National Union of Workers v Silk Contract Logistics Pty Ltd

[2017] FWC 6298

[2017] FWC 6298

FAIR WORK COMMISSION

DECISION

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

National Union of Workers
v
Silk Contract Logistics Pty Ltd
(B2017/1133 and B2017/1134)

DEPUTY PRESIDENT MILLHOUSE MELBOURNE, 28 NOVEMBER 2017

Proposed protected action ballots of employees of Silk Contract Logistics Pty Ltd.

[1] On 22 November 2017 the National Union of Workers (NUW) filed an application for a protected action ballot order (PABO) pursuant to s.437 of the Fair Work Act 2009 (Act). The application concerned a proposed ballot of certain employees of Silk Contract Logistics Pty Ltd (Silk Contract Logistics).

[2] The employees in question are members of the NUW who would be subject to a proposed enterprise agreement at the company’s sites in Altona North, Laverton and Tullamarine. Their employment is presently covered by Silk Contract Logistics Pty Ltd Altona North/Laverton/Tullamarine Enterprise Agreement 2014 (Altona North Agreement). I will refer to this as the Altona North application.

[3] On 22 November 2017, the NUW filed a second application for a PABO. This concerned a proposed ballot of certain employees of Silk Contract Logistics who are members of the NUW and who would be subject to a proposed enterprise agreement at the company’s Clayton site. Their employment is presently covered by the Silk Contract Logistics Pty Ltd Clayton Enterprise Agreement 2015 (Clayton Agreement). I will refer to this as the Clayton application.

[4] The Altona North application and Clayton application were allocated to my chambers on 23 November 2017. Silk Contract Logistics advised the Commission that it opposed both applications.

[5] Section 441 of the Act provides that the Commission must, as far as practicable, determine an application for a PABO within two working days after the application is made. The two applications were listed consecutively for Mention/Directions Hearing on 24 November 2017 to discuss the nature of Silk Contract Logistics’ objection and to further timetable the matter. In addition, I discussed with the parties the approach that I should take to hearing the two matters, given that Silk Contract Logistics’ objections to the applications appeared to advance similar questions of law and fact. Having sought the parties’ views, I considered that it was appropriate and most expeditious to deal with the two applications together, pursuant to s.442 of the Act, and they were listed for hearing on the next business day, being 27 November 2017.

[6] Mr Toner, Industrial Officer of the NUW, appeared for the union at the hearing. Mr Roux, General Manager for Victorian Operations appeared for Silk Contract Logistics.

Statutory framework

[7] Section 437 of the Act enables a bargaining representative to apply for a PABO. Subject to the restrictions in s.437(2A) and s.438(1) (which are not presently relevant), the Commission must make an order in relation to employees who will be covered by a proposed agreement in the circumstances set out in s.443. Section 443 relevantly 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).

(3) A protected action ballot order must specify the following:

(a) the name of each applicant for the order;

(b) the group or groups of employees who are to be balloted;

(c) the date by which voting in the protected action ballot closes;

(d) the question or questions to be put to the employees who are to be balloted, including the nature of the proposed industrial action.

(3A) For the purposes of paragraph (3)(c), the FWC must specify a date that will enable the protected action ballot to be conducted as expeditiously as practicable.

…”

[8] Whether an applicant “has been, and is, genuinely trying to reach an agreement” within the meaning of s.443(1)(b) 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 There are two temporal components to s.443(1)(b); the applicant must have been genuinely trying to reach agreement, and must be genuinely trying to reach agreement.

[9] While there is a relationship between s.443(1)(b) and the need to bargain in good faith under s.228 of the Act, a Full Bench of the Commission in Esso Australia Pty Ltd v AMWU 3cautioned against conflating the two requirements. It stated that “a party may not meet a particular good faith bargaining requirement but may nevertheless be genuinely trying to reach agreement.”4 Ultimately, it is the test in s.443(1) that must be applied.

[10] As is explained further below, Silk Contract Logistics contends that the NUW has not been, and is not, genuinely trying to reach agreement, including because it has not met certain good faith bargaining requirements. Apart from this contested matter, there is no dispute between the parties, and I am satisfied on the evidence, that the statutory requirements for the protected action ballot orders sought by the NUW have been met.

