Application by Construction, Forestry, Mining and Energy Union [2016] FWC 3732 (10 June 2016) [2016] FWC 3732 FAIR WORK COMMISSION DECISION Fair Work Act 2009 s.437 - Application for a protected action ballot order Construction, Forestry, Mining and Energy Union (B2016/539) DEPUTY PRESIDENT LAWRENCE SYDNEY, 10 JUNE 2016 Proposed protected action ballot of employees of Laing O'Rourke Australia Construction Pty Ltd. Introduction [1] On 16 May 2016 the Construction, Forestry, Mining and Energy Union (CFMEU) lodged an application pursuant to s.437 of the Fair Work Act 2009 (the Act) for a protected action ballot. [2] The Respondent employer is Laing O’Rourke Australia Construction Pty Ltd (Laing O’Rourke). [3] The negotiations in question are to renew the Laing O’Rourke Australia Pty Ltd-Building Group (NSW) Enterprise Agreement 2012-2015 (the 2012 – 2015 Agreement) which had a nominal expiry date of 30 September 2015. [4] The ballot questions are not objected to as such. They give employees a range of options for the taking of industrial action. The ballot is to be conducted by the Australian Electoral Commission (AEC). [5] I note that I issued a protected ballot order in the same terms on 20 November 2015 ( PR574200 ) as part of the same negotiations. Laing O’Rourke did not object to that order. [6] Attached to the application was a statement by CFMEU Branch President Rita Mallia, made on 16 May 2016. Ms Mallia stated: ● On 29 February 2016 she provided comments on the proposed new agreement to Branch Secretary Brian Parker. ● She and Mr Parker met with representatives of Laing O’Rourke on 14 March. ● On 23 March Laing O’Rourke responded on the one major outstanding matter. ● On 11 April Ms Mallia responded by email. ● On 3 May a further meeting took place. ● On 9 May Laing O’Rourke sent the CFMEU the final draft of the Agreement. ● On 10 May Laing O’Rourke confirmed that there was no agreement on the “Employment Security Clause”. All other matters were agreed. Commission Proceedings [7] On 17 May 2016, Mr Lindsay Olsson advised the Commission by email that Laing O’Rourke opposed the protected action ballot order because: ● The proposed “Employment Security Clause” is not a permitted matter. ● The clause is contrary to the Federal Government’s “Building Code 2013”, issued pursuant to the Fair Work (Building Industry) Act 2012 . ● The clause is contrary to the Federal Government’s proposed 2014 code which was held up in the Senate. The fate of this code is dependent on the 2 July 2016 Federal election. Laing O’Rourke expressed concern that the code would be retrospective and it would be deprived of Federal Government work. [8] The matter was listed for hearing on 25 May. Directors were issued to the parties for the filing of evidence and submissions which were complied with. [9] The CFMEU relied on a written submission and a witness statement of Brian Parker. [10] Laing O’Rourke relied on a written submission and a witness statement of Lindsay Olsson, its Employee and Industrial Relations Manager. [11] Mr P. Quinn appeared for the CFMEU. Mr P. Ludeke, solicitor appeared for Laing O’Rourke. Mr Ludeke was granted permission to appear pursuant to s.596. Relevant Legislative Provisions [12] Section 443 sets out the basis of granting a protected action ballot order: “ 443 When the FWC must make a protected action ballot order (1) The FWC 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) the FWC 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. (2) The FWC must not make a protected action ballot order in relation to a proposed enterprise agreement except in the circumstances referred to in subsection (1). (3) A protected action ballot order must specify the following: (a) the name of each applicant for the order; (b) the group or groups of employees who are to be balloted; (c) the date by which voting in the protected action ballot closes; (d) the question or questions to be put to the employees who are to be balloted, including the nature of the proposed industrial action. (3A) For the purposes of paragraph (3)(c), the FWC must specify a date that will enable the protected action ballot to be conducted as expeditiously as practicable. (4) If the FWC decides that a person other than the Australian Electoral Commission is to be the protected action ballot agent for the protected action ballot, the protected action ballot order must also specify: (a) the person that the FWC decides, under subsection 444(1), is to be the protected action ballot agent; and (b) the person (if any) that the FWC decides, under subsection 444(3), is to be the independent advisor for the ballot. (5) If the FWC is satisfied, in relation to the proposed industrial action that is the subject of the protected action ballot, that