[2009] FWAFB 599 |
|
DECISION |
Fair Work Act 2009
s.604 - Appeal of decisions
SENIOR DEPUTY PRESIDENT ACTON |
MELBOURNE, 12 OCTOBER 2009 |
Appeal – protected action ballot orders.
Introduction
[1] This matter concerns appeals by the Australian Postal Corporation (Australia Post) against a decision 1 of Senior Deputy President Drake to issue protected action ballot orders2 concerning employees of Australia Post who are members of the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU).
[2] The applications to appeal were heard by a Full Bench of Fair Work Australia (FWA) on 7 September 2009. At the conclusion of the hearing, the Full Bench granted permission to appeal, upheld the appeals, quashed the decision of Senior Deputy President Drake and dismissed the protected action ballot applications. We now give our reasons for doing so.
Protected action ballot applications
[3] On 12 August 2009, the CEPU made two applications to FWA, pursuant to s.437 of the Fair Work Act 2009 (Cth) (the FW Act), for orders requiring protected action ballots to be conducted to determine whether certain employees of Australia Post who are members of the CEPU wish to engage in particular protected industrial action for proposed enterprise agreements with Australia Post. 3
[4] One order was sought in respect of employees of Australia Post who are members of the CEPU, excluding those employees of Australia Post employed in Post Logistics (third and fourth party warehousing/fulfilment operations) (Post Logistics). Her Honour made that order on 25 August 2009 4 and varied it on 28 August 2009.5
[5] The second order was sought in respect of employees of Australia Post who are members of the CEPU and employed in Post Logistics. Her Honour also made that order on 25 August 2009 6 and varied it on 28 August 2009.7
Grounds of appeal
[6] Australia Post appealed against Senior Deputy President Drake’s decision to issue the orders on several grounds including that her Honour erred:
(a) in denying Australia Post its right to be heard on the CEPU’s protected industrial action ballot applications, particularly in denying it a right to be heard on whether applications had been made under s.437 of the FW Act, and
(b) in being satisfied that the CEPU had been, and was, genuinely trying to reach agreements with the employer of the employees to be balloted.
Standing and permission to appeal
[7] Section 604 of the FW Act provides that:
“(1) A person who is aggrieved by a decision made by FWA (other than a decision of a Full Bench or the Minimum Wage Panel) may appeal the decision, with the permission of FWA.
Note: Generally, FWA must be constituted by a Full Bench to decide whether to grant permission, and to hear an appeal (see section 613).
(2) Without limiting when FWA may grant permission, FWA must grant permission if FWA is satisfied that it is in the public interest to do so.
Note: Subsection (2) does not apply in relation to an application for an unfair dismissal (see section 400).”
[8] The ability of a person aggrieved by a decision to institute an appeal was a feature of predecessor legislation to the FW Act, namely s.45(3)(d) of the Industrial Relations Act 1998 (Cth) and s.120(3)(g) of the Workplace Relations Act 1996 (Cth).
[9] The term “person aggrieved” in s.45(3)(d) of the Industrial Relations Act 1988 (Cth), which was relevantly similar to s.120(3)(g) of the Workplace Relations Act 1996 (Cth), was considered by the Industrial Relations Court of Australia in Tweed Valley Fruit Processors Pty Ltd v Ross and Others. 8 The Tweed Valley case concerned an enterprise flexibility agreement that Tweed Valley Fruit Processors Pty Ltd (Tweed Valley) had reached with its employees. The agreement was approved by a single member of the Commission. A union bound by an award binding Tweed Valley but not bound by the agreement sought leave to appeal against the member’s decision to approve the agreement on the ground that the single member had failed to exercise his jurisdiction. The appeal was allowed by a Full Bench of the Commission. Tweed Valley then sought prerogative relief in the form of writs of prohibition and certiorari to quash the Full Bench decision.
[10] In the Tweed Valley case, Wilcox CJ and Marshall J said:
“There is no doubt that, in determining whether a person is a "person aggrieved" for the purposes of exercising a statutory right of appeal, it is necessary to consider the relevant statutory context. Gibbs CJ said as much in Koowarta v Bjelke-Petersen (1982) 153 CLR 168 at 184-185; 39 ALR 417. His Honour there referred to cases in which it had been held "that a person is `aggrieved' by an act which operates in restraint of what would otherwise have been his legal rights". But he also mentioned Attorney-General (Gambia) v N'Jie [1961] AC 617 at 634 in which the Judicial Committee of the Privy Council said that the words "person aggrieved" should not be subjected to a restricted interpretation; "they ... include a person who has a genuine grievance because an order has been made which prejudicially affects his interest".
In Tooheys Ltd v Minister for Business and Consumer Affairs (1981) 36 ALR 64; 54 FLR 421, Ellicott J at FLR 437 interpreted the description "a person who is aggrieved" in s 5 of the Administrative Decisions (Judicial Review) Act as extending, at least, to "a person who can show a grievance which will be suffered as a result of the decision complained of beyond that which he or she has as an ordinary member of the public". He went on to say at FLR 437-8 that, in many cases, that grievance will be shown because the decision affects his or her existing or future rights but in other cases it may be less direct; it "may affect him or her in the conduct of a business or ... affect his or her rights against third parties".
Gummow J followed Tooheys in Australian Institute of Marine and Power Engineers v Secretary, Department of Transport (1986) 13 FCR 124; 71 ALR 73 in holding that the applicant, a registered industrial organisation with members serving in ships of the relevant class, had standing to seek reasons for a manning notice given by the respondent. At FCR 133 his Honour pointed out, first, that the applicant had among its interests or objects the obtaining and maintenance of reasonable conditions of employment of its members; secondly, that it had been invited to participate in the relevant Manning Committee and had made submissions in regard to the manning notice and, thirdly, that the issue was one of safety and was "fertile ground for an industrial dispute".
