Liquor, Hospitality and Miscellaneous Union v Coca-Cola Amatil (Aust) Pty Ltd
[2009] FWA 818
•26 OCTOBER 2009
[2009] FWA 818 |
|
DECISION |
Fair Work Act 2009
s.238 - Application for a scope order
v
Coca-Cola Amatil (Aust) Pty Ltd
(B2009/10701)
SENIOR DEPUTY PRESIDENT O'CALLAGHAN | ADELAIDE, 26 OCTOBER 2009 |
application for a scope order.
[1] On 23 September 2009 the Liquor, Hospitality and Miscellaneous Union (LHMU) applied for a Scope Order with respect to manufacturing, warehousing and maintenance employees employed at the Coca-Cola Amatil (Aust) Pty Ltd (CCA) facilities at Thebarton and Gillman. This application was made pursuant to section 238 of the Fair Work Act 2009 (the Act).
[2] The application was made in the same terms as an application made in August 2009 (B2009/10464). The August 2009 application was refused in my decision of 18 September 2009 1. In that decision I found that the prerequisites for the making of an order set out in sub-section 238(3) had not been met.
[3] The determination of this second application was deferred by consent until 16 October 2009 pending the outcome of an appeal against a Majority Support Determination decision involving the LHMU and CCA. Notwithstanding that this appeal decision had not been issued on that day, the LHMU sought that this matter should proceed. CCA argued against this and proposed that the matter be further deferred pending the appeal outcome. As sections 238 and 236 provide for different remedies which may be sought from Fair Work Australia in order to expedite a bargaining process, I determined that this application should proceed on 16 October 2009. An opportunity was extended to the parties to make submissions with respect to any potential impact of the Majority Support Determination appeal decision on this matter in the event that decision was issued prior to this matter being determined. This has not happened.
[4] At the 16 October 2009 hearing Mr Love represented the LHMU and Mr Adley represented the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU). Mr Dixon SC, together with Ms Perry, of counsel, represented CCA. The Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (AMWU) was named as a respondent to the application and appeared in support of the earlier application. However, the AMWU did not appear on 16 October 2009. As a consequence, I sought advice of the AMWU position. On 19 October 2009 the AMWU confirmed that it supported the application. However, on 26 October 2009 the AMWU confirmed to my office that it had subsequently reached an "in principle agreement" with CCA. Whilst this advice appears to indicate that the CEPU position may also have changed, confirmation of any such change has not been received.
[5] At a hearing on 16 October 2009, the LHMU confirmed that it relied on the evidence presented to Fair Work Australia at the hearing of the earlier application. The CEPU also confirmed its support for this second application. CCA provided additional evidence through Mr Sinaunou, the Operations Manager, South Australia, Supply Chain for CCA. In considering the application, I have taken into account all of the material presented relative to the first application, together with the evidence and submissions of the parties on 16 October 2009.
[6] Additionally, at the hearing on 16 October 2009, the LHMU undertook to provide a draft form of Order. CCA was provided with the opportunity to provide any additional written submissions with respect to this draft Order.
Background
[7] The Order sought by the LHMU would be binding on the LHMU, the CEPU, the AMWU, CCA and any future Bargaining Representatives appointed in accordance with the Act. It would require CCA to bargain for one single-enterprise agreement covering employees whose terms and conditions of employment are governed by the Aerated Waters Manufacturing Award and the Metal Industry (South Australia) Award as notional agreements preserving State Awards, at the CCA Thebarton and Gillman work sites.
[8] CCA has traditionally covered its South Australian manufacturing, storage and warehousing and maintenance employees with agreements approved under the South Australian legislation. While the last three such agreements have applied generally to the CCA production, warehousing and maintenance employees, each of these last three agreements has contained wages and hours arrangements specific to these occupational functions. The last such agreement, the Coca-Cola Amatil (Aust) Pty Ltd (South Australia) Enterprise Development Agreement South Australian Operations 2005-2008 (the 2005 Agreement) was terminated by the Australian Industrial Relations Commission on 11 May 2009 2.
