WGC Crane Group Pty Ltd v Construction, Forestry, Maritime, Mining and Energy Union
[2018] FWC 5101
•31 AUGUST 2018
[2018] FWC 5101
The attached document replaces the document previously issued with the above code on 31 August 2018.
Due to a system error the matter no. in this case has been changed from IA2018-4583 to C2018/4637.
Rachel Wong
Associate to Deputy President Dean
Dated 12 September 2018
| [2018] FWC 5101 [Note: An appeal pursuant to s.604 (C2018/5218) was lodged against this decision.] |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.418—Industrial action
WGC Crane Group Pty Ltd
v
Construction, Forestry, Maritime, Mining and Energy Union
(C2018/4637)
DEPUTY PRESIDENT DEAN | SYDNEY, 31 AUGUST 2018 |
Application for an order that industrial action by employees or employers stop etc – whether union engaged in pattern bargaining – whether genuinely trying to reach agreement.
[1] On 20 August 2018 the Construction, Forestry, Maritime, Mining and Energy Union (CFMMEU) gave notice to WGC Crane Group Pty Ltd (WGC) in accordance with s.414 of the Fair Work Act 2009 that its members employed by WGC would take industrial action in the form of an indefinite strike commencing at 5am on 27 August 2018. The relevant employees are CFMMEU members employed by WGC based at the Smeaton Grange and Wollongong depots in NSW who would be subject to a proposed agreement(s).
[2] On 21 August 2018 WGC made an application under s.418 of the Act for orders to stop the industrial action from occurring. WGC argues that the proposed industrial action is not protected industrial action because the CFMMEU is engaging in pattern bargaining within the meaning of s.412 and the action is therefore not protected industrial action in accordance with s.409(4) of the Act. In this regard, WGC relied on negotiations between the CFMMEU and Boom Logistics Ltd (Boom), another employer within the mobile crane industry.
[3] WGC also takes issue with the manner in which the protected action ballot was conducted by the Australian Electoral Commission (AEC).
[4] The matter was listed for hearing in Sydney on 21 and 22 August 2018. Written submissions were filed in reply by WGC on 23 August 2018. Further submissions were made, in the form of an email exchange between the parties and the Fair Work Commission (the Commission), on 27 August 2018.
[5] At the hearing, WGC was represented by Mr G Jolly of Minter Ellison and the CFMMEU was represented by Mr I Latham of Counsel. Permission was granted pursuant to s.596(2) of the Act for the parties to be represented.
[6] During the hearing, evidence was given by Mr Sergei of WGC and Ms Mallia of the CFMMEU.
[7] By consent of the parties, and pursuant to s.420 of the Act, an Interim Order1 was issued at the conclusion of the proceedings on 22 August 2018. The effect of the interim order is that industrial action would not occur or be organised until the present application is determined. In issuing the Interim Order, I was satisfied that it would not be contrary to the public interest to do so.
[8] Subsequent to the hearing of this application, Minter Ellison made an application under s.418 on behalf of Boom, which was heard on 28 August 2018 and in which substantially the same issues were argued (the Boom proceedings).
[9] For the reasons set out below, I am satisfied and find that the CFMMEU is engaging in pattern bargaining within the meaning of s.412(1) of the Act, and has not discharged its onus of proving it is genuinely trying to reach agreement (s412(2)). Given there is threatened industrial action, I will make an order as sought by WGC.
[10] In coming to my conclusion, I have had regard to the extensive volume of material filed in this matter and tendered into evidence, even if it is not specifically referred to in this decision.
Relevant Legislation
[11] Sections 408 and 409 of the Act set out when industrial action for a proposed enterprise agreement is protected industrial action.
[12] Section 409(4) provides that for an ‘Employee claim action’ to be protected industrial action, a bargaining representative who will be covered by the proposed enterprise agreement must not be engaging in pattern bargaining.
[13] Pattern bargaining is defined in s.412 of the Act:
“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.”
[14] Section 413 of the Act sets out the common requirements that apply for industrial action to be protected action. One of those requirements, found in s.413(3), requires a person (ie the CFMMEU in this case) to be genuinely trying to reach an agreement.
[15] Section 418 of the Act provides that the Commission must order that industrial action stop, not occur or not be organised, if it appears that the intended industrial action would not be protected industrial action.
Background
[16] Based on the evidence, I make the following findings.
[17] The CFMMEU has a template mobile crane sector enterprise agreement, which was Exhibit 6 in the proceedings (the Template Agreement). The Template Agreement is comprehensive, comprising some 98 pages. 2
[18] The CFMMEU have made agreements with at least three other employers in the mobile crane sector in very similar terms to the Template Agreement. The wage rates, for example, are identical. These employers are Melrose Cranes and Rigging Pty Ltd (Melrose), Borger Crane Hire and Rigging Services Pty Ltd (Borger), and Harley Cranes Group Pty Ltd (Harley). 3
[19] On or about 27 April 2018, the CFMMEU indicated by letter to WGC that it wished to commence bargaining for one new agreement, to replace the WGC Crane Labour Pty Ltd (Smeaton Grange Depot)/CFMEU Collective Agreement 2011-2015 (the old Smeaton Grange Agreement) and the WCG Crane labour Pty Ltd (Wollongong Depot)/CFMEU Collective Agreement 2011-2015 (the old Wollongong Agreement). Both agreements passed their nominal expiry date on 31 May 2015. A draft agreement, based on the Template Agreement, was enclosed with the letter.
