Wattyl Australia Pty Ltd v Liquor, Hospitality and Miscellaneous Union
[2010] FWA 2587
•31 MARCH 2010
[2010] FWA 2587 |
|
DECISION |
Fair Work Act 2009
s.238 - Application for a scope order
Wattyl Australia Pty Ltd
v
Liquor, Hospitality and Miscellaneous Union
(B2010/2586, B2010/2587, B2010/2588, B2010/2589)
Liquor, Hospitality and Miscellaneous Union
v
Wattyl Australia Pty Ltd and WP Crowhurst Pty Limited
(B2010/2595, B2010/2596, B2010/2597, B2010/2598, B2010/2599)
SENIOR DEPUTY PRESIDENT ACTON | MELBOURNE, 31 MARCH 2010 |
Applications for scope orders.
Introduction
[1] These matters are applications for scope orders by both Wattyl Australia Pty Ltd (Wattyl) and the Liquor, Hospitality and Miscellaneous Union (LHMU) under s.238 of the Fair Work Act 2009 (Cth) (the Fair Work Act).
[2] Wattyl manufactures and distributes paint and paint related products. 1
Wattyl’s applications
[3] The Wattyl applications relate to its manufacturing operations in New South Wales and Victoria and its distribution operations in New South Wales, Victoria, Queensland and Western Australia.
[4] The employees of Wattyl who are the subject of its applications are currently covered by the Wattyl Group of Companies Certified Agreement 2005 2as extended and varied in 20083 (the 2005 Agreement) and the Wattyl Maintenance Support Focused Certified Agreement 20054 as extended and varied in 20085(the Maintenance Agreement).
[5] The 2005 Agreement applies to:
- Manufacturing at 4 Steel Street, Blacktown in New South Wales;
- Distribution at 46 Bessemer Street, Blacktown in New South Wales;
- Manufacturing and distribution at 2-44 Graingers Road, West Footscray in Victoria;
- Manufacturing at 1-19 Graingers Road, West Footscray in Victoria;
- Distribution at 65 Railway Parade, Rocklea in Queensland;
- Distribution at 211 Colliers Road, Bayswater in Western Australia; and
- Manufacturing at 560 Churchill Road, Kilburn in South Australia. 6
[6] The Maintenance Agreement applies to maintenance employees of Wattyl at 4 Steel Street, Blacktown in New South Wales. A distribution operation at 560 Churchill Road, Kilburn in South Australia is covered by the Wattyl Australia Pty Ltd (Kilburn) Warehouse and Distribution Collective Agreement 2005 7 as extended and varied in 20088 (the Distribution Agreement).
[7] The employees at the manufacturing and distribution operations in South Australia are employed by WP Crowhurst Pty Limited (Crowhurst) which is part of the Wattyl Group of Companies.
[8] Wattyl seeks to make new enterprise agreements in each state.
[9] In New South Wales, Wattyl seeks to make an agreement that will cover the employees at 4 Steel Street in Blacktown and the employees at 26 Bessemer Street in Blacktown whose terms and conditions of employment are governed by the 2005 Agreement and the Maintenance Agreement.
[10] In Victoria, Wattyl seeks to make an agreement that will cover the employees at 1-19 and 2-44 Graingers Road in West Footscray who fall within the classifications of the 2005 Agreement.
[11] In Queensland, Wattyl seeks to make an agreement that will cover the employees at 65 Railway Parade in Rocklea who perform work within the classifications of the 2005 Agreement.
[12] In Western Australia, Wattyl seeks to make an agreement that will cover the employees at 211 Collier Road in Bayswater who perform duties as outlined in the 2005 Agreement.
[13] In South Australia, Wattyl seeks to make an agreement, presumably through Crowhurst, that will cover the employees at 560 Churchill Road in Kilburn who perform work within the classifications of the 2005 Agreement and the Distribution Agreement. Although a scope order application in respect of South Australia has not been made by Wattyl or Crowhurst.
