National Union of Workers v AB Oxford Cold Storage Co Pty Ltd

[2017] FWC 3561

[2017] FWC 3561

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.437 - Application for a protected action ballot order

National Union of Workers
v
AB Oxford Cold Storage Co Pty Ltd
(B2017/553)

DEPUTY PRESIDENT COLMAN MELBOURNE, 5 JULY 2017

Proposed protected action ballot of employees of AB Oxford Cold Storage Company Pty Ltd.

[1] AB Oxford Cold Storage Pty Ltd (Oxford) operates a cold storage facility at Laverton in Victoria. The employment of various employees of Oxford is covered by the AB Oxford Cold Storage Co. Pty Ltd & National Union of Workers Enterprise Agreement 2014-2016 (2014 Agreement), the nominal expiry date of which was 31 December 2016. The NUW is bound by the 2014 Agreement.

[2] On or around 23 June 2016, Oxford commenced negotiations for a proposed new enterprise agreement and issued Notices of Representational Rights to employees covered by the 2014 Agreement. The NUW is a bargaining representative for the proposed agreement.

[3] On Friday 30 June 2017, the NUW made an application to the Commission for a protected action ballot order (PABO) pursuant to s437 of the Fair Work Act 2009 (Act). On Monday 3 July 2017, Oxford advised the Commission that it opposed the making of a PABO. Section 441 of the Act provides that the Commission must, as far as practicable, determine an application for a PABO within 2 working days after the application is made. Accordingly, the application was listed for hearing before me on the afternoon of 4 July 2017.

[4] Shortly before the hearing, Oxford filed and served submissions and a statement of Mr Gabor Fleiszig, a company director of Oxford. The NUW filed a statement of Ms Claire Lewis, a NUW organiser with responsibility for members at Oxford’s site in Laverton, who has been involved in enterprise bargaining negotiations with the company. Mr Fleiszig and Ms Lewis both gave evidence before the Commission and were cross-examined.

[5] The company advances three objections to the application. The first and second grounds are that the NUW has not been, and is not, genuinely trying to reach agreement. The third ground is that the NUW has an extraneous intention in seeking a PABO.

Statutory framework

[6] Section 437 enables a bargaining representative to apply for a PABO. Subject to the restrictions in s437(2A) and s438 (which are not presently relevant), the Commission must make a PABO in relation to employees who will be covered by a proposed agreement in the circumstances set out in s443. Section 443 provides:

“443 When the FWC must make a protected action ballot order

(1) The FWC must make a protected action ballot order in relation to a proposed enterprise agreement if:

(a) an application has been made under section 437; and

(b) the FWC is satisfied that each applicant has been, and is, genuinely trying to reach an agreement with the employer of the employees who are to be balloted.

(2) The FWC must not make a protected action ballot order in relation to a proposed enterprise agreement except in the circumstances referred to in subsection (1).”

[7] Whether an applicant ‘has been, and is, genuinely trying to reach an agreement’ is a question of fact to be decided by reference to all of the circumstances of the bargaining in question. 1 It will frequently involve consideration of the extent of progress in negotiations and the steps taken in order to try to reach agreement.2 Clearly, there are two temporal components to s443; the applicant must have been genuinely trying to reach agreement, and must be genuinely trying to reach agreement.

Relevant facts and circumstances

[8] It was common ground that in 2016, there were six enterprise bargaining meetings between the parties. 3 Towards the end of September, Mr Fleiszig received a document from the NUW entitled ‘Proposed NUW log of claims’.4 This document contained six bullet points. They were as follows:

● A fair pay rise each year of the agreement – for all workers on site, not just full timers
● A fair disciplinary procedure that is negotiated between the company and the union
● Not to go backwards or lose any conditions we have currently
● For all workers on site to be covered by the Oxford agreement
● For long-serving casuals and container workers to get the opportunity to convert to permanent employment at Oxford
● For casuals and container workers to receive agreement rates of pay (equal pay for equal work).

