Transport Workers' Union of Australia v CFC Consolidated Pty Ltd T/A Centurion Transport
[2018] FWC 1814
•27 MARCH 2018
| [2018] FWC 1814 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.437 - Application for a protected action ballot order
Transport Workers' Union of Australia
v
CFC Consolidated Pty Ltd T/A Centurion Transport
(B2018/205)
| DEPUTY PRESIDENT BEAUMONT | PERTH, 27 MARCH 2018 |
Proposed protected action ballot of employees of CFC Consolidated Pty Ltd T/A Centurion Transport – good faith bargaining – has been and is – genuinely trying to reach agreement.
On 23 March 2017 the Transport Workers’ Union of Australia (TWU) filed an application for a protected action ballot order (PABO) pursuant to s.437 of the Fair Work Act 2009 (Cth) (Act). The application concerned a proposed ballot of certain employees of CFC Consolidated Pty Ltd T/A Centurion Transport (Centurion).
The employees in question are members of the TWU who are based in the Pilbara region of Western Australia who would be subject to a proposed enterprise agreement (Proposed Agreement) that would replace the CFC Consolidated Pty Ltd & TWU – Pilbara Drivers and Freight Officers Enterprise Agreement 2014 (Centurion Agreement), which presently covers their employment.
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 application was listed for Hearing on 26 March 2018.
Mr Adam Dzieciol, Senior Legal / Industrial Officer of the TWU, appeared for the union at the hearing and Mr Jeff Uphill, Principal Consultant, appeared for Centurion.
Centurion’s objections
Centurion opposes the granting of the order on the basis that the TWU has not been and is not genuinely trying to reach agreement, including that it has not met certain good faith bargaining requirements and that the order proposed is vague and unsatisfactory and should not be issued. Particular reference is made to question 2 of the proposed ballot question in this respect.
Apart from these contested matters there is no dispute between the parties and I am satisfied on the evidence, that the statutory requirements for the protected action ballot order sought by the TWU has been met.
Statutory framework
Section 437 of the Act enables a bargaining representative to apply for a PABO. Subject to the restrictions in ss.437(2A) and ss.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.
…”
Whether an applicant ‘has been, and is, genuinely trying to reach an agreement’ within the meaning of ss.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 ss.443(1)(b); the applicant must have been genuinely trying to reach agreement, and must be genuinely trying to reach agreement[3].
While there is a relationship between ss.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[4] cautioned 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’[5]. Ultimately, it is the test in ss.443(1) that must be applied.
Within 24 hours of making the application for a PABO the applicant must give a copy of the application to the employer of the employees who are to be balloted[6].
Threshold requirements
It is not in contention that, and I am satisfied, pursuant to ss.437(1), the TWU is a bargaining representative and is entitled to make the application being considered in this matter.
I am satisfied the TWU has made a proper application as required by s.437 of the Act and have met the documentary and notice requirements for the application.
I am satisfied the TWU is not prevented from bringing the application by virtue of s.438 of the Act.
Background and evidence
Mr Michael Allen Knowles (Mr Knowles) gave evidence that he was the TWU WA Branch Organiser with responsibility for the TWU members employed by Centurion in the Pilbara region of Western Australia[7]. The TWU is the bargaining representative for those TWU members who are in negotiations for an enterprise agreement to replace the Centurion Agreement[8]. Mr Knowles had been involved in the negotiations since February 2018[9]. Before Mr Knowles’ involvement the TWU members were represented by Mr Knowles’ predecessor, Mr Mahmut Melkic (Mr Melkic)[10].
It was said that before negotiations started for the proposed agreement the TWU gave to Centurion a log of claims[11] (Log of Claims). The Log of Claims included wage increases of 3.00%, a 1% increase in employer superannuation contributions each year and increases in allowances and additional allowances[12]. Mr Dzieciol submitted that negotiations for the proposed agreement were initiated when the TWU sent to Centurion the Log of Claims.
Mr Knowles stated that there were a number of bargaining meetings held between employee representatives, including a TWU Organiser, and representatives of Centurion regarding the Proposed Agreement[13]. Centurion prepared minutes of the enterprise bargaining meetings that were held in 2017[14]. Mr Knowles referred thereafter to the copies of minutes for bargaining meetings held on 5 April 2017, 3 May 2017 and 31 May 2017[15].