there are exceptional circumstances justifying the period of written notice referred to in paragraph 414(2)(a) being longer than 3 working days, the protected action ballot order may specify a longer period of up to 7 working days.” [13] Section 228 contains the good faith bargaining requirements: “ 228 Bargaining representatives must meet the good faith bargaining requirements (1) The following are the good faith bargaining requirements that a bargaining representative for a proposed enterprise agreement must meet: (a) attending, and participating in, meetings at reasonable times; (b) disclosing relevant information (other than confidential or commercially sensitive information) in a timely manner; (c) responding to proposals made by other bargaining representatives for the agreement in a timely manner; (d) giving genuine consideration to the proposals of other bargaining representatives for the agreement, and giving reasons for the bargaining representative’s responses to those proposals; (e) refraining from capricious or unfair conduct that undermines freedom of association or collective bargaining; (f) recognising and bargaining with the other bargaining representatives for the agreement. (2) The good faith bargaining requirements do not require: (a) a bargaining representative to make concessions during bargaining for the agreement; or (b) a bargaining representative to reach agreement on the terms that are to be included in the agreement.” [14] Matters which are permitted in agreements are defined in s.172(1): “ 172 M aking 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.” The Employment Security Claim [15] The “Employment Security Clause” sought by the CFMEU, and the subject of the dispute was served on Laing O’Rourke as part of a draft agreement on 3 November 2015: “ EMPLOYMENT SECURITY, STAFFING, RECRUITMENT AND REPLACEMENT LABOUR The Company recognises that in certain circumstances the use of contractors and labour hire may affect the job security of Employees covered by this Agreement. Use of Contractors If the Company wishes to sub-let a contract or part of a contract to a bona fide contractor to perform work that might be performed by current or future Employees under this Agreement, the Company must first consult in good faith with the potentially affected Employees and the Union. If, after consultation, the Company decides to engage bona fide contractor(s), the employees of these contractor(s) must be afforded the same terms and conditions of engagement (or terms no less favourable) as they would receive if they were engaged as Employees under this Agreement performing the same work. The use of sham sub-contracting arrangements would constitute a breach of this Agreement. Supplementary Labour Hire Where there is a need for supplementary labour to meet temporary/peak work requirements, such labour will be accessed from the bona fide labour hire companies following consultation with the Company Consultative Committee and/or workplace delegate. If labour hire is to be used the Company shall ensure that any workers engaged through a supplementary/labour hire arrangement and who are under the direction and control of the Company performing work that, had it been done by direct Employees of the Company would have been covered by this Agreement, shall receive wages, allowances and conditions not less than those contained in this Agreement. [16] The CFMEU’s fall-back position was to revert to the “Employment Security Clause” in the 2012-2015 Agreement which is: “ 7.12 EMPLOYMENT SECURITY, AND REPLACEMENT LABOUR The Company recognises that in certain circumstances, the use of contractors and labour hire may affect the job security of Employees covered by this Agreement. The use of contractors and use of Supplementary Labour Hire requirements shall not apply to projects already awarded. The application of this clause shall be effective as from 1 July 2013. The application of these requirements shall recognise location and circumstance, and where the requirements as noted below would provide a competitive disadvantage to the Company. In these circumstances the Company and the Unions may agree to vary these requirements in a Project Specific Agreement. This agreement may not be unreasonably withheld. After 1 July 2013 this clause will be subject to review over the life of this Agreement by the Parties with respect to its application to major building and construction contractors in New South Wales. Where it becomes evident that the provisions below are not occurring a meeting of the Parties to this Agreement will be convened to resolve the matter with any dispute arising being processed in accordance with the dispute settlement procedures of this Agreement. So that there may be no doubt, the term