[20] On 7 May 2018 the CFMMEU sent an email to WGC in the following terms:
“Please advise us as a matter of urgency, as discussed with Darren [Greenfield, CFMMEU delegate], whether you are in agreement with the final draft of the proposed CFMMEU Agreement.”
[21] On 18 May 2018, the CFMMEU lodged an application for a protected action ballot order (First PABO) under s.437 of the Act in relation to the proposed enterprise agreement. The application was later withdrawn.
[22] The CFMMEU sought to have one single agreement to replace the old Smeaton Grange Agreement and the old Wollongong Agreement. Following the opposition of WGC, the CFMMEU subsequently indicated it might agree to negotiate for two agreements but maintained that if it were to do so, both agreements would need to contain the same terms.
[23] On 6 June 2018 the parties met for the first time for the purpose of bargaining for a new Smeaton Grange Agreement.
[24] On 19 June 2018 WGC raised concerns in writing with the CFMMEU regarding its failure to arrange a meeting to discuss a new Wollongong Agreement.
[25] A meeting was conducted between the parties on 27 June 2018 with respect to the new Wollongong Agreement. WGC provided the CFMMEU with its proposed agreements by email following the meeting.
[26] On 6 July 2018 the CFMMEU filed a second application for a PABO (Second PABO), which was heard by Commissioner McKenna on 13 July 2018. The Commissioner did not grant the Second PABO as she was not satisfied that the CFMMEU had genuinely tried to reach agreement.
[27] On 12 July 2018, Ms Mallia, State President, NSW Branch of the CFMMEU sent a letter to Mr Sergei, of WGC, regarding the negotiations.
[28] On 16 July 2008, Ms Mallia provided a written response to Mr Sergei to WGC’s proposed draft enterprise agreements.
[29] A second meeting concerning the new Smeaton Grange Agreement was held on 19 July 2018.
[30] A second meeting concerning the new Wollongong Agreement was held on 26 July 2018.
[31] On 27 July 2018 the CFMMEU filed another application for a PABO (Third PABO). WGC did not oppose the Third PABO however in correspondence to the Commission it said that it “reserves all of its rights in the event that protected action is sought to be taken – including (without limitation) its right to argue that the CFMMEU is seeking to engage in ‘pattern bargaining’ under section 412 of the Act”.
[32] On 30 July 2018 Deputy President Gostencnik approved the Third PABO. On the same day the CFMMEU provided a response to WGC’s draft proposed agreement. The correspondence indicated that the overwhelming number of WGC’s proposals were not agreed by the CFMMEU.
[33] On 16 August 2018 the AEC conducted a protected action ballot. The AEC provided the Declaration of Results on 17 August 2018. The declaration stated that there were 62 employees on the roll of voters and 55 out of 56 employees voted to approve the proposed industrial action.
[34] Notice of protected industrial action was given by the CFMMEU to WGC on 20 August 2018.
Pattern bargaining
[35] A course of conduct by a person is pattern bargaining if the matters set out in section 412(1)(a), (b) and (c) are satisfied. There is an exception in section 412(2) that the course of conduct is not pattern bargaining if the bargaining representative is genuinely trying to reach agreement with that employer.
[36] It is for WGC to satisfy me as to the matters in section 412(1). If I am satisfied as to these matters, the onus shifts to the CFMMEU to prove that the exception in section 412(2) applies.
Section 412(1)(a)
[37] There is no dispute and I find that the CFMMEU is a bargaining representative for two or more proposed enterprise agreements. The two or more proposed enterprise agreements in this case are either the new Smeaton Grange or Wollongong Agreements on the one hand, and the proposed agreement for Boom on the other. No issue was taken by the CFMMEU as to this matter. Accordingly, s.412(1)(a) is satisfied.
Section 412(1)(b)
[38] The primary focus of the parties in the hearing in relation to s.412(1) was whether there was a ‘course of conduct’ which involved ‘seeking common terms’ to be included in two or more of the agreements.
Course of conduct
[39] The CFMMEU argued that to constitute a course of conduct within the meaning of s.412(1), the conduct must be protracted or engaged in on more than one occasion and committed with a continuity of purpose. To this end, the CFMMEU relied on the decision of Nettle J in Thomas v Campbell and Others (Thomas) 4.
[40] It argued that the proof of a course of conduct requires evidence that the conduct of seeking common terms is committed with a continuity of purpose; or that the same conditions are being sought with the same purpose, and as such requires some examination of the purpose of the union.
[41] The CFMMEU argued that s.412 refers specifically to a ‘course of conduct’, so a situation where an organisation has sought common terms to be included in two or more agreements is not necessarily pattern bargaining. It can only be pattern bargaining if that is part of a course of conduct.
