DECISION

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

Application by United Workers' Union
(B2022/1274)

Proposed protected action ballot of employees of George Weston Foods Limited Trading As Tip Top Bakeries (Canning Vale)

[1] The United Workers’ Union (UWU) have applied to the Fair Work Commission (FWC) for a protected action ballot order (Application) pursuant to section 437 of the Fair Work Act 2009 (Cth) (FW Act) in relation to the bargaining for an agreement to replace the Tip Top Bakeries (Canning Vale) Bakehouse Agreement 2017 (Agreement).

[2] The Application was supported by a statutory declaration from Ms Pareen Minhas, an Industrial Officer for the UWU (Ms Minhas).

[3] The UWU seek an order for a ballot to be conducted of employees of George Weston Foods trading as Tip Top Bakeries Pty Ltd (Canning Vale) (Tip Top) who are employed by Tip Top in classifications covered by the Agreement and who are represented by the UWU, or who are bargaining representatives for themselves but are members of the UWU (Employees).

[4] The Application was listed for a Conference on 29 August 2022. The possibility of resolving the two outstanding bargaining issues was explored with the parties however the UWU indicated that they pressed to have the Application determined and would consider further bargaining proposals by Tip Top only at the next bargaining meeting. Due to technological issues the Hearing could not proceed the same day and was relisted to 30 August 2022 (Hearing).

[5] Directions for the filing of materials in advance of the Hearing were issued to the parties on 26 August 2022 (Directions).

Permission to be Represented

[6] The UWU were represented by Ms Minhas at the Hearing. Tip Top were represented by Mr Lee Buntman Principal Adviser of AI Group (Mr Buntman) pursuant to s 596(4)(b)(i) of the FW Act.

Evidence

[7] The Directions required the parties to file their witness evidence in chief in advance of the Hearing.

[8] UWU filed a witness statement setting out the evidence in chief of Mr Andrew Giles (Mr Giles). Mr Giles is a coordinator employed by the UWU and based on the east coast. He is assisting local officials and delegates to negotiate the replacement agreement. UWU subsequently filed an amended witness statement of Mr Giles replacing the previously filed statement.

[9] At the Hearing Mr Giles was cross examined by Mr Buntman.

[10] Tip Top filed a witness statement setting out the evidence in chief of its witness Mr Ryan Kemial Hodgson (Mr Hodgson). Mr Hodgson is the Operations Manager for South Australia and Western Australia and the lead negotiator for Tip Top in the bargaining for the replacement agreement. 1

[11] At the Hearing Mr Hodgson gave further oral evidence and was cross examined by Ms Minhas.

[12] The parties jointly prepared and filed a digital court book containing the evidence and submissions of the parties prior to the Hearing date (DCB). The DCB was admitted at the Hearing as an exhibit and marked Exhibit DCB1.

[13] In reaching my decision, I have considered all the submissions made and the evidence tendered by the parties, even if not expressly referred to in these reasons for decision.

Background

[14] Tip Top is part of George Weston Foods Limited (GWF). GWF is one of Australia and New Zealand’s largest food manufacturers employing over 6,000 people across 40 sites. Tip Top operate two sites in Western Australia. One in Canning Vale and one in O’Connor. 2

[15] The Agreement covers approximately 80 employees, all of whom are employed in the baking of bread products at the Canning Vale site. 3

[16] Mr Giles has been supporting the local organiser in the bargaining for the replacement agreement. His involvement in the negotiations has occurred remotely. He gave evidence at the Hearing that he has only attended the Canning Vale Site on one occasion and has never visited the O’Connor site. 4

[17] The primary bread product produced at the Canning Vale site is a ‘square loaf’ known in supermarkets as ‘The One’ and ‘Wonder’. 5

[18] Tip Top’s primary competitor is Goodman Fielder (GF). However, GF has no bread manufacturing facilities in Western Australia and all of GF’s bread products are supplied by Tip Top.  6

[19] Tip Top supplies products to major commercial partners in Western Australia including: 7

a. Supermarkets - Coles, Woolworths, Aldi, IGA and other independent grocers.
b. Quick service restaurants – KFC and Hungry Jacks.
c. Sandwich suppliers and caterers such as those companies which supply airlines with products.

