[2010] FWAFB 9963

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FAIR WORK AUSTRALIA

DECISION

Fair Work Act 2009
s.604—Appeal of decision

J.J. Richards & Sons Pty Ltd
v
Transport Workers’ Union of Australia
(C2010/730)

VICE PRESIDENT LAWLER
SENIOR DEPUTY PRESIDENT O’CALLAGHAN
COMMISSIONER BISSETT

MELBOURNE, 23 DECEMBER 2010

Appeal - application for a protected action ballot order - requirement in s.443(1)(b) - whether “genuinely trying to reach an agreement” - whether available when employer refuses to bargain or whether only remedy is a majority support determination.

DECISION OF VICE PRESIDENT LAWLER AND COMMISSIONER BISSETT

[1] This is an application pursuant to s.604 of the Fair Work Act 2009 (FW Act) by J.J. Richards & Sons Pty Ltd (JJR) for permission to appeal and, if permission is granted, an appeal against a decision of Commissioner Harrison 1 to make an order2 for a protected action ballot in relation to certain employees of JJR who perform subcontract garbage collection for the Canterbury City Council. That order was granted on the application of the Transport Workers’ Union of Australia (Federal TWU).

Background

[2] It is not in dispute that the primary business of JJR is as a garbage collection contractor and that JJR undertakes contract garbage collection for a number of NSW councils, including the Canterbury City Council.

[3] On 24 February 2010 the Transport Workers’ Union of NSW (NSW TWU) wrote to the Sydney Operations Manager of JJR stating:

[4] On 3 March 2010 JJR replied as follows:

[5] It is clear from the evidence before the Commissioner that the NSW TWU successfully lobbied the Canterbury City Council for a resolution by Council urging JJR to enter into negotiations for an enterprise agreement. A resolution to that effect was passed by the Council on 23 September 2010 and conveyed to JJR by letter dated 6 October 2010.

[6] On 11 October 2010 JJR wrote to the General Manager of the Council. That letter includes the following:

[7] On 4 November 2010 the Federal TWU made application to Fair Work Australia (FWA) for protected action ballot order. That application identifies the group of employees to be balloted as:

[8] Before the Commissioner, and on this appeal, JJR contended that protected industrial action is only available to the parties during the bargaining process. There was no dispute that the criterion in s.443(1)(a) was met in this case. Argument before the Commissioner focussed on whether the requirement in s.443(1)(b) was met. The Commissioner found that it was and made a protected action ballot order accordingly.

Key provision, leave to intervene and permission to appeal

[9] Each of the Australian Chamber of Commerce and Industry (ACCI), the Australian Mines and Metals Association (AMMA), the Australian Council of Trade Unions (ACTU) and the Australian Higher Education Industrial Association (AHEIA) sought leave to intervene in the appeal. There is no provision of the FW Act expressly dealing with intervention. Nevertheless, we are satisfied that the broad procedural power in s.589(1) is sufficient to empower FWA to permit intervention in an appropriate case.

[10] This appeal concerns the proper interpretation of s. 443(1)(b) of the FW Act. Section 443 relevantly provides:

[11] The central issue raised by the appeal is whether FWA has power under s.443 to make a protected action ballot order in circumstances where the employer to whom the order relates has refused to bargain and where there has been no majority support determination in relation to the employees covered by the proposed ballot order. This is an issue of considerable practical importance.

[12] Given the practical importance of that issue we granted each of the applications for leave to intervene. For the same reason, we are satisfied that there is a public interest in granting permission to appeal. Accordingly, we are obliged by s.604(2) to grant permission to appeal and do so.

[13] Having granted permission to appeal, the appeal proceeds as a rehearing. 3 Nevertheless, we are constrained from allowing the appeal and exercising any of the powers in s.607(3) unless the decision the subject of the appeal is affected by error.4

The Commissioner’s decision

[14] The Commissioner noted:

[15] The Commissioner noted JJR’s reliance on the decision and reasoning in Ford Motor Company of Australia Limited v Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia 5 (Ford) and the fact that employees had not been issued with a notice of representation rights. He then noted JJR’s reliance on Para [32] of and Total Marine Services Pty Ltd v Maritime Union of Australia6 (Total Marine Services) and its submission that:

[16] Finally the Commissioner noted a submission of JJR that:

[17] The Commissioner continued:

[18] The Commissioner then concluded that the “TWU” has been and is genuinely trying to reach an agreement with JJR and granted the application for a protected action ballot order.

Relevant principles of interpretation

[19] A central issue on the appeal was whether resort could properly be had to the Explanatory Memorandum in construing s.443(1)(b).

[20] Section 15AA of the Acts Interpretation Act 1901 (Cth) makes it clear that when a Commonwealth Act falls to be interpreted regard must always be had to the purpose of object underlying the Act and that a construction that would promote that purpose of object is to be preferred:

[21] In Project Blue Sky v Australian Broadcasting Authority 7 McHugh, Gummow, Kirby and Hayne JJ held:8

[22] The use of extrinsic material in the interpretation of a Commonwealth Act is governed by s.15AB of the Acts Interpretation Act 1901 (Cth) which provides:

[23] In CIC Insurance Ltd v Bankstown Football Club Ltd 9 Brennan CJ and Dawson, Toohey and Gummow JJ observed:10

[24] In Re Australian Federation of Construction Contractors; Ex parte Billing 11 (AFCC) a six member bench of the High Court unanimously observed:

[25] In Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue 12 Hayne, Heydon, Crennan and Kiefel JJ gave the following short summary of the relevant principles:13

[26] In Residual Assco Group v Spalvins 14 Gleeson CJ, Gaudron, McHugh, Gummow, Hayne and Callinan JJ noted:15

[27] In a recent decision of the High Court of Australia in Saeed v Minister for Immigration and Citizenship 16, French CJ, Gummow, Hayne, Crennan and Kiefel JJ held:

[28] The observations in AFCC and Re Bolton; Ex Parte Beane 17 were directed at reliance on a second reading speech. However, given the terms of s.15AB, they are equally applicable to reliance on an Explanatory Memorandum.

[29] Drawing these principles together, the task of statutory interpretation is concerned with ascertaining the intention of the legislature as manifested by the text of the legislation. Context (using that word in its widest sense to include such things as the existing state of the law and the mischief which, by legitimate means, one may discern the statute was intended to remedy) and the purpose or object underlying the legislation must always be considered. These must be considered in the first instance, not merely at some later stage when ambiguity might be thought to arise. The text of a provision, read in context and having regard to the object and purpose of the provision, is always the surest guide. Moreover, the context, the general purpose and policy of a provision and its consistency and fairness are surer guides to its meaning than the logic with which it is constructed. Resort to explanatory memoranda and other extrinsic material may only be had for the purposes stated in s.15AB(1)(a) and (b) of the Acts Interpretation Act 1901.

[30] It is erroneous to look at extrinsic materials before exhausting the application of the ordinary rules of statutory interpretation. Statements as to legislative intention made in explanatory memoranda or by Ministers, however clear or emphatic, cannot overcome the need to carefully consider the words of the statute to ascertain its meaning. Section 15AB does not permit recourse to explanatory memoranda or other extrinsic material for the purpose of departing from the ordinary meaning of the text unless either the meaning of the provision to be construed is ambiguous or obscure or in its ordinary meaning leads to a result that is manifestly absurd or is unreasonable.

[31] One may observe in the decisions of this and other tribunals a tendency when interpreting statutory provisions to have resort to the relevant explanatory memorandum without observing the full rigour of these principles. Nevertheless, when, as occurred in this appeal, objection is taken to resort to the explanatory memorandum there is no excuse for not giving full effect to these principles.

The proper interpretation of s.443(1)(b)

Purpose or object

[32] Section 4 contains a “guide” to the FW Act. It notes that the FW Act “is about workplace relations”. There is no need to speculate or hypothesize about the objects and purpose of the FW Act as a whole. Its objects are specified expressly in s.3:

[33] Obviously, the object in s.3(f) is the object that bears most directly on the interpretation question in this case.

