CPSU, the Community and Public Sector Union v Red Bee Media Australia Pty Ltd

[2010] FWA 9253

[2010] FWA 9253

FAIR WORK AUSTRALIA

DECISION

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

CPSU, the Community and Public Sector Union
v
Red Bee Media Australia Pty Ltd
(B2010/3616)

SENIOR DEPUTY PRESIDENT HAMBERGER SYDNEY, 7 DECEMBER 2010

Application for a bargaining order; good faith bargaining requirements; relationship of good faith bargaining requirements to protected action; whether one party can unilaterally declare negotiations at an end.

Introduction

[1] On 30 November 2010, I made an order under s.230 of the Fair Work Act 2009 (the Act) in the following terms:

“That:

Red Bee Media Australia Pty Ltd provide to the CPSU information showing the number of captioners who have been classified into each of the new PRS classifications levels in the new classification structure proposed by Red Bee and each of those cautioners’ current hourly rates of pay by close of business on 7 December 2010.

In providing the information Red Bee Media Australia Pty Ltd is not required to identify individual captioner’s PRS classification level or current hourly rates of pay.

The period of operation of this order is governed by s.232 of the Fair Work Act 2009.”

[2] These are my reasons for making that order.

[3] The order was made after hearings on 24 and 30 November 2010. The Community and Public Sector Union (the applicant, the CPSU) was represented at those hearings by Mr L Benfell, and Red Bee Media Australia Pty Ltd (the respondent, the company) by Mr P Ludeke. Mr J Warren an Industrial Officer with the CPSU gave evidence on behalf of the applicant. He made a statement which was tendered as Exhibit CPSU 1. Mr S Champion, the company’s Director of Employee Relations Strategies, gave oral evidence on behalf of the respondent.

Background

[4] The company’s employees who are primarily engaged in captioning activities are currently employed under the Red Bee Media Australia Union Collective Agreement 2007 (the 2007 Agreement). There are just under 100 employees covered by the 2007 Agreement, 59 of whom are members of the CPSU. 1 The 2007 Agreement has a nominal expiry date of 30 June 2010. The CPSU wrote to the company on 3 May 2010 seeking to initiate bargaining about a new agreement. On 15 May 2010 the company issued notices of representational rights. The CPSU and the company have had a series of meetings about a new enterprise agreement since 8 June 2010.

[5] On 21 September 2010, Fair Work Australia (FWA) made an order for a protected action ballot to be held. On 15 October, the ballot closed. The CPSU sent a notice of protected action on 22 October 2010. Protected action commenced on 28 October 2010.

[6] A number of issues have been in dispute between the parties. During the term of the 2007 Agreement the company has paid wage increases on an individual basis above those set out in the Agreement. This has resulted in a majority of captioners being paid wage rates that are greater than those in the 2007 Agreement. The new agreement proposed by the company contains a classification structure that is different from that contained in the 2007 Agreement. 2 The new classification structure sets a minimum pay rate for each level only. The proposed agreement sets out minimum rates to apply on commencement of the agreement with 3 per cent increases to apply 12 and 24 months after that. The proposed agreement also includes the following draft clause:

“In addition to payment of the minimum specified agreement rates, the Employer will conduct an annual general salary review of over-agreement rates, with any increase decided upon to normally be implemented during September each year. The salary review will take account of business profitability over the previous year, market rates for similar or equivalent occupations, individual employee rates relative to other employees of the same level, and business competitiveness.

Any proposal not to pay a general increase in any year, or to defer an increase to another month, will be communicated by the Employer to employees for the purpose of consultation with employees, and their representatives where requested.” 3

[7] The CPSU’s initial response to this is set out in Mr Warren’s statement:

“Red Bee is currently proposing to guarantee annual increases to the minimum rates only. It is proposed that other employees will have their wage rates reviewed annually and Red Bee management will retain the discretion to not provide a wage increase. In this circumstance the increases to the minimum rates would be absorbed by employees by employees on over agreement rates.

The CPSU has advised Red Bee that this proposal does not satisfy our members’ claims and that we will not be able to reach an agreement if it remains so.” 4

[8] The CPSU’s claim was for guaranteed annual pay increases for all employees covered by the agreement. 5 However, according to Mr Warren, at a negotiation meeting on 21 October 2010, the company advised the CPSU that it would be willing to consider increasing the proposed minimum pay rates.6 This was confirmed by Mr Champion during his cross examination.7 Mr Warren noted in his statement that:

“This would result in more employees being subject to the minimum pay rates and in turn subject to the proposed annual salary increases.”