contractor/labour hire shall include providers and group trainers of apprentices and trainees. Use of Contractors If the Company wishes to engage contractors and their employees to perform work in the Classifications covered by this Agreement and where the Company has Employees, employed under this Agreement in the relevant classification available to perform the work the Company must first consult in good faith with potentially affected Employees and their union. Consultation will occur prior to the engagement of sub-contractors for the construction works. If, after consultation, the Company decides to engage bone fide contractors, these contractors and their employees will receive terms and conditions of engagement (or terms no less favourable) as they would receive if they were engaged under this Agreement performing the same work. The use of sham sub-contracting arrangements is a breach of this Agreement. SUPPLEMENTARY LABOUR a) The Company recognizes that in certain circumstances the use of contractors and labour- hire may affect the job security of Employees covered by this Agreement. From time to time, the Company may need to engage labour hire contractors to cover short term requirements. Such requirements include absences due to leave, peak workloads, emergencies and unforeseen shortages. b) If the Company wishes to engage supplementary labour hire/contractors to perform work performed by its Employees under this Agreement, the Company must first consult in good faith with the Parties to this Agreement. The labour hire/contractor’s employees shall be paid the comparable rates of pay, including allowances and conditions of this Agreement and the terms and conditions of the labour hire/contractor’s employees will be no less favourable than what they would have received if they were engaged as Employees under this Agreement. c) Nothing in this clause: i) Requires, has the effect of requiring, of or purports to require or have the effect of requiring or ii) Permits, has the effect of permitting or purports to permit or have effect of permitting: i) A contravention of Part 3 – 1 of the Fair Work Act 2009 which deals with General Protections. d) This clause will be void to the extent that the clause or any part of it breaches the Fair Work Act 2009 , the Competition and Consumer Act 2010 or any other statute, law or the National Code of Practice for the Construction Industry or its applicable Guidelines.” The CFMEU’s Submissions [17] The CFMEU submits that s.443 requires the Commission to issue the protected action ballot order. The statements of Mr Parker and Ms Mallia demonstrate, it is submitted, that the CFMEU has been genuinely trying to reach agreement. [18] The CFMEU submits that the “Employment Security Clause” does not prohibit the use of contractors/labour hire, but requires consultation and the payment of contractors/labour-hire at no less favoured terms and conditions to direct employees. It is therefore a permitted matter in accordance with s.172. [19] Even if the “Employment Security Clause” was not a non-permitted matter, the CFMEU submits that this would not mean that it had not been genuinely trying to reach agreement. [20] Finally, the CFMEU submits that the Building Codes cannot be relevant to whether the clause is permitted under the Act or to whether the CFMEU has been genuinely seeking to reach agreement. [21] Brian Parker’s statement details the various steps in the negotiations and attaches the relevant documents. He clarifies that on 11 April the CFMEU suggested the “Employment Security Clause” from the 2012-2015 Agreement as a fall-back position. This was rejected by Laing O’Rourke on 27 April by email. [22] Although he was in attendance at the hearing, Mr Parker was not required to give formal evidence. Laing O’Rourke’s Submissions [23] Laing O’Rourke submits that the protected action ballot order cannot be granted because the CFMEU has not been genuinely seeking to reach agreement as required by s.443. [24] The first ground for this submission is the argument that bargaining has been superficial. It is suggested that the CFMEU has not seriously considered Laing O’Rourke’s position on the outstanding “Employment Security Clause” and that more meetings should take place about it. [25] The second ground, is that the CFMEU’s claim includes a non-permitted matter. It is submitted that the “Employment Security Clause” effectively prevents Laing O’Rourke from engaging sub-contractors and labour-hire companies. [26] Exhibit L1 is an analysis of the 2012-2015 Clause which argues that it has a default position against the engagement of contractors and labour-hire. It argues that the requirement for consultation implicitly prevents the engagement of contractors and the use of the