Liquor, Hospitality and Miscellaneous Union v Coca-Cola Amatil (Aust) Pty Ltd

[2009] FWA 320

[2009] FWA 320

FAIR WORK AUSTRALIA

DECISION

Fair Work Act 2009
s.238 - Application for a scope order

Liquor, Hospitality and Miscellaneous Union
v
Coca-Cola Amatil (Aust) Pty Ltd
(B2009/10464)

SENIOR DEPUTY PRESIDENT O'CALLAGHAN ADELAIDE, 18 SEPTEMBER 2009

application for a scope order.

[1] This decision deals with an application for a scope order lodged with Fair Work Australia on 13 August 2009 pursuant to section 238 of the Fair Work Act 2009 (the Act). In this application, the Liquor, Hospitality and Miscellaneous Union (LHMU) seek a scope order applicable to Coca-Cola Amatil (Aust) Pty Ltd (CCA) which would cover the following employees:

“Coca-Cola Amatil (Aust) Pty Ltd (CCA) 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 CCA’s Thebarton site (33 Port Road, Thebarton South Australia) and Gillman site (Whicker Road, Gillman South Australia).

For clarity, this proposed 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.”

[2] The scope order application was served on CCA together with the Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (AMWU) and the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU). There is no suggestion that any other bargaining agents are involved in this matter.

[3] At the outset I note that on 29 July 2009 the LHMU lodged an application for a majority support declaration with respect to its members employed by CCA at the Thebarton and Gillman sites in South Australia. Additionally, on 12 August 2009 the LHMU lodged an application for a bargaining order against CCA. Decisions relative to the majority support declaration 1 and the bargaining order2 applications were issued on 19 and 31 August respectively.

[4] At the request of the LHMU, the scope order application was initially listed for hearing with the majority support declaration and bargaining order applications on 17 August 2009. At the hearing on 17 August 2009, Mr Love, representing the LHMU, advised:

“PN20

MR LOVE: And you will be pleased to hear that we intend to deal with the majority support determination first. I will simply refer as that to the MSD. Once the Tribunal has dealt with that we'd then like to deal with the bargaining order application. Although it's been listed for hearing today we would suggest, or it's not our intention to proceed with the scope order today, and that's really for two reasons. Firstly, if the MSD is granted then the scope of the agreement will be defined and therefore it's unlikely, but I don't have a final view on that, it's unlikely that a formal section 238 application will be required. But in the event that the MSD is not granted then we would concede that CCA should be given more time within which to respond to the concerns that we raised in our correspondence that's attached to the application. So it would be our submission that we did the MSD and the bargaining order today and the scope order be listed at some point in the future, and CCA have requested until next Friday to provide reasons as to why - to the concerns we raised in our letter, and we think that's probably reasonable in the circumstances, although unlikely to resolve the issues at hand.”

[5] The application was subsequently the subject of a full hearing on 15 September 2009. At this hearing, Mr Love again represented the LHMU, Mr Adley appeared for the CEPU and Mr Thomas for the AMWU referred to hereinafter as the Unions. CCA was represented by Mr Dixon SC and Ms Perry of counsel. The LHMU application has the support of the AMWU and the CEPU.

[6] In my decision of 19 August 2009 I set out the background to this matter. I have briefly expanded on this background in so far as it is relevant to this application.

[7] CCA has traditionally covered its South Australian employees with agreements reached under the South Australian legislation. The last three such agreements have applied generally to the CCA production, warehousing and maintenance employees but have contained various wages and hours arrangements specific assertion of these functions.

[8] The last such agreement, the Coca-Cola (Aust) Pty Ltd (South Australia) Enterprise Development Agreement South Australia Operations 2005-2008 (the 2005 Agreement) was terminated by the Australian Industrial Relations Commission on 11 May 2009 3.

[9] Attempts to negotiate a replacement for the 2005 Agreement have occurred in three broad stages. It is common ground that the first stage occurred during 2008 when the parties engaged in extensive discussions directed at the negotiation of either a variation and extension of the 2005 Agreement, or, subsequently, the negotiation of a replacement agreement. These discussions did not result in an agreement and were discontinued by CCA in late 2008.

[10] A second stage can be identified commencing early in 2009 when CCA advised the LHMU, the AMWU and the CEPU of its intention to have three agreements. Separate agreements were proposed for manufacturing, warehouse and maintenance functions. CCA put proposed agreements to its employees for a ballot in February 2009. These proposals were rejected by a very substantial majority.