[9] During 2008 the parties engaged in extensive negotiations directed at agreeing on a replacement agreement, but were unable to achieve consensus. These discussions were terminated by CCA in late 2008. In early 2009 CCA advised the three unions of its intention to have separate agreements relating to the manufacturing, warehouse and maintenance work functions. CCA put proposed agreements to employees in each of these functional areas in February and June 2009. On both occasions these proposals were rejected.
[10] The LHMU, AMWU and CEPU subsequently surveyed their members and established broad employee support for bargaining toward a new single enterprise agreement.
[11] In August 2009 CCA issued Notices of Representational Rights to its employees. These notices confirmed CCA’s intention to bargain for separate agreements for the manufacturing, warehousing and maintenance functions. These notices were issued on the same day that the LHMU made an application for a Majority Support Determination and appear to have followed the making of that application.
[12] CCA, the LHMU and, separately, the AMWU and CEPU have subsequently met and are continuing to discuss specific agreement proposals. I deal later in this decision with the evidence before me in this respect.
[13] Additionally, I note that in August 2009 CCA detailed to the LHMU its proposal to restructure its Syrup Room operations so as to create a number of multi-skilled staff positions. This matter was primarily the subject of a Bargaining Order application sought by the LHMU. This application was addressed in a decision issued on 31 August 2009 3. The LHMU application was not granted and, on 16 October 2009, CCA confirmed that it was continuing to discuss the Syrup Room restructuring proposal with the LHMU. Absent advice to the contrary I have taken it that these discussions are occurring consistent with the consultative obligations established by the Aerated Waters Manufacturing Award, a notional agreement preserving state award which has application consequent upon the termination of the 2005 Agreement.
Section 238
[14] Section 238 states:
“238 Scope orders
Bargaining representatives may apply for scope orders
(1) A bargaining representative for a proposed single-enterprise agreement may apply to FWA for an order (a scope order) under this section if:
(a) the bargaining representative has concerns that bargaining for the agreement is not proceeding efficiently or fairly; and
(b) the reason for this is that the bargaining representative considers that the agreement will not cover appropriate employees, or will cover employees that it is not appropriate for the agreement to cover.
No scope order if a single interest employer authorisation is in operation
(2) Despite subsection (1), the bargaining representative must not apply for the scope order if a single interest employer authorisation is in operation in relation to the agreement.
Bargaining representative must have given notice of concerns
(3) The bargaining representative may only apply for the scope order if the bargaining representative:
(a) has given a written notice setting out the concerns referred to in subsection (1) to the relevant bargaining representatives for the agreement; and
(b) has given the relevant bargaining representatives a reasonable time within which to respond to those concerns; and
(c) considers that the relevant bargaining representatives have not responded appropriately.
When FWA may make scope order
(4) FWA may make the scope order if FWA is satisfied:
(a) that the bargaining representative who made the application has met, or is meeting, the good faith bargaining requirements; and
(b) that making the order will promote the fair and efficient conduct of bargaining; and
(c) that the group of employees who will be covered by the agreement proposed to be specified in the scope order was fairly chosen; and
(d) it is reasonable in all the circumstances to make the order.
Matters which FWA must take into account
(4A) If the agreement proposed to be specified in the scope order will not cover all of the employees of the employer or employers covered by the agreement, FWA must, in deciding for the purposes of paragraph (4)(c) whether the group of employees who will be covered was fairly chosen, take into account whether the group is geographically, operationally or organisationally distinct.
Scope order must specify employer and employees to be covered
(5) The scope order must specify, in relation to a proposed single-enterprise agreement:
(a) the employer, or employers, that will be covered by the agreement; and
(b) the employees who will be covered by the agreement.
Scope order must be in accordance with this section etc.
(6) The scope order:
(a) must be in accordance with this section; and
(b) may relate to more than one proposed single-enterprise agreement.
Orders etc. that FWA may make
(7) If FWA makes the scope order, FWA may also:
(a) amend any existing bargaining orders; and
(b) make or vary such other orders (such as protected action ballot orders), determinations or other instruments made by FWA, or take such other actions, as FWA considers appropriate.”
[15] There is no dispute that the LHMU is a bargaining representative and that it considers that the agreement proposals put by CCA are not appropriate. On this basis, I am satisfied that the LHMU is able to apply for the Scope Order consistent with subsection 238(1).
