The Association of Professional Engineers, Scientists and Managers, Australia v Peabody Energy Australia Coal Pty Ltd

[2014] FWC 6061

[2014] FWC 6061

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.229—Bargaining order

The Association of Professional Engineers, Scientists and Managers, Australia
v
Peabody Energy Australia Coal Pty Ltd
(B2014/827)

SENIOR DEPUTY PRESIDENT HAMBERGER SYDNEY, 4 SEPTEMBER 2014

Application for a bargaining order.

[1] On 30 May 2014 the Association of Professional Engineers, Scientists and Managers, Australia (APESMA) made an application for a bargaining order under s.229 of the Fair Work Act 2009 (the Act) in relation to a proposed enterprise agreement with Peabody Energy Australia Coal Pty Ltd (the respondent) in respect of deputies, on shift staff, technical services and engineering staff employed at the Wambo underground mine in New South Wales (Wambo). A separate application under s.240 of the Act to deal with a bargaining dispute was made at the same time. These applications followed the making of a majority support determination in relation to the proposed agreement by the Commission on 6 December 2013. 1

[2] Conciliation proceedings were conducted before Commissioner Stanton; however these did not result in an enterprise agreement being concluded. The application for a bargaining order was referred to me and was heard on 27 August 2014.

[3] At the hearing APESMA was represented by Mr Ingmar Taylor SC, with Mr O Fagir, of counsel. The respondent was represented by Mr Dan Williams, a solicitor from Minter Ellison Lawyers. Evidence was given on behalf of APESMA by Ms Catherine Bolger (Director of the Collieries’ Staff Division). Evidence was given on behalf of the respondent by Mr Emmanuel Davis (General Manager, Wambo Coal Mine).

[4] Section 229 includes the following:

229 Applications for bargaining orders

Persons who may apply for a bargaining order

(1) A bargaining representative for a proposed enterprise agreement may apply to the FWC for an order (a bargaining order) under section 230 in relation to the agreement.

...

Timing of applications

(3) The application may only be made at whichever of the following times applies:

(a) if one or more enterprise agreements apply to an employee, or employees, who will be covered by the proposed enterprise agreement:

(i) not more than 90 days before the nominal expiry date of the enterprise agreement, or the latest nominal expiry date of those enterprise agreements (as the case may be); or

(ii) after an employer that will be covered by the proposed enterprise agreement has requested under subsection 181(1) that employees approve the agreement, but before the agreement is so approved;

(b) otherwise—at any time.

Note: An employer cannot request employees to approve the agreement under subsection 181(1) until 21 days after the last notice of employee representational rights is given.

Prerequisites for making an application

(4) The bargaining representative may only apply for the bargaining order if the bargaining representative:

(a) has concerns that:

(i) one or more of the bargaining representatives for the agreement have not met, or are not meeting, the good faith bargaining requirements; or

(ii) the bargaining process is not proceeding efficiently or fairly because there are multiple bargaining representatives for the agreement; and

(b) has given a written notice setting out those concerns to the relevant bargaining representatives; and

(c) has given the relevant bargaining representatives a reasonable time within which to respond to those concerns; and

(d) considers that the relevant bargaining representatives have not responded appropriately to those concerns.

[5] It is not in dispute that APESMA is able to make the application. The good faith bargaining requirements are contained in s.228 of the Act.

228 Bargaining representatives must meet the good faith bargaining requirements

(1) The following are the good faith bargaining requirements that a bargaining representative for a proposed enterprise agreement must meet:

(a) attending, and participating in, meetings at reasonable times;

(b) disclosing relevant information (other than confidential or commercially sensitive information) in a timely manner;

(c) responding to proposals made by other bargaining representatives for the agreement in a timely manner;

(d) giving genuine consideration to the proposals of other bargaining representatives for the agreement, and giving reasons for the bargaining representative’s responses to those proposals;

(e) refraining from capricious or unfair conduct that undermines freedom of association or collective bargaining;

(f) recognising and bargaining with the other bargaining representatives for the agreement.

(2) The good faith bargaining requirements do not require:

(a) a bargaining representative to make concessions during bargaining for the agreement; or

(b) a bargaining representative to reach agreement on the terms that are to be included in the agreement.

