[2010] FWAFB 344

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FAIR WORK AUSTRALIA

REASONS FOR DECISION

Fair Work Act 2009
s.604 - Appeal of decisions

Australian Postal Corporation
v
Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia-Communications Division
(C2009/10925)

SENIOR DEPUTY PRESIDENT KAUFMAN
DEPUTY PRESIDENT IVES
COMMISSIONER LEWIN

MELBOURNE, 20 JANUARY 2010

Appeal – application for protected action ballot order – s.443(1)(b) – “has been, and is”, genuinely trying to reach an agreement – matters relating to employer/employee relationship – s.409(1) – reasonable belief, bearing upon genuinely trying – s.437 adequacy of disclosure of nature of proposed action.

On 23 November 2009 we granted permission to the Australian Postal Commission to appeal a decision and order made by Commissioner Roberts on 9 November 2009 and dismissed the appeal. These are our reasons.

[1] This is an appeal by the Australian Postal Corporation (Australia Post) against a decision 1 and order 2 made by Commissioner Roberts on 9 November 2009 requiring the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU) to hold a protected action ballot of employees of Australia Post. There is a considerable history to this matter which it is necessary to understand for the purpose of this appeal.

[2] Senior Deputy President Drake made orders 3 for a protected action ballot on 25 and 28 August 2009 4. Her Honour’s orders were quashed on appeal on 12 October 20095. A further application for protected action ballot orders was refused by Commissioner Roberts on 29 October 2009. The Commissioner finally made the order under appeal after the CEPU had again applied for it on 4 November 2009.

[3] The history of negotiations between the parties is set out in the decisions to which we have referred and it is not necessary that we repeat it in detail. The first Full Bench set out, at some length, extracts from an affidavit that was tendered before Senior Deputy President Drake and that recites much of the history. 6

[4] It is apparent that since late 2006 or early 2007 the CEPU has been seeking to negotiate with Australia Post for an agreement to replace the Australia Post Enterprise Agreement 2004, the nominal expiry date of which was 31 December 2006. That agreement was made between Australia Post, the CEPU and three other organsations of employees, under the Workplace Relations Act 1996 (WR Act).

[5] The negotiations were complex and traversed a wide variety of issues. Of particular relevance to this appeal is the issue of the CEPU’s desire to seek provisions that would restrict Australia Post’s ability to unilaterally engage contractors or to use agency staff to perform some of the work that had been performed by its own employees.

[6] Amongst other things, Australia Post took the point that an agreement that includes provisions that restrict or qualify the employer’s right to use independent contractors is incapable of certification because it contains matters that do not pertain to the relationship between employer and employees and is therefore not an agreement of the kind required by s.170LI of the WR Act or s.172(1) of the Fair Work Act 2009 (the FW Act).

[7] This issue is important to both parties because Australia Post wishes to be able to utilize the services of contractors or agency personnel (we will usually refer to them jointly as contractors) as it deems necessary from an operational perspective, whereas the CEPU fears for the security of the jobs of its members employed by Australia Post.

[8] It is fair to say that negotiations for a new enterprise agreement proceeded, albeit on a sporadic basis, throughout 2007 and 2008. Relevantly to this appeal bargaining between the parties recommenced in November 2008. Although the CEPU modified the terms of the provisions it was seeking, it maintained its desire to restrict the manner in which Australia Post could engage contractors. It should be made clear that the negotiations dealt with other substantial matters, upon some of which agreement was reached. By 21 January 2009 the list of issues that the CEPU wished to negotiate had been reduced to 14.

[9] The parties met many times between February and April 2009, but remained apart on matters such as full arbitration to settle disputes, the use of contractors, penalty rates and facility nominated doctors. Negotiations intensified until early July 2009. The issue of how to deal with contractors remained a fundamental sticking point. At all times Australia Post was of the view, and communicated this to the CEPU, that the CEPU’s claims in relation to contractors were impermissible as not pertaining to the employer/employee relationship and therefore could not be included in an agreement to be made under either the WR Act or the FW Act.

[10] By 8 July 2009 the CEPU had formed the view that negotiations were deadlocked as neither side was prepared to yield on what the CEPU characterized as sticking points.

