FWA 1081
REASONS FOR DECISION
Fair Work Act 2009
s.418 - Application for an order that industrial action by employees or employers stop etc.
Fair Work Australia
Union of Christmas Island Workers; Phosphate Resources Limited
PERTH, 16 FEBRUARY 2012
Application by Fair Work Australia of its own motion for industrial action by employees or employer to stop, not occur and not be organised.
 On 2 December 2011, of my own motion, I issued an Order that industrial action stop, not occur or not be organised for a period of 42 days.
 The order applied to and was binding upon:
(a) the Union of Christmas Island Workers (“UCIW”);
(b) officials, delegates, employees and agents (collectively Union Representatives) of the UCIW;
(c) Phosphate Resources Limited (“the Employer”) and
(d) employees of the Employer who are eligible to be members of the UCIW, who are taking industrial action and whose employment is regulated by the UCIW/Phosphate Resources Ltd (t/as Christmas Island Phosphates) Enterprise Agreement 2010 (“the Agreement”) (collectively the Employees).
 These are my written reasons for issuing the Order.
 The Employer operates a phosphate mine on Christmas Island.
 Christmas Island is an Australian territory located in the Indian Ocean approximately 2,600 kilometres north-west of Perth, Western Australia.
 The Employer has the largest commercial operation on Christmas Island and employs directly about 120 employees.
 Approximately 100 employees have their employment regulated, in part, by the Agreement. The nominal expiry date of the Agreement was 21 October 2011.
 The employees employed pursuant to the Agreement are eligible to be members of the UCIW.
 Bargaining meetings between the Employer and UCIW for a replacement enterprise agreement occurred in May and June 2011. Face to face meetings were supplemented by telephone conferences and correspondence between the parties.
 The parties were not able to reach agreement and the UCIW advised the Employer that it intended to apply for a Protected Action Ballot Order pursuant to s.437 of the Fair Work Act 2009 (‘the FW Act”).
 On 8 September 2011, the Employer made application to Fair Work Australia (FWA) for assistance in conciliating the major difference between the parties concerning the quantum of pay increases over the life of the replacement agreement.
 Following consultation with the parties, a Notice of Listing was forwarded to the Employer and UCIW on 22 September 2011 advising that the Tribunal would hold a conciliation conference on Christmas Island between 17 and 20 October 2011.
 On 23 September 2011, the UCIW made application to FWA for a Protected Action Ballot Order. The application was heard on 30 September 2011 and the Order issued on the same day (PR515221).
 The results of the ballot were declared on 12 October 2011. Sixty-eight (68) of the 88 eligible employees voted and a majority authorised the following relevant forms of protected industrial action.
7. An unlimited number of stoppages for 24 hours?
10. An unlimited number of stoppages for one week?
11. An unlimited or periodic ban on call backs?
 Three (3) days of conciliation facilitated the exploration of a number of options to resolve the dispute and was productive in some senses, however, it failed to achieve consensus between the Employer and the UCIW. At the conclusion of conciliation, it could not be said that either party was uninformed about the other party’s position or views. However, the consequences of failing to reach agreement was not a prominent consideration during conciliation.
 On 20 October 2011, the Employer provided notice to employees that conciliation had been unsuccessful.
 On 21 October 2011, the Agreement nominally expired.
 On 21 October 2011, the UCIW provided the requisite notice of industrial action to the Employer in the form of a stoppage of work for 24 hours commencing 27 October 2011 at 6:00am and ceasing at 6:00am on 28 October 2011. In addition, there would be a ban on call backs for the period 6:00am 27 October 2011 to 6:00am 3 November 2011.
 On 27 October 2011, the UCIW provided the requisite notice of industrial action to the Employer of a total stoppage of work for one week commencing at 6:00am on 2 November 2011 and ceasing at 6:00am on 9 November 2011. In addition, the notice provided for a ban on call backs for the same period.
 By notice, the UCIW continued its total stoppage of work until 1 December 2011.
