[2009] FWAFB 668

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FAIR WORK AUSTRALIA

DECISION

Fair Work Act 2009
s.604 - Appeal of decisions

Liquor, Hospitality and Miscellaneous Union
v
Coca-Cola Amatil (Aust) Pty Ltd
(C2009/10433)

SENIOR DEPUTY PRESIDENT WATSON
SENIOR DEPUTY PRESIDENT RICHARDS
COMMISSIONER SMITH

MELBOURNE, 28 OCTOBER 2009

Appeal against decision [2009] FWA 101 of Senior Deputy President O'Callaghan at Adelaide on 19 August 2009 in matter number B2009/10375 - majority support determination – permission to appeal refused – application dismissed.

[1] This is an appeal, pursuant to s.604(3) of the Fair Work Act 2009 (the Act), by the Liquor, Hospitality and Miscellaneous Union (LHMU). The appeal is directed to a decision 1 of Senior Deputy President O’Callaghan of 19 August 2009 in which he refused an application made for a majority support determination against Coca-Cola Amatil (Aust) Pty Ltd (Coca-Cola), by the LHMU on 29 July 2009 pursuant to s.236 of the Act.

[2] Section 604 of the Act provides that:

[3] The background to the decision of Senior Deputy President O’Callaghan is set out at the commencement of his decision. 2 In brief:

The Decision of Senior Deputy President O’Callaghan

[4] Senior Deputy President O’Callaghan concluded 6 that the preconditions for the making of a majority support determination had not been met, in the circumstances before him.

[5] In reaching that conclusion Senior Deputy President O’Callaghan noted that the Act distinguishes between a majority support determination and the various other forms of orders available under Part 2–4 of the Act and is not an order which is enforceable or subject to penalty in respect of any contravention of the determination.

[6] Senior Deputy President O’Callaghan was satisfied, on the basis of the LHMU sponsored petition that the majority of employees wanted to bargain.

[7] Senior Deputy President O’Callaghan was not satisfied that Coca-Cola had refused to bargain, finding that notices of representational rights had been issued and negotiating meetings had been arranged. He also accepted, to the extent that certain groups of employees may have been excluded from the intended negotiations, the undertaking given by Coca-Cola, in the proceedings before him, that the relevant groups of employees would be included in the negotiation process.

[8] The central part of the decision of Senior Deputy President O’Callaghan, which is challenged on appeal by the LHMU, is found at paragraph 21, where his Honour said:

Appeal grounds

[9] The appeal grounds advanced by the LHMU were that Senior Deputy President O’Callaghan erred:

Submissions in the appeal

LHMU

[10] The LHMU submitted that s.236 of the Act provides for a majority support determination to be made where a majority of employees want to bargain with an employer for “a proposed single-enterprise agreement”.

[11] Section 236(2) of the Act requires an application for a majority support determination to specify both the employer and the employees who will be covered by the proposed agreement. In its application, the LHMU specified that the proposed enterprise agreement would cover employees of Coca-Cola governed by either the Aerated Waters Manufacturing Award or the Metal Industry (South Australia) Award, working in two different locations.

[12] The LHMU submitted that Senior Deputy President O’Callaghan in his finding was not satisfied that Coca-Cola had refused to bargain and he failed to take into account not just that the majority of employees wanted to bargain, but that they wanted to bargain, as specified in the application, for a single-enterprise agreement covering the nominated employees.

[13] The LHMU submitted that Coca-Cola declined to negotiate on the single-enterprise agreement proposed by the majority of employees. Rather, by separate s.174(6) notices of representational rights, Coca-Cola gave notice that it was bargaining in relation to separate agreements for production and fork-lift employees at the Thebarton site; stores and associated employees (excluding fork-lift operations) at the Thebarton and Gilman sites; and maintenance employees at the Thebarton site.

[14] The LHMU submitted that Senior Deputy President O’Callaghan erred in finding that he was not satisfied that the circumstances in s.237(2)(b) of the Act had been met, in light of the fact that Coca-Cola had not, at any time, agreed to bargain with the majority of employees about the LHMU’s proposed coverage of employees specified in the application. It submitted that Coca-Cola maintained its refusal to bargain as sought, but offered to bargain on terms not proposed by, nor accepted by, the majority of employees. The LHMU submitted that s.237(2)(b) of the Act does not envisage that an employer who has refused to bargain may avoid a majority support determination by belatedly agreeing to bargain but only in respect of a different agreement and then on different terms.