[9] At the hearing, the union tendered a different version of this document, entitled ‘Oxford Cold Storage Union Log of Claims’, with the NUW logo appearing at the top of the page. One difference was the sixth dot point in that document, which read: ‘Redundancy. To improve the redundancy package.’ 5 It is unclear exactly when this document was provided by the union to the employer.

[10] Mr Fleiszig gave evidence of the negotiations that occurred between the parties in the second half of 2016 and early 2017. This evidence can be summarised as follows:

● On 21 July 2016 Oxford presented the NUW with a log of claims for a new agreement. It was agreed that the NUW would come back to the company with a position for the next round of bargaining.

● Further meetings between the company and the NUW took place on 24 August 2016, 15 September 2016 and 5 October 2016.

● On 7 November Oxford received an email from the NUW setting out proposed new clauses and amendments vis-à-vis the 2014 Agreement. 6 This document contains a table, setting out 11 items in three columns, identifying particular claims, which party has made the claim, and what the status of the claim is. The third mentioned claim is ‘1.5% wage increases per year of the Agreement’. It is identified as having been proposed by Oxford, with a status of ‘needs more discussion.’

● A further bargaining meeting was held on 17 November 2016, at which the NUW sought to have the 1.5% wage offer applied to all employees at the site, including those not covered by the agreement. The company responded that it would only negotiate in respect of employees to be covered by the agreement.

● At a meeting on 30 November 2016, the company advised the union of its ‘final offer’, which included a 1.5% wage increase that would be provided in the event that a major customer agreed to extend its contract with the company.

● On 16 December 2016, Oxford put the proposed agreement to a vote. It was rejected by a majority of 11 votes to 7.

● On 25 January 2017, a further enterprise bargaining meeting was held. The company advised the union that the offer made in December was no longer available (the client in question had not renewed its contract with the company), and that it now proposed to roll over the 2014 Agreement with no wage increases. At this meeting, the NUW asked Oxford to make an offer that had no financial impact on the company. However, the company explained that any offer would have a cost impact. 7

[11] Mr Fleiszig’s evidence was that, following the meeting on 25 January 2017, he had understood that the union would get back to the company with an updated agreement proposal, or a new meeting date, after consulting its membership.

[12] The union’s evidence concerning bargaining between July 2016 and January 2017 is broadly in line with what is summarised above. As to the meeting of 25 January 2017, Ms Lewis’ evidence was that the union asked the company to consider compromising on some non-monetary items in order to try to reach agreement. 8

[13] Ms Lewis’ evidence was that, after the meeting of 25 January 2017, she conferred with members about the status of negotiations, and that members’ feedback was that they wanted a guaranteed wage increase and improved redundancy entitlements. 9

[14] On 18 May 2017, Ms Lewis wrote to the company requesting a further bargaining meeting to attempt to reach agreement. The email message from Ms Lewis to Mr Fleiszig and others says: ‘The Oxford bargaining reps have asked me to indicate they would like to continue EA negotiations with the company.’ 10

[15] Up to this point in the bargaining history, there is broad agreement between the parties about what occurred, although their characterisation of it, in terms of the relevant requirements for a PABO, is different.

[16] Then on 22 June 2017, a further bargaining meeting was held. This was the meeting that had been sought by Ms Lewis in her message of 18 May 2017. A significant focus of the meeting was devoted to the discussion of pending redundancies, due to the worsening financial position. The minutes of this meeting prepared by the employer indicate that the company explained to the union representatives that, because of the loss of several important clients, the company would be restructuring operations with the loss of many roles.

[17] The parties disagree as to whether enterprise bargaining issues where discussed at the meeting on 22 June 2017.

