WGC Crane Group Pty Ltd v Construction, Forestry, Maritime, Mining and Energy Union
[2018] FWC 6383
•16 OCTOBER 2018
| [2018] FWC 6383 |
| FAIR WORK COMMISSION |
| REASONS FOR DECISION |
Fair Work Act 2009
s.418 - Application for an order that industrial action by employees or employers stop etc.
WGC Crane Group Pty Ltd
v
Construction, Forestry, Maritime, Mining and Energy Union
(C2018/5679)
| COMMISSIONER RIORDAN | SYDNEY, 16 OCTOBER 2018 |
Alleged industrial action at WGC Crane Group Pty Ltd.
This decision is to be read in conjunction with [2018] FWC 6330 (earlier Decision), which was published on 12 October 2018. This decision provides further reasons for my finding that the Respondent was not participating in pattern bargaining and was genuinely trying to reach an agreement with the Applicant.
Statutory Provisions
Section 418 of the Act states:
“FWC must order that industrial action by employees or employers stop etc.(1) If it appears to the FWC that industrial action by one or more employees or employers that is not, or would not be, protected industrial action:
(a) is happening; or
(b) is threatened, impending or probable; or
(c) is being organised;
the FWC must make an order that the industrial action stop, not occur or not be organised (as the case may be) for a period (the stop period ) specified in the order.
Note: For interim orders, see section 420.
(2) The FWC may make the order:
(a) on its own initiative; or
(b) on application by either of the following:
(i) a person who is affected (whether directly or indirectly), or who is likely to be affected (whether directly or indirectly), by the industrial action;
(ii) an organisation of which a person referred to in subparagraph (i) is a member.
(3) In making the order, the FWC does not have to specify the particular industrial action.
(4) If the FWC is required to make an order under subsection (1) in relation to industrial action and a protected action ballot authorised the industrial action:
(a) some or all of which has not been taken before the beginning of the stop period specified in the order; or
(b) which has not ended before the beginning of that stop period; or
(c) beyond that stop period;the FWC may state in the order whether or not the industrial action may be engaged in after the end of that stop period without another protected action ballot.
Section 412 of the Act states:
“Pattern bargaining
(1) A course of conduct by a person is pattern bargaining if:
(a) the person is a bargaining representative for 2 or more proposed enterprise agreements; and
(b) the course of conduct involves seeking common terms to be included in 2 or more of the agreements; and(c) the course of conduct relates to 2 or more employers.
Exception—genuinely trying to reach an agreement
(2) The course of conduct, to the extent that it relates to a particular employer, is not pattern bargaining if the bargaining representative is genuinely trying to reach an agreement with that employer.
(3) For the purposes of subsection (2), the factors relevant to working out whether a bargaining representative is genuinely trying to reach an agreement with a particular employer, include the following:
(a) whether the bargaining representative is demonstrating a preparedness to bargain for the agreement taking into account the individual circumstances of that employer, including in relation to the nominal expiry date of the agreement;
(b) whether the bargaining representative is bargaining in a manner consistent with the terms of the agreement being determined as far as possible by agreement between that employer and its employees;
(c) whether the bargaining representative is meeting the good faith bargaining requirements.
(4) If a person seeks to rely on subsection (2), the person has the burden of proving that the subsection applies.
Genuinely trying to reach an agreement
(5) This section does not affect, and is not affected by, the meaning of the expression ‘genuinely trying to reach an agreement’, or any variant of the expression, as used elsewhere in this Act.”
Section 413 of the Act states:
“Common requirements
(1) This section sets out the common requirements for industrial action to be protected industrial action for a proposed enterprise agreement.
Type of proposed enterprise agreement
(2) The industrial action must not relate to a proposed enterprise agreement that is a greenfields agreement or multi-enterprise agreement.
Genuinely trying to reach an agreement
(3) The following persons must be genuinely trying to reach an agreement:
(a) if the person organising or engaging in the industrial action is a bargaining representative for the agreement--the bargaining representative;
(b) if the person organising or engaging in the industrial action is an employee who will be covered by the agreement--the bargaining representative of the employee.
Notice requirements
(4) The notice requirements set out in section 414 must have been met in relation to the industrial action.
Compliance with orders
(5) The following persons must not have contravened any orders that apply to them and that relate to, or relate to industrial action relating to, the agreement or a matter that arose during bargaining for the agreement:
(a) if the person organising or engaging in the industrial action is a bargaining representative for the agreement--the bargaining representative;
(b) if the person organising or engaging in the industrial action is an employee who will be covered by the agreement--the employee and the bargaining representative of the employee.
