Viva Energy Refining Pty Ltd v Australian Workers' Union, The

[2019] FWC 2489

[2019] FWC 2489

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.229—Bargaining order

Viva Energy Refining Pty Ltd
v
Australian Workers’ Union, The
(B2019/266)

DEPUTY PRESIDENT COLMAN MELBOURNE, 11 APRIL 2019

Application for a bargaining order – condition placed on further bargaining meetings – condition unrelated to bargaining – whether reasonable to make an order – scope of order

[1] Viva Energy Refining Pty Ltd (Viva Energy) has made an application for a bargaining order under s 229 of the Fair Work Act 2009 (Act) directed at the Australian Workers’ Union (AWU) in connection with bargaining for a proposed enterprise agreement to cover employees at the company’s Geelong refinery. The application is opposed by the AWU.

[2] The employment of relevant employees is covered by the Viva Energy Refining Enterprise Agreement 2018 - Geelong Operator Employees (2018 Agreement) which has a nominal expiry date of 14 June 2019. On 8 January 2019, Viva Energy agreed to commence bargaining for an enterprise agreement to replace the 2018 Agreement. The AWU is the default bargaining representative for its members at the site.

[3] The central contention of Viva Energy is that the AWU has refused to attend further bargaining meetings until the company agrees to sign a deed in respect of redundancy arrangements associated with the 2018 Agreement, and that it is thereby in breach of various good faith bargaining requirements prescribed by s 228 of the Act. The company also contends that the union is seeking to delay the bargaining process.

[4] The AWU acknowledges that it has told the company that it will not attend bargaining meetings until the company signs the deed. It says that this condition was passed as a resolution at a mass meeting of members, and that the union intends to observe it. The union denies seeking to delay negotiations. It contends that it has not contravened the good faith bargaining requirements.

[5] The factual background to this application is largely uncontested and is addressed in the witness statement of Ms Leah Richards, who is the company’s lead manager for people and culture. Ms Richards gave evidence at the hearing and was cross-examined by the AWU. Certain additional information was tendered by the AWU at the hearing. The union did not lead evidence.

[6] The first bargaining meeting between the company and the AWU occurred on 12 February 2019. It was attended by the company’s lead negotiator, Mr Glen Pasque, as well as Ms Richards. The AWU was represented by Mr Sam Wood, its national vice president, and a number of employee representatives and union delegates known as the ‘site executive’, including Mr Stephen Jones and Mr Scott Grimes.

[7] This meeting did not go well. The parties disagreed about a number of matters relating to the process that they should adopt in the course of bargaining. On 14 February 2019, the AWU filed an application seeking the assistance of the Commission to resolve some of these disagreements. A conference was held before me on 1 March 2019, as a result of which the parties agreed on an agenda for the next bargaining meeting.

[8] A second bargaining meeting took place on 13 March 2019. At this meeting the AWU stated that it wished to receive the company’s log of claims before providing its own log to the company. Although the company did not consider this to be consistent with the agreed position arising from the conference in the Commission, it provided to the union a list of the ‘themes’ that would appear in its log of claims. Thereafter the AWU provided its log to the company. Several problems arose at this meeting.

[9] First, the parties disagreed about the taking of notes. Mr Wood asked whether the company’s minute-taker would be taking notes on behalf of all participants, or only for the benefit of the company. The company advised that the latter was the case. Mr Wood then said that he could not continue discussions without his own note-taker. The company considered this position not to be consistent with bargaining protocols it had provided to the union and employee representatives prior to the first bargaining meeting. The AWU’s position was that it had never agreed to these bargaining protocols.

[10] Secondly, in the course of the meeting, Mr Pasque advised the AWU that a deed concerning redundancy arrangements associated with the current 2018 Agreement had not been formalised, by which he meant that the company had not signed it. Such a deed had been made in connection with the enterprise agreement that preceded the 2018 Agreement, the Viva Energy Refining Enterprise Agreement 2014 - Geelong Operator Employees (2014 Agreement). As I explain further below, the negotiations for the 2018 Agreement contemplated a deed being made in respect of that agreement. A deed document exists, but it has not been executed.

[11] According to Ms Richards, the company raised this issue at the meeting on 13 March 2019 ‘in the interests of transparency.’ Perhaps it was expected that this issue would be controversial. In any event, the company representatives stated at the meeting that although the company had not executed the document, it agreed to observe the terms of the deed for as long as the 2018 Agreement was in term. The employee representatives stated that they were concerned about the legal status of the deed. The company’s position was that the deed was not relevant to the bargaining for a new enterprise agreement.

