Transport Workers' Union of Australia v Linfox Armaguard Pty Ltd

[2014] FWC 8934

[2014] FWC 8934

FAIR WORK COMMISSION

DECISION

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

Transport Workers' Union of Australia
v
Linfox Armaguard Pty Ltd
(B2014/1658)

COMMISSIONER SPENCER BRISBANE, 18 DECEMBER 2014

Proposed protected action ballot of employees of Linfox Armaguard Pty Ltd at Brisbane, Gold Coast and Sunshine Coast Depots - genuinely trying to reach agreement - contractor clause - not unlawful - 5 working days notice of industrial action

[1] This decision relates to an application pursuant to s.437 of the Fair Work Act 2009 (the Act) for a protected action ballot order in relation to members of the Transport Workers’ Union of Australia (the TWU / Union / Applicant) employed by Linfox Armaguard Pty Ltd (the Respondent) at the Brisbane, Gold Coast and Sunshine Coast Depots as armoured and non-armoured vehicle operators/crew, guards, escorts, crew leaders and payphone collectors.

[2] The Union and the Employer have been bargaining for an enterprise agreement to replace the Armaguard and Transport Workers Union Queensland Metropolitan Branches Road Crew and Associated Areas Collective Agreement 2010.

[3] Directions were set in line with the requirements in s.441 of the Act for the Respondent to confirm whether they objected to the application and if so on what grounds.

[4] The Respondent objected to the proposed order on the grounds that the Applicant had not been genuinely trying to reach agreement with the Respondent because the TWU had made a claim (in their log of claims) for an unlawful matter. In particular, it was argued this claim restricted the use of supplementary labour and outside hires to employment at the same rates as the Agreement rates (in breach of the General Protections provisions).

[5] The Respondent also submitted that in the event the Commission decides to make a protected action ballot order, the proposed notice period should be extended to require the Applicant to give seven working days notice in respect of any protected industrial action authorised by Questions 2 to 7 of the ballot (that is, industrial action involving stoppages of work of various lengths). The Respondent argued, pursuant to s.443(5) of the Act, that there are exceptional circumstances justifying the period of written notice to be extended to longer than the three working days; to seven working days.

[6] The Respondent submitted that there were exceptional circumstances related to the risks of industrial action associated with the movement of cash, the Respondent’s clients being left with the accumulation of large cash holdings on site and also the effect on the availability of cash to financial and retail institutions.

[7] The Applicant, in response to the submissions of the Respondent, submitted that the application should be granted because all of the statutory requirements of s.443(1) have been satisfied.

[8] The Applicant further submitted that, the claim in contention is a permitted matter aimed at preventing the undercutting of the Agreement conditions for the hire of supplementary labour and that, contrary to the Respondent’s submissions, it does not involve any potential adverse action against any contractor nor affect any contractor’s workplace rights.

[9] The Applicant further contended that the Respondent had not discharged the onus of linking its complaints to a justification for an extension of the notice period for the protected industrial action.

[10] In other respects, I am satisfied that the application was properly made and the statutory tests met. The remaining matters under consideration are those in relation to the extended notification period and the objection that the Applicant is not genuinely trying to reach agreement.

Legislation

[11] Section 443 of the Act sets out when the Commission must make a protected action ballot order:

“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.

(4) If the FWC decides that a person other than the Australian Electoral Commission is to be the protected action ballot agent for the protected action ballot, the protected action ballot order must also specify:

(a) the person that the FWC decides, under subsection 444(1), is to be the protected action ballot agent; and

(b) the person (if any) that the FWC decides, under subsection 444(3), is to be the independent advisor for the ballot.

(5) If the FWC is satisfied, in relation to the proposed industrial action that is the subject of the protected action ballot, that there are exceptional circumstances justifying the period of written notice referred to in paragraph 414(2)(a) being longer than 3 working days, the protected action ballot order may specify a longer period of up to 7 working days.

Note: Under subsection 414(1), before a person engages in employee claim action for a proposed enterprise agreement, a bargaining representative of an employee who will be covered by the agreement must give written notice of the action to the employer of the employee.”

[12] Section 194 relates to unlawful terms as follows:

“194 Meaning of unlawful term

A term of an enterprise agreement is an unlawful term if it is:

(a) a discriminatory term; or

(b) an objectionable term; or

…”

[13] An objectionable term is defined in s.12 as follows:

“objectionable term means a term that:

(a) requires, has the effect of requiring, or purports to require or have the effect of requiring; or

(b) permits, has the effect of permitting, or purports to permit or have the effect of permitting;

either of the following:

(c) a contravention of Part 3-1 (which deals with general protections);

…”

[14] Section 408 of the Act provides:

“408 Protected industrial action

Industrial action is protected industrial action for a proposed enterprise agreement if it is one of the following:

(a) employee claim action for the agreement (see section 409);

(b) employee response action for the agreement (see section 410);

(c) employer response action for the agreement (see section 411).”

[15] Section 409 of the Act provides, in relation to unlawful terms:

“409 Employee claim action

Employee claim action

(1) Employee claim action for a proposed enterprise agreement is industrial action that:

(a) is organised or engaged in for the purpose of supporting or advancing claims in relation to the agreement that are only about, or are reasonably believed to only be about, permitted matters; and

(b) is organised or engaged in, against an employer that will be covered by the agreement, by:

(i) a bargaining representative of an employee who will be covered by the agreement; or

(ii) an employee who is included in a group or groups of employees specified in a protected action ballot order for the industrial action; and

(c) meets the common requirements set out in Subdivision B; and

(d) meets the additional requirements set out in this section.

Protected action ballot is necessary

(2) The industrial action must be authorised by a protected action ballot (see Division 8 of this Part).

Unlawful terms

(3) The industrial action must not be in support of, or to advance, claims to include unlawful terms in the agreement.