[34] Part 2-4 of the FW Act deals with “Enterprise Agreements”. Section 171 specifies the objects of Part 2-4

[35] There is no separate statement of objects for Part 3-3. Section 406 contains a guide to Part 3-3. It includes the following:

[36] Division 8 of Part 3-3, in which s.443 appears, deals with “Protected Action Ballots”. Section 435 is a “Guide” to Division 8. It relevantly states:

[37] Section 436 specifies the object of Division 8:

[38] We adopt the following observations of the Full Bench in CFMEU v Woodside Burrup Pty Ltd 18 (Woodside Burrup):

[39] The FW Act creates a right to take industrial action. As was noted by the Full Bench in Woodside Burrup 19, it “may properly be seen as the means by which Australia has given effect to its important obligations under the International Labour Organisation Conventions particularly Convention No. 87 Freedom of Association and Protection of the Right to Organise 1948 and Convention No. 98 Right to Organise and Collective Bargaining 1949, both ratified by Australia in 1973.”

Context

[40] We turn to consider the context in which s.443 is placed. Part 2-4 of the FW Act is entitled “Enterprise Agreements” and contains a series of provisions regulating the content of enterprise agreements, bargaining for enterprise agreements and the facilitation of such bargaining, the making of enterprise agreements and the approval of enterprise agreements by FWA.

[41] Once bargaining has commenced, the FW Act imposes a duty on the bargaining representatives to bargain in good faith:

[42] It may be noted that s.228(2) imposes important limitations on the duty to bargain in good faith:

[43] The FW Act does not expressly impose a duty to bargain in good faith on an employer in relation to whom a majority support determination has been made. Rather, the imposition of that duty is necessarily implied from the general scheme of the FW Act and, in particular, from the obligation to give a notice of representational rights. Section 173 relevantly provides.

[44] Part 2-4 makes provision for applications to Fair Work Australia for determinations or orders that can facilitate bargaining. These include applications for:

[45] An application for a majority support determination is made by “a bargaining representative of an employee who will be covered by a proposed single enterprise agreement”. A majority support determination is a determination “that a majority of the employees who will be covered by the agreement want to bargain with the employer, or employers, that will be covered by the agreement” (s.236(1)).

[46] The matters of which FWA must be satisfied before making a majority support determination are specified in s.237(2):

[47] An enterprise agreement made under the FW Act cannot operate until it has been approved by FWA pursuant to an application made under s.185 of the FW Act: s.54(1). A protected action ballot order is made “in relation to a proposed enterprise agreement.” The expression “enterprise agreement” is defined in s.172(1). The FW Act contains a number of requirements, both positive and negative, as to content that must be satisfied before an enterprise agreement can be approved by FWA.

[48] Protected industrial action is defined in s.408 and relevantly includes: “(a) employee claim action for the agreement (see section 409)”. In relation to “employee claim action”, s.409 relevantly provides:

[49] Section 413 specifies the “common requirements” that must be met for industrial action to be protected industrial action:

[50] Section 437 authorises a bargaining representative to apply for a protected action ballot order. Section 437(1) provides:

[51] Other requirements are specified in s.437, both directly and indirectly.

Section 443(1)(b)

[52] We now turn to consider the text of s.443 which, as noted, relevantly provides:

[53] Once an application for a protected action ballot order has been made in accordance with s.437 the only criteria in s.443 of which FWA must be satisfied before it “must” make the order, is the criterion in s.443(1)(b).

[54] Plainly, the “agreement” referred to in s.443(1)(b), which the applicant for a protected action ballot order must be “genuinely trying to reach” is an enterprise agreement that meets the requirements of the FW Act 20, being the “proposed enterprise agreement” referred to in the opening words of s.443.

[55] When a bargaining representative attempts to initiate bargaining, the proposed [enterprise] agreement may be “inchoate” to use the language of French J in Wesfarmers Premier Coal Limited v The Automotive Food Metals Engineering, Printing and Kindred Industries Union (No 2) 21 (Wesfarmers). In other words, a bargaining representative may propose that there be an enterprise agreement covering an employer and employees without identifying the terms of that agreement.

[56] It may be noted that the opening words of s.437 are identical to the opening words of s.236, the provision authorising a bargaining representative to apply for a majority support determination. Each specifies that “[a] bargaining representative of an employee who will be covered by a proposed enterprise agreement ... may apply”. There is no obvious reason why the “proposed enterprise agreement” referred to in s.443(1) needs to be any more developed than a “proposed enterprise agreement” referred to in s.236.

[57] The word “genuine” is defined in the Macquarie Dictionary as follows:

[58] The expression “genuinely trying” in s.443(1)(b) is, clearly enough, concerned with the genuineness of the “trying”, the efforts, to reach the stated goal, namely an enterprise agreement that meets the requirements of the FW Act. It is directed at the authenticity of the applicant’s efforts to reach that goal. The genuineness or authenticity of an applicant’s efforts to reach that goal will turn on its motivation - the intention, object or purpose.

[59] The evident purpose of section 443 is to ensure that a bargaining representative has no access to a protected action ballot, and therefore to protected industrial action, unless that bargaining representative “has been, and is, genuinely trying to reach an [enterprise agreement]”.

[60] The expression “genuinely trying to reach an agreement” appears in three sections in the FW Act: s.412, s.413 and s.443. As was held by the Full Bench in John Holland Pty Ltd v AMWU 22 (John Holland), it is clear from s.412(5) that the legislature intended that expression to have a particular meaning in s.412 that should not affect the proper construction of the expression as it appears in other provisions of the Act. The requirement that an employee bargaining representative (union) be “genuinely trying to reach agreement” is imposed not only as a precondition to obtaining a protected action ballot, it is also a precondition to actually taking protected industrial action: this is one of the “common requirements” specified in s.413.

[61] As was noted by the Full Bench in Woodside Burrup, “[p]rotected industrial action in support of claims for an enterprise agreement, as authorised by the FW Act, is the only lawful mechanism available to employees to achieve improvements to wages and conditions that an employer is not otherwise prepared to agree to.” 23 Price inflation, to a greater or lesser extent, is part of the usual state of affairs in the economy (that is, inflation is the norm and deflation the exception). The effects of inflation mean that employees need to obtain wage increases periodically if they are to avoid a decrease in the real value of their wages. It follows that a union acting as an employee bargaining representative will almost invariably have a genuine reason for seeking an enterprise agreement to cover members who have not had the benefit of a wage increase for some time.

[62] In the ordinary course of events where an applicant for a protected ballot order calls (acceptable) evidence that their intention, object or purpose is to reach an enterprise agreement under the FW Act, what may be described as an evidentiary onus shifts to the party or parties opposing the application to demonstrate why that evidence ought not be accepted sufficient to shift the evidentiary onus back to the applicant.

[63] In circumstances where an applicant for a protected ballot order calls (acceptable) evidence that their intention, object or purpose is to reach an enterprise agreement under the FW Act a finding that the applicant was not “genuinely trying to reach an [enterprise] agreement” within the meaning of s.443(1)(b) will necessarily involve accepting evidence establishing that the applicant had some other, extraneous purpose in seeking the ballot. Indeed, when there is evidence from an applicant for a protected action ballot order that they have been and are “genuinely trying to reach an [enterprise] agreement” under the FW Act, it is difficult to conceive of circumstances where it could properly be found they were not, unless there is cross-examination or other evidence establishing that the applicant in truth has some other, extraneous intention, object or purpose or is seeking something other than an enterprise agreement under the FW Act. For example, the evidence may demonstrate that the applicant is pursuing an agreement that it knows or ought reasonably knows would not be an enterprise agreement within the meaning of the FW Act because it contains non-permitted matters contrary to s.172(1) or that the true motivation is to apply pressure in pursuit of political or environmental goals or simply to punish the employer for some perceived wrong doing.

