Metropolitan Collieries Pty Ltd v Construction, Forestry, Mining and Energy Union

[2013] FWC 7693

[2013] FWC 7693

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.418 - Application for an order that industrial action by employees or employers stop etc.

Metropolitan Collieries Pty Ltd
v
Construction, Forestry, Mining and Energy Union
(C2013/6107)

SENIOR DEPUTY PRESIDENT HARRISON SYDNEY, 2 OCTOBER 2013

Application for s.418 order to suspend or terminate unprotected industrial action.

[1] Metropolitan Collieries Pty Ltd (Metropolitan Collieries) made an application under s.418 of the Fair Work Act 2009 (the Act) for an order directed to certain industrial action, notice of which had been given by the Construction, Forestry, Mining and Energy Union (CFMEU). I refused to make an order and dismissed the application. These are my reasons for doing so.

[2] An order under s.418 may only issue if it appears that the action is not, or would not be, protected industrial action. The CFMEU submitted that the action it had notified was protected and I was persuaded that submission was correct. To put it into context I should refer to the background to the application being made.

[3] The enterprise agreement relevant to this matter is called the Helensburgh Coal Enterprise Agreement 2010 1 (the Agreement). Following its approval, it came into effect on 1 September 2010 with a nominal expiry date of 30 June 2013. The CFMEU, having filed a notice under s.183 of the Act, is covered by it. The employer named in the Agreement is Helensburgh Coal Pty Ltd (Helensburgh Coal). No issue was taken about the standing of Metropolitan Collieries to make the s.418 application and I assume it is in some way related to Helensburgh Coal. The issue did not arise in the hearing before me. I note that Metropolitan Collieries is described in the materials before me as a wholly owned subsidiary of Peabody Energy Australia Coal Pty Ltd (Peabody) and the operator of the Metropolitan Colliery, located at Helensburgh in the State of New South Wales. I will hereafter refer to both Metropolitan Collieries and Helensburgh Coal as “the Employer”. Permission to represent the Employer was granted to Mr Williams. The CFMEU was represented by Mr Walkaden.

[4] The key issue raised in the proceedings was whether the industrial action which was foreshadowed to commence on 24 September 2013 was protected industrial action.

The evidence

[5] The Employer filed a statement of Mr Jamie Paterson. He is the IR/HR Manager Corporate of Peabody. He was cross-examined by the CFMEU. The CFMEU tendered a statement of Mr Andrew Davey, Lodge President. This statement had been relied on by the CFMEU in earlier proceedings for a protected action ballot order (PAB order).

[6] The terms of clauses 3.2 and 3.3 of the Agreement are relevant to this matter. They read as follows:

“3.2 The parties will commence negotiations about the extension, variation or replacement of this Agreement no later than three months prior to the expiry date of this Agreement.

3.3 The parties agree that in the event this Agreement expires without a further agreement being approved, then for a period of three (3) months the parties shall not take any protected action or steps to terminate this Agreement in accordance with the Act. In the meantime, the terms of this Agreement will continue to apply.”

[7] The CFMEU and the Employer had been negotiating for a new enterprise agreement. The CFMEU was the bargaining representative for the employees who would be covered by that agreement. There was no other employee bargaining representative. No application had been made by the Employer or the CFMEU for good faith bargaining orders (GFB orders).

[8] On 30 August 2013, the CFMEU made an application under s.437 of the Act for a PAB order. A hearing of that matter proceeded before Senior Deputy President Hamberger on 3 September 2013. In support of its application for the order the CFMEU relied on the witness statement of Mr Andrew Davey which, as I have earlier mentioned, was tendered in this matter. The key points made in it, as relevant to this matter, are as follows:

● Negotiations for a new enterprise agreement commenced in early April 2013. Both the Employer and the CFMEU had a team of representatives who participated in the bargaining meetings.

● At the start of negotiations each outlined their claims and the changes that were sought to the terms of the existing agreement. There had been at least 21 meetings 2 and the dates of them were set out in Mr Davey’s statement.

● Claims made by each side had been discussed and there had been agreement reached between the CFMEU and the Employer on the majority of them. A number of significant ones remained outstanding, one of which was wages. On that claim, the CFMEU was seeking a 4% increase for each year of the new agreement and the Employer was proposing no wage increase during the term of the new agreement.

● The other key claims still in dispute were identified and any counter claim or response that had been made in relation to them was described.

● The CFMEU negotiating team had regularly reported back the outcome of meetings to its members. The members had endorsed the filing of the application to seek a PAB order.