[42] A course of action within the meaning of s.412(1) only applies, it submitted, to a situation such as where a bargaining representative attends a meeting with a number of different employers and says ‘here is our proposed agreement and you all have to agree to it’. In the present case, there were independent discussions between the CFMMEU and WCG and therefore the conduct is not part of a course of conduct.
[43] In response, WGC contended that care needed to be taken with applying statements about ‘course of conduct’ from other contexts. Phrases such as ‘course of conduct’ take their meaning from the context. The decision in Thomas is from a very different statutory context and concerned the criminal offence of stalking. There are self-evident difficulties, WGC submitted, with applying this to the very different context of pattern bargaining under the Fair Work Act.
[44] WGC submitted that the Commission should simply apply the words, according to their ordinary meaning. An analogy could be drawn with the decision of the Full Bench in Total Marine Services v Maritime Union of Australia 5(Total Marine) where the Commission concluded that it was not useful to formulate any alternative test or criteria for applying the statutory test for genuinely trying to reach agreement.
[45] WGC further submitted that the words also need to be applied in the context in which they were intended – that is, bargaining across multiple employers seeking common conditions.
[46] WGC said that even if a ‘course of conduct’ did require continuity of purpose or even the same purpose as contended by the CFMMEU, the test would still be satisfied in this case. It submitted that it could be readily inferred that there is a continuity of purpose or even the same purpose. In this regard:
a. the CFMMEU is seeking to have, as far as possible, the Template Agreement agreed to by employers within the NSW mobile crane sector, with no or minimal changes;
b. amongst others, it is pursuing this objective against WGC and Boom; and
c. it has already achieved this objective against a succession of employers in the NSW mobile crane sector.
[47] In addition, the conduct has occurred on more than one occasion – simply by virtue of seeking the conditions against WGC and Boom. Furthermore, the CFMMEU has repeatedly sought that WGC agree to the Template Agreement and, it can be readily inferred, Boom as well.
[48] Continuity of purpose could also be inferred because the conduct is occurring at the same time – the bargaining is going on at the same time. The protected action ballots occurred around the same time at both WGC and Boom and protected action is planned for both. Ms Mallia also gave evidence that the CFMMEU was planning an indefinite strike at Boom, like the one which has been notified to WGC. Ms Mallia accidentally included Boom’s name on the WGC notice for this reason.
[49] The course of conduct it said was evidenced by:
1. the fact that the agreements are being negotiated around the same time;
2. the fact that the agreements are largely in the same terms and are from a common base document prepared by the CFMMEU;
3. the fact that the CFMMEU is relying on agreements being reached with other companies to convince WGC to agree; and
4. the fact that the CFMMEU is evidently intending to take industrial action against Boom as well.
Seeking common terms
[50] In relation to ‘seeking common terms’, WGC made the following submissions:
a. The CFMMEU is a bargaining representative for a range of enterprise agreements in the mobile crane industry, including Boom, Borger and Harley. While agreements have been concluded with a number of companies, no agreement has been reached with WGC and Boom.
b. The CFMMEU has been seeking common terms as part of those negotiations. Those common terms include pay rates, casual loading and a range of other conditions.
c. There are a large number of common conditions between WGC and Boom.
d. The issue for which attention should be directed are to the common terms, not the differences, and the differences do not arise from concessions from the CFMMEU.
e. The requirements of s.412(1) are therefore made out.
[51] WGC relied on evidence brought in the proceedings which it contended showed that the CFMMEU is pattern bargaining. That evidence included:
a. The use of the Template Agreement.
b. The fact that the CFMMEU has not made any substantive concessions from its original position. This was apparent right from the start with Ms Mallia’s email of 7 May 2018, sent only about a week after bargaining has started, referring to the draft agreement provided as ‘the final draft of the proposed CFMEU Agreement’ and asking “Please advise us as a matter of urgency, as discussed with Darren, whether you are in agreement with the final draft of the proposed CFMEU Agreement.”
c. The concessions referred to in Ms Mallia’s evidence are minor and inconsequential.
d. Most of the differences between the WGC and Boom drafts identified in Ms Mallia’s statements are not concessions from the CFMMEU to WGC but seem to be extra claims against Boom.
e. The CFMMEU has not substantively changed its position of the nominal expiry date of 31 December 2018. The CFMMEU’s concession to extend for one month to 31 January 2019 is of little substance and is manifestly unreasonable.
f. The CFMMEU filed its original PABO application before there were any meetings. A second PABO application was filed after only one meeting at each of Smeaton Grange and Wollongong depots and failed to convince the Commission it was genuinely trying to reach agreement. It filed its third PABO application after only a further two meetings (ie one meeting for each site).
g. WGC’s business in Wollongong is markedly different to the Sydney based construction industry, where most of the work is maintenance and much more irregular and more difficult to pass on costs. In these circumstances, the significant increase in casual loading sought by the CFMMEU, an increase from 25% to 35% and 80% after 6 weeks engagement, is manifestly unreasonable and punitive.
h. The CFMMEU is unwilling to agree to any change to the position it has adopted in the pattern bargaining on casual loading.
