Fair Work Act 2009
s.437 - Application for a protected action ballot order

Construction, Forestry, Mining and Energy Union
v
Brookfield Multiplex Australasia Pty Ltd
(B2012/75)

Summary: reasons for rejection of question to be put to employees - whether industrial action - whether Applicant genuinely trying to reach agreement - definitional requirements of genuinely trying - motivation to manufacture a preferred bargaining environment in which to reach agreement

[1] On 17 April 2012, the Construction, Forestry, Mining and Energy Union (“CFMEU”) made an application under s.437 of the Fair Work Act 2009 (“the Act”), seeking an order requiring a protected action ballot to be conducted to determine whether employees wish to engage in particular protected industrial action for a proposed agreement.

[2] The employer of the employees who will be covered by the proposed enterprise agreement is Brookfield Multiplex Australasia Pty Ltd (“BMAPL”).

[3] The matter was subject to a hearing on 18 April 2012 in Brisbane.

[4] There is a previous decision by me in relation to the CFMEU and BMAPL regarding two prior applications. These are B2012/641 and B2012/648. 1  This earlier decision provides some further background to this particular decision.

Whether question discloses the nature of the industrial action

Over the course of the hearing on 18 April 2012, the various statutory requirements were considered and addressed along the way. This included my rejection of one of a number of questions to be put to the employees.

That question as articulated in the application was as follows:

Standing inside and immediately outside of the entrance to sites where Brookfield Multiplex Australasia Pty Ltd are operating and discussing the nature of the protected action being taken, the claims being pursued by CFMEU on the behalf of its’ members, and the response of BMAPL to these claims, with subcontractors of BMAPL, and employees of such subcontractors, and requesting that such persons to support the claims being pursued by the CFMEU. (sic)

BMAPL contended that this question was a thinly disguised effort to authorise a picket.

That aside, my reasons for rejecting the question was that the range and scope of the defined conduct that comes within the framework of the question is uncertain, and as a consequence it may lead to confusion on the part of the employees who are being requested to authorise (or not) that course of action. For example, the question was premised on an interaction (discussion) occurring between the relevant employees of BMAPL and subcontractors and/or the employees of subcontractors. In such circumstances, employees may not readily appreciate - from the terms of the question put to them - their exposure to legal risk in relation to the conduct the question sought to authorise. That is, conduct other than a discussion (such as merely conveying information or asserting a unilateral position which falls short of a discussion) might not be conduct that attracts the intended legal immunity.

I add that other difficulties arise with the question as proposed. The question lacks sufficient specificity as to the intended duration of the so-called discussions such that an employee might be capable of reasonably evaluating the nature of the industrial action in respect of which the CFMEU was seeking his or her approval. This is important in so far as it enables an employee, in turn, to evaluate the economic consequences to him or herself or the employer of approval of the question.

The CFMEU proposed an amendment to the words of the question so that it was not predicated upon a discussion with subcontractors or employees of subcontractors, but was predicated upon providing information to such persons. That amendment, in my view however, did not address the concerns raised above. In particular, the nature of the industrial action intended remained uncertain (along with the legal risks for employees) in circumstances where the mere conveyance of information migrated - intentionally or inadvertently - into an exchange or discussion with the subcontractors or employees of subcontractors.

Generally, I was of the view that the question as intended to be put to the employees did not sufficiently disclose the nature of the intended industrial action, and was inherently uncertain in its terms.

That said, there might be other circumstances in which the conduct for which the CFMEU sought authorisation - which one way or another involves communications across workforces - might not constitute industrial action of any kind under s.19 of the Act and might therefore not be protected industrial action. That is, it might be possible to participate in conduct of the kind contemplated by the question posed by the CFMEU but not offend against s.19 of the Act.

In that context, the question would not be disclosing any industrial action for the purposes of s.437(3)(b) of the Act, and the question would not be for the requisite statutory purpose as a result.

I note in passing that no argument was had as to whether or not the question intended to be put might in some particular circumstances give rise to conduct that might be open to characterisation as a restrictive trade measure under the Competition and Consumer Act 2010. But in circumstances where conduct intends to involve subcontractors and employees of other subcontractors, that prospect is not unimaginable.

These matters add to the general uncertainty in the terms of the question and the adequacy of the question in so far as it discloses the nature of the intended industrial action, as it must for purposes of s.437(3)(b) of the Act.

Section 443(1) of the Act: whether genuinely trying

One further matter remains to be determined for purposes of the application. That matter concerned s.443(1) of the Act, which provides as follows:

443 When FWA must make a protected action ballot order

(1) FWA must make a protected action ballot order in relation to a proposed enterprise agreement if:

(a) an application has been made under section 437; and

(b) FWA is satisfied that each applicant has been, and is, genuinely trying to reach an agreement with the employer of the employees who are to be balloted.