No industrial action before an enterprise agreement etc. passes its nominal expiry date
(6) The person organising or engaging in the industrial action must not contravene section 417 (which deals with industrial action before the nominal expiry date of an enterprise agreement etc.) by organising or engaging in the industrial action.
No suspension or termination order is in operation etc.
(7) None of the following must be in operation:
(a) an order under Division 6 of this Part suspending or terminating industrial action in relation to the agreement;
(b) a Ministerial declaration under subsection 431(1) terminating industrial action in relation to the agreement;(c) a serious breach declaration in relation to the agreement.”
On 31 August 2018, Dean DP held, based on the evidence before her, that the Respondent was engaged in pattern bargaining and was not genuinely trying to reach agreement. Her Honour published an Order in accordance with section 418 of the Fair Work Act, 2009 (the Act), stating that the intended industrial action will not be protected industrial action.
The Respondent has clearly taken heed of the concerns expressed by Her Honour and modified its behaviour in relation to its log of claims and negotiation practices. As it turns out, the Full Bench contemplated and endorsed this change of behaviour as a way to alleviate the concerns found by Her Honour. Relevantly the Full Bench held:
“[38] It is, we consider self-evident, given the basis for concluding that the industrial action was not or would not be protected action, that the circumstances which led to that conclusion might change over a relatively short period. This might occur, for example, by the Appellant altering in a significant way the terms that it seeks to be included in one or other of the proposed agreements the subject of bargaining with WGC and Boom. The Appellant might also or in the alternative, take steps to engage in bargaining discussions with one or other of WGC and Boom aimed at addressing the matters identified in s.412(3). Putting to one side the Appellant’s construction of s.412(1)(b), it would be unsurprising in the face of the findings made by the Deputy President that the Appellant might take steps to alter the terms that is seeking to include in a proposed agreement and/or alter the approach that it takes in bargaining with WGC and with Boom in order that its conduct is no longer caught by s.412. The prospect that further industrial action taken, organised or threatened pursuant to the ballot authorisation would not be protected industrial action by reason of a course of conduct that is pattern bargaining was, by no means inevitable or certain. The circumstances which led the Deputy President to have concluded that the organised and threatened industrial action would be unprotected industrial action could quickly change and yield a different conclusion. These are considerations that are, in our view, plainly relevant to assessing the duration of any order proscribing conduct relating to a strike which appears to be unprotected industrial action by reason of a course of conduct of the Appellant that is pattern bargaining.
[40] We are unable, respectfully, to discern any rational connection between the period of operation of the orders and the purpose for which they were required to be made. It does not appear to us, on the face of the decisions, that the Deputy President took into account the reason that the industrial action being organised and threatened is not or would not be protected industrial action or the fact that the circumstances are capable of change within a relatively short period, to assess the length of the period of operation of the orders. In the circumstances of this case, s.418(1) only required orders to operate for a period sufficient to ensure that the strike not be organised and that the threatened strike not occur. It appears to us that a period of operation of three months was clearly excessive given the circumstances which led to the Deputy President concluding that the industrial action organised and threatened was or would be unprotected industrial action. Consequently, and for the reasons given, we consider that the Deputy President was in error in fixing a period of operation of three months in respect of each order. In our view, a period of operation of two weeks in the circumstances would be more than sufficient to ensure the strike not be organised and that the threatened strike not occur. It would also give the Appellant time to modify or moderate its conduct vis-à-vis bargaining, without inappropriately interfering with the right of the bargaining representative and the employees whom it represents access to an otherwise legitimate form of pressure exercisable during bargaining.”[1]
(my emphasis)
The Applicant submitted that the actions by the Respondent are an attempt of superficial divergence and that the Respondent has not changed its behaviour at all and have also not modified any preferred outcome since the decision of Her Honour on 31 August 2018.
If the Commission were to accept this submission from the Applicant, then it would be hard to see how the Respondent could ever recover from a finding that they were engaged in pattern bargaining. The Respondent, following the decision of Her Honour, where they were found to be seeking common outcomes between WGC and Boom Logistics, dramatically changed their log of claims. The Full Bench indicated that this was an appropriate course of action. If the Applicant seeks to challenge the determination of the Full Bench then it has options before the Court. I took this into account.
The Respondent tabled pages from a written submission from an earlier proceeding that was marked as MFI-2 for the purposes of this proceeding. MFI 2 identified a list of differences between the Respondent’s logs of claims between the two applications as of 11 September 2018, which identified 35 different clauses.