[52] The CFMMEU submitted that ‘common’ means same or identical, and relied on Trinity Garden 6 in support of this proposition.
Consideration of section 412(1)(b)
[53] I consider that I should interpret a ‘course of conduct’ within the context of the Act and more specifically in the context of pattern bargaining. The ordinary meaning of these words, in this context, direct attention to the behaviour of a party, or their way of acting, in the course of bargaining for a new agreement, where common terms are sought to be included in two or more agreements.
[54] I agree with the submissions of WGC in relation to whether or not the proposed enterprise agreements need to be ‘the same’ for s.412(1) to apply.
[55] In this regard, I consider (and where relevant find) that the following principles are applicable:
(a) ‘Involves seeking common terms’ does not mean that all of the terms must be common – it means what it says, that is that the course of conduct involves seeking common terms.
(b) Section 412(1) needs to be given a sensible interpretation, so as to have a practical operation. This section is simply the gateway requirement – the union will not be pattern bargaining if they are genuinely trying to reach agreement. Accordingly, it should not be given an unduly restrictive interpretation.
(c) Section 412(3)(a) – ie 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 - would have no work to do if agreements had to be identical before section 412(2) and (3) could be engaged. By definition, the bargaining representative would not be seeking identical agreements if they were showing a preparedness to agree to changes for one employer.
(d) Accepting that ‘common’ means ‘same’ or ‘identical’, it does not mean all the terms in the agreement must be the same or identical. It simply means, as section 412(1)(b) says, that common terms are involved.
(e) Trinity Garden concerned the Workplace Relations Act 1996 which contained a slightly different definition of pattern bargaining in section 421. It relevantly provided:
“For the purposes of this Part, a course of conduct by a person is pattern bargaining if:
(a) the person is a negotiating party to 2 or more proposed collective agreements; and
(b) the course of conduct involves seeking common wages or conditions of employment for 2 or more of those proposed collective agreements; and
(c) the course of conduct extends beyond a single business.”
(f) In the original Trinity Garden decision 7, Vice President Lawler concluded:
“The precise meaning of the word ‘common’ in the expression ‘common wages or conditions of employment’ in s.421(1)(b) is not entirely clear. The explanatory memorandum does not assist. It seems to me that, as a matter of ordinary and natural meaning of the words used in s.421(1)(b), ‘common’ means ‘same’ or ‘identical’. Thus, the expression ‘common wages’ means wages that are the same or identical.” 8
(g) In other words, if the conditions in question were either same or identical, they would be common. This interpretation was endorsed by the Full Bench in Trinity Garden.
(h) Vice President Lawler also made the observation:
“[21] There is no doubt that the ANF was engaged in pattern bargaining, as it is now defined in s.421, when negotiations commenced in about May 2005 and for the whole of the period prior to the commencement of the major amendments effected by the WorkChoices Act. Of course, this was not unlawful in any respect prior to the commencement of WorkChoices. At that time, the expression “pattern bargaining”, in general industrial usage, referred to the practice (not unknown in, for example, the metals and construction industries), of a union serving a group of employers with a standard form agreement prepared by the union and intransigently insisting that the employer accept agreement without amendment with industrial action being organised against any employer who did not capitulate. [Victorian Association of Forest Industries v CFMEU (2003) 127 IR 349 per Lawler VP, Lacy SDP and Richards C, at para [25].] The definition of pattern bargaining in s.421 would appear to be broader than this prior industrial usage.”
(i) In Trinity Garden, there were different factual circumstances than is the case in this matter. The key difference is that the wages sought by the union in Trinity Garden were not the same. The Full Bench observed:
“It may be seen that at no time over the course of the agreement do the wage levels or compounded percentage increases coincide. The only common element is the coincidence of the cumulative arithmetic increase at two points of time, including the end of the agreement, albeit with a different timing in respect of the obtaining of that level.” 9
(j) In the case before me, the vast majority of the conditions in the proposed agreements are identical. This includes the wage rates which are proposed to take effect from 1 October 2018 and 1 March 2019.The rates are exactly the same, down to the last cent.
(k) This ‘sameness’ is evidenced by the document filed by WGC which showed a clause by clause comparison of the proposed Boom and WGC agreements. An examination of the comparison document shows that the changes between the WGC and Boom agreements are minimal. The proposed agreements comprise some 40 clauses and a number of annexures. Obviously, the name of the employer is different in each agreement. In terms of some of the differences, clause 11.2 - Protective Clothing provides a difference in the value of the footwear to be supplied by the employer. In clause 18 - Travel, there is a change in the applicability of the travel allowance related to geographical factors. The Parental Leave clause (clause 25) removes an operative date in 2017 in one agreement (ie no longer relevant). There are minor differences with respect to call back and the timing of breaks within the shift work clause. There is a minor difference with respect to overtime. Some allowances located in the appendices vary – these are mainly related to the location of work or travel performed. None of these matters in my view are matters of substance. The substantive provisions of the proposed agreements are the same.
