Re: Transport Workers' Union of Australia
[2011] FWA 1097
•25 FEBRUARY 2011
[2011] FWA 1097 |
|
REASONS FOR DECISION |
Fair Work Act 2009
s.459 - Application to extend the 30 day period in which industrial action is authorised by protected action ballot
Transport Workers' Union of Australia
(B2011/2557)
COMMISSIONER LEWIN | MELBOURNE, 25 FEBRUARY 2011 |
Extension of period in which authorised protected industrial action by employees may take place—discretion—Objects of the Act—legislative intention—application granted.
Background
[1] This matter concerns an application by the Transport Workers’ Union of Australia (the TWU) to extend the 30 day period in which industrial action is authorised by a protected action ballot, pursuant to s.459(3) of the Fair Work Act 2009 (the Act), which is set out below:
“459 Circumstances in which industrial action is authorised by protected action ballot
(1) Industrial action by employees is authorised by a protected action ballot if:
(a) the action was the subject of the ballot; and
(b) at least 50% of the employees on the roll of voters for the ballot voted in the ballot; and
(c) more than 50% of the valid votes were votes approving the action; and
(d) the action commences:
(i) during the 30-day period starting on the date of the declaration of the results of the ballot; or
(ii) if FWA has extended that period under subsection (3)—during the extended period.
Note: Under Division 2, industrial action by employees for a proposed enterprise agreement (other than employee response action) is not protected industrial action unless it has been authorised in advance by a protected action ballot.
(2) If:
(a) the nature of the proposed industrial action specified in the question or questions put to the employees in the protected action ballot included periods of industrial action of a particular duration; and
(b) the question or questions did not specify that consecutive periods of that industrial action may be organised or engaged in;
then only the first period in a series of consecutive periods of that industrial action is the subject of the ballot for the purposes of paragraph (1)(a).
(3) FWA may extend the 30-day period referred to in subparagraph (1)(d)(i) by up to 30 days if:
(a) an applicant for the protected action ballot order applies to FWA for the period to be extended; and
(b) the period has not previously been extended.
[2] The application relates to a protected action ballot order made by me on 17 December 2010 in matter B2010/3729. The TWU was the applicant for that protected action ballot order. The TWU is a bargaining representative for employees of Murray Goulburn Co-Operative Limited (MGC) who have proposed to MGC that an enterprise agreement be made by MGC with employees of MGC. The persons eligible to vote in the ballot were “those who will be covered by the proposed enterprise agreement and are represented by the bargaining representative who is the applicant for this protected action ballot order”. The result of the protected action ballot, which was conducted by the Australian Electoral Commission, was declared on 18 January 2011. The ballot sought responses to questions concerning approval of various forms of industrial action for the making of the proposed enterprise agreement between MGC and its employees. All of the questions were answered affirmatively by an overwhelming number of the employees who voted. There is no suggestion that the number of employees who voted did not comprise 50% of the employees on the roll of voters for the ballot.
[3] The application to extend the 30 day period in which protected industrial action is authorised to commence was filed on 11 February 2011 and listed for Hearing by video link between Melbourne and Sydney on 17 February 2011. Mr Michael Burns of the TWU appeared from Sydney. Mr Luke McCrone of the TWU appeared in Melbourne. Mr Stuart Wood, of counsel, appeared for MGC in Melbourne. MGC opposed the extension of time sought by the application.
[4] On 18 February 2011 I decided to grant the application 1 and issued an order accordingly. I now publish my reasons for that decision.
Statutory Provisions
[5] The discretion to extend the 30 day period in which industrial action is authorised by a protected action ballot is unconditioned by specific statutory direction. The discretion is therefore wide and should be exercised having regard to the objects of the Act and in particular the objects of the relevant part of the Act in which the power to do so appears, as expressed in s.436. In my view, this approach is consistent with relevant authority on the subject of the effective construction of statutory provisions by Courts and Tribunals, which requires that the intention of the legislature and the purpose of the legislation should be given effect to. So much I think is common to the submissions of the applicant and the respondent in this case. It is appropriate in this respect to also have regard to the statutory context in which the relevant provisions appear and the scheme of the Part of the Act which deals with the subject of protected industrial action, in order to exercise the discretion appropriately.