...”

[16] Section 414 of the Act provides:

“414 Notice requirements for industrial action

Notice requirements—employee claim action

(1) Before a person engages in employee claim action for a proposed enterprise agreement, a bargaining representative of an employee who will be covered by the agreement must give written notice of the action to the employer of the employee.

(2) The period of notice must be at least:

(a) 3 working days; or

(b) if a protected action ballot order for the employee claim action specifies a longer period of notice for the purposes of this paragraph—that period of notice.

...”

Summary of Submissions - genuinely trying to reach an agreement

[17] The Respondent argued that the TWU had not been genuinely trying to reach an agreement for the purpose of s.443 of the Act. The Respondent took issue with the Applicant’s claim as follows (the clause):

“Wages and Conditions of Supplementary Labour and Outside Hire

If, after consultation, the Company decides to utilise supplementary labour and/or outside hire, the Company shall take all necessary steps to ensure that all supplementary labour and/or outside hire receive the same rates and conditions as provided under this Agreement to employees directly engaged by the Company.”

(emphasis added)

[18]  The Respondent argued that the current wording of the clause was an “unlawful term” as defined in s.194. This includes an objectionable term as defined in s.12, both as previously set out. The Respondent argued that the language was broad and that if the clause requires it, or has the effect of requiring it, to allow or permit a breach of the General Protections provisions, it is an “objectionable term”.

[19] The Respondent submitted that the clause constituted an “unlawful term”, as it was “objectionable” as it contravened Part 3-1 of the Act, a contravention of the General Protections provisions. The Respondent submitted that the clause required the Respondent to take “all necessary steps” to ensure supplementary labour receive the “same rates and conditions” as are in the Agreement. The Respondent submitted that this clause had the potential to operate to require the exclusion of independent contractors (with enterprise agreements containing, for example, higher wages or different or inconsistent terms) to perform the supplementary work for the Respondent.

[20] In terms of the jurisdictional issue, Mr Williams, for the Respondent stated that it was a general requirement for employee industrial action to be protected, and that such action must not be in support of an unlawful term in the agreement as per s.409(3).

[21] The Respondent distinguished the subject term in the present case, from those as addressed in Asurco Contracting Pty Ltd v CFMEU 1. The distinguishing point, as addressed, is that the matter of Asurco set only a minimum threshold whereas, the employer contended the allegedly offending term in this matter set an unlawful rate to be met contrary to the provisions of the Act.

[22] The clause for consideration in Asurco was as follows:

“19 EMPLOYMENT SECURITY, STAFFING LEVELS, MODE OF RECRUITMENT AND REPLACEMENT LABOUR

The employer recognises that in certain circumstances the use of contractors and labour hire may affect the job security of employees covered by this agreement.

19.1 USE OF CONTRACTORS
(a) If the company wishes to engage independent contractors to perform work that might be performed by current or future employees under this agreement, the company must first consult in good faith with potentially affected employees and their union.

(b) If, after consultation, the company decides to engage bona fide contractors, these contractors must be afforded the same terms and conditions of engagement (or terms no less favourable) as they would receive if they were engaged as employees under this agreement performing the same work. The use of sham sub-contracting arrangements would constitute a breach of this agreement.

19.2 SUPPLEMENTARY LABOUR HIRE

Where there is a need for supplementary labour to meet temporary/peak work requirements, such labour may be accessed from bona fide labour hire companies following consultation with the Joint Consultative Committee and/or workplace delegate. If labour hire is to be used the company shall ensure that any workers engaged through a supplementary/labour hire arrangement and who are under the direction and control of the company performing work that, had it been done by direct employees of the Company would have been covered by this Agreement, shall receive wages, allowances and conditions not less than those contained in this Agreement.” 2

(emphasis added)

[23] The Applicant’s representative stated the clause was a permitted matter and not unlawful, that it, or its intention (by the framers) did not give rise to a breach of the General Protections provisions. The Applicant stated the Respondent had not previously raised an issue with the provision until it was seen in the submissions for this case. The Union had not been put on notice that they were not genuinely trying to reach agreement on the basis of the proposed supplementary labour claim. The term sought formed part of the log of claims. Mr Craig Williams, Co-ordinator of the TWU, stated that the Applicant had endeavoured to discuss the clause at a meeting (the day before the hearing in this matter) but stated that the Respondent refused, on the basis that it was to be before the Commission.

[24] Mr Craig Williams, in giving his evidence at the hearing, stated it was within his authority to amend the clause to only employ contractors on terms “no less favourable”. He conceded he would take the proposed amendment back to members for endorsement. However, the Respondent submitted that the Commission must proceed on the basis of the current claim (before the Commission) as made by the employees. Mr Craig Williams, in cross examination by Mr Dan Williams, gave the following evidence in relation to the proposed amendment as follows:

“Let’s assume that in the course of negotiations you’ve decided that it was appropriate for you to abandon or modify a claim, perhaps an order to secure an advantage in relation to a different claim. Would that be something you’d have to take back to the members?---We try and take everything back to the members, but when they give us a clear direction, which they have in this case, over the last couple of meetings, is that they don’t want any changes to our clauses and there was clear direction given there and, yes, we would not go back – keep going back to weaken our position with having meetings with the members. They would not like that.

No, I understand that. We can take it that at the point that you decided the valid application should be made you had a very firm direction from your members about what they were prepared to move on?---Yes.

It was reflected in the six outstanding matters at that point in time?---Yes.

Thank you. In your supplementary witness statement you’ve exhibited an email from Margarita Cerrato. Do you see that?---Yes.

That relates to a proposal to amend one of those claims?---I’ll just read it. Yes.