[11] During the period 10 November 2008 (when the CEPU had written to Australia Post, refining its position) to 8 July 2009 the CEPU had sought Australia Post’s agreement to the following in respect of contractors: 7

[12] There were no further negotiations between the beginning of July and 12 August 2009 on which date the CEPU made two applications (in respect of different categories of employees) pursuant to s.437 of the FW Act, for orders requiring protected action ballots to be conducted to determine whether certain employees of Australia Post who are members of the CEPU wished to engage in particular protected industrial action for proposed enterprise agreements with Australia Post. 8 The matters were heard by Senior Deputy President Drake on 13 and 17 August 2009.

[13] Her Honour was “persuaded that the CEPU’s correspondence expresses disappointment with Australia Post’s refusal to negotiate regarding these issues but nevertheless demonstrates a perhaps begrudging intention to negotiate from that date onwards within the confines of what is ‘permissible’.” 9

[14] Her Honour was satisfied that the CEPU had ceased to press its claims in respect of matters that were not permissible and found that from November 2008 the CEPU had been genuinely trying to reach an agreement with Australia Post. On 25 August 2009 her Honour issued two protected action ballot orders which she varied in a minor respect on 28 August 2009.

[15] Australia Post appealed against the decision and orders. The ground of appeal relevant to the matter before us was that her Honour had erred in finding that the CEPU had been, and was, genuinely trying to reach an agreement as required by s.443(1) of the FW Act before a protected action ballot could be ordered. The appeal was heard by a Full Bench on 7 September 2009.

[16] The Full Bench granted permission to appeal and upheld the first ground which is not germane to this appeal. Regarding the issue of whether or not the CEPU had been, and was, genuinely trying to reach an agreement with Australia Post, the Full Bench found that the matters for which the CEPU was continuing to press in relation to contractors were provisions restricting or qualifying Australia Post’s right to use independent contractors and were therefore not matters pertaining to the employment relationship. Accordingly, the Full Bench was not satisfied that the CEPU had been, and was, genuinely trying to reach an agreement with Australia Post, the employer of the employees to be balloted. On 7 September 2009 the Full Bench allowed the appeal and quashed Senior Deputy President Drake’s orders. Its reasons were published on 12 October 2009.  10

[17] The Full Bench found that, while in November 2008 the CEPU was seeking contracting out provisions to the extent permitted, by 18 December 2008 the CEPU was seeking changes to contractor provisions to require Australia Post to advertise every position internally and to only contract out a position if it is not wanted by Australia Post employees. These were not permitted matters as they were provisions restricting or qualifying the employer’s right to use independent contractors.

[18] On 14 September 2009, a week after Senior Deputy President Drake’s orders were quashed, the CEPU provided Australia Post with its version of the proposed new enterprise agreement. It contained clauses relating to contractors and agency personnel. Meetings between the parties took place during September and October 2009, with the CEPU providing another draft agreement to Australia Post on 1 October. Australia Post then wrote to the CEPU informing it that the revised contractors’ claim still contained non-permissible matters, as well as some 20 other new matters.

[19] On 14 October 2009, two days after the Full Bench published its reasons for decision, the CEPU wrote to Australia Post with a further revised contractors’ claim.

[20] On 21 October 2009 there was a meeting between Australia Post, the CEPU and, apparently for the first time, the other bargaining representatives of employees of Australia Post who were to be covered by the proposed agreement.

[21] On 23 October 2009 the CEPU filed a further application for a protected action ballot order. This application was heard on 26 October 2009 by Commissioner Roberts and a decision 11 was published on 29 October 2009.

[22] The CEPU submitted that, having regard to the decision of the Full Bench, it had amended its claims so that they no longer contained impermissible matters. It further submitted that since 7 September 2009 its actions clearly demonstrated that it had been, and was, genuinely trying to reach an agreement. Australia Post countered that the CEPU was still pursuing impermissible matters and was merely laying a paper trail to give the impression that it was genuinely trying to reach an agreement in order that it could obtain a protected action ballot order.