The decision of Commissioner Redmond did not affect AFME/PKIU's legal interests. But the union had an interest in the decision beyond that of an ordinary member of the public. Its position was much like that of AIMPE in the case heard by Gummow J: it was concerned with the maintenance of members' conditions of employment, it had participated in the decision complained of by making submissions (pursuant to a statutory right: see s 170NB(2) of the Industrial Relations Act) and the decision was one containing potential for industrial disputation.
Having regard to these decisions, and the other authorities discussed by the judges who made them, it seems to us that the formula "person aggrieved" covers the position of AFME/PKIU in this case, unless there is something about this particular statute that indicates otherwise. The only thing mentioned by counsel is the restriction in s 45(3)(baa). But we do not see the existence of that restriction as an indication that Parliament wished the courts to interpret s 45(3)(d) more narrowly than they might otherwise have done. Section 45(3)(baa) deals with the right to pursue a merits appeal against a refusal decision. Section 45(3)(d) relates to the entitlement to raise a question as to whether a Commission member has acted within jurisdiction. These are different questions. There is room for the view that a wider category of people has a legitimate interest in ensuring that the Commission acts within its jurisdiction than those who are directly affected by a particular decision, and so allowed to agitate its merits.” 9
[11] We were satisfied this authority is relevant to the meaning of the phase “a person who is aggrieved” in s.604(1) of the FW Act. Further, we were satisfied Australia Post was a person who was aggrieved by Senior Deputy President Drake’s decision and, therefore, had standing to appeal against that decision.
[12] Australia Post had a grievance resulting from her Honour’s decision beyond that of an ordinary member of the public because the decision led to orders requiring ballots to be conducted of employees of Australia Post to determine whether they wish to engage in particular protected industrial action against Australia Post for proposed enterprise agreements with Australia Post. The FW Act provides that no action lies under any law in force in a State or Territory in relation to any such industrial action, unless the industrial action has involved or is likely to involve personal injury, wilful or reckless destruction of or damage to property or the unlawful taking, keeping or use of property. 10 The legal immunity applies even if the decision to make the protected action ballot order is later quashed or varied on appeal or review by FWA, so long as the industrial action is taken in good faith.11 Without the ballot orders the Australia Post employees are not able to take the protected industrial action against Australia Post.12
[13] In addition, as a result of the orders arising from the decision Australia Post may be required to give to the ballot agent the names of its employees included in the groups of employees specified in the orders and any other information it is reasonable for the agent to require to assist in compiling the role of voters. 13
[14] We also concluded we must grant Australia Post permission to appeal because we were satisfied it was in the public interest to do so given the appeal raised the issue of an employer’s right to be heard in respect of a protected action ballot application made under the FW Act and that issue had apparently not previously been dealt with by a Full Bench of Fair Work Australia.
[15] We turn then to deal with the grounds of appeal. We deal firstly with Australia Post’s right to be heard before her Honour.
Right to be heard
[16] In the proceedings at first instance, Australia Post sought to be heard in relation to the question of whether the jurisdictional pre-requisites contained in s.443 of the FW Act for the making of a protected action ballot order had been satisfied. 14 Section 443 of the FW Act provides as follows:
“(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.
(2) FWA 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.
(4) If FWA 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 FWA decides, under subsection 444(1), is to be the protected action ballot agent; and
(b) the person (if any) that FWA decides, under subsection 444(3), is to be the independent advisor for the ballot.
(5) If FWA 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.”
[17] Australia Post indicated at first instance that the three jurisdictional pre-requisites in s.443 that it wished to be heard on were whether:
(a) applications had been made under s.437;
(b) the applicant had been genuinely trying to reach agreements with Australia Post; and
(c) the applicant was genuinely trying to reach agreements with Australia Post. 15
[18] Section 437 of the FW Act provides that:
“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 FWA 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.
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 FWA specifies another person in the protected action ballot order as the protected action ballot agent (see subsection 443(4)).
(5) 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) are represented by a bargaining representative who 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.”
[19] After hearing the parties on whether Australia Post should be heard on such matters, her Honour said:
“There is no open-ended right to be heard on these applications pursuant to s.437. It's not a question of rights. It's a question of an exercise of discretion by Fair Work Australia in each application. There are occasions when it is improper to hear evidence and that discretion ought to be exercised in those cases where it's proper to hear evidence. Those cases are the cases where there are facts relied on in the application and which are in dispute. In this case, in this application, there's been a proper application lodged, it appears to me in the proper form.
There is material in the application which states that the applicant is genuinely, or has been and is genuinely seeking to reach an agreement. In the absence of any dispute over that evidence, that is evidence that can be relied on and the orders issued, but where matters of fact are put forward, where there's a question on the material that is provided by those persons, I think it's proper for the Commission to hear the material on that matter in dispute, but that is an exercise of discretion. In this case, the only matters on which I think it's appropriate to hear anybody is the question of genuineness of the bargaining and for that limited purpose in this application I think it's proper to hear the evidence of whoever it is that whose affidavits have been filed … and limited to that issue, I'll hear the evidence.” 16
[20] In her Honour’s decision granting the protected action ballot orders, her Honour said:
“[4] Australia Post sought permission to appear and make submissions. The CEPU opposed Australia Post’s application. Much of the hearing was devoted to the issue of whether or not Australia Post had a right to appear. Mr Parry of Senior Counsel, appeared for Australia Post and provided written submissions in relation to Australia Post’s right to be heard. Mr Reitano of Counsel, appeared for the CEPU and provided an outline of submissions and spoke to his submissions.
