Independent Education Union of Australia v Catholic Church Endowment Society Inc
[2009] FWA 927
•3 NOVEMBER 2009
[2009] FWA 927 |
|
DECISION |
Fair Work Act 2009
s.229 - Application for a bargaining order
v
Catholic Church Endowment Society Inc
(B2009/10915)
The Catholic Diocese of Port Pirie Inc
(B2009/10916)
SENIOR DEPUTY PRESIDENT O'CALLAGHAN | ADELAIDE, 3 NOVEMBER 2009 |
applications for a bargaining order.
[1] On 26 October 2009 the Independent Education Union of Australia (IEU) lodged applications in identical terms pursuant to section 229 of the Fair Work Act 2009 (the Act). In these two applications, the IEU sought bargaining orders with respect to the Catholic Church Endowment Society Inc (CCES) and The Catholic Diocese of Port Pirie Inc (CDPP). In this decision, I have referred to both the CCES and the CDPP collectively as ‘the respondents’.
[2] The applications were heard together on 29 October 2009. At this hearing, Mr Seidel and Ms Edwards represented the IEU and Ms Webb, of counsel, the respondents.
[3] The IEU’s applications for the bargaining orders were made against the following background.
[4] Teachers and education support officers in all Catholic schools in South Australia are covered by the South Australia and Catholic Schools Enterprise Agreement 2006 (the 2006 Agreement), which achieved its nominal expiry date on 6 March 2009. This 2006 Agreement was binding on 17 named Catholic school employers. The respondents are two of the 17 named Catholic school employers covered by the 2006 Agreement and operate approximately 90 Catholic schools throughout South Australia. The remainder of the named Catholic school employers covered by the 2006 Agreement consist of Order-run or College schools. Together, the parties to the 2006 Agreement represent the entirety of Catholic School employers in South Australia. Collectively, these employers have traditionally been represented by Catholic Education SA (Catholic Education).
[5] The IEU advises that the negotiations for a replacement for the 2006 Agreement were initially sought through a log of claims addressed to Catholic Education in September 2008. Meetings commenced in November 2008. These meetings did not achieve agreement. The quantum and the timing of wage increases emerged as a key issue in these negotiations. Formal negotiating meetings have not occurred since July 2009.
[6] Until July 2009 the parties had been proposing to implement any agreed outcome by way of a variation and extension of the 2006 Agreement. In July 2009, the IEU advised that it sought a single interest agreement under the Act and foreshadowed that it may seek to pursue good faith bargaining orders.
[7] Following discussions with the IEU relative to the capacity to pursue a single interest agreement, Catholic Education made an application to the Minister for a Ministerial Declaration that all South Australian Catholic school employers may bargain together for a proposed enterprise agreement. This request was made on 3 August 2009.
[8] On 6 August 2009 Catholic Education declined to initiate bargaining, or to issue Notices of Representational Rights to Catholic school employers pending clarification of the type of agreement for which employers and employees would be bargaining.
[9] On 18 September 2009 DEEWR advised Catholic Education that the application for a Ministerial Declaration had been assessed. Further, that while it met the requirements of section 247, there was some doubt about the constitutional corporation status of at least some of the Order-run or College Schools. DEEWR advised that this issue would be addressed by the South Australian Governments referral legislation, due to come into effect on 1 January 2010. DEEWR invited Catholic Education to provide further information relative to this issue, presumably in the interim period before 1 January 2010.
[10] Following receipt of this advice, Catholic Education concluded it would take some time to provide additional advice to DEEWR and did not do so until 27 October 2009.
[11] The IEU and Catholic Education met on 28 September 2009. The DEEWR advice was discussed. Catholic Education proposed the negotiation of a sector wide agreement in the South Australian jurisdiction. However no negotiations occurred.
[12] On 7 October 2009 the IEU formally advised Catholic Education that it would be pursuing separate agreements, "possibly with different claims in the State jurisdiction" for the Order-run schools. On 19 October 2009 the IEU formally advised each of the respondents that it sought separate agreements with them, in the federal jurisdiction. These letters included logs of claims and sought negotiations within seven days.
[13] On 20 October 2009 the IEU lodged applications for protected action ballot orders with respect to employees of the respondents. These applications were not granted, although, in my decision I made it clear that the circumstances relevant to a protected action ballot order could easily change.
[14] The respondents responded to the 19 October 2009 correspondence from the IEU on 21 October 2009. These responses were to the effect that they denied that any bargaining had occurred for a separate agreement, that the respondents regarded the 19 October 2009 claims as new claims, and that they would continue to seek a single, sector wide agreement.