...”  3

[25] The further evidence of Mr Craig Williams was that he exhibited an email from Ms Cerrato of the Union to the Respondent dated 9 December 2014. The email stated the amendment to the alleged objectionable claim. Since the email was sent, on the day before the hearing, he confirmed he had not had a chance to go back to his members, however, he stated whilst he would go back to his members, it was not required as he had a clear mandate to support the amended wording. The email is extracted as follows:

“...In an effort to try to reach agreement, you are hereby notified that TWUQ will be proceeding with its claim on the basis of changing the wording of the clause to remove the words “the same as” and replacing them with the words “no less favourable than”.

We will prepare a new clause with the new words and this is the form of the clause that we will be pursuing from now on. The change should answer your concerns. For reasons set out in out submissions, the clause in its current form is not objectionable and it is a permitted matter.

This approach is made in the interests of reaching agreement and to resolve any misunderstanding on your part. We will bring this correspondence to the attention of the Commission tomorrow should you press ahead with your objection tomorrow.

...” 4

[26] Mr Craig Williams further stated in evidence as follows:

“...Yes, we might be at cross-purposes, Mr Williams, because I accept and understand your evidence in that regard, but I just wanted to make the point that if that being the case you’re going to have to go back to your members and get them to approve the modification to your log set out in Ms Cerrato’s email, aren’t you?

---No.

Isn’t that inconsistent with the evidence you gave me earlier?---No. As I said we had a clear mandate from the yard with the six outstanding issues, right, that they all have to be agreed to before we go back to the yard.

Yes, that’s right, but here you’re proposing an amendment to one of the claims, aren’t you?---Not really, no, because what we’re waiting on is the hearing here today with the last claim being the supplementary labour hire claim. There’s not going to be an amendment, I believe, unless it needs to be amended with direction from the commission.

Yes, I see.

…

MR WILLIAMS: Well, I understand what you’re saying, Mr Williams, but there is a difference, isn’t there, between a clause which says the terms must be the same and a clause which says the terms must be no less favourable?---Well, I don’t see the distinction between the two. I think they’re very similar. I mean, at the end of the day the main purpose of the clause is to make sure that the rates of pay are no less than what the respondent or Armaguard is paying their employees.

But, nevertheless, the clause that you advised the commission was non-negotiable had the word “same”, “same terms”, didn’t it?---That’s correct.

Now, as I read this email, there’s a proposal to prepare a new clause with new words and to substitute the words “no less favourable than” for the word “same”. You disagree with me that that’s a difference?---I don’t disagree with the wording has changed but I don’t think the meaning has changed.

All right.

…

MR WILLIAMS: Well, there might be a debate about that but, in any event, so we’re clear. I understand your evidence about that but at least so far, and maybe never, on your evidence, you have not taken it back to the members for their approval of the change?---We can do that. I haven’t got a problem with that. I’ll make that concession if you like. I’ll take it back.

All right. No further questions…” 5

[27] The Respondent referred to the case of AWU v Alcoa Work Alumina Australia Limited 6. In that case, it was held that an applicant will not be genuinely trying to reach agreement with an employer if they are making claims for the inclusion of an unlawful term in an enterprise agreement, as follows:

“[48] Section 408 prescribes that industrial action is protected industrial action for a proposed enterprise agreement if it is employee claim action for the agreement. Section 409(3) prescribes that employee claim action for a proposed enterprise agreement must not be in support of or to advance claims to include unlawful terms in the agreement.

[49] Therefore industrial action taken by employees in support of a claim to include the AWU’s Clause 18 (b)(vi) in an agreement, which is an unlawful term, will not be employee claim action and so cannot be protected industrial action. This is inconsistent with that industrial action becoming protected industrial action (by virtue of being endorsed by a majority of employees in a ballot), which is a requirement of s 437(1). Consequently this application has not been properly made under s 437. On this ground the application must be dismissed...”

[28] Clause 18(b)(vi) related to a draft agreement   which deleted any express statements of Alcoa's positive right to use contractors. However, Commissioner Williams stated that “it is abundantly clear from this document and the witness evidence that what was claimed by the AWU from Alcoa was their agreement to reduce the number of contractor employees on site and it is intended that there would only be a restricted or qualified right to use contractors.” 7 On that basis, the clause in that case was considered to be unlawful. The Applicant distinguished the current clause from a clause of this nature.

[29] The Applicant submitted that, on the basis of Amcor Ltd v Construction, Forestry, Mining and Energy Union 8 (Amcor) the clause as stated should be read in its industrial context and the intention of the framers should be paramount. The Applicant contended that the purpose of the term was to prevent undercutting of conditions and that the term should be interpreted as such regardless of the phrasing.

[30] The Applicant submitted that the contentions of the employer are counter intuitive and did not represent the intentions of the framers in their construction of the clause, identifying that a limitation on the amount paid to contractors would not provide any advantage to the employees. The aim was to secure the employment of their members.

[31] Mr Reidy, counsel for the Applicant, argued that the clause, in its current or proposed amended form could be read as a no less favourable term and that it was not an unlawful term. The Respondent stated that on the current wording of the clause they would be required that all supplementary labour and outside hire receive the same rates and conditions. In the current matter, the Union, on the evidence held a “reasonable belief” that it was a permitted matter, and not prohibited content.

[32] In the case National Union of Workers v Phillip Leong Stores Pty Ltd 9. Commissioner Bull referred to the differing interpretations of Full Bench authority in relation to prohibited content and “reasonable belief” as follows:

“[74] In 2006, a Full Bench of the Australian Industrial Relations Commission Tyco Australia Pty Ltd trading as Wormald v Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia63 (Tyco), dealt with the question of whether a union was genuinely trying to reach agreement while pursuing prohibited content in the proposed agreement.