[6] Industrial action by employees and employers which is not prohibited by s.417 of the Act is, but for the operation of s.415 of the Act, unprotected from legal action by a party who is aggrieved and alleges damage as a result of an unlawful act by a person engaging in industrial action. In order for industrial action to gain the protection afforded by s.415 of the Act certain substantive facts must exist and procedures prescribed by the Act must be followed.
[7] For the purposes of this decision some such features of the statutory provisions and requirements which give rise to the protection of industrial action may be conveniently referred to, in particular, the procedural components which are mandated by Part 3–3 of Chapter 3—Rights and responsibilities of employees, employers, organisations etc of the Act.
[8] It is worthy of note that, for reasons which will become clearer below, Part 3–3 of Chapter 3 of the Act, which deals with industrial action, does not appear in Chapter 2—Terms and conditions of employment. In particular, it may be noted that the provisions of the Act regulating the subject of industrial action and in particular the protection afforded to such action is subject to distinct and separate codification from that part of the Act which regulates the making and approval of enterprise agreements, Part 2–4—Enterprise Agreements, of Chapter 2.
[9] This significant separation of the subject of the making and approval of enterprise agreements and the protection of industrial action is linked by the concept of a “proposed enterprise agreement”. The instantly relevant condition precedent to the protection of industrial action afforded by the Act is that the industrial action must be for the purposes of pursuing a proposed enterprise agreement.
[10] Section 437 of the Act sets out who may make an application for a protected action ballot order. Only a bargaining representative or a plurality of bargaining representatives for a proposed enterprise agreement, which is not a greenfields agreement or a multi-enterprise agreement, as defined by the Act, may make such an application.
[11] Section 414 sets out a requirement for the effective authorisation and protection of industrial action by employees of an employer. The section requires that the relevant bargaining representative must provide notification to the employees’ employer of the industrial action to be taken by the relevant employees, in the manner prescribed thereby.
[12] It may therefore be observed that in order for the protection afforded by the Act to industrial action by employees to arise, a stepped process is prescribed within Chapter 3, Division 8 of the Act. The statutory requirements for this process to occur effectively, so as to give rise to the relevant protection, are that: there must be a proposed enterprise agreement of the requisite kind; there must be a bargaining representative who is competent to act in relation to that proposed enterprise agreement; the bargaining representative must be genuinely trying to reach agreement with the employer with whom the proposed enterprise agreement may be made; the bargaining representative must make an application to Fair Work Australia for a protected industrial action ballot order; Fair Work Australia must issue the order sought; subsequently a ballot must be conducted and a majority of 50% of those eligible to vote in the ballot must approve the specified industrial action.
[13] When all of these prescribed procedures and a number of substantive requirements imposed by the Act exist or are met an employee who chooses to and does take industrial action: which is directed toward the making of a proposed enterprise agreement of the requisite kind with an employer, which is authorised by the outcome of the protected industrial action ballot, and has been appropriately notified to the relevant employer, the industrial action of the employee will be protected from any legal action in relation to the effects of that industrial action. Unless the industrial action has involved or is likely to involve personal injury, wilful or reckless destruction of, or damage to, property or the unlawful taking, keeping or use of property 2.
[14] Without greater elaboration it may be noted therefore that what is regulated by the procedure to gain the protection afforded to certain industrial action for the purposes of pursuing a proposed enterprise agreement to be made with an employer is not the industrial action as such. Rather, the most substantial consequence of Part 3–3 of the Act, which is relevant to this matter, is to establish the conditions necessary for a defined class of industrial action to gain immunity from legal action. Quite separately from the specific prohibition on the taking of industrial action during the nominal life of an enterprise agreement in s.417; the decision to take or not to take industrial action is left to an individual employee. Clearly the propensity of an employee to take industrial action will no doubt be influenced by the legal consequences of doing so, however, it is an error to conflate the purposes of a protected action ballot order and the capacity or decision of an employee to take protected industrial action except to this extent. Awareness of the wishes of employees to engage in industrial action and access to legal immunity when doing so for the purposes of making a proposed enterprise agreement are the objects of the procedural requirements of Division 8 of Part 3-3 of Chapter 3 of the Act, as will be addressed further below.
