The Reject Shop Limited v National Union of Workers
[2011] FWA 5481
•19 AUGUST 2011
[2011] FWA 5481 |
|
DECISION |
Fair Work Act 2009
s.238 - Application for a scope order
The Reject Shop Limited
v
National Union of Workers
(B2011/3125)
COMMISSIONER BISSETT | MELBOURNE, 19 AUGUST 2011 |
Application for a scope order.
[1] This matter is an application for a scope order by The Reject Shop Limited (TRS) under s.238 of the Fair Work Act 2009 (the Act).
[2] TRS seeks a scope order with respect to bargaining with the National Union of Workers (NUW) for a collective agreement. TRS seeks to limit the scope of the bargaining to its Victorian distribution centres (DC). The NUW opposes the application. There is no counter claim for scope from the NUW. Should the TRS application be unsuccessful it will not resolve the scope of the proposed agreement but rather will leave this as an issue between the parties.
Background and bargaining history
[3] TRS owns and operates stores and two DCs in Victoria. The Victorian DCs are covered by The Reject Shop NUW Agreement 2005-2008. That agreement was certified on 9 February 2006 (the 2005 Agreement) 1 and covered warehouse employees of TRS in Victoria. It contained a commitment that should any other warehouses open during the life of the agreement, the agreement would be varied to cover such a warehouse. As such the 2005 Agreement was an agreement with national coverage. It only applied in Victoria because, at that time, TRS only had DCs in Victoria.
[4] The 2005 Agreement was extended and varied in 2008 (the 2008 Agreement) 2. One of the variations to the 2005 Agreement was the inclusion of a new clause 6.5, which stated that ‘from 1 August 2008 this agreement shall apply to all Distribution Centre(s) in Victoria only.’ The nominal expiry date of the 2008 Agreement is 30 June 2011.
[5] During 2010 negotiations occurred between TRS and the NUW for a greenfields agreement covering a new DC due to open at Ipswich in Queensland. On 29 December 2010 TRS sent to the NUW a revised draft of the proposed greenfields agreement. 3
[6] In January 2011 the Ipswich site was subject to severe flooding in the Queensland floods. This affected the anticipated start date for operation of the site.
[7] In May 2011 the NUW served a log of claims on TRS with respect to negotiations for an agreement to replace the 2008 Agreement. That log of claims indicated that the NUW sought that the replacement agreement should have national application. A number of meetings between the NUW and TRS occurred where items in the log of claims were discussed. There was no agreement on the issue of a national agreement with the NUW pursuing the issue and TRS rejecting the proposal.
[8] On 1 July 2011 I heard an application for a protected action ballot by the NUW with respect to bargaining with TRS. That application was granted 4 in the form sought by the NUW - that is it had effect with respect to all employees employed by TRS who would be covered by the proposed agreement. The NUW’s proposed agreement is a national agreement.
[9] TRS contends that the agreement being negotiated to replace the 2008 Agreement should only cover employees of TRS employed in any distribution centre in Victoria in the following classifications:
• Storeworker Grade 2;
• Storeworker Grade 3;
• Storeworker Grade 4; and
• Storeworker Grade 4A.
[10] TRS seeks a scope order to reflect this.
[11] The application was heard on 3 August 2011. Mr Jeffrey Bell, General Manager Human Resources, and Mr Philip Beckett, General Manager Logistics, gave evidence for TRS. Mr Matthew Toner, Organiser, gave evidence for the NUW.
Legislation
[12] The Act relevantly provides:
238 Scope orders
Bargaining representatives may apply for scope orders
(1) A bargaining representative for a proposed single-enterprise agreement may apply to FWA for an order (a scope order) under this section if:
(a) the bargaining representative has concerns that bargaining for the agreement is not proceeding efficiently or fairly; and
(b) the reason for this is that the bargaining representative considers that the agreement will not cover appropriate employees, or will cover employees that it is not appropriate for the agreement to cover.
...
Bargaining representative must have given notice of concerns
(3) The bargaining representative may only apply for the scope order if the bargaining representative:
(a) has given a written notice setting out the concerns referred to in subsection (1) to the relevant bargaining representatives for the agreement; and
(b) has given the relevant bargaining representatives a reasonable time within which to respond to those concerns; and
(c) considers that the relevant bargaining representatives have not responded appropriately.
When FWA may make scope order
(4) FWA may make the scope order if FWA is satisfied:
(a) that the bargaining representative who made the application has met, or is meeting, the good faith bargaining requirements; and
(b) that making the order will promote the fair and efficient conduct of bargaining; and
(c) that the group of employees who will be covered by the agreement proposed to be specified in the scope order was fairly chosen; and
(d) it is reasonable in all the circumstances to make the order.