 On 24 November 2011, the Employer gave notice that:
“Having been subject to industrial action in the forms of a withdrawal of labour and a ban on call backs, Phosphate Resources Ltd gives notice that it will take Employer Response Action.
Phosphate Resources Ltd advises as follows:
That it intends to impose a ‘lock out’ of all employees who are to be covered by the 2011 agreement. The ‘lock out’ will be of an indefinite duration until the date upon which either a settlement of the terms of the UCIW/CIP Enterprise Agreement 2011 is reached or the date upon which the employees to be covered by the UCIW/CIP Enterprise Agreement 2011 issue a notice to Fair Work Australia of their consent to a final arbitration by Fair Work Australia of the terms of that Agreement.
The ‘lock out’ will commence at 0600 on Wednesday 30 November 2011.” 1
 The Employer gave the requisite notice pursuant to ss.414(5) and (6) of the FW Act.
 On 25 November 2011, the UCIW provided the requisite notice to the Employer of industrial action of a further total stoppage of work for one week commencing at 6:00am on 1 December 2011 and ceasing at 6:00am on 8 December 2011.
RELEVANT LEGISLATIVE FRAMEWORK
 The factual background to enterprise bargaining between the UCIW and the Employer must be considered within the relevant statutory provisions.
 Part 2-4 of the FW Act sets out provisions related to enterprise bargaining.
 The objects of Part 2-4 of the FW Act are contained in s.171; the relevant parts are as follows:
The objects of this Part are:
(a) to provide a simple, flexible and fair framework that enables collective bargaining in good faith, particularly at the enterprise level, for enterprise agreements that deliver productivity benefits; and
(b) to enable FWA to facilitate good faith bargaining and the making of enterprise agreements, including through:
(iii) … (my emphasis)
 The first issue for my consideration in this application was whether, as a finding of fact, collective bargaining was taking place in good faith. In doing so, it is necessary to consider whether the bargaining representatives are meeting the good faith bargaining requirements.
 Collective bargaining takes place for single enterprise agreements, which this is, between employees and their representatives and the Employer. Employees can represent themselves or they may appoint a bargaining representative. With some specific exceptions, pursuant to s.176(3) of the FW Act and Regulation 2.06 of the FW Regulations 2009 , an employee can appoint any person to represent them in negotiations for an enterprise agreement. In the absence of a specific appointment by an employee of a person to represent them, the relevant union, in this case the UCIW, will be the bargaining representative should the employee be a member of the UCIW.
 Having been appointed as a bargaining representative, whether it be the employee themselves, a person nominated by the employee, or by default, the employee’s union, bargaining representatives and the employer, are each subject to the good faith bargaining requirements of the FW Act. The mandatory obligations of good faith bargaining are set out in s.228 of the FW Act as set out below.
• 228 Bargaining representatives
228 Bargaining representatives must meet the good faith bargaining requirements
(1) The following are the good faith bargaining requirements that a bargaining representative for a proposed enterprise agreement must meet:
(a) attending, and participating in, meetings at reasonable times;
(b) disclosing relevant information (other than confidential or commercially sensitive information) in a timely manner;
(c) responding to proposals made by other bargaining representatives for the agreement in a timely manner;
(d) giving genuine consideration to the proposals of other bargaining representatives for the agreement, and giving reasons for the bargaining representative’s responses to those proposals;
(e) refraining from capricious or unfair conduct that undermines freedom of association or collective bargaining;
(f) recognising and bargaining with the other bargaining representatives for the agreement.
(2) The good faith bargaining requirements do not require:
(a) a bargaining representative to make concessions during bargaining for the agreement; or
(b) a bargaining representative to reach agreement on the terms that are to be included in the agreement. (my emphasis)
 I now turn to the right to take industrial action.
 The FW Act provides for employees and employers to take, subject to the FW Act, industrial action.