dispute settlement clause can be used to effectively prevent their use. [27] On Monday 6 June 2016, Laing O’Rourke sought leave to make an additional written submission. On 8 June the CFMEU opposed the admission of that submission. Nevertheless, I have decided to take it into account. [28] The further submission referred to advice by the Federal Government and Fair Work Building and Construction (FWBC) about Code compliance. From 18 May 2016, FWBC is assessing compliance of agreements as against the 2013 Code. [29] The submission attaches an analysis of various clauses in the CFMEU “pattern agreement” by the FWBC. It concludes that a clause in the terms of the “Employment Security Clause” in this matter is contrary to the 2013 Code. [30] I note that Laing O’Rourke concedes in this submission that the CFMEU’s original “Employment Security Clause” and the clause from the 2012-2015 Agreement are “in its material respects and effect . . . the same”. Consideration [31] I am satisfied that the CFMEU has been, and is genuinely trying to reach an agreement, leaving to one side the “permitted matter” issue. [32] Conduct of negotiations is outlined in the statements of Brian Parker and Rita Mallia. Mostly this is not contradicted by Laing O’Rourke in respect of the various events in the negotiations. [33] The CFMEU served its claim in the form of a draft agreement on 3 November 2015. I granted a protected action ballot order on 20 November 2015. An overall agreement in principle was reached in December. However, when the parties got to the stage of drafting the agreement document there was no agreement on the “Employment Security Clause”. (See Transcript PN111-167) [34] I am satisfied that the CFMEU has met the good faith bargaining requirements. A number of meetings took place. Both sides considered and responded to claims. The CFMEU was prepared to consider Laing O’Rourke’s response and modify its position to suggest a fall back to the 2012-2015 Clause. [35] I do not accept that the evidence supports a conclusion that the CFMEU was bargaining superficially as suggested by Laing O’Rourke. Rather, it appears to have been a case of the CFMEU being committed to the principles in the “Employment Security Clause” but being prepared to consider alternatives to achieve it. [36] In any event the Full Bench in Esso Australia v “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) and others [2015] FWCFB 210 ( Esso ) made it clear that a party may be genuinely seeking to reach an agreement even if a good faith bargaining requirement is not met: “[16] The appellant contends that while the Unions responded to the proposals it advanced during bargaining they did not provide any reasons for some of those responses, despite being requested to do so. On this basis it is contended that the Unions have not complied with the good faith bargaining requirements, and in particular the requirement that they give reasons for their responses to the proposals of another bargaining representative (see s.228(1)(d)). The appellant submits that the Commissioner gave no real consideration to this matter and that the failure to do so was an error. [17] We are not persuaded that the Commissioner erred in the manner contended. The argument advanced by the appellant on appeal was not put at first instance. While the matter was the subject of some evidence before the Commissioner at no stage did the appellant contend that the Unions had not met their good faith bargaining requirements because they had failed to provide reasons for some of their responses to Esso’s proposals. The appeal process is not intended to provide an avenue for an unsuccessful party to seek to redress deficiencies in the manner in which their case was run at first instance. The failure to consider an argument which was not put is not an error in circumstances where the relevant evidence is far from unequivocal. Such was the case here; indeed there was a significant conflict in the evidence about this issue. While the appellant pointed to some evidence in support of its contention that the Unions had failed to provide reasons for some of their responses, two of the Unions’ witnesses gave evidence that reasons for their responses had in fact been provided - orally during the course of discussions facilitated by Commissioner Johns. [18] In any event, while there is a relationship between the good faith bargaining requirements and the concept of genuinely trying to reach an agreement, it would be wrong to conflate these terms. A party may not meet a particular good faith bargaining requirement but may nevertheless be genuinely trying to reach an agreement. . . . [54] The reference to the Commission being ‘satisfied’ means that whether or not the requisite circumstance exists is a