[64] FWA has responsibility under the FW Act for dealing with all applications for approval of enterprise agreements and for dealing with all applications for protected action ballot orders. It is a matter of the direct experience of the Tribunal that the overwhelming majority of enterprise agreements are concluded without any application for a protected action ballot order being made, let alone protected action being taken. Typically, in many if not most cases, bargaining commences consensually at the invitation of either an employee bargaining representative or the employer and proceeds for a time in good faith on both sides before the terms of an agreement are concluded, which agreement is then put to a vote of employees. In the typical case both parties have bargained in good faith at all times and have been “genuinely trying to reach an agreement” from the outset of their involvement in the bargaining. In such a case, where bargaining is initiated by an employee bargaining representative, this will be from the time that such representative requested the employer to bargain for an agreement. The first thing that an employee bargaining representative needs to do if it is to achieve an enterprise agreement is to secure the participation of the employer in bargaining. When the employer has not yet agreed to bargain, its efforts in that regard can properly be seen as part of genuinely trying to reach an enterprise agreement in accordance with the ordinary meaning of that expression.

[65] Does the provision made in s.236 and s.237 for a majority support determination in circumstances when an employer refuses to bargain necessarily imply that the legislature intended that a majority support determination is the only mechanism by which an employer who refuses to bargain can be compelled to bargain and that protected industrial action ought not be available as an alternative mechanism to compel such an employer to bargain? We think not. We observe that the practical capacity and inclination of employees to take industrial action in support of an enterprise agreement varies from workplace to workplace. At one end of the spectrum are workplaces where there is a high density of union membership and a preparedness on the part of the overwhelming majority of employees to act collectively and take industrial action to advance wages and conditions. At the other end of the spectrum are workplaces with a low density of union membership or no union membership at all and or a disinclination on the part of most employees to participate in industrial action (because, for example, of a fear of retribution which becomes practical if only a small number of employees take action or out of a concern over the adverse impact of such action on others). For cases that fall at that latter end of the spectrum, a mechanism such as a majority support determination is necessary if bargaining is to occur. It is not necessarily required in cases at the former end of the spectrum.

[66] We have also considered whether the language of s.409(1)(a) requires or suggests that a narrower construction be given to the expression “genuinely trying to reach agreement” in s.443(1)(b) and concluded that it does not. In this regard it should be noted that there will invariably be a delay, typically in the order of at least several weeks, between the making of a protected action ballot order and the taking of any protected industrial action consequent upon an affirmative vote in the ballot conducted pursuant to such an order. To the extent that a narrow construction of s.409(1)(a) were adopted (and we expressly refrain from making any conclusion in that regard), that period is one in which specific claims could be advanced. In other words, it cannot be assumed in a case such as the present that the requirement in s.409(1)(a), even on a narrow construction of that provision, will not be met by the time the hypothesised industrial action is taken.

[67] In our view there is nothing in the context of the FW Act within which s.443 appears that requires that the expression “genuinely trying to reach an [enterprise] agreement” should be given anything other than its ordinary English meaning. We respectfully endorse the conclusion of the Full Bench in John Holland that “the expression ‘genuinely trying to reach agreement’ in s.443(1)(b) should be given its ordinary meaning”. 24

[68] In our view, the ordinary meaning of the expression does not lead to a result that is manifestly absurd or is unreasonable. In this context it must be remembered that there is nothing intrinsically immoral about the taking of industrial action to secure improved terms and conditions. On the contrary, the taking of industrial action for that purpose is a ‘right’ recognised under international law and, in particular, under Conventions to which Australia is a signatory. The use of industrial action to induce an employer who has refused to bargain for an enterprise agreement to commence bargaining may properly be seen as a perfectly legitimate exercise of those ‘rights’.

[69] In our view, the ordinary meaning of the expression is entirely consistent with the purpose or object of the FW Act as a whole (including the most obviously relevant object in s.3(f)) and of Division 8 of Part 3-3 in particular.

[70] We consider that the meaning of s.443 and, in particular, the expression, “genuinely trying to reach agreement” in s.443(1)(b), considered in the context of the FW Act and having regard to the object and purpose of s.443 viewed in context, is clear and unambiguous. It follows that must give effect to that meaning without resort to the explanatory memorandum.

[71] Senior Counsel for JJR, supported by the advocates for AMMA and ACCI, placed significant reliance on a number of paragraphs in the Explanatory Memorandum which we accept convey a relatively clear intention on the part of the authors of the Explanatory Memorandum that a protected action ballot should only be available after bargaining has commenced. 25 He called these references in aid of a construction of the expression “genuinely trying to reach an agreement” in s.443(1)(b) that would require bargaining to have commenced before a bargaining representative could be found to be “genuinely trying to reach an agreement”. There is another single reference which tends to support the position advanced by the NSW TWU26, albeit that this reference may only relate to the situation when there are joint applications for a protected action ballot order.

[72] If, consistent with the principles we have outlined, it was permissible to have resort to the Explanatory Memorandum in interpreting s.443(1)(b), we accept that this would likely lead to the adoption of the construction for which the appellant contends. However, when we apply the relevant principles to the present case we are driven to the conclusion that after s.443(1)(b) has been construed in the context of the FW Act as a whole, and having regard to the relevant object and purpose, it has a meaning - its ordinary meaning - that is clear and that is neither ambiguous nor obscure. Further, that meaning does not lead to a result that is manifestly absurd or unreasonable. It follows that neither of the conditions in s.15AB(2) is made out and, accordingly, resort to extrinsic evidence in the form of the Explanatory Memorandum is not permissible.

[73] Senior Counsel for JJR, again supported by the advocates for AMMA and ACCI, relied on several Full Bench decisions of FWA in support of his contentions on the proper construction of s.443(1)(b). In the circumstances, we think it desirable to deal with those decisions in some detail.

[74] The decision in Ford 27 concerned an appeal against a decision granting the applications of five unions for protected action ballot orders of certain employees of Ford.

[75] Bargaining between Ford and the five unions had been proceeding for a single enterprise agreement to replace three existing workplace agreements that together covered some 3,284 employees. Ford had issued a notice of representational rights to all of those employees. One of three existing workplace agreements covered powertrain employees, of whom there were some 420 (Powertrain Agreement). The Powertrain Agreement had not passed its nominal expiry date and, accordingly, it was not open to the unions to obtain protected action ballot orders in relation to the proposed enterprise agreement while ever its coverage extended to the powertrain employees. The unions adopted a position that they no longer sought an enterprise agreement with coverage extending to the powertrain employees, but rather now sought an enterprise agreement covering employees other than powertrain employees. It is clear that the unions recognised that it would be unlikely that they would be able to conclude a satisfactory agreement without resort to industrial action and so, in order to advance the interests of the majority of employees, it was necessary to abandon their claim for an agreement that extended to the powertrain employees with a view to securing a separate agreement for those employees after the Powertrain Agreement passed its nominal expiry date. The member at first instance made ballot orders in respect of that reduced group of employees.

[76] The majority concluded 28 that

[77] The majority considered the operation of Part 2-4 of the FW Act which deals with enterprise agreements and observed, inter alia:

[78] The majority then considered the scheme of Part 3-3 which deals with industrial action, referred to the decision in Project Blue Sky, and continued:

[79] In Stuartholme School v The Corporation of the Trustees of the Roman Catholic Archdiocese of Brisbane 29 (Stuartholme) a Full Bench declined to follow the reasoning of the majority in Ford and concluded that the scope of a proposed agreement is a matter that can itself be the subject of bargaining for the agreement.30 After setting out paragraph [45] of the reasons of the majority in Ford, the Full Bench in Stuartholme observed:

[80] It is clear that if the approach in Ford had been followed, the result in Stuartholme would have been different. The approach of the Full Bench in Stuartholme was endorsed by a Full Bench in MSS Security Pty Ltd v Liquor, Hospitality and Miscellaneous Union 31 (MSS) where the Full Bench observed:

[81] None of Ford, Stuartholme or MSS was directly concerned with the central issue that falls for determination in this appeal. To the extent that the reasons of the majority in Ford address that issue, they are strictly obiter dicta and, in any event, are not a reliable guide for this Full Bench given apparent rejection of the reasoning in Ford in both Stuartholme and MSS.