LHMU’s applications
[14] The LHMU seeks a new enterprise agreement with the same coverage as the 2005 Agreement, 9 which is as follows:
“This agreement will apply in or in connection with the manufacture (including associated laboratory activities), processing, treatment, handling, distribution (but not retailing) or storage of materials or products used in or in connection with decorative or protective surface coatings or coverings and associated products at sites owned, leased and/or operated by Wattyl Australia Pty Limited and to all of the company’s employees who are engaged in work within the classification structure covered in clause 19, 20, 21 of this agreement.”
[15] The LHMU’s new enterprise agreement would not cover those covered by the two other agreements, namely the distribution employees at Kilburn in South Australia covered by the Distribution Agreement or the maintenance employees at Blacktown in New South Wales covered by the Maintenance Agreement.
[16] Wattyl and Crowhurst are “single interest employers” as defined in s.172(5) of the Fair Work Act and are capable of making a “single enterprise agreement” as defined in s.172(2) of the Fair Work Act.
[17] Section 172(2) providing, amongst other things, that an employer or two or more employers that are “single interest employers” may make an enterprise agreement, that is a single-enterprise agreement, with the employees employed at the time the agreement is madeand who will be covered by the agreement. And, s.172(5) relevantly providing that two or more employers are “single interest employers” if they are engaged in a joint venture or common enterprise or are related bodies corporate.
Bargaining History
[18] Bargaining to replace the 2005 Agreement commenced in October 2009. Wattyl and, it seems, Crowhurst and the LHMU are bargaining representatives in that bargaining. At least up to the hearing of the scope order applications on 24-25 February 2009 the bargaining had not proceeded very far due to the parties’ disagreement as to whether a national enterprise agreement with the same coverage as the 2005 Agreement should be negotiated as proposed by the LHMU or whether state-based enterprise agreements should be negotiated as proposed by Wattyl and Crowhurst. The parties maintaining that their claims and response to the other’s claims would depend on whether there was a national enterprise agreement or state-based enterprise agreements. Between October 2009 and 24-25 February 2010 there was some two bargaining meetings in New South Wales, about four in Victoria, some six in Queensland, around five in South Australia and about six in Western Australia. It is against this background that the scope order applications are made.
Section 238
[19] Section 238 of the Fair Work Act relevantly provides that:
“Bargaining representatives may apply for scope orders
(1) A bargaining representative for a proposed single-enterprise agreement may apply to FWA for an order (a scope order) under this section if:
(a) the bargaining representative has concerns that bargaining for the agreement is not proceeding efficiently or fairly; and
(b) the reason for this is that the bargaining representative considers that the agreement will not cover appropriate employees, or will cover employees that it is not appropriate for the agreement to cover…
Bargaining representative must have given notice of concerns
(3) The bargaining representative may only apply for the scope order if the bargaining representative:
(a) has given a written notice setting out the concerns referred to in subsection (1) to the relevant bargaining representatives for the agreement; and
(b) has given the relevant bargaining representatives a reasonable time within which to respond to those concerns; and
(c) considers that the relevant bargaining representatives have not responded appropriately.
When FWA may make scope order
(4) FWA may make the scope order if FWA is satisfied:
(a) that the bargaining representative who made the application has met, or is meeting, the good faith bargaining requirements; and
(b) that making the order will promote the fair and efficient conduct of bargaining; and
(c) that the group of employees who will be covered by the agreement proposed to be specified in the scope order was fairly chosen; and
(d) it is reasonable in all the circumstances to make the order.
Matters which FWA must take into account
(4A) If the agreement proposed to be specified in the scope order will not cover all of the employees of the employer or employers covered by the agreement, FWA must, in deciding for the purposes of paragraph (4)(c) whether the group of employees who will be covered was fairly chosen, take into account whether the group is geographically, operationally or organisationally distinct.
Scope order must specify employer and employees to be covered
(5) The scope order must specify, in relation to a proposed single-enterprise agreement:
(a) the employer, or employers, that will be covered by the agreement; and
(b) the employees who will be covered by the agreement.
Scope order must be in accordance with this section etc.