A sticking point between the parties appears to have been the negotiations for an increase in the base rate for ordinary hours and the provision of a housing or remote allowance. The two benefits have become interlinked because it would appear that an increase in one, such as an increase in the base rate for ordinary hours would therefore necessitate a drop in the housing allowance according to Centurion.
In the minutes of the bargaining meeting on 5 April 2017, Centurion, through its Divisional Manager, Mr Paul Doherty (Mr Doherty), expressed that it was willing to negotiate an increase but the details would have to be worked through in conjunction with the proposed removal of the housing allowance[16]. Mr Doherty is recorded in the same minutes as saying that Centurion was looking at removing the housing allowance which meant that Centurion could look at an increase in the base rate[17]. In response Mr Melkic, pointed out that an increase would need to be quite high and directed attention to circumstances of another boom and the increase in rental prices[18]. Mr Doherty responded by reference to consideration of whether a clause in the proposed enterprise agreement might be triggered if rental prices spike[19].
Minutes from a meeting on 3 May 2017 reveal that Mr Melkic put forward an increase in the hourly rate by $17.50, which was said to compensate for the removal of the housing allowance[20]. In response Mr Doherty acknowledged that a platform had been established upon which the parties could negotiate and committed to revert with a figure from Centurion[21].
Centurion responded at the next bargaining meeting on 31 May 2017 concerning the increase in the base hourly rate by $17.50. Mr Doherty advanced that this would equate to an approximate increase of $700 per week which is equivalent with the housing allowance. Mr Doherty is recorded as identifying that the hourly rates were set at the high end in comparison to the competition and that Centurion would consider a housing allowance around $150-$200 per week. He concluded that $700 for a housing allowance did not reflect the market and what the competitors of Centurion offer.
An increase to the base hourly rate and the housing allowance were the first benefits referred to in the minutes for the bargaining meeting held on 20 June 2017. Mr Doherty referred to a counteroffer having been made by either the Employee Group or Mr Melkic of a $5 per hour increase and a $500 per week housing allowance[22]. Mr Melkic responded in the meeting by voicing the opinion of Centurion that the position was not realistic, the rates paid by Centurion were premium, and an increase would not be sustainable to remain competitive[23]. Mr Doherty is noted in the minutes of the bargaining meeting on 20 June 2017 reporting that the market is not at that level and the offer for a housing allowance sits at $150 to $200[24]. Mr Melkic is recorded as saying that the offer for the housing allowance is ridiculous and cites the cost of power and general costs of living[25]. To which, Mr Doherty refers to having benchmarked data and is recorded as informing Mr Melkic to make available, if Mr Melkic has it, data to support the rates of Centurion not being competitive[26]. Mr Melkic is recorded as stating ‘we will look into and respond’[27].
Mr Knowles referred to other meetings held between Mr Melkic and representatives of Centurion in 2017. However, he conceded that it was not clear to him that they were bargaining meetings[28].
It would appear that in response to an email sent by Mr Melkic on 23 June 2017, Mr Doherty wrote to Mr Melkic (Letter of 14 July)[29]. Mr Doherty noted in the letter that Centurion had asked that the TWU reconsider their counter claim to Centurion’s response and provide detailed reasoning and justification for the amounts claimed[30]. It was said that a meeting that had been scheduled for 4 July 2017 was postponed to enable Mr Melkic to undertake his review therefore allowing further meaningful negotiations.
The Letter of 14 July recorded that Mr Melkic had sent an email on 25 June 2017 stating that the TWU and employees were ‘sticking with your original claim’[31]. It further recorded that on 3 July 2017, Mr Doherty had emailed Mr Melkic asking that a number of action items be closed out before Mr Melkic embarked on leave and on 4 July 2017. Mr Melkic responded by email advising that Centurion would be provided with an updated Log of Claims and justification by close of business on 7 July 2017[32].
The justification around the housing allowance and wage increases was forthcoming from Mr Melkic, according to the Letter of 14 July, on 12 July 2017[33]. It was said in the Letter of 14 July that Mr Melkic had emailed a response that referenced historical information that preceded the Centurion Agreement and was not relevant to the market conditions[34]. Further, the rental data attached for Karratha set out housing availability at $230.00 per week which it was said by Mr Doherty did not support the claim for the current allowance of $700.00 to continue[35]. Mr Doherty set out that the housing subsidy was designed to offset excessive costs of housing in the Pilbara and was not in place to meet the full cost of housing.