[6] Section 230 of the Act spells out when the Commission may make a bargaining order.

230 When the FWC may make a bargaining order

Bargaining orders

(1) The FWC may make a bargaining order under this section in relation to a proposed enterprise agreement if:

(a) an application for the order has been made; and

(b) the requirements of this section are met in relation to the agreement; and

(c) the FWC is satisfied that it is reasonable in all the circumstances to make the order.

Agreement to bargain or certain instruments in operation

(2) The FWC must be satisfied in all cases that one of the following applies:

(a) the employer or employers have agreed to bargain, or have initiated bargaining, for the agreement;

(b) a majority support determination in relation to the agreement is in operation;

(c) a scope order in relation to the agreement is in operation;

(d) all of the employers are specified in a low-paid authorisation that is in operation in relation to the agreement.

Good faith bargaining requirements not met

(3) The FWC must in all cases be satisfied:

(a) that:

(i) one or more of the relevant bargaining representatives for the agreement have not met, or are not meeting, the good faith bargaining requirements; or

(ii) the bargaining process is not proceeding efficiently or fairly because there are multiple bargaining representatives for the agreement; and

(b) that the applicant has complied with the requirements of subsection 229(4) (which deals with notifying relevant bargaining representatives of concerns), unless subsection 229(5) permitted the applicant to make the application without complying with those requirements.

Bargaining order must be in accordance with section 231

(4) The bargaining order must be in accordance with section 231 (which deals with what a bargaining order must specify).

[7] In the circumstances of this case, I must first determine whether I can be satisfied that the respondent, as alleged by APESMA, has not met, or is not meeting, the good faith bargaining requirements.

[8] Ms Bolger wrote to the respondent on 24 April 2014 indicating APESMA’s concerns that the respondent was failing to comply with the good faith bargaining requirements. These concerns included that the respondent had failed to put a genuine bargaining position; had failed to provide information relevant to bargaining and had failed to attend and participate in meetings at reasonable times.

[9] In his submissions to the Commission, Mr Taylor relied to a considerable degree on the judgement of Flick J of the Federal Court in Endeavour Coal Pty Ltd v Association of Professional Engineers, Scientists and Managers, Australia and Another (Endeavour) 2. In that judgement Flick J said:

31. The outer limits of the conduct which falls within s 228 is largely dependent upon factual matters which will undoubtedly vary from one situation to another. Certainly, it is neither possible nor prudent to attempt any exhaustive statement as to what will constitute compliance with the “good faith bargaining requirements” in the present statutory context. Clearly enough, whatever the reach of s 228(1), any “requirements” imposed by that provision are limited in scope by the matters contained in s 228(2).

32. Section 228(1), it will be noted, does not expressly impose upon a “bargaining representative” any duty or obligation to meet the “requirements” there referred to. A failure, however, to meet one or other of those “requirements” may provide the factual foundation for Fair Work Australia being “satisfied” that a “requirement” has not been “met” and may occasion the making of a “bargaining order”: s 230(3). Once a “majority support determination” has been made, an employer who does not then engage in “bargaining” and meet the requirements of s 228(1) faces the prospect of Fair Work Australia making an order pursuant to s 230.

33. The “requirements” set forth in s 228(1) which a “bargaining representative ... must meet” are thus the touchstone – or the condition precedent for the purposes of s 230 – and the touchstone against which the conduct of a “bargaining representative” is to be assessed.