“17. The differences between the agreements proposed by the CFMMEU for the WGC and Boom on and from 11 September 2018 are as follows:
(a) wage rates, which are not identical at any point;
(b) wage increases past 1 March 2019. No increases are proposed in the agreement for WGC, whilst wages are to increase by increments of 2.5% every 6 months past 1 March 2019 in the agreement proposed for Boom;
(c) backdating wage rates. Wage rates are to increase from 2017 in the agreement proposed for Boom. Wage rates are to increase from 1 March
2018 in the agreement proposed for WGC;(d) the presence of a no extra claims clause in the proposed Boom agreement. Such a clause is absent from the agreement proposed for WGC;
(e) the mandatory nature of the establishment of a Consultative Committee in the agreement proposed for WGC. The establishment of a Consultative Committee is a matter of discretion for Boom;
(f) the nominal expiry dates for both agreements;
(g) the rates at which overtime is paid;
(h) the quantum of the Blue Scope allowance;
(i) the quantum of site allowance;
(j) the application of site allowance to particular jobsites. The agreement proposed for WGC requires site allowance to be applicable on all jobsites, whilst the agreement proposed for Boom limits its application to construction sites;
(k) a further increment of 10 cents per $100 million or part thereof is applicable for site allowance in the agreement proposed for WGC for projects exceeding $404.2 million. No equivalent escalation for projects exceeding $404.2 million is provided in the agreement proposed for Boom;
(L) the superannuation contribution amounts are different;
(m) the amount for meal allowance is different;
(n) the amounts provided for living away from home allowance are different;
(o) the nomenclature for the attachments to the agreements is different;
(p) the requirements for the content of payslips provided on termination are different;
(q) starting locations for the purposes of calculating travel allowance are different;
(r) there is an ability to cash out annual leave in the agreement proposed for WGC. No such ability is provided under the agreement proposed for Boom;
(s) amounts for annual leave loading are different;
(t) the evidentiary requirements for personal/carers leave are different;
(u) the ability of an employee who is terminated and then re-engaged to have their prior service considered for the purposes of calculating personal/carers leave is premised on them being out of the employer's employ for up to 6 months with Boom, whilst it is up to 12 months with WGC;
(v) there is a temporary foreign labour clause in the proposed Boom agreement. No such clause is proposed in the agreement for WGC;
(w) a loading of 100% is applicable if WGC engages in sham contracting, whereas a loading of 75% is applicable if Boom engages in sham contracting;
(x) the right of a health and safety representative to seek assistance from the CFMMEU or a person suitably qualified is, under the agreement proposed for WGC, exercisable whenever this is determined to be necessary. Under the Boom agreement, a health and safety representative can seek assistance from the Union or a suitably qualified person 'at any time';
(y) where WGC engages in sham contracting, employees are, on being re inducted, to be provided with a copy of the agreement and awards it incorporates. No such requirement is proposed in the Boom agreement;
(z) the times when changes of shift are to be notified are different;
(aa) rostered days off can be altered in the proposed Boom agreement where employees are not working on building and construction sites. No similar ability is accorded under the proposed agreement for WGC
(bb) WGC is required, when engaged in consultation under the proposed consultation clause, to provide information in writing about the contemplated change to employees. No such requirement is proposed under the Boom agreement;
(cc) WGC is required, when engaged in consultation under the consultation clause, to provide a response to employee feedback. No such requirement is proposed under the Boom agreement;
(dd) individual flexibility records must be kept as a time and wages record by
WGC. No such requirement is proposed under the Boom agreement;(ee) there are no maintenance classifications in the proposed agreement for WGC. Such classifications are contained in the agreement proposed for Boom;
(ff) there is no rostered days off calendar for 2017 for WGC. There is for Boom. This is a matter that bears on amounts that may be due and owing to employees from 2017 if the Boom agreement is made and approved;
(gg) the agreement proposed for WGC requires it to notify employees in writing of the counselling and disciplinary procedures set out in Appendix E. No such requirement is proposed for Boom;
(hh) disciplinary matters about which a warning has been issued to an employee cannot be considered again by WGC in the context of determining whether to dismiss an employee if no further warnings are
proposed Boom agreement;(ii) the Boom agreement contains Singleton specific conditions. No such provisions are sought in the agreement proposed for WGC.”[2]
The earlier decision of 12 October 2018, highlighted a number of paragraphs of a letter from the Respondent’s State Secretary to the Applicant on 19 September 2018. This letter provided a comprehensive 5 page response to correspondence from the Applicant on 18 September 2018. The Applicant’s correspondence stated:
“Dear Rita
I refer to your letter of 11 September 2018, my letter of the same date and our meeting on Thursday, 13 September 2018 to discuss the agreement for Wollongong.