The Letter of 14 July set out that the meeting for 25 July 2017 would be postponed to allow Mr Melkic and the employees to review their position and report back with an updated Log of Claims and justifications for the proposal that included Port Hedland, Tom Price and Newman and not only Karratha[36].
In or around November 2017, Mr Knowles gave evidence that Centurion put out to vote a Proposed Agreement to the employees, but it was rejected[37]. Following that failed attempt, Centurion again put out a second Proposed Agreement which provided for, among other things, a wage increase of 0.09% and a housing subsidy of $250.00 per week[38]. The second Proposed Agreement was rejected by Centurion employees.
The parties agreed that in sometime in February 2018, Mr Knowles and Mr Doherty had a telephone discussion about where things were at.
Mr Knowles said that he then attended a further meeting with Centurion and members of the bargaining committee in Karratha on 13 March 2018[39]. Mr Knowles reported that at that meeting Mr Doherty stated that Centurion may be prepared to offer up to $400.00 towards housing, but dependent on that figure there may be no wage increase or maybe an increase of 1.0% to 1.5%. A phone allowance was referred to by Mr Doherty as another benefit which Centurion may provide and would amount to $50.00 to $60.00 a month. Mr Knowles’ evidence was that no firm commitment was provided in writing or verbally[40]. Mr Doherty acknowledged in evidence that no proposal was provided in writing.
Mr Knowles’ gave further evidence that at the meeting on 13 March 2018, Mr Doherty proposed that Centurion were having their finance department look into whether Centurion would directly lease housing for its employees. Questions regarding matters such as payment of a bond, cleaning, the area of the housing, neighbours the relevant employee would have, were all unable to be answered.
It appeared to have been accepted by the parties that following the meeting on 13 March 2018, Mr Knowles travelled in the Pilbara to facilitate feedback meetings with the relevant employees. There were two meetings in Karratha, and then one at Port Hedland, Tom Price and Newman. Mr Knowles gave evidence that all the relevant employees were alarmed by the proposal that Centurion would consider leasing properties in which the employees could live rather than providing an allowance or subsidy. Mr Knowles gave evidence that the relevant employees instructed him that they were seeking no less than: a wage increase of 3%; a housing/amenities allowance of $500.00 per week, and a 1% increase in the employer superannuation contributions. He received further instructions from relevant employees to make an application for a PABO.
No good faith bargaining orders had been sought by either party.
Included in the application for the PABO were the questions to be put to the employees who are to be balloted, regarding the nature of the proposed industrial action. Centurion objected to Question two on the basis that it was vague and unsatisfactory. Question two is listed below:
“In support of reaching an enterprise agreement with your employer, do you support the taking of protected industrial action against your employer which involve one or more of the following:
…
Question 2
An unlimited number of indefinite bands on the completion of paperwork?
¨ Yes
¨ No…”
Submissions of Centurion
In short, Mr Uphill on behalf of Centurion submitted that the TWU had not put any effort into presenting alternative proposals or a range of options to be tested and had stuck with their original claim. The TWU had, according to Mr Uphill, failed to explain the reasons for its claims and had not done the things required for efficient bargaining. When it came to the negotiations the TWU had utilised an organiser who Centurion considered was not the best possible resource, and had, in addition, not sought assistance from the Commission.
Submissions of TWU
Mr Dzieciol submitted that there was no dispute regarding there having been several face to face meetings and teleconferences in an attempt to progress the proposed agreement. He acknowledged that the employees had one view and Centurion another, and the employees were entitled to bargain hard. Mr Dzieciol submitted that the TWU was not required to have done all those things that are characteristic of efficient bargaining, and the good faith bargaining provisions did not form part of s.443 of the Act. Rather, s.443 of the Act required focus on the overall course of the bargaining. There was, according to Mr Dzieciol, no requirement to obtain assistance from the Commission to demonstrate that a party was genuinely trying to reach agreement or to put forward best possible resources.
Genuinely trying to reach agreement
Before a PABO can be issued, the Commission must be satisfied that the TWU has been, and is, genuinely trying to reach agreement with Centurion.