34. It is concluded that once a “majority support determination” has been made, Endeavour Coal must thereafter approach “bargaining” with the Association with a genuine (or “good faith”) objective or intention of concluding an “enterprise agreement” – if possible. What is required is that those participating in the “bargaining” must keep an “open mind” as to the prospect of ultimately reaching agreement: cf. Aiton Australia Pty Ltd v Transfield Pty Ltd [1999] NSWSC 996 at [156], [1999] NSWSC 996; 153 FLR 236 at 268 per Einstein J. It is further concluded that a “bargaining representative” may be held to have fallen short of the “requirements” set forth in s 228(1) if there is a failure to put forward for consideration a proposal or a counter-proposal or suggested terms which may be acceptable. The manner in which Endeavour Coal approaches “bargaining” is, subject to s 228(1), largely a matter for it to determine. Section 228(1) does not require a party to “bargain” in any particular manner: cf. FMG Pilbara Pty Ltd v Cox [2009] FCAFC 49 at [38], [2009] FCAFC 49; 175 FCR 141 at 148 per Spender, Sundberg and McKerracher JJ. But, within the bounds of the “good faith bargaining requirements” set forth in s 228(1), Endeavour Coal is certainly not required to put self-interest to one side. Indeed, s 228(2) clearly contemplates that no party to the bargaining process is required to do so. Albeit in the context of construing a contractual obligation to act in “good faith”, it has been recognised that “good faith does not require a party to act in the interests of the other party or to subordinate its own legitimate interest to the interests of the other party”: Macquarie International Health Clinic Pty Ltd v Sydney South West Area Health Service [2010] NSWCA 268 at [147] per Hodgson JA. See also: Strzelecki Holdings Pty Ltd v Cable Sands Pty Ltd [2010] WASCA 222 at [62], [2010] WASCA 222; 41 WAR 318 at 339 per Pullin JA. Newnes JA agreed with Pullin JA.

35. The putting of a proposal or a counter-proposal, or the suggestion of terms for the purpose of “bargaining” or advancing the “bargaining” process, does not irrevocably commit Endeavour Coal to ultimately agree to the proposal or to those terms and limit the “bargaining” solely to matters which have not yet been agreed upon. To impose such a constraint upon the bargaining process would be contrary to s 228(2). But, in the course of “bargaining”, if Endeavour Coal sits “mute” and merely reject proposals or terms which are being advanced for its consideration, it may fail to meet the “requirements” set forth in s 228(1). A party who participates in bargaining that is subject to the requirements of s 228(1) must genuinely participate in the bargaining process; it cannot adopt the role of a disinterested suitor, only rejecting offers and proposals made by other “bargaining representatives”.

...

43. Construed in its entirety, the “good faith bargaining requirements” impose conditions which are “called for or demanded ...”. That which will satisfy those “requirements” will vary from case to case. At the outset of bargaining, one party’s “bargaining representative” may consider it in that party’s best interests to merely solicit or determine that which is being sought by another party. It may be that what the other party seeks is less than or within the range and scope of what may be on offer. In such cases, bargaining may well be completed quickly – one party seeking less than the other is prepared to give with both parties presumably happy to reach agreement. In other circumstances, one party’s representative may again attempt at the outset to merely ascertain what the other party is seeking. The bargaining may proceed by one party’s “bargaining representative” repeatedly making requests which may be repeatedly rejected. But at some stage during the process there may come a time when the combined effect of the “good faith bargaining requirements” requires the proffering of a counter-proposal. To progress “bargaining” in compliance with s 228, a participant may be required to disclose what they may be prepared to tentatively accept – even if all that has so far been put to them for consideration has been rejected. A party may be required to advance for consideration a proposal which it may be prepared to accept, albeit a proposal which may well be subject to qualifications or reservations. The point in time when a “bargaining representative” may be required to positively respond to proposals being advanced for its consideration – or to put its own proposals – will vary from case to case. It is both impossible and imprudent to devise a set course which all bargaining must follow. The manner in which one party may approach bargaining may, in some situations, be such that a failure to put a counter-proposal may not be a failure to meet the requirements imposed by s 228(1). The option, however, of one party sitting mute throughout the entire bargaining process – and not “putting” its own proposals – may in some situations fall short of the requirements imposed by s 228(1).

44. Second, the immediate statutory context within Division 8 further reinforces this conclusion. In the absence of a “majority support determination” being made under s 237, an employer need not bargain with employees for the purpose of entering an “enterprise agreement”. But where a “majority support determination” has been made, the “good faith bargaining requirements” will apply. A “bargaining order” may be made in order to enforce those requirements.

45. Within the context of Division 8, it would render nugatory the imposition of “good faith bargaining requirements” and the making of a “bargaining order” if a party to such “bargaining” either:

• did not participate with the objective of ultimately reaching agreement, if possible; and

• did not participate in the bargaining process in “good faith” and in a genuine process of “give and take”, including (if appropriate) the putting forward of matters which it tentatively may indicate could possibly be included in an “enterprise agreement” if other requirements or conditions can be agreed upon.