Background and evidence: Altona North application and Clayton application

[11] Mr Dixon gave evidence that he is the organiser who is leading the NUW negotiations for a new agreement in respect of both the Altona North application and the Clayton application. He explained that the NUW developed a log of claims 5 containing eight items that applied to both the Altona North negotiations and the Clayton negotiations.

[12] Mr Dixon said that since the first bargaining meeting on 28 September 2017, there have been five meetings held between the NUW and Silk Contract Logistics to discuss the log of claims and the proposed agreement concerning the Altona North and related sites. Four bargaining meetings have been held between the NUW and Silk Contract Logistics to discuss the log of claims and the proposed agreement at the Clayton site.

[13] Of the eight items in the log of claims, Mr Dixon said that claims 1 and 2 had been agreed. Claim 1 stated that the proposed agreement would be based on the respective terms of the Altona North Agreement and the Clayton Agreement, subject to the log of claims and any relevant legislation. Claim 2 related to the duration of the proposed agreement.

[14] Mr Dixon said that the NUW had explained to the company its position in respect of the balance of the claims, and that Silk Contract Logistics had provided a response to each of them. He explained that claim 3 related to the scope of the respective agreements. Claim 4 contained the proposed wage increases, including how they will be paid. Claim 5 related to paid time off to attend union meetings. Claim 6 related to the maintenance of terms and conditions in relation to transfers between sites. Claims 7 and 8 related to changes to the current meal allowances and payment for public holidays worked.

[15] Claims 3 to 8 (inclusive) remain unresolved, including the quantum of the wage increase. In respect of this issue, Mr Dixon said that the NUW could not move from its initial wages claim (of 5% for each year of the agreement) until some of the NUW’s other claims were addressed by Silk Contract Logistics. 6 Mr Dixon also said that there had been some movement on the part of the company in respect of part of claim 6.7

[16] Mr Roux gave evidence that he is part of Silk Contract Logistics’ bargaining team and has attended every bargaining meeting. He said that the NUW presented its log of claims to Silk Contract Logistics at the second bargaining meeting for each site on 10 October 2017 and relied upon meeting minutes of the Altona North negotiations 8 and Clayton negotiations9 to support his position. The meeting minutes show that, with the exception of bargaining meeting five (discussed below), the negotiations for each of the sites were held on the same dates and the matters discussed were virtually the same.

[17] Mr Roux said that Silk Contract Logistics provided a response to the log of claims at bargaining meeting three on 17 October 2017, which included a wages proposal of 1.5% for each year of the agreement. He accepted that Silk Contract Logistics had agreed to claims 1 and 2. 10 At bargaining meeting four on 2 November 2017, he said that the NUW provided a response to Silk Contract Logistics that simply rejected the company’s position and the NUW did not engage further on any issues at that meeting.

[18] A fifth bargaining meeting was held in respect of the Altona North negotiations on 15 November 2017 (but not in relation to the Clayton negotiations). The meeting minutes specify that the parties spent a “significant amount of time discussing item 3” 11 being the NUW’s scope claim. Mr Roux also gave evidence that Silk Contract Logistics sought from the NUW a revised wages offer and this was declined by the NUW.

Company objection

[19] Silk Contract Logistics contends that the NUW has not been and is not genuinely trying to reach agreement in respect of both the Altona North application and the Clayton application. It said that the NUW’s conduct contravened s.228(1)(c) of the Act and advanced two key grounds in support of its position:

(a) the NUW has not responded to the company’s wages claim in a timely manner or moved from its original position; 12 and

(b) the focus of the NUW has been on progressing union driven claims such as claim 3 (scope) and claim 5 (paid union meetings). 13

[20] Silk Contract Logistics also contends that the small number of bargaining meetings held to date and the fact that some were concluded early by the NUW contravenes s.228(1)(f) of the Act and this supports its contention that the NUW has not been and is not genuinely trying to reach agreement. 14

[21] The NUW submits to the contrary. It says that the union has been and continues to genuinely try and reach agreement with Silk Contract Logistics. It referred to the evidence of the four bargaining meetings concerning the Clayton application and five bargaining meetings concerning the Altona North application and pointed out that two of the items on the log of claims had been agreed. The NUW accepted that it had not moved from its original wages position and relied upon s.228(2)(a) of the Act, which provides that “the good faith bargaining requirements do not require… a bargaining representative to make concessions during bargaining for the agreement…” to reject Silk Contract Logistics’ claim that its failure to do so was undermining good faith bargaining.