Matters which FWA must take into account
(4A) If the agreement proposed to be specified in the scope order will not cover all of the employees of the employer or employers covered by the agreement, FWA must, in deciding for the purposes of paragraph (4)(c) whether the group of employees who will be covered was fairly chosen, take into account whether the group is geographically, operationally or organisationally distinct.
Scope order must specify employer and employees to be covered
(5) The scope order must specify, in relation to a proposed single-enterprise agreement:
(a) the employer, or employers, that will be covered by the agreement; and
(b) the employees who will be covered by the agreement.
Scope order must be in accordance with this section etc.
(6) The scope order:
(a) must be in accordance with this section; and
(b) may relate to more than one proposed single-enterprise agreement.
Orders etc. that FWA may make
(7) If FWA makes the scope order, FWA may also:
(a) amend any existing bargaining orders; and
(b) make or vary such other orders (such as protected action ballot orders), determinations or other instruments made by FWA, or take such other actions, as FWA considers appropriate.
[13] I now turn to consider each of the relevant matters.
Bargaining representatives may apply (s.238(1))
[14] The application has been made by TRS. It is a bargaining representative for the purposes of the Act.
Bargaining representative has identified concerns (s.238(3))
[15] TRS included with its application for a scope order details relating to the written notice of its concerns to the NUW. It provided a reasonable period for the NUW to respond. No submissions were made that this provision of the Act has not been met.
Good faith bargaining (s.238(4)(a))
[16] There is no submission that TRS has not been bargaining in good faith. I therefore find that it has been bargaining in good faith.
Order will promote fair and efficient conduct of bargaining (s.238(4)(b)
[17] During negotiations for the extension of the 2005 Agreement, agreement was reached that the extended agreement would apply to Victoria only. An undertaking was given by TRS that it would negotiate exclusively with the NUW in relation to a greenfields agreement to apply to the proposed Ipswich site. This understanding with respect to the 2008 Agreement and the greenfields agreement was apparently reflected in a memorandum of understanding (MOU) between TRS and the NUW. The existence of this MOU was raised by TRS in evidence and submissions. Nothing was put by the NUW either in cross examination or submissions that suggested the MOU did not exist or existed in some other form than that put forward by TRS. Therefore, I accept that the MOU does exist as described by TRS.
[18] The evidence of Mr Bell is that the bargaining with respect to the Ipswich greenfields agreement had progressed to the stage where TRS understood all outstanding matters except for one had been agreed. The final outstanding matter related to the direct engagement of casual employees. The proposed resolution of this was identified in an email of 29 December 2010 from Mr Bell to Mr Godfrey Moase, who had been negotiating the greenfields agreement on behalf of the NUW. 5 The floods in Queensland destroyed the equipment and stock in the Ipswich DC. The recovery from the floods became the immediate focus for TRS in early 2011. TRS contacted the NUW on several occasions in early 2011 with respect to finalising the greenfields agreement with little success. Mr Moase ultimately advised TRS that he was busy through to mid-July.
[19] Mr Bell’s evidence is that the major sticking point in negotiations for the replacement to the 2008 Agreement is the claim by the NUW for a national agreement and TRS’s desire to have it apply in Victoria only. It appears that negotiations occurred in good faith on other matters in the log with the scope of any proposed agreement an outstanding issue. The most recent negotiations in August were positive. The NUW had indicated at one stage that they were prepared to deal with Queensland specific matters in a schedule to the national agreement, although Mr Bell indicated that from TRS’s perspective this was not a preferred outcome.
[20] TRS considers the decision by the NUW to seek national coverage for the proposed agreement as being unfair, given the history of bargaining between them.
[21] TRS submits that the work organisation and automation present in the Ipswich DC is substantially different to that in Victoria. This, therefore, requires a different skill set for Ipswich employees and a different classification and pay structure. The skills required at the Ipswich DC are, in Mr Beckett’s evidence, outside those of normal warehouse operations.
[22] The evidence of Mr Bell and Mr Beckett with respect to the history of bargaining and in particular the MOU reached in 2008 was not disputed. I also accept the evidence of Mr Bell and Mr Beckett with respect to the different skill levels and work organisation in the Ipswich DC compared to the Victorian sites.
[23] The NUW submits that there is no evidence that the current bargaining is unfair or inefficient. Rather it says that the bargaining is ‘healthy and robust’. It submits that the making of the scope order would lead to duplication in the time and effort of all parties to the bargaining process. It does not accept that the proposed Queensland operations are distinct operationally or organisationally from the Victorian operations.
[24] The NUW submits that its members want a national agreement and that this desire would be thwarted by the granting of the scope order. Further, it submits that it would not be fair to have an agreement determined for employees in Queensland where no employees are actually involved in that bargaining process. In that respect it is much fairer to have the existing Victorian employees have a say over the terms and conditions in Queensland than have those conditions determined through a greenfields agreement.