Section 443(1) of the Act requires that a protected action ballot order must be made once FWA “is satisfied that each applicant has been, and is, genuinely trying to reach an agreement with the employer of the employees who are to be balloted”. FWA must determine whether it can reach the state of requisite satisfaction only by having regard to the facts and circumstances adduced in the evidence and materials before it.

It is to that task that I now turn.

The CFMEU and BMAPL relied on one witness statement each for the purposes of these proceedings. Neither witness was called, and the CFMEU and BMAPL did not cavil with one another's statements.

The factual matrix before me therefore is an amalgam of both the unchallenged witness statements. One is the witness statement of Mr David Higgon, who was employed as the Employee Relations Manager for BMAPL and the other is of Mr Kane Pearson, who is the Assistant Divisional Branch Secretary of the CFMEU.

It appears from the evidence that two representatives of the CFMEU met with representatives of BMAPL on 10 April 2012. The meeting lasted almost four hours

The parties had initially settled the issue of the base agreement which was to be used for the purposes of negotiations. That document appeared to be the current Brookfield Multiplex EBA. The parties appear to have progressed discussions on the basis of cutting and pasting clauses from the CFMEU's template agreement, which it was advocating, into the current Brookfield Multiplex EBA.

According to Mr Higgon the meeting proceeded fairly efficiently and by the end of the meeting 17 clauses had been dealt with, mostly in favour of the CFMEU's terms. That is, the clauses from the CFMEU's template agreement were incorporated into the base document.

A further meeting was conducted on 16 April 2012.

Mr Pearson participated in this meeting along with a representative who had participated in the previous meeting. Mr Pearson agitated an issue at the commencement of the meeting as to why the base document was not the CFMEU template agreement but instead was the Brookfield Multiplex EBA. The position reached in the previous meeting was explained and the parties appeared to then turn to discuss relevant clauses.

At this meeting some 11 clauses were dealt with, again on the CFMEU's terms.

There appears at this meeting to have been some discussion about the CFMEU's ‘contractors’ clause in its template agreement. It was agreed at the end of the meeting that the CFMEU would write to BMAPL before the next meeting regarding the ‘contractors’ clause. This was said to enable BMAPL to consider the CFMEU's position prior to the next meeting, which it was agreed would be on 24 April 2012.

There also appears to have been discussion about the relevant wages clause and the wages classification structure to apply. The parties put forward their respective positions but there was no resolution of this matter at the meeting. BMAPL undertook to come back to the CFMEU with more information about the classification structure.

The parties discussed the method of calculation of the CFMEU's increase in site allowances, and the CFMEU undertook to enquire into this and provide an answer as soon as possible.

There was also acceptance, it appears, of the CFMEU's approach to the consultation clause in relation to productivity schemes. The CFMEU appears to have accepted the existing BMAPL payment of wages and allowances clause, which deals with administrative matters relating to payment.

Other clauses were discussed concerning interest being paid for the period of non-payment of superannuation and salary sacrifice provisions.

The parties did not resolve an issue in relation to the times at which ordinary hours would commence, and the CFMEU indicated it would seek the views of its membership in this regard. There was agreement as to other clauses such as the medical assessments clause, which provides for a free medical assessment for employees.

At the end of the second meeting there remains some 11 clauses in the current Brookfield Multiplex EBA and CFMEU template agreement which had not been discussed at all between the parties.

At 8:55am on 17 April 2012, the morning after the April 16 meeting mentioned above and prior to the next meeting scheduled to take place on 24 April 2012, the CFMEU made this application under s.437 of the Act, seeking a protected action ballot order

CONSIDERATION

The CFMEU contends that it has met the minimum requirements for the purposes of the statutory test under s.443(1) of the Act, as set out in the decision of the Full Bench in Total Marine Services Pty Ltd v Maritime union of Australia 2  (“Re: Total Marine Services”).

