[2010] FWAFB 526 |
FAIR WORK AUSTRALIA |
DECISION |
Fair Work Act 2009
s.604—Appeal of decisions
JUSTICE GIUDICE, PRESIDENT |
MELBOURNE, 28 JANUARY 2010 |
Application for protected action ballot order – whether valid applications – form of question to be put to employees– requirement to specify employees to be balloted – whether bargaining representatives genuinely trying to reach an agreement – relevance of pattern bargaining – Fair Work Act 2009 ss.172, 406, 409(2) 412, 114, 430, 437, 443(1) and 604.
[1] These are two appeals, for which permission is required, by John Holland Pty Ltd (the appellant). The first appeal is against a decision made by Senior Deputy President Richards on 2 October 2009. 1 The second appeal is against a decision made by Commissioner Spencer on 12 October 2009.2 The appeals are brought pursuant to s.604 of the Fair Work Act 2009 (the Fair Work Act).
[2] The appeals arise out of similar circumstances, both being concerned with negotiations for an enterprise agreement to cover employees at the appellant’s Richlands workshops in the state of Queensland. The first appeal is from a decision to grant an application by the “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) for a protected action ballot order. The second appeal is from a decision to grant an application by the Australian Workers’ Union (AWU) for a similar order.
Background
[3] The appellant, the AMWU and the AWU are all parties to an agreement made under the Workplace Relations Act 1996 (WR Act) known as the John Holland Richlands Fabrication and Coatings Agreement 2006-2009 3 (the expired agreement). The nominal expiry date of the expired agreement is 3 April 2009. After 3 April 2009 there were a number of meetings between the appellant and the two unions to discuss a replacement agreement. A significant issue arose between them as to the relationship between the operation of the replacement agreement and the operation of the Metal, Engineering and Associated Industries Award 1998,4 a pre-reform award (the metal industry award). The expired agreement contains a clause which incorporates the terms of the metal industry award as at 1 December 2005 subject to the proviso that the terms of the expired agreement should apply in the event of any inconsistency between the two instruments. The metal industry award has 7 parts. The expired agreement was expressed to apply to employees “employed in the classifications provided for by Part 5 of Part 1” of that award.
[4] In the discussions for a replacement agreement the AMWU and the AWU sought a provision incorporating all of the provisions of the metal industry award by reference. The appellant took the position that the replacement agreement should be a site-specific, stand-alone agreement and only include award terms relevant to the employees covered. Consistent with this approach, the draft agreement prepared by the appellant contained what it considered to be the relevant terms from the metal industry award but did not incorporate any terms of that award by reference. There was evidence that at a number of meetings the appellant’s representative, Mr Patten, asked the AMWU and AWU representatives to identify any additional relevant terms of the metal industry award but they did not do so. In addition, there was evidence that the unions took the position that if the appellant would not agree to incorporate the terms of the metal industry award by reference they would not negotiate with the appellant on any other matters.
[5] It is unnecessary to detail the course of these discussions. It is sufficient to note that there were meetings on 6 April, 5 May and 24 July 2009 and various items of correspondence. The appellant submitted, and it seems to be common ground, that neither union ever formulated a written proposal for a replacement agreement or otherwise detailed their claims in writing. It should be noted, however, that on 22 September 2009 the AMWU wrote to the appellant seeking an explanation of the appellant’s position on the award incorporation question.
[6] The AMWU application for a protected action ballot order was lodged on 29 September 2009. The Senior Deputy President granted the application on 2 October 2009 and issued the protected action ballot order on the same day. The AWU application for a protected action ballot order was lodged on 7 October 2009. The Commissioner granted the application on 12 October 2009 and issued the protected action ballot order on the same day.
[7] It is apparent that the appeals raise a number of significant issues concerning the interpretation and operation of the relevant statutory provisions. We have decided to grant permission to appeal in both cases.
[8] There are four grounds of the first appeal. The first ground is that the AMWU’s application was not a valid one under s.437 of the Fair Work Act because the question to be put to the employees was ambiguous and did not adequately specify the nature of the industrial action for which the endorsement of the employees was sought. The second ground of appeal is that the application was invalid because it failed to specify the group or groups of employees to be balloted, contrary to the requirements of ss.437(3)(a) and 443(3)(b) of the Fair Work Act. The third ground is that in approaching the question of whether the AMWU had been or was genuinely trying to reach agreement with the appellant, a statutory precondition for a protected action ballot order, the Senior Deputy President misapplied the terms of s.443(1)(b) of the Fair Work Act. The fourth ground of appeal is related to the third. It is based on the further contention that the Senior Deputy President was wrong to find that the AMWU had been and was genuinely trying to reach agreement with the appellant.