[5] An employer does not have an open ended right to appear before Fair Work Australia (FWA) in applications pursuant to s437. Permission for an employer to appear, and on what issues, is a matter for the exercise of a discretion by FWA in each application.
[6] In these applications Australia Post indicated that it disputed the matters of fact relied on by the CEPU to establish its entitlement to orders ie whether the CEPU had been, and was still, genuinely trying to reach an agreement with Australia Post concerning both groups of employees who were proposed to be balloted. In this circumstance I considered it appropriate that Australia Post should be heard. I granted Mr Parry permission to appear for Australia Post limited to these issues.” 17
[21] We thought that as a matter of natural justice or procedural fairness, Australia Post had a right to be heard not only in respect of whether the CEPU had been, and was, genuinely trying to reach agreements but also in respect of whether applications had been made under s.437 of the FW Act.
[22] In Annetts v McCann, 18 Mason CJ and Deane and McHugh JJ stated:
“It can now be taken as settled that, when a statute confers power upon a public official to destroy, defeat or prejudice a person's rights, interests or legitimate expectations, the rules of natural justice regulate the exercise of that power unless they are excluded by plain words of necessary intendment: Commissioner of Police v Tanos; Twist v Randwick Municipal Council; Heatley v Tasmanian Racing and Gaming Commission; J v Lieschke; Haoucher v Minister for Immigration and Ethnic Affairs. In Tanos, Dixon C.J. and Webb J, said that an intention on the part of the legislature to exclude the rules of natural justice was not to be assumed nor spelled out from "indirect references, uncertain inferences or equivocal considerations". Nor is such an intention to be inferred from the presence in the statute of rights which are commensurate with some of the rules of natural justice: Baba v Parole Board of New South Wales. In Kioa v West, Mason J. said that the law in relation to administrative decisions "has now developed to a point where it may be accepted that there is a common law duty to act fairly, in the sense of according procedural fairness, in the making of administrative decisions which affect rights, interests and legitimate expectations, subject only to the clear manifestation of a contrary statutory intention." In Haoucher, Deane J. said that the law seemed to him "to be moving towards a conceptually more satisfying position where common law requirements of procedural fairness will, in the absence of a clear contrary legislative intent, be recognised as applying generally to governmental executive decision-making".” 19 [Footnotes omitted]
[23] Senior Deputy President Drake was deciding whether to make orders for protected action ballots to determine whether employees of Australia Post who are members of the CEPU wish to engage in particular protected industrial action against Australia Post for proposed enterprise agreements. As we have earlier indicated, such industrial action attracts legal immunity, so that Australia Post is not able to take legal action in respect of it, except in limited circumstances. 20 Without the ballot orders the Australia Post employees are not able to take the protected industrial action against Australia Post.21
[24] Further, for an application for a ballot order to have been made under s.437 of the FW Act it must have been made by a bargaining representative and specify the employees to be balloted and the particular industrial action to be protected. 22 The ballot order must specify the name of the applicant for the order, the groups of employees to be balloted, the date voting in the protected action ballot closes and the question or questions to be put to the employees who are to be balloted, including the nature of the proposed industrial action.23 The order may also specify that the written notice a bargaining representative must give to an employer of the protected industrial action is to be longer than three working days due to exceptional circumstances.24 Many of the matters to be specified in the application for a ballot order and the order itself are matters which are within the knowledge and concerns of the employer against whom the industrial action is to be taken. For example, it is to be expected that it is within the concerns of the employer that the industrial action be specified with sufficient particularity to enable the employer to apprehend the industrial action to be taken against it25 and that the period of written notice of the protected industrial action be sufficient to meet any of the employer’s relevant exceptional circumstances.
[25] Moreover, while the decision to make the ballot orders may be appealed by Australia Post, the decision to make the ballot orders cannot be stayed pending a decision in relation to the appeals or further order by FWA. 26
[26] Her Honour, therefore, was deciding whether to issue orders capable of destroying, defeating or prejudicing Australia Post with respect to its rights, interests or legitimate expectations. In the circumstances, we were unable to agree with the CEPU that Australia Post’s rights, interests or legitimate expectations were too remote, consequential and indirect for it to be afforded the right to be heard as a matter of natural justice or procedural fairness.
[27] Further, there are no plain words in the FW Act excluding the rules of natural justice or procedural fairness in respect of protected action ballot applications. Indeed there are provisions of the FW Act which are supportive of a conclusion that an employer of the employees to be balloted has a right to be heard in relation to the making of the order. Section 440 requires an applicant for a protected action ballot order to give a copy of the application to the employer of the employees who are to be balloted within 24 hours after making the application and s.441 provides that FWA must not determine the application unless it is satisfied that the application has been so given. Section 443(2) also provides that FWA must not make a protected action ballot order unless it is satisfied the applicant has been, and is, genuinely trying to reach an agreement with the employer of the employees to be balloted. The facts relating to which the employer is in a position to give evidence.
[28] While FWA must perform its functions and exercise its powers in a manner that is quick, informal and avoids unnecessary technicalities, 27 may make decisions as to how a matter is to be dealt with28 and may inform itself in relation to any matter in such manner as it considers appropriate,29 we do not perceive that such performance and conduct issues relieve FWA of the requirement to afford natural justice or procedural fairness.30
[29] Her Honour’s decision to make the protected action ballot orders without allowing Australia Post to be heard on whether the protected action ballot applications had been made under s.437 of the FW Act was, therefore, affected by error. This also provided a basis for granting permission to appeal.
[30] We now deal with whether the CEPU had been, and was, genuinely trying to reach agreements with Australia Post.