[16] Subsection 238(2) is not relevant to this matter.
[17] My decision of 18 September 2009 addressed the requirements of subsection 238(3) in some detail. I have adopted the same construction of that section such that, satisfaction of these prerequisites is an essential prerequisite for the exercise of the jurisdiction established later in this section.
[18] Relative to this second application, the LHMU assert that it provided written notice to CCA on 13 August 2009. Further, that CCA has had a reasonable time within which it could respond to the LHMU concerns but CCA has maintained its position that it seeks three separate agreements. Accordingly, the LHMU position is that the prerequisites set out in subsection 238(3) have been met.
[19] The CCA position is that the requirements of subsection 238(3)(c) have not been demonstrated in that this subsection requires evidence that the LHMU "considers that the bargaining representatives have not responded appropriately". CCA assert that the opinion of the LHMU Organiser, Mr Watson, in the initial application proceedings could not, under the LHMU rules, be taken as the position of the LHMU.
[20] Additionally, CCA asserted that the relevant test in relation to subsection 238(3)(c) was whether the LHMU had properly concluded that CCA had not responded appropriately. In this respect, CCA referred me to the definition of "appropriate" as in "suitable or proper" and asserted that this should be considered in the context of the CCA undertaking, given during the Majority Support Determination application hearing, that CCA would include all relevant employees in the bargaining process.
[21] Further, CCA argued that the LHMU had not established that the CCA position was inappropriate and that "…. in the absence of evidence of an inappropriate response, the subjective assertion of a ‘concern’ will not satisfy the hurdle imposed by the legislation before an application may be made." 4
[22] I have considered each of these arguments.
[23] Firstly, I am unable to construe the requirements of subsection 238(3)(c) as requiring the LHMU adopt, through the process set out in its Rules, a formal union position, so as to reach a conclusion that CCA had not responded appropriately. Subsection 238(3)(c) is directed at the function of bargaining representatives and deals with the workplace relations actions and conclusions on the part of these bargaining representatives. To impose an obligation on unions to formulate a formal union position would be inconsistent with the construction of this section and would disadvantage a union as distinct from all other bargaining representatives. Further, had the Act intended that a formal union position be developed through the process as set out in the relevant Union rules, it would have specified the requirements associated with that approach. I consider that the requirements of subsection 238(3)(c) are met when a bargaining representative has considered the response or lack thereof from the other negotiating representative.
[24] Secondly, the requirement that the LHMU considers that CCA has not responded appropriately, must incorporate a degree of subjectivity. In my opinion, it suffices that the LHMU regard the CCA response as inappropriate in order for the prerequisite in subsection 238(3)(c) to be met. Subsection 238(4) specifies the matters about which Fair Work Australia must be satisfied in order to countenance a Scope Order. It would be inconsistent with this subsection to require Fair Work Australia to make an objective finding as to the appropriateness or otherwise of the CCA response before considering the requirements of subsection 238(4).
[25] For these reasons, I have concluded that the conditions precedent set out in subsection 238(3) to allow the LHMU to make this scope order application, have been met.
[26] Subsection 238(4) details the matters about which I must be satisfied in order to be able to make a Scope Order.
[27] The LHMU position, put in support of the first application, is that it is genuinely prepared to meet with CCA and is meeting the necessary good-faith bargaining requirements.
[28] CCA assert that the LHMU has not yet met the requirements in subsection 238(4)(a) in that it has taken the following actions:
- initially applied for a Scope Order before bargaining commenced,
- continued to adopt an inflexible position in support of a single agreement,
- pursued a Bargaining Order relative to the Syrup Room employees,
- appealed the 19 August 2009 Majority Support Determination decision in an endeavour to foreclose debate with respect to the scope of the agreement, and
- sought to stop the current bargaining process from proceeding.
[29] In my decision of 18 September 2009 I refused the initial Scope Order application on the basis that the preconditions in subsection 238(3) had not been met. The fact that the LHMU may have erred in prematurely seeking that first Scope Order does not now support a conclusion that the LHMU has not, or is not, meeting its good-faith bargaining requirements. It simply means that the first application failed.