[9] In order to deal with the first two grounds of appeal it is necessary to set out the terms of s.437 of the Fair Work Act. It reads:
“437 Application for a protected action ballot order
Who may apply for a protected action ballot order
(1) A bargaining representative of an employee who will be covered by a proposed enterprise agreement, or 2 or more such bargaining representatives (acting jointly), may apply to FWA for an order (a protected action ballot order) requiring a protected action ballot to be conducted to determine whether employees wish to engage in particular protected industrial action for the agreement.
(2) Subsection (1) does not apply if the proposed enterprise agreement is:
(a) a greenfields agreement; or
(b) a multi-enterprise agreement.
Matters to be specified in application
(3) The application must specify:
(a) the group or groups of employees who are to be balloted; and
(b) the question or questions to be put to the employees who are to be balloted, including the nature of the proposed industrial action.
(4) If the applicant wishes a person other than the Australian Electoral Commission to be the protected action ballot agent for the protected action ballot, the application must specify the name of the person.
Note: The protected action ballot agent will be the Australian Electoral Commission unless FWA specifies another person in the protected action ballot order as the protected action ballot agent (see subsection 443(4)).
(5) A group of employees specified under paragraph (3)(a) is taken to include only employees who:
(a) will be covered by the proposed enterprise agreement; and
(b) are represented by a bargaining representative who is an applicant for the protected action ballot order.
Documents to accompany application
(6) The application must be accompanied by any documents and other information prescribed by the regulations.”
[10] It is convenient at this point to set out the ballot questions as they appeared in the AMWU’s application and, subsequently, in the protected action ballot order:
“5. QUESTIONS
The questions to be put to voters in the ballot are:
“In support of reaching an Enterprise Agreement with John Holland Pty Ltd do you endorse the taking of any and all protected industrial action against your employer which is authorised by this ballot, separately, concurrently and/or consecutively in the form of:
Question 1
Stoppages of work for a 1 hour period?
Question 2
Stoppages of work for 2 hour periods?
Question 3
Stoppages of work for 4 hour periods?
Question 4
Stoppages of work for 8 hour periods?
Question 5
Stoppages of work for 10 hour periods?
Question 6
Stoppages of work for 24 hour periods?
Question 7
Stoppages of work for 48 hour periods?
Question 8
Indefinite or periodic bans on overtime?
The first ground of the first appeal
[11] The first ground of appeal is based on the contention that it is a requirement of s.437(1) that the application for a protected action ballot order must unambiguously specify the nature of the particular industrial action which is to be endorsed. The appellant relies on the terms of ss.437(1) and (3)(b) as well as the object of the relevant division in s.436. We have already set out the terms of ss.437(1) and (3)(b). Section 436 reads:
The object of this Division is to establish 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.
Note: Under Division 2, industrial action by employees for a proposed enterprise agreement (other than employee response action) is not protected industrial action unless it has been authorised in advance by a protected action ballot.”
[12] It was submitted that s.437(3)(b) is in almost identical terms to s.452(1)(a) of the WR Act and that the cases decided in relation to that section indicate that a question in the application which is ambiguous will render the application invalid. The appellant’s counsel referred to a number of decisions in this regard. Reliance was also placed on the use of the term “particular” in s.437(1) as an indication of the requirement for specificity.
[13] The appellant made a detailed analysis of the questions in the AMWU’s application in order to show that they are ambiguous and lacking in the necessary specificity. It was pointed out that the preamble asks employees to indicate whether they wish to engage in eight different types of industrial action “separately, concurrently and/or consecutively”. It was submitted that employees would have little appreciation of the outer limits of the action for which endorsement was sought, would not be in a position to make an informed choice and that the words “separately, concurrently and/or consecutively” make the nature of the industrial action endorsed by a positive vote quite unclear. Question eight was also the subject of criticism on the basis that it is not possible to give an affirmative answer to a disjunctive question. It was also submitted that questions one to eight taken together make little sense because, for example, it would not be possible to ban overtime in conjunction with a 24 hour stoppage of work.