[23] The contactors clause in the draft agreement provided by the CEPU on 14 October 2009 reads:

[24] The CEPU also submitted an amended claim concerning agency personnel:

[25] Commissioner Roberts found that the CEPU had persisted with claims about non-permitted matters until at least 14 October 2009, with the result that it could not be said to have been genuinely trying to reach an agreement to that date.

[26] Regarding the revised contractors’ claim of 14 October 2009, the Commissioner found that the clause constituted a provision “restricting or qualifying the employer’s right to use independent contractors.” 12 The Commissioner also found that the proposals in the amended claim relating to consultation were “so onerous as to constitute a restriction or qualification of the employer’s right to use contractors.” The Commissioner thus found that “the CEPU cannot be said to have been genuinely trying to reach an agreement with Australia Post in the period from 14 October 2009 until it filed the current application on 23 October 2009.”13

[27] As to the agency personnel claim, the Commissioner found that clause 6.6.1 was in relation to a permitted matter, but that the proposed provision in clause 6.6.2 qualified or restricted the rights of Australia Post and was not a permitted matter.

[28] The Commissioner dismissed the CEPU’s application for a protected action ballot order. He did, however, observe that, having regard to the history of negotiations between the parties, had the CEPU not included the non-permitted matters, he would have been satisfied that the CEPU was genuinely trying to reach an agreement with Australia Post and would have made a protected action ballot order. He also expressed the view that there was no defect with the form of the questions to be put in the proposed ballot.

[29] On 30 October 2009 the CEPU wrote to Australia Post advising it that, in light of correspondence to it from Australia Post and Commissioner Roberts’ decision the previous day, it had revised its agency personnel and contractors clauses:

[30] The CEPU also sought a meeting with Australia Post for any time that day (Friday 30 October 2009), over the weekend, or up until 2.30pm on Monday 2 November 2009.

[31] Australia Post responded the same day to propose a meeting of all the bargaining representatives on 5 November 2009 and stated that it would be in a position to discuss the revised clauses at that meeting. Australia Post also alleged that the CEPU was failing to meet the good faith bargaining requirements of the Act by insisting on a meeting over a de facto long weekend (that being the weekend preceding Melbourne Cup Day). It also alleged that the CEPU had failed to give adequate consideration to its proposals.

[32] After several exchanges of correspondence the CEPU confirmed its attendance at the 5 November 2009 meeting via email of 4 November 2009.

[33] In the early evening of 4 November 2009 Australia Post notified the CEPU that its latest proposal still contained non-permitted matters.

[34] On 5 November 2009 the CEPU responded to Australia Post. Whilst confirming that it believed its revised claims did not contain non-permitted matters, it stated that, in an effort to genuinely try to reach an agreement, the CEPU agreed to amend the two clauses in the manner suggested by Australia Post. The last sentence in clause 6.6.1, which read:

was deleted, as was the sentence to similar effect in clause 30.3.2:

[35] However, at the hearing before Commissioner Roberts on 5 November 2009, Australia Post raised further objections to three further aspects of the clauses, asserting that they still contained non-permitted matters. The allegedly objectionable matters are clause 6.6.2, the last sentence in clause 30.7.2 and clause 30.6.3.

[36] The Commissioner found that none of the clauses to which Australia Post objected contained non-permitted matters. In his view, clause 6.6.2 is a logical and necessary provision to allow for the transparent operation of clause 6.6.1. For similar reasons he found that clause 30.3.3 also contained only permitted matters. The Commissioner’s finding in relation to clause 30.3.2 was that that sub-clause related to the employer/employee relationship because it attempts to protect the safety of Australia Post employees and also the “facilities arrangements” of such employees.

[37] As the Commissioner had noted in his previous decision of 29 October 2009 that, apart from the non-permitted material, he would have found that the CEPU had been, and was, genuinely trying to reach an agreement, he found accordingly. The Commissioner also rejected Australia Post’s objections to the form of the questions to be put in the ballot.