(6) The scope order:
(a) must be in accordance with this section; and
(b) may relate to more than one proposed single-enterprise agreement.
Orders etc. that FWA may make
(7) If FWA makes the scope order, FWA may also:
(a) amend any existing bargaining orders; and
(b) make or vary such other orders (such as protected action ballot orders), determinations or other instruments made by FWA, or take such other actions, as FWA considers appropriate.”
[20] I turn then to the parties’ submissions on these sections of the Fair Work Act.
Sections 238(1) and (3)
[21] The parties agree and I am satisfied that the provisions of ss.238(1) and (3) have been met in these matters. None of the parties contested that Wattyl and, presumably, Crowhurst and the LHMU are bargaining representatives for a proposed single-enterprise agreement. 10 Further, Wattyl and the LHMU have given the relevant written notice to the relevant bargaining representative, given that representative a reasonable time to respond and considers that representative has not responded appropriately.11
Section 238(4)(a)
[22] Nor is there any contest between the parties that they have met, and are meeting, the good faith bargaining requirements as required by s.238(4)(a). As a result, I am satisfied as to the requirements in s.238(4)(a). Rather, the issues in these applications centre on the requirements in ss.238(4)(b), (c) and (d) and s.238(4A) of the Fair Work Act.
Sections 238(4)(b)-(d) and (4A)
[23] In respect of ss.238(4)(b), (c) and (d) and s.238(4A), Wattyl and Crowhurst submit that central to exercise of the tribunal’s powers to grant a scope order is the concept of “fairness”.
[24] They maintain the concept is implicit in the overarching objective of the Fair Work Act to “provide a balanced framework for cooperative and productive workplace relations that promotes national economic prosperity and social inclusion for all Australians”. They say further understanding of the meaning of “fairness” is provided by the objects of Part 2–4 of the Fair Work Act to:
“(a) to provide a simple, flexible and fair framework that enables collective bargaining in good faith, particularly at the enterprise level, for enterprise agreements that deliver productivity benefits; and
(b) to enable FWA to facilitate good faith bargaining and the making of enterprise agreements, including through:
(i) makingbargaining orders; and
(ii) dealing with disputes where the bargaining representatives request assistance; and
(iii) ensuring that applications to FWA for approval of enterprise agreements are dealt with without delay.” 12
[25] Specifically with respect to s.238(4)(b), Wattyl and Crowhurst submit the term “fair” requires consideration of all parties’ interests and their ability to be involved in a real way in bargaining and the term “efficient” suggests that when bargaining occurs the process is relatively quick with each party able to detail their positions and the reasons for them.
[26] In elaborating on this they say:
“27. … Large meetings with parties with disparate interests tend not to be efficient. Employees who comprise disparate groups and interests may well best be served by separate bargaining processes. The mere fact that separate meetings are required does not mean that that dictates that more than one agreement be made. It is however a strong indicator that bargaining is more efficient when such parties are bargaining for their own interests and do not have to await the outcome of other bargaining before making their own agreement.
28. Further, efficient bargaining is more likely to lead to agreements that promote the objects of the FW Act, being ones that deliver productivity benefits. Where an employer wants to negotiate a range of matters some of which are particular to different sites, it is unlikely that a single stream of bargaining with meetings of all parties will encourage such an outcome. Such bargaining will focus on the largest interest groups who are more likely to sway any final approval process. The small groups will have a lesser role, although their contribution to productivity improvements may be significant. Issues particular to one site or one group are likely to be given less, or any, attention.”
[27] Moreover, they maintain fair and efficient bargaining is likely to be promoted by a process which:
(a) gives employees through their chosen bargaining representatives, a greater opportunity to have their views listened to and presented;
(b) involves as the main negotiators the employees’ local state representatives who have knowledge of their issues and concerns;
(c) is held locally where the employees work;
(d) involves local managers with authority to make decisions; and
(e) encourages the employees to raise issues of concern to them.