[20] Tip Top is also the major producer of bread products to vulnerable sectors of the Western Australia community which includes public schools, aged care facilities, hospitals, prisons, regional indigenous communities and Foodbank. 8 The UWU asserted in its submission that ‘vulnerable customers’ form a minority of Tip top’s customer base but led no evidence in support of this assertion.

[21] Tip Top supplies its’ fresh bread products on a daily basis. 9

[22] The majority of the bread market in Western Australia (at least 80%) is supplied by Tip Top and GF. 10

[23] Tip Top’s other site in Western Australia does not have bread making capacities, it only produces crumpets, muffins and pancakes.  11

[24] There are no other major providers of fresh bread products to the state of Western Australia. 12

[25] The Application contemplates four forms of employee claim action all involving cessation of work of one form or another.

[26] The process of producing the bread from start to being ready for dispatch takes approximately six hours. Any interruption to that cycle results in the process having to be recommenced. 13

[27] Any stoppage of work affects not only the production of bread in Western Australia but results in storage/warehouse and merchandise employees being unable to perform their role (approximately 250 employees). 14

[28] If production can not occur at Canning Vale then Tip Top would need to source bread products from interstate. Mr Hodgson gave evidence that the only feasible interstate option is to source the bread from Tip Top’s site in South Australia. 15

[29] Tip Top currently supply in excess of 200,000 units of bread products to the Western Australian market each day. According to Mr Hodgson, South Australia does not presently have the staffing or production capacity to supply fresh bread to Western Australia. He gave evidence that in fact he has been unsuccessfully trying to recruit staff for the South Australian operations for some months. Even once labour is secured his evidence is that four to five weeks of training will then be required.

[30] South Australia can only supply frozen bread products to Western Australia. In order to do this, it would take three days to freeze the bread and a further three days to transport the bread by road train from South Australia to Western Australia. 16

[31] Both Western Australia and South Australian sites have limited freezer storage so the cycle of three days to freeze the bread and three days to transport it would need to be repeated daily each day the product cannot be freshly produced in Western Australia. 17 According to Mr Hodgson approximately 20-25 trucks would be required to transport the amount of bread product Tip Top currently supplies to the Western Australian market each day.

[32] According to Mr Hodgson the South Australian facility has limited capacity to increase its production. Therefore, even if bread is sourced in South Australia Tip Top is unlikely to be able to supply the same volume of product as it would normally and would incur significant financial costs doing so.

[33] Tip Top assert that inability by it to supply the daily requirements of the Western Australian market is not a circumstance which occurs regularly, routinely or normally. Mr Hodgson gave evidence that this occurred on a rare occasion on or about 13 July this year. 18

[34] Mr Giles asserted in his witness statement that: 19

“A stoppage of work is commonplace at the Company's sites, in fact, I am aware that breakdowns and issues in production occur regularly that in turn cause delays to the production and distribution of bread products.”

[35] At the Hearing he conceded that his evidence was in relation to all the Company’s sites Australia wide. He was only able to identify one short interruption to production at the Canning Vale site specifically. On this basis I have accepted the Company’s evidence that such events are not common place.

Consideration

[36] The FWC is obliged to issue a protected ballot order in the following circumstances:

“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.

Note: Under subsection 414(1), before a person engages in employee claim action for a proposed enterprise agreement, a bargaining representative of an employee who will be covered by the agreement must give written notice of the action to the employer of the employee.”

[37] Section 437 relevantly provides as follows:

“437 Application for a protected action ballot order

Who may apply for a protected action ballot order

(1) A bargaining representative of an employee who will be covered by a proposed enterprise agreement, or 2 or more such bargaining representatives (acting jointly), may apply to the FWC for an order (a protected action ballot order) requiring a protected action ballot to be conducted to determine whether employees wish to engage in particular protected industrial action for the agreement.