[12] A third bargaining meeting was scheduled to occur on 26 March 2019. However on 22 March 2019 Mr Wood sent an email message to Ms Richards stating the following:

‘Hi Leah, I have been advised that until the Deed regarding Redundancy is signed I and the site Executive is not to hold any meeting with the company regarding replacement of the EBA. I suggest that we keep the current dates and times but until the company advises me the Deed is signed both I and the site executive will not be attending the planned meeting in accordance with the mass meeting resolution.’

[13] On 25 March 2019, Mr Pasque wrote a letter to Mr Wood in which he stated that the company considered the AWU was not meeting the good faith bargaining requirements set out in section 228 of the Act. He stated that the company remained committed to bargaining for a new enterprise and that discussions about the redundancy deed were not relevant to bargaining. He said that the union’s refusal to continue to attend bargaining meetings was unreasonable and capricious. He sought a response by close of business on 28 March 2019 and said that he expected bargaining representatives to attend the next scheduled bargaining meeting on 26 March 2019.

[14] The next day Mr Wood sent a message to Mr Pasque requesting a telephone call about the matters raised in the previous day’s letter. Mr Pasque replied, stating that the bargaining meeting would take place at 2.00pm that day and that after the agenda items had been discussed, other issues could be raised. To this Mr Wood replied as follows:

‘I take it that this means that you will not talk to me, and I won’t break a mass meeting resolution so all that equates to no talks, shame.’

[15] Mr Pasque asked Mr Wood to reconsider, but a short while later Mr Wood sent a further email to Mr Pasque stating the following:

‘As I said you are not talking and I will not break the resolution passed by a mass meeting. Are you asking me to meet with you knowing that by meeting with you that is breaking the resolution, and if I say you are not talking that means your not talking.’

[16] On 26 March 2019 Mr Pasque, Ms Richards and other company representatives attended the third bargaining meeting at the scheduled commencement time, however no AWU or employee representatives were present.

[17] Shortly afterwards Mr Pasque spoke with Mr Jones on the telephone. Mr Jones said that he would not be attending the bargaining meeting because members were ‘aggrieved’ about the redundancy deed not having been made legally enforceable. He said that he had understood that the deed formed part of the 2018 Agreement. Later, Mr Jones sent to Mr Pasque a copy of Viva Energy’s email to the union dated 16 May 2018, in which it accepted the AWU’s offer to ‘rollover’ the 2014 Agreement for 12 months. That document contains a small table summarising the agreement, stating ‘Increase: CPI + 1.5%’ and ‘Roll over of the current EBA Document and Conditions for 12 months – including the Redundancy Deed’.

[18] Later that afternoon Mr Pasque spoke with Mr Wood on the telephone. Mr Wood said words to the effect that the delegates had not reacted well to the news that the deed had not been made legally enforceable, but that he was confident that if the deed were executed by Viva Energy, negotiations could recommence.

[19] On 29 March 2019, Mr Pasque sent an email to Mr Wood and the employee representatives, including Mr Jones and Mr Grimes, and copied to Ms Richards, in which he stated that the company had serious concerns that the AWU and the employee representatives were not complying with their good faith bargaining obligations and that the company intended to make an application in the Commission to address those concerns. Mr Pasque stated that the next bargaining meeting was scheduled for 2 April 2019 at 2.00pm and that the company expected all representatives to attend. Later that day Mr Wood replied, stating that the AWU ‘will not be attending until the deed is signed as moved by a mass meeting.’

[20] On 2 April 2019, Mr Pasque, Ms Richards and other company representatives arrived at the scheduled commencement of the next bargaining meeting. No union or employee representatives attended.

[21] On 3 April 2019, Mr Pasque sent an email to Mr Wood and other employee bargaining representatives, stating that he was disappointed that they had not attended the scheduled bargaining meeting the day before and that he was concerned that the union was seeking to delay negotiations for a new enterprise agreement by focusing on matters outside the negotiations. He stated that a mass meeting resolution did not displace obligations to bargain in good faith, and that the company expected all parties to attend the next scheduled bargaining meeting on 9 April 2019 at 2.00pm.

[22] That evening, Mr Wood replied to Mr Pasque stating:

‘I have been involved in the trade union movement for over 45 years and I have never worked against a mass meeting resolution. I understand that mass meeting resolutions mean little to you but they mean a great deal to me.