[82] Next it was contended by those supporting the appeal that the decision of the Full Bench in Total Marine Services required a finding that the TWU had not been, and was not, “genuinely trying to seek an agreement” within the meaning of s.443(1)(b). In that case the Full Bench held:

[83] We entirely agree with and endorse those observations.

[84] Paragraph [32] of the Full Bench’s reasons continues:

[85] JJR relied on those observations before the Commissioner and on appeal. We have some difficulty accepting the TMS Observations without qualification. Quite apart from their tendency to detract from what was held by the Full Bench in paragraph [31] of its decision, our concern is with what was said “[a]t the very least one would normally expect”.

[86] We have already made several observations about what constitutes genuinely trying to reach an agreement which are apposite to a consideration of the TMS observations. 32 We note further, as a matter within the direct experience of the Tribunal, that it is often the case that a union or employer will decline to adopt a position on an offer or claim for increased wages until after other, non-wage related claims, have been agreed upon. For example, it is not unusual for an employer that is a subsidiary of a foreign corporation to be given a budget by its parent company in connection with the bargaining. In such a case, it will typically be perfectly rational and reasonable for that employer to refrain from making an offer of increased wages, or responding to a union claim for a particular increase in wages, until all significant non-wage related claims have been resolved. This is because until such claims are resolved the employer will not be in a position to assess the total cost of non-wage related claims and therefore be in a position to ascertain the amount of any increase that can be offered within the available budget. In the same way, it is not unusual for a union to advance non-wage related claims that it regards as important to its members with a view to later setting its claim for increased wages depending upon the outcome of bargaining in relation to those non-wage related claims (sometimes a union will be prepared to accept a lower increase in wages than it would otherwise have insisted upon in order to achieve important non-wage related gains). In both these examples, a bargaining party may refrain from articulating a major item (namely its wage offer/claim) while still bargaining in good faith and “genuinely trying to reach an agreement” within the ordinary meaning of that expression.

[87] Obviously, sometimes a bargaining representative may be content to advance a claim for or offer of a wage increase and make it conditional upon a particular outcome or concession in relation to other claims. However, sometimes a bargaining representative may reasonably and rationally form the view that to do this is likely to create an expectation in the other party that will itself become an impediment to reaching an overall agreement in the event that it becomes necessary to alter the wage offer/claim because other non-wage related claims do not settle as hoped or anticipated. A withholding of a wage claim/offer in such circumstances will not, of itself, be indicative of the bargaining representative not genuinely trying to reach agreement.

[88] In short, we can see no warrant in the language of s.443(1)(b) for putting a straight jacket on the availability of negotiating strategies that would otherwise be rational and reasonable strategies for a bargaining representative to adopt.

[89] The TMS observations, in describing what one would “normally expect” and in the reference to “premature applications”, suggest that in the typical case referred to in paragraph [63] above, a union bargaining representative will not be “genuinely trying to reach an agreement” until “it has clearly articulated the major items it is seeking for inclusion in the agreement, and to have provided a considered response to any demands made by the other side”. With respect, this is at odds with the reality of the typical case to which we have referred. In relation to the typical case, one may ask rhetorically: what were the bargaining representatives doing in the period prior to the point identified by the majority in TMS if they were not genuinely trying to reach an agreement? It seems to us a matter of common sense that the level of specificity that is consistent with a party “genuinely trying to reach agreement” will vary depending upon the state of the bargaining. At the time a party seeks to initiate bargaining and in the early stages of bargaining its claims and the agreement it proposes may, to use the language of French J in Wesfarmers, be “inchoate”. 33 However, that fact will not necessarily or even commonly be indicative of a bargaining representative not genuinely trying to reach an agreement.

[90] This is not to say that a failure to articulate a major claim can never be a factor in favour of a finding that a bargaining representative is not “genuinely trying to reach an agreement”. Obviously, in particular circumstances such a failure could well support such a finding.

[91] For the reasons we have given, a proper application of the relevant principles of interpretation leads to a conclusion that an employee bargaining representative can be genuinely trying to seek an agreement within the meaning of s.443(1)(b) in circumstances where the employer has refused to bargain for the agreement. The Commissioner was correct to reject the jurisdictional objection raised by JJR that he had no jurisdiction to grant the application because bargaining had yet to commence.

Application of the law to the facts in the present case

[92] The letter of 24 February 2010 sought an enterprise agreement covering all of JJR’s employees in NSW. JJR refused to bargain for such an agreement. The application for a protected action ballot order dealt with by the Commissioner related to a proposed enterprise agreement for “[e]mployees of [JJR] who perform work in connection with [JJR’s] contract with Canterbury City Council...”.

[93] It was contended by JJR that the mismatch between the scope of the agreement proposed by letter of 24 February 2010 (all employees in NSW) and the group of employees in respect of whom the protected action ballot order was sought (JJR employees who perform work in connection with its contract with Canterbury City Council) was such that, for the purposes of the application for a protected action ballot order, the union was seeking a different agreement to that in relation to which JRR had refused to bargain. That is, JRR had not refused to bargain for an agreement covering only those employees who worked on the Canterbury City Council contract. Accordingly, it was argued that the could not be found to have been, and to be, “genuinely trying to reach agreement” with JRR in relation to those employees.

[94] The facts set out at paragraphs [2]-[7] above are the facts as they emerge from the evidence before the Commissioner. In oral submissions to the Commissioner reference was made to a second letter written by the “TWU” to JJR in which it again sought an agreement with JJR (second letter). That second letter was not produced or tendered to the Commissioner. It may be noted, however, that JJR admitted in submissions to the Commissioner that it was aware that the TWU was seeking an agreement with JJR for the Canterbury City Council employees.

[95] On the hearing of the appeal we decided to provisionally receive evidence in relation to the second letter. Section 607(2) confers a discretion on a Full Bench hearing an appeal to “admit further evidence” and “take into account any other information or evidence”. The principles governing the admission of fresh evidence on appeal in the courts provide a useful guide to the exercise of that discretion. It is arguable that the fresh evidence in this case would not be admitted if those principles were strictly applied because it was available at the time of the hearing at first instance. Nevertheless, in our view, there are special considerations that apply in relation to an appeal against a decision on an application for a protected action ballot order. Section 441(1) requires FWA, as far as practical, to determine an application for protected action ballot order within two working days after the application is made. A practical consequence of this requirement is that parties, particularly the respondent to such an application, will often not have sufficient time to fully prepare their case. Consequently, in an appropriate case it will be a permissible exercise of the discretion in s.607(2) to admit fresh evidence on an appeal against a protected action ballot order decision notwithstanding that, strictly speaking, the evidence was available to be led at first instance. In the exercise of our discretion we admit the further evidence in this case.

[96] We make the following findings in relation to the further evidence:

[97] The requirement in section 443(1)(b) is concerned with the subjective intention, purpose or object of the applicant. Neither the NSW TWU nor the Federal TWU was aware that the JJR had not received the second letter. The relevant official was operating on the reasonable assumption that it had been received. The NSW TWU had sought to bring the influence of the Canterbury City Council to bear on JJR. At the time of the hearing before the Commissioner the NSW TWU had been, and was, trying to get JJR to participate in bargaining for an enterprise agreement. That is, the NSW TWU had been, and was, genuinely trying to reach an agreement with JJR albeit that it had been unsuccessful in persuading JJR to participate in bargaining.

[98] We turn to JJR’s final argument. The NSW TWU is a transitionally recognised association under the Fair Work (Registered Organisations) Act 2009 34 and, as such, is an “employee organisation” within the meaning of the FW Act and capable of being a default bargaining representative pursuant to s.176(1)(b) of the FW Act. The Federal TWU has always been a federally registered organisation of employees. The NSW TWU and the Federal TWU are different legal entities. Both the first letter of 24 February 2010 and the second letter were on the letterhead of the NSW TWU. The body of the letter of 24 February 2010 makes express reference to the NSW TWU as the union seeking to negotiate an enterprise agreement with JJR on behalf of JJR employees.