(2) Subsection (1) does not apply if the proposed enterprise agreement is:

(a) a greenfields agreement; or

(b) a multi-enterprise agreement.

(2A) Subsection (1) does not apply unless there has been a notification time in relation to the proposed enterprise agreement.

Note: For notification time, see subsection 173(2). Protected industrial action cannot be taken until after bargaining has commenced (including where the scope of the proposed enterprise agreement is the only matter in dispute).

Matters to be specified in application

(3) The application must specify:

(a) the group or groups of employees who are to be balloted; and

(b) the question or questions to be put to the employees who are to be balloted, including the nature of the proposed industrial action.

(4) If the applicant wishes a person other than the Australian Electoral Commission to be the protected action ballot agent for the protected action ballot, the application must specify the name of the person.

Note: The protected action ballot agent will be the Australian Electoral Commission unless the FWC specifies another person in the protected action ballot order as the protected action ballot agent (see subsection 443(4)).

(5) If A group of employees specified under paragraph (3)(a) is taken to include only employees who:

(a) will be covered by the proposed enterprise agreement; and

(b) either:

(i) are represented by a bargaining representative who is an applicant for the protected action ballot order; or

(ii) are bargaining representatives for themselves but are members of an employee organisation that is an applicant for the protected action ballot order.

Documents to accompany application

(6) The application must be accompanied by any documents and other information prescribed by the regulations.”

[38] It is not in dispute that the UWU has standing to make the Application in their capacity as a bargaining representative. 20 The notification time in relation to the Proposed Agreement is 28 February 2022.21 The Proposed Agreement is not a greenfields agreement or a multi-enterprise agreement.22

[39] The Application does not specify at Question 2.1 the group of employees who are to be balloted however this was clarified by UWU at the Hearing. 23

[40] The UWU have proposed that the Australian Electoral Commission conduct the ballot. 24

[41] UWU have sought that the date by which the ballot should close be thirty (30) days from the date of the granting of any Order. 25

[42] The Application specifies the questions to be put to the employees who are to be balloted, including the nature of the proposed industrial action. 26

[43] The Application was accompanied by documents and other information prescribed by the Fair Work Regulations 2009 (Cth).

[44] I am therefore satisfied that the Application has been made in accordance with section 437 of the FW Act.

[45] The FWC may only make the order sought if the FWC is satisfied that UWU has been, and is, genuinely trying to reach an agreement with Tip Top. UWU bears the onus of establishing this. 27

[46] The reference to the FWC being “satisfied” means that determining whether or not the requisite circumstance exists is a discretionary decision. The expression “has been, and is” imports temporal considerations, both of which are to be considered. An applicant for a protected action ballot order must satisfy both.

[47] In Esso Australia Pty Ltd v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union; Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia; The Australian Workers' Union  28 (Esso Case), the Full Bench stated:

“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”  29 (references omitted)

[48] In Total Marine Services Pty Ltd v Maritime Union of Australia, 30 a Full Bench of Fair Work Australia relevantly stated:

“[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. 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...”

[49] Both decisions stand for the proposition that a decision rule should not be adopted for the purposes of determining whether an applicant for a protected action ballot order has been, and is, genuinely trying to reach an agreement with the employer of the employees who are to be balloted. The entirety of the circumstances of the case must be taken into account.

[50] At the UWU provided evidence of the steps taken by them to bargain and of the progress of bargaining to date.

[51] It is not in dispute and I am satisfied that the UWU have been, and is, genuinely trying to reach an agreement with Tip Top.

[52] Pursuant to section 414 of the FW Act, where an employee is to engage in protected industrial action, their bargaining representative must give written notice of the action. Section 414(2) requires three working days’ notice, or any longer period specified in the protected action ballot order.

[53] Tip Top submitted that, if an order is to be made, the FWC should exercise its discretion to increase the subsection 414(2)(a) notice period of three working days to up to seven working days.

[54] Section 443(5) of the FW Act provides that:

“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.”

[55] This requires consideration of: 31

a. whether the circumstances are ‘exceptional’;

b. whether the ‘exceptional circumstances’ justify a requirement of notice longer than the statutory default; and

c. what the period of notice should be, up to a maximum of seven days.