(l) The proposed agreements are also in substance the same as the Template Agreement and the agreements made with Melrose, Borger and Harley.
(m) The legislative history makes it clear that the entire agreement does not need to be common. The old definition set out above refers to seeking common wages or conditions of employment – which clearly means the entire agreement does not need to be identical. The Explanatory Memorandum to the Fair Work Bill 2008 says that the revised definition was not intended to change the effect of the definition. The Explanatory Memorandum says:
1658. Subclause 412(1) provides that pattern bargaining is a course of conduct by a bargaining representative for two or more proposed enterprise agreements. That course of conduct must involve the bargaining representative seeking the inclusion of common terms in two or more proposed enterprise agreements and that course of conduct must also extend beyond a single employer.
1659. The meaning of pattern bargaining contained in clause 412 is in substance the same as the meaning of pattern bargaining contained in the WR Act, but it has been simplified where possible.
1660. Subclause 412(2) makes clear that a bargaining representative does not engage in pattern bargaining if the bargaining representative is genuinely trying to reach an agreement with an employer.
(n) Vice President Lawler’s observation that the definition of pattern bargaining is broader than ‘a union serving a group of employers with a standard form agreement prepared by the union and intransigently insisting that the employer accept agreement without amendment’ is consistent with this view.
[56] In the Boom proceedings, Mr Latham on behalf of the CFMMEU appropriately acknowledged that the question of whether ‘common terms’ were sought required consideration of whether the terms were in substance the same or identical. This did not require the terms being identical in form. For example, if two agreements had the same or identical entitlement to personal/carer’s leave, but were worded differently, this would still be ‘common’. This proposition at a minimum must be correct. No two agreements could be identical in their entirety because at a minimum, the name of the employer or location to which the agreement applied for example, will differ between agreements. If the requirement was that the agreements were identical in every respect, then a typographical error would be sufficient to mean that a positive finding could not made as to ‘common terms’ being sought by a person. Clearly this is not what is intended by the legislation.
[57] The Macquarie Dictionary’s definition of ‘common’ includes belonging equally to or shared alike by two or more or all in question; widespread; general; ordinary; of frequent occurrence.
[58] I consider that ‘common’ in this context means terms which are in substance the same, but do not need to be the same in form. In other words, the terms provide the same outcome or entitlement, or have the same effect. Common does not require the terms to be identical in every respect, nor does it require that every single term must be common. This is because, for the same reasons set out earlier, a minor or inconsequential variation between two agreements should not be sufficient to be able to avoid a finding that particular conduct is pattern bargaining. Again, this could not be the intention of the legislation.
[59] I do not consider that a course of conduct requires, as contended by the CFMMEU, two or more employers in negotiations at the same time in the same room with the CFMMEU. There is no reason that a course of conduct cannot involve a number of employers, in this case within the mobile crane sector, separately, but where common terms are sought across two or more employers.
[60] The evidence referred to in paragraphs 49 and 51 above supports a finding that the CFMMEU is pattern bargaining. I am satisfied and find that the CFMMEU is engaging in a course of conduct which involves seeking common terms to be included in the proposed agreements for WGC and Boom.
Section 412(1)(c)
[61] The CFMMEU accepted that Boom and WGC are ‘two or more employers’.
[62] I am satisfied for the reasons above and find that the course of conduct relates to two or more employers, being WGC and Boom.
Section 412(2) – genuinely trying to reach agreement
[63] As each of the elements of s.412(1) has been made out by WGC, I now need to consider whether the exception in s.412(2) applies. In doing so, I need to consider the factors relevant to working out whether a bargaining representative is genuinely trying to reach agreement set out in s.412(3), which include whether the CFMMEU is demonstrating preparedness to bargain for the agreement taking into account the individual circumstances of WGC, including in relation to the nominal expiry date.
[64] The CFMMEU has the onus of proving that the exception applies (s.412(4)).
CFMMEU submissions
[65] The CFMMEU submitted that ‘genuinely try’ has an ordinary meaning of making a real, true and authentic attempt or effort to achieve or accomplish something. The effort or attempt must be an attempt for effort that is authentic or true 10. The test should be an objective one and inevitably with some elements of subjectivity.
[66] In Minister for Health 11, DP McCarthy held that where a negotiating party does not seriously consider a claim that party may be at risk of being found to have not been genuinely trying to reach an agreement. His Honour went on to set out matters that are relevant to be examined.12 The CFMMEU said that those matters go to a refusal to bargain and refusal to bargain is different to refusal to make a concession.