...

48. It may nevertheless be accepted that “good faith bargaining” may fail. As the Regulatory Analysis set forth in the Explanatory Memorandum to the Fair Work Bill 2008 (Cth) states:

r.174. Where bargaining representatives cannot agree regarding agreement content, they will be able to jointly walk away (in which case the workplace arrangements already in place would remain in force), take protected industrial action or jointly seek FWA’s assistance in determining a settlement. ...

The requirements set forth in s 228(1), accordingly, do not require “bargaining” to proceed until an “enterprise agreement” is ultimately reached. The fact that s 228(2) expressly recognises that agreement on terms is not required expressly contemplates the possibility that bargaining may cease without agreement being reached. But “good faith bargaining” does require all “bargaining representatives” to approach their task in “good faith” and with a view to achieving agreement – if possible.’

[10] In summary, in the circumstances of this case, once the majority support determination had been made, the respondent was required to:

a) approach bargaining with APESMA with the genuine objective of concluding an enterprise agreement – if possible. The respondent was required to keep an open mind as to the prospect of ultimately reaching agreement;

b) the respondent may be held to have fallen short of the requirements set forth in s 228(1) if it has failed to put forward for consideration a proposal or a counter-proposal or suggested terms which may be acceptable;

c)the respondent is not required to act in the interests of APESMA or to subordinate its own legitimate interest to the interests of APESMA;

d) If the respondent, in the course of bargaining, had sat “mute” and merely rejected proposals or terms which were advanced for its consideration, it may have failed to meet the “requirements” set forth in s 228(1). The respondent was required to genuinely participate in the bargaining process; it could not adopt the role of a disinterested suitor, only rejecting offers and proposals made by APESMA;

e) at some stage during the bargaining process there may have come a time when the combined effect of the good faith bargaining requirements would have required the respondent to have proffered a counter-proposal. This may have involved a requirement on the part of the respondent to have disclosed what they may have been prepared to tentatively accept – even if all that had so far been put to them for consideration had been rejected; and

f) there is no requirement to keep on bargaining until an agreement has been reached.

[11] The reference in b) is to putting forward for consideration a proposal which may be acceptable to the party putting forward the proposal - not the other side. Flick J’s comments are directed against one party merely being a naysayer, simply rejecting proposals put by the other side. In some circumstances a party might be required to put forward their own proposal. However they are not required to put forward a position that they consider is against their own interests.

[12] Mr Taylor submitted that the respondent was required not only to put forward its own proposal - but that any such proposal had to be ‘genuine’. It might be said that putting forward a ‘non-genuine’ or sham proposal would by definition be inconsistent with ‘good faith’. However one needs to be careful before characterising a proposal in this way. The concept of an ‘ambit claim’ which no one seriously expects to be acceptable to the other side has a long history in Australian industrial relations. One might be more willing to characterise a proposal as a sham - or lacking in ‘good faith’ - if it was a proposal that if the other side had accepted it would then have been withdrawn (unless there were some special circumstances - for example an unexpected intervening event that made the original proposal no longer appropriate for the party that had proposed it.)

[13] It is appropriate to return to the facts in the present case. The respondent indicated in October 2013 that it did not wish to bargain for an enterprise agreement to cover the employees in question. On 6 December 2013 Commissioner Stanton made a majority support determination. On 29 January 2014 the first bargaining meeting occurred and APESMA tabled its first draft agreement. On 25 February 2014 the respondent responded to aspects of APESMA’s claim. On 9 March 2014 APESMA presented a second draft agreement. On 11 March 2014 the respondent tabled a draft enterprise agreement. On 24 April 2014 APESMA gave notice of its concerns that the respondent was not bargaining in good faith and requested certain information. On 30 May 2014 the application for a good faith bargaining order was made. On 25 June 2014 a conciliation conference was conducted by Commissioner Stanton. On 27 June 2014 APESMA presented a further draft agreement. On 4 July 2014 the respondent rejected the draft agreement.

[14] As is clear from this summary, unlike in Endeavour, the respondent did present its own counter proposal. According to Mr Taylor however that proposal was a ‘sham’.

