Transport Workers' Union of Australia v TNT Australia Pty Limited

[2011] FWA 1543

[2011] FWA 1543

FAIR WORK AUSTRALIA

DECISION

Fair Work Act 2009
s.229 - Application for a bargaining order

Transport Workers' Union of Australia
v
TNT Australia Pty Limited
(B2011/2559)

COMMISSIONER CAMBRIDGE SYDNEY, 10 MARCH 2011

Application for bargaining Orders - good faith bargaining requirements - s.228(1)(e) capricious or unfair conduct that undermines freedom of association or collective bargaining - action of employer taken in response to protected industrial action - employer response action - adverse action - s.346 protection.

[1] On 15 February 2011 the Transport Workers’ Union of Australia (TWU) made an application for a bargaining Order. The application was made pursuant to section 229 of the Fair Work Act 2009 (the Act). The application named as respondent TNT Australia Pty Ltd (TNT).

[2] The matter was listed for Mention and Directions before Fair Work Australia (FWA) on 16 February 2011, at which time Mr O Fagir and Mr D Wait appeared for the TWU and Mr S Woodbury and Ms J Goedhuys appeared for TNT. The Parties were provided with a timetable for the exchange of evidentiary material and submissions. The matter was listed for conciliation on 2 and 3 March 2011. However the Parties determined not to utilise the time that had been allocated for conciliation in view of apparent progress that had been made in respect to potential agreement regarding enterprise agreement negotiations. Subsequently the matter proceeded to Hearing conducted on 8 March 2011 in Sydney.

[3] At the Hearing Mr Fagir continued his appearance for the TWU and Mr Woodbury together with Ms J Sutherland appeared for TNT. Evidence in support of the TWU application was taken from witnesses who appeared via video link from Melbourne. In addition, further witness evidence was provided by individuals in attendance at the Hearing including evidence provided by TNT in opposition to the bargaining Orders sought by the TWU.

[4] The relevant background to this matter, in summary form, is that it involves enterprise bargaining negotiations between the TWU and TNT which have occurred as a consequence of the expiry of the TNT Australia Pty Limited - TWU (Federal) Heads of Agreement 2008 - 2010, (the 2008 Agreement). The 2008 Agreement expired on 31 December 2010. Following a successful protected action ballot TWU members employed by TNT have taken protected industrial action commencing on 28 January 2011 and continuing during February 2011.

[5] The basis for the application has involved assertions by the TWU that TNT has taken action as a consequence of the protected industrial action, and which has breached the good faith bargaining requirements of the Act.

[6] In brief the TWU has sought bargaining Orders to require TNT to reinstate, (a) arrangements that permitted right of entry arrangements for TWU officials which were less restrictive than those permitted by the Act, and (b), arrangements that had allowed for TNT employees to meet with TWU officials during paid working time, and (c) arrangements whereby TNT employees who hold positions on the Victoria/Tasmanian TWU Branch Committee of Management (BCOM) receive payment as time worked when they attend meetings of the BCOM.

[7] The TWU submitted that the Orders sought were required as a means to stop action taken by TNT which would constitute capricious or unfair conduct that undermined freedom of association or collective bargaining, thus breaching the good faith bargaining requirements stipulated by subsection 228 (1) (e) of the Act. The TWU asserted that TNT had altered long standing arrangements involving right of entry, paid Union meetings and BCOM leave (the discretionary benefits), as retaliation in response to TWU members taking protected industrial action.

[8] TNT opposed the application for bargaining Orders and submitted that the discretionary benefits were by their nature, provided to employees at the discretion of TNT. According to TNT, it provided the discretionary benefits by agreement and it was entitled to preservation of its right to refuse agreement and thereby deny or remove the benefits as it may choose provided that any refusal to grant the discretionary benefits was not taken on a discriminatory basis or in some other unlawful fashion.