MGC’s Submissions
[15] In this matter it was conceded by MGC that the applicant is a bargaining representative competent to represent the relevant employees and is genuinely trying to reach agreement with MGC for a proposed single enterprise agreement, and that the majority, in fact an overwhelming majority, of employees eligible to vote approved all of the specified industrial action in the ballot declared on 18 January 2011.
[16] MGC submits that the Tribunal should require a new ballot of the employees eligible to vote in the protected action ballot because there are grounds to believe that the disposition of those employees toward the authorisation of industrial action may have changed, in light of developments in the course of negotiations between the TWU and MGC for an enterprise agreement since the protected action ballot was declared on 18 January 2011. The relevant facts which are said to support this submission are that:
- MGC has incrementally improved the value of the terms and conditions of its offer for an enterprise agreement to be made with its employees.
- A vote was conducted by the TWU in relation to such improved terms and conditions, the result of which was that 162 employees voted to assent to MGC’s offer and 167 voted against the offer as the basis for an enterprise agreement.
- MGC employees at Rochester, Koroit, Cobran, Leitchville and Keiwa depots voted to assent to the terms of MGC’s offer whereas those at Leongatha and Maffra depots voted to reject the offer.
- From this it can be inferred that those eligible to vote may now be more disposed not to approve of industrial action if another ballot were to be required.
[17] MGC advised the Tribunal that their research had revealed only one decision of the Tribunal which was relevant to their submission concerning the disposition of employees to authorise industrial action in relation to an application made under s.459(3) of the Act. That is a decision of Commissioner Hampton in Maritime Union of Australia v DP World Adelaide Pty Ltd 3(DP World). In that decision DP World and their employees had agreed on terms for an enterprise agreement, to be drafted for approval by employees under the provisions of s.185 of the Act and subsequently to be the subject of an application to the Tribunal for statutory approval, under Subdivision B of Division 4 of Part 2-4 of Chapter 2 of the Act. The bargaining representative of those employees applied for an extension under s.459(3) of the Act, notwithstanding the agreement between the parties on the terms of the proposed enterprise agreement. DP World relied upon the fact that the terms to be incorporated into a draft enterprise agreement for approval by the employees had been agreed, in order to seek that the extension of time for taking industrial action under s.459(3) should be refused by the Tribunal.
[18] MGC relied upon a part of the Commissioner’s decision which appears at paragraph 36 thereof, namely the last sentence thereof. That paragraph is set out below, and with it I have extracted adjacent paragraphs of the Commissioner’s decision so that the path of the Commissioner’s reasoning and the relevant context of what MGC relies upon within the body of the decision may be comprehended.
“[32] In this case there is no contention that either party has not bargained in good faith. It is also common ground that as a result of the confirmation of positions in the lead up to the hearing of this matter, an in-principle agreement exists as to the basis of a proposed agreement between them.
[33] It is clear to me that Fair Work Australia should avoid an approach to these matters that would encourage a union from taking industrial action in part for the purpose of keeping open the option to take protected action beyond the 30 day period. Further, it would not be appropriate to penalise a party that has acted constructively by not utilising its right to take industrial action.
[34] The approach of the union not to take protected industrial action in this matter has been largely influenced by the view that the potential to give notice was sufficient to advance its interests and more recently because the in-principle agreement between the parties was predicated on the basis that there would no industrial action. I add that unless the in-principle agreement is not honoured by DP World, the institution of industrial action by the MUA would raise serious issues under the good faith bargaining requirements of s.228 of the Act. I also add that there is no indication that either course of action is likely.
[35] I have carefully considered whether it is appropriate to grant an extension for the potential taking of protected industrial action given these somewhat unusual circumstances. On balance, I am persuaded that I should do so. Without canvassing all of the considerations leading to that conclusion, the fact that the MUA has actively pursued its bargaining interests during the 30 day period and has not resorted to protected action for the reasons set out above, are important factors. Further, there is no guarantee that a final agreement will be made, and given the scheme of the Act, the capacity to access protected industrial action for a further period is not in itself inappropriate as part of the bargaining regime.