[14] In order to deal adequately with these submissions it is necessary to refer to other relevant provisions of the Fair Work Act. An application under s.437 is the first step in a process which can ultimately lead to the taking of protected industrial action. In order to be protected, industrial action must be authorised by a protected action ballot. That requirement is made explicit in s.409(2). That section reads:
Employee claim action
(1) …..
Protected action ballot is necessary
(2) The industrial action must be authorised by a protected action ballot (see Division 8 of this Part).”
[15] Before protected action can be taken, however, ss.413 and 414 must be complied with. Section 414 reads where relevant:
“414 Notice requirements for industrial action
Notice requirements—employee claim action
(1) Before a person engages in employee claim action for a proposed enterprise agreement, a bargaining representative of an employee who will be covered by the agreement must give written notice of the action to the employer of the employee.
(2) The period of notice must be at least:
(a) 3 working days; or
(b) if a protected action ballot order for the employee claim action specifies a longer period of notice for the purposes of this paragraph—that period of notice.
Notice of employee claim action not to be given until ballot results declared
(3) A notice under subsection (1) must not be given until after the results of the protected action ballot for the employee claim action have been declared.
… …
Notice requirements—content
(6) A notice given under this section must specify the nature of the action and the day on which it will start.”
[16] We draw attention in particular to the requirement for notice in ss.414(1) and (6). If the action specified in the notice is not authorised by the relevant ballot, any action taken pursuant to the notice will not be protected industrial action. For this reason there will be a natural tendency for bargaining representatives to frame ballot questions in a way which minimises the possibility that the industrial action eventually taken will fall outside the action authorised by the ballot. If the ballot questions describe industrial action in a general way it might subsequently be held that specific types of industrial action were not authorised. No doubt, for that reason, a number of bargaining representatives have drafted ballot applications containing very detailed questions.
[17] Reference should also be made to the effect of s.459(2). Section 459 deals with the circumstances in which industrial action is authorised by a protected action ballot. Section 459(2) reads:
“459 Circumstances in which industrial action is authorised by protected action ballot
…..
(2) [First period only subject of ballot] If:
(a) the nature of the proposed industrial action specified in the question or questions put to the employees in the protected action ballot included periods of industrial action of a particular duration; and
(b) the question or questions did not specify that consecutive periods of that industrial action may be organised or engaged in;
then only the first period in a series of consecutive periods of that industrial action is the subject of the ballot for the purposes of paragraph (1)(a).”
[18] It is apparent that this sub-section operates so that consecutive periods of industrial action are not protected unless the ballot which authorised the action so provides. We think this explains the inclusion of the word “consecutively” in the preamble to the questions in the ballot application in this case.
[19] Moving now to the construction of s.437 itself, seen in its statutory context, all that the section requires is that the questions should describe the industrial action in such a way that employees are capable of responding to them. If the questions are ambiguous or lack clarity there may be consequences for the bargaining representative and the employees if reliance is placed on the result of the ballot in taking industrial action. If the question or questions give rise to ambiguity, the conclusion may be reached that the industrial action specified in a notice under s.414 was not authorised by the ballot and that the action is not protected for the purposes of s.409(2). It is true that ambiguity or lack of clarity in the description of the industrial action is undesirable, but these are matters more appropriate for consideration under other provisions. It follows that in most cases the drafting of the questions will be a matter for the applicant.
[20] The appellant’s criticism of the questions in the AMWU application is based on a technical and pedantic approach. The expression “separately, concurrently and/or consecutively” does not deprive the question of meaning. Those expressions apply, as far as there is scope, to the types of industrial action specified. We have already noted the terms of s.459(2) which gives separate justification for the term “consecutively”. While it is possible to construct extreme examples of the number of types of industrial action which might be authorised by an affirmative answer to the questions, in practical terms the questions do no more than identify eight types of industrial action and the possible options for taking each of those types of action.
[21] The criticism of question eight is unfounded. It might have been clearer to split that question into two parts, one dealing with indefinite bans on overtime and one with periodic bans. But the question is not meaningless. Seen in its full context the question asks whether employees will endorse bans on overtime which are either indefinite or periodic. An affirmative answer would indicate endorsement of both types of ban.