[28] Specifically in respect of the scope orders Wattyl seeks, Wattyl and Crowhurst submit state-based bargaining is fair to:
(a) Wattyl and Crowhurst as they can –
(i) progress their own issues with affected employees through their chosen bargaining representatives,
(ii) involve local management and employees through their chosen bargaining representatives in a state-based and transparent process,
(iii) avoid a large, slow and cumbersome national bargaining process, and
(iv) hear and deal with local issues affecting local employees;
(b) the employees as they can raise local issues through their bargaining representatives, negotiate with their management and agree to what they want, with no suggestion of untoward or unfair pressure being placed on them and no allegation that Wattyl or Crowhurst has ulterior motives or that there is no proper representation of employees;
(c) the LHMU at State or Federal level as it is involved with the process, can attend meetings and deal easily with local employees; and
(d) generally, as it is more likely to reach productive agreements in a co-operative and transparent process.
[29] Wattyl and Crowhurst point out that they have state specific issues they want to progress as does the LHMU, with the LHMU indicating that if there is to be state-based bargaining their claims may include other state specific issues. Further, Wattyl and Crowhurst say the apparent choice of the employees for a national agreement is not and cannot be decisive of bargaining proceeding fairly. While state-based bargaining may result in enterprise agreements with different conditions that does not mean the bargaining is unfair. The content of an agreement is a matter for the parties to agree on. National bargaining is likely to involve trade-offs and a balancing out of interests with less concentration on matters that will encourage productivity at a state level.
[30] The LHMU submits the state-based bargaining which has been and is taking place is not proceeding fairly because the relevant employees prefer a new enterprise agreement with the same coverage as the 2005 Agreement and Wattyl and Crowhurst are not taking into account the view of those employees. The LHMU also says that in some respects state-based bargaining may result in differing terms and conditions of employment applying to employees who perform substantially the same work for the same employer.
[31] Wattyl and Crowhurst submit the state-based bargaining is efficient as:
(a) the meetings can take place on-site with the attendance of local organisers and delegates;
(b) the meetings can be of one or two hours duration, be held weekly or fortnightly as agreed and be easily scheduled; and
(c) the meetings can involve the LHMU’s competent and experienced state-based organisers who have knowledge of Wattyl’s or Crowhurst’s operations in the particular state.
[32] In this regard, Wattyl and Crowhurst point out the state-based bargaining has been progressing for months and there is no evidence the LHMU’s state-based organisers have had difficulty in attending. The national bargaining in 2004/05 in respect of the 2005 Agreement involved a four-five month program of about 10 meetings in Sydney with both National and State LHMU officials and delegates.
[33] The LHMU submits the state-based bargaining is resulting in unnecessary duplication as many of the parties’ claims are common between states. The LHMU also say it is resulting in the use of more resources than would national bargaining as some representatives of Wattyl have appeared at the bargaining in various states.
[34] Mr Vincent Connor, the Production Manager at Blacktown in New South Wales, gave evidence for Wattyl that “Wattyl wishes to bargain a single state agreement at the Blacktown Manufacturing Site and Blacktown Distribution Site because it wishes to improve and build on relationships with employees and their representatives at the two Blacktown sites.” 13
[35] Mr Ian Richardson, the Distribution Manager at Rocklea in Queensland, gave evidence for Wattyl that “Wattyl’s rationale in bargaining for a state based agreement at the Rocklea Site is to improve and build on the company’s relationship with its employees and their representatives in balance with Wattyl’s operational demands. Wattyl can achieve this with greater effectiveness by focussing on the specific issues at the Rocklea Site, whilst avoiding being distracted by external issues that are of importance to other state sites or to the national business. In the long run this will benefit the working environment for the Rocklea Site employees.” 14