[36] I accept that there may be occasions where it is appropriate that a fresh ballot be conducted after the initial 30 day period. However such would need to be approached in the knowledge that Parliament has provided for the potential of a one off extension without that course of action and there would in my view need to be some cogent reason to refuse an application on that basis alone. In this case, there is no suggestion that the employees have changed in composition or likely disposition.
[37] I have also considered the circumstances of the employer and its understandable desire to reach an agreement without being subject to industrial action. This is of course the best outcome for all parties but must be considered in the context of the bargaining arrangements of the Act. In this case, it is also desirable that DP World not lose the benefit of its part of the in-principle agreement. That was reached in the context of the initial 30 day period and the same context will operate under any extension. I also note that there are options open to DP World in the event that protected action is taken. These include the pursuit of bargaining orders pursuant to s.230 of the Act and orders to cease or suspend protected action in certain circumstances (including potentially s.424).”
[19] DP World’s submissions were ultimately rejected and the extension sought by the bargaining representative and the employees was granted, notwithstanding that the parties had agreed on terms but were yet to reduce those terms to the form of an enterprise agreement for approval by the relevant employees, in accordance with the requirements of the Act for the making of such an agreement.
Consideration
[20] There are three reasons why I consider this decision does not assist the case for MGC in this matter. The first is that, in my view, the exercise of the statutory discretion will always be contingent on the individual facts and circumstances of a particular case. The second is that there is no analogy between the facts of that matter and the matter before me in respect of the basis upon which the employer in that matter sought refusal of the application. In that case the parties had agreed on terms. In this case they have not. The third is that, in any event, notwithstanding agreement on terms between the parties in that matter, the discretion was exercised to grant the application rather than to refuse it.
[21] Moreover, in my view, the reference in the Commissioner’s decision to the “likely disposition” of employees is fragmentary and should be read in the context of the additional content of the decision which preceded and followed it, as cited.
[22] I now turn to the statutory considerations relevant to the exercise of the discretion to grant or refuse the application.
[23] The relevant provisions of the Act as set out in Section 3—Object of this Act would appear to be contained in subparagraph (f) thereof, which are set out below:
“(f) achieving productivity and fairness through an emphasis on enterprise-level collective bargaining underpinned by simple good faith bargaining obligations and clear rules governing industrial action; ...”
(Emphasis added)
[24] Chapter 3 of the Act contains no general object. Part 3–3—Industrial action of the Act, likewise contains no general object. However, s.406 which is a guide to Part 3–3 of the Act relevantly provides descriptors of the various divisions of Part 3–3, which for present purposes includes the descriptions of the Divisions 2, 3 and 8 of Part 3–3 of the Act which are set out below:
“406 Guide to this Part
This Part deals mainly with industrial action by national system employees and national system employers.
Division 2 sets out when industrial action for a proposed enterprise agreement is protected industrial action. No action lies under any law in force in a State or Territory in relation to protected industrial action except in certain circumstances.
Division 3 provides that industrial action must not be organised or engaged in by certain persons before the nominal expiry date of an enterprise agreement or workplace determination has passed.
...
Division 8 establishes the process that will allow employees to choose, by means of a fair and democratic secret ballot, whether to authorise protected industrial action for a proposed enterprise agreement.”
[25] Division 8 of part 3–3 of Chapter 3 of the Act, which deals with protected action ballots, contains s.436 which is set out below:
“436 Object of this Division
The object of this Division is to establish a fair, simple and democratic process to allow a bargaining representative to determine whether employees wish to engage in particular protected industrial action for a proposed enterprise agreement.
Note: Under Division 2, industrial action by employees for a proposed enterprise agreement (other than employee response action) is not protected industrial action unless it has been authorised in advance by a protected action ballot.”