[9] TNT provided evidence which asserted that the alteration to the arrangements to provide for the discretionary benefits was made for operational reasons as opposed to retaliation for taking protected industrial action. In broad terms much of this evidence was based upon the business needs of TNT to recover from the operational impact of the industrial action. Consequently, it was suggested that the connection between the refusal to agree to provide the benefits was not in retaliation for the industrial action but because of the operational impact caused by the industrial action. TNT submitted that this action could not be construed to represent a breach of the good faith bargaining requirements of the Act.

[10] TNT further submitted that the Orders sought by the TWU lacked sufficient specificity so as to be able to comply with section 231 of the Act. TNT also submitted that the granting of the Orders sought by the TWU would contravene subsection 505 (5) of the Act because the Orders would permit right of entry arrangements additional to, or inconsistent with the right of entry generally provided under the relevant provisions of the Act. TNT also submitted that the Orders sought by the TWU in respect to the leave to attend BCOM meetings involved a term in a proposed enterprise agreement that would not pertain to a permitted matter as defined by section 172 of the Act.

[11] Before any bargaining Order can be made under section 230 of the Act, FWA must be satisfied that a bargaining representative is not meeting the good faith bargaining requirements established by section 228 of the Act. Various other statutory pre-requisites also exist. However in this instance no challenge arose regarding what might be described as the technical statutory pre-requisites. Consequently focus has been directed towards evidence of the conduct of TNT regarding the discretionary benefits and whether such conduct breached the good faith bargaining requirements of the Act.

[12] Section 228 of the Act sets out the good faith bargaining requirements and reads as follows:

“228 Bargaining representatives must meet the good faith bargaining requirements

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

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

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

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

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

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

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

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

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

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

[13] The central issue under examination has involved an analysis of the conduct of TNT with respect to the discretionary benefits and in particular, whether that conduct represented capricious or unfair conduct that undermined freedom of association or collective bargaining (subsection 228 (1) (e)).

[14] The evidence established that the discretionary benefits had broadly been granted, and sometimes refused, over a period of many years. The discretionary benefits applied to varying degrees and in different localised manner at a number of particular workplaces. The evidence, including that provided by TNT, confirmed that on or about 27 January 2011, TNT commenced to implement a change to its approach to grant the discretionary benefits¹. This change has manifest as a universal or “blanket” determination to refuse to grant the discretionary benefits.

[15] The determination by TNT to universally refuse to grant the discretionary benefits can be seen to be both directly and indirectly connected to the taking of protected industrial action. As attested to by the witness who gave evidence on behalf of TNT, the operational impact of the protected industrial action established work requirements which could, prima facie, provide justification for some short term refusal to grant the discretionary benefits.

[16] Unfortunately the totality of the evidence, when carefully examined, confirms that the action by TNT to implement a “blanket” refusal to grant the discretionary benefits was primarily motivated as retaliation against the TWU and its members for arranging, facilitating and participating in protected industrial action. One clear and notable example that established that the refusal to grant the discretionary benefits was motivated at least in large part, by retaliation for the industrial action as opposed to genuine operational requirements, concerned the refusal to grant BCOM leave requested for a newly appointed BCOM delegate in respect of future absences anticipated for, inter alia, April and June 2011.

[17] Although the evidence established that TNT had acted to implement a “blanket” refusal to grant the discretionary benefits as retaliation for taking protected industrial action it remains necessary to determine whether such action could constitute capricious or unfair conduct that undermined freedom of association or collective bargaining. It would seem that any action which contravened or removed an established workplace right as retaliation for the taking of protected industrial action, would represent adverse action and therefore breach a general protection, specifically as contemplated by section 346 of the Act.

[18] In this instance TNT has not disturbed any established workplace right but rather exercised its discretion to no longer agree to grant the discretionary benefits. Therefore it is necessary to consider whether action of this nature could constitute adverse action particularly because the Act deals with the prospect of an employer taking action in response to protected industrial action.

[19] For example, subsection 342 (4) of the Act states that:

“... adverse action does not include an employer standing down an employee who is:

(a) engaged in protected industrial action; and

(b) employed under a contract of employment that provides for the employer to stand down the employee in the circumstances.”

