led to a number of the Employees being employed by Boggabri Coal on favourable terms, thereby eliminating or ameliorating the impact of those Employees being made redundant by Downer;
(c) After it became apparent to Mr Drayton in the meeting with Idemitsu on 10 July 2017 that it would be difficult to negotiate an agreement with Idemitsu to vary the CHPP Agreement, Mr Drayton turned his attention back to the Proposed Agreement with Downer. Mr Drayton attended the bargaining meeting with Downer on 11 July 2017 and indicated that the Employees “were seeking to negotiate a new agreement with Downer and were seeking” changes which he proceeded to outline;36
(d) Those claims were discussed during the bargaining meeting on 11 July 2017. At the end of the meeting the participants organised a further bargaining meeting for 24 July 2017 at the Boggabri mine, which would provide Downer with time to assess the claims made on 11 July 2017;
(e) On 13 July 2017, the CFMEU filed applications for protected action ballot orders in relation to the Employees, but withdrew those applications on 18 July 2017 without them being heard;
(f) On 17 July 2017, Mr Goos wrote to Mr Drayton in relation to the claims communicated in the 11 July 2017 bargaining meeting. One issue raised by Mr Goos in that correspondence was whether the three claims articulated on 11 July 2017 were in lieu of, or in addition to, the claims made earlier in the bargaining negotiations for the Proposed Agreement. On 19 July 2017, Mr Drayton responded to the issues made by Mr Goos and made a further claim that on termination (redundancy) personal leave accruals will be paid ‘as if at work’. This further claim had not been raised previously by the CFMEU. It was clear to Mr Goos after receipt of the 19 July 2017 email from Mr Drayton that the CFMEU was only making four claims in relation to the Proposed Agreement, namely the three claims made on 11 July 2017 and the personal leave claim referred to in the 19 July 2017 email, and the CFMEU was not pursuing the other claims originally communicated in its log of claims back in April 2017.
(g) Importantly, the CFMEU did not ignore the important change in events triggered by reason of the news that Downer had not been awarded the contract extension at the Boggabri Mine. The CFMEU dropped the vast majority of its earlier claims that were premised on an assumption that Downer would continue to operate the Boggabri Mine after 30 November 2017 and focused in its negotiations for the Proposed Agreement on four claims in response to Downer’s loss of the contract. Three of the four claims related to the payments the Employees would receive if they were dismissed by Downer on the ground of redundancy, namely the change to the redundancy exemption clause, the change in the definition to a week’s pay as it relates to severance pay, and payment of accrued personal leave on termination. I accept that those matters were, and remain, of significant importance to the Employees because they face a situation in which their employment at the Boggabri Mine and/or with Downer may well come to an end in connection with Downer’s loss of the contract later this year. The CFMEU would not be acting in the best interests of its members at the Boggabri Mine if it did not try to secure such enhanced benefits for Employees who face the real risk of redundancy. While it is true, as Downer contends, that such benefits can be agreed on or arranged by a mechanism other than a new enterprise agreement, I accept the CFMEU’s argument that the negotiation, making and approval of a new enterprise agreement prior to 30 November 2017 containing such benefits is the most effective and efficient means by which the CFMEU could secure such benefits for its members at the Boggabri Mine. These matters support the CFMEU’s contention that it is genuinely trying to reach an agreement with Downer;
(h) As to the CFMEU’s fourth claim, being a claim for an agreement of 12 months duration, it does not, in my view, suggest or indicate that the CFMEU is not genuinely trying to reach an agreement with Downer. As Mr Drayton explained in his evidence, he believes it is likely that Downer will continue to undertake some work at the Boggabri Mine after 30 November 2017, because the new contractor may not be ready to commence operating the Boggabri Mine, or part of it, by 1 December 2017 and/or for the purpose of removing machinery and equipment belonging to Downer from the Boggabri Mine. Further, a new enterprise agreement between Downer and the Employees may transfer to the new operator and employer at the Boggabri Mine. If there was such a transfer, having an in-term enterprise agreement applying at the Boggabri Mine for up to 12 months may be of some benefit to employees working there. It is also relevant to note that the Downer Agreement only covers employees of Downer while they are working at the Boggabri Mine. No suggestion has been made by either party to change the coverage clause in the Downer Agreement. It follows that if a new enterprise agreement (with the same coverage clause as the Downer Agreement) between Downer and the Employees was made and approved with a term of 12 months, it would not apply to Downer employees working at mines or workplaces other than the Boggabri Mine;
(i) I am satisfied that Mr Drayton attended the bargaining meeting on 24 July 2017 for the purpose of hearing and discussing Downer’s response to the four claims communicated by Mr Drayton on 11 and 19 July 2017. Downer agreed to two of those four claims, namely the change to the redundancy exemption clause and the change in the definition to a week’s pay as it relates to severance pay. Downer did not agree to the claim for a 12 month enterprise agreement; they restated their willingness to agree to an enterprise agreement with a nominal expiry date of 30 November 2017 and gave a commitment “to work with the representatives to address the continuation of employment for any employees engaged beyond 30 November 2017 for the demobilisation.”37 Downer rejected the claim for higher personal leave payments on termination on the basis that the cost of the claim was “prohibitive” and made a counter offer of $1,000 to each Employee as a retention payment. Mr Drayton responded to Downer’s offer by saying, “The position we put to you was our base position. We can’t go any lower than that. Our log of claims, in writing to you, is the position we want.” No further bargaining meeting was arranged at the end of the 24 July 2017 bargaining meeting, nor has such a meeting since been arranged;