[22] In respect of the company’s objection that the NUW’s focus was primarily on its scope claim, the NUW relied upon the decision in Stuartholme School v Independent Education Union of Australia 15in support of its position that the fact that scope has formed part of the bargaining discussions does not mean that the NUW is not genuinely trying to reach agreement.

Genuinely trying to reach agreement

[23] Before a PABO can be issued, the Commission must be satisfied that the NUW has been, and is, genuinely trying to reach agreement with Silk Contract Logistics. I have considered the company’s objections to the applications in this regard. In my view, for the reasons below, the matters raised do not compromise the genuineness of the NUW’s efforts to reach agreement at each site with Silk Contract Logistics.

[24] In respect of Silk Contract Logistics’ first ground, the fact that the NUW is maintaining a hard line in relation to its wages claim does not mean that it has not been, and is not, genuinely trying to reach agreement. 16 The meeting minutes for each negotiation contain a status report which specifies that part of the NUW’s wages claim has been agreed in principle, subject to overall agreement of the final wages percentage.17 The NUW provided Silk Contract Logistics with a response to the company’s proposed percentage wage increase at bargaining meeting four on 2 November 2017. The fact that the NUW did not make a concession at this time does not persuade me that the NUW has not been, and is not, genuinely trying to reach agreement in the context of these negotiations.

[25] I also do not accept that Silk Contract Logistics’ second ground discloses that the NUW has not been, and is not, genuinely trying to each agreement. In respect of the NUW’s focus on scope, a Full Bench of Fair Work Australia in Stuartholme School v Independent Education Union of Australia said:

“…the mere fact that a bargaining representative puts scope in issue does not mean the bargaining representative is not genuinely trying to reach agreement.” 18

[26] I respectfully adopt the observations of the Full Bench in this regard. In the absence of a scope order, the parties are entitled to continue to bargain over the scope of the agreement until that matter is settled through bargaining, and protected industrial action in support of a claim for a particular scope may be taken (provided that the statutory pre-requisites have been satisfied). 19 The status report in respect of the Altona North negotiations states that “there was a significant amount of time discussing item 3” (scope) at bargaining meeting five. This suggests that the parties are progressing bargaining in relation to this issue, but an agreement has not been reached. That the NUW has focussed its recent attention on this aspect of its log of claims does not, in my view, give rise to a finding that the NUW has not been, and is not, genuinely trying to reach agreement.

[27] I also do not accept that any particular focus by the NUW on claim 5 (paid union meetings) compromises the genuineness of the union’s efforts to reach agreement with Silk Contract Logistics. While the matter was not dealt with in detail by the parties at the hearing, the NUW’s pursuit of this clause, in the circumstances of the present case, does not disclose that the NUW has not been, and is not, genuinely trying to reach agreement.

[28] More generally, the evidence relating to the details of the negotiations that have occurred between the NUW and Silk Contract Logistics at the sites is set out above. In particular, there is a log of claims that is understood between the parties, 20 there have been four and five meetings respectively at Clayton and Altona North in which positions have been shared, and it is not in dispute that at least two claims have been agreed.21 I do not consider that the number of bargaining meetings held before the applications were made or the early conclusion of certain bargaining meetings supports a view that the NUW’s efforts to reach agreement at each site are not genuine. It is not necessary to show that negotiations on the agreement or an item of the agreement have been exhausted before a PABO application is made or that such action is a matter of last resort.22 Mr Dixon gave evidence that the claims are not “closed” from the NUW’s perspective23 and I accept this evidence. I note also the content of Mr Dixon’s statutory declaration in which he attests that the NUW has been, and is, genuinely trying to reach agreement with Silk Contract Logistics.24

[29] Taken together, the above consideration supports a conclusion that the NUW has been, and is, genuinely trying to reach agreement with Silk Contract Logistics.