[15] The IEU submitted that it had met the prerequisites for the making of a bargaining order and that such an order was appropriate so as to facilitate discussions between the union and the respondents.
[16] In this respect, the IEU asserted that the respondents had been aware, through Catholic Education, of the possibility of separate agreement claims since July 2009 and that they had delayed acting and used the DEEWR position as the further basis for a delay in resuming negotiations. The IEU advised that the respondents had not agreed to return to the negotiating table since the correspondence of 19 October 2009.
[17] Further, the IEU argued that interstate experiences demonstrated that separate agreements were possible and that its members were entitled to pursue such arrangements with the respondents, about whom there was no question relative to national system employer status.
[18] In considering the IEU applications I have taken into account the evidence of its lead negotiator, Mr Bernardi, together with the written material provided to me and the evidence presented in the course of the protected action ballot order hearing.
[19] The respondents’ position was that they had not unnecessarily delayed the negotiation process but they were operating in an environment where the standing of the various Catholic school employers was uncertain.
[20] The respondents reaffirmed their commitment to and reliance on the sector-wide agreement arrangements which have been in place since 1996.
[21] The respondents argue that bargaining orders should not be available to the IEU as they, as the employers, had not agreed to bargain so that the good faith bargaining requirements and the prerequisites for the making of bargaining orders in section 230(2) had not been met. Further, that the IEU had not specified its claims with sufficient particularity to meet the requirements for a bargaining order to be granted.
[22] In considering the position put by the respondents, I have had regard to the evidence of Dr Thomas, the Assistant Director Catholic Education.
[23] Finally, at the conclusion of the hearing on 29 October 2009 I recommended to Catholic Education that, irrespective of the outcome of these applications, Catholic Education should take all possible steps to respond to any outstanding DEEWR concerns and to stress the significance of an early resolution of the Ministerial Declaration request. After that hearing, Catholic Education confirmed to me that further contact had been made with DEEWR who had undertaken to give urgent consideration to additional information provided by Catholic Education.
Findings
[24] Bargaining Orders are one of the mechanisms available to Fair Work Australia to facilitate bargaining processes.
[25] The Orders sought by the IEU are to the effect that the respondents would be required to meet to conduct bargaining negotiations on the 19 October 2009 claims within seven days and then continue to meet to progress negotiations. Further, that the respondents would be required to issue Notices of Representational Rights within 48 hours.
[26] Section 229 states:
“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.”
[27] There is no dispute that the IEU is a bargaining representative and can therefore apply for such an order.
[28] Subsection 229(2) is not relevant in this instance - at least at the present time.
[29] The 2006 Agreement has exceeded its nominal expiry date such that the requirements of subsection 229(3) are met.
[30] Subsection 229(4) details prerequisites which must be met unless Fair Work Australia considers that, consistent with subsection 229(5), it is appropriate to waive those requirements. I am satisfied that, on the basis of the significant correspondence trail up to, and including 19 October 2009 and the evidence of Mr Bernardi, the IEU is concerned that the respondents, through the agency of Catholic Education, are not meeting their good faith bargaining obligations.
[31] The advice of 19 October 2009, and indeed, earlier advices, specify these concerns. I am similarly satisfied that the IEU has given the respondents a reasonable time in which to respond to the 19 October 2009 advice and that the IEU is not satisfied with this response. Accordingly, the subsection 229(4) prerequisites for the making of an application have been met.
[32] Section 230 states:
“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).”
[33] The consideration of whether it is reasonable for a bargaining order to be made requires consideration of two matters fundamentally in dispute between the parties. Firstly, there is the matter of whether the respondents have agreed to bargain for the agreement and, if this is the case, whether they have and are meeting their good faith bargaining requirements. Secondly, there is the question of whether an order is reasonable in these circumstances.
[34] As a major part of the conglomerate of Catholic schools, the respondents have been engaging in discussions over an agreement from November 2008 to July 2009. The form of the agreement sought changed in July 2009 from an initial proposal for an extension and a variation of the 2006 Agreement, to a single enterprise agreement. I do not consider that this changed the character or the content of the agreement being sought by the parties. It was simply the case that the parties were seeking to utilise a different legislative vehicle upon which to found or legitimise any agreement they reached.