[18] Ms Lewis gave evidence that at the meeting, she asked the company if it was willing to put an improved offer on the table, and the company said no. 11 Specifically, Ms Lewis said that she asked the company for an update on its position, whether it was still the same and whether there was anything that the union could take back to the members’.12

[19] By contrast, Mr Fleiszig gave evidence that, whilst the purpose of the meeting had been to discuss a new agreement, this was not ultimately discussed. 13 The company points to the minutes of the meeting of 22 June 2017, which contain no reference to the union seeking a revised offer, or to any other enterprise bargaining issues being discussed at the meeting. However, the minutes do not purport to record everything that was said at the meeting.

[20] In the course of his evidence, Mr Fleiszig said that, at the earlier meeting of 25 January 2017, he had made the point that the business was ‘sinking’, and that the company could not ‘take on any commitments’ in this context. Mr Fleiszig then said that he had also made that plain in the meeting of 22 June 2017. 14 This is consistent, to my mind, with the question of a new agreement having arisen at the June meeting, however briefly.

[21] I found both witnesses gave evidence openly and candidly, to the best of their recollection. There is a conflict on the evidence as to what was discussed at the meeting. In my view, this reflects the parties’ differing but genuine recollections. I do not find either witness to be lacking in credit. According to the minutes, there were at least eight people present at the meeting. It is possible that Mr Fleiszig did not hear Ms Lewis ask the questions referred to in paragraph 18 above, or that the questions were not understood as pertaining to bargaining. However, I accept Ms Lewis’ evidence that she asked these questions, and received what she believed was a negative response.

Genuinely trying to reach agreement

[22] Oxford contends that the union has not been genuinely trying to reach agreement because the NUW demands are not clear. 15 Mr Fleiszig’s evidence was that he found the union’s ‘proposed log of claims’ to lack specificity, particularly in relation to the pay increase sought by the union.16 Oxford says that in nearly a year of bargaining, the union has still not articulated what increase it is seeking, but maintains a wage increase as a major item in bargaining.

[23] The bargaining between the company and the NUW in relation to a proposed new enterprise agreement commenced in July 2016. There have been at least seven meetings at which a new agreement has been discussed. Those meetings have addressed questions of substance concerning the terms of a new agreement. It is true that the NUW cast its claims in brief and fairly general terms. It provided the company with a proposed log of claims, and it is not clear when the other version of the log of claims was served. However, it was not suggested that the company did not understand whether the proposed log was being seriously pursued, or that there was any real confusion arising from the existence of two documents. The company’s concern was rather with what it considered to be the lack of specificity in the union’s claims, and in particular the union’s unspecified wage claim.

[24] The six items listed in the union’s document set out a bargaining position. It conveyed to the employer the general ambit of what the union was seeking, including several reasonably concise terms that were sought to be included in a new agreement. The union did not specify a particular wage increase that it was seeking. However, it was not the case that the union refused to disclose what increase it wanted. Rather, the union conveyed that it was open to a reasonable offer. In this regard, it appears that the union was prepared to accept the 1.5% increase that was offered before Christmas. Further, at the meeting in January, the union was prepared to consider, and asked the employer to consider, non-monetary items that could be included in an agreement. It is evident that the company is experiencing commercial difficulties, and in such a context, it is not unreasonable for a bargaining representative to adopt a cautious and flexible approach to a wages outcome.

[25] In my opinion, the union’s pursuit of a ‘reasonable wage increase’, in the circumstances of the present case, does not detract from the genuineness of its efforts to reach an agreement. Nor do I consider that the union’s claims have lacked specificity such as to undermine the genuineness of its efforts to reach agreement. I consider that the union has been genuinely trying to reach agreement.

[26] In its submissions, Oxford then contends that the applicant is not genuinely trying to reach agreement, and thereby fails the ‘present obligation’ contained in s443(1)(b). 17 In support of this contention, it contrasts the period of bargaining in 2016, where 6 meetings were held in the second half of the year, with what has occurred in 2017. It points in particular to the significant time gap between the meeting of 25 January 2017 and the most recent meeting on 22 June 2017. It further contrasts the paucity of recent negotiations between the NUW and Oxford with the bargaining that is said to be underway between the union and another employer, ‘Coldunit’, where regular meetings have occurred since March 2017. Oxford also contends that the fact that a new agreement was not discussed at the meeting of 22 June supports a conclusion that the union is not genuinely trying to reach an agreement.