Genuinely tried and trying to reach agreement
[31] As already indicated, s.443(2) of the FW Act provides that FWA must not make a protected action ballot order in relation to a proposed enterprise agreement unless it 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.
[32] At first instance, Australia Post submitted the CEPU had not been, and was not, genuinely trying to reach agreements with it.
(a) Enterprise agreement excluding Post Logistics
[33] In respect of the agreement excluding Post Logistics, Australia Post said the CEPU had not been and was not genuinely trying to reach an agreement with it because as part of the negotiations with it the CEPU had been and was pursuing a claim in relation to contractors which was not a permitted matter for an enterprise agreement.
[34] In respect of permitted matters, s.172(1) of the FW Act provides that:
“(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.
Note 1: For when an enterprise agreement covers an employer, employee or employee organisation, see section 53.
Note 2: An employee organisation that was a bargaining representative for a proposed enterprise agreement will be covered by the agreement if the organisation notifies FWA under section 183 that it wants to be covered.”
[35] An enterprise agreement, that is a non-greenfields single enterprise agreement, is made when an employer that will be covered by a proposed enterprise agreement requests the employees employed at the time who will be covered by the agreement to approve it by voting for it and the majority of those employees who cast a valid vote approve the agreement. 31
[36] If an enterprise agreement is made, a bargaining representative for the agreement must apply to FWA for approval of the agreement. 32 FWA must approve the enterprise agreement if certain requirements are met including that the agreement has been genuinely agreed to by the employees covered by it.33 An enterprise agreement approved by FWA operates from seven days after the agreement is approved or any later day specified in the agreement.34
[37] Section 253 of the FW Act provides:
“(1) A term of an enterprise agreement has no effect to the extent that:
(a) it is not a term about a permitted matter; or
(b) it is an unlawful term…
(2) However, if an enterprise agreement includes a term that has no effect because of subsection (1), or section 56 or 326, the inclusion of the term does not prevent the agreement from being an enterprise agreement.”
[38] Section 408 of the FW Act states that industrial action is protected industrial action for a proposed enterprise agreement if it is employee claim action for the agreement. Section 409(1)(a) provides that:
“(1) Employee claim action for a proposed enterprise agreement is industrial action that:
(a) is organised or engaged in for the purpose of supporting or advancing claims in relation to the agreement that are only about, or are reasonably believed to only be about, permitted matters”.
[39] There is arguably some tension between these sections. On one reading s.172(1) suggests an enterprise agreement may only contain permitted matters. Section 253 however seems to recognise there can be an enterprise agreement which contains non-permitted matters. Section 409(1)(a) seems to suggest that protected industrial action can only be taken to support or advance claims for a proposed enterprise agreement that are only about, or are reasonably believed to only be about, permitted matters.
[40] The Explanatory Memorandum to the Fair Work Bill 2008 said of then clause 172:
“Clause 172 – Making an enterprise agreement
660. This clause provides for the making of enterprise agreements. Enterprise agreements can be made about ‘permitted matters’ (subclause 172(1)). The permitted matters are:
661. In Electrolux Home Products Pty Limited v The Australian Workers’ Union and others (2004) 221 CLR 309 the High Court found, when considering a provision similar to clause 172(1), that industrial action could not be taken in support of claims that could not be validly included in an agreement under the WR Act as in force at the time.
662. After the High Court’s decision, the AIRC carefully checked whether each term of an agreement pertained to the employment relationship in order to determine whether the application before it for certification of the agreement was valid.
663. To resolve any uncertainty following the High Court’s decision, the Parliament enacted the Workplace Relations Amendment (Agreement Variation) Act 2004 to ensure that agreements that contained non-pertaining terms were valid to the extent that they contained pertaining terms.
664. Clause 253 will have the effect that an agreement will still be valid even where it includes terms that are not about permitted matters. It is not intended that FWA will have to scrutinise each enterprise agreement to ensure that all its terms are about permitted matters as this would unduly delay the agreement making process.
665. However, to the extent that a term of an enterprise agreement is not about permitted matters, the term will be of no effect.
666. It is intended that each substantive term of an enterprise agreement must be about one or more of the permitted matters in order for the agreement to be characterised as about permitted matters. This would not prevent an enterprise agreement from containing other, valid, terms where the term is ancillary or incidental to, or a machinery provision, relating to a permitted matter (Electrolux ibid. at [96]-[97], per McHugh J).
667. Whether an enterprise agreement is about permitted matter is also significant in the context of protected industrial action for the purpose of clause 409 (which deals with employee claim action). Employees and their bargaining representatives cannot organise or take protected industrial action in support of claims for a proposed enterprise agreement that will include terms that are not about permitted matters.” [Underlining added]
[41] In respect of clause 253, the Explanatory Memorandum stated:
“Clause 253 - Terms of an enterprise agreement that are of no effect
1063. This clause provides that a term of an enterprise agreement has no effect to the extent that:
1064. The legislative notes following subclause 253(1) refer to other clauses in the Bill which provide that a term of an enterprise agreement has no effect. The notes make it clear that a term of an enterprise agreement has no effect if:
1065. Subclause 253(2) makes it clear that the inclusion of a term has no effect because of subclause 253(1), clause 56 or clause 326, does not affect the validity of an enterprise agreement.
This clause is intended to clarify any uncertainty about the operation of an enterprise agreement containing such terms as a result of the High Court decision in Electrolux Home Products Pty Ltd v Australian Workers’ Union and others (2004) 221 CLR 239 (Electrolux) (see the discussion of this case at the beginning of the Explanatory Memorandum relating to Part 2-4).” [Underlining added]
[42] In respect of clause 409(1)(a), the Explanatory Memorandum stated:
“Clause 409 - Employee claim action
1640. The first element of employee claim action is that it is organised or engaged in for the purpose of supporting or advancing claims in relation to a proposed enterprise agreement that are about, or are reasonably believed to be about, permitted matters (paragraph 409(1)(a)).