[56] The right to otherwise give three working days’ written notice of industrial action “should not lightly be curtailed” by the imposition of a longer period of notice. 32

[57] The determination of whether the circumstances of a particular case are ‘exceptional’ involves an evaluative judgement of those circumstances. Circumstances may be “exceptional” if they are out of the ordinary course, unusual, special or uncommon. They need not be unique, unprecedented, rare or unexpected. For this purpose, “circumstances” may include a combination of factors which together produce a situation that is out of the ordinary course, unusual, special or uncommon, notwithstanding that none of them taken in isolation would be “exceptional”. 33

[58] When considering whether to extend the notice longer that that statutory default the FWC is not simply concerned with determining whether there are exception circumstances. The exceptional circumstances must ‘justify’ the granting of a longer notice period. 34

[59] Determining whether the “exceptional circumstances” justify a requirement of notice longer than the statutory default inevitably requires balancing the interests of the employer and third parties in having a greater opportunity to take defensive action, against those of the employees which may be adversely affected by a diminution in the effect of their industrial action, and hence their bargaining power. 35

[60] Having concluded that particular circumstances are exceptional, and that they justify a requirement of a notice period longer than the statutory default, a Member must decide whether to exercise their discretion to grant an additional period of notice and determine how long that period should be. 36

[61] An extension of the notice period under sub section 443(5) while not a regular exercise of the FWC’s discretion is not uncommon, including an extension to seven working days. 37

[62] Tip Top provided evidence in support of its assertion that exceptional circumstances currently exist, which justify a requirement for a longer notice period.

[63] The evidence is that Tip Top is the major producer of fresh bread products to the State of Western Australia supplying eighty percent of the Western Australian market. This includes supply of fresh bread products to Tip Top’s primary competitor GF, supermarkets, quick service restaurants and vulnerable customers. The product is supplied fresh daily and takes approximately 6 hours to complete per cycle.

[64] UWU assert that production would not be disrupted by the proposed industrial action because not all members of the workforce are union members. The evidence is that approximately 50 of the 80 workforce are union members. I accept that evidence of Mr Hodgson that the loss of the labour of this proportion of the workforce would stop production. It is also possible that some of the non union members would be disinclined to cross any picket line further exacerbating the situation.

[65] There is no alternative major producer of bread products to Western Australia other than Tip Top. Mr Hodgson explained that the remaining producers of bread in Western Australia were boutique or only capable of comparatively small scale production.

[66] The inability of Tip Top to produce and supply up to eighty percent of the daily fresh bread product in the State of Western Australia is a situation which is out of the ordinary course, unusual, special or uncommon. A rare example of this occurred on or about 13 July 2022. Bread products are a basic product purchased and/or consumed by the general public most commonly on a daily basis. Shortages of key consumables during the pandemic triggered ‘panic buying’ resulting in unnecessary shortages on supermarket shelves of other products. There is a risk that such behaviour would be repeated if up to eighty percent of daily bread supply is disrupted by industrial action.

[67] Loss of product would have significant impact for Tip Top corporate clients. Bread is a key product of many of the menu items of its quick service restaurant customers. A lack of product would impact on their sales and reputation. It would also potentially impact the hours of work available to their employees.

[68] The inability to produce fresh product daily would result in 250 warehouse/storage and merchandise employees being unable to perform their roles.

[69] If production can not occur at Canning Vale then Tip Top would need to source bread products from interstate. The only feasible interstate option is South Australia. To supply product from South Australia, requires a timeframe of six days. To do so will require significant logistical challenges including sourcing and managing a fleet of 20 delivery trucks.

[70] An extension of seven days would provide Tip Top with one day to ensure production cycles are adjusted and truck fleets are in place in order to deliver bread to Western Australians then three days to freeze the bread and a further three days to deliver the bread across the Nullarbor to Western Australian grocery stores, fast food restaurants and other customers.