Coca-Cola

[15] Coca-Cola submitted that the appeal founders on:

[16] Coca-Cola submitted that permission to appeal should be refused in circumstances whereby:

[17] As to the appeal grounds, Coca-Cola submitted that:

[18] Coca-Cola submitted that the purpose of s.237 of the Act is to require an employer, who refuses to collectively bargain with its employees who wish to do so, to engage in bargaining. It is not designed to compel an employer to bargain only about what the employees (or their bargaining representative) want to bargain about, or on their terms, or for purposes of arriving at one single-enterprise agreement.

[19] Coca-Cola submitted that the LHMU’s proposition that Senior Deputy President O’Callaghan erred in finding that Coca-Cola had agreed to bargain or initiated bargaining for the agreement misunderstands the term “a proposed single-enterprise agreement” in s.237 of the Act. That phase describes only in conceptual terms an agreement of the nature of an instrument which may be made under the Act, as defined in s.172. It is not a phrase which, in s.237 of the Act, should be read to mean “the ultimate agreement and terms which one bargaining representative has in mind”. It was submitted that the LHMU interpretation:

Consideration

Permission to appeal

[20] An appeal is not available of right under the Act. Section 604 of the Act provides a right of appeal, subject to the permission of Fair Work Australia. The usual approach is to grant permission where the decision is affected by error or where it is in the public interest for permission to be granted.

Error

[21] The errors in the decision of Senior Deputy President O’Callaghan, alleged by the LHMU, were that he misinterpreted s.237(2)(b) of the Act and erred, given the facts of the matter, in finding that Coca-Cola had agreed to bargain or initiated bargaining for the agreement, within the proper meaning of s.237(2)(b) of the Act.

The operation of s.237(2)(b) of the Act

[22] Section 236 of the Act states:

[23] Section 237 of the Act states:

[24] Before going to the competing contentions about the operation of s.237(2)(b) of the Act advanced by the parties, there is some value in considering the role of majority support determinations within the bargaining processes contemplated by the Act. The statutory provisions dealing with majority support determinations form part of Division 8 of Part 2–4 of the Act, which deals with Fair Work Australia’s general role in facilitating bargaining. The bargaining system includes a number of processes designed to facilitate agreement making and assist bargaining representatives to bargain effectively when it is required. 9 As noted in s.169 of the Act, Division 8 provides for Fair Work Australia to facilitate bargaining by making bargaining orders, serious breach declarations, majority support determinations and scope orders and permits bargaining representatives to apply to Fair Work Australia to deal with bargaining disputes.

[25] A majority support determination might be sought in circumstances where an employer is aware that a majority of its employees wish to bargain but declines to do so or in circumstances where an employer is not aware or certain of the views of a majority of its employees in relation to their desire to bargain. If made in either of those circumstances, a majority support determination provides a means by which the bargaining processes within the Act are commenced within the meaning of the “notification time” in s.173(2)). Once the bargaining processes commence, an employer is required by s.173 of the Act to take all reasonable steps to give notice to each employee of their right to be represented by a bargaining representative. A majority support determination, in itself, does not require bargaining to occur. There is no penalty, as such, for contravening a majority support determination. However, once the bargaining process commences, the employer’s bargaining representative is obliged to meet the good faith bargaining requirements in s.228 of the Act and is subject to the statutory consequences of a failure to do so (for example, good faith bargaining orders (s.229) and serious breach declarations (s.234)).

[26] If, upon the commencement of the bargaining process following a majority support determination, an employer declines to bargain, the employee bargaining representative may seek a bargaining order to address a failure of the employer to meet the good faith bargaining requirements.

[27] Division 8 of Part 2–4 of the Act also provides a number of other functions for Fair Work Australia to facilitate fair and efficient bargaining, including:

[28] Division 8 also contains a variety of processes designed to facilitate agreement making. Within those processes, the role of a majority support determination is to commence the bargaining process when there is majority support among employees to collectively bargain, when their employer has not agreed to do so. The effect of a majority support determination itself extends no further. However, once a determination is made, the bargaining process under the Act is enlivened, including the good faith bargaining requirements under s.228 of the Act.

[29] Where the bargaining raises a dispute about the scope of the agreement or agreements to be made and the classes or groups of employees to be covered by the proposed enterprise agreement or agreements, Fair Work Australia has power to make scope orders to determine which classes or groups of employees are to be covered. The scheme of the Act does not envisage a role for a majority support determination in determining the scope of bargaining or the scope of an agreement.

