Liquor, Hospitality and Miscellaneous Union v Coca-Cola Amatil (Aust) Pty Ltd
[2009] FWA 153
•31 AUGUST 2009
[2009] FWA 153 |
|
DECISION |
Fair Work Act 2009
s.229 - Application for a bargaining order
v
Coca-Cola Amatil (Aust) Pty Ltd
(B2009/10456)
SENIOR DEPUTY PRESIDENT O'CALLAGHAN | ADELAIDE, 31 AUGUST 2009 |
application for a bargaining order.
[1] This decision deals with an application for a bargaining order made by the Liquor, Hospitality and Miscellaneous Union (LHMU) pursuant to section 229 of the Fair Work Act 2009 (the Act) on 12 August 2009. The bargaining order is sought against Coca-Cola Amatil (Aust) Pty Ltd (Coca-Cola).
[2] The application has been the subject of hearings on 17, 21 and 25 August 2009. At these hearings, the LHMU was represented by Mr Bourne of counsel and Coca-Cola by Mr Manuel and Ms Perry, of counsel.
[3] It is appropriate that I note that the LHMU had also sought a majority support determination. That application has been determined by a decision issued on 19 August 2009 [2009] FWA 101 (PR988595). The LHMU has also filed an application for a scope order against Coca-Cola that is listed for hearing on 10 September 2009.
[4] This particular application has its foundation in a dispute over a Coca-Cola proposal to restructure its syrup room, alcohol testing and quality assurance positions to new technical specialist positions. The new technical specialist positions would be salaried positions and not covered by an enterprise agreement which is itself the subject of current negotiations. The LHMU seek a bargaining order that stops Coca-Cola from implementing this proposed restructuring until the conclusion of the current negotiation process.
[5] Coca-Cola manufactures soft drinks and premixed alcoholic beverages, together with other products in South Australia. Coca-Cola in South Australia has, over the last decade, engaged employees under the terms of collective agreements approved under the South Australian workplace relations legislation. The last such agreement was terminated by order of the Australian Industrial Relations Commission (PR986914) on 11 May 2009. In the course of proceedings at that time, Coca-Cola made certain undertakings. These are noted in my decision in that matter 1 but the relevant undertaking was to preserve, for a period of at least six months, or until a new agreement is made, the current wages with respect to permanent weekly hired employees and casual employees. The general effect of the order of 11 May 2009 is to reinstate the Aerated Waters Manufacturing Award, a notional agreement preserving a state award (NAPSA) under the former Workplace Relations Act 1996 as the principal means of regulating the employment conditions of Coca-Cola employees. I have subsequently referred to this NAPSA as ‘the Award’.
[6] After a period during which it appears that there were no discussions about a new agreement, the LHMU sought to recommence this process on 8 July 2009 but were rebuffed by Coca-Cola on 17 July 2009. The majority support determination application was made on 29 July 2009 but on 12 August 2009, before that application was heard, Coca-Cola issued notices of representational rights and confirmed to the LHMU that it was prepared to meet with it and with the other unions who represented employees. The first of these meetings was held on 21 August 2009.
[7] There appear to be three significant issues about which the parties are in dispute. The first of these relates to the scope of any enterprise agreement to be made. Coca-Cola have proposed three discrete agreements while the LHMU and the other participating unions, seek a single agreement.
[8] The second issue is at the heart of this application and relates to a proposed restructuring of the Coca-Cola Syrup Room employment arrangements so as to establish a new Technical Specialist position on a salaried basis that would not be covered by any new agreement.
[9] The third issue appears to relate to the negotiation of any new agreement or agreements, in terms of wages, classifications, hours and working arrangements.
[10] In terms of the relevant second issue, Coca-Cola has conducted a collective briefing of the employees affected and have now met individually with these employees. Additionally, the matter was discussed at the initial 21 August 2009 meeting and Coca-Cola understand that it will be further discussed at the next meeting, to be arranged over the next few days.
[11] In detailing the basis of the Syrup Room dispute, I have taken into account the evidence of Mr Watson of the LHMU and that of Mr Sininou, the State Operations Manager for Coca-Cola. As a matter of convenience I have initially set out the Coca-Cola position with respect to this proposed restructure.