[22] Nor do we accept the criticism that questions one to eight, taken together, are nonsensical. An employee can endorse a number of different types of industrial action even if the deployment of one type may logically exclude another. There is no reason why employees cannot be asked to endorse a range of options.
[23] We are of the view that the AMWU application did specify the question or questions to be put to the employees, including the nature of the proposed industrial action, as required by s.437(3)(b). The first ground of appeal is rejected.
The second ground of the first appeal
[24] The second ground of the first appeal alleges that the AMWU’s application and the ballot order do not specify the group or groups of employees who are to be balloted, contrary to the requirements of ss.437(3)(a) and 443(3)(b).
[25] The application described the group to be balloted as employees of John Holland Pty Ltd who are members of the AMWU and who would be subject to the proposed enterprise agreement. We think it is a fair inference from the circumstances that the group was the employees covered by the expired agreement. This inference is supported by the fact that the expired agreement was cited in the application as the existing enterprise agreement. We dismiss this ground of appeal also.
The third ground of the first appeal
[26] The third ground of the first appeal is that the Senior Deputy President misapplied the terms of s.443(1)(b). Section 443(1) reads as follows:
“443 When FWA must make a protected action ballot order
(1) FWA must make a protected action ballot order in relation to a proposed enterprise agreement if:
(a) an application has been made under section 437; and
(b) FWA is satisfied that each applicant has been, and is, genuinely trying to reach an agreement with the employer of the employees who are to be balloted.”
[27] There were two submissions advanced on this ground. They require separate consideration. The principal submission is that the terms of s.443(1)(b) place an onus on the applicant to demonstrate that it has been and is genuinely trying to reach agreement with the employer. The appellant submitted that the Senior Deputy President had misapplied the section by finding that the appellant had failed to prove the AMWU was not genuinely trying to reach an agreement. This is based on the contention that the onus of demonstrating that the requirements in s.443(1) have been fulfilled is upon the applicant for the order.
[28] The appellant relied in particular on paragraphs 19 to 29 of the decision. 5 Two of these paragraphs have particular relevance:
“[26] Further, given the history of this matter in relation to previous agreements, just because there is an impasse on the issue of incorporation, and one side or the other has failed to make a concession to this point, I see no reason (on what is before me) to conclude the AMWU is not genuinely trying to reach an agreement.
…..
[28] On its own, perhaps something of substance might be made of this conduct in relation to whether the AMWU was genuinely trying to reach agreement with the employer, and whether its efforts were genuinely directed towards that goal. But in the context of the six meetings with the employer held between February and September 2009, and without more, I could not make a finding (under s.443 of the Act) that would be adverse to the AMWU on this basis.” (footnote omitted)
[29] The use of the expression “not genuinely trying to reach an agreement” in paragraph 26 and the conclusion that “I could not make a finding (under s.443 of the Act) that would be adverse to the AMWU on this basis.” in paragraph 28 are not cast in terms which directly reflect the requirement in s.443(1)(b). That section requires the tribunal to be satisfied that the applicant has been, and is, genuinely trying to reach agreement.
[30] We point out, however, that at the start of the relevant part of his decision the Senior Deputy President stated that the question was whether the AMWU had been genuinely trying to reach agreement and then set out the terms of s.443(1)(b). This is a clear indication that the Senior Deputy President had the correct test in mind. It appears to us that the analysis was based on an acceptance, from the circumstances overall, including the history of negotiations, that the AMWU was at all relevant times genuinely seeking an agreement. That was the context and conclusions made by the appellant at first instance and in that context he considered whether the submissions raised by the appellant should lead him to a different conclusion. It was open to His Honour to deal with the matter on that basis.
[31] The appellant’s second submission in relation to this ground of appeal depends upon the term of s.412 of the Fair Work Act, which deals with pattern bargaining. Section 412 reads:
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.”
[32] The appellant contended in its written submissions that in order to be satisfied that an applicant is genuinely trying to reach agreement, Fair Work Australia must be satisfied that the applicant is not engaged in pattern bargaining as that expression is defined in s.412. The point was not developed during the oral hearing. The AMWU submitted that the submission was misplaced. It contended that there is no requirement in the Fair Work Act that the tribunal be satisfied the applicant is not engaged in pattern bargaining as a precondition to the making of a s.443 protected action ballot order. These submissions raise a number of issues which require closer examination.