[75] In dismissing Tyco’s appeal the Full Bench observed:

[20] There is no doubt that the provisions dealing with the negotiation and making of workplace agreements outlaw prohibited content. In that respect the construction of the legislation urged on us by Wormald and the Commonwealth is clearly correct. It may be accepted that a union which makes prohibited content a part of its claims cannot be said to be genuinely trying to reach agreement. That is because agreement in this context must mean a workplace agreement under the Act, as explained by Senior Deputy President Acton in Kempe Engineering Services. Of course it is not always easy to say whether claims involve prohibited content. Whether it can be said that a union is advancing such claims depends upon the evidence as to the nature of the claims and the union’s statements and conduct. Leaving aside cases in which it is clear on any reasonable view that claims being advanced involve prohibited content, it is conceivable that a party may be “genuinely trying” to reach an agreement under the Act even though, as a matter of ultimate conclusion, the claims it is advancing do contain prohibited content. ...

(Reference omitted, my underline)

...”

[33] As per that case an assessment as to whether prohibited content is being advanced must be made. In the current case, the Union’s evidence on the clause and the email regarding the amendment to the clause, Mr Craig Williams’ evidence as to his authority to amend and further concession on endorsement must be taken into account.

[34] Commissioner Bull referred to the other relevant cases in National Union of Workers v Phillip Leong Stores Pty Ltd as follows:

“[96] I am persuaded to follow the Full Bench authority in Airport Fuel Services, Asurco and Kagan (Kagan also being the most recent) in holding that a reasonable belief that only permitted matters are being pursued is not an absolute defence to not having tried to genuinely reach an agreement, where non-permitted matters are being sought. Section 409 Employee Claim Action in the FW Act is specific in its reference to the holding of a reasonable belief whereas s.443 or Subdivision B Protected action ballot orders makes no such reference. Where however, claims for non-permitted matters have been abandoned before an application for a protected action ballot is made, this would not preclude a finding that the applicant was genuinely trying to reach an agreement, this is in my view consistent with that expressed in the Explanatory Memorandum at Item 1644:

In addition, the pursuit of claims about non-permitted matters during bargaining for a proposed enterprise agreement does not necessarily prevent a finding that a bargaining representative is genuinely trying to reach an agreement (which is also a pre-condition to the taking of protected industrial action under subclause 413(3)) e.g., where those claims have subsequently been abandoned.

(My underline)

[97] In examining whether the NUW have been and are continuing to pursue non-permitted matters via their log of claims, I have applied the following principles gleaned from the FW Act, the relevant case law and the Explanatory Memorandum.

• Terms relating to conditions or requirements which sufficiently relate to an employee’s security of employment and maintenance of wages and conditions, such as a requirement that contractors must not be engaged on terms and conditions that would undercut the enterprise agreement, are permitted matters as they pertain to the employment relationship.



• Terms that contain a prohibition on the employer engaging contractors or labour hire employees or the employer’s right to use independent contractors are not matters pertaining to the employment relationship, as opposed to those which may relate to the regulation of conditions to be afforded to contractor employees.



• A bargaining representative pursuing an agreement that contains non-permitted matters as substantive terms cannot be genuinely trying to reach an agreement under the FW Act.



• The legislation requires that an applicant for a PABO is genuinely trying to reach an agreement at the time of the making the application for the order…” 10

[35] In the case before the Commission, the Respondent’s objection related to one claim as opposed to the three claims that continued to be pursued, relevant to that protected action ballot application (that were alleged to be non-permitted matters) before Commissioner Bull in National Union of Workers v Phillip Leong Stores Pty Ltd 11. The Applicant had resiled from the wording in the single clause in contention in the current matter.

[36] The Respondent’s objection to the currently claimed clause, that “the Company shall take all necessary steps to ensure that all supplementary labour and/or outside hire receive the same rates and conditions...” as employees, is that the clause requires, permits or purports to require or permit a breach of the General Protections provisions and therefore is an objectionable term as per s.12 and therefore an unlawful term is being pursued.

[37] It was submitted on behalf of the Applicant, that the clause is a minimum rates clause for the purpose of job protection and has no effect or operation attached to the conditions of contractors or to undermine their conditions. Mr Reidy, on behalf of the Applicant argued that the current claim on that basis was not an unlawful term.

[38] In the current circumstances on the evidence of Mr Craig Williams, the Union held a reasonable belief that the matter pursued was a permitted matter. In the alternative, the proposed amended provision, (which Mr Craig Williams stated he already held the approval of members to amend) to replace contractors being engaged on rates “the same as” employees with “no less favourable than” employees, met the intention of the clause as approved by the members; that is, that the employment of supplementary labour should not undercut current employees’ wages in the agreement. As soon as Mr Craig Williams became aware of the Respondent’s objection, the Applicant indicated they would not be pursuing the claim on that wording and effectively resiled from the claim.

[39] After a consideration of Full Bench authority, Commissioner Bull in NUW v Phillip Leong Stores Pty Ltd stated principles in relation to permitted matters. ‘Permitted matters’ within the meaning of s.172(1) of the Act referenced in the Explanatory Memorandum to the Fair Work Bill 2008 which states:

“672. It is intended that the following terms should be within the scope of permitted matters for the purpose of paragraph 172(1)(a):
...

• terms relating to conditions or requirements about employing casual employees or engaging labour hirer or contractors if those terms sufficiently relate to employees’ job security – eg. a term which provided that contractors must not be engaged on terms and conditions that would undercut the enterprise agreement.”

(emphasis added)

[40] In similar terms, I am satisfied that the current clause is a permitted matter.