[71] In its submissions UWU assert that the effect of granting the extension sought “…would be that the employees covered by the Agreement remain on low wages and unfavourable conditions…” and that Employees “…would not only be prohibited from taking industrial action, but that they would not even be entitled to be balloted as to whether they approve the taking of industrial action.” 38

[72] The logistical complexity and the financial cost of sourcing bread products from outside of Western Australia will be onerous for Tip Top. The evidence is that South Australia will be unable to match in full the current supply to the Western Australian market. For these reasons there will remain considerable pressure on Tip Top to endeavour to secure an agreement with its workforce notwithstanding an extension of the notice period.

[73] It is important to note that the parties are apart on only two issues. In relation to financial outcomes those differences are not large and there remains only one ‘condition’ of employment which is unresolved.

[74] The extension of the notice period does not in any way prevent Employees taking industrial action nor does it in any way prevent them voting in a ballot to authorise industrial action.

[75] I am satisfied that the nature, and the potential impact, of the proposed industrial action is such that exceptional circumstances do exist justifying the extension of the notice period. In light of the evidence before me, I have decided to exercise my discretion to grant an extension of the notice period. I am satisfied that an extension of the notice period from three working days to seven working days is appropriate in all the circumstances.

[76] Having been satisfied that the requirements of s 443(1)(a) and (b) of the FW Act have been complied with, the Application is granted, and a protected action ballot order will be issued with this decision. 39

DEPUTY PRESIDENT

Printed by authority of the Commonwealth Government Printer

<PR745274>

Appearances:

Ms P Minhas, for the Applicant.

Mr L Buntman, for the Respondent.

Hearing details:

2022

PERTH

30 August

 1   Digital Court Book (DCB) 6.

 2   Ibid 69.

 3   Ibid 6.

 4   Ibid 69.

 5   Ibid 6.

 6   Ibid 7.

 7   Ibid 7.

 8   Ibid 7.

 9   Ibid 7.

 10   Ibid 7.

 11   Ibid 8.

 12   Ibid 7.

 13   Ibid 7.

 14   Ibid 7.

 15   Ibid 7.

 16   Ibid 7.

 17   Ibid 8.

 18   Ibid 7.

 19   Ibid 68.

 20   Ibid.

 21   F34B – Declaration in support of an application for protected action ballot order dated 24 August 2022 (‘Minhas Declaration’) at Q1.6.

 22   Ibid Q1.3.

 23   Form F34 – Application for a protected action ballot order dated 21 May 2021 (‘F34’) at Q2.1.

 24   Ibid Q3.1.

 25   Ibid Q2.3.

 26   Ibid Q2.2.

 27   John Holland v AMWU [2010] FWAFB 526, [27].

 28   [2015] FWCFB 210.

 29   Ibid [57].

 30   [2009] FWAFB 368.

 31   National Tertiary Education Industry Union v Charles Darwin University [2018] FWCFB 4011, [23] - [25].

 32   National Tertiary Education Industry Union v Charles Darwin University [2018] FWCFB 4011 as cited in Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union known as the Australian Manufacturing Workers’ Union (AMWU) v Turosi Pty Ltd t/a Golden Farms Geelong t/a Golden Farms Geelong [2021] FWC 4959 at [18]

 33  Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing, and Allied Services Union of Australia v Australian Postal Corporation (2007) 167 IR 4; [2007] AIRC 848, [10]; accepted as a correct statement of the law in Construction, Forestry, Maritime, Mining and Energy Union v DP World Sydney Ltd [2019] FCAFC 99, [7] - [8].

 34   Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing, and Allied Services Union of Australia v Australian Postal Corporation (2007) 167 IR 4; [2007] AIRC 848, [11].

 35   Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing, and Allied Services Union of Australia v Australian Postal Corporation (2007) 167 IR 4; [2007] AIRC 848, [21].

 36   National Tertiary Education Industry Union v Charles Darwin University [2018] FWCFB 4011, [25].

 37   Application by Australian Rail, Tram and Bus Industry Union [2021] FWC 4391 at [211].

 38   DCB (n 1) 63.

 39   PR745275.