[9] According to Mr Warren, the CPSU advised the company that this could be a potential way to resolve the issue. However following the meeting, the CPSU gave the proposal further consideration and decided that more information was required in order to give the offer proper consideration. 8 Mr Warren then sent an email to the company on 25 October 2010.9

[10] The email commenced as follows:

“At our last meeting we agreed that the CPSU would provide some information on a few of the outstanding issues. To make this easier it would be appreciated if you could provide us with some information to help us form a position.”

[11] The email dealt with three issues that were still in dispute. It attached a consultation clause which Mr Warren suggested might be acceptable as a compromise in relation to that particular issue. It also asked the company to clarify its concerns about compulsory arbitration under the proposed disputes procedure.

[12] Under the heading “Pay” the email included the following:

“We discussed the possibility of making changes to the new agreement minimums to try and resolve the pay issue. In order for us to make a proposal on this I would like to request information that sets out how many captioners will fit into each level and what their current hourly rate is? I only request raw numbers and all information should of course be de-identified.”

[13] At a meeting on 4 November 2010, the company advised the CPSU that they would not agree to provide this information. On 5 November 2010, Mr Warren wrote a letter to the company’s Managing Director, Mr Howe, 10 which included the following:

“The CPSU writes regarding a request for information made to the Red Bee Media bargaining representatives on the 25th of October 2010.

The CPSU requested in an email that Red Bee Media provide information indicating how many captioners fit into each of the new PRS classification levels and what the current hourly rates are for each employee in each level. Any information provided should be de-identified. This information is important as it would allow the CPSU to properly consider the Red Bee Enterprise Agreement proposals and in turn put forward proposals of our own.

In the last negotiation meeting on the 4th of November the Red Bee Media bargaining representatives verbally advised the CPSU that Red Bee would not be providing this information.

As such the CPSU does not believe that Red Bee Media has met the good faith requirements of the Fair Work Act 2009.

In our view, the failure to provide this information is inconsistent with the good faith bargaining obligations. Specifically s228(1)(b) states that good faith bargaining requires:

(b) disclosing relevant information (other than confidential or commercially sensitive information) in a timely manner;

To remedy this breach of good faith bargaining the CPSU requires that Red Bee Media provides the necessary information by COB Tuesday 9 November 2010.”

[14] On 8 November 2010, Mr Howe replied to Mr Warren. His letter included the following:

“Your suggestion that a failure to provide requested information is “inconsistent” with good faith bargaining obligations is wrong on several levels.

1. Red Bee has met with the CPSU on many occasions (on at least 10 occasions) and has negotiated in good faith throughout. Your late request for information after commencing industrial action does not derogate from that fact. As a relatively small employer, there is a practical limit to the length of negotiations we can participate in, particularly when it has become evident the negotiations have reached an impasse.

2. The CPSU has moved to having its members take protected action, a step which indicates that the CPSU intends to force its position on Red Bee rather than bargain on an outcome.

3. The requested information is not relevant to the setting of the minimum rates in an agreement, should one be reached.

4. The requested information is confidential and cannot be satisfactorily “de-identified” as you suggest. The CPSU is a bargaining representative only for its members. The requested information is all the more confidential as it relates to non-members of the CPSU. The information will not be released, whether or not in a “de-identified” form. If members of the CPSU wish to release their personal information to the CPSU, that is of course a matter for them.

5. Finally, it is clear that the parties have reached an impasse. The CPSU has stated that its “bottom line” particularly in respect of performance appraisal provisions and “compulsory” arbitration, has not been met. We confirm that Red Bee will not be agreeing to the CPSU’s “bottom line”. As previously advised to the CPSU and resulting from the impasse reached, Red Bee intends to propose options for an agreement directly to our employees.

We therefore formally advise that as the negotiations have concluded, we do not intend to hold further negotiation meetings with the CPSU at this time. Employees will also be advised of this and our arrangements for a poll in relation to the agreement options put to you at the last meeting on 4 November.”