[27] It is true that negotiations for a new agreement have not been particularly active since January 2017. However, there has been some recent activity. In February and March the union discussed the status of negotiations with members. 18 In May the union wrote to the employer seeking a further enterprise bargaining meeting. On 22 June 2017, the meeting requested by the union took place. I have accepted the evidence of Ms Lewis that she asked the questions referred to in paragraph 18 above. It seems clear that the general focus of the meeting was on redundancy issues, rather than reaching an agreement. However, given that an ‘improved redundancy package’ was one of the items of the union’s log of claims,19 these discussions were of potential relevance to a new agreement.

[28] I do not consider it relevant to the question of genuineness that the NUW might have been negotiating more actively with another employer, Coldunit.

[29] In my opinion, the NUW is genuinely trying to reach agreement with the company. The NUW may not have been trying especially hard of late to reach agreement. But this does not mean that its efforts have not been, or are not, genuine.

Alleged extraneous intention

[30] Oxford’s third argument in opposition to the granting of a PABO was that the union had filed its application for an ‘extraneous intention.’ 20 Three such intensions were proffered: first, to apply pressure to the company by having employees of Coldunit and Oxford engaged in protected industrial action at the same time; secondly, to apply pressure to the company in relation to the proposed redundancies; and thirdly, to punish the company for a perceived wrongdoing in relation to matters that have been the subject of a general protections claim brought by the NUW against the company in the Federal Court.

[31] Oxford’s arguments in this regard make reference to the decision of the Full Bench in JJ Richards and Sons v TWU, 21 where VP Lawler and Bissett C stated that the genuineness or authenticity of an applicant’s efforts to reach agreement will turn on its ‘motivation – the intention, object or purpose.’22 This was contrasted with a situation where the applicant has ‘in truth some other, extraneous intention, object or purpose or is seeking something other than an enterprise agreement under the FW Act’.23 Examples cited were the application of pressure in pursuit of political or environmental goals or simply punishing the employer for some perceived wrongdoing.

[32] As to the first alleged ‘extraneous intention’, the contention is that protected industrial action undertaken by employees of both Oxford and Coldunit would inflict maximum disruption and damage to Oxford’s business. The true purpose of the application for the PABO is said to be to occasion this damage, rather than advancing members’ claims for a new agreement. I do not accept this submission.

[33] The purpose of organising and engaging in protected industrial action must be to support or advance claims in relation to an enterprise agreement. 24 However, provided the other requirements of the Act are met, protected industrial action may exert pressure, and indeed inflict economic damage. The protection afforded by the immunity provision in s415 of the Act provides a defence against legal action that an employer might otherwise be able to take in respect of damage suffered as a result of industrial action.

[34] The fact that a union might seek to align various streams of bargaining with different employers so as to maximise the impact of any protected industrial action does not speak against the genuineness of their efforts to reach agreement with those employers. Of course, the requirements for protection under the Act must be met in relation to the bargaining with each individual employer, and the bargaining representative must not be engaging in pattern bargaining. 25

[35] In relation to the second alleged extraneous purpose, there is no evidence that the NUW is seeking the PABO as a means to pressure the company to abandon the foreshadowed redundancies. Further, to the extent there is any link between the PABO application and the proposed redundancies, it should be recalled that an improved redundancy package is one of the items in respect of which the union is bargaining.

[36] Finally, there is no evidence that the NUW’s purpose in seeking a PABO is to punish the company in relation to the claims that are the object of the NUW’s general protections claim in the Federal Court. It is not necessary to address the NUW’s claims in this decision; they are outlined in Oxford’s submissions. 26 I am advised by the parties that his Honour Justice Bromberg made interim orders in that matter on 12 May 2017, following which the parties consented to further orders pending the final hearing of the matter, which will be heard in due course. The union is prosecuting its concerns about the relevant matters in the Court.