[30] Secondly, I am satisfied that the LHMU has consistently sought to reflect the views of its memmbers, articulated through the employee survey conducted earlier this year, to the effect that there should be a single agreement. There is no evidence before me that the LHMU has refused to meet its good faith bargaining obligations and, indeed, the evidence of Mr Sinaunou advises of some progress in the various agreement discussions.
[31] The LHMU’s actions in seeking a bargaining order, with particular reference to the Syrup Room discussions do not indicate a failure to meet good faith bargaining requirements. On the material before me I understand that both the LHMU and CCA are continuing to discuss the Syrup Room restructuring in a fashion consistent with both the underpinning Award obligations and the good faith bargaining requirements.
[32] The fact that the LHMU exercised its appeal rights with respect to my 19 August 2009 Majority Support Determination decision does not establish the absence of good faith bargaining on the part of the LHMU. Those appeal rights are available under the Act.
[33] Finally, the pursuit of this application in order to further the claim for a single agreement does not, of itself, indicate a failure to meet good faith bargaining requirements.
[34] Accordingly, I am satisfied that the LHMU has met, and is meeting its good faith bargaining requirements.
[35] The requirements that I be satisfied as to subsections 238(4)(b), (c) and (d) necessitate a conclusion with respect to the current status of the negotiation process.
[36] The evidence put to me by the LHMU Organiser, Mr Watson and by Mr Thomas of the AMWU and Mr Adley of the CEPU, at the hearing of the initial application, was put in the context that bargaining discussions were, at that time, only just commencing.
[37] Whilst I understand that Mr Watson has been absent on leave, no new information has been provided by the unions in support of this second application.
[38] Mr Watson's evidence at the hearing relative to the first Scope Order application was that:
“PN89
Now, I want to ask a question really about from your perspective representing the bulk of the workers on site, do you think that the bargaining would assisted by the parties negotiating around one agreement?---I think it certainly would be. I mean the members have made it clear to their respective union representatives and bargaining representatives that their desire is to have one agreement. Clearly it is of assistance to finalise agreements if all parties that are going to be covered by it are at the negotiating table together, not separately.”
[39] Mr Watson continued to express concern over the proposed Syrup Room restructuring.
[40] At the hearing of the initial application, Mr Watson, Mr Thomas and Mr Adley all confirmed that logs of claims had been prepared with respect to CCA.
[41] No new evidence was presented in support of this second application.
[42] At the hearing on 16 October 2009, Mr Sinaunou’s evidence with respect to discussions with the AMWU and the CEPU was that:
“7. CCA met with the LHMU, AMWU and CEPU on 28 August. Thereafter, CCA also met separately with the AMWU and CEPU (acting jointly). Meetings with the AMWU and CEPU representatives took place on:
17 September 2009
23 September 2009
13 October 2009
8. Following progress made in the discussions and negotiations which occurred at the meetings on 17 and 23 September I tabled a draft Enterprise Agreement at the meeting on 13 October (“draft EBA”). We then considered the proposals clause by clause with the AMWU and CEPU. The representatives of those unions made some minor suggestions for change as we worked through the draft EBA. I committed to return to the AMWU and CEPU representatives by email by the end of this week i.e. by 16 October about their proposed changes.
9. It was then agreed that the AMWU and CEPU will present the draft EBA, with any agreed changes, to their members in meetings (facilitated by CCA) to be held on 20 October at 6am and 2pm.
10. The scope of the draft EBA which is to be presented to the members of the AMWU and CEPU is confined to employees with trade qualifications, and expressly excludes employees whose substantive position is one engaged in manufacturing or warehousing duties.
11. A further meeting is scheduled between the bargaining representatives for the AMWU and CEPU and CCA on 22 October 2009 to discuss the outcomes of the union meetings with their members.”
[43] The advice the AMWU provided to my office on 26 October 2009, to the effect that an "in principle agreement" had been reached with CCA appears to reflect these discussions and consultations with AMWU members.
[44] At the hearing on 16 October 2009 Mr Sinaonou referred to the negotiations between CCA and the LHMU in the following terms:
“12. CCA met with the LHMU on 21 and 27 August. Thereafter, CCA has met separately with the LHMU. Meetings with the LHMU representatives occurred on:
16 September 2009
24 September 2009
(The first meeting occurred on the day of the hearing of the previous application, namely, 15 September 2009)
13. Further meetings are scheduled between these bargaining representatives after I return from leave, and after Jim Watson returns from leave, on 20 and 21 October 2009.