In your letter, the CFMMEU made the following additional claims:
1. increasing the rates by 0.5% - back to 1 March 2018;
2. all overtime at double time;
3. an increase in the Blue Scope Port Kembla Allowance from $1 to $2 per hour;
4. the site allowance to all job site, not just construction sites;
5. an increase in superannuation contributions from the superannuation guarantee (9.5%) to 11%;
6.an increase to the Additional Meal Allowance from $22 to $30.60;
7.an increase in the Living Away from Home Allowance from $120 to $150 per day
8.an increase in the sham contracting loading form 75% to 100%.
(Additional claims)
The Additional claims were not part of the original CFMMEU claims.
Each of these matters had been agreed with the Company, prior to receipt of your letter. In fact, the Company had agreed to the CFMMEU’s original claims in relation to these matters.
These Additional Claims, if agreed to, would result in a significant additional cost to the Company over and above the CFMMEU’s original claims.
The Company discussed each of the Additional Claims with the CFMMEU at the meeting of 13 September 2018 and asked the CFMMEU to explain how it justified them. No explanation was forthcoming, save to say that it was the CFMMEU’s prerogative to change its claims as no agreement had been reached.
By introducing these Additional Claims, the Company considers that the CFMMEU is neither bargaining in good faith nor genuinely trying to reach agreement.
Amongst other things, it amounts to “capricious or unfair conduct that undermines…collective bargaining”, within the meaning of section 228(1)(e) of the Fair Work Act, 2009. It can also be readily inferred that the real reason that the CFMMEU has made the Additional Claims is to punish the Company for exercising its rights to seek section418 Orders on the basis that the CFMMEU was pattern bargaining.
The Company would invite the CFMMEU to respond to these concerns by no later than 12noon, Thursday, 20 September 2018.
In the meantime, as I foreshadowed in my letter of 11 September 2018 and at the meeting on 13 September 2018, the Company will now put its drat agreement for Wollongong to a vote of employees.
As requested by the CFMMEU, the Company will remove the CFMMEU’s name from the agreement.
Kind regards
Marc Sergi
Area Manager” [3]
Relevantly, the Applicant’s letter advised the Respondent about the Applicant’s intention to put the draft Agreement out to a vote of employees. This ballot was unsuccessful. It is common practice, from my experience, following an unsuccessful ballot, for the parties to reconvene in the bargaining process – including taking protected industrial action.
Apart from the paragraphs mentioned in the earlier Decision, I note the inclusion of the following paragraph in the Respondent’s reply.
“19 September 2018
Dear Mr Sergi
…
Discussion in respect of Wollongong Yard
You fail to mention in your correspondence that in respect of the Wollongong yard there was discussion about a number of elements of the WGC proposed draft. The Union sought clarification and there was considerable discussion as to the renaming of the Bluescope Steel port Kembla Allowance to a “Docket allowance” and what was meant by “billable hours”, the reduction of the radial distance from 50km to 45km and what that meant, the deletion from classification MC5 reference to employees with HC class licences and what that meant, the operation of the redundancy provisions in terms of contribution to ACIRT. There was also discussion about the expiry date.
…Darren Greenfield
State Secretary”[4]
The Respondent has clearly and identifiably changed its bargaining position. The dropping of its back pay claim is a major concession. From my 30 years’ experience in industrial relations in the construction industry this is a very significant alteration to the traditional negotiating outcomes of this industry. I took this into account.
I do not accept the Applicant’s argument that the Respondent’s modified position is simply superficial. I am satisfied that the Respondent has taken into account the position of the Applicant. The Applicant claimed, for example, that they could not afford backpay. Relevantly, the Respondent dropped this claim.
This is an unusual case where the Applicant had complained that the Respondent was pattern bargaining and not genuinely trying to reach agreement. After Her Honour agreed with the Applicant that this was the case, the Respondent changed its behaviour. The Respondent then had to defend a claim that it had reneged on a deal and that it was not negotiating in good faith. The Applicant has now submitted that the Respondent had been involved in an abuse of process. I reject this submission outright. It has no basis or foundation. The Respondent has recently been conducting itself in a manner contemplated by the Full bench.
In reaching my decision to not issue an order under section 418 of the Act, I took into account all of the submissions and evidence that was submitted by the parties. The fact that an issue is no mentioned in either this Decision or the Decision on 12 October 2018 does not mean that the issue was not taken into account.
For the reasons stated above and on 12 October 2018 in the earlier Decision, the application was dismissed.
COMMISSIONER
<PR701342>
[1] [2018] FWCFB 6200 at [38] and [40].
[2] MFI2 – PN17
[3] Witness Statement Marc Sergi Tab 65
[4] Witness Statement Marc Sergi Tab 67
Printed by authority of the Commonwealth Government Printer
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