[15] Mr Davis took over as General Manager of Wambo in February 2014. Part of his role as General Manager is to be a negotiating representative on behalf of the respondent during negotiations for enterprise agreements. In his statement 3 he outlined the respondent’s position.

[16] The respondent engages its salaried staff on written contracts of employment underpinned by the Black Coal Mining Industry Award 2010 (the Award). It also has a number of policies and procedures which apply to work carried out at Wambo, including staff. The respondent has it appears always engaged and remunerated its staff at Wambo using this model.

‘For these reasons, Peabody had not itself proposed entering into an Enterprise Agreement with its Wambo Coal staff employees. I understand that the predecessor in my role did not agree to bargain for an enterprise agreement which was requested by APESMA because we had a different remuneration model which was successful as far as the company was concerned.

I also understand that once APESMA was able to gain a majority support determination (MSD) which required bargaining to commence, Peabody participated in those negotiations in good faith from the outset, with an open mind as to what the process might achieve. That was certainly the position that I took when I gained responsibility for the negotiations on about 26 February 2014.’ 4

[17] Mr Davis emphasised that, given the difficult economic times that the coal industry was facing, he did not believe it was appropriate for the respondent to enter into new arrangements which might reduce flexibility in any area, or be an impediment to whatever the respondent might need to do in the future to adapt to changing circumstances. For those reasons his approach to the negotiations was to ensure that they did not add to the complexity of the respondent’s employment arrangements with staff and that they did not decrease flexibility or add to cost.

‘I was also keen to ensure that we did not move away from a successful remuneration model unless it was clear that it would have a positive impact on the operation, and that there would be no or negligible risk of an adverse impact.’ 5

[18] From the minutes of the negotiation meeting on 13 February 2014 attached to Mr Davis’s statement it is clear that the respondent put at that meeting the position that it had no interest in having both staff employment contracts and an enterprise agreement. There should be one or the other.

[19] On 25 February 2014 the respondent wrote to APESMA putting its position on a number of the issues raised by a proposed agreement that had been tabled by APESMA. For example, it supported the inclusion of a redundancy clause that reflected conditions contained in the respondent's redundancy policy. It also supported a proposed clause on probation though suggested a change in the drafting. However it indicated that it did not support any clause that supported a requirement to call for expressions of interest as part of the selection for retrenchment.

[20] According to Mr Davis's statement, APESMA had asked the respondent to indicate what terms they would be prepared to contemplate. In response to this request, the respondent prepared a draft enterprise agreement for the purpose of explaining to APESMA what terms they might be prepared to consider if there was to be such an agreement. This draft agreement was provided to APESMA on 11 March 2014. A further negotiation meeting was held that day and the respondent’s draft agreement was discussed at the meeting. As Mr Davis put it:

‘The rates of pay included in the Enterprise Agreement were consistent with those in the Award. This is consistent with Peabody's position that a minimum safety net for salaried staff is already in place in the form of the Award, so any enterprise agreement should reflect the industry standard.’ 6

[21] During his cross-examination Mr Davis said that the proposed agreement contained the conditions that the respondent might be willing to enter into. 7 He also agreed that the respondent’s position had consistently been that there should either be staff employment contracts or an enterprise agreement - not both.8 The respondent’s draft enterprise agreement included a clause that would terminate all existing contractual arrangements.

[22] Mr Davis agreed that the rates in the respondent’s proposed enterprise agreement (reflecting as they did the award rates) were around one third to one half of the actual rates staff were being paid. He said that Ms Bolger made it clear at the next negotiation meeting and in writing that such a proposal was unacceptable to APESMA.