[38] The Commissioner found that from “30 October 2009 the CEPU was genuinely seeking to reach agreement with Australia Post by responding to Australia Post’s concerns on various matters and seeking to negotiate on a face to face basis as a matter of urgency.” The Commissioner found that the jurisdictional prerequisites for the making of a protected action ballot order pursuant to s.437 of the FW Act had been satisfied and made a protected action ballot order 14 on 9 November 2009.

[39] On the appeal Mr J Bourke, of counsel, appeared for Australia Post and Mr R Reitano, of counsel, appeared for the CEPU.

[40] Australia Post contended that the Commissioner had erred in finding that the CEPU had been, and was, genuinely trying to reach an agreement with it and, further, that the questions that were to be put in the ballot were so broad that they could not be said to disclose adequately the nature of the proposed industrial action, as required by s.437(3) of the FW Act.

[41] Mr Bourke analysed the history of negotiations in minute detail. He submitted that given that, as late as the morning of the hearing before Commissioner Roberts on 5 November 2009, the CEPU had withdrawn parts of the allegedly objectionable clauses it follows that until that time it could not be said that the CEPU had been, and was, genuinely trying to reach an agreement with Australia Post because until then its claims contained non-permitted matters. He then submitted that given the short period of time that had elapsed between the withdrawal of those portions of the clauses and the hearing, it could not to be said that the CEPU had been, or was, genuinely trying to reach an agreement. Insufficient time had elapsed for negotiations on the claims as amended to take place. In any event, the clauses still contained impermissible matter and, as an agreement containing them could not be made under the Act, the CEPU was still not genuinely trying to reach such an agreement.

[42] Mr Bourke noted that:

[43] He submitted that it follows that, at least from July 2008 until 30 October 2009, when the CEPU again amended its claim, the CEPU was not genuinely trying to reach an agreement. He further submitted that between 29 October and 5 November 2009, the date of the hearing that culminated with the decision under appeal, the CEPU was still not genuinely trying to reach an agreement. In support of this submission he noted “the undue, indeed extraordinary, haste with which the CEPU brought its application for a protected ballot order.” The application was made on 4 November, which was apparently only one clear business day after the CEPU revised its contractor claim on 30 October 2009. He also referred to the insistence by the CEPU for meetings on the same day as it had served its amended claim as well as seeking meetings over the weekend as well as on Melbourne Cup Day. In Australia Post’s submission, the insistence upon such an unreasonable timeline further demonstrated that the CEPU was not genuinely trying to reach an agreement. It was merely seeking to clear the way of impediments to it being able to obtain a protected action ballot order.

[44] Mr Bourke further submitted that, in any event, the further revised claims of 30 October 2009 still contained non-permitted matters. The revision of those claims by the CEPU on the morning of 5 November, prior to the hearing before Commissioner Roberts, was further evidence that all that the CEPU was doing was trying to enable it to seek the protected action ballot order. Notwithstanding the CEPU’s amendment to its claim to deal with the objections that Australia Post had notified it of on the evening of 4 November, Australia Post considered that the claims still contained non-permitted matters. Why Australia Post did not object to those aspects of the claim on 4 November has not been explained.

[45] In Mr Bourke’s submission, even had the claims as amended on 5 November not contained impermissible matters, the CEPU had been genuinely trying to reach an agreement only since “9:34 am on the morning of the hearing of its third application.” This would not satisfy the “has been” requirements of s.443(1) of the FW Act.

[46] Mr Bourke also maintained his submission that the questions proposed to be put to the relevant employees did not disclose adequately the nature of the proposed industrial action as required by s.437(3) of the Act.

[47] On 9 November 2009 Commissioner Roberts found that the CEPU had finally eliminated non-permitted matters from its claim and that it had been genuinely trying to reach an agreement from 30 October 2009. He was satisfied that it ‘“has been, and is, genuinely trying to reach an agreement with the employer’ as at the time of making this decision…” He also considered that the questions conformed with the requirements of s.437(3).