discretionary decision. Section 443(1)(b) directs attention to the conduct of the applicant. The expression ‘has been, and is’, imports temporal considerations. The Commission’s attention is thereby directed to the applicant’s prior conduct at the time the application for a protected action ballot order is determined. Given the context the reference to ‘an agreement’ is plainly a reference to an enterprise agreement within the meaning of Part 2-4 of the FW Act. The clear inference from s.172(1) is that the substantive terms of enterprise agreements should be confined to permitted matters, though the Commission is not required to scrutinise each agreement to ensure that all its terms are about permitted matters and the statutory requirements for the approval of an agreement (ss 186-187) make no express reference to the concept of permitted matters (also see s.253). [55] Section 443(1)(b) does not contain any words which limit the circumstances in which the Commission may be satisfied that an applicant ‘has been, and is, genuinely trying to reach an agreement with the employer of the employees who are to be balloted’. Further, the Explanatory Memorandum to what became s.443 supports the proposition that the legislature did not intend that any one factor would necessarily be determinative of the question of whether the applicant is genuinely trying to reach an agreement with the employer. The relevant parts of the Explanatory Memorandum to what became s.443 states: 1771. For joint applications, each applicant must be and must have been, genuinely trying to reach an agreement with the relevant employer. A finding by FWA that there is no majority support for collective bargaining is not of itself intended to be determinative of the question of whether the applicant is genuinely trying to reach an agreement with the employer . 1772. 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). (emphasis added) [56] Neither of the paragraphs set out above support the proposition that it was intended that any one factor would be determinative of the issue in s.443(1)(b). [57] Whether an applicant ‘has been, and is, genuinely trying to reach an agreement’ is a question of fact to be decided having regard to all of the facts and circumstances of the particular case. Such a construction of s.443(1)(b) is consistent with the judgment of the Full Court in JJ Richards and with a number of Full Bench decisions of the Commission (see Total Marine; Pelican Point Power Limited v ASU ; JJ Richards No.1; Alcoa ; JJ Richards No.2 ; and Farstad ) . [58] In our view the adoption of a decision rule or principle of the type proposed in Australia Post No.1 and Airport Fuel Services would be an inappropriate fetter on the exercise of what the legislature clearly intended would be a discretionary decision. As Bowen LJ observed in Gardner v Jay ,: “When a tribunal is invested by Act of Parliament or by Rules with a discretion, without any indication in the Act or Rules of the grounds upon which the discretion is to be exercised, it is a mistake to lay down any rules with a view to indicating the particular grooves in which the discretion should run, for if the Act or the Rules do not fetter the discretion of the Judge why should the court so do.” [59] There is no legislative warrant for the adoption of a decision rule such that if an applicant is, or has been, pursuing a substantive claim which is not about a permitted matter it is not genuinely trying to reach an agreement within the meaning of s.443(1)(b). The fact that an applicant is, or has been, pursuing a claim about a non-permitted matter is relevant to whether the test posited by s.443(1)(b) has been met, but it is not determinative of the issue. A range of factual considerations may potentially be relevant in that context, including but not limited to the subject matter of the claim, the timing of the advancement of the claim, the basis upon which the claim is advanced, the significance of the claim in the course of the negotiations, the claimant’s belief as to whether the claim is about a non-permitted matter or not, where there is legal clarity about the permitted status of the claim, whether the other party has placed in contest whether the claim is about a permitted matter, and whether such a claim has been withdrawn and, if so, when and in what circumstances. The diversity of the factual circumstances and nuances which will be found in different cases means that it is not possible to say that any particular factor or consideration will always be determinative of the result.” [37] I am also satisfied that both of the employment security clauses are permitted pursuant to s.172. I rely on the numerous cases which deal with this issue and the Explanatory Memorandum to the Fair