[36] Mr Stewart Smith, the Distribution Manager at Bayswater in Western Australia, gave evidence for Wattyl that “I am informed from discussions with senior management that the transition from a national certified agreement to a state-based agreement is motivated by a wish that the Enterprise Agreement will focus on and reflect issues relevant to the Western Australian site (issues that may not be applicable to other states). This state focus will eliminate issues irrelevant to Western Australia that may have been necessary to include in a national agreement. By having an agreement that is more specific to Western Australian operations, the relationship between Wattyl and the employees at the Bayswater site will be improved.” 15
[37] Ms Andrea Bold, the Human Resources Manager at Bayswater in Western Australia, gave evidence for Wattyl that “the reason that Wattyl is seeking to have a state based agreement is so that the enterprise agreement will contain terms and conditions explicit to the nature of the work performed at the Bayswater site rather than having national provisions that have no application to the Bayswater site. It is envisaged that this focus on the specific site will improve interaction and rapport between Wattyl, the employees and their representatives.” 16
[38] Mr Brett Goulding, Manufacturing Manager at Kilburn in South Australia, gave evidence for Wattyl and, presumably, Crowhurst that “Wattyl wants to negotiate a state based agreement in South Australia … because it wishes to improve and build on relationships with employees and their representatives at the Kilburn Site by having a single site agreement to cover the Kilburn site, rather than the two agreements (one of which is a national agreement) covering the site.” 17
[39] In respect of s.238(4)(c) and s.238(4A), Wattyl submits the group of employees it has chosen for each of its scope orders is manifestly geographically distinct but is also operationally and organisationally distinct. The few maintenance employees of Wattyl in New South Wales should come within the scope of the proposed New South Wales agreement as they work in the manufacturing operation along with the other employees. However, Wattyl says the scope order for the proposed New South Wales agreement could be limited to the production and distribution employees in New South Wales. Wattyl and Crowhurst maintain the selection by the LHMU of employees across Australia, including clerical employees in New South Wales who used to be but are no longer employed at Blacktown and excluding maintenance employees in New South Wales and distribution employees in South Australia, is not a group of employees that is fairly chosen.
[40] The LHMU says the groups of employees chosen by Wattyl and Crowhurst to be covered by proposed state-based agreements are not fairly chosen because the employees have indicated they would prefer a new enterprise agreement with the same coverage as the 2005 Agreement and because such groupings could result in differing terms and conditions of employment applying to employees performing substantially the same work for Wattyl and Crowhurst.
[41] Finally, in respect of s.238(4)(d), Wattyl and Crowhurst submit it is reasonable in all the circumstances to make the scope orders Wattyl seeks. The LHMU also submits it is reasonable in all the circumstances to make the scope order it seeks.
Consideration of ss.238(4)(b)-(d) and (4A)
[42] I am satisfied that making the scope order sought by the LHMU, with the deletion of the clerical employees who no longer work at Blacktown in New South Wales, will promote the fair and efficient conduct of bargaining. I am also satisfied that making the scope orders sought by Wattyl will promote the fair and efficient conduct of bargaining. Although, I am satisfied that making the scope order sought by the LHMU with the deletion mentioned will better promote the fair and efficient conduct of bargaining. I have come to this latter satisfaction for the following reasons.
[43] Bargaining is occurring at a state level at present but is not progressing as it should be because of a dispute between Wattyl and Crowhurst and the LHMU, being bargaining representatives, about whether there should be a national enterprise agreement or state-based enterprise agreements. The LHMU is pursuing a national enterprise agreement and Wattyl and Crowhurst are pursuing state-based enterprise agreements. The bargaining representatives have indicated their claims and responses to the other’s claims will alter depending on whether it is a national enterprise agreement or state-based enterprise agreements to be negotiated.
[44] The 2005 Agreement, a national enterprise agreement with some clauses only applying in a particular state or to certain employees in a state, was originally made over four-five months and involved about 10 meetings in Sydney between Wattyl, Crowhurst and the LHMU. That is a relatively short period for achieving an agreement, particularly in comparison to the progress that has been achieved in the state-based bargaining between the parties to date.