[99] JJR contended on appeal that the Commissioner could not have been satisfied, and on a rehearing the Full Bench could not be satisfied, that the “applicant” for the protected action ballot order - the Federal TWU - had been genuinely trying to reach an agreement as required by s.443(1)(b) because the actions relied upon by the Federal TWU to establish that jurisdictional fact were not the actions of the Federal TWU but, rather, were the actions of a different legal entity, the NSW TWU. There was no evidence that the NSW TWU, in taking those actions, was acting as the agent of the Federal TWU. On the contrary, the terms of the two letters make it plain that the entity seeking an enterprise agreement was the NSW TWU.

[100] While there may be little industrial merit in this point (it seems the two entities have a number of common officials and there is no suggestion that JJR ever distinguished between the two entities in its dealings prior to this appeal), it is a point with technical legal merit. Under s.443(1)(b), FWA must be satisfied that “the applicant” for the protected action ballot order has been and is genuinely trying to reach an enterprise agreement. There was no evidence that the Federal TWU, as distinct from the NSW TWU, had done anything in pursuit of an enterprise agreement with JJR prior to making its application under s.437. It follows that we cannot be satisfied on the material before the Commissioner (and irrespective of whether account is taken of the fresh evidence), that the Federal TWU, as the applicant for the protected action ballot order that is the subject of this appeal, had been genuinely trying to reach an agreement with JJR. The application should have been dismissed. We are obliged to uphold the appeal and quash the Commissioner’s decision and order.

[101] We emphasise that this point was not taken before the Commissioner and, given the industrial realities, it is unsurprising that he did not turn his mind to it unprompted by the advocate for JJR. Nevertheless, the point goes to jurisdiction and, it having now been taken, we are obliged on the rehearing to uphold it.

VICE PRESIDENT

DECISION OF SENIOR DEPUTY PRESIDENT O’CALLAGHAN

[102] I have had the opportunity to consider the decision of Lawler VP and Bissett C in this matter. I agree with the decision to allow intervention, with the general summary of the background to the matter and the decision to grant permission to appeal. Further I agree that the appeal should be allowed on the basis that the application was made by a different union entity to that which sought to negotiate with JJ Richards Pty Ltd (JJR) such that the Commissioner could not have been satisfied that the applicant was genuinely trying to reach an agreement. I am respectfully unable to agree with the majority position in two related respects. These concern the construction of the Fair Work Act 2009 (the FW Act) as it bears on the bargaining process and the characterisation of the conduct of the federal Transport Workers Union (TWU) in terms of its purported efforts to genuinely try to reach an agreement with JJR for the purposes of s.443 of the FW Act. I have set out the reasons for my conclusions in this matter.

[103] The decision of Harrison C of 12 November 2010 noted the competing position of the parties with respect to the extent to which a protected action ballot order was available in this circumstance, where JJR had declined to bargain. The Commissioner concluded that s.443, relating to protected action ballots was properly available to the TWU in these circumstances. The Commissioner stated:

[104] I have briefly outlined the background to the matter in the following terms.

[105] JJR undertakes waste removal services. On 24 February 2010 the Transport Workers Union of New South Wales (TWUNSW) wrote to JJR advising that members of the TWUNSW had asked that union to initiate negotiations for an enterprise agreement in New South Wales. The letter asked JJR to advise if it was willing to enter into discussions to this effect. This letter did not detail, or summarise any claims being pursued by the TWUNSW.

[106] On 3 March 2010 JJR replied such that, at that stage, it declined to enter into discussions for a new agreement. In this letter, JJR advised that it believed the award, legislative protections and individual benefits offered by the company were sufficient.

[107] The parties disagree over a second letter the TWU assert was forwarded (under the same TWUNSW letterhead) with a specific request that negotiations occur for an agreement to cover JJR employees working on the City of Canterbury Waste Contract in New South Wales. Evidence with respect to this second letter was provided to us on a provisional basis in the appeal. The second letter, however, was not before the Commissioner at first instance. The evidence of the then TWUNSW Official, Ms Walton was that she believed that it was sent to JJR, notwithstanding that this letter was not recorded on the union’s mail log. The evidence of Ms Forster of JJR was that it was not received by JJR.

[108] Independent of this second letter, the evidence before Harrison C established that the TWUNSW had approached the City of Canterbury and had complained about its capacity to access JJR employees, for the purposes of negotiating a collective agreement. The TWU in some form had also made various media comments relative to its desire to access JJR employees on the City of Canterbury Waste Contract and negotiate an agreement on their behalf.

[109] As a consequence, the City of Canterbury wrote to JJR on 3 August 2010 in the following terms:

[110] JJR responded on 19 August 2010 in the following terms:

[111] The City of Canterbury passed a resolution on 23 September 2010 supporting the rights of JJR employees to be represented by trade unions and calling on JJR to enter into meaningful negotiations with the TWU for an enterprise agreement.

[112] JJR then responded to this correspondence on the basis that it considered that its relations with its employees was harmonious, that rights of entry would be granted in accordance with the FW Act and that JJR had discussed an enterprise agreement with its employees and was not convinced that this was sought.

[113] The protected action ballot application made by the (Federally registered) TWU, identified the group of employees to be balloted as the employees of JJR who perform work in connection with the JJR contract with the Canterbury City Council. It detailed a series of specific questions to be put to these employees.

[114] In the hearing before Harrison C the application for a protected action ballot was made on the basis that the application was properly made and that the TWU’s genuine attempts to reach an agreement were truncated by the JJR refusal to negotiate.

[115] JJR asserted that the TWU had not established that it was genuinely trying to reach an agreement and that, because bargaining had not commenced, a protected action ballot was not available.

The Appeal

[116] The matter under appeal goes to the exercise of discretion and hence the principles in House v King 35 apply such that the fundamental issue is whether it was reasonably open to the Commissioner to reach a finding that the TWU was genuinely trying to reach an agreement with JJR. This requires consideration of questions about whether and/or when a bargaining representative can be genuinely trying to reach agreement when an employer declines to bargain. Secondly, if bargaining is not an essential characteristic of the concept of genuinely trying to reach an agreement, did the Commissioner have sufficient information available to him to be satisfied that the TWU was genuinely trying to reach agreement in this circumstance? The factual issue in dispute over the second letter allegedly sent to JJR and the import of the fact that the earlier correspondence was from the transitionally registered union, and the application was made by its federal counterpart, are relevant to my consideration of this latter issue.

Is a protected action ballot available if the parties are not bargaining?

[117] The union and employer parties have proposed competing contentions about the construction of the FW Act with respect to whether a protected action ballot is available in a circumstance where there has been no agreement to bargain for an agreement.

[118] In Project Blue Sky Inc and Others 36 the High Court stated:

[119] More recently, in Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue 37 the Court addressed the task of legislation interpretation in the following terms:

[120] I have considered the construction of the FW Act in specific and overall terms with respect to whether it explicitly permits a protected action ballot application in these circumstances.

[121] It is appropriate to note that I have taken the phrase ‘agreement to bargain’ as referring to the circumstances described in s.237(2). JJR has refused to discuss an agreement with the TWU. I do not consider that this refusal could itself be regarded as bargaining for the purposes of the FW Act. In this respect, I have noted the dictionary definition 38 of “bargain” is in the following terms:

[122] Part 2-4 of the FW Act deals with the making of enterprise agreements between employers and their employees. The objects of this part of the FW Act are set out in s.171 in the following terms:

[123] Section 176 of the FW Act provides that employees are able to be represented in the agreement making process by bargaining representatives. Employee organisations, eligible to be the industrial interests of employees and which have members within the employer’s workforce assume the status of default bargaining representatives, absent election by employees of other bargaining representatives.

[124] Section 173 requires that employers who have agreed to bargain, or are initiating bargaining for an agreement must issue a notice of employee representational rights to each employee who will be covered by the agreement. This notice sets out the representational rights of employees. Section 181 mandates that a minimum of 21 days be provided between the issuing of this notice and the making of any agreement.

