[2009] FWA 750 Download Word Document FAIR WORK AUSTRALIA REASONS FOR DECISION Fair Work Act 2009 s.229 - Application for a bargaining order Liquor, Hospitality and Miscellaneous Union v Foster’s Australia Ltd (B2009/10740) SENIOR DEPUTY PRESIDENT KAUFMAN MELBOURNE, 28 OCTOBER 2009 Application for a bargaining order – scheme of Act – Fair Work Australia’s role in facilitating bargaining – whether requirement by employer to allow paid meetings during bargaining negotiations On 6 October 2009 I dismissed an application by the Liquor Hospitality and Miscellaneous Union for a bargaining order. These are my reasons. THE APPLICATION [1] The Liquor Hospitality and Miscellaneous Union applied under s.229 of the Fair Work Act 2009 (the Act) for orders that Foster’s Australia Limited (Fosters), together with the union, schedule two meetings in order that the union, which is the bargaining representative for its members employed by Fosters, update those employees about the progress of enterprise bargaining. [2] The Act has introduced a new regime for the making of enterprise agreements. It has similarities with, and differences from, the regime prescribed by the Workplace Relations Act 1996 , which it repealed. For the purposes of these reasons it is not necessary to delve into those matters. Suffice to say that the good faith bargaining requirements the subject of this decision were not found in the repealed Act. THE STATUTORY SCHEME [3] Part 2-4 of the Act deals with enterprise agreements. Section 172 provides that enterprise agreements may be made in accordance with the Part. Division 3 deals with the provision of a notice of employee representational rights by employers that agree to bargain or initiate bargaining. That is generally the beginning of the formal bargaining process in any given case. The notice is to be given to each employee who will be covered by the agreement and is employed at the notification time for the agreement. The notification time is defined in s.173(2). By s.176 the employer and, in most circumstances, an employee organisation which has an employee who will be covered by the agreement as a member, are the bargaining representatives for the proposed agreement. Section 181 allows an employer that will be covered by a proposed enterprise agreement to request relevant employees to approve the agreement by voting. However, before a s.181 request may be made the pre-approval requirements of s.180 must be met. These may generally be described as requiring the relevant employees to have an opportunity to consider, after having had appropriately explained to them, the terms of the agreement as well as the process for voting whether to approve it. Once an enterprise agreement is made (when a majority of those employees who cast a valid vote approve the agreement – s.182) a bargaining representative may apply to Fair Work Australia (FWA) to have it approved – s.185. [4] Subdivision B deals with the requirements for approval. It is not necessary to deal with those requirements save to note that the agreement must have been genuinely agreed to by the employees covered by it – s.186(2)(a). FWA’S ROLE IN FACILITATING BARGAINING [5] Division 8 deals with FWA’s general role in facilitating bargaining. Section 228 sets out the good faith bargaining requirements that a bargaining representative for a proposed agreement must heed. Section 229 permits a bargaining representative to apply for a bargaining order under s.230 in relation to the agreement if the representative, amongst other things, has concerns that one of the other bargaining representatives has not met, or is not meeting, the good faith bargaining requirements. Here the concern of the union was that Fosters had not refrained from capricious or unfair conduct that undermines freedom of association or collective bargaining – s.228(1)(c). The union also submitted that it had complied with the requirements of s.229(4) in that it had given Fosters written notice of its concerns and Fosters had not responded appropriately. [6] Section 443 of the Act, which is found in Division 8 of Part 3 of Chapter 3, which deals with rights and responsibilities of employees, employers and organisations, requires FWA to make a protected action ballot order in relation to a proposed enterprise agreement in certain circumstances. One of the required circumstances is that the applicant for the order has been, and is, genuinely trying to reach an agreement with the employer of the employees who are to be balloted. [7] Once a protected action ballot authorizes the taking of industrial action that action may be taken by employees if it is in conformity with the scheme of Division 2 of Part 3. THE FACTS [8] Bargaining with respect to a proposed enterprise agreement at Fosters commenced in February 2009 and has continued throughout the year. On or about 17 July 2009 Fosters distributed a Notice of Employee Representational Rights pursuant to s. 173 of the Act. [9] The union has conducted several meetings with its members since February 2009. The meetings were predominantly in paid time and were held with Fosters’ consent. However, when the union sought similar meetings to be held on 29 September 2009 Fosters declined to grant permission. The reason given by Fosters was that it would not allow paid meetings whilst it was under threat of industrial action. [10] On 30 September 2009, Fosters provided a revised offer to the union for its consideration. Although this offer post-dates the time sought for the meetings, the union contended that this is another reason that the order it seeks should be made. [11] The reason that Fosters perceived it was under threat of industrial action was that the union had, on 14 September 2009, obtained an order under s.443 that a protected action ballot be held. 1 The ballot closed on 4 October 2009. [12] The union submitted that Fosters’ actions in failing to allow the union to hold the meetings, in circumstances where Fosters had previously allowed similar meetings, caused it to have concerns that Fosters is not meeting its good faith obligations, in particular that, contrary to s.228(1)(e) of the Act, Fosters has engaged in capricious or unfair conduct that has undermined freedom of association or collective bargaining. [13] In addition to taking me to the dictionary definition of ‘capricious’, the union referred me to the Explanatory Memorandum. The New Shorter Oxford English Dictionary defines ‘capricious’ as “guided by caprice; readily swayed by whim or fancy; inconstant” and ‘caprice’ as “an unaccountable change of mind or conduct…”. The Explanatory Memorandum relevantly states at paragraph 951: “The good faith bargaining requirements are generally