[30] Taking into account the findings made by a Full Bench of the Commission in Esso Australia Pty Ltd v AMWU, 25 even if I had found that the NUW was not bargaining in good faith in respect of the above matters (something that I have not done), that would not necessarily mean that the NUW was not genuinely trying to reach agreement.

[31] In relation to the Altona North application (B2017/1134), I have taken into account all of the circumstances of the bargaining that is occurring between Silk Contract Logistics and the NUW in relation to a proposed enterprise agreement at Altona North, Laverton and Tullamarine. I am satisfied that the NUW, being the applicant for a PABO, has been, and is, genuinely trying to reach an agreement with Silk Contract Logistics, the employer of the employees who are to be balloted.

[32] In relation to the Clayton application (B2017/1133), I have taken into account all of the circumstances of the bargaining that is occurring between Silk Contract Logistics and the NUW in relation to a proposed enterprise agreement at Clayton. I am satisfied that the NUW, being the applicant for a PABO, has been, and is, genuinely trying to reach an agreement with Silk Contract Logistics, the employer of the employees who are to be balloted.

Conclusion

[33] Having regard to all of the circumstances of the bargaining in the two matters before me, I am satisfied that the NUW, the applicant for PABOs in the Altona North application and the Clayton application, has been, and is, genuinely trying to reach agreement with Silk Contract Logistics.

[34] I am also satisfied that the restrictions on the making of an application under section 437(2A) and 438(1) are not applicable in the circumstances of these applications, and that the other statutory criteria for the granting of a PABO in each application have been met.

[35] Pursuant to s.443(1) of the Act, protected action ballot orders are issued in PR598155 and PR598156.

DEPUTY PRESIDENT

Appearances:

M Toner for the National Union of Workers

J Roux for Silk Contract Logistics Pty Ltd

Hearing details:

2017

Melbourne

November 27

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

 2   Total Marine Services Pty Ltd v Maritime Union of Australia[2009] FWAFB 368 at [32]; (2009) 189 IR 407 at [32]; National Union of Workers (NUW), Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU) and Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union known as the Australian Manufacturing Workers’ Union (AMWU) v Sakata Rice Snacks Australia Pty Ltd[2016] FWC 6262 at [25].

 3   [2015] FWCFB 210.

 4 Ibid at [18].

 5   Exhibit A1.

 6 Transcript PN [69].

 7   Transcript PN [77] and PN [105].

 8   Exhibit R2.

 9   Exhibit R1.

 10 Transcript PN [267].

 11   Exhibit R2, Meeting 5, Minute item 4.

 12   Transcript PN [320]-[321].

 13   Transcript PN [324] and PN [340].

 14   Transcript PN [335]-[336].

 15 (2010) 192 IR 29.

 16   NUW v ACCO Australia Pty Ltd [2009] FWA 226; NUW v Riverland Oilseeds Pty Ltd[2013] FWC 5914.

 17   Exhibit R1, page 7; Exhibit R2, page 8.

 18   Stuartholme School v Independent Education Union of Australia (2010) 192 IR 29 at [25].

 19   See the discussion in Maritime Union of Australia v Maersk Crewing Australia Pty Ltd[2016] FWCFB 1894 at [28]-[30].

 20 Transcript PN [266].

 21   Transcript PN [67] and PN [267].

 22   CEPU and AMWU v Kraft Foods Ltd (2010) 197 IR 12 at [40].

 23 Transcript PN [226].

 24   Exhibit A2, Statutory declaration of Mr J. Dixon dated 22 November 2017 at Question 2.1, paragraph 1; Exhibit A3, Statutory declaration of Mr J. Dixon dated 22 November 2017 at Question 2.1, paragraph 1.

 25   [2015] FWCFB 210.

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<Price code C, PR598158 >