United Voice

[2012] FWA 9047

[2012] FWA 9047

FAIR WORK AUSTRALIA

DECISION

Fair Work Act 2009
s 229 - Application for bargaining orders

United Voice
(B2012/1714)

DEPUTY PRESIDENT SAMS SYDNEY, 24 OCTOBER 2012

Application for good faith bargaining orders - consideration of legislative scheme for making bargaining orders - breach of good faith bargaining requirements - parties not required to make concessions - rejection of proposals on reasonable financial grounds not a breach of good faith bargaining requirements - failure to give formal written reasons for rejecting proposals not a breach of good faith bargaining requirements - management discussing consequences of vote for agreement with employees not a breach of good faith bargaining requirements - organising vote of employees without reaching agreement with Union not a breach of good faith bargaining requirements - orders refused - application dismissed.

[1] This decision will determine an urgent application for good faith bargaining orders filed by United Voice (the ‘Union’) pursuant to s 229 of the Fair Work Act 2009 (‘the Act’) on 18 October 2012. The application arises from negotiations for a new enterprise agreement with the Catalina Country Club (the ‘Club’) in Bateman’s Bay, New South Wales. The urgency arises because one of the orders sought by the Union seeks the cancellation of a proposed vote of the employees to be conducted on 1 November 2012 for approval of the agreement. The application was listed for hearing on 22 October 2012 with Mr C Acev, Mr R Threlfall and Mr G Thom appearing for the Union and Mr C Langton from Clubs NSW appearing for the Club.

BACKGROUND

[2] The Union is a bargaining representative for some, if not the majority, of the employees of the Club and has been negotiating with the Club for a new enterprise agreement. There have been two meetings (held on 12 September and 3 October, 2012) between the Union and the Club in respect to the terms of a new agreement. The current agreement expired on 7 September 2012 , although a further wage increase is due to be paid in December 2012 based on the expired agreement’s own terms.

[3] Prior to the first meeting, the Club provided a draft agreement to the Union. In the first meeting, the Union submitted a list of changes it sought to be included in the agreement, including 3% annual wage increases. In a second draft, the Club made some changes to the first draft including assurances that existing rates of pay for current employees were to be retained while new employees would be paid the modern award rate. There was also an offer of 1.5% annual wage increases.

[4] At the meeting on 3 October 2012, the second draft was discussed. The Union raised the same issues that it had with the first draft and reiterated its earlier proposals. There were no further negotiations between the Club and the Union after this meeting.

[5] On 16 October 2012, the Union Organiser, Mr G Threlfall, received an email from Mr C Langton from Clubs NSW, advising that it was the Club’s intention to put the proposed agreement to a vote of employees on 2 November (subsequently changed to 1 November) after an information session to be conducted on 23 October 2012 at 5pm. A letter from the Club to the Union delegate, Mr R Thom, outlined the legislative processes for the Agreement’s approval, detailing benefits in the proposed agreement compared to the Award and advising of the voting process and information session. The letter said, in part, ‘The negotiations are now concluded and a final proposed Agreement has been established’.

THE RELEVANT LEGISLATIVE PROVISIONS

[6] The relevant statutory provisions governing this application are found at ss 228 - 231 of the Act 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.

229 Applications for bargaining orders

Persons who may apply for a bargaining order

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

Multi-enterprise agreements

(2) An application for a bargaining order must not be made in relation to a proposed multi-enterprise agreement unless a low-paid authorisation is in operation in relation to the agreement.

Timing of applications

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

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

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

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

(b) otherwise—at any time.

Prerequisites for making an application

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

(a) has concerns that:

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

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

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

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

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

Non-compliance with notice requirements may be permitted

(5) FWA may consider the application even if it does not comply with paragraph (4)(b) or (c) if FWA is satisfied that it is appropriate in all the circumstances to do so.