[41] The Respondent argued that if the employees are making a claim for an unlawful term, this invalidates the application for an order. Mr Williams, on behalf of the Respondent referred to the decision of Justice Bromberg in Construction, Forestry, Mining and Energy Union v  McCorkell Constructions Pty Ltd (No 2)  12 (McCorkell) and submitted this case demonstrated the purported ability the current clause had to effect a breach of the General Protections provision as follows:

“MR WILLIAMS: Paragraph 153 on page 47. Can I note that although in the ADJ Contractors case, which I think came before you as the AIG v Fair Work Commission, it was doubted in that case that a corporate contractor had workplace rights, but they didn’t decide it, they doubted it. His Honour Bromberg J found that they did, and that has not been disturbed, that finding. In paragraph 153 his Honour said:

The workplace right that the CFMEU relies upon is the right of employees of Eco to the benefits of the Eco Agreement.

Paragraph 159, he says:

By its amended statement of claim, the CFMEU alleged that McCorkell refused to engage Eco for the demolition work because the employees of Eco were entitled to the benefit of the Eco agreement.

Then he went on to say:

To discharge the onus McCorkell had to establish that the entitlement of the employees of Eco to the benefit of the Eco Agreement was not a substantial and operative reason in McCorkell’s decision to refuse to engage.

The case is rewarding reading in its totality, but my submission is that that is an acceptance of the position that the CFMEU had taken. That’s certainly the way the case was disposed of, that is, that if an entity, in this case my client, refuses to engage a contractor because of the terms of its enterprise agreement, it will have taken adverse action against the contractors and its employees - or at least its employees. On paragraph 174, his ultimate conclusion, on page 53:

I am not satisfied that the presumption cast by section 361 has been displaced. I am therefore satisfied that McCorkell excluded or passed over Eco as a contender in the tender process and thereby refused to engage or make use of the services of Eco for the demolition work, because the employees of Eco were entitled to the benefit of the Eco Agreement. For those reasons I am satisfied that on 9 November 2012, McCorkell contravened section 340(1)(a)(i) of the FW Act.

That is, of course, the general protections subsection. So in my submission my client would be in the same position. He would be required to pass over potential contractors because the contractor and its employees were bound by and therefore had the benefit of their enterprise agreement, because if that enterprise agreement contained superior terms then my client could not engage them and still comply with the claim made against it. That’s my submission on that point, Commissioner. As I say, it’s technical, it’s right or wrong, but we say - - -…” 13

(emphasis added)

[42] The Respondent however, acknowledged that if the claim was amended in the manner foreshadowed by the Union, it may then potentially be considered lawful:

“THE COMMISSIONER: It falls away if in fact it’s approved - if in fact the new wording is approved.

MR WILLIAMS: It will fall away at that point - well, sorry, I should reserve. It perhaps has - - -

THE COMMISSIONER: I’m not holding - you need to see that.

MR WILLIAMS: I’d have to see what the clause said, but on the authority of AiG v FWA and some others, if the prescription was no less favourable it’s a different equation, we accept that, but at the moment it’s the same and those words mean exactly what they say...” 14

(emphasis added)

[43] Paragraph 153 of Justice Bromberg’s decision, as referred to by the Respondent above, is extracted as follows:

“The workplace right that the CFMEU relies upon is the right of employees of Eco to the benefits of the Eco Agreement. It is not only the fact of the existence of an enterprise agreement but also the content of an enterprise agreement that may constitute a “workplace right” within the meaning of that expression in s 341(1) of the FW Act. As the CFMEU contended, the proper approach to the words “entitled to the benefit” in s 341(1)(a) is that they protect against conduct motivated by the fact that an industrial instrument or order applies to the person against whom “adverse action” is taken, as well as where the motivation to engage in the “adverse action” arises because of the content of the instrument or order: Greater Dandenong City Council v Australian Municipal, Administrative, Clerical and Services Union [2001] FCA 349; (2001) 112 FCR 232 at [80] (Wilcox J); [123]-[131] (Merkel J); and [212] (Finkelstein J).” 15

[44] Adopting the reasoning, as relied on by the Respondent, in McCorkell, the current claim would require that the Respondent pass over potential contractors because the contractor and its employees were bound by, and therefore had the benefit of, their enterprise agreement containing superior terms and that this would constitute adverse action and a breach of the General Protections provisions.

[45] However, on this basis, if the clause was in its amended form (as per the TWU email), the Respondent would still have to pass over contractors if the contractor and its employees had the benefit of an enterprise agreement containing terms less favourable than those in the proposed agreement. Any situation where the Respondent passes over contractors because they and their employees have the benefit of an enterprise agreement, whether the enterprise agreement provides for terms that are less or more favourable, would be “conduct motivated by the fact that an industrial instrument or order applies to the person against whom “adverse action” is taken”.

[46] Mr Williams, on behalf of the Respondent, also referred to the Decision of Justices North, McKerracher and Reeves of the Federal Court in Australian Industry Group v Fair Work Australia 16 (AIG) in consideration of whether the following clause was an objectionable and unlawful term:

(the Company) “... shall only engage contractors and employees as contractors, to do work that would be covered by the Agreement if it was performed by the Employees, who apply wages and conditions that are no less favourable than that provided for in this Agreement. This will not apply where [ADJ] is contractually obliged by the head contractor/client to engage a specific nominated contractor to do specialist work...” 17

[47] The clause under consideration in that case is similar to the TWU’s amended clause and their intention to pursue a clause where engaging contractors did not undercut employees’ wages.

[48] The Federal Court in the AIG decision observed as follows:

“Although AIG contends that the contractors have a ‘workplace right’ (being entitled to the benefit of industrial instrument), this is not supported by the authorities. There has been no such determination in the authorities on relevant entitlements of employers. There is no case which has applied s 341(1)(a) with respect to an employer in the manner argued for by AIG. It is doubtful, therefore, that AIG has made out the essential first limb of its argument, namely, that there is relevant ‘workplace right’ on the part of the contractor. Without that argument, the first ground of review must fail.