[25] Section 238(4)(b) does not require that I find that the current bargaining is unfair and inefficient. Nor does it require that I find it would be less fair or efficient not to issue the order. Rather it requires a positive finding about the future bargaining - that it ‘will at least be fairer or more efficient or both than it would be if no order were to be made.’ 6
[26] I am cognisant of the history of bargaining between the NUW and TRS and the understandings reached. TRS have proceeded to negotiate a greenfields agreement with the NUW with respect to Ipswich. The NUW participated in these negotiations until very late in 2010 when it ceased any meaningful communications. It is not possible to say if this agreement would have been concluded but for the floods. However, it is evident that through 2010 the NUW was prepared to negotiate a greenfields agreement.
[27] TRS entered into negotiations for the replacement to the 2008 Agreement on the understanding that there would be a greenfields agreement for Ipswich and a separate agreement for Victoria. They have maintained this position.
[28] The NUW referred me to Wattyl Australia Pty Ltd v Liquor, Hospitality and Miscellaneous Union, 7 a decision of her Honour Senior Deputy President Acton in which she stated that:
Notions that state-based bargaining is to be preferred as it facilitates employee and local union and management involvement in the bargaining misappreciates the role of bargaining representatives in bargaining under the Fair Work Act.
Further, at present there are claims which are sought nationally or in each state by the parties and claims which are sought in a particular state. The national or all state claims are likely to be more fairly and efficiently bargained for through national bargaining. 8
[29] I do not disagree with the statement of her Honour. However, the circumstances of this case with respect to national and state based claims are distinguishable from the circumstances facing her Honour. This claim is not pressed by TRS on the basis that it might facilitate local employee engagement. There are no relevant employees of TRS except in Victoria. This order will not alter who is engaged in bargaining. On the basis of the evidence before me the greenfields agreement negotiations were to all intent completed and the negotiations for the Victorian agreement are progressing well.
[30] To not grant the order may well result in inefficiencies if the bargaining to date is to be unravelled. In saying this I note that contemplation of the implications of not issuing the order are not strictly necessary in determining if the order should be issued, although they may be a broader consideration under s.238(4)(d).
[31] The NUW also submit that the wishes of its members should be taken into account. On this it refers me to the decision in United Firefighters’ Union of Australia v Metropolitan Fire & Emergency Services Board 9 where a Full bench of Fair Work Australia found:
As recorded above, it was submitted by the UFUA and the ACTU that particular weight should be given to the views of employees because of, for example, legislative policy imperatives concerning freedom of association. While we generally agree with that submission it requires some qualification. The power to make a scope order is predicated on disagreement between bargaining representatives. The discretion to resolve that disagreement is to be exercised as provided for in ss.238(4) and (4A). While those provisions do not assign priority to the views of employees, in applying the provisions it is necessary to have regard to the overall context. The legislative scheme supports collective bargaining principles and the Fair Work Act encourages freedom of association and collective bargaining. It may be implied from the legislative scheme that the collective choice of employees is significant. It must be said, however, that while weight should be given to the views of the employees potentially affected, it may be that a proper consideration of the matters specified in ss.238(4) and (4A) in a particular case may make it appropriate to make a scope order contrary to the views of the employees potentially affected.10
[32] I note the views of the members of the NUW that they ‘demand a national agreement to protect our long term job security. We don’t want our work being done by cheaper labour in Queensland or WA.’ 11
[33] These are legitimate views of employees of TRS and they should not be disregarded. Job security and some equality of conditions and rates for employees performing the same work for the same organisation are legitimate aims.
[34] Nothing, however, was put to me on the rates of pay or conditions being offered under the proposed greenfields agreement compared to the Victorian agreement. Nor was anything put to me to explain the reference to WA. The basis of the views expressed has not been expanded upon. I do not know how the granting or otherwise of the scope order may affect these concerns. It should be noted that a single national agreement may well have differing rates of pay or conditions for a particular state. This appears to have been contemplated by the NUW in proposing a schedule to a national agreement dealing with Queensland.
[35] The views of the employees must be weighed against the history of bargaining and the benefits derived from the MOU, which included an extension and variation to the 2005 Agreement.
[36] The NUW submits that to issue the order will deny its members the right to take industrial action in support of their claims. It is true that to grant the order will deny the members of the NUW the right to take industrial action in support of their claim for a national agreement. This is but one of a number of claims that have been made against TRS. The order, if issued, will not affect the right of the employees to take action in support of the remainder of their claims.