14. We have agreed with Jim Watson the LHMU organiser that CCA will return to the LHMU with information regarding performance reviews, plans, career planning, dollar relativities between CCA and other beverage manufacturers, classifications, training and development together with the CCA response to the LHMU log of claims.
15. The LHMU representatives have agreed that they will return to CCA with proposals as to how 24/7 shifts and flexibilities devised by CCA may be implemented and suggestions for flexibility in the use of casual employees.
16. We then plan to prepare draft enterprise agreements, incorporating the tabled matters for discussion with the LHMU and covering the separate geographical and operational areas under consideration.”
[45] On 19 October 2009 the LHMU provided the following draft order.
“1. TITLE
This Order will be known as the LHMU – Coca-Cola Amatil (Aust) Pty Ltd Scope Order.
2. APPLICANT/PARTIES BOUND
2.1 The applicant for this Order is the Liquor, Hospitality and Miscellaneous Union.
2.2 The Order will be binding on:
a) the Liquor, Hospitality and Miscellaneous Union; and
b) the CEPU (Plumbing and Electrical Division – South Australia); and
c) the Australian Manufacturing Workers Union; and
d) Coca-Cola Amatil (Aust) Pty Ltd; and
e) any future Bargaining Representatives appointed in accordance with the Act.
3. SCOPE OF THE PROPOSED SINGLE-ENTERPRISE AGREEMENT
Coca-Cola Amatil (Aust) Pty Ltd will bargain with the parties set out at paragraph 2.2 of this Order for one single-enterprise agreement, which will cover the following employees:
3.1 Coca-Cola Amatil (Aust) Pty Ltd employees whose terms and conditions of employment are governed by the Aerated Waters Manufacturing Award and the Metal Industry (South Australia) Award, as notional agreements preserving State awards, or their successors and are employed at Coca-Cola Amatil (Aust) Pty Ltd’s Thebarton site (33 Port Road, Thebarton South Australia) and Gillman site (Whicker Road, Gillman, South Australia).
3.2 This includes employees who carry out any work in the newly created Technical Specialist position.
3.3 For clarity, the single-enterprise agreement will not apply to those employees currently bound by either:
• The Coca-Cola Amatil (Aust) Pty Ltd (South Australia) Salaried Staff Enterprise Agreement 2007 – 2009; or
• The Coca-Cola Amatil (Aust) Pty Ltd Equipment Service (SA) Union Collective Agreement 2006.
4. OTHER MATTERS
4.1 Coca-Cola Amatil (Aust) Pty Ltd will cease to bargain for the proposed three separate single-enterprise agreements consisting of:
(1) Coca-Cola South Australia Manufacturing Enterprise Agreement 2009 which is proposed to cover employees of the company located at 33-43 Port Road, Thebarton who perform the functions of:
• Production line operations including any employee engaged in ‘on line’ quality control and hot-fill process room duties but excluding any employee who is engaged in the position of ‘Technical Specialist’ (formerly the positions of Syrup Room, ‘laboratory’ quality control and CIC duties); and
• To forklift operations associated with production line requirements and operations but excluding employees engaged in warehouse functions.
(2) Coca-Cola South Australia Warehouse Enterprise Agreement 2009 which is proposed to cover employees of the company located at 33-43 Port Road, Thebarton and at Shed B, Whicker Road, Gillman, South Australia who perform the functions of:
• Truck loading/unloading; or
• General hand duties; or
• General warehouse duties including forklift operations but excluding forklift operations directly associated with production line requirements.
(3) Coca-Cola South Australia Maintenance Enterprise Agreement 2009 which is proposed to cover employees of the company located at 33-43 Port Road, Thebarton who perform the functions of:
• Electrical maintenance; or
• Mechanical maintenance
In relation or ancillary to the company’s production operations at the over mentioned address.
4.2 Parties bound by this Order will bargain for one single-enterprise agreement within the scope defined in paragraph 3 of this Order.