[12] The Coca-Cola beverage manufacturing base was substantially expanded in 2006 when the South Australian manufacturing operation was allocated manufacturing responsibility for the Jim Beam and Coca-Cola product. Coca-Cola competes with other businesses offering comparable products and also competes internally for manufacturing capacity. Recently, approximately half of the premixed alcoholic drink manufacturing function was moved to Brisbane. This represented an overall 20% production decrease in South Australia. Coca-Cola seek to preserve and expand the South Australian operation by improving efficiencies of operation. Coca-Cola said that this underpins its proposed Syrup Room restructure.
[13] There are some 11 employees in the Syrup Room who have traditionally been covered by the enterprise agreements. These consist of an alcohol ingredient picker, a non-alcohol ingredient picker, eight syrup makers and one quality assurance technician. Three other employees are engaged as salaried employees, undertaking alcohol testing duties. The proposed restructure of the Syrup Room would involve the establishment of the new Technical Specialist staff function. Coca-Cola have undertaken that existing staff can apply for these positions. Further, that staff who do not apply, or are unsuccessful, will be employed in other positions consistent with their current grade, skill and classification.
[14] Coca-Cola advise that the restructure proposal is based on a need for improved succession planning so as to allow it to meet daily changes to product and leave requirements. Coca-Cola also seek to use the restructured operation as a leadership nursery, to provide for more efficient product testing and improved quality assurance expertise and, in overall terms, to increase the extent to which a multi-skilled staff can undertake the full range of Syrup Room duties.
[15] Coca-Cola said that it is currently following the consultation process set out in clause 3 of the Award in that it has met collectively with the affected employees and has subsequently met with these employees on an individual basis. Further, that the proposal was discussed at some length at the enterprise agreement negotiations on 21 August 2009 and that whilst Coca-Cola indicated it had a firm view that the technical specialist staff positions were appropriate, it was prepared to consider other alternatives which might be put. In this respect, Coca-Cola understood that the consultation process could not be completed until at least the next negotiation session and that, even then, the LHMU may seek to dispute the Syrup Room restructuring consistent with the consultation process set out in the Award. Whilst Coca-Cola were prepared to continue to consult on this Syrup Room change proposal, it was not prepared to commit to delaying the implementation of this proposal until the conclusion of the enterprise agreement negotiations.
[16] Coca-Cola said that it is bargaining in good faith pursuant to section 228, in that it remains committed to meeting and recognising bargaining representatives, disclosing relevant information, responding and giving genuine consideration to proposals and that the Syrup Room restructure could not be regarded as capricious or unfair conduct so as to meet the prerequisites for the making of a bargaining order.
[17] The LHMU position is that the bargaining order is warranted on the basis that Coca-Cola’s pursuit of the Syrup Room restructure represents capricious or unfair conduct that undermines freedom of association or collective bargaining in breach of section 228(1)(e). The LHMU asserts that Coca-Cola was simply going through the motions of consultation and remained committed to the commencement of its Syrup Room restructuring proposal in a fashion which meant that it was not prepared to engage in discussions about classifications or work arrangements applicable to the current Syrup Room positions.
[18] The evidence of Mr Watson of the LHMU went to summarise the concerns of LHMU members currently engaged in the Syrup Room about the potential, if they were selected for salaried positions, to incur adverse wages and hours demands and the absence of proper agreement coverage. Further, if these employees were not so selected, they were concerned about the alternative work arrangements that would then apply.
[19] The LHMU asserted that it is supportive of multi-skilling and believed that Coca-Cola could meet its Syrup Room efficiency objectives through discussions about the proposed enterprise agreement. It asserted that the restructuring proposal should logically be subsumed within the ongoing discussions about the enterprise agreement.
Findings
[20] The Act provides for a number of actions available to Fair Work Australia to facilitate fair and equitable agreement making. The objects of this part of the Act are set out in section 171 in the following terms:
“The objects of this Part are:
(a) to provide a simple, flexible and fair framework that enables collective bargaining in good faith, particularly at the enterprise level, for enterprise agreements that deliver productivity benefits; and
(b) to enable FWA to facilitate good faith bargaining and the making of enterprise agreements, including through:
(i) making bargaining orders; and
(ii) dealing with disputes where the bargaining representatives request assistance; and
(iii) ensuring that applications to FWA for approval of enterprise agreements are dealt with without delay.”