self-explanatory. The last requirement, ‘refraining from capricious or unfair conduct…’ is intended to cover a broad range of conduct. For example, conduct may be capricious or unfair conduct if an employer: • … • does not permit an employee who is a bargaining representative to attend meetings or discuss matters relating to the terms of the proposed agreement with fellow employees; • …” [14] Mr B Redford, the Assistant State Secretary of the Victorian Branch of the union, who appeared for the union and also gave evidence on its behalf, readily conceded that had the union been granted permission to hold the meetings, one of the topics for discussion would have been the protected action ballot, the voting for which was then open. He added that he would have urged participants at the meetings to vote in favour of the taking of protected action. [15] In Project Blue Sky Inc v Australian Broadcasting Authority 2 a majority of the High Court held: The primary object of statutory construction is to construe the relevant provision so that it is consistent with the language and purpose of all the provisions of the statute 3 . The meaning of the provision must be determined "by reference to the language of the instrument viewed as a whole" 4 . In Commissioner for Railways (NSW) v Agalianos 5 , Dixon CJ pointed out that "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". Thus, the process of construction must always begin by examining the context of the provision that is being construed 6 . [16] I have tried to set out what I consider the relevant provisions of the Act in order to identify the context in which the good faith bargaining requirements in s.228 are found; particularly s.228(1)(e) that a bargaining representative refrain from capricious or unfair conduct. [17] It is apparent that the Act has created a scheme whereby bargaining for an enterprise agreement is encouraged. During the course of bargaining it is legitimate to take protected industrial action, provided that the statutory requirements have been met. The application for a protected action ballot and the taking of industrial action that may be authorized by such a ballot are some of the legitimate bargaining tactics that a union may engage in to further or strengthen its bargaining position. Here, Fosters does not complain that the union seeks the ability to engage in such tactics. Nor does the union complain of Fosters’ conduct in the bargaining negotiations beyond the complaint it makes in relation to the withholding of permission to have the meetings it seeks. [18] Mr Redford took me to Alphington Aged Care v Sisters of St Joseph Health Care Services (Vic) t/a Mary Mackillop Aged Care 7 in order to support his submission that by refusing the meetings request Fosters had been engaging in capricious conduct. That case concerned an application to approve an enterprise agreement in circumstances where it had been alleged that the relevant employees had not had an adequate opportunity to consider the terms of the proposed agreement. The Commissioner referred with approval to the judgment of Reeves J in CEPU v Blue Star Pacific Pty Ltd 8 , an application for a declaration that the employer had not given all persons employed by it and who were entitled under s.340 of the Workplace Relations Act 1996 to decide whether they wanted to approve the proposed collective agreement. His Honour found, taking into account aspects of the context and language of s.340(2)(a), that a purpose of the sub-section was to require an employer wishing to have approved and, therefore, be bound by an employee collective agreement, to provide an opportunity for all employees who would be affected by it, to meet together as a group, to discuss the provisions of the proposed agreement. 9 The two decisions to which I have referred dealt with the approval process for proposed agreements. To the extent that the Commissioner found that prior to deciding whether to approve a proposed enterprise agreement the employees who will be affected by it should have the opportunity to meet together as a group to discuss its provisions 10 , I agree with her. However, the meetings sought here were not for the purpose of discussing a document that was proposed to be put to a vote. Accordingly, those cases are of limited assistance. [19] Initially the meetings were sought for the purposes of updating members of the union as to the progress of the bargaining as well as discussing, and advocating support for, the protected action ballot. After Fosters provided its revised draft on 30 September 2009, a date which was after the time at which the union had proposed the meetings, but before the hearing of this matter, it was put that the order sought would also facilitate discussion of the revised draft. [20] In my view FWA should be slow to interfere in the legitimate tactics undertaken by parties during the bargaining process unless an applicant for a bargaining order has demonstrated that there are sound reasons for so doing. There needs to be satisfaction that the good faith bargaining requirements are not being met. An order under s.230 is discretionary and may only be made if FWA is satisfied that it is reasonable in all the circumstances to make the order. [21] In the circumstances of this case, Fosters did not breach the good faith bargaining requirements of s.228. More particularly, it refrained from capricious or unfair conduct that undermines freedom of association or collective bargaining. In refusing to allow meetings that had as one of their purposes consideration of authorizing the potential taking of industrial action against it, Fosters cannot be criticised. [22] It follows that the application must be dismissed. SENIOR DEPUTY PRESIDENT Appearances : Mr B Redford for the applicant Mr J Tuck, solicitor, for the respondent Hearing details: Melbourne. 2009: 6 October 1 PR989246 2 (1998) 194 CLR 355 at [69] 3 See Taylor v Public Service Board (NSW) (1976) 137 CLR 208 at 213 per Barwick CJ. 4 Cooper Brookes (Wollongong) Pty Ltd v Federal Commissioner of Taxation (1981) 147 CLR 297 at 320 per Mason and Wilson JJ. See also South West Water Authority v Rumble's [1985] AC 609 at 617 per Lord Scarman, "in the context of the legislation read as a whole". 5 (1955) 92 CLR 390 at 397. 6 Toronto Suburban Railway Co v Toronto Corporation [1915] AC 590 at 597; Minister for Lands (NSW) v Jeremias (1917) 23 CLR 322 at 332; K & S Lake City Freighters Pty Ltd v Gordon & Gotch Ltd (1985) 157 CLR 309 at 312 per Gibbs CJ, 315 per Mason J, 321 per Deane J. 7 [2009] FWA 301 8 [2009] FCA 750 9 Ibid at [45] 10 [2009] FWA 301 at [42] Printed by authority of the Commonwealth Government Printer <Price code {C}, PR990096>