Freo Group Limited T/A Freo Machinery v The Construction, Forestry, Mining and Energy Union

[2010] FWA 3489

[2010] FWA 3489

FAIR WORK AUSTRALIA

DECISION

Fair Work Act 2009
s.604 - Appeal of decisions – application for a stay order.

Freo Group Limited T/A Freo Machinery
v
The Construction, Forestry, Mining and Energy Union
(C2010/3495)

VICE PRESIDENT LAWLER SYDNEY, 30 APRIL 2010

Application for a stay order - Appeal against decision [2010] FWA 2592 and Order PR995624 of Deputy President McCarthy at Perth on 30 March 2010 in matter number B2010/2794.

[1] This is an application pursuant to s.606 of the Fair Work Act 2009 for a stay of a decision of McCarthy SDP on 30 March 2010 to make a majority support determination 1 pending the hearing of an application by the employer, Freo Group Ltd (Freo), for permission to appeal and, if permission is granted, the appeal.

Stay principles

[2] In determining whether to grant a stay application FWA must be satisfied that there is an arguable case, with some reasonable prospect of success, in respect of both the question of permission to appeal and the substantive merits of the appeal. In addition, the balance of convenience must weigh in favour of the order subject to appeal being stayed. Each of the two elements referred to must be established before a stay order will be granted. The tribunal approaches applications for stay orders on the basis that, unless otherwise established, the order subject to appeal was regularly made. 2

Whether arguable case of error – whether appeal has reasonable prospects of success

[3] Freo made a Greenfields agreement in 2008 that was registered under the Workplace Relations Act 1996. That agreement is now well passed its nominal expiry date.

[4] The CFMEU has sought to negotiate a new enterprise agreement with Freo. Freo has declined to bargain with the CFMEU. The CFMEU organised a petition of Freo employees. It is not disputed that a majority of Freo’s employees signed the petition.

[5] The petition has the following statement in a box occupying about the top quarter of each page:

“We, the undersigned are employees of Debin Pty Ltd trading as Freo Machinery (the Employer) and are employed on the Woodside Burrup Pluto Project on the Burrup Peninsula. We want to bargain with the Employer for a new Enterprise Agreement to replace our existing Agreement which has passed its nominal expiry date.

We understand that the signing of this petition is on a voluntary basis and do so of our own free will.” 3

[6] Section 237 of the FW Act relevantly provides:

“237 When FWA must make a majority support determination

Majority support determination

(1) FWA must make a majority support determination in relation to a proposed single-enterprise agreement if:

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

(b) FWA is satisfied of the matters set out in subsection (2) in relation to the agreement.

Matters of which FWA must be satisfied before making a majority support determination

(2) FWA must be satisfied that:

(a) a majority of the employees:

(i) who are employed by the employer or employers at a time determined by FWA; and

(ii) who will be covered by the agreement;

want to bargain; and

(b) the employer, or employers, that will be covered by the agreement have not yet agreed to bargain, or initiated bargaining, for the agreement; and

(c) that the group of employees who will be covered by the agreement was fairly chosen; and

(d) it is reasonable in all the circumstances to make the determination.”

(underline emphasis added)

[7] The Senior Deputy President accepted the petition as demonstrating that the requirement in s.237(2)(a) was satisfied. His Honour delivered a short decision of only 8 paragraphs. The primary reasoning was as follows:

“[5] It was contended by FGL that the signatories did, or may have believed, they were signing a petition appointing the CFMEU as a bargaining representative despite the petition at the top of every page of signatories making it clear what was being signed. I do not accept the contention of FGL that there was doubt about the knowledge that the signatories to the petition had regarding their understanding of what they were signing. Rather, I accept from the evidence of Mr Hudston, Ms Vaughan and Mr Harkensee that the petition is an accurate reflection by those that signed the petition and that they wished to bargain for an enterprise agreement.

[6] FGL also appeared to infer that from their involvement in discussions with employees and the putting to a vote of employees for a proposed agreement in June, that I may be able to find that FGL had agreed to bargain. If that was FGL's contention then there was insufficient evidence placed before me to form a view regarding that. Further if FGL was contending that they had agreed to bargain then they simply had to state as much. The CFMEU indicated that if FGL did state that then the CFMEU would withdraw their application for a MSD.

[7] The circumstances here are the CFMEU has sought to bargain. FGL has not yet agreed to bargain and there appears to be good reason to issue a MSD. There was nothing convincing put to me about any circumstances that existed as to why I should not issue the MSD. Indeed there was no evidence called by FGL in support of any contentions in that regard.”

[8] Section 237(3) provides that, “[f]or the purposes of paragraph (2)(a), FWA may work out whether a majority of employees want to bargain using any method FWA considers appropriate”. Freo does not appear to suggest that a petition is an inappropriate way of working out whether a majority of employees want to bargain. Rather, Freo attacks reliance on the petition in this case on the basis of evidence as to what was said to employees about the purpose of the petition when they were invited to sign it. In particular, Freo relies on answers given by Ms Vaughan and Mr Harkensee (two employee witnesses called by the CFMEU) who, in their oral evidence in chief, suggested that employees were asked to sign the petition to have the CFMEU “represent” them as their “bargaining agent”. 4

[9] Although the notice of appeal contains a number of grounds, Freo’s essential contention, as advanced on the stay application, is that there is a material difference between an employee wanting the CFMEU to be his or her “bargaining agent” and an employee wanting “to bargain” (the expression used in s.237(2)(a)) and that, given the evidence of Ms Vaughan and Mr Harkensee, the Senior Deputy President erred in treating the petition as evidence that the requirement in s.237(2)(a) was satisfied.