(Emphasis added)
[26] Having regard to s.3 paragraph (f) of the Act, clarity in the rules governing industrial action by the employees of MGC for the proposed enterprise agreement should therefore be considered when exercising the discretion vested in the Tribunal to extend the time in which industrial action is authorised by a protected Action ballot, pursuant to s.459(3) of the Act.
[27] It is convenient at this point to refer to paragraphs r285 and 1755 of the Explanatory Memorandum to the Fair Work Bill 2008 as follows:
“r.285. The requirement to hold a mandatory secret ballot authorising industrial action will be retained. However, provisions will be streamlined and simplified, impacting positively on users of the system. Further details are provided below.”
“1175. Clause 436 states that the object of the Division is to provide bargaining representatives with access to a fair, simple and democratic secret ballot process in order to determine whether employees wish to take certain types of protected industrial action. The Division contains facilitative provisions designed to provide a means for assessing the level of support for protected industrial action. The process the Division establishes is not intended to delay or frustrate the taking of protected industrial action by employees.”
(All emphasis added)
[28] In light of all of the above it is therefore relevant to consider the following when deciding whether or not to grant the application:
- Would the granting or refusal of the application contribute positively to clarity in the rules governing relevant industrial action?
- Would granting or refusal of the application streamline and simplify the process whereby the relevant employees can take protected industrial action for the proposed enterprise agreement?
- The democratic process which has been followed;
- Would simplification in the process for the authorisation of industrial action for the proposed enterprise agreement be served by granting or refusing the application?
- Would granting or refusing the application be fair to the employees, who are the persons whose wishes are the subject of the provision of s.436 and the conduct of the ballot?
- Would the exercise of the discretion to refuse the application be likely to have the effect of delaying or frustrating the taking of protected industrial action of employees of MGC for the purposes of the proposed enterprise agreement?
[29] It is difficult to see how, in the circumstances of this case, refusal of the application would lead to streamlining and simplifying the authorisation of protected industrial action by the employees of MGC for the proposed enterprise agreement. Rather, in my judgment, to refuse the application, on what is before me, would arguably cause greater complexity to arise in relation to such action. Any enterprise agreement made under the Fair Work Act to apply to the relevant employees can only be approved if a majority of those employees eligible to vote in a ballot to approve the agreement do so. The numerical dispersal of the employees throughout the various depots and their uneven views about the acceptability of the MGC’s terms for an enterprise agreement does not change this requirement.
[30] It is likewise difficult to see how refusing to grant the extension would lead to any needed clarification of the rules governing protected industrial action by employees of MGC for the proposed enterprise agreement. Rather, in my judgment, a lack of clarity in relation to such rules could well arise from refusal. Employees would no doubt need to understand the changed circumstances and could be uncertain about the situation in which protected industrial action could be taken in relation to the proposed enterprise agreement with MGC.
[31] I am unable to see how the refusal of the application could be said to provide simplification in the rules governing the statutory authorisation of protected industrial action by the relevant employees for the proposed enterprise agreement with MGC. On the contrary, in my judgment, refusal of the application would be more likely to give rise to confusion among the employees over whether, when and under what circumstances protected industrial action for the proposed enterprise agreement is authorised by the Act.
[32] It is further difficult to see what unfairness to the employees who were eligible to vote in the ballot would arise if the application were granted. The outcome of the ballot does not require the taking of any of the specified protected industrial action. If employees choose to take such action, and the action is duly notified in accordance with the Act, the consequence of the ballot and the extension sought is merely to provide the authorisation necessary for the legal immunity conferred by the Act to arise. Employees will make a choice to take authorised industrial action for themselves, with the statutory protection, if the application is granted.
[33] It is hard to see how, having rejected MGC’s offer of terms for an enterprise agreement by a majority vote, the relevant employees would not find the situation inexplicably complicated if the application were refused. If the application were to be refused they would, shortly, be unable to, regardless of the outcome of the protected action ballot declared in January and the rejection of MGC’s offer of terms, take protected industrial action in order to achieve an agreement with MGC on mutually acceptable terms for an enterprise agreement, if they considered it necessary to do so.