[67] In NUW v ACCO 13, Commissioner Thatcher made the following observations:
a. Hard bargaining is not the same as not genuinely trying to reach an agreement.
b. Genuinely trying to reach agreement did not automatically imply continual movement in the same direction.
c. Bargaining in good faith does not require a willingness to make concessions
[68] In CFMEU 14, SDP Harrison held that:
“I accept that the Employers did not consider any concessions made by the CFMEU as of any significance. That may be so but is not indicative of the union not genuinely trying to reach an agreement. I was satisfied the CFMEU had shown a willingness to consider seriously the claims made by the Employers and had in fact considered those claims. That the CFMEU did not concede those claims does not suggest otherwise.” 15
[69] The CFMMEU also relied on the decision in J.J. Richards & Sons Pty Ltd v Fair Work Australia 16 (JJ Richards) at [59]:
“One person may wish to reach an agreement with another. But, until the general content of the proposed agreement is disclosed, it cannot be said that he has even attempted to reach an agreement….”
[70] The CFMMEU contended that Flick J’s judgement in JJ Richards proffered that the process of reaching agreement requires the exchange of parties and “it seems from his Honour’s judgment that that is all that is required.”17 The CFMMEU said that to satisfy the term ‘genuinely trying to reach agreement’ all that was required was an exchange of different positions and such had occurred early in the process in the present case.
[71] The CFMMEU said that the Act does not prohibit a party putting a position that the other side considers to be unreasonable. There is also no requirement under the Act that force parties to make concessions.
[72] Section 228 of the Act makes it clear, the CFMMEU contended, that the elements of good faith bargaining only require parties to meet and exchange information and to refrain from capricious or unfair conduct and to consider the other’s position. In particular, s.228(2)(a) and (b) provides that:
“(2) The good faith bargaining requirements do not require:
(a) a bargaining representative to make concessions during bargaining for the agreement; or
(b) a bargaining representative to reach agreement on the terms that are to be included in the agreement.”
[73] The CFMMEU submitted that the Act is based on a regime where the bargaining parties are able to bargain within particular boundaries and as long as they bargain within those boundaries, they are entitled to exercise their right to take protected action.
[74] The prohibitions in relation to pattern bargaining are to prevent parties from negotiating or seeking to negotiate on sectoral or industry bases and then refusing to negotiate individually with each employer as part of a course of conduct.
[75] The regime, it argued, allows the taking of protected action when there is an impasse, and it submitted that there is clearly an impasse in this case. It submitted that WCG’s position in the present case is if there is any impasse, it is up to the CFMMEU to make a concession.
[76] The CFMMEU’s submission concluded as follows:
“… it would be entirely contrary to the Act for a party to be required to make concessions or for the Commission to sanction a party for not doing so. That would inevitably involve the Commission intervening in the bargaining process. The Act has for some decades been essentially non interventionist. It provides a system that allows for bargaining within established guidelines. The Act does not provide for arbitration except within narrow territory which does not apply here. The Commission would fall into jurisdictional error if it made orders, the effect of which were to require either party to make concessions.”
WGC’s submissions
[77] WGC made the following submissions in relation to whether the CFMMEU was genuinely trying to reach agreement.
1. The reference to ‘genuinely trying to reach an agreement’ has a special meaning in the context of s.412 and pattern bargaining. Such is supported by the Full Bench in John Holland Pty Ltd v AMWU 18 where the Full Bench said:
“We have come to the conclusion that the expression ‘genuinely trying to reach agreement’ in s.443(1)(b) should be given its ordinary meaning unaffected by the terms of s.412(3). It is clear from our analysis of the statutory provisions that the term ‘genuinely trying to reach an agreement’ is given a particular or specialised meaning for the purpose of the definition of pattern bargaining.”
2. Therefore, the ordinary meaning of ‘genuinely trying to reach an agreement’ cannot be applied “to the extent they might cut across the application of the factors in section 412. The main guide to the operation of section 412 is found in the factors themselves.”
3. Section 412 also needs to be interpreted in light of its evident purpose. That purpose is, evidently, not to permit unions to use protected action in aid of pattern bargaining. It also needs to be interpreted in light of the objects of the Act, which include in section 3:
“The object of this Act is to provide a balanced framework for cooperative and productive workplace relations that promotes national economic prosperity and social inclusion for all Australians by: … (f) achieving productivity and fairness through an emphasis on enterprise-level collective bargaining underpinned by simple good faith bargaining obligations and clear rules governing industrial action; …”
4. If the unions want to be able to utilise protected action, WGC submitted, then they must be willing to actually negotiate agreements at an enterprise level with individual employers. This is not constituted by forcing a pattern agreement on employers, with only minor concessions.
5. The general rule, proffered by the Full Bench in Total Marine 19, that the concept of genuinely trying to reach an agreement involves a finding of fact applied by reference to the circumstances of the particular negotiations, also applies to s.412.
6. The additional term ‘genuine’ serves to ‘emphasise the importance of a person actually trying to solicit agreement’ (see JJ Richards per Flick J) and a preparedness to consider seriously offers and proposals made by the other side, and to take account of arguments is of paramount importance.
7. While the inability of parties to reach an agreement is not evidence that either party is ‘not genuinely trying’, the adoption of a hard line or the making of extravagant demands may evince an underlying intention of obstructing agreement. (Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Cadbury Schweppes Australia Ltd) 20
8. The CFMMEU has failed to discharge the onus to convince the Commission that it is genuinely trying to reach agreement.