[15] During his cross examination, Mr Champion indicated that he considered negotiations had been ended by the union when it indicated at the conclusion of the meeting on 21 October 2010 that it was taking industrial action:

“So it was very clear to me that at that point of the negotiations, the union didn’t feel it was going to advance its position further by discussion, that it was going to force us, or attempt to force us to agree to their position, to their bottom line, by taking industrial action against us.” 11

[16] He later reiterated this point:

“So when it became clear that the union intended to take industrial action, you decided that the negotiations were over? -- I believe the union made clear the negotiations at that point had reached an impasse and were over.

...

THE SENIOR DEPUTY PRESIDENT: Sorry, just to be clear, so you are saying that you thought the negotiations were over. You thought they were brought to an end by the union? ---Yes.

But is that what you’re saying? The negotiations are over? --- Yes.

Can I ask you why you think that? --- ... the fact that there’s industrial action means that you can’t have further negotiations. That’s not how the law works? --- It would certainly seem highly odd to me that you would be bargaining in good faith at the same time as you’re being pressured to alter your position.” 12

[17] Mr Champion later stated:

“... I believe good faith bargaining obligations end when negotiations end.

...

What I was trying to indicate before when you cut me off was that it was the union’s quite clear conduct and actions and words which to me indicated their intent to end negotiations.

MR BENFELL: That’s why you in response to the request for the information said no? --- Yes.” 13

[18] Mr Champion indicated that it was still his intention to make an agreement with the employees; if possible. 14 The company is planning to hold a plebiscite to gauge the views of the employees on the term of a possible agreement. After the plebiscite, an agreement would be presented to the employees for their approval.15

Consideration

[19] Section 228 sets out the good faith bargaining requirements that bargaining representatives for a proposed enterprise agreement must meet. The section reads:

“228 Bargaining representatives must meet the good faith bargaining requirements

(1) The following are the good faith bargaining requirements that a bargaining representative for a proposed enterprise agreement must meet:

(a) attending, and participating in, meetings at reasonable times;

(b) disclosing relevant information (other than confidential or commercially sensitive information) in a timely manner;

(c) responding to proposals made by other bargaining representatives for the agreement in a timely manner;

(d) giving genuine consideration to the proposals of other bargaining representatives for the agreement, and giving reasons for the bargaining representative’s responses to those proposals;

(e) refraining from capricious or unfair conduct that undermines freedom of association or collective bargaining;

(f) recognising and bargaining with the other bargaining representatives for the agreement.

(2) The good faith bargaining requirements do not require:

(a) a bargaining representative to make concessions during bargaining for the agreement; or

(b) a bargaining representative to reach agreement on the terms that are to be included in the agreement.”

[20] Section 229 of the Act deals with the circumstances in which a bargaining representative may apply for a bargaining order. It states:

“229 Applications for bargaining orders

Persons who may apply for a bargaining order

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

Multi-enterprise agreements

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

Timing of applications

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

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

(i) not more than 90 days before the nominal expiry date of the enterprise agreement, or the latest nominal expiry date of those enterprise agreements (as the case may be); or

(ii) after an employer that will be covered by the proposed enterprise agreement has requested under subsection 181(1) that employees approve the agreement, but before the agreement is so approved;

(b) otherwise—at any time.

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

Prerequisites for making an application

(4) The bargaining representative may only apply for the bargaining order if the bargaining representative:

(a) has concerns that:

(i) one or more of the bargaining representatives for the agreement have not met, or are not meeting, the good faith bargaining requirements; or

(ii) the bargaining process is not proceeding efficiently or fairly because there are multiple bargaining representatives for the agreement; and

(b) has given a written notice setting out those concerns to the relevant bargaining representatives; and

(c) has given the relevant bargaining representatives a reasonable time within which to respond to those concerns; and

(d) considers that the relevant bargaining representatives have not responded appropriately to those concerns.

Non-compliance with notice requirements may be permitted

(5) FWA may consider the application even if it does not comply with paragraph (4)(b) or (c) if FWA is satisfied that it is appropriate in all the circumstances to do so.”

[21] Sections 230, 231 and 232 deal respectively with when FWA may make a bargaining order, what a bargaining order must specify and the operation of a bargaining order. They read as follows:

“230 When FWA may make a bargaining order

Bargaining orders

(1) FWA may make a bargaining order under this section in relation to a proposed enterprise agreement if:

(a) an application for the order has been made; and

(b) the requirements of this section are met in relation to the agreement; and

(c) FWA is satisfied that it is reasonable in all the circumstances to make the order.