230 When FWA may make a bargaining order

Bargaining orders

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

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

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

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

Agreement to bargain or certain instruments in operation

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

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

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

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

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

Good faith bargaining requirements not met

(3) FWA must in all cases be satisfied:

(a) that:

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

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

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

Bargaining order must be in accordance with section 231

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

231 What a bargaining order must specify

(1) A bargaining order in relation to a proposed enterprise agreement must specify all or any of the following:

(a) the actions to be taken by, and requirements imposed upon, the bargaining representatives for the agreement, for the purpose of ensuring that they meet the good faith bargaining requirements;

(b) requirements imposed upon those bargaining representatives not to take action that would constitute capricious or unfair conduct that undermines freedom of association or collective bargaining;

(c) the actions to be taken by those bargaining representatives to deal with the effects of such capricious or unfair conduct;

(d) such matters, actions or requirements as FWA considers appropriate, taking into account subparagraph 230(3)(a)(ii) (which deals with multiple bargaining representatives), for the purpose of promoting the efficient or fair conduct of bargaining for the agreement.

(2) The kinds of bargaining orders that FWA may make in relation to a proposed enterprise agreement include the following:

(a) an order excluding a bargaining representative for the agreement from bargaining;

(b) an order requiring some or all of the bargaining representatives of the employees who will be covered by the agreement to meet and appoint one of the bargaining representatives to represent the bargaining representatives in bargaining;

(c) an order that an employer not terminate the employment of an employee, if the termination would constitute, or relate to, a failure by a bargaining representative to meet the good faith bargaining requirement referred to in paragraph 228(1)(e) (which deals with capricious or unfair conduct that undermines freedom of association or collective bargaining);

(d) an order to reinstate an employee whose employment has been terminated if the termination constitutes, or relates to, a failure by a bargaining representative to meet the good faith bargaining requirement referred to in paragraph 228(1)(e) (which deals with capricious or unfair conduct that undermines freedom of association or collective bargaining).

(3) The regulations may:

(a) specify the factors FWA may or must take into account in deciding whether or not to make a bargaining order for reinstatement of an employee; and

(b) provide for FWA to take action and make orders in connection with, and to deal with matters relating to, a bargaining order of that kind.

ORDERS SOUGHT

[7] The Union seeks the following orders be made by Fair Work Australia:

‘1. That within 24 hours of the Order being made the respondent and the Union confirms the date for the next meeting and agrees to a timetable for future meetings.

2. That the Respondent gives genuine consideration to proposals made by the Union and formally responds to those proposals.

3. That the Respondent refrain from conducting agreement negotiations with the employees (either individually or collectively) and recognise/include the Union in such discussions.

4. That the Respondent cancels the intended vote of the Agreement.’

SUBMISSIONS

For the Union

[8] Mr C Acev submitted that the conduct of the Club was in breach of the good faith bargaining requirements of the Act in that:

a) it had not given genuine consideration to the Union’s proposals before rejecting them;

b) it had not given formal written reasons for rejecting the Union’s proposals;

c) there was no response to the Union’s proposals between 3 October and 16 October;

d) a representative of management (Ms Hands) had been speaking to individual employees and made comments (‘threats’) that a failure to vote for the Agreement may result in the expired agreement being terminated with the further consequence that the Modern Award would apply; and

e) it had organised a vote of employees without reaching an agreement with the Union.

[9] Mr Acev relied on the following authorities and submitted:

‘6. The Union submits the following citation to the Tribunal Endeavour Coal Pty Ltd v Association of Professional Engineers, Scientists and Managers Australia (Collieries’ Staff Division) [2012] FWAFB 1891 (22 March 2012) as authority for the correct consideration of the good faith bargaining requirements of the Act.

The judgment of the Federal Court in Endeavour Coal sets out a detailed analysis of the operation of the good faith bargaining requirements at paragraphs 30 to 52.

The Court noted that the legislative purpose of section 228(1) was to impose a requirement to not just bargain in good faith, but to bargain to achieve an enterprise agreement, if possible.

7. The Court also cited the decision in

Public Sector Professional Scientifica Research, Technical, Communications, Aviation and Broadcasting Union v Australian Commission(ABC case) AILR Vol 36 No.21 374:

The full extract from the ABC Case is as follows:

“However, the determination of whether or not a negotiating party is “negotiating in good faith” may depend on the conduct of the party when considered as a whole. For example if a party is only participating in negotiations in a formal sense, but not bargaining as such then they may not be “negotiating in good faith”. Negotiating in good faith would generally involve approaching negotiations with an open mind and a desire to reach an agreement as opposed to simply adopting a rigid predetermined position and not demonstrating any preparedness to shift.”’

