Lion - Beer Spirits & Wine Pty Ltd v United Workers' Union

[2020] FWC 6617

[2020] FWC 6617

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.229 - Application for a bargaining order
s.425 - Application to suspend protected industrial action, cooling off

Lion - Beer Spirits & Wine Pty Ltd
v
United Workers' Union
(B2020/795; B2020/796)

DEPUTY PRESIDENT ANDERSON ADELAIDE, 8 DECEMBER 2020

Collective bargaining – brewery site – blockade - application for a bargaining order – good faith bargaining requirements – capricious or unfair conduct – order made

Collective bargaining – brewery site - protected action – application for a cooling off period – no extraordinary circumstances – application adjourned

[1] These matters concern two applications made to the Commission on the afternoon of Friday 4 December 2020 by Lion Beer Spirits and Wine Pty Ltd (Lion). Lion seek urgent orders relating to industrial action being taken at its West End Brewery in Adelaide, South Australia.

[2] The first is an application for bargaining orders under section 229 of the Fair Work Act 2009 (FW Act).

[3] The second is an application for a cooling off period under section 425 of the FW Act.

[4] Both applications name the United Workers Union (UWU) as the responding party.

[5] The underpinning industrial instrument related to these applications is the West End Brewery Technicians Enterprise Agreement 2017 (the Agreement).

[6] Two other unions are covered by the Agreement and involved in bargaining – the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU) and the Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union known as the Australian Manufacturing Workers Union (AMWU).

[7] Lion seeks urgent orders.

[8] I have expedited a hearing of these applications. I issued directions on 7 December 2020. I heard the matters on 8 December 2020.

[9] I am dealing with both applications concurrently.

[10] I granted requests by both Lion and the UWU to be represented on both applications by a legal practitioner. I was satisfied that doing so would be more efficient under section 596 of the FW Act having regard to the legal issues arising with respect to the FW Act’s scheme for collective bargaining, the evidence on file and the relative urgency associated with dealing with both applications.

[11] In support of its applications Lion filed three witness statements, and written submissions. The witness statements were a primary and supplementary statement by Lion’s Engineering Reliability Manager (West End) Mr Jensen Jackson, and a statement from a risk management contractor Mr Paul Collins. Each statement attached multiple documents and video recordings. All this material is in evidence.

[12] Mr Collins was not required for cross examination. Mr Jackson gave evidence and was cross examined on his written statement.

[13] I rely on the evidence of Mr Collins and Mr Jackson save that I give only limited weight to the hearsay elements of the statement 1 and supplementary statement2 of Mr Jackson concerning matters reported to him on 3 December 2020 and 4 December 2020. I recognise that given the fluid circumstances associated with industrial action and the urgency accompanying Lion’s applications, statements of evidence may necessarily include hearsay aspects. However, as hearsay evidence is not able to be tested, it only carries limited weight in this matter.

[14] The UWU appeared in the proceedings. It did not file any materials.

[15] The CEPU also appeared.

Procedural matters

[16] At the hearing, the UWU did not object to the Commission dealing with the section 229 application but sought an adjournment of the section 425 application on the ground that it now sought to put on file evidence and submissions relating to bargaining. I declined the request on the grounds that the applications are advanced by Lion as urgent and interrelated matters and that the UWU had, the previous day, been directed by the Commission to put on file any material on which it relied by 4.00pm 7 December 2020. At 4.44pm that afternoon an officer of the UWU had advised my chambers that “the UWU will not be filing materials ahead of tomorrow’s hearing”.

[17] I caused the two other unions covered by the Agreement (the CEPU and the AMWU) to be notified of the listing. I am satisfied that the CEPU (and AMWU) have a real and direct interest in the section 425 application bearing in mind that a section 425 order may have impact on any protected action taken by members of those unions (section 413(7)(a)). Further, whilst the orders sought on the section 229 application are directed only at the UWU, a bargaining order has potential impact on the dynamics of bargaining and thus all bargaining representatives.

[18] The CEPU sought an adjournment of the applications on the ground that in the short time frames the officer who appeared (Mr Pisoni) had not had the opportunity to examine the applications or materials and was seeking instructions from the CEPU’s national office. The evidence establishes that Lion served the CEPU (and AMWU) with both applications on the evening of 4 December 2020, the day the proceedings were filed. Whilst some attachments were unable to be opened due to their format, the CEPU took no action on 7 December 2020 to follow up the issue with Lion or the Commission. I declined the CEPU’s request for an adjournment.

Facts

[19] I briefly summarise the relevant facts. Necessarily, this is a summary. Generally, the facts are not in dispute and are set out in the statements of Mr Collins and Mr Jackson and in attachments to those statements (including photographic and video attachments).

[20] The factual background concerns collective bargaining for a replacement Agreement.