[11] CCA again put the three agreement proposal, in a modified form, to employees for a vote in June 2009, and again, a substantial majority of employees voted against the employer proposal.

[12] It appears that there were minimal negotiations between CCA and the three unions over this time. However, the unions conducted a survey of members to establish majority employee support for bargaining toward a new single enterprise agreement. This survey established broad support for this proposition.

[13] A third stage in the negotiation process commenced on 12 August 2009 when CCA issued notices of representational rights to its employees. In these notices, CCA advised of its intention to bargain in relation to three agreements. These were specified as:

• the Coca-Cola South Australian Manufacturing Enterprise Agreement 2009, to apply at the Thebarton site,



• the Coca-Cola South Australian Warehouse Enterprise Agreement 2009, to apply to warehouse functions at Thebarton and Gillman sites, and



• the Coca-Cola South Australian Maintenance Agreement 2009, to apply to electrical and mechanical maintenance employees at the Thebarton site.

[14] The CCA notices of representational rights were issued on the same day as the LHMU majority support declaration application was made and appear to have followed the making of that application.

[15] CCA has subsequently met with the unions and further meetings are occurring and are scheduled over the coming weeks. These discussions are at an early stage with the union claims only just being detailed and the full CCA position with respect to the content of the proposed agreements not yet clear.

[16] A further issue, relevant to this application, was considered at some length in the bargaining order decision of 31 August 2009. In August 2009 CCA advised its employees in the Syrup Room, adjacent to the manufacturing facility at Thebarton, and the LHMU, of its intention to restructure the existing Syrup Room working arrangements so as to establish a new Technical Specialist position on a salaried basis that would not be covered by any new agreement. Whilst CCA have called for, and gained expressions of interest in these positions from existing staff, consultation with respect to this restructuring is continuing and the proposal has yet to be implemented. CCA has, however, undertaken that any existing Syrup Room employees not selected for the new Technical Officer positions will be redeployed, at their existing classifications, elsewhere within the plant. The consultations relative to the Syrup Room restructure have occurred, at least in part, in the context of negotiations over the CCA manufacturing agreement proposal.

[17] At the hearing on 16 September 2009 both parties provided me with a substantial amount of written material, including correspondence exchanges. In addition, evidence was given by the LHMU organiser, Mr Watson and by Mr Thomas and Mr Adley. Mr Watson's evidence went generally to the negotiation process while all three union officials made clear their opinion that the agreement negotiation process would be expedited by negotiations toward a single agreement.

[18] Evidence was also given by the CCA South Australian Supply Chain Manager, Mr Sinainou. This evidence also went to the negotiation process and the basis upon which CCA asserted that it was appropriate to have three separate agreements.

[19] I have taken all of the relevant material before me into account. I have also noted the evidence put to me in the course of the majority support declaration and bargaining order matters 4.

[20] The unions’ position was that a scope order in the terms sought was appropriate and that this would facilitate the process of ultimately reaching one or more agreements. The LHMU asserted that it had met the prerequisites for the making of a scope order and that such an order would be consistent with the obligations established under the Act.

[21] The CCA position was that the prerequisites for the making of an order had not been met and that, in any event, an order was inappropriate in these circumstances because of the behaviour of the unions and the status of the current negotiation process.

[22] I have initially considered whether the capacity to grant the application exists.

[23] 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.”

[24] Subsections (1), (2) and (3) deal with the prerequisites for the making of a scope order. The later subsections deal with the actions available to Fair Work Australia.

[25] I am satisfied that the LHMU is a bargaining representative and is in this situation, seeking a proposed single enterprise agreement with CCA. I am further satisfied that the LHMU has concerns that the bargaining process is not proceeding efficiently or fairly because of agreement coverage issues. I do not consider that subsection 238(1) requires that I make a finding about the extent to which these concerns are warranted as such a finding must form part of the considerations inherent in subsection 238(4). Suffice to say, that the evidence put by the LHMU substantiates that it had these concerns which underpinned the application and that these concerns were derived from a combination of the three stage negotiation process to date. Consequently, I am satisfied, on the material before me that the LHMU has met the prerequisite requirement set out in subsection 238(1).

[26] Subsection 238(2) is not relevant to this application.