If, however, it is proper to describe a contractor’s rights as being workplace rights under the FW Act, the argument faces a second difficulty. In relation to adverse action there is no evidence that the consequences of the First Impugned Clause would be adverse for a contractor in all cases. That being so, the term would not be automatically objectionable within s 12 of the FW Act. Importantly, in a case where the consequence was adverse (again on which there is not evidence), the term would be unenforceable.

Additionally, the primary consideration relied upon by the Full Bench was that the clause is not concerned with whether or not an enterprise agreement or other workplace agreement covers the contractor. The existence or content of a contractor’s industrial instrument is not the operative or immediate reason of any conduct. In Maritime Union of Australia v CSL Australia Pty Ltd (2002) 113 IR 326 (at [54]) Branson J said:

It is difficult, if not impossible, to identify the ratio decidendi of Greater Dandenong. However, two members of the Full Court (Merkel and Finkelstein JJ) concluded that the learned primary judge had erroneously failed to distinguish between the operative (or immediate) reason for the Council's conduct and the cause (or proximate reason) for the Council's conduct. While, as it seems to me, this distinction may in many cases be easier to articulate than to draw, especially in respect of a statutory provision that recognises the possibility of a number of reasons having a causal connection with conduct, I consider that I should be guided by the approach taken by Merkel and Finkelstein JJ who constituted a majority of the Full Court in Greater Dandenong on this issue. I am fortified in my decision to adopt this approach by the fact that the approach appears to me to be consistent with that adopted by R D Nicholson J in MUA v Geraldton … . (emphasis added)

Applying this test, there is nothing in the First Impugned Clause which ‘requires’ ADJ to take any action against a contractor ‘because’ the contractor is entitled to the benefit of any industrial instrument. The clause concerned is with the rates of pay and conditions, not the source of the obligation in respect of the rates of pay. ADJ’s concern is directed only towards the rates of pay which the contractor is paying. Nothing else is relevant in order to comply with the clause. Significantly, the clause would operate in the same way whether the contractor paid its employees under an industrial instrument or a common law contract or some other causal arrangement not caught by the FW Act...” 18

(emphasis added)

[49] The Full Court of the Federal Court distinguished between the rates of pay and conditions and the source of the obligation in respect of the rates of pay. On this reasoning, the TWU’s current or amended claim would not give rise to a breach of the General Protections provisions and therefore is not unlawful.

[50] I note that the decision of McCorkell 19 was the subject of an appeal by the Full Court of the Federal Court20. The appeal decision was not provided or argued in this matter21. Such decision has been considered, but does not disturb the reasoning provided in relation to the circumstances currently before me.

[51] I do not adopt the reasoning in McCorkell 22and State of Victoria v Construction, Forestry, Mining and Energy Union23. I adopt the approach of the Full Court of the Federal Court in AIG. I do not consider that the clause as sought or the amended clause requires or permits a contravention of Part 3-1 of the Act, and therefore it is not an unlawful term. The Applicant is considered to be genuinely trying to reach agreement.

Summary of Submissions - extending notice period

[52] The other matter for determination is whether there are “exceptional circumstances” justifying a longer period of written notice than three working days, pursuant to s.443(5) of the Act.

[53] The Respondent relied on the following exceptional circumstances of the Respondent’s operations to demonstrate that exceptional circumstances exist justifying a greater notice period in which to prepare for industrial action. It was submitted that the Respondent would need to put in place business contingency arrangements, to minimise cash holdings on the Respondent’s clients’ premises due to the inherent risks to clients’ staff and customers with large cash holdings on site. It was also emphasised that it is necessary to maintain a constant availability of cash to the major financial and retail institutions in addition to ATMs nationally.

[54] The Respondent submitted that there could be serious security consequences if increased notice was not allowed to make plans, to accommodate the impact of the protected industrial action on these business operations.

[55] The Respondent relied upon the authority of Vice President Lawler's decision in CEPU v Australia Postal Corporation 24, which concerned s.463(5) of the Workplace Relations Act (the mirror provision of s.443(5) of the current Act), where Vice President Lawler, referring to the Decision of Justice Rares in Ho v Professional Services Review Committee No 29525, stated the following:

“[10] In this passage his Honour was concerned with the ordinary meaning of the expression “exceptional circumstances” and the approach identified is, in my view, equally applicable to the use of that expression in s.465(3). In summary, the expression “exceptional circumstances” requires consideration of all the circumstances. To be exceptional, circumstances must be out of the ordinary course, or unusual, or special, or uncommon but need not be unique, or unprecedented, or very rare. Circumstances will not be exceptional if they are regularly, or routinely, or normally encountered. Exceptional circumstances can include a single exceptional matter, a combination of exceptional factors or a combination of ordinary factors which, although individually of no particular significance, when taken together are seen as exceptional. It is not correct to construe “exceptional circumstances” as being only some unexpected occurrence, although frequently it will be. Nor is it correct to construe the plural “circumstances” as if it were only a singular occurrence, even though it can be a one off situation. The ordinary and natural meaning of “exceptional circumstances” includes a combination of factors which, when viewed together, may reasonably be seen as producing a situation which is out of the ordinary course, unusual, special or uncommon.

[11] However, it is important to note that when considering whether to make an order pursuant to s.463(5) the Commission is not simply concerned with determining whether there are exceptional circumstances. There must be exceptional circumstances “justifying” the specification of a longer notice period. The notion of justification is critical and calls for a consideration of the purpose of the notice required by s.441.”

[56] The Respondent contended that the present matter was one where exceptional circumstances existed in line with the definition in CEPU v Australia Post 26, in relation to the impact that stoppages of Road Crew would have on the Respondent, its customers and potentially the public.

[57] The Respondent contended that there was a basis, for the exercise of the discretion, to extend the notice period where a public interest exists. The Respondent submitted a public interest existed on the basis of the public safety and security in relation to managing cash in transit, preventing the accumulation of significant levels of cash and maintaining the level of cash in circuit.