As per the mass meeting resolution until the company signs the Deed AWU will not be attending any meeting so let’s make it simple sign the deed and AWU will be there’

[23] Company representatives attended the scheduled meeting on 9 April 2019, but again no union or employee representatives were present.

Contentions of the parties

[24] The company contends that the AWU has contravened three of the good faith bargaining requirements set out in section 228(1) of the Act. It says that the union has failed to attend and participate in meetings at reasonable times (s 228(1)(a)); not given genuine consideration to the company’s proposals or given reasons for its responses to those proposals (s 228(1)(d)); and not refrained from capricious or unfair conduct that undermines collective bargaining (s 228(1)(e)).

[25] The conduct of the AWU that is the primary focus of the application is the condition placed on further bargaining. The company says that by refusing to attend bargaining meetings until the company signs a deed concerning redundancy arrangements the union has contravened each of the three requirements above. However the company also impugns the union’s conduct more broadly by contending, in essence, that the union has not behaved reasonably during the bargaining meetings that have occurred and that it is seeking to delay negotiations. As a possible motive for the union’s delay, the company points to the nominal expiry date of the agreement in June 2019, after which protected industrial action in support of bargaining claims becomes available.

[26] The AWU acknowledges that it is observing the resolution of the mass meeting. It tendered a copy of this resolution at the hearing and reiterated that it would not attend bargaining meetings, if to do so would go against the resolution. In opposing the company’s application for a bargaining order, the union contended that its conduct in supporting the concerns of its members about the company’s failure to sign the redundancy deed was reasonable. However, it is not clear to me how exactly the union contended that it was complying with the obligation to ‘attend and participate in meetings at reasonable times’.

Consideration

[27] Sections 229 and 230 of the Act prescribe the requirements which must be met before a bargaining order can be made. I briefly address these requirements, as they relate to the present matter.

[28] Section 229(3) states that if an enterprise agreement applies to employees who will be covered by a proposed enterprise agreement, an application for a bargaining order must be made not more than 90 days before the nominal expiry date of the agreement. The application in this case was made on 29 March 2019, which is not more than 90 days before the expiry date of the 2018 Agreement on 14 June 2019.

[29] Section 229(4) provides that a bargaining representative may only apply for a bargaining order if it has concerns that one or more of the bargaining representatives for the agreement have not met, or are not meeting, the good faith bargaining requirements. The applicant must have given a written notice setting out those concerns to the relevant bargaining representatives, and given them a reasonable time within which to respond to those concerns. These requirements are met in this case. In particular, an appropriate written notice was given to the AWU by the company on 25 March 2019, and the application was not lodged for a further four days, which I consider to be a reasonable period to allow for a response. Further, the company does not consider the union to have responded appropriately to the concerns.

[30] Section 230 then provides as follows:

‘(1) The FWC 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) the FWC is satisfied that it is reasonable in all the circumstances to make the order.

(2) The FWC 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;

…

(3) The FWC 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.

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

[31] In the present case, an application for an order has been made and the requirements of s 230 have been satisfied. In this regard, I am satisfied that the employer has agreed to bargain for a proposed agreement (s 230(2)(a)), and that the company has complied with the requirement of s 229(4) by notifying the AWU of its concerns (s 230(3)(b)). I am also satisfied, for the reasons that follow, that the union, being a bargaining representative for the agreement, has not met and is not meeting the good faith bargaining requirements (s 230(3)(a)).

[32] Section 228 prescribes good faith bargaining requirements. It states:

‘(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.’

[33] In my opinion the AWU has not, and is not now, meeting the requirement of attending and participating in meetings at reasonable times. It did not comply with this requirement by not attending the meetings scheduled for 26 March 2019, 2 April 2019 or 9 April 2019. It is not meeting this requirement now by refusing to meet until the company meets a condition that is extraneous to the bargaining. There was no suggestion that the particular times or dates arranged for these meetings were not reasonable. The only justification provided by the AWU for not attending these meetings was that a mass meeting had passed a resolution that no further bargaining meetings be attended by the union or ‘site executive’ until the company had signed the redundancy deed. Two elements may be noted here.

[34] First, the fact that a mass meeting has passed a resolution may be a matter of industrial relevance and importance, particularly for the AWU which after all represents the interests of many of these individuals, however it does not confer on the subject matter of the resolution any special legal status. A resolution of the kind that is at issue in this matter is simply a statement of what the employees wish to occur. It is no more or less legitimate than a position that might be adopted by the union itself or any other party to the bargaining.