[37] I do not accept that the PABO application is sought as some form of punishment for the company’s alleged wrongdoing.

Non-permitted matters

[38] Whilst the matter was not raised by the parties to this proceeding, I note that the NUW’s wage claim was purportedly directed not only at the wages of employees, but ‘all workers on site’. The second version of the log, referred to in paragraph 9 above, makes clear that by this is meant ‘both Oxford employees and Labour Hire Agency employees.’ A claim for wage increases in relation to the employment of other employers’ employees is not a permitted matter for the purposes of s172. Such a claim is different in nature from a claim that seeks to have employees of contractors paid no less than employees of the company. The latter claim is referable to job security of company employees and is a permitted matter. 27

[39] Where a claim for non-permitted matters is pursued in the course of bargaining, a question can arise as to whether this affects the genuineness of the efforts to reach an agreement.

[40] However, as was pointed about by the Full Bench in Esso Australia Pty Ltd v AMWU, 28there are a number of ‘contextual matters’ that are important in considering the significance to be attributed to a union’s pursuit of non-permitted matters. In this case, it does not appear that this aspect of the log featured prominently in negotiations, or that concerns were raised about it by the employer. In the circumstances, I do not consider the presence of this claim to affect the genuineness of the union’s efforts to reach agreement.

Conclusion

[41] Having regard to all of the circumstances of the bargaining in the present matter, I am satisfied that the NUW, as a bargaining representative for the proposed agreement, and applicant for a PABO, has been and is genuinely trying to reach agreement with the employer.
I am also satisfied that the restrictions on the making of an application under section 437(2A) and 438(1) are not applicable, and that the other statutory criteria have been met.

[42] A protected action ballot order has been made and separately issued in PR594370.

DEPUTY PRESIDENT

Appearances:

Ms M Segan for the National Union of Workers

Ms A Hirsh for AB Oxford Cold Storage Company Pty Ltd

Hearing details:

Melbourne

4 July 2017

 1   Esso Australia Pty Ltd v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (2015) 257 IR 5 at 69; [2015] FWCFB 210 at 57

 2   Total Marine Services Pty Ltd v Maritime Union of Australia[2009] FWAFB 368]; Application by NUW [2016] FWC 6262 at 25

 3   Statement of Mr Fleiszig, paragraphs 5-13; Statement of Ms Lewis, paragraph 12

 4   Ibid at paragraph 9, and Attachment GF4

 5   Annexure D to the Statement of Ms Lewis

 6   See Attachment GF6 to Mr Fleiszig’s Statement

 7   See paragraph 15 of the Statement of Mr Fleiszig

 8   Statement of Ms Lewis, paragraph 17

 9   See paragraph 18 of the Statement of Ms Lewis.

 10   Ibid, paragraph 19.

 11   Paragraph 21 of the Statement of Ms Lewis

 12   PN214

 13   See paragraphs 18 and 20 of the Statement of Mr Fleiszig

 14   PN235. Note that the transcript records the word ‘plan’, but it is clear from context that the word ‘plain’ should appear.

 15   See Respondent’s Submissions, paragraph 41 to 45.

 16   See Statement of Mr Fleiszig, paragraph 9

 17   Ibid, at paragraphs 46 to 51.

 18   Statement of Ms Lewis, paragraph 18.

 19   Item 6 of the ‘final’ log, Annexure D to the Statement of Ms Lewis

 20   See Respondent’s Submissions, paragraph 52; and generally at 53 to 64

 21   [2010] FWAFB 9963

 22   Ibid at paragraph 58

 23   Ibid at paragraph 63

 24   See the definition of employee claim, action in s409(1)

 25   Section 409(4)

 26   See paragraphs 60 to 64

 27   Australian Industry Group v ADJ Contracting Pty Ltd (2011) 213 IR 165. See also the Explanatory Memorandum to the Fair Work Bill

 28   [2015] FWCFB 210 at 72

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<Price code C, PR594323>