[21] The good faith bargaining requirements are specified in section 228.
“(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.”
[22] Section 229 establishes the requirements necessary for the making of a bargaining order. There is no question that the LHMU is a bargaining representative in this matter and that the application is able to be made pursuant to sub-section 229(3).
[23] Subsection 229(4) states:
“(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.”
[24] The LHMU has advised that it has concerns that Coca-Cola is not meeting the good faith bargaining requirements with respect to the Syrup Room function.
[25] The LHMU initially identified a concern with respect to the Technical Specialist role within the Syrup Room in an e-mail on 11 August 2009. This e-mail stated:
‘Hi John,
I have tried to ring you on your office and mobile phone but unfortunately your are unavailable.
I am receiving inquiries from members regarding the Company proposal.
Can you advise me as to what timeline you have advised members have available to provide any responses/feedback to you on the proposal?
Regards
Jim Watson – LHMU” (sic)
[26] Coca-Cola replied that same day in the following terms:
“Hi Jim,
Earlier today, the Syrup room team, including delegates from the area, were taken through a presentation outlining proposed changes to QA, Alcohol testing and Syrup room as part of the consultation process. A copy of the presentation is attached for your reference.
If you have any feedback, could you please provide it in writing by Tuesday 18th August 09.
If you have any issues you wish to discuss, please contact Tony Macolino by email or phone.
Regards”
[27] The attachments to this e-mail were the slides shown to Syrup Room employees on 11 August 2009. The slides identified the change proposal and the Coca-Cola objectives. They include the benefits identified by Coca-Cola and outlined the proposed recruitment process for these salaried positions. They included an undertaking that employees who did not seek, or were not successful in obtaining one of these positions, would retain their existing classification by being deployed in other positions. Finally, the slides detailed the consultation process, including the opportunity for employees, or their representatives, to provide feedback over the next week.
[28] On 12 August 2009 the LHMU wrote to Coca-Cola expressing concern that the introduction of the proposed new structure amounted to a breach of the good faith bargaining requirements and seeking that this proposal was withdrawn by 13 August 2009.
[29] On this same day, the LHMU lodged this application.
[30] Coca-Cola responded to the LHMU by letter of 12 August 2009, on 13 August 2009. In this letter, Coca-Cola acknowledged the potential impact of the proposal on employees and confirmed that it sought to discharge its consultative obligations under the Award. It confirmed the invitation for feedback by 18 August 2009 and that LHMU or employee feedback had not, at that time, been received. Finally, this letter referenced the scheduled Collective Agreement bargaining meeting and indicated that any LHMU concerns could be raised at that meeting.
[31] On 19 August 2009 the LHMU provided advice of its concerns that Coca-Cola was continuing to seek expressions of interest in filling the Technical Specialist positions. The LHMU sought additional information pursuant to the Award clause 3 and an opportunity to discuss the matter.
[32] Further information was provided to the LHMU by e-mail on 20 August 2009. This advice confirmed that additional information would be provided to the LHMU within seven days and that further feedback from the LHMU would then be sought. This advice continued, to state:
“3. The expressions of interest process is being undertaken as part of the consultation process – we do not intend actually appoint any employee to the proposed role until we have discharged all of our obligations under the award. In this respect we have some way to go, including but not limited to a consideration of any formal feedback provided to us by the LHMU. We again invite you to withdraw your Bargaining Order Application given that the parties have not yet had the opportunity to discuss any concerns that you may have about the new position pursuant to the Award consultation process
4. The company undertook in the hearing in Fair Work Australia on Monday 17 August 2009 that it will negotiate with all its operational employees notwithstanding that certain positions have been excluded form the Notices of Representational rights.” (sic)
[33] This application was first considered in detail at a hearing on 21 August 2009. This hearing preceded the first negotiation meeting with respect to both the proposed Collective Agreement and a discussion about the Syrup Room restructuring. The matter was subsequently the subject of a second hearing on 25 August 2009 at which evidence from Coca-Cola was provided.