[21] Multiple bargaining meetings (approximately thirteen) have been held during 2020. The last was on 16 November 2020.

[22] Bargaining was being conducted in an orderly manner without industrial action, until recently.

[23] The bargaining dynamic changed following Lion announcing its intention to close the brewery. This announcement was made on 14 October 2020.

[24] The UWU made application for orders for a protected action ballot. On 21 September 2020 those orders were made by the Commission, consistent with the FW Act. 3 A ballot was held. On 28 October 2020 the ballot agent (AEC) announced that taking various forms of protected action by UWU members covered by the Agreement had been approved.

[25] A significant issue now in dispute in the collective bargaining negotiations, in light of the announced plant closure, is the terms under which employees are to be made redundant.

[26] Whilst that is the subject matter of one of the major areas of disagreement between Lion and the UWU, the applications concern industrial action currently being taken at the West End Brewery.

[27] Protected action was first notified on 12 November 2020. On 25 November 2020 protected action was taken by members of the UWU, as further notified on 19 November 2020 and clarified on 20 November 2020. That protected action was in the form of an unlimited number of stoppages of indefinite duration. A UWU picket was established. However, between 25 November 2020 and 2 December 2020 access and egress to and from the brewery site was not disrupted.

[28] The situation changed on 2 December 2020. From that date, and on almost each day following up to and including 7 December 2020, the evidence before me establishes that action in the form of a blockade is occurring at the brewery. The blockade, which in this decision I refer to as obstructive picketing, is preventing access and egress of commercial vehicles (trucks and motor cars) to and from the site. The blockade is organised and actively advanced by the UWU. It continues to prevent access and egress of goods into and out of the brewery. The blockade has not entirely halted production but has had the effect of causing production to be significantly reduced, and to cause major disruption to delivery and disposal of waste matter. The operational impacts are significant and will escalate further in coming days.

[29] Having reached what it considered an impasse with the UWU on bargaining, Lion has submitted its proposed replacement Agreement to employees for a vote. The vote opened on 7 December 2020 and will close tomorrow, 9 December 2020.

[30] No bargaining meeting has occurred since 16 November 2020. However a bargaining meeting is proposed for 10 December 2020 (adjourned from 8 November at Lion’s request).

[31] Relevantly, on 7 December 2020 the UWU advised Lion of a revised union position on its redundancy claim. Lion has sought further information from the UWU on its revised position. Both Lion and the UWU intend to meet on 10 December 2020 to consider, amongst other matters, the outcome of the ballot and, if the ballot does not approve the proposed Agreement, this revised position.

Section 229 application

[32] I now turn to Lion’s application under section 229 of the FW Act.

Power to make order

[33] Lion’s section 229 application seeks to prevent the UWU and its officers and members from engaging in obstructive picketing.

[34] Lion submit that obstructive picketing is inconsistent with the good faith bargaining requirements of the FW Act.

[35] The UWU submit that obstructive picketing said by Lion to be unlawful conduct cannot be a breach of the good faith bargaining requirements in section 228(1) of the FW Act. It submits that as unlawful picketing does not fall within meaning of the phrase “capricious or unfair conduct” in section 228(1)(e) it cannot be a breach of good faith. In any event, the UWU submit that the Commission does not have power to determine lawfulness of conduct; only a court of competent jurisdiction can do so.

[36] I note there are diverse single member decisions and observations on this point which have been referred to in the submissions of the UWU and Lion.  4

[37] For three reasons I do not accept the UWU submission that the Commission lacks the power to make the order sought.

[38] Firstly, section 228(1)(e) does not require a finding of unlawfulness. Capricious or unfair conduct undermining freedom of association or collective bargaining is a breach of the good faith requirement. The ordinary meaning of “capricious” and “unfair” does not require conduct to be unlawful.

[39] Secondly, Lion’s application seeks to characterise the picketing conduct as booth capricious and unfair conduct, irrespective of lawfulness.

[40] Thirdly, conduct of a bargaining representative during the course of bargaining that is associated with the pursuit of bargaining claims is relevant to considering whether good faith bargaining requirements have or are being breached. This includes conduct of bargaining representatives inside or outside of formal meetings or exchanges of position. There is no reason that conduct by a bargaining representative that has a direct connection between a claim being advanced or opposed and a picket (including an obstructive picket) in which that bargaining representative is actively participating or promoting to advance its bargaining position is not relevant conduct.

Good faith bargaining requirements

[41] For orders to be made with respect to the section 229 application the Commission needs to be satisfied that certain jurisdictional facts exist and, if they exist, that it is reasonable in all the circumstances to make the order.

[42] I am satisfied that the required jurisdictional facts exist.