1641. An enterprise agreement may only contain terms that are either required under this Bill or that are about permitted matters. (The description of clause 172 discusses relevant case law and lists examples of the types of matters are that intended to be permitted matters for enterprise agreements). In most cases, it is clear that particular claims are about permitted matters.
1642. In limited cases it is not so clear. However, industrial action is protected if - at the time of the action - the person reasonably believes they are pursuing claims about permitted matters (paragraph 409(1)(a)). What constitutes a 'reasonable belief' depends on the circumstances of the case and the person concerned. For example, a tribunal would expect an official of an employee organisation with extensive experience in enterprise bargaining to have a greater appreciation of the limits of the permitted matters than a novice employee bargaining representative who has been appointed by his or her colleagues to represent them in bargaining with the employer.
1643. Another factor that is relevant to the question of reasonable belief is whether the employer attempted to advise its employees or its bargaining representatives that they were pursuing claims about non- permitted matters. If the employer did so and the industrial action proceeded nonetheless, then it is much more likely that it would not be found to be protected.
1644. In addition, the pursuit of claims about non-permitted matters during bargaining for a proposed enterprise agreement does not necessarily prevent a finding that a bargaining representative is genuinely trying to reach an agreement (which is also a pre-condition to the taking of protected industrial action under subclause 413(3)) e.g., where those claims have subsequently been abandoned.” [Underlining added]
[43] It is apparent that the scheme of the FW Act is that the substantive terms of an enterprise agreement are to be about permitted matters. Since an enterprise agreement is made by employees approving a proposed enterprise agreement, it follows that the substantive terms of a proposed enterprise agreement are also to be about permitted matters.
[44] As a result, an applicant for a protected action ballot order pursuing a claim as a substantive term of a proposed enterprise agreement which is not about a permitted matter is not genuinely trying to reach an agreement with the employer of the employees to be balloted.
[45] This accords with the inference in the statement in the Explanatory Memorandum that “the pursuit of claims about non-permitted matters for a proposed enterprise agreement does not necessarily prevent a finding that a bargaining representative is genuinely trying to reach an agreement … where those claims have subsequently been abandoned.”
[46] The purpose of s.253 of the FW Act is to save an enterprise agreement that is in operation from challenge if it contains a term or terms that are not about permitted matters.
[47] Item 18 of Schedule 13 to the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth) enables FWA, in deciding whether the CEPU is genuinely trying to reach an agreement with Australia Post, to take into account the CEPU’s conduct in relation to the proposed collective agreement it was trying to reach with Australia Post prior to 1 July 2009.
[48] The evidence before her Honour from Mr Ed Husic, Divisional Secretary of the Communications Division of the CEPU was that the “CEPU has been and is genuinely trying to reach agreement with the employer of the employees who are to be balloted.” 35
[49] Ms Catherine Walsh, Manager, Employee Relations at Australia Post gave evidence challenging this evidence. Her evidence was that:
“7. Contractors and Agency Staff
7.1 Use of Contractors by Australia Post
7.1.1 The parties acknowledge that the use of outside contractors can impact on opportunities for Australia Post employees. Contractors have been used as a means of undermining wages and conditions of Australia Post employees, altering Australia Post’s commitment to provide opportunities for its employees including full-time, part-time, fixed term employees and labour hire staff.
7.1.2 The parties agree that there will be no contracting out during the life of EBA7.
7.1.3 Further the parties agree that where current contracts expire or become vacant the corporation will arrange for the work to be performed by an employee.
7.1.4 Disputes about contracting out will be dealt with in accordance with the dispute resolution procedures in Clause 20 of this Deed of Agreement.”
“19. Further terms and conditions – EBA7
(a) The terms contained in EBA7 (which is attached at Schedule A) are included in this clause and commence operation in accordance with this clause.
(b) In the event that due to changes to the Act or regulations made under the Act, or other statutory regulation or a determination by a Court affecting the operation of EBA7:
(i) EBA7 ceases to be enforceable as an agreement pursuant to the Act; or
(ii) any term or part of any term of EBA7 ceases to be enforceable or to have effect as a term of EBA7;
then EBA7, or the term or the part of the term, shall thereupon commence to operate as a provision of this clause of the Deed of Agreement and shall be deemed to have had such effect from the date that it ceased to be enforceable or to have effect as a term of EBA7.”
“Following the EBA7 negotiations, we also sought a common law agreement which attempted to protect other conditions of service. Australia Post rejected this approach outright.
During recent talks we suggested another approach: to vary and extend EBA6 under new provisions contained in the Forward with Fairness amendments. If an agreement is extended and varied, prohibited content, for example, can remain and even be added. This completely removed the broad and “technical” problems relied on by your negotiators to frustrate agreement on EBA7.
This last offer by us was also rejected by Post …
6. Additionally, we identify the following issues that need to be addressed in any future enterprise bargaining agreement:
Notwithstanding your previous advice that you will not negotiate any changes to the draft EBA7 document, we invite Post to enter into meaningful negotiations.”
“In your fourth paragraph you refer to a suggestion by the CEPU during recent discussions to vary and extend EBA6 under the new Forward With Fairness amendments. The CEPU has never put this proposal to Australia Post …
I now address the numbered items on which you to seek to advise Australia Post …
6. With the exception of the first dot point under this paragraph, which talks about the type of agreement to be entered into, it is my view that the remaining five issues were discussed and addressed in EBA7 negotiations …
Given the CEPU’s clear intent to re-commence EBA7 negotiations for a new agreement, Australia Post will agree to meet and discuss what the CEPU is proposing in respect of such negotiations. However, as part of this process we would require specific written details around the new claims the CEPU are pursuing.”
