CPSU, the Community and Public Sector Union v Royal Flying Doctor Service of Australia Central Operations

[2017] FWC 5408

[2017] FWC 5408

FAIR WORK COMMISSION

DECISION

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

CPSU, the Community and Public Sector Union
v
Royal Flying Doctor Service of Australia Central Operations
(B2017/858)

COMMISSIONER HAMPTON ADELAIDE, 20 OCTOBER 2017

Section 229 application for a bargaining order – interlocutory decision – whether question about power to make an order sought by the applicant union should be dealt with as a preliminary point – issue has substance but likely to be a matter of discretion – Commission not bound by orders as sought – issue would not determine application – balance of convenience favours hearing as part of substantive application – directions to be issued.

1. What this decision is about

[1] The CPSU, the Community and Public Sector Union has applied for Good Faith Bargaining Orders under s.229 of the Fair Work Act 2009 (the FW Act) against the Royal Flying Doctor Service, Central Operations (the RFDS).

[2] This decision concerns an interlocutory issue about how the Commission should deal with that application.

[3] The application arises in the context of bargaining between these parties for a new enterprise agreement to replace the Royal Flying Doctor Service, Central Operations, Operations Co-ordinators Agreement 2014 (the 2014 EA). In addition, a decision¹ issued by this arm of the Commission on 22 July 2016 concerning the 2014 EA confirmed, in effect, that:

● annual leave, given the particular terms of the agreement, operated on the basis of rostered working days and not hours or weeks;

● subject to the National Employment Standards, the 30 rostered working days of annual leave would depend upon the rostered working hours in the roster from time to time;

● the roster was a matter that could be further dealt with under the consultation and hours of work provisions of the 2014 EA; and

● to the extent that the 2014 EA produces a result which, from the perspective of the RFDS, was not completely consistent with more conventional rostering practice and entitlements, this was a matter to be dealt with directly through bargaining.

[4] The further context is set by a proposed change to the rosters of the Operations Co-ordinators that is subject to a consultation process which has more recently been initiated by the RFDS, ostensibly under the 2014 EA.

[5] In its s.229 application, the CPSU allege that the conduct of the RFDS is a breach of good faith bargaining requirements of the FW Act because it proposes to introduce an 8 hour shift roster which has the effect of reducing annual leave while refusing to properly negotiate hours of work and annual leave at the bargaining table. The CPSU contends that this is conduct which is unfair and undermines collective bargaining. In addition, it contends that the RFDS has failed to genuinely consider or respond appropriately to CPSU claims and offers about hours of work and annual leave.

[6] The RFDS denies that its conduct is inconsistent with good faith bargaining on a number of grounds including that any change to the roster system is being undertaken under the terms of the 2014 EA and is separate to the bargaining process.

[7] The RFDS has requested that the Commission first hear and determine a “jurisdictional point” about whether the Commission has the power to grant the order sought by the CPSU in their draft order filed with the originating application. That draft order seeks the following:

1. The Royal Flying Doctor Service, Central Operations must not take any further steps to introduce an 8 hour shift roster for Operations Coordinator staff at Port Augusta.

2. The Royal Flying Doctor Service, Central Operations provide to the Community and Public Sector Union within 7 days of this Order a list of items regarding 12 hour shift roster and annual leave which it may be willing to accept in a proposed enterprise agreement.

3. The Royal Flying Doctor Service, Central Operations and the Community Public Sector Union participate in an agreed schedule of bargaining meetings.

4. The Royal Flying Doctor Service, Central Operations and the Community Public Sector Union give genuine consideration to any proposals regarding 12 hour shift roster and annual leave provided by each party.

[8] The challenge made by the RFDS is primarily to draft Order 1, which it contends is beyond the jurisdiction of the Commission to grant. The fundamental contention that the RFDS proposes to argue is that the Commission does not have power to make the primary bargaining order sought because:

● the conduct or action of the RFDS which the CPSU seeks to impeach as not meeting good faith bargaining requirements consists of the exercise by the RFDS of a right and entitlement conferred on it by the 2014 EA; and
● as a matter of implication from the provisions and scheme of the FW Act, the Commission’s power to grant a bargaining order does not extend to restraining the exercise by a bargaining representative of a specific right and entitlement conferred on them by an existing enterprise agreement.

[9] The CPSU oppose the separate consideration and determination of this issue as a preliminary point.

2. The basis of the RFDS position to deal separately with the “jurisdictional” issue

[10] The RFDS contends that the determination of that question first and favourably to the RFDS would dispose of the application or, alternatively, confine the question to be determined on the application to such an extent as to make it likely that the application would be resolved without hearing and determination.