[33] We deal first with the construction of s.412. The section defines pattern bargaining but subject to the exception is s.412(2). Section 412(2) provides that conduct which would otherwise constitute pattern bargaining will not be if the bargaining representative is genuinely trying to reach an agreement with the employer. Section 412(3) defines the expression “genuinely trying to reach an agreement”. Importantly, s.412(5) then provides that the meaning given to that expression in the section does not affect, and is not affected by, the meaning given to the expression elsewhere in the Fair Work Act.
[34] The question which arises is whether there is any connection between the terms of s.412 and the requirements of s.443(1)(b). In this regard there is a potentially relevant paragraph in the Explanatory Memorandum to the Fair Work Bill 2008. That paragraph appears in the part of the Memorandum referable to cl.443 of the Bill, which became s.443 of the Fair Work Act. The paragraph reads:
“1172. It could be the case that an applicant engaged in pattern bargaining (as defined in clause 412) in relation to the relevant employer would not be genuinely trying to reach an agreement, based on the indicia listed in subclause 412(3) (e.g the applicant may not have been prepared to take into account the individual circumstances of the employer in bargaining for the agreement).”
[35] This paragraph tends to the conclusion that the meaning given by s.412(3) to the term “genuinely trying to reach an agreement” is relevant to the construction of s.443(1)(b). That conclusion is in direct conflict with the clear words of s.412(5). In the circumstances it is necessary to explore the provisions further.
[36] Section 412 is found in Division 2 of Part 3 of Chapter 3 of the Fair Work Act. Part 3 of Chapter 3 is entitled “Industrial action”. Section 406 is the first relevant provision. Where relevant it reads:
“406 Guide to this Part
… …
Division 2 sets out when industrial action for a proposed enterprise agreement is protected industrial action. No action lies under any law in force in a State or Territory in relation to protected industrial action except in certain circumstances.”
[37] Division 2 is entitled “Protected industrial action”. The only references to pattern bargaining in Division 2 are in ss.409 and 412. The terms of s.412 have already been set out. Section 409(4) provides that a bargaining representative cannot engage in protected action against an employer if the representative is engaging in pattern bargaining with that employer. If industrial action is taken which is not protected, an order is available under s.418 and possibly an injunction under s.422. It is important to note that the Fair Work Act contains no substantive references to pattern bargaining other than those in s.406, 409, 412 and 422. It is particularly significant that the term does not appear in Division 8. Division 8 deals with protected action ballot orders and is the division in which ss.437 and 443 are found.
[38] 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. That definition is only relevant to the question of whether industrial action is protected under Division 2 of Part 3 of Chapter 3. To the extent that paragraph 1172 of the Explanatory Memorandum suggests that the factors in s.412(3) should affect the meaning of s.443(1)(b), it is clearly inconsistent with the express words of s.412(5). We have no doubt we should give effect to the express stipulation in s.412(5).
[39] We also find no implication in the terms of s.443(1)(b) that a bargaining representative engaged in pattern bargaining is thereby not genuinely trying to reach an agreement. There is no fundamental reason why a bargaining representative engaged in pattern bargaining would not be genuinely trying to reach an agreement. Furthermore the section contains no reference to pattern bargaining and the application must be granted if the prescribed conditions are fulfilled. The opening words of paragraph 1172 of the Explanatory Memorandum, if they are relevant, leave open the possibility that a bargaining representative engaged in pattern bargaining might also be genuinely trying to reach agreement. While there might be circumstances in which the terms of the pattern agreement sought are so much in conflict with the employer’s operations that the conclusion can be reached that the bargaining representative is not genuinely trying to reach an agreement, that conclusion would be reached without reference to or reliance on the terms of s.412.
[40] What we have said is sufficient to deal with the appellant’s second argument on the third ground of appeal. There was no requirement on the Senior Deputy President under s.443(1)(b) to satisfy himself that the AMWU was not engaged in pattern bargaining.
[41] We dismiss the third ground of appeal.
The fourth ground of the first appeal
[42] The final ground of appeal alleges that the Senior Deputy President erred in finding the AMWU had been and was genuinely trying to reach an agreement with the appellant. The appellant submitted that s.443(1)(b) involves the exercise of discretion but pointed out that a matter of jurisdictional fact is involved.