For the respondent

[10] Mr C Langton opposed the Union’s application for good faith bargaining orders and vigorously denied that the Club had breached its good faith bargaining obligations. On the contrary, Mr Langton said, it was the Union which had not changed its position from the first to the second meeting, whereas the Club had made changes to the first draft.

[11] Mr Langton said the Union had not sought a formal written response to its claims and the Club would have done so, if it had been asked. In any event, the Club had made clear that the reason for rejecting the Union’s proposals was due to its difficult financial circumstances, and it simply could not afford to make further concessions.

[12] Mr Langton said the Club was perfectly entitled to adopt the position it had and also to put its proposals to the employees to seek their views. He resisted the submissions that Management had been ‘pressuring’ individual employees and said that Ms Hands was simply informing employees of the options open to the Club if the Agreement was not approved.

[13] Mr Langton also relied on Endeavour Coal and the comments of His Honour Watson VP in The Broken Hill Town Employees’ Union v Barrier Social Democratic Club Ltd [2012] FWA 196 (‘Broken Hill Town Employees’ Union’) at paras [23] and [24]:

‘[23] I turn to the circumstances following the first vote. The Club contends that it only held one negotiation meeting between the first vote and the second vote. It also consulted with employees separately. It proposed a revised enterprise agreement and distributed it to all bargaining representatives well in advance of the negotiation meeting. It invited claims from other bargaining representatives in advance of the meeting. The BHTEU provided its claims and they were discussed at the meeting on 22 November 2011. Claims inconsistent with the Club’s draft were rejected.

[24] I do not consider that the Club breached any good faith bargaining requirement in following this process. Where a bargaining representative has an opportunity to participate in the process and present its position for consideration, the requirements to recognise, meet with and consider proposals of bargaining representatives are likely to be satisfied. The process for approval essentially then became a battle for the hearts and minds of the employees who decide whether to approve the agreement. I do not consider that the agreement reached with employees is tainted by any failure to follow the good faith bargaining requirements in the Act. Even if a valid application was before me I would not make a good faith bargaining order.’

CONSIDERATION

[14] At the outset, I note that the Union did not provide any direct evidence of the claims it made through Mr Acev’s submissions that the actions of the Club were unfair, capricious and in breach of the good faith bargaining requirements of the Act. This observation is not meant to be a criticism of the Union’s case, but it must be remembered that these allegations are serious ones, which require a proper evidentiary base for the making of the orders it seeks.

[15] On the other hand, I do not doubt the sense of frustration the Union has with the lack of acceptance of its proposals and, as I observed during the proceedings, the Club’s proposal to have different rates of pay for existing employees and new employees. That said, there is no statutory obligation on an employer to respond, in writing, to the bargaining representative’s proposals or to provide written reasons for its response.

[16] There are a number of prerequisites for the making of an application under s 229 of the Act. I am satisfied that the Union is a bargaining representative for the proposed enterprise agreement (s 229(1)). However, there must be some doubt that the Union has met its obligation under s 229(4)(b) of the Act in giving a written notice to the Club setting out its concerns that the Club was not meeting its good faith bargaining obligations. However, given my later conclusions in this matter, it is unnecessary to make any specific findings on that issue.

[17] In my opinion, the actions of the Club complained about by the Union do not amount to a breach of its good faith bargaining obligations under the Act, in particular, as claimed by the Union, breaches of subsections (d), (e) and (f) of s 228. I make this finding for the following reasons.

[18] Just because the Club did not give a favourable response to the Union’s claims, it does not follow that it did not give genuine consideration to the Union’s proposals. The Club gave its reasons for not accepting the Union’s proposals and, as I said earlier, was not required to give the response in writing. In any event, had it been asked, the Club would have done so. Even so, given the Club had modified its first draft and the Union had, on its own submission, not changed its position, it is somewhat disingenuous for the Union to assert that the Club was ‘simply adopting a rigid, predetermined position and not demonstrating any preparedness to shift’ as described in the ABC Case referred to me by Mr Acev. In any event, I do not apprehend that the Union seriously doubts the Club’s difficult financial position.