[35] Further, I am unable to see in the 19 October 2009 correspondence, any claim on either of the respondents which significantly changes the character of the agreement sought earlier. The IEU seek to rely on the earlier negotiations with respect to the agreements now sought specifically with each respondent. I am unable to discern any fundamental difference in the matters that had previously been pursued on a sector-wide basis which included both the respondents.
[36] Consequently, in terms of subsection 230(2)(a), I am satisfied that both the respondents agreed to bargain for the agreement. They did so on the basis of a clear understanding that the agreement would apply across the South Australian Catholic Education sector, but nevertheless they participated in negotiations which would be binding on them as distinct entities.
[37] The fact is that the respondents have not been prepared to participate in further discussions. Clearly, this has to do with concerns over the capacity to include in the Agreement, the entirety of the South Australian Catholic school employers. However, it may also relate to other concerns, such as the protracted determination of the public sector teachers agreement in South Australia which the parties to this matter acknowledge has generally been used as a basis for wage determination.
[38] Section 228 details the requirements associated with good faith bargaining in the following terms:
“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.”
[39] Given the position adopted by the respondents, they have not been meeting, responding to proposals, or giving genuine consideration to proposals since July 2009. As a consequence, I am satisfied that the circumstances in subsections 230(3) have been met.
[40] In determining whether a bargaining order is reasonable in all the circumstances, I have taken account of Catholic Education's continuing commitment to a sector wide approach.
[41] While, from the perspective of Catholic education employers, the advantages of a sector wide approach in terms of consistency of salary and conditions, and the operation of pooled leave funding arrangements appear obvious and are likely to generate operational efficiencies, I am not convinced that such an arrangement is necessarily the only way of achieving consistent conditions or that it is appropriate that negotiations not occur until the issue of the Ministerial Single Interest Determination is resolved. Such an approach appears to me to leave employees of both respondents without the capacity to resolve agreement related issues for a potentially undetermined time period. Additionally, it may well be that the IEU members in some areas of the Catholic Education sector, seek to reach agreements which are specific to their particular circumstances.
[42] Accordingly, I am satisfied that the requirements of section 230(1) are met such that an Order should be made.
[43] Section 231 identifies what a bargaining order must specify.
[44] There are three key components of the Order sought by the IEU. Firstly, there is the requirement that the IEU and the respondents meet as soon as possible, and in any event, within seven days. I consider this to be a reasonable requirement consistent with the good faith bargaining requirements and will incorporate it in the Order reflecting this decision. I see no impediment to these discussions involving both respondents.
[45] Secondly, there is the requirement that these negotiations continue on a weekly basis, with the exception of the Christmas/New Year period. I consider this to be consistent with the good faith bargaining obligations on the parties and have required regular and expedient meetings to continue. As a matter of practicality I am not inclined to require the parties to meet on a weekly basis as the discussions may necessitate different time frames to be agreed. I am satisfied that the protections in the Act provide the capacity for a breach of the good faith bargaining obligations to be addressed, should this be necessary.
[46] An agreement cannot be made until at least 21 days after the respondents have issued Notices of Representational Rights. The desire of the IEU to reach an agreement as a matter of urgency is clear and understandable, but it is equally clear that the parties have the capacity to negotiate the commencement date for agreed wages and conditions if they wish to do so. Further, given the potential for an expeditious response from DEEWR to the request for the Ministerial Declaration, it is possible that within a short time, the parties may yet find themselves in a position to determine a sector-wide agreement if they still wish to do so. In that instance, the time frame for the making of any such agreement would depend on when the last Notice of Representational Rights is issued. For these reasons I consider that it is appropriate that I delay the requirement that the respondents issue Notices of Representational Rights for a brief time in the hope that the Ministerial Declaration issue is clarified or that other options relative to agreement making can be fully considered. I consider that a three-week period is appropriate for this purpose. Within this time I anticipate that the potential for agreement will be fully explored through negotiations between the parties.
[47] An Order (PR990416) consistent with these reasons will be published.
[48] Finally, it is appropriate that I again confirm to the parties that, in the event that both the IEU and Catholic Education seek the assistance of a Fair Work Australia member, I will facilitate this as both parties would appreciate that there is nothing in this decision, or the Order reflecting it, that necessarily resolves the matters which may be at issue between the parties.
SENIOR DEPUTY PRESIDENT
Appearances:
G Seidel and A Edwards for the Independent Education Union of Australia.
Y Webb counsel for the Catholic Church Endowment Society Inc and The Catholic Diocese of Port Pirie Inc.
Hearing details:
2009.
Adelaide:
October 29.
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<Price code C, PR990413>
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