[125] The time at which the notice of employee representational rights is required to be issued is the “notification time” specified in s.173. This is either the time the employer agrees to bargain, or initiates bargaining for the agreement, or the time at which a majority support determination, a scope order or a low paid authorisation comes into effect.

[126] In the vast majority of situations employers and employee bargaining representatives then proceed to negotiate an agreement. These agreements are formally “made” in that they are endorsed by employees before an application for approval is made pursuant to s.185. A union bargaining representative may give notice that it seeks to be covered by the agreement pursuant to s.201.

[127] The FW Act details the various considerations required of Fair Work Australia in order to approve or not approve an agreement. Whilst certain issues of agreement content are matters of discretion, there is no discretion to approve an agreement which has been reached through a process which is not compliant with the provisions of Part 2-4.

[128] As the objects of Part 2-4 of the FW Act recognise, there are occasions when either there is no agreement to bargain, no agreement on the scope of the proposed agreement, or allegations that the bargaining process is being marred by behaviour not consistent with the good faith bargaining requirements set out in s.228.

[129] Division 8 of Part 2-4 deals with a number of mechanisms directed at the facilitation of the bargaining process.

[130] Sections 236 and 237 deal with majority support determinations which may be sought by an employee bargaining representative. Such a determination may be issued by Fair Work Australia where it is satisfied that a majority of all the employees who will then be covered by the agreement, want to bargain for that agreement, and the employer has not agreed to do so. In making a majority support determination, Fair Work Australia must also be satisfied that the group of employees to be covered by the agreement was fairly chosen and that such a determination is reasonable in all the circumstances. A requirement for the seeking of a majority support determination is that the application must specify the employer and the group of employees to be covered by the proposed agreement.

[131] Whilst there is no immediate penalty for the breach of a majority support determination, this determination creates an obligation that notices of employee representational rights be issued at that time. The notice of representational rights is particularly significant in its own right. It commences with the following paragraph:

[132] The notice of employee representative rights thus represents the statutory commencement of the bargaining process. The notice then continues, to specify the basis for the agreement and employee rights with respect to representation.

[133] In addition, the granting of a majority support determination provides the foundation for other actions that might be taken by bargaining representatives.

[134] A bargaining representative may also seek scope orders pursuant to s.238. Fair Work Australia has the discretion to make a scope order if it is satisfied about certain prerequisites, including whether the group of employees to be covered by the agreement was fairly chosen. Again, the making of a scope order creates a requirement for notices of employee representational rights to be provided where this has not already occurred.

[135] Section 228 specifies the good faith bargaining requirements which must be met by bargaining representatives. These include meeting attendance and conduct, and the presentation of, and response to proposals. Bargaining Orders may be granted pursuant to ss.229, 230 and 231 where Fair Work Australia is satisfied that there is an agreement to bargain, or a majority support determination or a scope order or a relevant low paid authorisation. Fair Work Australia must be satisfied that one or more bargaining representatives are not meeting the good faith bargaining requirements or that the bargaining process is not proceeding efficiently because there are multiple bargaining agents. Whilst these sections of the FW Act do not explicitly state that notices of employee representative rights must have been issued as a prerequisite for the making of a bargaining order application, the preconditions for the making of such an order, set out in s.230(2) mean that these notices must have been issued. Penalties may apply for the breach of a Bargaining Order.

[136] A further mechanism open to Fair Work Australia to facilitate the bargaining process involves the issuing of a serious breach determination pursuant to ss.234 and 235. Such a determination requires that Fair Work Australia be satisfied about the serious and sustained contravention of one or more bargaining orders that have significantly undermined the bargaining process. Further, that all reasonable alternatives to reaching an agreement have been exhausted and agreement will not be reached in the near future.

[137] A serious breach determination is one of the prerequisites for the making of a bargaining related workplace determination pursuant to s.269. Such a determination specifies the resolution of the matters in dispute between the bargaining representatives and is, in effect, the arbitration of last resort relative to such disputed matters.

[138] Part 3-3 of the FW Act deals with protected industrial action on the part of employees or employers. This action must be in support of a position with respect to a proposed agreement, or in response to action being taken by another negotiating party.

[139] For the current purposes it is worth noting that an employee claim action is specified in s.409(1) in the following terms:

[140] Protected industrial action must be authorised by a protected action ballot. It must be taken consistent with the common requirements specified in ss.413 and 414 and is immune from civil action consistent with s.415.

[141] Protected action ballots are dealt with in Division 8 of Part 3-3. The objects of this division state:

[142] Section 437 provides that a bargaining representative of an employee who will be covered by a proposed enterprise agreement may apply for a protected action ballot. It further specifies the matters required to be identified in the application and documents to accompany the application.

[143] Section 443 relevantly provides that:

[144] It is patently clear that protected industrial action may be taken in support of claims that have not been agreed as part of the bargaining process. However, not only are the provisions relating to the agreement making process and the taking of protected industrial action in different parts of the FW Act, these provisions are not cross-referenced such that the capacity to take protected industrial action is explicitly linked to a specified point in the agreement making process. Significantly, however, the references in Part 3-3 to action being taken in support of a “proposed agreement” reflect the same words referenced in the notice of employee representational rights.

[145] I have noted the objects of the FW Act which relevantly state:

[146] I do not consider that Australia’s international labour obligations provide guidance in the interpretation of the provisions of the FW Act with respect to the extent to which bargaining must commence before protected industrial action can be taken. Those international obligations make clear the primacy of Australian law and this question simply goes to the construction of the relevant legislation.

[147] Secondly, I do not consider that the object of the FW Act, set out in s.3(f), assists in this process other than identifying the need for clarity.

[148] In considering the structure of the FW Act, only limited assistance is to be found in other Full Bench decisions. In Total Marine Services Pty Ltd v Maritime Union of Australia 39 a Full Bench considered whether an applicant was genuinely trying to reach agreement. The essential difference between this matter and the situation in Total Marine Services is that in Total Marine Services there was no dispute that the parties were engaged in bargaining. Notices of employee representational rights had been issued and the matters in dispute went to the relevant unions’ bargaining behaviour. The Full Bench in that matter stipulated that there was a necessary threshold degree of specificity about the claims being pursued and the negotiation process in order for Fair Work Australia to be satisfied that the applicant was genuinely trying to reach agreement.

[149] In Ford Motor Company of Australia Limited v Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia; “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union-Vehicle Division Victoria Region; “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union-Victorian Branch; “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union-Technical and Supervisory Division 40 (Ford), a Full Bench considered the provisions of the FW Act with respect to the concept of genuinely trying to reach agreement. In that matter, Ford was engaged in bargaining with employee bargaining representatives who had declined to bargain with respect to a significant group of Ford employees. The dispute over the scope of the negotiations underpinned Ford’s objection to a protected action ballot, on the basis that it asserted that the unions’ were not genuinely trying to reach agreement.

[150] The majority decision in Ford determined:

[151] The majority position was that because bargaining had not, and was not, taking place with respect to employees whom the unions sought to exclude, a finding that the unions were genuinely trying to reach agreement was not available.

[152] The dissenting decision of Lewin C concluded that the provisions of Part 2-4 of the FW Act should be considered in their own right rather than providing a constraint over the operation of s.437. The Commissioner concluded:

[153] In Stuartholme School and Others; The Corporation of the Trustees of the Roman Catholic Archdiocese of Brisbane T/A Brisbane Catholic Education Office and Others v Independent Education Union of Australia 41 (Stuartholme) a Full Bench was also called upon to consider contested scope issues. This was again in the context of a substantial negotiation and bargaining process, which involved the issuing of notices of employee representational rights.

[154] In Stuartholme the Full Bench disagreed with the conclusion reached by the majority in Ford to the extent that it concluded:

[155] The final Full Bench decision which touches upon the matters at issue here is MSS Security Pty Ltd v Liquor, Hospitality and Miscellaneous Union 42 (MSS). In that matter the LHMU, as an employee bargaining representative had sought an agreement to cover a broad group of MSS employees. MSS agreed to bargain only with respect to a narrower category of employees. Notices of employee representational rights were not issued to the employees with whom MSS had not agreed to bargain.