(j) Downer contends that Mr Drayton’s flat rejection of Downer’s offer on 24 July 2017, without discussion with or consideration by the Employees (other than those attending the bargaining meeting), together with Mr Drayton’s insistence that the CFMEU’s claim is non-negotiable and the fact that no further bargaining meeting has been held or arranged, supports a finding that the CFMEU is not genuinely trying to reach an agreement with Downer. I do not accept this argument. There is only a little over three months before Downer’s contract at the Boggabri Mine expires on 30 November 2017 and many of the Employees are likely to be made redundant by Downer. It follows that there is a limited window of time for the parties to negotiate, make and have approved a new enterprise agreement to replace the Downer Agreement. Having regard to those matters and the four focused claims the CFMEU is pursuing for the Proposed Agreement, two of which are agreed, I accept that Mr Drayton was acting on the instructions of his members at the Boggabri Mine when he told Downer on 24 July 2017 that he had already communicated “our base position. We can’t go any lower than that.” I would characterise Mr Drayton’s, and therefore the CFMEU’s, conduct in that regard as “hard bargaining”, but given the short period of time to achieve a new agreement and the benefits that may accrue to the Employees if the outstanding claims, particularly the personal leave claim, were accepted, the CFMEU’s position is both understandable and, in my view, consistent with a genuine desire to try to reach an agreement with Downer. That a further bargaining meeting has not been held or arranged is not, in my view, of particular significance in this case. The present applications were filed on 3 August 2017, just over a week after the bargaining meeting on 24 July 2017. There is no evidence to suggest that Downer has invited the CFMEU and the employee bargaining representatives to a further bargaining meeting and they have refused to attend. There is currently an impasse in the bargaining in connection with the two outstanding claims and it seems clear that both parties are waiting for these applications to be determined before making their next move in the negotiation of the Proposed Agreement;
(k) In cross examination Mr Drayton was asked about his expectations in the event that Downer employees continue to do some work at the Boggabri Mine after 30 November 2017. Mr Drayton gave evidence to the effect that, should Downer employees continue to work at the Boggabri Mine after 30 November 2017, he would expect them to continue to work under the “current agreement”. Downer submits that Mr Drayton’s evidence in this regard supports its contention that the CFMEU is not genuinely trying to reach an agreement with Downer; its sole aim is to take protected industrial action to get to Idemitsu. I do not accept that submission. When Mr Drayton was asked about the prospect of Downer employees remaining at the Boggabri Mine to undertake work after 30 November 2017, it was in the context of Downer acknowledging that some employees would be required at the Boggabri Mine after 30 November 2017 to demobilise equipment from the mine. Mr Drayton’s view is that such demobilisation work should be covered by the “current agreement”. Further, in re-examination Mr Drayton explained what he meant by the “current agreement” in his earlier evidence; he gave evidence, which I accept, that the “current agreement means the new enterprise agreement if we come to a new enterprise agreement”. I also accept Mr Drayton’s evidence given in cross examination to the effect that a large number of the Employees will be made redundant as a result of Downer’s loss of its contract at the Boggabri Mine, so what is important to the CFMEU is the terms that will apply to those Employees on their redundancy.
Conclusion
[55] Having had regard to all the relevant facts and circumstances, as summarised in paragraphs [14] to [54] above, I am satisfied that:
(a) two applications have been made by the CFMEU under s.437 of the Act, one for each of Downer EDI and Downer Regional; and
(b) the CFMEU has been during bargaining negotiations, and is at the time of my determination of this matter, genuinely trying to reach an agreement with Downer EDI and Downer Regional as the employers of the Employees who are to be balloted.
[56] Accordingly, I must make protected action ballot orders. 38
[57] Orders PR595502 and PR595505 will be issued concurrently with this decision.
COMMISSIONER
Appearances:
Mr K Endacott on behalf of the CFMEU.
Mr R Warren, of Counsel, on behalf of Downer.
Hearing details:
2017.
Newcastle:
17 August.
1 Sections 443(1)-(2) of the Act
2 [2012] FCAFC 53
3 [2009] FWAFB 368
4 [2015] FWCFB 210
5 [2010] FWAFB 9963 at [63]
6 Ibid
7 [2012] FWA 3374 at [45]
8 Esso Australia Pty Ltd v AMWU & Ors[2015] FWCFB 210 at [57] and [69]
9 Ibid at [55]
10 Ibid at [35]
11 Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union v H J Heinz Company Australia Ltd[2009] FWA 322 at [20]
12 Esso Australia Pty Ltd v AMWU & Ors[2015] FWCFB 210 at [54]
13 Coles Supermarkets (Australia) Pty Ltd v The Australasian Meat Industry Employees Union[2015] FWCFB 379 at [45]-[51]
14 Ex R1 at [10]
15 Ex A1 at [9]-[18]
16 Ex A1 [19]
17 Ex A1 at [20]
18 Ex R1 at [14]
19 Ex R1 at [44]
20 Ex A1 at [22]
21 Ex R1 at [15], [17]
22 Ex A1 at [24]; Ex R1 at [19]-[21]
23 Ex R1 at [22]
24 Ex A1 at [38]
25 Ex R1 at ]24]
26 Ex R1 at [26]-[27]
27 Ex R1 at [28]
28 Ex A1 at [38]
29 Ex R1 at [30]
30 The email sent on 2 July 2017 suggests that Idemitsu was attempting to organise a meeting with Mr Drayton on 6 or 7 July 2017, but Mr Drayton says the meeting with Idemitsu did not take place until 10 July 2017 (annexure C to Ex R1)
31 Ex R2
32 Ex R1 at [31]
33 Ex A1 at [30]
34 Ex R1 at [36]
35 See, for example, Board of Bendigo Regional Institute of Technical and Further Education v Barclay (2012) 248 CLR 500; General Motors-Holdens Pty Ltd v Bowling (1976) 136 CLR 676
36 See paragraph [37(a)] above
37 Ex R1 at [36]
38 Section 443(1) of the Act
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