Work Bill 2009 . [38] The 2012-2015 agreement clause is not well drafted. It contains references to 2013, which are not entirely clear, and, in any event are redundant. Laing O’Rourke admitted, in its 6 June submissions, that the two clauses have the same effect. Both require consultation about the engagement of contractors/labour-hire and require the payment of contractors/labour-hire at no less favourable terms and conditions to direct employees. That is all they do. They do not prevent or hinder the engagement of contractors in a way which would make them non-permitted. [39] This conclusion is supported by the Commission’s approach in previous cases. [40] In Asurco Contracting Pty Ltd v Construction, Forestry, Mining and Energy Union [2010] FWAFB 6180 ( Asurco ) the Full Bench considered a clause almost the same as the clauses in this case: “[10] Clause 19 of the proposed agreement is central to the grounds of appeal. Its meaning and effect should be considered at the outset. In our view it is clear that the clause seeks to impose the following obligations: that the employer consult with employees and their unions prior to the engagement of contractors or supplementary labour hire employees who will perform the work that could be performed by employees; that if the employer engages contractors or supplementary labour hire employees, such persons must be afforded terms and conditions that are no less favourable to the terms and conditions for employees; a prohibition on sham sub-contracting arrangements. [11] It is clearly established from cases before Fair Work Australia (FWA), and its predecessor, that clauses of this nature are permitted matters on the basis that the clauses do not prohibit contracting arrangements or restrict or qualify the employer’s right to use contractors. For example, a Full Bench of FWA recently held that such clauses are permitted matters, but clauses that sought to require contracting entities to have a workplace agreement are not. In our view the argument that such a clause is not a permitted matter is plainly misconceived. [12] Asurco also argues that the clauses in question contain unlawful content. It contends that the clause requires or permits the employer to refuse to engage an independent contractor because the independent contractor is entitled to the benefit of a workplace law or workplace instrument. We reject this argument. First the terms of an agreement cannot override the terms of the Act. Any objectionable term has no effect: ‘ 356 Objectionable terms A term of a workplace instrument, or an agreement or arrangement (whether written or unwritten), has no effect to the extent that it is an objectionable term.’ [13] In any event, the obligation sought to be imposed on the employer is to require contractors to be paid, as a minimum, the amounts in the agreement applicable to employees. The existence of another enterprise agreement with higher or lower terms does not preclude any such obligation being observed, nor does it follow, as was submitted by Asurco, that such a provision would lead to a breach of the general protections provisions of the Act.” [41] In Australian Industry Group v Fair Work Australia [2012] FCAFC 108 the Full Federal Court considered a similar clause and stated: “26. It would have been surprising, the majority noted, if a term of an enterprise agreement such as cl.4.3(b)(v) which was a permitted matter about which an agreement may be made would none the less be an unlawful term under s.194. The majority noted (at [48]) that it: ‘Is notorious that terms similar to this clause are in hundreds of enterprise agreements and such a term has been the subject of judicial and Commission consideration for many years.’ If it was intended that s.194 had the effect of disallowing such a clause in an enterprise agreement, the legislature would have made that clear. If there had been a need to resort to the Explanatory Memorandum to assist in this respect, that would not have assisted the contention for AIG. . . . 61. As noted, clauses such as the First Impugned Clause are ‘permitted matters’ within the meaning of s.172(1) of the FW Act confirmed by cl 672 of the Explanatory Memorandum to the Fair Work Bill 2008 which states: 672. It is intended that the following terms should be within the scope of permitted matters for the purpose of paragraph 172(12)(a): . . . Terms relating to conditions or requirements about employing casual employees or engaging labour hirer or contractors if those terms sufficiently relate to employees’ job security – eg. A term which provided that contractors must not be engaged on terms and conditions that would undercut the enterprise agreement. (emphasis added)” [42] The Commission has also taken the view, in any event, that