United Voice v Goodman Fielder Limited

[2011] FWA 2419

[2011] FWA 2419

FAIR WORK AUSTRALIA

REASONS FOR DECISION

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

United Voice
v
Goodman Fielder Limited
(B2011/2726)

and

Transport Workers’ Union of Australia
v
Goodman Fielder Limited

(B2011/2732)

COMMISSIONER CLOGHAN PERTH, 2 MAY 2011

Proposed protected action ballot by employees of Goodman Fielder Limited.

[1] On 5 April 2011, United Voice made application to Fair Work Australia (FWA) for a Protected Action Ballot Order pursuant to s.437 of the Fair Work Act 2009 (“the FW Act”) (B2011/276).

[2] On 7 April 2011, the Transport Workers’ Union of Australia (TWU) made application to FWA for a Protected Action Ballot Order pursuant to s.437 of the FW Act (B2011/2732).

[3] For the purposes of this Decision, I will refer to United Voice and the TWU as “the Applicants” and where appropriate, individually.

[4] The applications and draft orders which accompanied the applications are identical save the names of the different applicants.

[5] The employees who were to be balloted are employed by Goodman Fielder Limited (“the Employer”) who are members of the Applicant unions at the Employer’s Buttercup Bakery in Malaga, Western Australia and who will be covered by a proposed replacement enterprise agreement.

[6] The employees to be balloted currently have their conditions of employment regulated, in part, by the following:

• Buttercup Bakery Malaga (WA) - LHMU Bakehouse Union Collective Agreement 2008; and



• Buttercup Bakery Malaga (WA) Breadroom, Distribution and Maintenance Collective Agreement.

[7] The nominal expiry date of both agreements is 28 February 2011.

[8] Both applications were heard and determined conjointly on 11 April 2011. At the conclusion of the hearing, I determined that I must make Protected Action Ballot Orders as sought by the Applicants. The applications had been properly made pursuant to s.437 of the FW Act and I was satisfied that the Applicants had been, and are, genuinely trying to reach agreement with the Employer of the employees who were to be balloted. This Decision sets out my reasons for issuing the Orders sought in applications B2011/2726 and B2011/2732.

RELEVANT BACKGROUND FACTS

[9] The relevant background facts up to 8 March 2011 are set out in my Reasons for Decision issued on 31 March 2011 in applications B2011/2614 and B2011/2615.

[10] The Reasons for Decision in paragraph [9] relate to the same parties as these proceedings and similar applications for Protected Action Ballot Orders. In those matters (B2011/2614 and B2011/2615), the applications for Orders were made on 2 March 2011 and heard on 8 March 2011 At the conclusion of the hearing, I declined to make the orders requested by the Applicants and subsequently issued Reasons for Decision.

[11] To recap, the first bargaining meeting of the parties took place on 3 March 2011.

[12] Following my dismissal of the earlier applications on 8 March 2011, the Employer emailed the Applicants on 10 March 2011 proposing a second bargaining meeting on 22 March 2011.

[13] On 22 March 2011, a bargaining meeting of approximately three hours took place. It is uncontested that the discussion focused on the logs of claims from the three unions (United Voice, TWU and the Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union known as the Australian Manufacturing Workers’ Union (AMWU)) and the Employer. The discussions concluded on the basis that the Employer had to cost the claims from the three unions which involved financial elements. United Voice suggested, and it was agreed, it would draft some clauses and the Employer would provide a “draft working document” before the next meeting scheduled on 4 April 2011 1 (my emphasis).

[14] On 28 March 2011, United Voice provided to the Employer, on a “without prejudice” basis, “Draft clauses for items 7 and 18 of LOC [Log of Claims] re Goodman Fielder WA Union Collective Agreement 2011”. The draft clauses have the following “headings”:

• Relationship to Parent Awards



• Relationship with National Employment Standards



• Dispute Settlement Procedure



• Individual Flexibility Clause x 2



• Consultation for Major Change



• Union right of entry



• Union recognition



• Role of Union Delegates.

[15] The covering email to the Employer containing the draft clauses states, “should you have any queries, please do not hesitate to contact myself, Sam or Daniel to discuss” 2.

[16] On 30 March 2011, the Employer, on a without prejudice basis, provided a draft working document. The covering email to the working document contains the following statements, in part:

“In short - what I have attempted to do is just give us a base document that we can amend going forward during our negotiations. It is based on the old Buttercup/LHMU 2008 Agreement...You will see that the only changes at this point are:

• Insertion of model clauses where required;

• Re-order clauses where there was more sensible approach;

• Delete clauses that were no longer operational.