[23] While Mr Davis said that the respondent had not altered its position that any enterprise agreement should have rates reflecting those in the award, the respondent had no intention of cutting the actual remuneration paid to staff. In response to questioning from the Bench Mr Davis said that the respondent would have paid staff well above what was in the agreement, though over time the intention would have been to bring about an alignment between the agreement rates and actual rates. However there was no discussion with APESMA about how this process would have worked as APESMA simply rejected the proposal as completely unacceptable. 9 Mr Davis said he had suggested to Ms Bolger at a meeting on 27 March 2014 that APESMA should put forward proposed rates of pay for inclusion in the agreement and the respondent would negotiate.10

[24] This is consistent with the minutes of the meeting on 27 March 2014 which included the following interchange:

CB (Ms Bolger) We are trying to understand who (sic) your position is bargaining in good faith? JD (Mr Davis) -- our starting position is the award and we will negotiate from there, the minimum is the award and that's where we are starting from. CB - I am just struggling to see how this is bargaining in good faith, if you look at the current pay rates to what you have offered there is a $100,000 difference which makes it seem like you aren't being genuine. JD -- Put forward rates and we will negotiate.’ 11

[25] According to Mr Davis, and I accept, no proposed rates of pay were provided by APESMA. 12

[26] Mr Davis said that the respondent had no intention of putting its draft agreement to staff for a vote as it was a ‘starting document’. The aim was to work collectively with APESMA to come up with something they could live with. 13

[27] A further meeting was held on 15 April 2014 where a number of clauses were discussed including redundancy, scope and accident pay. Mr Davis suggested that further bargaining should be put on hold for around 12 weeks while a task force conducted a review of costs and implemented changes ‘to secure the longevity of the Wambo mine.’ This was not agreed to by APESMA. 14

[28] On 24 April 2014, Ms Bolger wrote to Mr Davis expressing concerns that the respondent was not bargaining in good faith. In particular she expressed concern that the respondent had failed to put a genuine bargaining position.

‘The Wambo draft contains rates of pay that are approximately $100,000 less than the rates of pay currently paid by Wambo to Staff pursuant to their contracts of employment. Further, the Wambo draft proposes to “terminate" those existing contracts of employment of staff which provides the current rates of pay. Put together, the Wambo draft proposes a draft agreement that would have the effect, on average, of each staff member suffering a reduction in pay of approximately $100,000. The Association notes that the Wambo draft does not propose to improve any existing conditions.

That is clearly not a genuine bargaining position. It is, at best, sham or ‘surface’ bargaining.’

[29] Ms Bolger's letter also expressed concern about the redundancy clause proposed by the respondent. She requested that the respondent ‘address its failure to put a genuine bargaining position by providing a genuine proposed draft agreement that meets its obligations to bargain in good faith within 7 days.’

[30] Ms Bolger also referred to a request that APESMA had made previously for information it considered relevant to bargaining. This included the salary range for the classifications would be covered by the proposed agreement, and ‘the current spread of the employees, who would be covered by the proposed enterprise agreement, across the actual salary range in either number or percentage terms in the last year.’ Ms Bolger clarified that APESMA was not seeking information in a form that would identify the nature of a particular person's salary. If there was only one person at the bottom of top of the range then the request was that the respondent provided the median point of the range so that individuals’ pay would not be identified. She said that the respondent had to date refused to provide the information sought. The information was necessary so that the rates of pay proposed by the respondent could be compared against the current range of pay. Ms Bolger asked that information be provided within seven days.

[31] Finally, Ms Bolger expressed concern that the respondent had delayed meetings, repeatedly sought to change bargaining meetings at short notice and was now proposing to suspend bargaining. She asked for a commitment from the respondent that it would participate in the previously agreed next three meetings and not change those dates. Ms Bolger also asked the respondent to commit to a further three negotiation dates.

[32] A further negotiation meeting was held on 28 April 2014 (the seventh such meeting). A number of clauses in the draft agreement were discussed including redundancy, scope, public holidays, accident pay, consultation and company policies and procedures. Mr Davis asked Ms Bolger why she could not ask her members for the salary information she wanted. He was concerned that salary information was confidential between the respondent and its employees, and between the respondent and its competitors. He would not be prepared to release such information unless specifically requested by an employee on terms where he could be confident that the confidentiality of information would be maintained. He suggested that the respondent could provide a draft information release form that employees could sign and return authorising the respondent to release some information to APESMA. Such a form was developed by the respondent. 15 However the form was never sent out because - according to Mr Davis - ‘the employees’ bargaining representatives displayed a general reticence to the idea of individual employee's salaries being provided to APESMA.’