[27] Subsection 238(3) establishes three prerequisite requirements for the making of an application.

[28] Firstly, a written notice detailing the concerns relative to the efficiency or fairness of the negotiation process and coverage issues must be given to the relevant bargaining representatives. In this instance, whilst all three unions support the scope order application, I have taken this to require the provision of such a notice to CCA.

[29] The earliest written expression of the LHMU concerns to CCA relative to the efficiency or fairness of the negotiation process and coverage issues appears to be correspondence from the LHMU Branch Secretary, Mr Di Troia to CCA of 13 August 2009, the day the scope order application was lodged with Fair Work Australia. I am unable to conclude that this requirement has been met.

[30] Secondly, subsection 238(3)(b) requires that, in this instance, CCA is given a reasonable time in which to respond to the LHMU concerns. The 13 August 2009 LHMU correspondence requires a response from CCA by close of business 14 August 2009. Again, I am unable to conclude that the requirement in subsection 238(3)(b) has been met.

[31] Finally, subsection 238(3)(c) requires that the LHMU may only apply for a scope order if it considers that CCA has not responded appropriately. In this situation the application for a scope order was made even before CCA had the opportunity to respond.

[32] The LHMU acknowledged that the application had been lodged on 13 August 2009, before CCA had been given a reasonable opportunity to respond. The LHMU argues that it wrote to CCA on 13 August 2009 inviting a response by 14 August 2009, but that as the parties were before Fair Work Australia on that date, the LHMU extended the time for CCA to respond. The LHMU position is that CCA responded on 23 August 2009 and that the LHMU replied on 24 August 2009. It is the LHMU position that the requirements of subsection (3) have been met as the LHMU did not seek the scope order until the hearing on 16 September 2009. Further, the LHMU asserted that a literal application of the provisions of subsection 238(3) would reflect a pedantic approach to the Act.

[33] Notwithstanding these submissions, I am unable to accept the LHMU position. The requirements in subsection 238(3) must be regarded as prerequisites for the making of an application for a scope order. A scope order is but one of a range of mechanisms available to Fair Work Australia to facilitate the bargaining process. It is a significant step in that it may form a foundation for other actions and has the real potential to impact on the negotiation process. In contrast to the prerequisites for the making of a bargaining order set out in section 229, which allow Fair Work Australia to consider a bargaining order application even if it does not comply with certain of the prerequisites established within that section, section 238 does not provide the capacity for Fair Work Australia to waive the requirement that these prerequisites be met. Unless the conditions precedent set out in subsection 238(3) are met, I do not consider that Fair Work Australia is able to exercise the discretion to grant a scope order.

[34] Simply put, this application was made prematurely. I do not consider that subsection 238(3) permits an application to be made such that it might then be left to one side whilst the bargaining process continues and the prerequisite requirements are then fulfilled. This would create the real potential for applications for scope orders to be misused as part of a flawed bargaining process. The application filed on 13 August 2009 occurred before these requirements could be met.

[35] There is no capacity for an application which was not made consistent with the requirements of subsections (1), (2) and (3) to be pursued.

[36] Accordingly, the application must be dismissed, and an Order [PR989351] to this effect will be issued.

[37] Two final observations appear to me to be appropriate.

[38] Firstly I do not consider that there is any impediment to the LHMU, or, for that matter, the AMWU or the CEPU lodging a new application for a scope order and there is nothing before me at this point which indicates that the action of doing just that is, in itself, indicative of a breach of the good-faith bargaining requirements set out in section 228. Should such an application be made, the parties are on notice that the evidence put to me in this matter may be considered in any such new application.

[39] Secondly, I have advised the parties on a number of occasions that I am concerned that proceedings in the former Australia Industrial Relations Commission and now, Fair Work Australia, have the potential to represent distractions from what should be the principal objective of reaching an agreement. To this end I have recommended that consideration be given to seeking Fair Work Australia assistance in the negotiation process. Negotiations in this respect may extend to the question of the number of agreements intended to apply.

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.

D Thomas on behalf of the Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union.

H J Dixon Senior Counsel and E Perry Counsel for Coca-Cola Amatil (Australia) Pty Ltd

Hearing details:

2009.

Adelaide:

September 15.

 1  [2009] AIRC 101 (PR988595)

 2  [2009] AIRC 153 (PR988822)

 3  PR986914

 4   B2009/10375 and B2009/10456

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