I haven’t drafted any new clauses for matters which we have already agreed, although perhaps we can talk about that process next Monday as to who will draft what and how we will swap them for review.

Finally - please excuse any errors or omissions if (or when!) you find them. This is intended really as a working document.”  3. (my emphasis)

[17] The Employer’s representative also advised in the email of his contact details to discuss any content of the working document prior to the meeting.

[18] On 4 April 2011, a further bargaining meeting took place (“the third bargaining meeting”). In the meeting, the Employer explained its costings in relation to some of the claims. The Employer also advised that the clauses provided by United Voice had not been considered. Further, and finally, the Employer provided a wages offer to the three unions which, although being rejected unanimously by the Applicants’ bargaining representatives, would be taken to their respective membership for consideration.

[19] As I have already indicated, on 5 April and 7 April 2011, United Voice (B2011/2726) and the TWU (B2011/2732) made their respective applications for these Protected Action Ballot Orders.

[20] RELEVANT STATUTORY FRAMEWORK

• Section 437 - Application for a protected action ballot order

Who may apply for a protected action ballot order

(1) A bargaining representative of an employee who will be covered by a proposed enterprise agreement, or 2 or more such bargaining representatives (acting jointly), may apply to FWA for an order (a protected action ballot order ) requiring a protected action ballot to be conducted to determine whether employees wish to engage in particular protected industrial action for the agreement.

...

• Section 441 - Application to be determined within 2 days after it is made

(1) FWA must, as far as practicable, determine an application for a protected action ballot order within 2 working days after the application is made.

...

• Section 442 - Dealing with multiple applications together

FWA may deal with 2 or more applications for a protected action ballot order at the same time if:

(a) the applications relate to industrial action by:

(i) employees of the same employer; or

(ii) employees at the same workplace; and

(b) FWA is satisfied that dealing with the applications at the same time will not unreasonably delay the determination of any of the applications.

• Section 443 - When FWA must make a protected action ballot order

(1) FWA 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) FWA 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.

APPLICANTS’ CASE

[21] The Applicants’ case is that the “procedural requirements” of the FW Act have been satisfied concerning the making of the applications and each Applicant has been and is genuinely trying to reach an agreement with the Employer of the employees to be balloted.

[22] Mr Dane, Organiser with United Voice, gave evidence by agreement on matters occurring since 8 March 2011 and that the Applicants were genuinely trying to reach agreement.

[23] On 7 April 2011, the Applicants, in an endeavour to expedite proceedings, sought the views of the Employer on these applications. The Applicants became aware of the Employer’s opposition to the applications on the day of the hearing (11 April 2011).

EMPLOYER’S CASE

[24] The Employer did not contest the satisfaction of “procedural requirements” of the FW Act for the making of these applications but opposed the making of the orders on the grounds that the Tribunal could not be satisfied that the Applicants had been, and are, genuinely trying to reach agreement with the Employer.

[25] The grounds of the Employer’s objections can be divided into two (2) areas; that the applications are premature and that the Applicants are seeking unlawful terms or non-permitted matters in the proposed replacement enterprise agreement. In summary, the objections are as follows.

Applications are premature

[26] The Employer submits that the applications are premature to the extent that at the time of making the applications (5 and 7 April 2011) and at the date of the hearing (11 April 2011), the Applicants had not met with their respective members as discussed at the third bargaining meeting and had not specifically:

• discussed the Employer’s wage proposal; and



• as a result, [the membership] have not accepted or rejected the wage proposal; or



• provided any substantial response to the Employer’s wage proposal.

[27] The Employer relies upon Total Marine Services Pty Ltd v Maritime Union of Australia[2009] FWAFB 368 (the Total Marine Services decision) at [7] for its contention.

Unlawful terms or non-permitted matters

Consultation clause

[28] The Employer submits that the draft consultation clause mandates union representation/involvement in the consultation process where major change occurs. In doing so, the draft clause includes circumstances where the affected employee may not be a union member, or may be a union member, but not wish the union to represent them in consultation.

[29] The employer refers to a number of provisions in the FW Act which it contends would be breached if this draft clause was adopted.

Union recognition

[30] In short, the Employer submits that the draft clause requires it “to allow the union delegates and/or officials thirty minutes at inductions to address the participants”.

[31] The Employer contends that the draft clause relating to right of entry to include inductions “would potentially be inconsistent with s.484(c) of the FW Act, which provides that discussion is limited to employees who wish to participate in those discussions, and also contends that there is no right of the employees to refuse to meet with the union delegate and/or officials.