[45] While the national bargaining for the 2005 Agreement involved many people meeting in Sydney, bargaining under the Fair Work Act is between the bargaining representatives. The relevant bargaining representatives in these matters are Wattyl and Crowhurst and the LHMU. It is up to each bargaining representative and those they are representing as to how they ensure the bargaining representative is properly representing their position. If Wattyl and Crowhurst or the LHMU as bargaining representatives have too many people at the bargaining then bargaining orders may be sought. Notions that state-based bargaining is to be preferred as it facilitates employee and local union and management involvement in the bargaining misappreciates the role of bargaining representatives in bargaining under the Fair Work Act.
[46] Further, at present there are claims which are sought nationally or in each state by the parties and claims which are sought in a particular state. The national or all state claims are likely to be more fairly and efficiently bargained for through national bargaining. The claims applying to a particular state or to certain employees in a state that the bargaining representatives have identified to date include claims such as reflecting local practice in respect of tea and crib breaks, paying for meal breaks which are not guaranteed to be uninterrupted, including resins classifications and providing for part-time work. State oriented claims are capable of being fairly and efficiently bargained for in national bargaining just as state oriented claims were negotiated and agreed for the 2005 Agreement.
[47] I am satisfied the groups of employees who will be covered by the state-based enterprise agreements proposed to be specified in the scope orders sought by Wattyl were fairly chosen taking into account that each group is geographically, operationally or organisationally distinct.
[48] I am also satisfied the group of employees who will be covered by the national enterprise agreement proposed to be specified in the scope order sought by the LHMU was, with the deletion previously mentioned, fairly chosen. The group of employees is largely the same as that covered by the 2005 Agreement. The group is not geographically, operationally or organisationally distinct to the extent it does not include the employees at Kilburn in South Australia currently covered by the Distribution Agreement and the maintenance employees at Blacktown in New South Wales currently covered by the Maintenance Agreement. However, those employees are currently covered by their own agreements. Further, Wattyl does not seek scope orders covering the Kilburn distribution employees and concedes the possible exclusion of the Blacktown maintenance employees from the type of scope orders it seeks.
[49] I am satisfied it is reasonable in all the circumstances to make the scope order sought by the LHMU with the deletion mentioned. I am not satisfied it is reasonable in all the circumstances to make the scope orders sought by Wattyl given I am satisfied the scope order sought by the LHMU with the deletion mentioned will better promote the fair and efficient conduct of bargaining.
Conclusion
[50] In light of the fact the jurisdictional pre-requisites for the scope order applications have been met and having regard to my satisfaction in respect of the matters in s.238(4) of the Fair Work Act, I will order that any proposed single-enterprise agreement covering an employee covered by the 2005 Agreement, except a clerical employee who is no longer employed at Blacktown in New South Wales, is to cover Wattyl Australia Pty Ltd and WP Crowhurst Pty Limited and all employees covered by the 2005 Agreement, except the clerical employees who are no longer employed at Blacktown in New South Wales.
[51] An order 18 giving effect to this decision is being published at the same time as the decision.
SENIOR DEPUTY PRESIDENT
Appearances:
W. Ash for the Liquor, Hospitality and Miscellaneous Union.
F. Parry, Senior Counsel, and J. Lee for Wattyl Australia Pty Ltd.
Hearing details:
2010.
Sydney:
February 24, 25.
1 Endnotes:
Exhibit P18 at paragraph 4.
2 AG840680, PR959032.
3 AG840680, PR982376.
4 AG840681, PR959033.
5 AG840681, PR982777.
6 Exhibit P18 at paragraph 8.
7 AG844881, PR965884.
8 AG844881, PR982128.
9 Exhibit A2 at paragraph 9.
10 Exhibit P18 at paragraph 22 and Exhibit A2 at paragraph 11.
11 Exhibit P20 at paragraphs 18-21 and Exhibit A2 at paragraphs 13-16.
12 Fair Work Act 2009 (Cth), s.171.
13 Exhibit P9 at paragraph 27.
14 Exhibit P15 at paragraph 25.
15 Exhibit P11 at paragraph 26.
16 Exhibit P14 at paragraph 7.
17 Exhibit P6 at paragraph 87.
18 PR995606.
Printed by authority of the Commonwealth Government Printer
<Price code C, PR995618>
0
0