Agreement to bargain or certain instruments in operation

(2) FWA must be satisfied in all cases that one of the following applies:

(a) the employer or employers have agreed to bargain, or have initiated bargaining, for the agreement;

(b) a majority support determination in relation to the agreement is in operation;

(c) a scope order in relation to the agreement is in operation;

(d) all of the employers are specified in a low-paid authorisation that is in operation in relation to the agreement.

Good faith bargaining requirements not met

(3) FWA must in all cases be satisfied:

(a) that:

(i) one or more of the relevant bargaining representatives for the agreement have not met, or are not meeting, the good faith bargaining requirements; or

(ii) the bargaining process is not proceeding efficiently or fairly because there are multiple bargaining representatives for the agreement; and

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

Bargaining order must be in accordance with section 231

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

231 What a bargaining order must specify

(1) A bargaining order in relation to a proposed enterprise agreement must specify all or any of the following:

(a) the actions to be taken by, and requirements imposed upon, the bargaining representatives for the agreement, for the purpose of ensuring that they meet the good faith bargaining requirements;

(b) requirements imposed upon those bargaining representatives not to take action that would constitute capricious or unfair conduct that undermines freedom of association or collective bargaining;

(c) the actions to be taken by those bargaining representatives to deal with the effects of such capricious or unfair conduct;

(d) such matters, actions or requirements as FWA considers appropriate, taking into account subparagraph 230(3)(a)(ii) (which deals with multiple bargaining representatives), for the purpose of promoting the efficient or fair conduct of bargaining for the agreement.

(2) The kinds of bargaining orders that FWA may make in relation to a proposed enterprise agreement include the following:

(a) an order excluding a bargaining representative for the agreement from bargaining;

(b) an order requiring some or all of the bargaining representatives of the employees who will be covered by the agreement to meet and appoint one of the bargaining representatives to represent the bargaining representatives in bargaining;

(c) an order that an employer not terminate the employment of an employee, if the termination would constitute, or relate to, a failure by a bargaining representative to meet the good faith bargaining requirement referred to in paragraph 228(1)(e) (which deals with capricious or unfair conduct that undermines freedom of association or collective bargaining);

(d) an order to reinstate an employee whose employment has been terminated if the termination constitutes, or relates to, a failure by a bargaining representative to meet the good faith bargaining requirement referred to in paragraph 228(1)(e) (which deals with capricious or unfair conduct that undermines freedom of association or collective bargaining).

(3) The regulations may:

(a) specify the factors FWA may or must take into account in deciding whether or not to make a bargaining order for reinstatement of an employee; and

(b) provide for FWA to take action and make orders in connection with, and to deal with matters relating to, a bargaining order of that kind.

232 Operation of a bargaining order

A bargaining order in relation to a proposed enterprise agreement:

(a) comes into operation on the day on which it is made; and

(b) ceases to be in operation at the earliest of the following:

(i) if the order is revoked—the time specified in the instrument of revocation;

(ii) when the agreement is approved by FWA;

(iii) when a workplace determination that covers the employees that would have been covered by the agreement comes into operation;

(iv) when the bargaining representatives for the agreement agree that bargaining has ceased.”

[22] The CFMEU has applied for an order that:

“Red Bee Media Australia Pty Ltd provide to the CPSU information showing the number of captioners who have been classified into each of the new PRS classifications levels in the new classification structure proposed by Red Bee and each of those captioners’ current hourly rates of pay by close of business on 7 December 2010.”

[23] A Full Bench in Construction, Forestry, Mining and Energy Union - Mining and Energy Division v Tahmoor Coal Pty Ltd 16 (Tahmoor) has noted that s.230(1):

“...establishes three conditions for the making of an order. The first is that an application has been made. The second is that the requirements of the section have been met. The third is that the tribunal is satisfied that it is reasonable in all the circumstances to make the order. Each of these conditions must be present.”

[24] Dealing with the first of these requirements, I am satisfied that an application for the order has been made, in line with the requirements of s.229. The CPSU is a bargaining representative for a proposed enterprise agreement. An existing enterprise agreement (the 2007 Agreement) whose nominal term has expired applies to the employees covered by the proposed agreement. The CPSU has concerns that the company has failed to meet the good faith bargaining requirements, has given a written notice setting out those concerns to the company, has given the company a reasonable time to respond, and considers that the company has not responded appropriately to those concerns.