[33] On 1 May 2014 Mr Davis wrote to Ms Bolger rejecting her assertion that the respondent was not bargaining in good faith and reiterating the respondent's position that there was no advantage to it or its salaried staff in having an enterprise agreement, as the Award provided a minimum safety net for employees and the respondent had fair and effective terms of the conditions of employment for staff in place. 16

[34] Three further meetings were held on 7 and 20 May 2014, and 3 June 2014. There were further discussions about a range of issues. At the last of these meetings Mr Davies indicated that while agreement had been reached on certain matters (accident pay, annual leave payment, some aspects of redundancy, personal leave payment, public holiday definition, parental leave policy, and periodic medical assessments) a range of other issues had been ‘parked’. He indicated that it was the respondent's intention not to attend further bargaining meetings until APESMA’s application to deal with the bargaining dispute had been resolved.

[35] Pursuant to the s.240 application, a conciliation conference was held before Commissioner Stanton on 25 June 2014.

Has Peabody failed to meet the good-faith bargaining requirements?

[36] Mr Taylor submitted that the respondent had engaged in ‘surface bargaining’. Its proposals were so far from existing conditions in the industry as to be not genuine proposals. It had therefore failed to meet the good-faith bargaining requirements.

[37] I do not agree. There is no obligation to put a position that might be acceptable to the other side in bargaining - nor is there any obligation to act against your own interests in the bargaining process. The position adopted by the respondent was certainly a ‘hard’ one. I am satisfied on the evidence that it did not intend to reduce the actual terms and conditions of its current staff employees (as opposed to what it might put in an enterprise agreement). Nor on the evidence do I consider that it was unwilling to negotiate at least some modification to its proposed agreement. However, it was determined to maintain maximum flexibility and therefore was not willing to include in an enterprise agreement much more than was already provided in the Award. It was entitled to take that position. APESMA appears to have offered nothing that would have assisted the respondent deal with the challenging economic circumstances that it currently faces, in the form of productivity improvements or otherwise. It is understandable that the respondent could see no reason why it was in its interests to negotiate an agreement of the type sought by APESMA.

[38] The position adopted by respondent can be contrasted with that in Endeavour. The respondent did indicate what type of enterprise agreement it would find acceptable. Its offer was a genuine one. APESMA could have agreed to the respondent's proposed agreement; it could have sought to negotiate based on that agreement rather than simply rejecting it as unacceptable. It is nevertheless understandable why APESMA chose not to do so. However I do not find based on the facts that the respondent failed to comply with the good-faith bargaining requirements in the manner described by Justice Flick in Endeavour.

[39] Nor do I find that the respondent failed to meet the good-faith bargaining requirements in any other way. While there is an obligation to disclose relevant information, that does not apply to confidential or commercially sensitive information. I accept Mr Davis's proposition that the salary information sought by APESMA is confidential and indeed commercially sensitive information. Moreover I do not consider that the respondent failed to meet its obligation to attend, and participate, in meetings at reasonable times. It attended and participated in ten meetings. The minutes of the meetings clearly reveal that there were genuine negotiations taking place. Unfortunately those negotiations did not achieve an enterprise agreement that was mutually satisfactory. The Act recognises that sometimes parties will be unable to conclude an enterprise agreement. In this case the positions of both parties were so far apart that such an agreement was always somewhat unlikely. It is hard to see that there would be any benefit in any further negotiations taking place at this stage.

Conclusion

[40] I am not satisfied that the respondent has failed, or is failing, to meet the good-faith bargaining requirements in s.228 of the Act. Accordingly, APESMA’s application for a bargaining order is dismissed.

SENIOR DEPUTY PRESIDENT

Appearances:

I Taylor SC and O Fagir, of counselfor APESMA

D Williams for Peabody Energy Australia Coal Pty Ltd

Hearing details:

2014

Sydney

27 August

 1   PR545441

 2 [2012] FCA 764

 3   Exhibit P1

 4   Paragraphs 10-11

 5   Paragraph 15

 6   Paragraph 44

 7   PN413

 8   PN407

 9   PN430-438

 10   Paragraph 53

 11   Attachment EJD - 13

 12   Paragraph 53

 13   PN468

 14   Paragraph 57

 15   Paragraphs 62-65

 16   Paragraph 67

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