[9] The application for the PAB order was not opposed by the Employer. It did not take issue with the matters contained in Mr Davey’s statement and did not seek to be heard on the issue of whether the CFMEU had been genuinely trying to reach agreement. However, Mr Williams who appeared for the Employer, did raise an issue relevant to the application I am now dealing with. He referred to the terms of clause 3.3 of the Agreement and indicated that no industrial action should take place before 1 October 2013. His Honour observed that the statutory scheme may give a right to take protected action and there may be some doubt as to whether clause 3.3 would override that right however that was not a matter he needed to decide. Mr Williams said he reserved his client’s rights, whether under good faith bargaining principles or otherwise, to object to any industrial action which would take place before 1 October 2013. Nothing further was said about this issue.

[10] Mr Paterson was familiar with the bargaining process that had been undertaken and the relevant provisions of the Act relating to that process. He was one of the members of the Employer’s bargaining team and had attended the meetings with the CFMEU.

[11] The most recent bargaining meeting had been on 17 September 2013. Clause 3.3 had been discussed in that meeting. At that meeting Mr Timbs, the District Official for the CFMEU, put a proposal to the Employer about the holding of an “aggregate meeting” so an update could be given to the workforce about negotiations and any questions could be answered. The Employer had proposed that meeting should occur on 27 September 2013. There was an issue about what Mr Timbs said in response to that proposal. Mr Paterson said that Mr Timbs had said words to the effect he would not be able to contain the employees from giving notice of industrial action if the meeting was held that late. The CFMEU and the Employer then agreed the meeting should be held on 23 September 2013. The Employer had agreed to that meeting in good faith. Mr Paterson recalled that Mr Timbs had said words to the effect that the meeting will proceed uninterrupted by the CFMEU Executive and the CFMEU would not proceed to issue any notice of intended protected action prior to the meeting.

[12] The CFMEU version of what was said at the meeting of 17 September was put to Mr Paterson. It asserted that Mr Timbs had in fact said that if the meeting was on the earlier date (23 September) then he would not seek the endorsement by the CFMEU Executive for any industrial action but he could not vouch for the workforce. Mr Paterson could not recall if Mr Timbs had said this. Mr Timbs was not called to give evidence. In my opinion, it does not matter what exactly was said at the meeting. Either version of the conversation would not affect my decision. On either version the industrial action which was being spoken of was contrary to the terms of clause 3.3 of the Agreement but not inconsistent with a desire by the CFMEU to obtain a new enterprise agreement with the Employer.

[13] On 18 September 2013 the CFMEU sent a notice to the Employer advising that employee claim action, pursuant to s.414 of the Act would be taken. Several types of actions were described but the most relevant matter is that the first of them was to commence at 11.00 pm on Tuesday, 24 September 2013.

[14] As recently as the morning of the hearing before me there had been a meeting between the CFMEU and the Employer. Mr Timbs had put two proposals to the Employer concerning the wages claim. A further meeting was to be held on Thursday 26 September 2013 and it was likely that the Employer would then respond to that CFMEU wages proposal.

The submissions of the Employer and the CFMEU

[15] The Employer accepted that as at the time of the application for the PAB order and until the CFMEU issued the notice of intention to take industrial action the CFMEU had been genuinely trying to reach a new agreement.

[16] Both the Employer and the CFMEU agreed that decisions and judgements which had considered the wording of s.443(1)(b) were also relevant. Section 443 sets out considerations about which the Commission must be satisfied prior to issuing a PAB order. In such a matter an applicant must establish that it had been, and is, genuinely trying to reach an agreement with the employer. As is apparent that section contains the relevant phrase in terms identical to the phrase in s.413(3) of the Act.

[17] The Employer submitted that I must consider the facts in context which here includes the terms of the Agreement. It submitted that what the CFMEU proposed to do cannot be genuine. It could never be a ‘genuine’ attempt to do something if it is done in a way that is deliberately in breach of a commitment solemnly given in a document (here, an enterprise agreement) which was binding on all parties and reached as part of an overall bargain. The CFMEU and its members had committed not to take action until 1 October 2013.

[18] The Employer also submitted that the effect of clause 3.3 of the Agreement is that the parties had agreed, in advance, what is required for them to be genuinely trying to reach agreement in the context of the current negotiations.

[19] Both the Employer and CFMEU agreed that the phrase “genuinely trying to reach an agreement” should be given its ordinary meaning. It was accepted that the concept of genuinely trying to reach an agreement involves a finding of fact applied by reference to the circumstances of the particular negotiations.

[20] The CFMEU submitted that clause 3.3 of the Agreement was irrelevant to this application as the clause is contained in an agreement that is now time expired. The Act provided that protected action could now to be taken and that statutory entitlement cannot be compromised. It was also submitted that clause 3.3 is an unlawful term. The CFMEU referred to s.194 of the Act which lists terms of an enterprise agreement that are unlawful terms. Section 194(e) provides that “a term that is inconsistent with a provision of Part 3-3 (which deals with industrial action)” is an unlawful term. The CFMEU submitted that provided it had complied with the requirements in that part of the Act it had an entitlement to take action and clause 3.3 purported to qualify that right; it was inconsistent with it. Section 253 of the Act operated so as to deprive clause 3.3 of having any effect.