[34] For the employees to be told that it would be necessary to start the process of authorisation again, having by majority rejected MGC’s offer of terms, would not be a simple situation. Rather, in my view, it would be both objectively and subjectively, in the latter case from the perspective of the employees, to say the least, complex and problematic.
[35] Likewise, in my judgment, refusal of the application would not be fair for the relevant employees. It is to be remembered that it is the wishes of the employees in relation to engaging in protected industrial action which s.436 establishes as the object of the procedural requirements for a protected industrial action ballot in order for the employees to gain the legal immunity available under the Act. To MGC’s credit they did not submit that the use of the word “fairness” in s.436 refers to fairness as between MGC and those eligible to vote in the protected action ballot. There is no evidence that the employees who voted in that ballot wish to lose the authorisation and statutory protection of industrial action for the proposed enterprise agreement, which they obtained by voting in that ballot. On the contrary, the outcome of the voting on MGC’s terms for such an agreement would, prima facie, indicate that the employees would be advantaged by the extension so that the option of authorised protected industrial action and the collateral immunity under the Act were available to them, if necessary, to bring the negotiations for the enterprise agreement to an expeditious conclusion.
[36] At this point, it is relevant to observe that at the hearing I was informed that, subsequent to the negative outcome of the voting by employees on MCG’s offer of terms, MGC withdrew a valuable component of that offer, namely a retrospective date of operation of the first wage increase payable under those terms. This development can give rise to speculation about what effect this amendment of MGC’s terms of offer would have on the likelihood of industrial action. In my view, it is difficult to see how an offer of terms which has failed to achieved majority support among the employees to be covered by the proposed enterprise agreement and has since been reduced in value offers good reason to exercise the discretion to refuse the application. On the contrary, as protected industrial action may be authorised by the process prescribed by the Act, it would seem that the decision of how to proceed in light of this change in MGC’s position is best left to the employees to decide within the scheme of the Act.
[37] Finally, it seems to me that there is a likelihood that refusal of the application could delay or frustrate any wish to take protected industrial action for the proposed enterprise agreement by the relevant employees. Refusal would mean that a new application for another protected action ballot would be required and the application would have to be heard by the Tribunal. There would be an unspecified delay in the making and hearing of such an application.
[38] As MGC says that the employees’ bargaining representative is genuinely trying to reach agreement it is difficult to see, on what is before me, why such a delay should be instituted. The only condition precedent to making an order for a further ballot is that the bargaining representative making such an application is genuinely trying to reach agreement in respect of a proposed enterprise agreement. That was the factual position at the time the application in this matter was heard. So much was conceded by MGC.
[39] Additionally if a further application was made and a further ballot ordered, the AEC would be required to conduct another ballot, and a period of time for administration, voting and declaration of the ballot would be required. In my judgment, on what is before me, and given the intention to avoid delay and frustration expressed in the Explanatory Memorandum referred to above, I cannot see any merit in this outcome.
Conclusion
[40] For all of the above reasons I consider it appropriate to grant the application. The application is competent and has the necessary standing under the relevant provisions of the Act. The bargaining representative making the application is the bargaining representative who made the application for the protected action ballot order to which the application relates. The bargaining representative was then, has been and is still genuinely trying to reach agreement with MGC for an enterprise agreement to be made and approved under the Act. When these preconditions are met, in the absence of any other relevant considerations, one would normally expect an application under s.459(3) of the Act to succeed. Regardless of any such presumption, the grounds upon which MGC seeks that the Tribunal exercise its discretion to refuse the application are incongruous with the objective circumstances of the negotiations between the parties, are unconvincing, do not serve the objects and purposes of the Act and are not in harmony with the intention of the legislature.
COMMISSIONER
Appearances:
Mr L McCrone and Mr M Burns for The Transport Workers’ Union.
Mr S Wood of Counsel for Murray Goulburn Co-Operative Limited.
Hearing details:
2011.
Melbourne and Sydney (video hearing)
February 17.
1 Order PR506908, Decision PR506909 [2011] FWA 1104.
2 Section 415 of the Fair Work Act 2009.
3 [2010] FWA 7638
Printed by authority of the Commonwealth Government Printer
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