[78] There was debate in the proceedings as to whether there was a requirement on behalf of the CFMMEU to make concessions. The case law is clear that there is a difference between a refusal to bargain and a refusal to make a concession.
[79] In terms of the requirement or otherwise to make a concession, WGC contended that there were two difficulties with the CFMMEU’s argument that concessions were not required.
[80] First, it contended that the test for ‘genuinely trying to reach agreement’ had a special meaning afforded to it in s.412. Preparedness to make concessions is clearly a factor, given the terms of section 412(3)(a) which refers to:
“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;”
[81] A preparedness to bargain can only mean a preparedness to give things up. In this regard, WGC placed reliance on Justice Flick's judgment in Endeavour Coal Pty Limited v Association of Professional Engineers, Scientists and Managers, Australia 21 where he said in relation to the term ‘bargaining’:
“[40] To the extent that it was faintly suggested that ‘bargaining’ stood in contrast to the term ‘negotiating’, or that ‘bargaining’ involved less in terms of a willingness to move or to disclose a position than ‘negotiating’, any such distinction is rejected …
[41] The term ‘bargaining’ involves the parties to the ‘bargaining’ process engaging in a process of ‘give and take’ …”
[82] Second, WGC contended that the adoption of a rigid predetermined position and not demonstrating any preparedness to shift was a recognised category of bargaining in bad faith, notwithstanding section 228(2). In Endeavour Coal Pty Ltd v Association of Professional Engineers, Scientists and Managers, Australia (Collieries' Staff Division) 22 the Full Bench said
“[31] In the ABC case it was said that the determination of whether or not a negotiating party is ‘negotiating in good faith’ may depend upon the conduct of the party when considered as a whole. The Full Bench gave the following example:
... if a party is only participating in negotiations in a formal sense but not bargaining as such then they may not be “negotiating in good faith”. Negotiating in good faith would generally involve approaching negotiations with an open mind and a genuine desire to reach an agreement as opposed to simply adopting a rigid predetermined position and not demonstrating any preparedness to shift.”
Is the CFMMEU genuinely trying to reach agreement?
[83] Based on the evidence in this matter, it is clear that very shortly after the CFMMEU provided the Template Agreement to WGC it made the First PABO application. At the time the First PABO application was made, no negotiations had taken place between the parties. At the time of the Second PABO, only one meeting had taken place during which the CFMMEU provided WGC with another copy of its proposed agreement. The Second PABO application was declined because the Commission was not satisfied that the CFMMEU had genuinely tried to reach agreement. At the time of the Third PABO application, a second meeting had been held between the parties in relation to each proposed agreement. While WGC did not oppose the Third PABO application, it did indicate that it reserved its right to argue that the CFMMEU was engaging in pattern bargaining. Since that time there has been correspondence between WGC and the CFMMEU regarding the proposed agreements. It is clear from that correspondence and from the evidence of Ms Mallia that the changes the CFMMEU has indicated it may agree to in respect of its Template Agreement are minor or inconsequential in nature. There is no evidence that changes have in fact been agreed to by the CFMMEU. This is not to say that concessions are a prerequisite in order to demonstrate that a party is genuinely trying to reach agreement.
[84] I agree with the CFMMEU submissions to the effect that the ordinary meaning of ‘genuinely try’ is making a real, true and authentic attempt or effort to achieve or accomplish something, and that this test is an objective one albeit with some element of subjectivity.
[85] I further agree with the CFMMEU that hard bargaining is not the same as not genuinely trying to reach agreement, nor does genuinely trying to reach agreement imply a need for continual movement in the same direction.
[86] However in this context, ‘genuinely trying to reach agreement’ does require consideration of particular factors, one of those being 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.
[87] Having carefully considered the evidence and the submissions of the parties, I am not satisfied that the CFMMEU has discharged its onus of proving that it has been genuinely trying to reach agreement, when taking into account the factors set out in section 413(3) of the Act.
[88] The evidence demonstrates a lack of preparedness by the CFMMEU to take account of the individual circumstances of WGC particularly in relation to the nominal expiry date of the proposed agreements.
[89] Ms Mallia’s evidence in this regard is telling. During her oral evidence she confirmed that the common expiry date of the proposed agreements was 31 December 2018 (i.e. a few months from now). She confirmed that this was a common expiry date sought by the CFMMEU across the mobile crane sector. When asked why that was the case she provided the following answer:
“We don’t want to be locked into a long-term arrangement. We were quite honest with the company about this. The legislative industrial climate might change in the next 12 to 18 months and we want to be in a position to take advantage of that if that provides an environment more beneficial to the employees”. 23
[90] WGC seeks a term of three or four years. While Ms Mallia confirmed that in relation to WGC, the CFMMEU had indicated a willingness to extend the nominal expiry date by one month, i.e. 31 January 2019, I do not consider one month to be in substance a real difference.
[91] It is clear from Ms Mallia’s evidence that the CFMMEU was not taking into account the individual circumstances of the relevant employer in relation to the nominal expiry date of the proposed agreements.