“changes to contractor/agency staff provisions to require Australia Post to advertise every position internally and to only contract out a position if it is not wanted by an Australia Post employee, and to impose more onerous consultation obligations on Australia Post in respect of contracting out”. 40
Australia Post requested from the CEPU draft wording on the issues. The CEPU advised it would provide draft wording later, depending on Australia Post’s response to its new claims. 41 Australia Post also asked the CEPU to confirm whether its claim for a common law agreement had lapsed given the parties had entered into renegotiations. The CEPU informed Australia Post that its claim for a common law agreement would depend on Australia Post’s response to the new issues raised by it.42
“EBA7 – RESPONSE TO CEPU’S ADDITIONAL CLAIMS FOR EBA7
1. Introduction
I refer to the above and the meetings that have taken place since 18 December 2008 in an effort to reach agreement on a revised EBA7 including the specific meetings held on FDD and Retail issues.
Following these meetings and our undertaking at the meeting on 2 April 2009 to provide you with draft clauses on a number of issues, I have set out in this letter our response to the CEPU’s claims and draft clauses on those issues we have agreed to cover in the EBA7 document itself.
We have considered your claims carefully and balanced them against our desire to reach agreement on a revised EBA7 and ensuring our business viability in the face of the unprecedented and difficult global economic problems being faced.
It should be noted that these clauses have been provided on the basis that EBA7 would be effective from the 1 July 2009 commencement date of the Fair Work Act, having regard to the prohibited content constraints of the current legislation …
4. Contractors
We are prepared to insert into EBA7 our commitments made in relation to use of contractors in our letter dated 3 May 2007, as outlined below, whilst recognising that mail delivery contracting has been a longstanding feature of our delivery operations for many years and will continue to be utilised in the future.
“Contractors
(a) It is not Australia Post’s intention to contract out its workforce or any significant part of that workforce nor make any substantial change in the current overall balance of employee/contractor resources. In this context, “workforce” refers to the entire Australia Post workforce. It does not refer to the workforce in a particular facility, work location, network, state or territory.
(b) The parties recognise that use of contractors, such as in mail delivery, has been a feature of Australia Post’s operations for many years, and Australia Post agrees to continue the established processes of notification and consultation in relation to mail delivery contracts. Any new proposals involving the contracting out on an ongoing basis, of work currently done by Australia Post employees, will be elevated to the National level and sufficient time will be allowed for discussions before action was taken in implement any such proposal.
(c) Australia Post will provide information on use of contractors in mail delivery to the unions in the manner it presently does. Information will be provided nationally to the unions on a quarterly basis” …
19. Conclusion
I trust the draft clauses outlined above and clarification of our position on a number of your EBA7 claims will assist in moving the parties towards resolution of the agreement.”
“As discussed with your Group Manager Corporate Human Resources Mr Rod McDonald last night, the CEPU Divisional Executive considered the status of negotiations with Australia Post regarding Enterprise Bargaining Agreement 7 (EBA7).
I write to inform you that the Divisional Executive unanimously resolved to adopt the following position in relation to EBA7:
“The Divisional Executive has noted the report of the Divisional Secretary on the status of negotiations with Australia Post regarding Enterprise Bargaining Agreement 7 (EBA7).
Divisional Executive notes that the parties remain divided on a range of critical matters including: …
5. Post has refused union recommendations to improve the way it consults about the introduction and use of contractors …
Given the seriousness of these issues as they relate to our members’ job security, health and safety, and protection of take home pay, the Divisional Executive cannot recommend the agreement to its members in Australia Post because the CEPU believes this is against our members’ interests.
Divisional Executive requires all branches to consult with members about the serious defects in the current Post offer and urges Branches to obtain member support for measures to help secure a fair and satisfactory enterprise agreement with Australia Post.”
While we remain committed to securing an agreement with Australia Post, it is important to recognise that the latest round of negotiations have spanned nearly six months. It is evident that further negotiation with Australia Post will not be productive in resolving these critical outstanding issues.
As such we will be canvassing with members a range of options to satisfactorily progress this issue.”
“The Divisional Executive Resolution sets out seven issues which the CEPU consider are still outstanding between the parties.
The Resolution goes on to state that, as a result of these outstanding issues, you cannot recommend that your members agree to the current draft of EBA7 as the CEPU believe it is against their interests. The Resolution also advises that you will now be speaking with members to determine next steps and that you do not consider further negotiations productive.
Australia Post is extremely disappointed by the CEPU’s Resolution and also perplexed by its timing. It is our view that negotiations were continuing and indeed discussions regarding the wording of particular clauses were happening in the days preceding the Divisional Executive meeting. While you state that you want to reach agreement with us, your decision to suddenly walk away in the middle of negotiations is unhelpful and confusing ...
Over the course of the past six months it is my view that significant progress has been made with Australia Post having made a number of concessions in an effort to reach a resolution.
These concessions include: …
11. Use of Contractors
Australia Post made a significant concession by agreeing to include the contents of our side letter on contractors in the body of EBA7. This committed us to national level consultation on contracting out and agreeing to not contracting out a significant part of our workforce …
Once again, I express my disappointment at the CEPU’s course of action and reiterate that Australia Post remains available to meet to discuss the CEPU’s issues.”
“I refer to your recent correspondence regarding EBA7.
While the matters of difference between the parties have been discussed at great length, the CEPU believes it’s important to correct one point you have made in your correspondence – and which has been repeated to employees and external audiences.
In your letter you claim that we have walked away from the EBA talks. We do not accept this characterization of our position.