Essentially, although not exclusively, it would seem that Centurion’s objection amounted to an allegation that the TWU was not meeting the good faith bargaining requirements which are set out in s.228 of the Act and therefore, given the nature of its conduct, was not genuinely trying to reach agreement with Centurion.
In Total Marine Services Pty Ltd v Maritime Union of Australia[41], the Full Bench determined that while the conduct of an applicant for a protected action ballot order in relation to good faith bargaining is a relevant consideration for the purpose of ss.443(1)(b) of the Act, it is not appropriate to equate the concepts of ‘good faith bargaining’ and ‘genuinely trying to reach agreement’.
In National Union of Workers v Riverland Oilseeds Pty Ltd[42], Deputy President Gostencnik expressed that if a party held concern that a bargaining representative was not meeting good faith bargaining requirements then it was always open to it pursue such remedies that are available for such a contravention under the Act[43].
There was no evidence before me to suggest that such an application was either made or was in contemplation. Mr Uphill said that while Exhibit R1 referred to the obligation to bargain in good faith in the context of responding to proposals in a timely manner and validating reasons for responses, Centurion had purposely opted not to pursue an application for a good faith bargaining order. It is not apparent from the evidence that Centurion sought to address what it considered to be non-compliance with the good faith bargaining provisions for remedies available under the Act and yet it sought to rely on such non-compliance to now assert that the TWU is not genuinely trying to reach an agreement.
Exhibit 1, a letter that had been prepared by Mr Doherty, set out that Mr Melkic had responded via email on 12 July 2017 concerning justification for a response or responses given, regarding the housing allowance. It is clear from Exhibit 1 that Mr Doherty was dissatisfied with the response of Mr Melkic noting Mr Melkic’s reference to historical data and the rental data having been extracted for Karratha. Mr Doherty expressed in Exhibit 1 that Mr Melkic’s reasons did not support a claim for a housing allowance of $700.00 per week.
It is simply not the case based on the evidence before me that Mr Melkic did not respond or did not provide reasons for his response. Mr Doherty may have formed the view that the response of Mr Melkic was insufficient. But, the insufficiency of such response may in and of itself not mean that genuine consideration of the proposal was not given.
In this case the Commission is informed by Exhibit R1 that there was the provision of rental data albeit it is limited to Karratha and historical market conditions by Mr Melkic to Mr Doherty. However, there was no evidence before the Commission of Mr Melkic’s actual response or his intent[44]. All that was presented and referred to was the opinion expressed by Mr Doherty at hearing and in Exhibit R1.
From the evidence it now appears that Centurion, as recently as 13 March 2018 are considering whether to address the issue of the housing allowance or subsidy, by providing employees with rental accommodation that Centurion directly leases. This gave rise to multifold questions on behalf of the TWU, to which, Mr Knowles said, Centurion did not currently have answers.
It is clearly understood that while there is a relationship between the good faith bargaining requirements and the concept of genuinely trying to reach an agreement, it would be wrong to conflate these terms[45]. A party may not meet a particular good faith bargaining requirement but may nevertheless be genuinely trying to reach an agreement.
There was a submission made to the effect that given Mr Knowles had only been involved in the negotiations for 3-4 weeks it was premature for the PABO to be made. Correctly, in my view, Mr Dzieciol, submitted that the TWU had over a period of months devoted resources, attended meetings, and corresponded with the Centurion[46]. While Mr Knowles was a recent replacement for Mr Melkic in my view that did not reset the bargaining process negating the negotiations that had been conducted up until Mr Knowles assumed the responsibility.
The TWU and Centurion have progressed bargaining, but an agreement has not been reached. Mr Doherty’s evidence does not disclose that the TWU has not or is not genuinely trying to reach an agreement with Centurion. There must be capacity for the TWU to demonstrate that it has given a considered response to any demands that have been made in the negotiations by Centurion[47]. The issue of the housing allowance remains live and is currently being negotiated with evidence that Centurion may be considering a new proposal regarding provision of accommodation by the company. There have been alternative proposals put forward by the TWU. It is not necessary to show that negotiations on the agreement or an item of the agreement have been exhausted and it is not necessary, in my view, to show that the making of an application for a protected action ballot order is a last resort[48].