[43] The submissions filed by the appellant set out a long list of factors which have been taken into account by members of the Australian Industrial Relations Commission and this tribunal in considering whether a bargaining representative has been or is genuinely trying to reach an agreement. The submissions identify some ten matters emerging from the evidence which, it was submitted, lead to the conclusion that the AMWU was not at any time genuinely trying to reach agreement with the appellant. One of these matters was an error made by the Senior Deputy President in citing the number of meetings between the parties. It was also submitted that the AMWU had failed to discharge the evidential onus it bears under s.443(1)(b). The appellant submitted in conclusion that there was no basis on which the tribunal was entitled to be satisfied that the requirement of s.443(1)(b) had been met.
[44] The appellant also sought to introduce further evidence in affidavit form as to the course of events including the negotiations. The AMWU objected to the tribunal receiving the affidavits. We adopt the following statement of the Full Bench of the Australian Industrial Relations Commission in Harvey v Australian Injecting & Illicit Drug Users’ League:
“An appeal bench would not usually admit evidence which could have been called at first instance. That approach is grounded in an important policy consideration, namely, that an appeal should not be an opportunity for parties to remedy avoidable deficiencies in the evidence adduced at the trial.” 6
[45] Counsel for the appellant submitted that because of the time constraints in ss.440 and 441 of the Fair Work Act, the respondent to an application for a ballot order may be hard pressed to assemble the relevant evidence and provide it to the tribunal. While we have some sympathy for the appellant’s position we do not think it provides a cogent basis to admit the evidence. Were we to do so, the number of appeals from protected action ballot orders would be likely to increase and the clear legislative policy in favour of expedition be undermined. The application for the admission of further evidence is rejected.
[46] The terms of s.443(1)(b) involves the formulation of an opinion by the tribunal. If the opinion is formed and the condition in s.443(1)(a) is fulfilled, the tribunal must make an order. The decision required by s.443(1)(b) is a discretionary one of the kind considered by the High Court in Coal and Allied Operations v Australian Industrial Relations Commission. 7 The Court found that an appeal against a discretionary decision should be governed by the principles in House v R.8 The Court’s conclusion was in the context of an appeal to the Australian Industrial Relations Commission pursuant to s.45 of the WR Act. The terms of that section are not relevantly different from the terms of s.604 of the Fair Work Act. In relation to this ground of appeal, therefore, the correctness of the decision under s.443(1)(b) can only be challenged if error can be shown in the decision-making process.9
[47] We have reviewed the material and submissions before the Senior Deputy President and his reasons for decision. It is apparent that the parties had been in negotiations on and off between April and October 2009. There had been three meetings at the appellant’s plant, three draft agreements were circulated by the appellant and there was some correspondence. The negotiations stalled on the basis that the AMWU made the incorporation of the terms of the metal industry award a threshold issue. The Senior Deputy President found that the AMWU nevertheless had been and was genuinely trying to reach agreement. That decision was open to him on the material and submissions. However, there are two additional matters requiring consideration. The first is that in his reasons for decision the Senior Deputy President referred to six meetings between the parties when it appears from the evidence that there were only three meetings. The second is a suggestion that the AMWU was seeking an agreement containing matters which are not permitted matters.
[48] In relation to the first matter, it appears that there were only 3 meetings and the reference to six meetings was an error. We do not regard this error as significant. Clearly the negotiations were deadlocked in any event and there was certainly no evidence of the AMWU refusing to meet the appellant. In order to deal with the second matter it will be necessary to refer to yet another statutory provision.
[49] Section 172 prescribes the nature of the enterprise agreements which may be made under the Fair Work Act. Section 172(1) deals with the concept of “permitted matters”. It reads:
“172 Making an enterprise agreement
Enterprise agreements may be made about permitted matters
(1) An agreement (an enterprise agreement) that is about one or more of the following matters (the permitted matters) may be made in accordance with this Part:
(a) matters pertaining to the relationship between an employer that will be covered by the agreement and that employer’s employees who will be covered by the agreement;
(b) matters pertaining to the relationship between the employer or employers, and the employee organisation or employee organisations, that will be covered by the agreement;
(c) deductions from wages for any purpose authorised by an employee who will be covered by the agreement;
(d) how the agreement will operate.
Note 1: For when an enterprise agreement covers an employer, employee or employee organisation, see section 53.