[32] The Employer relies upon, in relation to this draft clause, Australian Industry Group [2010] FWAFB 4337 at [34].

Dispute resolution procedure

[33] The Employer contends that the proposed draft dispute resolution clause offends, or is an unlawful term, because it is broader in scope than provided in s.186(6) of the FW Act. The scope of the draft clause includes “any grievance” and is not limited to matters arising under the proposed agreement or the National Employment Standards.

Contractor clause

[34] The proposed draft contractor clause requires the Employer to make it a condition of a contractor’s engagement that the Employer require the contract to provide, at a minimum, the same terms and conditions as the Employer’s employees.

[35] The Employer relied upon, in its submission concerning this draft clause, Asurco Contracting Pty Ltd v Construction Forestry, Mining and Energy Union[2010] FWAFB 618 (the Asurco Contracting decision) at [12], and Australian Postal Corporation v Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia[2009] FWAFB 599 (the Australian Postal Corporation decision) at [44] and in ADJ Contracting Pty Ltd Enterprise Agreement 2010-2014 [AE884506  PR507346] part heard by Senior Deputy President Acton.

[36] In summary, the Employer submitted that the applications should be dismissed because they are premature and/or draft clauses which are unlawful or non-permitted matters.

DISCUSSION AND CONCLUSION

[37] Bargaining or negotiation for a replacement enterprise agreement does not occur in a vacuum. While Counsel for the Employer essentially focussed on submissions relating to what he described as the premature nature of the applications and/or draft clauses which he asserted are unlawful or non-permitted matters, the reality is that bargaining always occurs within an environment that has a history, is fluid, and increasingly involves a blend of full-time officials and shop floor delegates.

[38] The recent history of bargaining for the replacement agreement which is the subject of these applications has included a protracted period of approximately eight (8) months which is the time it took before holding the first bargaining meeting. This occurred after the nominal expiry date of the current agreements.

[39] Currently, bargaining can be described as occurring at plant level and negotiations, in the vernacular, are getting down to the “nitty gritty”.

[40] The parties have exchanged their logs of claims and are attempting to influence the other side of the merits of their particular claims. It is appropriate and not unusual for the Employer to cost the claims being made by the union bargaining representatives. Similarly, I apprehend that the union bargaining representatives are attempting to persuade the Employer of the force of its arguments relating to wage increases and job security.

[41] In summary, each party, at this stage, has its hopes, expectations and fears. However, as I have already stated, negotiations do not stand still and the parties are moving towards the resolution stage with the drafting, on a “without prejudice” basis, of clauses which, following further discussions, may form the basis of the replacement enterprise agreement.

Premature applications

[42] With respect to the Employer’s submissions that the applications are premature, I find as follows:

[43] The Employer is bargaining with its employees through their bargaining representatives. The Applicants, as bargaining representatives, stated at the third bargaining meeting that, despite rejecting the Employer’s wage offer without reservation, they would take the offer back to their respective memberships. As at the time of the applications, this consultation with the membership had not occurred. For this reason the Employer submitted that the Applications were premature because their wage offer had not been considered and a response provided.

[44] The FW Act provides for the Tribunal to be satisfied that the Applicants have been and are genuinely trying to reach agreement. In my view to say that the applications should be dismissed as being premature, because the Applicants have not discussed this one issue with their membership, is tenable. The timing of such discussions is a matter for the Applicants and as the Full Bench stated in the Total Marine Services decision, the FW Act does “not require that sort of supervision” 4. Such matters of consultation and discussion between bargaining representatives and employees, if it is relevant, can take place over time. The lack of instant action cannot be said, in these circumstances, to demonstrate a lack of genuineness on behalf of the Applicants to the extent of necessitating the applications being dismissed.

Non-permitted matters

[45] The first matter to note is that the parties are drafting clauses on a “without prejudice” basis; that is, in regard to the matter in question, each party is stating that it should not be held to the position it has documented, but is open or willing to change its position.

[46] Secondly, the parties agreed that United Voice should provide the disputed draft clauses.

[47] Thirdly, the disputed draft clauses were the first draft of such matters and, until the day of the hearing, the Applicants did not know, or appreciate, the Employer’s objection to the draft clauses.

[48] Finally, and importantly, the draft clauses were for the purposes of a “base” or “draft working document” which was intended to be subject to “review”.

[49] It seems that in good faith, the parties were preparing a common principal working document as the next step of bargaining; such documents are for the purpose of review, counter proposal and compromise.

[50] Notwithstanding the good faith process to obtain a draft working document, the Employer has now characterised United Voice’s draft clauses as illustrating that the Applicants have not been, and are not genuinely trying to reach agreement with the Employer.