[156] In that matter, MSS contended that there could be no bargaining representative for a group of employees until notices of employee representational rights were issued.

[157] The Full Bench in that matter addressed the operation of the FW Act in the following terms:

[158] With respect to this issue, it concluded:

[159] I note that, whilst provisions of the FW Act such as s.437 remain substantially unchanged from the former Workplace Relations Act 1996, Part 2-4 represents a new series of provisions which reflect a substantially different approach to the basis upon which agreements are founded and mandate different minimum requirements which must be met for any agreement to be approved. They follow a long series of legislative provisions which deal with the details about agreement claims required of applicants to commence the bargaining process and the time at which bargaining was deemed to commence.

[160] Some conclusions can be drawn from the provisions of the FW Act in the context of these decisions.

[161] The extent to which Fair Work Australia is requested to facilitate the bargaining process pursuant to Part 2-4 is a matter for bargaining representatives, but this Part of the FW Act nevertheless defines certain essential and mandatory elements of the bargaining process.

[162] Once bargaining has commenced, or once there is an agreement to bargain, issues related to the scope of an agreement may form part of the bargaining process and may be the catalyst for a protected action ballot application and/or a scope application.

[163] The requirement that Fair Work Australia be satisfied that an applicant is genuinely trying to reach an agreement relative to a proposed agreement requires the provision of information, by the applicant, to demonstrate what it seeks.

[164] In my opinion the FW Act, taken as a whole, and in the context of these Full Bench decisions, requires that bargaining be occurring before a protected action ballot can be granted. The FW Act provides a mechanism whereby employers can be required to bargain, if the majority of employees confirm through a majority support determination, that they wish to bargain. I consider that it logically follows that where an employer has declined to bargain, a bargaining representative who is genuinely trying to reach an agreement should then establish that there is employee support for bargaining for an agreement because, absent that support, no agreement is possible.

[165] Once the notice of representational rights is issued, the employer has agreed to bargain and employees have been advised of their rights in terms of representation, access to a protected action ballot is one of the bargaining strategies open to a bargaining representative.

[166] Notwithstanding this preliminary conclusion, the effect of the absence of any explicit limitation on access to a protected action ballot before the bargaining process referenced in Part 2-4 commences means that, as this decision demonstrates, this issue could be argued from other perspectives.

[167] The operation of the FW Act with respect to whether or not a protected action ballot is available before bargaining has commenced has significant consequences. Some of these can be simply identified. They go to whether protected industrial action can occur if a majority of employees reject a bargaining proposal through the majority support determination process. In this respect, I note that a protected action ballot is most likely to apply to a smaller employee population than is the case in the consideration of a majority support determination.

[168] Secondly, if Part 2-4 of the FW Act is recognised as providing for agreements between employers and employees with an explicit capacity for employees to nominate bargaining representatives, who are not their union, to what extent does the conduct of a protected action ballot before employees receive formal advice of their representational rights, pre-empt the bargaining process set out in Part 2-4 and operate contrary to the objects stated in s.436 ?

[169] Thirdly, if it is the case that a protected action ballot is available to an applicant before the agreement making process has commenced, does this mean that the concept of genuinely trying to reach an agreement is reduced to a simple request for negotiations? In this last respect I note that there is nothing that indicates that the TWU is pursuing claims which could not be countenanced in an agreement or taking other actions which would automatically exclude its members from taking protected industrial action.

[170] Ambiguities such as these about the operation of the provisions of the FW Act, in the context of the legislation as a whole, mean that it is appropriate to have regard to the overall purpose and operation of the FW Act, to the content of the Explanatory Memorandum and, to the extent necessary, to the Minister’s Second Reading Speech. Section 15AB of the Acts Interpretation Act 1901 provides for access to extraneous material where the meaning of legislative provisions are ambiguous.

[171] The Explanatory Memorandum details the intention that Part 2-4 establishes representational rights and protections and specifies the obligations of bargaining representatives together with mechanisms to help resolve bargaining differences.

Paragraph 651 states:

Paragraph 697 states:

Paragraph 948 states:

Paragraph 1630 states:

Paragraph 1708 states:

Paragraphs 1770, 1771 and 1772 deal with protected action ballots in the following terms:

[172] Notwithstanding that paragraph 1771 is directed at joint applications for protected action ballots, I am unable to reconcile this paragraph with the other relevant provisions of the explanatory memorandum and the Minister’s Second Reading Speech which states:

[173] Taken in isolation, paragraph 1771 of the Explanatory Memorandum suggests that a protected action ballot may be granted even though a majority support determination has been refused. In such an instance it would appear to envisage that protected industrial action may be authorised by a protected action ballot. In those circumstances no notice of employee representative rights would have been issued and no agreement could be reached because the majority of employees to be covered by any agreement would have already indicated that an agreement is not sought. Any protected industrial action would therefore be futile.

[174] However, I could envisage a circumstance where a majority support determination application has failed because of the majority view of employees to be covered by the proposed agreement, but a sub-group of employees, represented by a bargaining representative then seeks to pursue an agreement with more limited application or to a smaller employer population.

[175] In summary terms, the Explanatory Memorandum and the Second Reading Speech indicate the intention of the legislation is to provide for agreements to be made between employers and employees, through mandatory employee representation arrangements and a series of mechanisms designed to facilitate bargaining processes. While these mechanisms can require an employer to bargain, they do not require that agreement must be reached through the bargaining process. Importantly, the Explanatory Memorandum and Second Reading Speech confirm that the taking of protected industrial action is limited to the bargaining process.

[176] Where parties are bargaining for an agreement, a protected action ballot may be sought to authorise protected industrial action to support the claims being made. The use of protected industrial action outside of a bargaining situation appears counter intuitive, inconsistent with the objective intention of the FW Act as a whole and inconsistent with the intention of the legislation.

[177] Where there is no agreement to bargain, the majority support determination becomes fundamental to the agreement making process in so far as it represents the formal mechanism whereby employee support for the commencement of bargaining for an agreement can be tested independently and entirely separately from the protected action ballot process, so as to determine whether a majority of employees support the taking of industrial action. If that majority support exists, s.173(2) requires the employer to agree to bargain.

[178] For Fair Work Australia to be satisfied that an applicant for a protected action ballot has been, and is genuinely trying to reach an agreement, necessitates consideration of the agreement making prerequisites set out in Part 2-4.

[179] In a situation where a bargaining representative requests that an employer bargain or where there is an agreement to do so, this will be obvious. The notices of employee representational rights will be issued and presumably the parties will engage in good faith bargaining behaviour. In the event that they are unable to reach agreement, a bargaining representative may seek a protected action ballot to enable protected industrial action to be taken, or threatened, to further the employee claims.

[180] Fair Work Australia would, in that circumstance, take into account the bargaining process, its status and the conduct of the applicant in deciding whether that applicant was genuinely trying to reach an agreement.

[181] In a situation where a bargaining representative requests an employer to bargain and the employer refuses, the objective intention of the FW Act dictates that the concept of genuinely trying to reach an agreement requires that the bargaining representative must pursue a majority support determination to establish the majority view of all of the employees to be covered by the proposed agreement. If this is established, the employer is then obligated to issue the notices of employee representational rights and to engage in the bargaining process. At that point, if all of the bargaining representative claims are rejected, or the employer refuses to meet and negotiate, a protected action ballot could be available to a bargaining representative where Fair Work Australia is satisfied about the genuineness of the bargaining endeavour.

[182] In such a circumstance, the absence of action on the part of a bargaining representative to initiate the bargaining process consistent with Part 2-4 means that the bargaining representative has not utilised the only way in which an agreement can be put into effect, and the mechanism which requires an employer to bargain, and cannot thus be regarded as genuinely trying to reach an agreement for the purposes of s.443. It may be the case that the bargaining representative clearly wants to reach an agreement but absence of any agreement to bargain must require that the mechanism to start the bargaining process is activated.