Consideration

[21] The industrial action I am here concerned with is employee claim action. That action, to be protected, needs to comply with the provisions of s.409. There is no question it is authorised by the PAB order. It is also accepted that the action to be taken falls within that described in s.409(1)(b). Section 409(1)(c) requires the action to meet the “common requirements” set out in the Act. Of those common requirements those in s.413(3) are at the heart of the issue in this matter. That sections reads as follows:

“Genuinely trying to reach an agreement

(3) The following persons must be genuinely trying to reach an agreement:

(a) if the person organising or engaging in the industrial action is a bargaining representative for the agreement—the bargaining representative;

(b) if the person organising or engaging in the industrial action is an employee who will be covered by the agreement—the bargaining representative of the employee.”

[22] It was not in dispute that the notified industrial action was threatened, impending, probable or being organised. The only issue for determination was whether that action is protected within the meaning of s.408 of the Act. In that respect it is the actions of the CFMEU which are the focus of this matter. It is the bargaining representative and it is the person to whom the enquiry, as to whether it is genuinely trying to reach an agreement, is to be directed.

[23] The question posed by the ordinary and natural meaning of the words is whether the CFMEU’s conduct and actions indicate that it is trying to reach an agreement and that it is genuine in its attempts to do so. The enquiry is to be whether it is real, true or authentic in its intentions, actions or efforts to achieve the goal of reaching an agreement.

[24] There is no issue that prior to 18 September 2013, the CFMEU had been genuinely trying to reach an agreement with the Employer. The Employer submits that what it did subsequently raised the good faith bargaining requirements in the Act. It submitted that although the consideration of whether the CFMEU was genuinely trying to reach an agreement was not limited to a consideration of those requirements they were nonetheless relevant to take into account in the overall circumstances. It referred to an extract from paragraph 1664 of the Explanatory Memorandum. It reads as follows:

“Specified persons organising or engaging in industrial action must be genuinely trying to reach an agreement (subclause 413(3)). The question whether a person is genuinely trying to reach an agreement requires a subjective assessment of the actual intention of the person and the overall circumstances. It is not limited to an assessment of whether the person is complying with the good faith bargaining requirements.”

[25] The Employer did not expressly identify any particular one of the GFB requirements which was not being met. It appeared to suggest that the actions of the CFMEU would undermine the collective bargaining taking place. That would seem to identify the good faith bargaining requirement in s.228(1)(e) of the Act as being relevant. It requires a bargaining representative to refrain from capricious or unfair conduct that undermines freedom of association or collective bargaining.

[26] Accepting that the good faith bargaining requirements may be considerations relevant to whether a bargaining representative is genuinely trying to reach agreement, I am not persuaded that the CFMEU’s actions were contrary to s.228(1)(e). To be so I would need to be satisfied the actions were either capricious or constituted unfair conduct and further those actions undermined collective bargaining. On the evidence and submissions before me I am not so satisfied.

[27] I was not persuaded by the Employer’s submission that the effect of clause 3.3 was that the parties had agreed in advance what would be required of them to genuinely try to reach agreement. The CFMEU did not agree with the Employer’s construction of clause 3.3. The Employer’s construction of the clause may well be relevant to whether GFB orders may issue but it does not defeat the evidence before me that the only object, purpose or goal motivating the CFMEU was to genuinely try and reach an agreement.

[28] I concluded that on the evidence the CFMEU was genuinely trying to reach agreement. Its conduct and actions were taken solely to reach that goal. Whatever approach I took (the submissions referred to the overall circumstances, all aspects of the bargaining conduct, to the conduct as a whole) I reached the same conclusion.

[29] I refer to the CFMEU’s submissions that clause 3.3 is an unlawful term and accordingly s.253 applies. No notice of that submission had been given to the Employer prior to the hearing and it had not been raised in the bargaining negotiations. I do not propose to consider it further in this decision.

Conclusion

[30] Despite significant concerns which I expressed to the CFMEU about its actions being contrary to clause 3.3 of the Agreement I was nonetheless satisfied that the requirements of s.413 were met and it had been genuinely trying to reach an agreement. As a consequence, the foreshadowed industrial action was protected. No s.418 order should issue.

SENIOR DEPUTY PRESIDENT

Appearances:

D. Williams, solicitor for the applicant

A. Walkaden for the CFMEU.

Hearing details:

2013.

Sydney.

23 September.

 1   [2010] FWAA 6634.

 2   I note Mr Paterson says at paragraph 9 of Exhibit A1 there had been “approximately 19 meetings”.

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