[51] Before I consider the Employer’s submission in relation to Australian Postal Corporation decision, it is necessary to dispense with two observations in relation to the alleged unlawful and/or non-permitted matters and consider the objects of the Division relating to protected action ballots.

[52] My first observation is that following the first bargaining meeting on 3 March 2011, the Applicants and the AMWU amended their log of claims in relation to the use of contractors to rectify what the Employer considered a non-permitted matter. This action, of itself, illustrates a preparedness and pursuit on the part of the Applicants to achieve a replacement enterprise agreement which meets the statutory requirements of the FW Act.

[53] Secondly, the Employer’s Counsel invited me to conclude that, because the disputed draft clauses were created and provided to the Employer on 28 March 2011 and the applications were lodged on 5 and 7 April 2011, if the protected action ballot orders were made and the ballot successful, the protected industrial action would be in pursuit of unlawful and/or non-permitted matters. I am unable to accept this conclusion for at the time the Unions made these applications, they had not received the Employer’s position in relation to the disputed draft clauses; it as possible that the Employer may have agreed to the draft clauses, and any industrial action that may take place would then relate to other matters, such as wages.

[54] It is important when considering the application to consider the relevant statutory provisions.

[55] The object of Division 8 - Protected Action Ballots is set out in s436 of the FW Act and is as follows:

436 Object of this Division

The object of this Division is to establish a fair, simple and democratic process to allow a bargaining representative to determine whether employees wish to engage in particular protected industrial action for a proposed enterprise agreement.

Note: Under Division 2, industrial action by employees for a proposed enterprise agreement (other than employee response action) is not protected industrial action unless it has been authorised in advance by a protected action ballot.

[56] While it may not be necessary to have regard to the extrinsic material, the Explanatory Memorandum to the Fair Work Bill 2008 also sets out in paragraphs 1755, r.284, r.285 and r.287 the following, which is of assistance:

“1755. Clause 436 states that the object of the Division is to provide bargaining representatives with access to a fair, simple and democratic secret ballot process in order to determine whether employees wish to take certain types of protected industrial action. The Division contains facilitative provisions designed to provide a means for assessing the level of support for protected industrial action. The process the Division establishes is not intended to delay or frustrate the taking of protected industrial action by employees.

r.284: A precondition for taking industrial action will be that the participants are genuinely trying to reach agreement and are complying with any good faith bargaining orders in place.

r.285: The requirement to hold a mandatory secret ballot authorising industrial action will be retained. However, provisions will be streamlined and simplified, impacting positively on users of the system. Further details are provided below.

r.287: The requirements are aimed at ensuring that industrial action is only taken during genuine bargaining and not for spurious reasons. This is consistent with minimising the economic impact of industrial action.” (my emphasis)

[57] I now turn to the Australian Postal Corporation decision.

[58] Counsel for the Employer expressed strongly that the Tribunal could not, based on the Australian Postal Corporation decision, find that the Applicants had been and were genuinely trying to reach agreement.

[59] The Full Bench in Australian Postal Corporation decision came to the conclusion that:

“[59] As a result, the CEPU has been and is pursuing as a substantive term of the proposed enterprise agreement a claim in respect of contractors which is not about a permitted matter for a proposed enterprise agreement under the FW Act.

[60] Since the CEPU has been and is pursuing as a substantive term of the proposed enterprise agreement a claim in respect of contractors which is not about a permitted matter, we were not satisfied the CEPU has been, and is, genuinely trying to reach an agreement with Australia Post, being the employer of the employees to be balloted.”

[60] In reaching this conclusion, the Full Bench considered, in my view, the following factors:

• the disputed clause was a substantive term of the proposed enterprise agreement - it was not minor, trivial or ancillary;



• the disputed clause contained “provisions restricting or qualifying the employer’s right to use independent contractors”;



• the disputed clause was critical to the proposed enterprise agreement;



• the extent to which the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU) pursued the disputed clause from December 2008 to July 2009;



• the irreconcilable differences between the parties on the disputed clause; and



• the applicable legislative provisions and relevant auxiliary material.

[61] Shortly put, the Full Bench in the Australian Postal Corporation examined the content of the disputed clause, the conduct and position of the CEPU on the disputed clause, and applied the statutory regime.

[62] In my view, it does not do justice to the Australian Postal Corporation decision to simply say, as the Employer submits, that because an applicant is pursuing a claim which, allegedly, is not about a permitted matter, then the applicant has not, and is not, genuinely trying to reach agreement with the employer. The Australian Postal Corporation decision, in my view, is not, nor could it be, intended as a “straightjacket” on the Tribunal on such matters.