[25] I now turn to whether the requirements of s.230 have been met. With regard to s.230(2) it is clear from the evidence that the company has agreed to bargain for an enterprise agreement. The issue then arises in the circumstances of this case whether the company has failed to meet the good faith bargaining requirements.

[26] The Full Bench in Tahmoor said:

“Whether a party observes or fails to observe the good faith bargaining requirements set out in s.288(1) is to be determined in light of all of the relevant circumstances. While at one level this is stating the obvious, it is appropriate in view of the submissions in the appeal to indicate that the question will rarely be decided by reference to one action or series of actions. Equally it would be undesirable to read into the legislation concepts which do not already appear in it for the purpose of explaining its operation. That approach is likely to lead to error in the construction and application of the provisions.” 17

[27] The CPSU and the respondent have been negotiating for an enterprise agreement for some time. The company took the view that negotiations were at an end following the decision of the CPSU to engage in protected action. The CPSU on the other hand, despite Mr Champion’s claims to the contrary, continued to be keen to negotiate an agreement and was continuing to try and explore options for the resolution of the remaining points of difference. So much is clear from Mr Warren’s email of 25 October 2010.

[28] In the context of a proposed agreement that provides minimum pay rates for each level, the information sought by the CPSU is relevant to the bargaining process. As Mr Benfell put it:

“Because of that background, in the absence of the information we seek, how can the bargaining representative work out how and when the wages proposal put by Red Bee would actually lead to an increase in wages?” 18

[29] The information sought is not confidential. The CPSU specifically requested the information in a form that would not identify individual employees. I am satisfied that this can be done.

[30] It is clear from Mr Champion’s evidence that the company considered the decision of the CPSU to take protected action not only brought the negotiation process to an end but signified the end of good faith bargaining. This is inconsistent with the scheme of the Act. The taking of protected action, as long as all the statutory requirements are met, is a legitimate bargaining tactic in the pursuit of an enterprise agreement. 19 While one must always consider all the relevant circumstances, the fact that one bargaining representative has decided to take protected action will not normally have any bearing on another bargaining representative’s obligation to comply with the good faith bargaining requirements.

[31] Nor can one party normally declare on a unilateral basis that negotiations are at an end and the good faith bargaining requirements no longer have any application. Mr Ludeke conceded that the CPSU still wished to negotiate “but it takes two to perform that particular dance. 20” The Act does not explicitly spell out when good faith bargaining requirements no longer apply. However s.232 sets out when a good faith bargaining order ceases to be in operation. In particular such an order ceases, unless it is revoked, when an agreement is approved by FWA, when a workplace determination is made, or when the bargaining representatives for the agreement agree that bargaining has ceased. It would be consistent with the scheme of the Act to infer that, in general, good faith bargaining requirements have a similar life.

[32] Accordingly, I am satisfied that the requirements of s.230 have been met. Finally, I consider whether it is reasonable in all the circumstances to make the order. I consider it relevant that the company still wishes to make an agreement with its employees, and that the CPSU is the bargaining representative for the majority of those employees. The request by the CPSU for information is a modest one that will enable it to determine its response to the agreement proposed by the company.

[33] For these reasons I have decided to make the order as sought by the CPSU.

SENIOR DEPUTY PRESIDENT

Appearances:

Mr L Benfell, for the applicant.

Mr P Ludeke, for the respondent.

Hearing details:

Sydney.

2010.

24, 30 November.

 1   Exhibit CPSU 1, paragraph 3

 2   The latest version of the draft agreement proposed by the company was tendered as Exhibit CPSU 3

 3   Exhibit CPSU 3, clause 5.9

 4   Exhibit CPSU 1, paragraphs 13-14

 5   Exhibit CPSU1, paragraph 8

 6   Exhibit CPSU, paragraph 15

 7   Transcript PN432

 8   Exhibit CPSU 1, paragraph 16

 9   Exhibit CPSU 1, attachment C

 10   Exhibit CPSU 1, attachment D

 11   Transcript PN424

 12   Transcript PN450-455

 13   Transcript PN545-550

 14   Transcript PN570

 15   Transcript PN570-575

 16   [2010] FWAFB 3510

 17   [2010] FWAFB 3510, at 24

 18   Transcript PN721

 19   See, Liquor, Hospitality and Miscellaneous Union v Foster’s Australia Ltd[2009] FWA 750

 20  Transcript PN927

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