[30] The Explanatory Memorandum 10 notes that s.237 of the Act requires Fair Work Australia to make a majority support determination, upon application, if satisfied that the employer has not yet agreed to bargain, or initiated bargaining, for the agreement (s.237(2)(b)). It further notes that:

[31] Section 238(1) of the Act allows a bargaining representative for a single-enterprise agreement to apply for a scope order if it has concerns that bargaining for the proposed enterprise agreement is not proceeding efficiently or fairly because the agreement will not cover the appropriate employees, or will cover employees that are not appropriate for the agreement to cover.

[32] Against this background, we turn to consider the competing interpretations of a s.237(2)(b) majority support determination, which arise because the LHMU and Coca-Cola have different bargaining positions as to the number and scope of agreements which should be made in relation to the relevant employees. The LHMU seeks a single agreement covering all employees, while Coca-Cola seeks three agreements covering various specified groups of employees. None of the agreements cover one small group of employees. There is a dispute as to the scope of the agreement or agreements to be made.

[33] The LHMU submitted that in considering whether the employer that will be covered by the agreement has not yet agreed to bargain, or initiated bargaining, Senior Deputy President O’Callaghan failed to take into account that the majority of employees wanted to bargain for a single-enterprise agreement covering the nominated employees. It contended that s.237(2)(b) of the Act concerns agreement to bargain in relation to an agreement of the specific nature sought by the majority of employees.

[34] Coca-Cola submitted that s.237(2)(b) concerns agreement to bargain in relation to a proposed single-enterprise agreement which has the characteristics of an agreement as defined by s.172 of the Act.

[35] In our view, the proper interpretation of agreement by an employer to bargain for the purposes of s.237(2)(b) of the Act is agreement to bargain about a single-enterprise agreement or agreements as defined by s.172 of the Act in respect of the employees identified in a s.236 application, subject to the good faith bargaining requirements within s.228 of the Act.

[36] The expression “bargain” in s.237(2)(b) means bargaining in relation to an agreement of the type described in s.172 and bargaining in accordance with the bargaining process within Division 8 of Part 2-4 of the Act, rather than bargaining in a generic sense. Simply put, bargain, interpreted in the context of Division 8 of Part 2-4, means bargain in accordance with the bargaining processes of the Act.

[37] If such agreement is found to exist, bargaining has commenced within the meaning of the “notification time” in s.173(2) and a majority support determination is not available in light of s.237(2)(b). Nor is it necessary to commence the bargaining processes within the Act. If such agreement is not evident, a majority support determination must be made, subject to satisfaction as to the other matters within s.237 of the Act. Agreement to bargain in some general sense, but a refusal to bargain about an agreement as defined by s.172 or an agreement in terms proposed by the bargaining representative of the employees, could not support a finding that an employer had agreed to bargain for the purposes of s.237(2)(b).

[38] The LHMU submitted that the Act requires an acknowledgment of the bargaining position of the majority of employees identified in a s.236 application for there to be agreement to bargain within the meaning of s.237(2)(b) of the Act. That proposition is correct insofar as agreement to bargain for the purposes of s.237(2)(b) of the Act involves agreement to bargain in compliance with s.228. Once bargaining has commenced, s.228 requires an employer to bargain about the position sought by the employees by, amongst other things, responding to their proposals in a timely manner, giving genuine consideration to their proposals and giving reasons for their responses to those proposals. The same obligations apply to the bargaining representative of the employees in respect of the bargaining position of the employer. It should be noted, however, that there is no statutory basis for the concept of a “formal recognition of the preference of the majority to bargain about a particular . . . proposed agreement” 11 beyond the good faith bargaining requirements in s.228. Further, whilst agreement to bargain imports a preparedness to bargain about an agreement or agreements proposed by the majority of employees, both in respect of the scope and terms and contents of an agreement or agreements, it does not require the bargaining to occur only in respect of a particular form of proposed agreement sought by the majority of employees and their bargaining representative.

[39] It should be noted, given the competing views of the parties as to the number and scope of agreements which should be made, that a majority support determination does not determine the scope of bargaining, any more than it determines the terms and conditions to apply. Once bargaining has commenced, s.238 is available to deal with disputes about the scope which impede bargaining. Unlike a majority support determination, a scope order can limit or extend the scope of bargaining, through a requirement to include or exclude a class of employees in bargaining for a proposed agreement or requiring bargaining collectively with different classes of employees in relation to separate agreements.