[37] The bargaining for both the replacement to the 2008 Agreement and the greenfields agreement is being conducted by the NUW as a bargaining representative and relevant employee organisation. 12 The evidence is that the same national managers have been involved in each of the sets of bargaining for TRS with some local management input for the replacement agreement. I am not convinced that a determination of who is conducting the bargaining for each side is relevant in the circumstances of this matter where the greenfields agreement is all but concluded.13
[38] In considering the evidence and submissions I conclude that the issuing of the order will promote the fair and efficient conduct of bargaining.
[39] In reaching this conclusion I have taken into account the history of bargaining for a greenfields agreement (all but concluded in late 2010) and the apparently satisfactory progress in bargaining for the replacement to the 2008 Agreement. I consider it will be more efficient and fair to allow these separate negotiations to continue. The order sought will allow this to occur.
Group of employees is fairly chosen (s.238(4)(c) and (4A))
[40] I consider that the group of employees to be covered by the proposed agreement to be specified in the scope order has been fairly chosen, given that they are geographically distinct (that is the proposed agreement will apply in Victoria). I reject the NUW’s submissions on this point.
It is reasonable in all the circumstances to make the order (s.238(4)(d))
[41] The NUW submits that it would not be reasonable to make the order for two particular reasons.
[42] Firstly, it says that any greenfields agreement arising from the negotiations for Ipswich would not be capable of certification as the site is not truly a greenfields site. 14 What may or may not come out of the negotiations for Ipswich and whether or not this is a greenfields site at the time are matters to be determined by those negotiating the agreement. It is also a matter to be considered by Fair Work Australia when approval of the agreement is sought. The NUW has been involved in these negotiations and I note that the Act requires that an employee organisation be involved. I do not consider this to be a reason not to issue the order.
[43] Secondly, the NUW says that if I grant the scope order NUW members who have voted to take protected industrial action will be unable to do so for a Victorian agreement because the ballot was conducted pursuant to an order relating to a broader scope. It submits that the making of the order would render the protected industrial action unprotected.
[44] This is not a reason to not make the scope order. I note that if I do make the scope order s.238(7) of the Act allows me to make or vary other orders, including a protected action ballot order or to take other actions as considered appropriate. The reality of the protected action ballot order is that only employees in Victoria could participate in that ballot as there are no other employees who would be covered by the agreement. As long as industrial action is limited to employees of the Victorian DCs and relates to the proposed agreement as now limited by the scope order made pursuant to this decision, the industrial action will, in my view, be protected. Should the NUW or TRS consider otherwise I am prepared to hear an application for an order or such other actions pursuant to s.238(7) as may remediate the situation.
[45] The NUW suggest that I should intervene if I am satisfied that the present bargaining is sick and needs to be made better. This is incorrect. I do not need to find that the existing process requires some remediation, 15 I just need to be satisfied that the issuing of the order will make the bargaining fairer or more efficient than it has been to date.
Conclusion
[46] I have carefully considered all of the material put before me in this matter. My consideration cannot be restricted to the bargaining that has occurred since May 2011 for the replacement to the 2008 Agreement. The matter has a longer history that involves the extension and variation of the 2005 Agreement, an MOU and extensive negotiations for a greenfields agreement for the Ipswich DC.
[47] I have also considered the right of employees to take protected industrial action in support of a set of claims against their employer.
[48] The scheme of the Act enables the Tribunal, on application and following the consideration of the issues at hand, to make a decision to interfere in the bargaining process. It is not a decision to be taken lightly.
[49] In this case the question of scope has been an issue not just in the negotiations for a replacement to the 2008 Agreement but also in 2008 when the 2005 Agreement was extended and varied. It is not a recent issue between the parties.
[50] In all of the circumstances I have decided to grant the application of TRS. A scope order in the form sought by TRS shall be issued with this decision.
COMMISSIONER
Appearances:
E. Mentiplay for The Reject Shop.
C. Power for the National Union of Workers.
Hearing details:
2011.
Melbourne:
August 3.
1 AG846502, PR968310.
2 AG846502, PR923875.
3 TRS1.
4 [2011] FWA 4242.
5 TRS1.
6 United Firefighters’ Union of Australia v Metropolitan Fire & Emergency Services Board[2010] FWAFB 3009.
7 [2010] FWA 2587.
8 Wattyl Australia Pty Ltd v Liquor, Hospitality and Miscellaneous Union[2010] FWA 2587, 45-46.
9 [2010] FWAFB 3009.
10 United Firefighters’ Union of Australia v Metropolitan Fire & Emergency Services Board[2010] FWAFB 3009, 53.
11 NUW3.
12 See s.172(3)(b) with respect to who a greenfields agreement can be made with.
13 TRS6.
14
15 The Association of Professional Engineers, Scientists and Managers, Australia v Australian Red Cross Blood Service & Anor[2010] FWA 3911, 23.
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