[35] Secondly, the condition that has been imposed on the union’s attendance at further meetings is unrelated to bargaining. It requires the company to execute a deed that concerns redundancy benefits for employees whose employment is covered by the 2018 Agreement, that is, the current enterprise agreement. I could accept that, depending on the circumstances, a bargaining representative might not contravene s 228(1)(a) by refusing to meet until such time as the other side showed a willingness to bargain on a particular matter of importance. In such a case there might be no point in the parties’ meeting, and the time proposed for any meeting might therefore not be reasonable. But in the present case, the condition does not relate to the bargaining for a proposed new enterprise agreement. In my view it does not even relate to past enterprise bargaining, as the subject matter of the deed was never proposed to be included in the 2018 Agreement, but was intended to sit outside of it.

[36] For the purposes of s 230(3)(a), it is sufficient for me to identify one good faith bargaining requirement that is not being met. However, I consider that, in connection with its refusal to attend and participate in meetings at reasonable times, the AWU is also failing to consider proposals of the company. It is not considering proposals to meet and resume bargaining. Instead, the union has told the company that it will not consider proposals for further meetings until the deed is signed.

[37] For completeness, I note that I would not describe the union’s condition on the resumption of bargaining as unfair or capricious as the union has at least a rationale for its position, which I accept reflects a genuinely held concern, even though it is not one that relates to bargaining.

[38] Section 230(1)(c) then provides that the Commission may make a bargaining order only if it is satisfied that it is reasonable in all the circumstances to make the order. Here I return to the broader ‘merits’ of the concern raised by the union and its members about the company not having executed the redundancy deed.

[39] The union submitted that Viva Energy did not come to the Commission with ‘clean hands’, and that, although this doctrine is one from the realm of equity, the Commission could have regard to it. I would instead formulate the matter this way. The Commission’s consideration of whether it is reasonable in all the circumstances to make a bargaining order allows it to take into account the conduct of other parties and bargaining representatives, and, in this case, the company. However, the conduct that I consider most relevant is the conduct of the parties in and in relation to bargaining, rather than conduct that may have given rise to grievances that are unrelated to bargaining.

[40] If the employer had behaved unreasonably in the course of bargaining, or its conduct had caused or led the other party to take action that breached the good faith bargaining requirements, the Commission might conclude that it would not be reasonable to issue a bargaining order. But this is not such a case.

[41] The union complains that the company has not executed a deed which sets out certain redundancy obligations. I take note of the fact that the agreement between the company and the AWU to roll over the 2014 Agreement specifically referred to a roll-over of the agreement for 12 months ‘including the Redundancy Deed.’ The deed document was not in evidence in these proceedings however the particular terms of the deed do not appear to be controversial. Rather, the grievance concerns the fact that the company has not taken steps to make that document legally binding.

[42] The letter from the company to Mr Wood dated 16 May 2018, in which the 12 month roll over of the 2014 Agreement was agreed, does not specifically state that the deed would be re-executed. Perhaps so much can fairly be implied. I also take note of a document handed up by Mr Wood during the hearing showing an email Mr Jones sent to Ms Craven dated 5 December 2017, in which he stated that the expectation of the site executive and the AWU was that the deed would be signed by the company as a matter of urgency. In her reply of 17 December 2017, Ms Craven stated that the document was with the company lawyer, and that the directors would sign it once ‘this process’ had been finalised.

[43] The answer to the question of why the company has not signed the deed is not in evidence. However, I do not consider this proceeding to be an appropriate forum to investigate this matter or resolve the associated grievance. I note that the company has committed to observe the terms of the deed. During the hearing, a question arose as to how long this commitment would endure. Ms Richard’s witness statement made reference to the company’s commitment continuing for the ‘term’ of the 2018 Agreement, which suggests only until the nominal expiry date of the agreement. However, the company through its solicitor confirmed during the hearing that the commitment would continue beyond the nominal expiry date of the 2018 Agreement until a new enterprise agreement was made. Further, the company has been observing the terms of the deed, despite the fact that it has not been executed. That is, the terms of the deed have been applied in particular cases over the life of the 2018 Agreement. And the company intends to bargain in relation to the question of redundancy benefits that will apply under the new enterprise agreement.

[44] Taking all of this into account, it does not appear to me that there is any actual disadvantage accruing to employees as a result of the deed not having been executed. I appreciate that there is concern among the employees that the un-executed deed is not legally enforceable. However, the company has now repeated before the Commission its commitment to honour the terms of the deed until a new enterprise agreement is reached. And the union and employees can bargain for the inclusion of redundancy benefits in the new agreement. To do this of course, negotiations must resume.