[48] In our view the Commissioner was correct in finding that the CEPU had been and was genuinely trying to reach an agreement with Australia Post. However, in our view, the removal of the non-permitted matters from the claim on 30 October 2009 was not necessarily the time from which the CEPU commenced to genuinely reach an agreement with Australia Post. To suggest that the time at which a union can commence to genuinely try to reach an agreement with an employer is the time at which it makes a claim that in Fair Work Australia’s view does not contain prohibited content is to inject an unwarranted degree of artificiality and technicality into what is intended to be “a fair, simple and democratic process to allow a bargaining representative to determine whether employees wish to engage in particular protected industrial action for a proposed enterprise agreement.” 15

[49] In our view, it was appropriate to take into account the entire history of the negotiations between the CEPU and Australia Post. As Mr Reitano said on the appeal, it is not as though everything that had transpired over the past three years or so had not occurred. It should be remembered that many items for the proposed agreement had been discussed and agreed between the parties over the course of the meetings. The insistence by the CEPU of a clause or clauses that proved not to pertain to the employer/employee relationship was a stumbling block to the attainment of an agreement that could be made under the FW Act.

[50] The genesis of the jurisprudence is to be found in Electrolux Home Products Pty Ltd v the Australian Workers’ Union and Others 16 where the High Court held that industrial action taken in relation to a proposed agreement which is not capable of certification was not protected under the provisions of the WR Act.

[51] The first consideration of Electrolux at Full Bench level was in Re Rural City of Murray Bridge Nursing Employees, ANF (Aged Care) -- Enterprise Agreement 2004; Re Schefenacker Vision Systems Australia Pty Ltd, AWU, AMWU Certified Agreement 2004 17 . The Full Bench observed that an important proposition to emerge from that case is that an agreement that contains a matter which does not pertain to the relationship of employers and employees could not be subject of a valid application for certification pursuant to s.170L of the WR Act. This was not the case if the non-pertaining matter was ancillary or incidental, or a machinery provision relating to, a matter pertaining to the employment relationship.

[52] Given that industrial action in relation to a non-pertaining agreement could not be protected, it was found that a union that was seeking to make such an agreement could not be genuinely said to be trying to reach an agreement for the purposes of the WR Act and now the FW Act. This is because the agreement that it is trying to reach must be an agreement capable of being made under the legislation.

[53] In Wesfarmers Premier Coal Ltd v the Automotive, Food, Metals, Engineering, Printing & Kindred Industries Union (No 2) 18 French J, as he then was, found that a clause that restricts or qualifies the employer’s right to use individual contractors imports into the proposed agreement a discrete matter which does not pertain to the employer/employee relationship. It not being merely ancillary, but substantive and distinct, a proposed agreement containing such a clause is not an agreement of the kind required by the legislation. It follows that industrial action taken in support of a proposed agreement containing such a clause could not be protected industrial action.

[54] Before a protected action ballot order can be made the applicant for the order must be genuinely trying to reach an agreement that can be made under the FW Act. So much is clear from Electrolux and Schefenacker.

[55] Thus where protected action ballot orders have been sought in relation to proposed agreements containing non-pertaining or non-permissible matters, those orders have been refused on the basis that the union was not genuinely trying to reach an agreement. 19 However, even under the WR Act the position was not so clear when doubt existed as to whether or not the claims being pursued contained non-pertaining matters.20

[56] Given the wording of s.409(1)(a) the jurisprudence prior to the enactment of the FW Act must be viewed cautiously. The first Full Bench adverted to this at paragraph 39 of its reasons. Employee claim action may be engaged in for the purpose of advancing claims that are reasonably believed to be only about permitted matters. It seems to us to follow that if a bargaining agent that reasonably believed that the claims it was advancing at the time it sought a protected action ballot order were only about permitted matters, it could not, for that reason alone, be said that the bargaining agent was not genuinely trying to reach an agreement.

[57] Further, the recognition in s.253(2) that an enterprise agreement might contain a term which is not about a permitted matter, lends weight to this proposition. The apparent tension between that section and s.172(1)(a), adverted to by the first Full Bench, may be more apparent than real. In our view, the combined effect of ss.172(1) and 253(2) is that the agreement will be an agreement under the Act only insofar as it deals with the matters in s.172(1). Terms which are not about matters set out in s.172(1) are merely of no effect.