[58] An issue to be taken into account was that, where the interests beyond that of the immediate parties may be significantly impacted by the taking of industrial action, the tendency is for an extension of the notice period to be provided, and in this regard the decision of Commissioner Lewin in Transport Workers’ Union of Australia 27, is extracted as follows: (citations omitted)

“[17] Decisions of Fair Work Australia ... which have granted an extension of the relevant period of notice beyond that prescribed by s414(2)(a) of the Act have all involved circumstances where a broader public interest to those of the parties immediately concerned with the protected industrial action existed. Such circumstances are the conjunctive circumstances of the employer and third parties referred to by Vice President Lawler. Those circumstances included: the national interest in the operation of the Australian Customs and Border Protection Services; the availability of public transport services in a capital city; and a particular form of industrial action involving risks to public safety from prisoners of a State and access to medical services within a State prison, in which case the period of notice was extended from three to five working days but limited to a particular form of protected industrial action, among others, which might be taken by employees of the employer responsible for the management of the prison.”

[59]  The Commission has, in a number of cases, increased the notification period, generally in relation to essential services important to the public interest, such as health services 28, public transport services29, correctional30 and fire31 services, the provision of power32 and airport security33, and customs and border protection services34. Between five and seven working days were granted for notice periods in these cases.

[60] In support of its premise for an extended notice period, the Respondent relied upon the statement of Mr Adrian Bonacci (Regional Security Manager - Northern Region). It is recognised that Mr Reidy (during cross examination) demonstrated the limitations of Mr Bonacci’s evidence given the manner in which Mr Bonacci had been assisted in drafting his statement. Parts of Commissioner Gregory’s decision in TWU v Linfox Armaguard Pty Ltd 35 had been extracted and relied on in his evidence. However, his evidence was endorsed by Mr O’Brien (Regional Manager - Northern Region) and much of the evidence is consistent with that presented before Commissioner Gregory and before Commissioner Hampton in the two similar cases of TWU v Linfox Armaguard Pty Ltd36. The evidence of Mr Bonacci at paragraphs 11 to 16 of his statement is referred to and is consistent with the operational evidence in these other cases.

[61] The Applicant denied that such exceptional circumstances existed and relied on the evidence of Mr Steven Matthews, an experienced armoured vehicle operator employed by the Respondent. He stepped through the range of ways the Respondent could currently accommodate the protected industrial action with three working days’ notice.

[62] However, it is recognised, on the evidence, that industrial action will cause disruption to the provision of the full services provided by the Respondent, including the cash in transit and cash collection. It is recognised that protected industrial action is a statutory entitlement and the length of the notice period is not designed to deliver a period in which the Respondent can take such defensive strategies, such that the effect of the industrial action on the Respondent’s business is significantly reduced or voided.

[63] As stated, the similar business operations of the Respondent (being Australia’s largest cash-in-transit security company 37) in Victoria and South Australia, have been considered in relation to the granting of extended periods of notice of five working days, in the decisions of Commissioner Gregory and Commissioner Hampton.

[64] Similarly, in verifying the current evidence (given the matters arising), I have taken those similar business operations into account in considering the appropriate notice period. In reaching his conclusion as to whether exceptional circumstances existed, Commissioner Gregory also undertook such a practice and referred to the considerations of similar evidence before Commissioner Hampton as follows:

“[56] In coming to his decision Commissioner Hampton noted he was required to weigh up the opportunity for Armaguard to take appropriate defensive action against the diminution of the effectiveness of the TWU members’ bargaining power. He stated, “In that light, it would not be a relevant exercise of discretion to grant additional notice simply to allow the employer to neutralise the impact of the industrial action.”xxxviii However, he concluded (references omitted):

“[24] In this case, the particular nature of the work, the extent of the cash transit business in South Australia conducted by Armaguard, the implications of some forms of potential industrial action for the business, their customers and potentially the public, are all significant factors that support a finding of exceptional circumstances. In particular, the capacity for the employer to make reasonable contingency arrangements for the collection of money and the servicing of ATM’s is impacted by the nature of that work and the regulatory and security environment in which it is performed.

[25] Additional notice is warranted in relation to those actions that most directly put the safety and security of the employees and client businesses involved, and potentially the public, at risk. In those cases, the additional notice will permit appropriate contingency arrangements to be put into place that will mitigate those risks. The particular arrangements include the opportunity for Armaguard to arrange the licensing of appropriate contingency staff, from non-operational and interstate sources, under South Australian law. Further, the ban on ATM services and two-man crewing represent significant limitations on the operations of Armaguard in the context of its South Australian operations with identifiable security and safety implications.

[26] These exceptional circumstances do justify an extended period of notice in relation to some but not all of the proposed industrial action...” 38

[65] The circumstances of the current matter are similar to that considered by Commissioners Hampton 39 and Gregory40 where the particular nature of the work with considerations for safety and security, and the impact of some forms of the potential industrial action were recognised. The cash in transit business and the potential repercussions on the business, customers and the public are commensurate with exceptional circumstances and a consistent finding in the industry is warranted, that five working days is appropriate (based on the exceptional circumstances) for the notice period.

[66] The Respondent’s overall claim for the extension of the notice period to cover the protected industrial action (Questions 2 to 7) has been considered against the statutory entitlement to take the action. As per Vice President Lawler's consideration of exceptional circumstances in CEPU v Australia Post, it is necessary for the Commission to balance the statutory entitlement to take protected industrial action and whether exceptional circumstances exist, which warrant a longer notice period for the industrial action. The following two paragraphs of Vice President Lawler’s decision are relevant to the determination of exceptional circumstances:

“[21] Essentially, what is required in determining whether exceptional circumstances justify an extension of the required notices period is a weighing of the interests of the employer and third parties in the employer having a greater opportunity to take appropriate defensive action as against the diminution in the effectiveness of the employees’ bargaining power that results from such an extension. The fact that the legislature has seen fit to condition the ordering of an extension of the required notice period on the presence of exceptional circumstances justifying it, as distinct from merely conferring a simple discretion to extend the required notice period, indicates that ordinarily there should be no extension.