Note 2: An employee organisation that was a bargaining representative for a proposed enterprise agreement will be covered by the agreement if the organisation notifies FWA under section 183 that it wants to be covered.”
[50] It may be accepted that an enterprise agreement cannot contain matters which are not permitted matters. The appellant advanced an argument that the AMWU was not genuinely trying to reach agreement because it was seeking to include in the proposed agreement matters which were not permitted matters. The argument was based on the premise that in seeking the incorporation of the whole of the metal industry award in the proposed agreement, the AMWU was seeking the inclusion of terms which were irrelevant to the relationship between those to be covered by the proposed agreement and therefore not permitted by s.172(1). It is unclear whether this point was advanced before the Senior Deputy President. On one view it clearly was not. 10 Out of an abundance of caution, however, we have decided to deal with it.
[51] Most cases in which it is alleged that certain matters are not permitted involve the identification of specific claims. This case is different. It is submitted that by necessary implication the incorporation claim involves a claim for matters which are irrelevant to the relationship and therefore not permitted. We doubt the correctness of that proposition. It is difficult to see how matters in the metal industry award which are incapable of application to the appellant’s employees could have any legal effect in relation to them. Nor is there any suggestion that the AMWU intends irrelevant provisions to have any effect. Looked at from the perspective of the bargaining agent, it is to be assumed that incorporation is sought in order to ensure that no relevant condition ceases to apply rather than that irrelevant conditions should commence to apply. We reject the suggestion that pursuit of the claim for incorporation of the metal industry award involved a claim for matters which are not permitted.
[52] It has not been shown that the decision-making process under s.443(1)(b) was affected by error. We dismiss this ground of appeal also.
[53] For the above reasons we dismiss the first appeal and we confirm the decision of 2 October 2009.
The second appeal
[54] There are in substance three grounds of the second appeal. The first ground is that the AWU’s application was invalid because the question to be put to the employees was ambiguous and failed to specify the nature of the industrial action to be endorsed. The second ground asserts that the Commissioner misapplied s.443(1)(b). The third ground is that the Commissioner erred in concluding that the requirement in s. 443(1)(b) had been met.
The first ground of the second appeal
[55] The first ground of appeal raises identical issues to those raised by the appellant in the first ground of the first appeal. For reasons given in relation to the first appeal we reject the first ground of appeal.
The second ground of the second appeal
[56] The arguments advanced in support of the second ground of appeal repeat those advanced in relation to the third ground of the first appeal, with necessary changes relating to the identity of the applicant union. The appellant adopted a number of arguments which were advanced by it in relation to the third ground of the first appeal. To the extent necessary we adopt our conclusions in relation to the third ground of the first appeal both as to the question of onus and as to the relevance of s.412 and the concept of pattern bargaining to the construction of s.443(1)(b). With that in mind, a few additional observations should be made. The fundamental question is whether the Commissioner approached her task under s.443(1)(b) correctly.
[57] Commissioner Spencer’s conclusions on the question posed by s.443(1)(5) were as follows:
“[22] Pursuant to s.443(1)(b) of the Act prior to issuing an order FWA must be “satisfied that each applicant has been, and is, genuinely trying to reach an agreement with the employer of the employees who are to be balloted”. This is to be determined by examining the circumstances of each case. The embodiment of all Award terms in the agreement does not negate the negotiations. In fact the parties had previously reached agreement on similar terms. I agree with SDP Richards assessment of this same situation in his matter that:
“The course of conduct in which the AMWU and its members are involved was and remains an effort to embody the Award in the agreement. Arguably, from the Employer’s point of view, because they represent industry standards, the Award provisions may well have marginal utility in relation to enterprise level needs.
But be that as it may, while the Employer will perceive the incorporation of the Award as a sub optimal outcome to agreement making, the conduct of the AMWU and its members is not pattern bargaining, nor is it evidence of the AMWU not genuinely trying to reach an agreement (on the terms it had in the past). I add that there was no submission that the inclusion of the Award, or any of its terms, in the Agreement is not otherwise non-allowable for the Act’s purposes.
Further, given the history of this matter in relation to previous agreements, just because there is an impasse on the issue of incorporation, and one side or the other has failed to make a concession to this point, I see no reason (on what is before me) to conclude the AMWU is not genuinely trying to reach an agreement.” (footnote omitted)
[23] There was also evidence before me that negotiations had been occurring and that an impasse had been reached on the issue of the Award terms; however such does not mean the parties are not genuinely trying to reach Agreement, particularly in the circumstances where the submissions relied on s.412 and allegations of pattern bargaining.