[183] In Total Marine Services the concept of “genuinely trying to reach an agreement” was expressed in the following terms:

[184] I have adopted that general principle on the basis that I do not understand that the subsequent series of minimum normal expectations must be literally applied such that they deprive parties negotiating about how, for instance, an overall employment cost should be packaged, of the capacity to demonstrate that they are genuinely trying to reach an agreement.

[185] To this general principle I would add that where there is no agreement to bargain at all, the concept of genuineness for the purposes of s.443 should incorporate recognition that the only way in which an agreement can be ultimately achieved is consistent with the requirements of Part 2-4. Within this part, s.236 provides the mechanism to deal with an employer’s refusal to bargain and the capacity to require the employer to bargain. In such circumstances a failure to utilise this mechanism cannot be generally consistent with the genuine pursuit of an agreement under the FW Act.

[186] Conceivably, there may be situations where a bargaining representative can establish that the population of employees which it represents is synonymous with the overall employee population such that a protected action ballot can be considered. I think this is unlikely but, even then, until action is taken consistent with Part 2-4, to initiate the bargaining process, it will be very difficult for a bargaining representative to establish that it has been genuinely trying to reach an agreement. That circumstance was not established before Harrison C.

[187] Further, it is conceivable that there could be no dispute that negotiations have been occurring but no notice of employee representational rights has been issued despite the requirements of s.173. In that instance, the capacity to access a protected action ballot order will depend on the information provided to Fair Work Australia. That circumstance clearly does not apply here.

If bargaining is not an essential characteristic of the concept of genuinely trying to reach agreement, was Fair Work Australia able to be satisfied the TWU was genuinely trying to reach agreement?

[188] Even if I am wrong in my conclusion about the structure of the FW Act, I consider that the conclusion of the learned Commissioner was in error in that he was not able, on the material before him, to be satisfied that the TWU was genuinely trying to reach an agreement. The provision to the employer of a letter simply requesting negotiations, cannot meet this requirement.

[189] Not only was there nothing about the content of the claims before the Commissioner or, for that matter before us, but the evidence of Ms Forster of JJR and the correspondence from JJR to the City of Canterbury in August 2010 clearly confirms that JJR was not aware of the agreement content or scope sought by the TWU. At its highest, the February 2010 request for an agreement and the April 2010 request for an agreement of narrower scope (which I am not satisfied was ever received by JJR) represented a statement of intention rather than at least some elemental position established by the provision of a claim, such as a specified wage increase claim, or at least even a request to meet and discuss claims at a particular date and location. The TWU provided no information about its claims or its requests for meetings so as to enable Fair Work Australia to be satisfied about its genuineness. There is no certainty about the scope of the agreement sought.

[190] Additionally, I cannot reconcile the concept of genuinely trying to reach agreement with the TWU approach of seeking to use a third party, being the City of Canterbury as the negotiating medium.

[191] Simply put, and without further commenting on the issue of which union was seeking to negotiate with JJR, the TWU did not provide evidence of actions that would enable the Commissioner to be satisfied as to any of the claims and to whom these were to apply. In that circumstance, satisfaction about whether the TWU was genuinely trying to reach agreement was simply impossible.

[192] I consider that there is a positive onus on the TWU, as the applicant for a protected action ballot, to establish to Fair Work Australia that it is and has been, genuinely trying to reach agreement.

[193] On the approach adopted in Total Marine Services this must go beyond a mere statement of intention. The absence of a claim, clarification of the scope of the agreement sought, or who was the bargaining representative means that the Commissioner could not have been satisfied in these circumstances.

Conclusion

[194] This appeal raises significant issues associated with conduct in pursuit of an agreement. I consider that the decision incorporates an error in the application of the FW Act relative to the circumstances under which Fair Work Australia could find that a bargaining representative is, and has been genuinely trying to reach an agreement. The structure of the FW Act and its objective intention must be that protected industrial action is available as a bargaining device. Consequently the parties have to be bargaining to enable access to a protected action ballot order. Where an employer refuses to bargain, a majority support determination must generally be sought if the applicant is genuinely pursuing an agreement. Majority employee support can require the employer to bargain and hence enable legitimate access to a protected action ballot. In this matter the TWU provided no basis upon which this general requirement could be avoided. In my view the decision was in error in concluding that the TWU was genuinely trying to reach an agreement when it had not responded to the employer refusal to bargain by seeking a majority support determination. I would uphold the appeal on this basis.

[195] Independent of this, if bargaining is not a prerequisite for the making of a protected action ballot, the information before the Commissioner was not sufficient to establish that the TWU was genuinely trying to reach an agreement. I consider that the proper application of the approach in Total Marine Services requires the making of actual and specific claims, the identification of the agreement scope sought and clarity in terms of who is the bargaining representative.

[196] Accordingly, irrespective of whether a majority support determination is a prerequisite for a protected action ballot where there is no agreement to bargain, I consider that the discretion available to Fair Work Australia has been misapplied in this situation.

[197] I would uphold the appeal and quash the Order for a protected action ballot.

SENIOR DEPUTY PRESIDENT

Appearances:

J. Murdoch, Senior Council, for JJ Richards & Sons Pty Ltd.

O. Fagir for the Transport Workers’ Union of Australia.

T. Clarke for the Australian Council of Trade Unions.

D. Mammone for the Australian Chamber of Commerce and Industry.

G. Bull for the Australian Mines and Metals Association.

I. Argall for the Australian Higher Education Industrial Association.

Hearing details:

2010.
Brisbane:
December 7.

Melbourne (video-link to Brisbane and Sydney):
December 14.

 1   Transport Workers Union of Australia v J.J. Richards & Sons Pty Ltd [2010] FWA 8766 (15 November 2010)

 2   PR503546

 3   Coal and Allied Operations Pty Ltd v Australian Industrial Relations Commission (2000) 203 CLR 194 at para [17]

 4   Ibid at paras [17] and [32]

 5   [2009] FWAFB 1240

 6   [2009] FWAFB 368

 7   (1998) 194 CLR 355

 8   Ibid at para [69]

 9   (1997) 187 CLR 384

 10   Ibid at 408

 11   (1986) 68 ALR 416 at 420

 12   (2009) 239 CLR 27

 13   Ibid at para [47]

 14   (2000) 202 CLR 629

 15   Ibid at para [27]

 16   (2010) 84 ALJR 507; (2010) 267 ALR 204

 17   (1987) 162 CLR 514 at 518

 18   [2010] FWAFB 6021

 19   Ibid at para [37]

 20   Australian Postal Corporation v CEPU [2010] FWAFB 344 at para [60]; see also Australian Postal Corporation v CEPU [2009] FWAFB 599 at paras [43] - [45]

 21   (2004) 138 IR 362 at para [70]

 22   [2010] FWAFB 526 at para [38]

 23   [2010] FWAFB 6021 at para [27]

 24   [2010] FWAFB 526 at para [38]

 25   Explanatory Memorandum paragraphs R283, 648, 651, 696, 697, 948 and 975-977 (to which may be added paragraphs 1630 and 1708)

 26   Explanatory Memorandum, paragraph 1771

 27   [2009] FWAFB 1240

 28   Ibid at para [48]

 29   [2010] FWAFB 1714

 30   Ibid at paras [21]-[25]

 31   [2010] FWAFB 6519

 32   see para [64] of this decision

 33   (2004) 138 IR 362 at para [71]

 34   The NSW TWU became a transitionally registered organisation under the Workplace Relations Act 1996 in 2006. Pursuant to item 627, Sch 22, of the Fair Work (Transitional Provisions and Consequential Amendments Act) 2009 it is a transitionally recognised organisation under the FW Act.

 35   (1936) 55 CLR 499

 36   (1998) 194 CLR 355 at para 69

 37   (2009) 239 CLR 27 at para 47

 38   the Macquarie Dictionary

 39   [2009] FWAFB 368

 40   [2009] FWAFB 1240

 41   [2010] FWAFB 1714

 42   [2010] FWAFB 6519




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