[63] As I understand it, the Australian Postal Corporation decision was determined on the facts, and the important elements or principles that should be considered when assessing bargaining genuineness is materiality, clarity of claim and sustainable action to achieve the claim.

[64] I find that the circumstances in which the Full Bench found itself in the Australian Postal Corporation decision are significantly different to these particular applications. It would be perverse to arbitrarily apply the conclusion to the Australian Postal Corporation decision without examining and considering the considerations which led to that conclusion as set out in paragraph [60].

[65] In these applications, the context of the disputed clauses, with maybe the exception of the contractor draft clause, were at the periphery of content of the proposed agreement. The finer details and understanding of the draft clauses were not exchanged between the parties because the Employer had not accepted the invitation of the Applicants to seek clarification; they were not discussed at the next bargaining meeting and the applications were brought on for hearing. Finally, it would distort the meaning of sustainable action to include within this expression the Applicant’s one email of 28 March 2011 containing the “without prejudice” draft clauses.

[66] There was no evidence put to the Tribunal that the disputed “without prejudice” draft clauses were for a purpose other than that of establishing a draft working or base document for negotiations. From the evidence, I was not able to discern a purpose of the Applicants to clearly include material terms which were non-permitted matters on a sustained basis.

[67] As I am unable to support the Employer’s deemed purpose of the inclusion of the disputed draft clauses, I also am unable to reach their conclusion, which is that the Applicants have not, and are not, genuinely trying to reach agreement.

[68] I note that the Applicants’ witness conceded that the disputed draft clauses were important and contained in other enterprise agreements. The Employer seized upon these remarks as illustrating their material nature. However, relatively speaking, I apprehended the Applicants had other terms, besides the disputed draft clauses, which they considered more important and meaningful. The fact that the disputed draft clauses are contained in other agreements (if they are) is, in my view, neither here nor there, in view of the provisions of the FW Act.

[69] In closing submissions, it was notable that Counsel for the Employer, after outlining his arguments why particular disputed draft clauses offended the FW Act, stated, “this may be an issue just simply for redrafting” 5 and “Again, this may be a drafting issue”6 and “...it’s got the potential to offend...”7.

[70] In contrast, Mr Clark submitted, “clearly, if people don’t want to be represented by the union, that’s entirely up to them” 8 and “now, we’ve already made it clear right up front that we’re not going to do anything contrary to section 194F or G of the Act”9. Mr Clark’s concluding comment on what was evident in proceedings is that the Applicants are not seeking to include in the proposed replacement agreement, any unlawful clauses or non-permitted matters.

[71] I also note, in these applications, the Employer submitted that the draft contractor clause is a non-permitted matter, however, a reading of the Asurco Contracting decision sets out the real position which is:

“[13] In any event, the obligation sought to be imposed on the employer is to require contractors to be paid, as a minimum, the amounts in the agreement applicable to employees. The existence of another enterprise agreement with higher or lower terms does not preclude any such obligation being observed, nor does it follow, as was submitted by Asurco, that such a provision would lead to a breach of the general protections provisions of the Act.”

[72] In conclusion, clearly, unlike the Australian Postal Corporation decision, bargaining on the disputed draft clauses in these applications has not been protracted to the extent that the Applicants have arrived at an entrenched position. On the contrary, the Applicants are cognizant of not including unlawful terms and have revised their position on one occasion during bargaining for this reason.

[73] In summary, the Applicants have demonstrated a preparedness to adopt an alternative position when it comes to bargaining. The Applicants’ conduct is not exceptional and is part of the negotiating process. This is especially the case when the parties are getting down to the “nitty gritty” of exchanging draft clauses. The extent to which the Applicant’s actions and content of the disputed draft clause demonstrate a lack of genuineness falls far short of what was found in the Australian Postal Corporation decision.

[74] For these reasons, I found that the Applicants had made the applications within the provisions of the FW Act and made the Orders as requested by the Applicants on 11 April 2011.

COMMISSIONER

Appearances:

Mr T Clark, for United Voice.

Ms M Papa, for the Transport Workers’ Union of Australia.

Mr A Wong, of Norton Rose with Mr A Woods, for Goodman Fielder Limited.

Hearing details:

2011:

Perth:

11 April.

 1   Exhibit A1

 2   Exhibit A1-11

 3   Exhibit A1-12

 4   [2009] FWAFB 368 at para 34

 5   PN 244

 6   PN 247

 7   PN 247

 8   PN 261

 9   PN 265

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