Externally, the corporation has indicated it is surprised by our position on the EBA7 offer.
As far back as April this year, Australia Post has indicated in correspondence to our organisation that it will not alter its position on a series of matters of critical concern to our members – and which were central matters of dispute detailed in our Divisional Executive resolution of 18 June.
On a number of occasions between April and June, the corporation has been advised directly – via meetings between the parties and discussion between yourself and myself – that Post’s refusal to address these issues were of serious concern to the CEPU and would prevent our organisation from recommending the draft agreement to our members.
The corporation was reminded of the CEPU’s position once again via a conversation between yourself and myself on 18 June just ahead of the Divisional Executive meeting, followed up by our correspondence to the Managing Director. In this conversation you acknowledged that you understood our position but indicated that the corporation was not able to move from its position.
Given Post has said in concrete terms that it will not alter its stance on these matters, most reasonable people would fail to see how continued talks could result in anything productive.
We’ve been prepared to patiently work with Post over the course of more than six months, only to hit the stumbling blocks over issues that have prevented us from reaching complete agreement back in 2007. Limited access to arbitration, continued use of FND’s, restrictions on accessing penalty rates and our concerns regarding the use of contractors – these are all longstanding issues continually represented by CEPU.
The corporation well knows these issues been sticking points in our negotiations for a considerable time. The CEPU has consistently argued for them. Your contention that they represent new issues is false.
Unless Post is prepared to alter its position on these long standing matters, the CEPU finds it difficult to see what progress can be achieved in meeting simply to restate our respective resistance to adopting alternate approaches to the matters in dispute.”
[50] There was no evidence of there being negotiations between the CEPU and Australia Post on EBA7 after 12 August 2009.
[51] It is apparent that as part of its claims the CEPU has been and is pursuing claims about contractors as substantive terms of the proposed enterprise agreement.
[52] In this regard the evidence in these matters was that from 10 November 2008 to 8 July 2009 the CEPU sought Australia Post’s agreement to the following in respect of contractors as part of EBA7:
• use of contractors 50 – February-April 2009;
[53] After 8 July 2009 there were no negotiations between the CEPU and Australia Post on EBA7.
[54] During the negotiations the contractor matters were said by the CEPU to be critical issues for EBA7.
[55] The evidence reveals that, while in November 2008 the CEPU was seeking contracting out provisions to the extent permitted, by 18 December 2008 the CEPU was seeking changes to contractor provisions to require Australia Post to advertise every position internally and to only contract out a position if it is not wanted by an Australia Post employee.
[56] The issue of whether a claim about contractors is a matter pertaining to the relationship between an employer and its employees was considered by French J, as he then was, in Wesfarmers Premier Coal Ltd v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (No. 2). 53 His Honour found that “provisions restricting or qualifying the employer’s right to use independent contractors” are not matters pertaining to the employment relationship.54
[57] Contractor provisions requiring Australia Post to advertise every position internally and to only contract out a position if it is not wanted by an Australia Post employee are “provisions restricting or qualifying the employer’s right to use independent contractors”. 55 The CEPU sought such provisions as a substantive term of the proposed enterprise agreement. The claim was not minor, trivial or ancillary. Therefore, by 18 December 2008, the CEPU was seeking a matter not pertaining to the employment relationship as part of EBA7. Nor do such provisions fall within any of the other categories in s.172(1) of the FW Act.
[58] There is a lack of detail in the CEPU’s claims in respect of contractors for EBA7 post-18 December 2008. However, given the history of the negotiations between the parties and the failure of the CEPU to abandon its claim of 18 December 2008 or make clear to Australia Post after 18 December 2008 that it was not pursuing a contractor claim that does not pertain to the employment relationship, 56 we considered it could be assumed that after 18 December 2008 the CEPU’s claims in respect of contractors for EBA7 included those sought by them on 18 December 2008.
[59] As a result, the CEPU has been and is pursuing as a substantive term of the proposed enterprise agreement a claim in respect of contractors which is not about a permitted matter for a proposed enterprise agreement under the FW Act. Her Honour’s conclusion to the effect that from 10 November 2008 the CEPU ceased to press its claim for Australia Post to include a clause in EBA7 in relation to contractors that was not permissible was in error. 57
[60] Since the CEPU has been and is pursuing as a substantive term of the proposed enterprise agreement a claim in respect of contractors which is not about a permitted matter, we were not satisfied the CEPU has been, and is, genuinely trying to reach an agreement with Australia Post, being the employer of the employees to be balloted.
[61] As a result a jurisdictional pre-requisite for making the protected action ballot order sought by the CEPU in its s.437 application concerning Australia Post employees, excluding Post Logistics’ employees, was not satisfied. Her Honour erred in concluding otherwise. 58 We therefore decided to uphold the appeal and quash her Honour’s decision in so far as it concerned Australia Post’s employees excluding those employed in Post Logistics and to dismiss the s.437 application of the CEPU concerning Australia Post and its employees excluding those employed in Post Logistics.
[62] We add that we did not need to deal with the issue of whether a person who reasonably believes they have been and are pursuing a claim about a permitted matter as a substantive term of a proposed enterprise agreement has been, and is, genuinely trying to reach an agreement. Given the authority in Wesfarmers case and the status of those in the CEPU who were pursuing the claim, the CEPU could not have reasonably believed the aforementioned claim in respect of contractors that it had been and was pursuing as a substantive term of the proposed enterprise agreement was about a permitted matter.