[19] Again, it needs to be emphasised that it is not a breach of the good faith bargaining provisions of the Act if a party adopts a position, on reasonable grounds, that it can make no further concessions because of its financial position. So much so was made clear by the Full Bench of FWA in Endeavour Coal at para [48] as follows:

‘[48] The good faith bargaining requirements in s.228 require bargaining representatives to “bargain” but do not require them to make concessions or to reach agreement. An order would be beyond power if it required a party to put a different negotiating position to that which it wished to put. However it is not beyond power to require a party to put its negotiating position. Such an order requires no concessions to be made.’

[20] As to the letter to Mr Thom, while I accept that the wording of the first paragraph is somewhat misleading in that one view of the sentence I referred to at para [5] could be that the Club and the Union had reached an agreement when they plainly had not, I do not consider that this would constitute a breach of the good faith bargaining requirements of the Act, in any relevant sense.

[21] The Union further submits that the action of a member of senior management, in speaking directly to individual employees, undermined collective bargaining. I disagree. On the Union’s submission, the Club had considered the negotiations concluded, so Ms Hands could not have been seeking to influence, let alone undermine, collective bargaining. The bargaining, as far as the Club was concerned, had ended. Mr Langton put that Ms Hands was merely informing employees what options the Club might have if the Agreement was not approved. I do not consider this action can be characterised as capricious or unfair conduct. It might be more appropriately described as lobbying to ensure a result the Club wanted to achieve. Conversely, the Union has every right to do exactly the same, and lobby its members to oppose the agreement’s approval should it decide to do so. In this respect, I am of the opinion that the decision of Watson VP in Broken Hill Town Employees’ Union is particularly apposite to this case. At para [23]-[24], His Honour said:

‘[23] I turn to the circumstances following the first vote. The Club contends that it only held one negotiation meeting between the first vote and the second vote. It also consulted with employees separately. It proposed a revised enterprise agreement and distributed it to all bargaining representatives well in advance of the negotiation meeting. It invited claims from other bargaining representatives in advance of the meeting. The BHTEU provided its claims and they were discussed at the meeting on 22 November 2011. Claims inconsistent with the Club’s draft were rejected.

[24] I do not consider that the Club breached any good faith bargaining requirement in following this process. Where a bargaining representative has an opportunity to participate in the process and present its position for consideration, the requirements to recognise, meet with and consider proposals of bargaining representatives are likely to be satisfied. The process for approval essentially then became a battle for the hearts and minds of the employees who decide whether to approve the agreement. I do not consider that the agreement reached with employees is tainted by any failure to follow the good faith bargaining requirements in the Act. Even if a valid application was before me I would not make a good faith bargaining order.’

[22] As to the request for an order cancelling next week’s vote of employees seeking approval of the agreement, I do not believe the Union has made out a persuasive case for such an order. Obviously, there is no requirement for bargaining representatives to reach an agreement before a vote of employees is proposed to be taken. Indeed, there have been numerous examples of vigorous, hard-fought campaigns by Unions to encourage employees to vote against an employer’s proposed agreement. In my view, unless there is a sound basis for believing the vote itself will be tainted by a failure of the Club to properly explain the terms of the agreement or a failure to comply with any of the mandatory pre-approval steps, then I consider it would not be appropriate to cancel the vote of employees. I have no such evidence before me in this case and consequently do not intend to make the order sought.

[23] While I acknowledge that there has only been two meetings between the Club and the Union, it seems an unassailable proposition that the negotiations have reached a stalemate. Given these circumstances, the negotiations for a new agreement have, in my view, reached the point where it is appropriate and desirable for the views of the employees to be sought. I note that an information session in which the Union is to participate, was held on Tuesday 23 October at 5pm. I understand the session was to include the presentation of financial information relevant to the Club’s current financial position.

[24] For the aforementioned reasons, I am satisfied that the Club has not breached the good faith bargaining requirements of the Act. In the result, I do not intend to make the orders sought by the Union and the application is dismissed. An order to this effect will be published contemporaneously with this decision. Nevertheless, if the parties seek further assistance from the Tribunal in the event of the agreement not being approved by the employees in the vote scheduled for 1 November, then I grant liberty for both, or either of them, to do so.

DEPUTY PRESIDENT

Appearances:

C Acev from the applicant.

C Langton for the Respondent.

Hearing details:

2012.

Sydney:

October 22

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