[40] The LHMU has not identified any part of the decision of Senior Deputy President O’Callaghan which suggests that he misconstrued or misapplied s.237(2)(b) of the Act.

Error in finding that Coca-Cola had agreed to bargain within the proper meaning of s.237(2)(b) of the Act

[41] The LHMU contended that Coca-Cola declined to bargain with its employees for an agreement of the scope for which a majority of its employees wished to bargain. Instead, it submitted, Coca-Cola had agreed to bargaining with its employees in relation to three distinct agreements, in respect of which it issued notices of bargaining representational rights and had excluded from the bargaining “‘Technical Specialist’ (formerly the positions of Syrup Room, ‘laboratory’ quality control and CIC duties); and to forklift operations associated with production line”. 12 On this basis, it contended, Coca-Cola had not agreed to bargain within the meaning of s.237(2)(b) because it refused to entertain bargaining about the employees’ proposal and Senior Deputy President O’Callaghan erred in making his findings at paragraphs 19 and 20 of his decision.

[42] In those paragraphs, Senior Deputy President O’Callaghan found that:

[43] If the LHMU contention that Coca-Cola had not agreed to bargain about an agreement proposed by its employees is accepted, the precondition to the making of a majority support determination in s.237(2)(b) would be met. In that circumstance, the employees would be entitled to a majority support determination requiring their employer to bargain on that basis.

[44] However, the LHMU contention as to the facts is not supported by the evidence. The finding of Senior Deputy President O’Callaghan that he was not satisfied that Coca-Cola had refused to bargain is supported by the evidence of:

[45] On that evidence, Senior Deputy President O’Callaghan was entitled to conclude that Coca-Cola had agreed to bargain in respect of all of the employees identified in the s.236 application and to bargain in relation to “all proposals and matters of concern”. No error exists in relation to that finding.

Public Interest Considerations

[46] In the absence of relevant error, permission to appeal arises only if we are satisfied that it is in the public interest to grant permission.

[47] We are not satisfied that it is in the public interest to grant permission to appeal. Indeed, public interest considerations militate against permission to appeal.

[48] Specifically, in circumstances in which bargaining is occurring and applications premised upon the conduct of bargaining are being made by the LHMU, and heard, permission to appeal has no utility.

[49] Bargaining is proceeding in respect of an agreement or agreements covering the employees identified in the s.236 application of the LHMU.

[50] In addition to the facts upon which Senior Deputy President O’Callaghan relied on in paragraph 44 above, Counsel for Coca-Cola in the appeal, confirmed that bargaining was continuing and Coca-Cola had not refused to seek an agreement on the union proposition. 15

[51] In the appeal, the LHMU did not seriously contend that bargaining was not occurring. Indeed, it could hardly do so in circumstances, where:

[52] In those circumstances the appeal has no utility. Further, no detriment arises to the LHMU or the majority of employees out of the decision of Senior Deputy President O’Callaghan under appeal in terms of the bargaining process or their rights to seek relevant orders available in relation to the bargaining process.

[53] No public interest consideration supports permission to appeal.

Conclusion

[54] In the absence of error or a public interest consideration which requires permission to appeal, permission is refused. The appeal is dismissed.

SENIOR DEPUTY PRESIDENT

Appearances:

T. Bourne of Counsel for the appellant.

H. Dixon of Counsel for the respondent.

Hearing details:

2009.
Adelaide:
October 7.

 1   [2009] FWA 101.

 2   [2009] FWA 101, at paras 4-12.

 3   The Coca-Cola (Aust) Pty Ltd (South Australia) Enterprise Development Agreement, South Australia Operations 2005-2008.

 4   PR986914.

 5   Section 238 of the Fair Work Act 2009.

 6   [2009] FWA 101, at para 26.

 7   [2009] FWA 320.

 8   Explanatory Memorandum, at item 985.

 9   Explanatory Memorandum, at item r.165.

 10   Item 978.

 11   Appeal Transcript at para 13.

 12   Appeal Book p. 86 (Exhibit C1).

 13   Appeal Book, p. 88.

 14   Appeal Book, p. 51 (Transcript at para 150).

 15   Appeal Transcript at paras 83-84.

 16   B2009/10456, decided in [2009] FWA 153.

 17   Section 230(2).

 18   B2009/10464, determined in [2009] FWA 320 and B2009/10701, hearing pending.

 19   Section 238(1).




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