[11] It further contends the following context supports that course of action:

“(a) The primary bargaining order is an order that the RFDS not take any steps to introduce an 8 hour shift roster for Operations Coordinator staff at Port Augusta.

(b) The action or conduct of RFDS which the CPSU seeks to impugn as not meeting good faith bargaining requirements (and to warrant the making of the primary bargaining order) is the taking of steps by RFDS to alter a 12 hour roster applicable to Operations Coordinators at Port Augusta to an 8 hour roster together with the making of a connection by the RFDS between it proceeding to make that alteration and the inclusion of certain terms in a new enterprise agreement relating to annual leave (roster alteration conduct).

(c) The particular good faith bargaining requirement which the CPSU alleges the RFDS is not meeting in that respect is that referred to in s.228(1)(e) of the FW Act, namely, the requirement that a bargaining representative refrain from capricious or unfair conduct that undermines freedom of association or collective bargaining.

(d) The subject of roster alteration is governed by clause 15 of the RFDS Agreement and, under that term, RFDS has an entitlement to alter a current roster provided that in doing so it proceeds in accordance with clause 15.3. Clause 15.3 relevantly provides that an altered or varied roster will be developed in consultation with the Operations Coordinators, which is to occur at least seven days prior to any permanent roster changes.

(e) The CPSU does not contend in the present application that the roster alteration conduct is in breach of clause 15 of the RFDS Agreement or otherwise contrary to RFDS’s rights and obligations under that enterprise agreement.

(f) The CPSU has not brought any application in the Commission or in a Court making that allegation (albeit that if it had that view it would have those remedial avenues available to it).” 2

[12] The RFDS contends that the facts of the matter are largely uncontroversial and has also indicated, in effect, that at least for the purposes of the jurisdictional issue, it would be prepared to accept the evidence provided by the CPSU that accompanied the application. Accordingly, it contends the discrete jurisdictional question can be determined without the need for the parties to present additional evidential material. In other words, the question can be determined essentially by reference to legal submissions made in the context of uncontentious matters and the hearing can be so confined.

[13] In terms of considerations that might go to the balance of convenience, the RFDS contends that if the jurisdictional issue was determined first and favourably to its position, time, resources and expense would be minimised and would lead to the least disruption to the bargaining process. On the other hand, if the Commission rules against the RFDS on the question, it contends that the result is nevertheless liable to be beneficial in that both parties will have the certainty of knowing the scope of the further hearing of the application. Further, the RFDS contends that the determination may very well assist in identifying the key issue or issues in the determination of the application and contribute to the efficiency with which a hearing of the application on the merits is dealt with.

3. The basis of the CPSU’s opposition

[14] The CPSU contends that the matters raised by the RFDS cannot properly be characterised as jurisdictional objections into the capacity of the Commission to deal with the matter. Rather, their concerns go to the substance of the existence, nature and extent of the good faith bargaining requirements in the context of current bargaining, the reasonableness of granting the orders sought, and power to grant those orders.

[15] The CPSU further contends that an argument about whether the Commission has the power to grant what is sought can and should only be dealt with after all the issues of fact and law have been properly aired before the decision maker. That is, it is a matter going to the power of the Commission to remedy a breach of good faith bargaining, not a jurisdictional matter requiring a preliminary hearing about the competence of the application. This is in accordance with the broad discretion of the Commission to grant orders remedying breach of good faith bargaining under ss.230 and 231 of the FW Act.

[16] The CPSU has indicated that it will make submissions rejecting the RFDS submission that the Commission does not have power to remedy the alleged breach of good faith bargaining. This it suggests, is supported by consistent authority and means that the Commission has the power to restrain actions of the employer, including by making orders of the nature proposed. In that light, it contends that the question posed by the RFDS is a matter of substance not jurisdiction. Further, the issue cannot be dealt with without all the facts and matters being available to be weighed and considered in order for the matter to be ‘determined in the light of all the circumstances’ as required by the FW Act.

[17] In terms of the balance of convenience, the CPSU contends that notwithstanding the concessions by the RFDS regarding the evidence, there may be a range of other factual matters which would appropriately be before the Commission in order to be fully informed. Further, such a preliminary hearing would be an unnecessary delay and expense, when the RFDS’s arguments about the powers of the Commission could be appropriately dealt with as part of the substantive hearing of the matter.

4. Should the “jurisdictional” issue be dealt with separately?

[18] It is common ground that this question is a matter of discretion to be exercised having regard to the circumstances of the matter and the Commission’s statutory charter.