[34] The initial issue goes to the extent to which the prerequisite requirements specified in section 229(4)(b), (c) and (d) were met before the application was lodged with Fair Work Australia.
[35] As at 12 August 2009 when the bargaining order application was lodged, the LHMU had simply identified its concerns and had sought that the proposal was withdrawn by the next day.
[36] I do not consider that this meets the requirement that Coca-Cola be given a reasonable opportunity to respond for the purposes of section 229(4)(c). I am also unclear about the extent to which the LHMU concerns predated the lodgement of the application.
[37] The exchanges and discussions which occurred subsequent to the making of the application have further clarified the position of the parties but, at the time, the application was made, this had not occurred.
[38] As a consequence, I consider the application was, at best, made prematurely in that the necessary prerequisites for the making of an application of this nature had not been met.
[39] Subsection 229(5) provides Fair Work Australia with the capacity to consider the application event if it does not comply with paragraph 4(b) or (c) if Fair Work Australia is satisfied that it is appropriate in all the circumstances, to do so.
[40] In this situation Coca-Cola has given an undertaking to negotiate with respect to all of its employees. It has given a commitment to comply with the consultative provisions set out in clause 3 of the Award. It has undertaken to provide additional material to the LHMU and has invited further discussions and feedback. It has undertaken not to conclude the call for expressions of interest in the new Technical Specialist positions until its Award obligations are met. The Award obligations extend to the capacity to seek the assistance of Fair Work Australia to resolve the matter in dispute. Finally, it is clear that the ongoing enterprise agreement negotiations will allow the opportunity, if the parties wish, to further discuss this matter and any alternative work concerns which the Syrup Room employees may have. These employees are not being removed from the current negotiation process or the capacity to vote for any proposed agreement if they elect not to pursue a revised role, or are unsuccessful in doing so.
[41] The operation of a bargaining order is a significant step which has an obvious and intended capacity to alter the way in which the bargaining process operates. Given the extent to which I consider the Coca-Cola consultation and actions are consistent with the Award requirements and those specified in the Act, I do not consider it appropriate to make a bargaining order in this instance when I am not satisfied that subsections 229(4)(b) and (c) have been met.
[42] It follows that the application must be refused.
[43] Notwithstanding this conclusion, I consider it is appropriate that I note that even if I had utilised the discretion in subsection 229(5) to consider the application, I am not satisfied that an order, pursuant to section 230 could be made.
[44] 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.”
[45] On the information before me, subsection 230(1)(c) and 230(3)(a) preclude the making of an order in these circumstances.
[46] The LHMU application is founded on the allegation that Coca-Cola's proposed restructuring of the Syrup Room and its actions in support of this restructuring, represent capricious or unfair conduct that undermines freedom of association or collective bargaining.
[47] On the information before me I am unable to agree. The Syrup Room restructuring cannot be regarded as capricious. Coca-Cola have provided evidence that the proposal is based on its concerns about the recent loss of 20% of its overall manufacturing business and its desire to improve its competitive position, both externally and within the overall corporate group. In this respect, Coca-Cola have detailed its objectives which can be regarded as neither fanciful, vindictive nor whimsical.
[48] I cannot consider the Coca-Cola restructuring proposal to represent unfair conduct. Coca-Cola has committed to considering responses to this proposal. It has committed to completing a consultative process before implementing the change proposal. It has committed to not excluding the current Syrup Room employees from the negotiation process directed at a new Collective Agreement.
[49] It is possible that some future action on the part of Coca-Cola can be shown to be capricious or unfair conduct, but this is not the case at the present time.
[50] As I am not satisfied that a breach of the good-faith bargaining requirements has occurred, the application could not have been granted in any event.
SENIOR DEPUTY PRESIDENT
Appearances:
T Bourne of counsel for the Liquor, Hospitality and Miscellaneous Union.
R Manuel and E Perry of counsel for Coca-Cola Amatil (Australia) Pty Ltd.
Hearing details:
2009.
Adelaide:
August 17, 21 and 25.
1 [2009] AIRC 438, Para 44
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