[20] These provisions appear, to some extent, to synchronise with other provisions of the Act which deal with what is called employer response action, specifically sections 411 and 416. The Act clearly contemplates that as part of the bargaining process an employer is entitled to initiate industrial action as employer response action. (Employer response action must comply with various provisions of the Act including the common requirements set out in section 413 and the notice requirements of section 414.) The meaning of industrial action is set out in section 19 of the Act where it appears to confine mention of employer response action to the lockout of employees from their employment (presumably with the immunity provided by subsection 342 (4)).

[21] However I do not believe that the provisions of section 19 should be narrowly construed such that the meaning of industrial action would be confined to the particular circumstances that are stated in section 19. In my view, section 19 is not an exhaustive prescription for industrial action but more an indicative guide to the activities that satisfy the notion of industrial action for the purposes of the Act. This broad approach to any contemplation of industrial action would be particularly important given the changing nature of employment arrangements and circumstances. Consequently I do not believe that employer response action would be confined to the lockout of employees from their employment but rather encompass a range of potential response actions many of which would be of lesser gravity than the lockout of employees.

[22] Employer response action that does not involve the lockout of employees and their standing down in accordance with section 342 (4) of the Act, traverses what can be described as a difficult legislative minefield. In particular section 342 (1) of the Act sets out the circumstances in which a person takes adverse action against another person. The first item in section 342 (1) of the Act in combination with section 346, would severely limit the employer response action that an employer could take against an employee. Importantly, there is no item within section 342 (1) which comprehends adverse action taken by an employer against an industrial association.

[23] The corollary of the application of the relevant statutory provisions as discussed above when translated into the circumstances presented by the evidence in this case leads to findings that:

1. TNT's action involving the “blanket” refusal to grant the discretionary benefits is properly characterised as employer response action.

2. TNT's employer response action has not been made in accordance with the requirements of the Act, specifically the notice requirements of section 414.

3. That aspect of TNT's employer response action which involved right of entry restrictions upon officials of the TWU cannot represent adverse action pursuant to section 342 of the Act.

4. Those aspects of TNT's employer response action which involved the refusal to grant paid union meeting time and BCOM leave altered the position of the effected employees to the employee’s prejudice and thus constituted adverse action and was therefore in breach of the general protection established by section 346 of the Act.

[24] In view of the conclusions that I have drawn in points 1 to 4 above, I return to consideration of whether TNT's actions regarding the refusal to grant the discretionary benefits represents capricious or unfair conduct that undermines freedom of association or collective bargaining.

[25] When TNT's action to refuse to grant the discretionary benefits is considered in the context of employer response action, it is clear that all aspects of TNT's employer response action did not comply with, inter alia, the notice requirements of section 414 of the Act. Further, those aspects of TNT's employer response action which involved the refusal to grant paid union meeting time and BCOM leave to employees represented adverse action which breached the general protection established by section 346 of the Act. That aspect of TNT's employer response action which involved right of entry restrictions upon officials of the TWU did not represent adverse action.

[26] Therefore those aspects of TNT's employer response action which represented adverse action and breached the general protection established by section 346 of the Act represents capricious and unfair conduct that undermines freedom of association and collective bargaining. This is particularly evident given the objects of Part 3-1 of the Act as set out in section 336 which reads as follows:

“336 Objects of this Part

The objects of this Part are as follows:

(a) to protect workplace rights;

(b) to protect freedom of association by ensuring that persons are:

(i) free to become, or not become, members of industrial associations; and

(ii) free to be represented, or not represented, by industrial associations; and

(iii) free to participate, or not participate, in lawful industrial activities;

(c) to provide protection from workplace discrimination;

(d) to provide effective relief for persons who have been discriminated against, victimised or otherwise adversely affected as a result of contraventions of this Part.”

[27] The objects of the general protections Part of the Act include, to protect freedom of association and as a matter of logic, those aspects of TNT's actions which represented breaches of one specific general protection (s. 346), must therefore undermine freedom of association.