The CFMEU put it, succinctly, this way:

The applicant has provided a clear articulation of their claims to the employer. They have met on a number of occasions, they have considered the claims put by the employer and responded. In some cases they've agreed. The statements of Messrs Higgin and Pearson clearly articulate a bargaining process whereby both parties are putting their claims, discussing them, in some cases reaching agreement, in other cases not. Again, in my submission, your Honour, this should be a fairly uncontroversial point. It's clear on the material filed by the applicant but also in the material filed by the respondent, that the applicant meets the test and that they are genuinely trying to reach agreement here. 3 

The CFMEU's submissions were directed at the observations of the Full Bench in Re: Total Marine Services (as highlighted below) as to the normally expected circumstances necessary for an Applicant to sustain a case that it has been, and is, genuinely trying to reach agreement:

[31] In our view the concept of genuinely trying to reach an agreement involves a finding of fact applied by reference to the circumstances of the particular negotiations. 2 It is not useful to formulate any alternative test or criteria for applying the statutory test because it is the words of s 443 which must be applied. In the course of examining all of the circumstances it may be relevant to consider related matters but ultimately the test in s 443 must be applied.

[32] We agree that it is not appropriate or possible to establish rigid rules for the required point of negotiations that must be reached. All the relevant circumstances must be assessed to establish whether the applicant has met the test or not. This will frequently involve considering the extent of progress in negotiations and the steps taken in order to try and reach an agreement. At the very least one would normally expect the applicant to be able to demonstrate that 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. Premature applications, where sufficient steps have not been taken to satisfy the test that the applicant has genuinely tried to reach an agreement, cannot be granted.

The Full Bench has described a formulaic or staged model of negotiation in which one party presents a claim, the other responds to the claim with its counter claims, and the original party provides a considered response to the other party’s counter claims. Not all negotiation processes fit such a model comfortably. In some cases, as in the one before me, the parties are advancing their discussions on an interactive basis over time.

Again, in the current case, the parties have met on two occasions in which they have turned their collective minds to the actual negotiation process. The meetings were not perfunctory. In fact, progress has been made in numerous areas of the agreement making agenda (though not necessarily in critical areas such as wages, site allowance increases, classifications and contractor clauses).

The parties have entered mutual undertakings to respond to one another about various of the issues in contest.

It cannot be said that BMAPL or the CFMEU are entirely uninformed about one another's respective positions or claims.

But do such circumstances provide a basis on which FWA might reach the requisite degree of satisfaction about the requirements of s.443(1) of the Act?

If the CFMEU had been genuinely actuated to reach agreement with BMAPL in a situation:

• in which effective negotiations were in their early stages;



• where it has been accepted negotiations were progressing fairly efficiently, and quite a number of matters had been resolved; but



• where there has not been an effective and considered exchange between the parties on critical issues such as wages, site allowances, classifications and contractor clauses, which they themselves by their own conduct had anticipated,

the CFMEU would be expected to continue along that pathway someway further. By so doing, the CFMEU would demonstrate that it was genuinely trying to reach agreement. Instead, the morning after the second meeting, the CFMEU lodged the current application, seeking a protected action ballot order.

The notion of genuinely trying to reach agreement is latent with a definitional expectation that an applicant demonstrate that its motivation is authentic, real and truthful and\or not a sham. But the facts before me do not sufficiently demonstrate the CFMEU’s motivation to reach an agreement with BMAPL to be genuine, at this juncture. The evidence suggests that in the context in which bargaining is being pursued at an early stage in a relatively fluid manner, and there is yet to be a full exchange of views on critical matters let alone consideration of those views as exchanged, and an applicant makes an application for a ballot order under s.437 of the Act directly following a meeting and before a considered exchange of views on key issues, the genuineness of the motivation of the applicant to reach agreement must fall into serious doubt. Indeed, as the representative for BMAPL put it, the CFMEU was in an unseemly rush to initiate protected industrial action against BMAPL, rather than genuinely motivated or trying to reach agreement with it.

Put another way, the circumstances of this application demonstrate that the CFMEU is motivated to manufacture a preferred environment in which to negotiate an agreement, as opposed to genuinely trying to reach agreement in its own right. Absent the necessary demonstration of genuineness in this regard, the application under s.437 of the Act must fail.

Further, and separately, the facts of this case (which go to the early stages and qualitative depth of the bargaining interactions and the wider conduct of the parties) are sufficient to demonstrate that the application before me, in the words of the Full Bench in Re: Total Marine Services, is premature because sufficient steps have not been taken to satisfy the test that the applicant has been genuinely tried to reach agreement.

CONCLUSION

Because of my findings above, the mandatory precondition to a protected action ballot order being made is not currently available, the factual matrix and the circumstances of this matter do not demonstrate that the CFMEU has been, and is, genuinely trying to reach agreement as a necessary prior step to making an application for a protected action ballot order.

For these reasons the application under s.437 of the Act is dismissed.

SENIOR DEPUTY PRESIDENT

Appearances:

Mr T. O’Brien for the Applicant

Mr D. Williams, solicitor for the Respondent

Hearing details:

2012

18 April

Brisbane

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