[43] Lion is a bargaining representative. It has standing to make the application. The application is made in the time frame required by section 229(3). Lion has concerns that the UWU, as a bargaining representative, is not meeting the good faith bargaining requirements of the FW Act. The evidence clearly establishes that Lion has given written notice of these concerns. I am also satisfied that it has given the UWU reasonable time within which to respond to those concerns, and that it considers the union’s response to have not been appropriate. The pre-requisites for making an order, as set out in section 229(4), are met.

[44] I am also satisfied that Lion has agreed to bargain (section 230(2)(a)).

[45] I am further satisfied that the UWU has, in organising, promoting and participating in an obstructive picket over a significant number of days since 2 December 2020 it has prevented access into and out of the brewery for the delivery or distribution of goods. In so doing, the UWU has engaged in capricious and unfair conduct which has undermined freedom of association or collective bargaining.

[46] As a consequence, the UWU has, since 2 December 2020, not met and is not meeting the good faith bargaining requirements of the FW Act. Section 230(3)(a) is made out.

[47] Good faith bargaining requires bargaining representatives to conduct themselves in a manner that enables the orderly and respectful consideration and exchange of industrial views, proposals and counter proposals on industrial matters with a view to collective agreement being reached. It does not exclude the possibility of robust disagreement especially where emotions run high such as when as a long-established plant such as the West End Brewery in Adelaide is set to close and employees (including long terms employees) are to be made redundant. However, the FW Act requires conduct by bargaining representatives inside the bargaining period to be in good faith.

[48] The obstructive picketing taken since 2 December 2020 is not consistent with the orderly conduct of industrial relations or dialogue designed to bring the bargaining representatives towards a respectful and mutual understanding of each other’s position, and through that process, reach agreement on a new collective bargain. It is not fostering a meaningful exchange of views. It is distortionary of the dynamics of collective bargaining. It imposes an economic and operational burden that goes well beyond the economic impact of protected action. Time taken in consequence of obstruction and picketing of business operations (and in particular access and egress in the ordinary course of business) diverts employer resources from the matters in issue and diverts attention of bargaining representatives from the challenge of securing a collective outcome. It is not action protected by the FW act and it is, objectively considered, capricious and unfair.

[49] In these circumstances is it reasonable to make a bargaining order?

[50] I conclude it is, for four reasons.

[51] Firstly, what is currently occurring at the brewery goes well beyond the UWU and its members exercising their lawful right to take protected action. The FW Act establishes a scheme whereby economic pressure can be placed on an employer by taking authorised protected action in pursuit of collective bargaining demands. The Commission has made orders for a protected action ballot in the current bargaining round. Employees who are members of the UWU and employed under the Agreement have voted to take protected action, including stoppages of an indefinite duration. Industrial action, even with economic impact on Lion, taken consistent with the right to protected action would not, of itself, be a breach of good faith bargaining (though in exceptional cases it may give rise to unrelated orders under the FW Act, such as cooling-off orders under section 425).

[52] The right to withdraw one’s own labour through the taking of authorised protected action does not include the right to picket or blockade the lawful rights of others to go about their business, either as employee, contractor or employer.

[53] The evidence before me clearly establishes that economic impacts are being placed on the employer not simply by the lawful taking of protected action and an employee withdrawing their own labour, but by interfering with the rights of others to go about their lawful business.

[54] The obstructive picket that is the subject of this decision has had the effect of preventing Lion, including third party contractors, going about their lawful business – that is, to produce and distribute brewed product and matters incidental thereto.

[55] The FW Act does not authorise action of that type. The right to take protected action cannot be used as a fig leaf to give legitimacy to what the FW Act does not protect.

[56] Respecting the right to withdraw one’s labour and protest publicly is well established. The conduct since 2 December 2020 goes well beyond that. It is not conduct consistent with the FW Act’s scheme for collective bargaining and the use of protected action to impose economic pressure in pursuit of a collective bargain.

[57] Secondly, the economic impacts of the action do not simply adversely affect Lion. Adverse operational and commercial consequences potentially flow from such action, not just to Lion, but to its customers (including in the hospitality industry) and the public more generally.

[58] Thirdly, the action has not been a one-off. The evidence suggests a concerted and organised blockade at multiple entrances over multiple consecutive days impacting multiple types of commercial vehicles and affecting both incoming and outgoing goods and services.

[59] Fourthly, an order will have the effect of preventing the obstructive picket continuing and in doing so return the bargaining dynamic to one that more closely resembles the framework for orderly collective bargaining as contemplated by the FW Act. It will untwine the protected action from the obstructive picket. It will allow the vote on Lion’s proposed replacement Agreement to be finalised absent the obstructive picket. It will allow the meeting of 10 December 2020 to proceed in light of the outcome of that vote and the UWU’s revised position on redundancy as communicated on 7 December 2020.

Order

[60] The bargaining order will largely be in the terms sought, with minor changes.

[61] It will specify that it does not preclude the taking of protected action consistent with the FW Act.