[58] The history of the negotiations demonstrates that the CEPU, especially after the decision of the first Full Bench, was seeking to formulate a contractors’ clause that did not restrict or qualify the right of Australia Post to use contractors or agency staff and pertained to the employer/employee relationship. It is clear that by the time of the last hearing before Commissioner Roberts, and indeed well before, the CEPU reasonably believed that the clauses it was promulgating did not contain non-permitted matters.

[59] Ultimately, because of the operation of s.409(1), it is not necessary to decide whether the claim at the time of the hearing under appeal contained non-permitted matters as identified by Australia Post. Because the CEPU reasonably believed that they did not, it was genuinely trying to reach an agreement. In any event, for the reasons given by him, we consider that the Commissioner did not err in characterizing those matters as permitted. Further, in our view, even were they non-pertaining, the few remaining clauses to which Australia Post still objected were ancillary or incidental or machinery provisions relating to matters pertaining to the employment relationship.

[60] It is self-evident that if a union is proposing an agreement containing clearly non-pertaining clauses it cannot be genuinely trying to reach an agreement that may be approved by Fair Work Australia under s.186 of the FW Act. Section 409(1) could not be called in aid because it could not be said that a union advancing such claims reasonably believed that they were only about permitted matters.

[61] Australia Post also submitted that the questions that are contained in the order made by Commissioner Roberts are contrary to the requirements of s.437 of the FW Act in that they do not adequately disclose the nature of the proposed industrial action. It was put that the Commissioner erred in not so finding.

[62] Mr Bourke submitted that questions that contemplate an indefinite or unlimited number of proposed forms of action, as is the case here, are so wide and vague as to not “enable employees to understand what work would not be undertaken and what work would remain to be done.” 21 We disagree. Although the range and types of the industrial action is wide and of potentially unlimited frequency and duration, the questions sufficiently identify the nature of the proposed industrial action as required by s.437(3)(b). The Commissioner did not err in ordering the questions to be put.

[63] Mr Bourke asked the rhetorical question: if Australia Post received a notice of intention to take industrial action which identified it as an indefinite number of stoppages of work varying in length from one to 24 hours would Australia Post know the industrial action it would be subjected to in order that it could make defensive preparations? In his submission Mr Bourke mistakenly conflated the requirements of s.437(3)(b) with those of s.414(1). They are not the same. Whilst it is implicit that the description of the action contained in the s.414 notice given to the employer should be sufficient to put it a position to make reasonable preparations to deal with the effect of the industrial action, 22 that is not the case in relation to the questions to be put to a ballot. What is required for the purposes of s.437(3)(b) is that the nature of the proposed action be disclosed.

[64] Accordingly, we dismissed the appeal.

SENIOR DEPUTY PRESIDENT KAUFMAN

Appearances:

Mr J Bourke, barrister, for the appellant, Australian Postal Corporation.

Mr R Reitano, barrister, for the respondent, Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia.

Hearing details:

2009
MELBOURNE
20 NOVEMBER

 1   [2009] FWA 998.

 2   PR990480.

 3   PR988659 and PR988662.

 4   PR988906 and PR988907.

 5   The reasons for decision of the Full Bench are at [2009] FWAFB 599.

 6   Ibid at [49].

 7   [2009] FWAFB 599 at [52].

 8   B2009/10457 and B2009/10458.

 9   [2009] FWA 136 at [19].

 10   [2009] FWAFB 599.

 11   [2009] FWA 878.

 12   Ibid at [24].

 13   Ibid.

 14   PR990480.

 15   Section 436.

 16   (2004) 221 CLR 309.

 17   (2005) 142 IR 289.

 18   (2004) 138 IR 362.

 19   Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union v Kempe Engineering Services Pty Ltd PR973592; United Firefighters’ Union of Australia v Country Fire Authority (2006) 158 IR 120.

 20   Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Tyco Australia Pty Ltd (2006) 157 IR 15.

 21   United Firefighters’ Union of Australia v Country Fire Authority (2006) 155 IR 120 at [31].

 22   Telstra Corporation Limited v Communications, Electrical, Electronic, Energy, Information, Postal Plumbing and Allied Services Union of Australia [2009] FWAFB 1698




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