(b) Enterprise agreement concerning Post Logistics
[63] In respect of the agreement concerning Post Logistics, the uncontested evidence before her Honour was that in about November 2006 the CEPU commenced discussions with Australia Post about making a new union collective agreement to replace the Post Logistics Third Party Warehousing Fulfilment Business Enterprise Agreement 2004-2006 and the parties met on a number of occasions in an attempt to achieve an agreement. 59 However, there have been no negotiations on an agreement for Post Logistics since December 2007. On 23 January 2008, the CEPU initiated a bargaining period for negotiating the agreement with Australia Post.60 Nonetheless, the expectation of the CEPU is that a proposed enterprise agreement concerning Australia Post and its Post Logistics’ employees will progress when the proposed enterprise agreement concerning Australia Post and its employees excluding Post Logistics’ employees (i.e. EBA7) is progressed. Before the Full Bench the CEPU confirmed it is awaiting an outcome in respect of EBA7 before progressing a proposed enterprise agreement between Australia Post and its Post Logistics’ employees.61 Her Honour erred in concluding that bargaining in relation to the Post Logistics’ employees had been subsumed into the centralised bargaining between the CEPU and Australia Post.62
[64] In circumstances where there had been no negotiations on an agreement for Post Logistics since December 2007 and further action in respect of a proposed enterprise agreement between Australia Post and its Post Logistics’ employees is awaiting an outcome in respect of another proposed enterprise agreement, we were not satisfied the CEPU has been, and is, genuinely trying to reach an agreement with Australia Post, being the employer of the Post Logistics’ employees to be balloted. A jurisdictional pre-requisite for the making of the protected action ballot order sought by the CEPU in its s.437 application concerning Post Logistics’ employees was therefore not satisfied and her Honour erred in concluding otherwise. 63 Accordingly, we decided to uphold the appeal and quash her Honour’s decision in so far as it concerned Australia Post’s employees employed in Post Logistics and to dismiss the s.437 application of the CEPU concerning Australia Post and its employees employed in Post Logistics.
Conclusion
[65] In the circumstances we did not need to deal with the other grounds of appeal raised by Australia Post.
[66] We note that, as often happens in appeals, the issues relevant to the s.437 applications before Senior Deputy President Drake were more thoroughly canvassed before us than at first instance.
SENIOR DEPUTY PRESIDENT
Appearances:
F. Parry, Senior Counsel and J. Tracey, Counsel, for Australia Post.
R. Reitano, Counsel, for the Communications, Electrical, Electronic, Energy, Information,
Postal, Plumbing and Allied Services Union of Australia.
Hearing details:
2009.
Melbourne:
September 7.
1 Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Australian Postal Corporation [2009] FWA 136, 25 August 2009 per Drake SDP.
2 PR988659, PR988662, PR988906 and PR988907.
3 B2009/10457 and B2009/10458.
8 (1996) 137 ALR 70.
9 Ibid at 90-91.
10 Fair Work Act 2009 (Cth), s.415.
11 Ibid at s.460.
12 Ibid at s.409(2).
13 Ibid at s.452(3).
14 “Submissions of Australia Post in relation to its right to be heard” at paragraph 2.9.
15 Ibid at paragraph 12 and transcript of proceedings in B2009/10457 and B2009/10458 at PN128-129.
16 Transcript of proceedings in B2009/10457 and B2009/10458 at PN 142-143.
18 (1990) 170 CLR 596.
19 Ibid at 598.
20 Fair Work Act 2009 (Cth), ss.415 and 460.
21 Ibid at s.409(2).
22 Ibid at s.437.
23 Ibid at s.443(3).
24 Ibid at s.443(5).
25 United Firefighters Union of Australia v Country Fire Authority, PR973841 per Watson SDP, Lacy SDP and Hingley C at paragraph 31.
26 Ibid at s.606(3).
27 Ibid at s.577.
28 Ibid at s.589.
29 Ibid at s.590.
30 Sullivan v Department of Transport (1978) 20 ALR 323 at 342.
31 Fair Work Act 2009 (Cth), ss.181 and 182(1).
32 Ibid at s.185(1).
33 Ibid at s.186.
34 Ibid at s.54(1).
35 Affidavit of Ed Husic dated 13 August 2009 at paragraph 7.
36 Statutory declaration of Catherine Walsh dated 17 August 2009 at paragraph 17.
37 Ibid at paragraph 18(c).
38 Ibid at paragraph 49.
39 Ibid at paragraph 52.
40 Ibid at paragraph 59.
41 Ibid at paragraph 62.
42 Ibid.
43 Ibid at paragraph 64.
44 Ibid at paragraphs 65-66.
45 Ibid at paragraph 73.
46 Statutory declaration of Catherine Walsh dated 17 August 209 at paragraph 90-91.
47 Ibid at paragraph 91.
48 Statutory declaration of Catherine Walsh dated 17 August 2009 at paragraphs 55-56.
49 Ibid at paragraph 59.
50 Ibid at paragraphs 65-66.
51 Ibid at paragraph 75.
52 Ibid at paragraph 85.
53 (2004) 138 IR 362.
54 Ibid at paragraph 109.
55 Ibid.
56 Tyco Australia Pty Ltd trading as Wormald v Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia, PR974317, 12 October 2006 per Giudice J, Lawler VP and Williams C at paragraph 20.
57 Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Australian Postal Corporation [2009] FWA 136, 25 August 2009 per Drake SDP at paragraph 24.
58 Ibid at paragraphs 24 and 27.
59 Affidavit of Ian Bryant dated 13 August 2009 at paragraphs 8-9.
60 Statutory declaration of Toni Scott-Brown at paragraphs 9 and 11.
61 Transcript of proceedings in Australian Postal Corporation v Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia, C2009/10364 and C9009/10366, 7 September 2009 at PN 501-505.
62 Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Australian Postal Corporation [2009] FWA 136, 25 August 2009 per Drake SDP at paragraph 28.
63 Ibid.
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