the pursuit of a non-permitted matter does not mean that a party is not genuinely seeking to reach agreement. See Alcoa of Australia Ltd v Australian Workers’ Union – Western Australia Branch [2010] FWAFB 4889 ( Alcoa ): “[18] Further, as was also noted in Australia Post, s.253 recognises that an enterprise agreement may contain terms that are about non-permitted matters. This seems to us to reinforce the conclusion that the mere fact that a proposed agreement contains non-permitted matters is not fatal to a conclusion that the bargaining representative who propounded it is genuinely trying to reach agreement. . . . [23] It is readily apparent that s.443(1), on its face, does not contain any requirement relating to permitted matters. As may be discerned from our analysis of the Australia Post case, the issue of permitted matters is but one of the factors to be taken into account in determining whether an applicant has been genuinely trying to reach an agreement. [24] It is not only satisfaction that a proposed agreement does not contain claims about, or reasonably be believed to be about, permitted matters that informs a judgment as to whether an applicant has been genuinely trying to reach an agreement. [26] We do not accept this proposition. In our view, the issue that had to be decided was whether the union had been, and was, genuinely trying to reach an agreement. In the circumstances of this case, the questions that the Commissioner posed, in order that he could determine that issue, were appropriate26” [43] See also Esso at [57] and [59]: “[57] Whether an applicant ‘has been, and is, genuinely trying to reach an agreement’ is a question of fact to be decided having regard to all of the facts and circumstances of the particular case. Such a construction of s.443(1)(b) is consistent with the judgment of the Full Court in JJ Richards and with a number of Full Bench decisions of the Commission (see Total Marine; Pelican Point Power Limited v ASU ; JJ Richards No.1; Alcoa ; JJ Richards No.2 ; and Farstad ) . . . . [59] There is no legislative warrant for the adoption of a decision rule such that if an applicant is, or has been, pursuing a substantive claim which is not about a permitted matter it is not genuinely trying to reach an agreement within the meaning of s.443(1)(b). The fact that an applicant is, or has been, pursuing a claim about a non-permitted matter is relevant to whether the test posited by s.443(1)(b) has been met, but it is not determinative of the issue. A range of factual considerations may potentially be relevant in that context, including but not limited to the subject matter of the claim, the timing of the advancement of the claim, the basis upon which the claim is advanced, the significance of the claim in the course of the negotiations, the claimant’s belief as to whether the claim is about a non-permitted matter or not, where there is legal clarity about the permitted status of the claim, whether the other party has placed in contest whether the claim is about a permitted matter, and whether such a claim has been withdrawn and, if so, when and in what circumstances. The diversity of the factual circumstances and nuances which will be found in different cases means that it is not possible to say that any particular factor or consideration will always be determinative of the result.” [44] Whether or not the “Employment Security Clauses” in question comply with the 2013 or 2014 Building Codes does not alter the position. The Commission must test the claim against the Act and the accepted approach of the Commission in applying it. Whether or not a claim complies with a government procurement policy cannot affect the legality of a claim under the Act. It does not mean that the CFMEU was not and is not genuinely seeking to pursue this claim. It is a notorious fact the union movement has been opposed to and has sought actively to resist restrictions on bargaining, which are not contrary to the Act but arise from the Building Codes, for many years. Conclusion [45] Accordingly, I am satisfied that the CFMEU has been, and is, genuinely trying to reach an agreement with Laing O’Rourke. [46] An application has been made by the CFMEU which complies with s.437. [47] The protected action ballot order submitted by the CFMEU complies with the requirements of s.443. Accordingly, I will issue an order in the terms sought by the CFMEU [48] A protected action ballot order ( PR571373 ) is issued together with this decision. DEPUTY PRESIDENT Appearances : P. Quinn for the CFMEU; P. Ludeke , solicitor for Laing O’Rourke. Hearing details: 2016 Sydney: May 25. Written submissions: Laing O’Rourke: June 6; CFMEU: June 8. Printed by authority of the Commonwealth Government Printer <Price code A, PR581393>