[10] I note that there was other evidence from Ms Vaughan and Mr Harkensee that they explained to employees that the purpose of the petition was to demonstrate to Freo that employees wanted “to bargain” for a new agreement. 5 Mr Hudston, a CFMEU official, gave unchallenged evidence that at a meeting of about 20 employees he went through the statement at the top of the petition set out above.6 It may be noted that Freo called no witness evidence.

[11] Moreover, so far as the requirement in s.237(2)(a) is concerned, it is necessarily implicit in an employee wanting a union to be his or her bargaining representative that the employee wants to bargain: it would be illogical for an employee to want a union to be his or her bargaining representative but not want to bargain.

[12] The objective circumstances in which the application is was made also supports this conclusion. The existing agreement is well passed its nominal expiry date. To secure any improvement in wages and conditions the employees will need to bargain for a new agreement. It is to be expected that employees will want to achieve an increase in wages given the period of time that has elapsed since their last wage increase.

[13] Given the totality of the evidence, including the plain words of the petition, on the basis of the arguments advanced during the stay hearing I cannot see how the factual finding of the Senior Deputy President that “the petition is an accurate reflection by those that signed the petition and that they wished to bargain for an enterprise agreement” is open to serious challenge consistent with the appellate principles governing challenges to findings of fact. If that finding stands then the appeal must fail. For the purposes of this stay application, I am not persuaded that Freo has made out an arguable case of error on the part of the Senior Deputy President or that there are some reasonable prospects of success on the appeal. Of course, when Freo’s arguments are fully developed at the appeal hearing a different conclusion may emerge.

Balance of Convenience

[14] I am not persuaded that the balance of convenience favours a stay.

[15] At the time of the stay hearing the solicitor for Freo did not have any instructions as to whether Freo wants to bargain for a new agreement. Freo must be seen as recognising that a new agreement will need to be negotiated: it put a new agreement to employees in June 2009 but that agreement was voted down. 7

[16] Putting aside the question of protected industrial action, the solicitor for Freo could point to no relevant prejudice to Freo if the stay was refused. In the absence of a stay the effect of the majority support determination made by the Senior Deputy President is to oblige Freo to commence bargaining in good faith for a new enterprise agreement. To the extent that Freo has employees who are properly members of the CFMEU and who do not exercise their right to appoint someone else as their bargaining agent, Freo will be obliged to bargain with the CFEMU as a bargaining representative (s.176(1)(b) and (3)) – something that it does not want to do. However, Freo is not be obliged to make concessions during the bargaining for the agreement or to reach agreement on the terms that are to be included in the agreement (s.228(2)).

[17] In the ordinary course it will be at least some weeks before the CFMEU will be entitled to obtain a protected action ballot order because it must be able to demonstrate that it has genuinely tried to reach an agreement. There will be further time while such a ballot is conducted before the CFMEU will be in a position to take protected industrial action in support of claims advanced on behalf of employees in the bargaining. It is improbable that there could be protected industrial action before the appeal is heard.

[18] On the other hand, the employees may be prejudiced by the delay that a stay would cause to the negotiation of a new agreement that may secure not only improved wages but also improved conditions (particularly given that the existing agreement is a ‘WorkChoices’ Greenfields agreement, that is, an ‘agreement’ made by the employer with itself). The solicitor for Freo offered to seek instructions about an undertaking to backdate any wage increase as a way of addressing this prejudice. Such an undertaking would address prejudice from delay in relation to improved wages but not in relation to improved conditions.

[19] For all these reasons the application for a stay is refused.

VICE PRESIDENT

Appearances:

Mr A Drake-Brockman, solicitor, for the appellant.

Mr J Nicholas of CFMEU.

Hearing details:

2010.

Sydney:

April 30

 1   [2010] FWA 2592 with the order (determination) being PR995624.

 2   Kellow-Falkiner Motors Pty Ltd v Edghill (S4216, 17 March 2000, Giudice J, Acton SDP and Simmonds C); Independent Schools Staff Association of the ACT v Comalco Aluminium Ltd (Print K0963, 10 December 1991, Moore DP, Williams DP and Palmer C).

 3   Freo changed its name from Debin Pty Ltd some time after the petition was signed.

 4   Evidence of Mr Harkensee at PN295 and PN301; see also the evidence of Ms Vaughan at PN264.

 5   Statement of Ms Vaughan Exhibit A11, para 9 (see also PN260-PN263); Statement of Mr Harkensee, Exhibit A12 para 11(see also PN309).

 6   Transcript PN86 – PN87.

 7   Transcript PN209.

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