[19] Section 230 of the FW Act provides as follows:

“230 When the FWC may make a bargaining order

Bargaining orders

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

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

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

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

Agreement to bargain or certain instruments in operation

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

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

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

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

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

Good faith bargaining requirements not met

(3) The FWC must in all cases be satisfied:

(a) that:

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

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

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

Bargaining order must be in accordance with section 231

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

[20] No issues have been raised to date about the capacity of the CPSU to bring this application or about its compliance with the pre-application requirements set out above.

[21] The potential scope of a bargaining order is established by the provisions of s.231 of the FW Act as follows:

“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 the FWC 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 the FWC 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 the FWC 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 the FWC to take action and make orders in connection with, and to deal with matters relating to, a bargaining order of that kind. 3”

[22] The good faith bargaining obligations are defined as follows by s.228 of the FW Act:

“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.”

[23] Although I have only heard preliminary argument, my present view is that the issue raised by the RFDS fundamentally concerns whether the Commission should make an order of the kind contemplated by draft order number 1. That issue has substance given the terms of the 2014 EA, the apparent circumstances and the scheme of the FW Act. However, subject to some other limitation within the legislation, the Commission appears to have broad powers to make orders requiring a bargaining representative to take actions, or not to take actions, for the purpose of ensuring that they meet the good faith bargaining obligations (s.231(1)(a) and (b)). Whether it can and should do so will, of course, depend upon findings that there has been a breach of the good faith bargaining obligations and consideration as to whether it is appropriate to do so. The nature of any orders would also be informed by the basis upon which any findings were made, the terms of s.231, and the scheme of the FW Act more generally.

[24] The reality is that the jurisdictional proposition advanced by the RFDS is not self-evident and the Commission will need to hear further argument about whether there is in fact a jurisdictional limitation as contended. This in itself militates against dealing with the issue as a preliminary point with the consequential additional step and delay in the process of dealing with the substantive application.

[25] In any event, even if the issue could be properly described and treated as a separate jurisdictional issue, I do not consider that it should be dealt with as a preliminary point. Amongst other reasons for adopting that view, is the fact that although proposed Order number 1 is likely to be the focus of any remedy considerations, it is not the only order sought. Further, s.599 of the FW Act provides as follows:

“599 FWC not required to decide an application in terms applied for

Except as provided by this Act, the FWC is not required to make a decision in relation to an application in the terms applied for.”

[26] Accordingly, the broad scope of orders potentially available under s.231 and the import of s.599 also militate against dealing with the issue raised by the RFDS in isolation from the matter more generally.

[27] The prudent and appropriate course of action is to deal with this issue (if required) in light of full factual findings, findings about whether one or more of the bargaining representatives are not meeting the good faith bargaining obligations, and comprehensive submissions about the statutory requirements and considerations.

[28] I do accept that the hearing of this application will have some impact on the timing of the bargaining process. However, I note that even if a finding about Order 1 could properly be made in isolation and narrow the issues under the s.229 application, it would not dispose of the application. It is also likely that the hearing and determination of the application, including the “jurisdictional” point, would not necessarily involve a significant delay beyond that necessary to deal with that issue alone.

[29] I also note that certain measures can be taken to limit the delays to the bargaining process including making arrangements for the expeditious hearing and determination of the s.229 application and the steps outlined below.

5. Conclusions and the next steps

[30] In all of the circumstances, I am not satisfied that the “jurisdictional” issue raised by the RFDS should be dealt with separately.

[31] Directions will now be issued leading to the expeditious hearing and determination of the s.229 application. The “jurisdictional” issue will be considered and dealt with in conjunction with the application more generally.

[32] In addition, after consultation with the parties, I have made arrangements for another Member of the Commission to conduct some further conciliation in relation to the substantive issues arising from the present round of bargaining (the terms of any new enterprise agreement) and the RFDS’s proposal to modify the working hours arrangements. That conciliation will be conducted in parallel with, and without prejudice to, this matter.

[33] I would urge both parties to make good use of that opportunity to explore whether an agreed approach to these issues can be found.

COMMISSIONER

Appearances:

K Barlow on behalf of the CPSU, the Community and Public Sector Union.

R Tanner for the Royal Flying Doctor Service of Australia, Central Operations.

Conference details:

2017

October 5.

Final written submissions:

RFDS, 13 October 2017

CPSU, 18 October 2017

1 [2016] FWC 3796.

 2   Written submissions on behalf of the RFDS, 13 October 2017.

 3   There are no relevant regulations touching upon this matter.

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