I have considered the Centurion’s objections to the application. In my view, for the reasons above, the matters raised do not compromise the genuineness of the TWU’s efforts to reach agreement with Centurion.
Whether proposed ballot questions sufficiently clear
With regard to the proposed ballot questions it is clear that what is required is that the questions should describe the industrial action in such a way that employees are capable of responding to them[49]. To be able to respond the application should propose a question and contain other details about the industrial action and other relevant matters such as will permit employees to make an informed choice on whether to authorise the particular action specified in the question[50]. A question which is ambiguous or does not permit such a result does not comply with the requirements for a valid application.
Centurion has submitted that question 2 of the ballot questions is vague, unsatisfactory and needs to be more precise. In this respect Centurion submits that the question should talk about the obligations of fatigue management that form part of legislative obligations. The submission was advanced no further save to requiring specificity and no evidence was put before this Commission to support the objection made by Centurion.
The TWU have said that they consider the question unremarkable and it is one that they have seen many times. It was said by Mr Knowles that the relevant employees understand that paperwork refers to the operational day to day paperwork not paperwork that is required by law. It would therefore cover consignment notes but not completing driving times and rest times as required for fatigue management sheets.
The evidence of Mr Knowles was that paperwork was differentiated between paperwork required by law to be completed and other paperwork that was not. In my view, in the absence of any evidence to the contrary, the generic description is clear and is capable of being responded to by employees. I consider that in the context of this application the employees who will vote on this questions will understand the general nature of the industrial action they are asked to approve and as such this will permit them to make an informed choice.
Conclusion
I am satisfied the requirements in ss.443(1) of the Act have been met. Accordingly, I have made a protected action ballot order. The order PR601548 was based on the draft order proposed by the TWU in its application.
DEPUTY PRESIDENT
[1] Esso Australia Pty Ltd v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union[2015] FWCFB 210 [57].
[2] Total Marine Services Pty Ltd v Maritime Union of Australia[2009] FWAFB 368 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] Esso Australia Pty Ltd v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union[2015] FWCFB 210 [54].
[4] [2015] FWCFB 210.
[5] Ibid [18].
[6] Section 440 of the Act.
[7] Exhibit A1 Statutory Declaration of Michael Allen Knowles dated 22 March 2018 (Knowles’ Statutory Declaration) [1].
[8] Knowles’ Statutory Declaration [3].
[9] Ibid.
[10] Ibid.
[11] Ibid [4].
[12] Ibid Annexure A.
[13] Ibid [5].
[14] Ibid.
[15] Ibid [5] and Annexure B.
[16] Ibid Annexure B.
[17] Ibid.
[18] Ibid.
[19] Ibid.
[20] Ibid.
[21] Ibid.
[22] Ibid.
[23] Ibid.
[24] Ibid.
[25] Ibid.
[26] Ibid.
[27] Ibid.
[28] Knowles’ Statutory Declaration [6].
[29] Exhibit R1.
[30] Ibid.
[31] Ibid.
[32] Ibid.
[33] Ibid.
[34] Ibid.
[35] Ibid.
[36] Ibid.
[37] Knowles’ Statutory Declaration [7].
[38] Ibid.
[39] Ibid [9].
[40] Ibid.
[41] Total Marine Services Pty Ltd v Maritime Union of Australia (2009) 189 IR 407; [2009] FWAFB 368 [33];
[42] [2013] FWC 5914.
[43] National Union of Workers v Riverland Oilseeds Pty Ltd[2013] FWC 5914 [10].
[44] National Union of Workers v SKF Australia Pty Ltd[2010] FWA 6557 [13].
[45] Esso Australia Pty Ltd v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union[2015] FWCFB 210 [18].
[46] Exhibit R1.
[47] Total Marine Services Pty Ltd v Maritime Union of Australia (2009) 189 IR 407.
[48] CEPU and AMWU v Kraft Foods Ltd (2010) 197 IR 12.
[49] John Holland Pty Ltd v Automotive, Food, Metals Engineering, Printing and Kindred Industries Union known as the Australian Manufacturing Workers’ Union (AMWU) 2010 FWAFB 526 [19].
[50] National Union of Workers—New South Wales Branch v FreshExchange Pty Ltd [2009] FWA 221 [10].
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