4.3 Coca-Cola Amatil (Aust) Pty Ltd within 7 days of this Order will re-issue a ‘Notice of Employee Representational Rights’ as prescribed by regulation 2.05 of the Fair Work Regulations 2009 to all employees that will be bound by the proposed single-enterprise agreement, as per the scope defined in paragraph 3 of this Order and in accordance with the notification requirements set out at Section 173 of the Act.
5. DURATION
This Order will continue to apply until the earliest of the following:
(a) This order is revoked by FWA;
(b) The agreement is approved by FWA;
(c) When a workplace determination that covers the employees that would have been covered by the agreement comes into operation;
(d) When the bargaining representatives for the agreement agree that bargaining has ceased.
6. DATE OF EFFECT
This Order will come into effect from DD October 2009.”
[46] Leaving aside, for the moment, the obvious capacity for Fair Work Australia to issue an Order in different terms to that sought by the LHMU, provided that the remaining requirements of subsection 238(4) are met, and the various concerns relative to that draft order which were raised by CCA on 21 October 2009, the utility of the Order sought by the LHMU is to terminate the existing series of negotiations so that negotiations relative to all of the CCA employees occur together.
[47] An Order could be made in different terms to that sought by the LHMU. However, I am unable to see that any such Order could avoid fundamentally changing the current negotiation process and still retain the fundamental characteristics sought by the LHMU.
[48] On the evidence before me the LHMU has not met the evidentiary requirements such that I could be satisfied that an order of the nature sought will promote the fair and efficient conduct of bargaining consistent with subsection 238(4)(c). There is no evidence that provides an update on the continuing discussions between the LHMU and CCA Further, the effect of the LHMU Draft Order is to require CCA to include within the proposed new agreement, the newly created Technical Specialist positions within the Syrup Room. The latest information I have been given is to the effect that CCA and the LHMU are continuing to discuss this proposed restructure, that CCA has a range of applicants for the proposed new staff positions and that existing syrup room employees who are not appointed to any such positions will be redeployed elsewhere within the plant at a corresponding classification level. There is no information or evidence which shows that these negotiations are not occurring in a fair and efficient manner such that I could be satisfied that the employees who have expressed an interest in being appointed to such positions should be deprived of that opportunity.
[49] The submissions of the LHMU in the hearing of the first application referred to the potential for CCA’s three agreement approach to result in inherent anomalies in wage outcomes for comparable classifications such as forklift drivers working in the manufacturing and warehousing areas. However, there is no new evidence which demonstrates that this concern is a current likely consequence of the negotiations which are presently underway.
[50] I note that the LHMU has subsequently applied for a protected action ballot and accordingly, it may be that the discussions between CCA and the LHMU have reached an absolute stalemate. However, absent information about the basis of such a stalemate, I am unable to conclude that the current process is deficient.
[51] The advice of the AMWU position means that an order of this nature would have the potential to be clearly inconsistent and incompatible with the position apparently adopted by AMWU members.
[52] Even if there is no agreement between CCA and the CEPU, I have not been provided with evidence that the group of employees who would be covered by the proposed order was fairly chosen given the discussions which have now continued between those two groups.
[53] Accordingly, I am not satisfied that the requirements of subsections 238(4)(b),(c) and (d) have been met. Consequently, an Order cannot be made.
Conclusion
[54] I am satisfied that the application can be made. However, the LHMU has not satisfied me that the requirements of section 238(4)(b) to (d) have been met. I am therefore not prepared to issue an order. Additionally, advice, subsequent to the hearing, of an "in principle agreement" between the AMWU and CCA is important in this respect.
[55] If, having further progressed the negotiations, the LHMU concludes that a further scope application should be made, this will be considered in the context of the evidence then presented.
[56] On this basis the application is refused.
SENIOR DEPUTY PRESIDENT
Appearances:
J Love on behalf of the Liquor, Hospitality and Miscellaneous Union.
J Adley on behalf of the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia
S Dixon SC and E Perry Counsel for Coca Cola Amatil (Aust) Pty Ltd
Hearing details:
2009.
Adelaide:
October 16.
1 [2009] FWA 320 (PR989331)
2 PR986914
3 [2009] FWA 153 (PR988822)
4 CCA Submissions Exhibit R3 (PN 3(xii))
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<Price code C, PR990201>
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