[62] It will specify the matters required to be specified by section 231 of the FW Act.

[63] It will prevent the continuation of the obstructive picket which I have found to be in breach of the good faith bargaining requirements. That element of the order will come into operation from 12.01am tomorrow, Wednesday 9 December 2020. That is, in some five hours’ time.

[64] The order will also require the UWU to take steps to communicate the order to its employees, officers, members and delegates involved in this matter. It will also require notices to be placed on social media sites it operates. Those obligations will take effect from 12 noon tomorrow, Wednesday 9 December 2020. That is, some seventeen hours’ time.

[65] I note that Lion and the UWU have agreed to meet, and intend to meet, on Thursday 10 December 2020 to continue bargaining in the event that employees have not voted to adopt Lion’s proposed replacement Agreement. I do not make an order to that effect in light of the expressions of intent referred to at the hearing of this matter.

[66] The order will operate until varied or revoked or until bargaining ceases or a new Agreement is approved or a workplace determination made.

[67] Liberty is provided to both Lion and the UWU to seek to revoke or vary the order.

Section 425 application

[68] I now turn to consider Lion’s application under section 425 of the FW Act for a cooling off period.

[69] This application would have the effect of the Commission bringing protected action to an end for a period (of one month) to enable dialogue to occur absent the taking of protected action.

[70] Whilst the employer’s application is understandable given the current intertwining of protected action with the obstructive picket, I am not currently persuaded that protected action, which has been authorised, should cease for three reasons:

[71] Firstly, a high bar exists for making an order under section 425. Protected action is consistent with the statutory scheme for collective bargaining under the FW Act. It is discomforting for an employer, no doubt, as the lawful withdrawal of an employee’s labour is likely to have operational impacts and place economic pressure on an employer especially where action is taken collectively. Yet, within limits, that is the FW Act’s design. Authorised protected action brought to an end by a third party such as the Commission, even for a limited period, is a significant step and whilst the scheme of the FW Act contemplates making cooling off orders, such orders should not render the right to take protected action nugatory. Such orders should only be made in exceptional circumstances. 5

[72] Secondly, although bargaining for a new agreement has been prolonged, it is only relatively recently that protected action has occurred. Whilst protected action in the form of an unlimited number of stoppages of indefinite duration has been in place for a not insignificant period (approximately fourteen days as of the date of this decision), the protected action has occurred subsequent to Lion’s decision to close the brewery and to make employees redundant. Having made that business decision inside a period where collective bargaining for a new agreement was occurring, it ought to have been reasonably foreseeable to Lion that lawfully available bargaining rights (including rights to protected action) could be invoked by the UWU and its members.

[73] Thirdly, it is not currently clear that the relevant causative effect between suspension of protected action and resolution of the outstanding issues required by section 425 6 exists, given that protected action has been intertwined with an obstructive picket. Put simply, the obstructive picket has muddied the waters in assessing whether beneficial impacts to bargaining would be likely to arise should protected action be suspended.

[74] For these reasons I will not make a cooling off order. However, I will not dismiss Lion’s application under section 425 of the FW Act. I will adjourn Lion’s application and grant leave for the employer to seek its relisting on short but reasonable notice.

Conclusion

[75] In summary:

•  The Commission will order that the blockade at the West End brewery cease from midnight tonight as it is not consistent with the UWU’s good faith bargaining obligations. The order will not prevent the taking of protected action;

•  The Commission will order that by 12 noon tomorrow the UWU takes active steps to notify its members and relevant social media sites it operates of the terms of the order;

•  The Commission will adjourn Lion’s application that protected action be subject to a cooling off period on the basis that Lion has leave to call its application back on should circumstances warrant; and

•  The Commission notes the intention of Lion and the UWU to meet on 10 December 2020 to pursue collective bargaining should a replacement Agreement not have been adopted by employees by that date.

DEPUTY PRESIDENT

Appearances:

R Dalton, R Doyle, Z Brown, S Beaman and D Carlon, with permission for Lion - Beer Spirits & Wine Pty Ltd

Y Bakri, with permission and Mr De Rooy for United Workers' Union

S Pisoni, for the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia

Hearing details:

2020
Adelaide (by telephone)
8 December

Printed by authority of the Commonwealth Government Printer

<PR725272>

 1   A4 paragraphs 95 - 96

 2   A5 paragraphs 8 to 11; paragraph 13

 3   PR722962

 4   Castelmaine Perkins Pty Ltd [2018] FWC 2979; Toll Transport Pty Ltd v NUW B2012/1126 13 July 2012; NUW v Chemist Warehouse B2019/232 25 March 2019

 5   AMWU v Paper Australia Pty Ltd[2018] FWCFB 2011

 6   Orora Packaging Australia Pty Ltd v AMWU[2020] FWC 49