[22] The first example provided in Davids Distribution provides an illustration of where exceptional circumstances may justify an extension of the required notice period. A sophisticated piece of plant, such as a smelter, may take many days to shut down without damage. The employer is exposed to wholly disproportionate damage if it is prevented by too limited a notice period from undertaking an orderly shutdown of the plant. A further example may be afforded by a strike by teachers where the school needs to be able to notify parents of the strike so as to give them an opportunity to make alternative arrangements for the care of their children on the days of the strike. Typically, three working days will be insufficient for this purpose…” 41

[67] Balancing the considerations as referred to by Vice President Lawler and taking into account all of the facts and circumstances of the matter, it is concluded that, to accommodate the range of operational, safety and security matters, an increased notice period of five working days for the notification of protected industrial action authorised by Questions 2 to 7 of the ballot is justified.

Conclusion

[68] I acknowledge the Respondent’s position that their case is conducted on the basis of the wording in the current clause. However, this clause (and the amended clause) has been dealt with above. If, on the reasoning provided, in connection with the currently worded clause, I am wrong, it would be improper based on all of the circumstances of this matter to expect the matter to be re-heard on the amended clause, given the Respondent was on notice of the Union’s amendment to the clause, which was provided to the Respondent prior to the hearing. The Respondent acknowledged that the objection may fall away in relation to the amended clause 42. However, the AIG decision, as relied on, is applicable to the wording of either clause.

[69] The TWU exhibited their amended wording of the clause in the email sent prior to the hearing. I have taken into account the circumstances where (on this unchallenged part of Mr Craig Williams’ evidence) he sought to discuss the Respondent’s issue with the contractor clause with the Respondent’s representative, on the day prior to the hearing, but was refused such discussion. The TWU, prior to the hearing, clarified the clause and that they were resiling from the current wording and pursuing the stated amendment as per the email.

[70] For the aforementioned reasons, it is determined that the Applicant is genuinely trying to reach agreement based on the intent of current wording (and a consideration of the amended wording) of the supplementary labour and outside hire clause. The supplementary labour clause on the reasoning, as set out, is a permitted matter and not an objectionable or unlawful term.

[71] In addition, having determined that exceptional circumstances exist for the provision of five working days notice, it is considered that the grant of a protected action ballot order will issue on that basis.

[72] A separate Order [PR559103] will issue.

COMMISSIONER

Appearances:

Mr L Reidy, Counsel, instructed by Ms M Cerrato for the Transport Workers’ Union of Australia

Mr D Williams, Partner and Mr T Walthall, (both of Minter Ellison) for Linfox Armaguard Pty Ltd

Hearing details:

2014

Brisbane

December 10.

 1   [2010] FWAFB 6180

 2   [2010] FWAFB 6180 at [4]

 3   Transcript, 10 December 2014 at PN70 to PN74

 4   Annexure CW-6 to the Supplementary Witness Statement of Craig Williams dated 9 December 2014

 5   Transcript, 10 December 2014 at PN79 to PN91

 6   [2009] FWA 796

 7   [2009] FWA 796 at [28]

 8 (2005) 222 CLR 241 per Gleeson CJ and McHugh J at [2], Gummow, Hayne and Heydon JJ at [30] and Kirby J at [93]-[97];

 9   [2014] FWC 6459

 10   [2014] FWC 6459

 11   [2014] FWC 6459

 12 [2013] FCA 446

 13   Transcript, 10 December 2014 at PN1070 to PN1078

 14   Transcript, 10 December 2014 at PN1079 to PN1082

 15 [2013] FCA 446 at [153]

 16 [2012] FCAFC 108

 17 [2012] FCAFC 108 at [51]

 18 [2012] FCAFC 108 at [62] to [65]

 19 [2013] FCA 446

 20   State of Victoria v Construction, Forestry, Mining and Energy Union [2013] FCAFC 160

 21   Transcript, 10 December 2014 at PN1093 to PN1095

 22 [2013] FCA 446

 23 [2013] FCAFC 160

 24   [2007] AIRC 848

 25 [2007] FCA 388 (27 March 2007)

 26   [2007] AIRC 848

 27   [2012] FWA 133

 28   HSU v Victorian Institute of Forensic Mental Health[2012] FWA 4633; Australian Nursing Federation v Victorian Hospitals Industrial Association[2011] FWA 7198

 29   TWU and AMWU v the Chief Executive of the ACT Internal Omnibus Network(ACTION) on behalf of the Australian Capital Territory[2010] FWA 3355

 30   CPSU, the Community and Public Service Sector v G4S[2011] FWA 2115

 31   United Firefighter’s Union of Australia [2013] FWC 5360

 32   Construction, Forestry, Mining and Energy Union (EnergyAustralia) [2013] FWC 2748; AMWU v Clyde Babcock-Hitachi (Australia) Pty Ltd[2011] FWA 2291

 33   TWU v ISS Security Pty Ltd[2012] FWA 7141

 34   CPSU, the Community and Public Sector Union v Commonwealth Government - Australian Customs and Border Protection Service[2011] FWA 3919

 35   [2014] FWC 7558

 36  [2014] FWC 7558 and [2014] FWC 1753

 37   TWU v Linfox Armaguard Pty Ltd [2014] FWC 1753 at [4]

 38   [2014] FWC 7558

 39   [2014] FWC 1753 at [24] to [30]

 40   [2014] FWC 7558 at [57] to [66]

 41   Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Australian Postal Corporation [2007] AIRC 848

 42   Transcript, 10 December 2014 at PN1082

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