[28] That aspect of TNT's employer's response action to refuse to grant the discretionary benefits which involved right of entry restrictions upon officials of the TWU did not constitute adverse action and must be distinguished accordingly. It would appear that if appropriate notice requirements were given, TNT would be entitled to refuse to grant the less restrictive right of entry benefits that may have previously been enjoyed by officials of the TWU. Therefore I have not been persuaded that that part of the TWU employer response action which involved right of entry restrictions should be held to represent capricious or unfair conduct that undermines freedom of association or collective bargaining.

[29] Consequently I would refuse to grant Order number 1 of the bargaining Orders sought by the TWU and, but for the matters mentioned below, I would be prepared to grant the remaining Orders numbered 2, 3, and 4.

[30] The construction of the Orders proposed by the TWU introduces potential practical problems with regard to any enforcement. The proposed Orders refer to practices or arrangements applying as of 1 October 2010. Orders constructed with such terminology create significant potential for confusion arising from interpretation as to precisely what practice or arrangement may have applied at the multitude of worksites (circa 52) as at October 2010. The difficulty with the terminology of the proposed Orders could be addressed by FWA specifying that TNT be Ordered to refrain from refusing to grant paid union meeting time or BCOM leave unless it provided details to the TWU and the relevant employees, of the operational requirements which represented legitimate basis for such refusal.

[31] It has however become unnecessary to recast the Orders which I would otherwise be prepared to make because the evidence given by TNT's General Manager Industrial Relations, Mr Robert Mackenzie during the Hearing of 8 March 2011, has obviated the need for any such Orders. In particular I refer to the following extract from transcript:

“PN542

I think that the concern is that is there a legitimate removal of the consent?---No.  Ongoing, permanently?  No.

PN543

So there is no blanket removal of the consent?---No, it's - but I made the point, there's no blanket agreement to unfettered right of entry, nor is there agreement - as I said, apart from the fact that it is by agreement - entry into the sites.

PN544

No, I don't think anyone takes issue with that.  It's a question of - it's the notion, I suppose, that emerges as the one where - and we've seen it in industrial instruments over the years - agreement would not be unreasonably withheld?---And that's exactly the words that are in the draft agreement that we've got and proposing under the current heads of agreement.  It's by agreement and agreement will not be unreasonably withheld.”

[32] This evidence has satisfied me that in simple terms, TNT has retracted any “blanket” refusal to grant the discretionary benefits and instead will properly consider all requests for paid union meeting time or BCOM leave and only refuse such requests in circumstances where it can demonstrate genuine operational requirements as legitimate basis for such refusal.

[33] If however I have misunderstood the evidence of Mr Mackenzie or the position of TNT does not materialise in a practical fashion in accordance with my understandings, I propose to provide for opportunity to reactivate the application in this matter and allow for further proceedings. It would be regrettable if further proceedings were required but if necessary an opportunity to advance further evidence would be provided to both Parties.

[34] In summary, the application for bargaining Orders has been made in accordance with section 229 of the Act. I have considered the evidence and submissions provided by the Parties and I am satisfied that the requirements of section 230 of the Act have been met. Further I am satisfied that the action of TNT in refusing to grant those aspects of the discretionary benefits relating to paid union meeting time and BCOM leave has represented capricious or unfair conduct that undermines freedom of association or collective bargaining.

[35] However, in view of the circumstances of this case particularly involving the evidence provided by Mr Mackenzie from TNT, I am not satisfied that it is reasonable or desirable in all the circumstances to make bargaining Orders in this matter at this time.

[36] Accordingly the application must be declined at this time. The applicant is directed to provide any written request for further proceedings in this matter on or before 29 April 2011.

COMMISSIONER

Appearances:

Mr O. Fagir (TWU) for the Applicant.

Mr S. Woodbury and Ms J. Sutherland (Blake Dawson) for the Respondent.

¹ Transcript of proceedings (8 March 2011) PN471 - PN474

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