[45] The fact that the union and employees have a grievance concerning the company’s failure to sign the deed is not a matter that is relevant to bargaining. Like any other grievance that is unrelated to bargaining, it should be dealt with separately. I do not consider that it has any significant bearing on whether it is reasonable in all the circumstances to make a bargaining order. The good faith bargaining requirements have not been met and are not being met. There is, simply put, no good reason for bargaining not to continue. I am satisfied that it is reasonable in all of the circumstances for the Commission to make a bargaining order. I note that s 230 states that the Commission may make an order if the relevant requirements are met, and that I therefore ultimately have a discretion as to whether to make an order. I consider it appropriate to exercise that discretion and to make a bargaining order in this case.

Terms of the order

[46] What should be the terms of the order? Section 231 provides, relevantly for the present case, that a bargaining order must specify the actions to be taken by, and the requirements imposed upon, the bargaining representative for the agreement, for the purpose of ensuring that they meet the good faith bargaining requirements (s 231(1)(a)). Section 231(1) goes to the matters that the bargaining order must specify. Beyond this, the Commission has a discretion to frame the order in an appropriate way, and this discretion should be exercised with due regard to sections 577 and 578. In my view the terms of an order should go no further than what is reasonably necessary to bring about compliance with the good faith bargaining requirements that have not been, or are not being met.

[47] The company’s draft order would have the AWU do a number of things. It would require the union to meet with the company and recommence negotiations in good faith and for the first such meeting to occur within ten days of the order. It would also have the union be required to give genuine consideration to proposals put forward by the company, and give reasons in writing explaining why it does not agree with any particular proposal. It would require the union to attend weekly meetings thereafter, and to abide by the company’s bargaining protocol. And it would order that the union refrain from any capricious conduct that is calculated or likely to undermine freedom of association or collective bargaining.

[48] I have concluded earlier that the AWU has not met, and is not meeting, the good faith bargaining requirements to attend and participate in meetings, and to give genuine consideration to the proposals of the company. I have not concluded that the union is seeking to delay bargaining, or that, beyond the conduct identified above, it has failed to comply with good faith bargaining requirements. I do not consider that the company has established the broader case it brings against the union. The company considers the union has been difficult, and has raised trivial matters such as the role of note-takers and the question of who should provide their log of claims first. However these particular matters have now been settled. And the union says it is simply proceeding cautiously. As to the company’s contention about delay, the union points out that it approached the company late last year proposing an early start to bargaining. And the nominal expiry date of the 2018 Agreement is still some two months away.

[49] I consider that the actions that the order should require the AWU to take, for the purpose of ensuring that it meets the good faith bargaining requirements, are the following. The AWU should be ordered to resume bargaining by attending and participating in a bargaining meeting, to occur at a time agreed by the parties but not later than ten days of the date of this order. It should also be required to attend and participate in at least three further meetings within the following month, at times to be agreed. The union will be required to give genuine consideration to the proposals of the company and reasons for its responses. Orders to this effect will comply with s 231 and are appropriate and proportionate to my findings.

[50] In my view it is not warranted to require the union to observe the company’s bargaining protocol. The protocol might well have merit, but the union may wish to propose its own arrangements. And I do not consider it appropriate at this time to require the union to respond in writing to any proposals of the company which it rejects. Generally-framed orders requiring the union not to act capriciously or otherwise contravene the good faith bargaining requirements are also not appropriate. If there are further concerns about compliance with the good faith bargaining requirements, parties may make further applications in the Commission.

[51] Finally, I note that during the hearing, Mr Wood said that he intended to abide by the resolution of the mass meeting come what may, even if this meant contravening a bargaining order issued by the Commission. I think it only fair to point out that pursuant to s 233 of the Act a person to whom a bargaining order applies must not contravene a term of the order, and that s 233 is a civil remedy provision. However, it should not be the threat of sanction that compels conformity with the law, but respect for the rule of law. If one person can place his values above the law, others with different values can do the same. Who should prevail in a contest of values without law – the strongest? This would be the road to perdition.

[52] An order giving effect to this decision will be issued separately.

DEPUTY PRESIDENT

Appearances:

N. Gasper of Herbert Smith Freehills for Viva Energy Refining Pty Ltd

S. Wood for the Australian Workers’ Union

Hearing details:

2019.

Melbourne:

10 April.

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