[24] The assessment of whether the parties were genuinely trying to reach agreement involves a finding of facts on the circumstances. Mr Herbert’s submissions on the objection that the Union had not been generally trying to reach agreement were based on the actions of the Union seeking to include all of the Award in the proposed agreement. Whilst Mr Patten’s witness statements addressed the nature of the negotiations to date, Mr Herbert did not progress other deficiencies in the conduct of the negotiations as the basis for the objection. Mr Chambers stated the AWU’s members wanted the inclusion of the whole award as reflected in their current agreement. The insistence on the incorporation of the Award may represent a hard-line position in the bargaining, but it does not represent pattern bargaining on the current facts or in the circumstances support the assertion that the AWU is not genuinely trying to reach agreement.”
[58] We note first that the Commissioner set out the terms of the section. She expressed agreement with Senior Deputy President Richard’s assessment and set out the relevant extract from the decision of 2 October 2009. That she made her own assessment is clear from the final paragraph of the passage. She accepted the AWU’s submission and rejected the appellant’s. There is no error apparent in this reasoning, in particular there is no proper basis to conclude that the Commissioner misunderstood the nature of her task under the section. The second ground of appeal is not made out.
The third ground of the second appeal
[59] The third ground of appeal is that the Commissioner erred in concluding that the requirement in s.443(1)(b) had been met. In dealing with the fourth ground of the first appeal, we decided that a decision under s.443(1)(b) is a discretionary one which may only be called into question on appeal if the decision-making process is affected by error. Accordingly the question is whether Commissioner Spencer’s conclusion that the AWU had been and was genuinely trying to reach agreement was affected by error.
[60] The appellant’s submission to a large extent adopted those made in relation to the first appeal. Reference was made to what were said to be general principles emerging from the legislative scheme and decisions of the Australian Industrial Relations Commission and Fair Work Australia. The material before the Commissioner was said to indicate that, taking these principles into account, the Commissioner’s conclusion was wrong.
[61] We have considered these submissions and the submissions made on behalf of the AWU. Subject to one matter, which we deal with below, the Commissioner’s decision seems an unremarkable one. On the basis of the evidence and material, she was satisfied that although the negotiations had reached an impasse the AWU had been and was genuinely trying to reach an agreement for the purposes of s.443(1)(b).
[62] In the proceedings before the Commissioner, counsel for the appellant (then the respondent) advanced one submission in particular which should be mentioned. It was submitted that the terms of s.412(3) provide guidance in answering the question posed by s.443(1)(b). Although the Commissioner formed the requisite opinion under s.443(1)(b), she nevertheless appears to have accepted that s.412 was a relevant consideration. In particular, she made a finding that the AWU’s conduct did not constitute pattern bargaining. For reasons given above in dealing with the fourth ground of the first appeal, the submission based on s.412(3) should have been rejected. In the circumstances, however, the error is not critical because it did not affect the outcome.
[63] To the extent that the Commissioner was asked to find that the AWU had not been and was not genuinely seeking to reach an agreement because it was demanding the incorporation of the whole of the metal industry award into the proposed agreement that was a matter proper for consideration. The submission which was put to her, admittedly by reference to s.412(3), was that if a bargaining representative was not prepared to take into account the individual circumstances of the employer that was an indication that the bargaining representative was not genuinely trying to reach an agreement. The Commissioner was entitled to reject the submission on the material before her.
[64] We reject the third ground of appeal.
Conclusion
[65] For the reasons set out above we dismiss both appeals and confirm the decisions.
PRESIDENT
Appearances:
S. Moody of counsel for John Holland Pty Ltd.
H. Borenstein SC for the “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union.
T. Clarke on behalf of the Australian Council of Trade Unions.
Hearing details:
2009.
Melbourne:
October, 23.
3 AG848226, PR971243.
4 AP789529.
6 [2007] AIRCFB 230 at para 18.
7 [2000] HCA 47 at paras 19 and 20, (2000) 203 CLR 194.
8 (1936) 55 CLR 499 at 505.
9 [2000] HCA 47 at para 21.
10 [2009] FWA 494 at para 26.
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