[92] In relation to the preparedness by the CFMMEU to take account of the individual circumstances of WGC more generally, the evidence makes it clear that WGC has sought two agreements i.e. one for Smeaton Grange and one for Wollongong, because of the differences in the work and the different contracts WGC has with its clients relevant at the two sites. WGC’s evidence shows that in Sydney its work involves major infrastructure projects, whereas in Wollongong around 70% of its work is maintenance. As a regional centre, Wollongong has lower wage rates by comparison to Sydney. Mr Sergei’s evidence was that WGC was already paying 10% to 20% more than their competitors in Wollongong. The CFMMEU has sought one agreement covering both sites, and to the extent it is indicated a willingness to consider two enterprise agreements, it is on the basis that the two agreements are identical. This includes identical wage rates, those wage rates being identical to the Template Agreement. This is not evidence of a preparedness to take account of individual circumstances.
[93] As in the decision of SDP Harrison in CFMEU, it is clear that the WGC does not consider any concessions made by the CFMMEU as of any significance. I accept that this of itself is not determinative of the CFMMEU not genuinely trying to reach an agreement. However, based on the evidence before me, I am not satisfied the CFMMEU has shown a willingness to consider seriously the claims made by the WGC, nor am I satisfied that the CFMMEU has in fact seriously considered those claims. Ms Mallia’s evidence regarding the common nominal expiry date is one such example.
[94] There is no evidence that the CFMMEU has engaged in genuine ‘give and take’, nor is there evidence that it has approached the negotiations with an open mind and a genuine desire to reach an agreement. Rather, the CFMMEU, in my view, has adopted a rigid predetermined position and has not demonstrated any preparedness to shift on matters of substance.
[95] I do not accept that in this context, to demonstrate a person is genuinely trying to reach agreement, all that is required is an exchange of different positions. At a minimum, there must be evidence of a willingness to seriously consider those claims. A willingness to seriously consider claims is not the same as requiring a party to make concessions nor does it detract from an ability of a person to engage in hard bargaining.
[96] Having considered the evidence as to the conduct of the CFMMEU as a whole, I am not satisfied that it is genuinely trying to reach agreement.
Was the ballot properly conducted?
[97] WGC argued that the ballot was not conducted in accordance with the PABO issued on 30 July 2018 because the voting did not close on 28 August 2018 as required by order 4.
[98] Order 4 of the PABO says:
“The date by which voting in the protected action ballot is to close is 28 August 2018.”
[99] As a result, WGC submitted, the industrial action was not properly authorised.
[100] I disagree with WGC’s submissions that order 4 required the ballot to close on 28 August 2018. The plain wording is ‘by’ 28 August 2018; not ‘on’. Had the ballot been required to close ‘on’ 28 August 2018, the order would have so specified.
[101] I am therefore satisfied and find that the ballot undertaken by the AEC was properly conducted and valid.
[102] As a result of this finding I do not need to consider whether there has been a technical breach to which s.461 applies.
Conclusion
[103] The CFMMEU can engage in pattern bargaining if it so chooses, however the Act denies protection to industrial action taken in support of pattern bargaining.
[104] The CFMMEU has given notice of its intention to take industrial action. The intended industrial action is evidenced by the CFMMEU’s letter of 20 August 2018 to WGC giving notice of purported protected industrial action.
[105] Given my finding that the CFMMEU is engaging in pattern bargaining, I must make an order under section 418 of the Act as the intended industrial action will not be protected industrial action.
[106] An order will issue separately.
DEPUTY PRESIDENT
Printed by authority of the Commonwealth Government Printer
<PR700002>
Appearances:
G Jolly for WGC Crane Group Pty Ltd.
I Latham of Counsel for the Construction, Forestry, Maritime, Mining and Energy Union.
Hearing details:
2018.
Sydney:
August 21, 22.
1 PR620063.
2 See Transcript PN59, confirmed by Ms Mallia that it is the CFMMEU’s draft mobile crane sector agreement.
3 EA’s in Annexures MS 32 to MS 34 to Mr Sergei’s statement respectively.
4 (2003) 9 VR 136.
5 [2009] FWAFB 368.
6 Trinity Garden Aged Care & Anor v ANF [2006] AIRC 508.
7 [2006] AIRC 445.
8 Ibid at [20].
9 [2006] AIRC 508 at [27].
10 See Liquor, Hospitality and Miscellaneous Union - Western Australian Branch v CSBP Limited and CSBP Limited v Liquor, Hospitality and Miscellaneous Union, [2007] AIRC 469.
11 (2004) AIRC 1234.
12 Ibid at [57].
13 [2009] FWA 226.
14 [2014] FWC 1600.
15 Ibid at [34].
16 [2012] FCAFC 53.
17 Transcript PN1057.
18 [2010] FWAFB 526.
19 [2009] FWAFB 368.
20 PR973290.
21 [2012] FCA 764 at [40] and [41].
22 [2012] FWAFB 1891 at [31].
23 Transcript PN763.
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