 For employees to take industrial action, it must be authorised by a ballot of the relevant employees. However, before the democratic decision making takes place by the relevant employees, save procedural requirements, the Tribunal must be satisfied that the applicant, normally an employee organisation, is genuinely trying to reach agreement with the employer of the employees to be balloted. Should the Tribunal be satisfied it must issue an order that the ballot take place.
 The ballot must particularise the forms of industrial action which can be taken against the employer. Should 50 percent of the employees on the roll of voters vote, and more than 50 per cent of valid votes approve the specific forms of industrial action, the industrial action can, subject to the required notice, commence within 30 days of the declaration of the results of the ballot.
 The approval process of the employee organisation of the form of industrial action (if any) to be taken by employees after the declaration of the results of the ballot (if approved), is not regulated by the FW Act and is a matter for the applicant’s processes.
 However, what is regulated by the FW Act is that for industrial action to be protected industrial action, it must meet the common requirements in Subdivision B of Division 2 of Chapter 3 of the FW Act; the relevant parts are outlined below. For the purposes of this particular application, the provisions of subsection 413(3) of the FW Act require that the UCIW must continue to be genuinely trying to reach an agreement with the Employer.
• Subdivision B—Common requirements for industrial action to be protected industrial action
413 Common requirements that apply for industrial action to be protected industrial action
(1) This section sets out the common requirements for industrial action to be protected industrial action for a proposed enterprise agreement.
Type of proposed enterprise agreement
Genuinely trying to reach an agreement
(3) The following persons must be genuinely trying to reach an agreement:
(a) if the person organising or engaging in the industrial action is a bargaining representative for the agreement—the bargaining representative;
(b) if the person organising or engaging in the industrial action is an employee who will be covered by the agreement—the bargaining representative of the employee. (my emphasis)
 Consequently, pursuant to subsection 413(3) of the FW Act, for industrial action to be protected industrial action, at any time, the relevant bargaining representatives must be genuinely trying to reach agreement.
 Accordingly, the second issue for my consideration in this application is to determine, as a finding of fact, whether the UCIW and the Employer, when taking the industrial action, are genuinely trying to reach agreement on a replacement agreement.
 At this point, I consider it useful, by way of summary, to state that although protected industrial action could continue indefinitely, it is subject to specific and general requirements under the FW Act. For the purposes of this application, those requirements are that:
 The Tribunal may make an order, of its own initiative, to stop industrial action and this is provided in s.418 of the FW Act as set out below.
Division 4—FWA orders stopping etc. industrial action
• 418 - FWA must order that industrial action by employees or employers stop etc.
(1) If it appears to FWA that industrial action by one or more employees or employers that is not, or would not be, protected industrial action:
(a) is happening; or
(b) is threatened, impending or probable; or
(c) is being organised;
FWA must make an order that the industrial action stop, not occur or not be organised (as the case may be) for a period (the stop period) specified in the order.
Note: For interim orders, see section 420.
(2) FWA may make the order:
(a) on its own initiative; or
(b) on application by either of the following:
(i) a person who is affected (whether directly or indirectly), or who is likely to be affected (whether directly or indirectly), by the industrial action;
(ii) an organisation of which a person referred to in subparagraph (i) is a member.
(3) In making the order, FWA does not have to specify the particular industrial action.
(4) If FWA is required to make an order under subsection (1) in relation to industrial action and a protected action ballot authorised the industrial action:
(a) some or all of which has not been taken before the beginning of the stop period specified in the order; or
(b) which has not ended before the beginning of that stop period; or
(c) beyond that stop period;
FWA may state in the order whether or not the industrial action may be engaged in after the end of that stop period without another protected action ballot.
ANALYSIS OF BARGAINING POST UNSUCCESSFUL CONCILIATION BETWEEN 17 AND 19 OCTOBER 2011
 Following unsuccessful conciliation between 17 and 19 October 2011, the Employer issued a notice to all employees on 20 October 2011 advising them that a resolution had not been achieved during conciliation and also the Employer’s final offer.
 On 21 October 2011, the nominal expiry date of the Agreement transpired.
 On 21 October 2011 at 7:00am the employees held a stop work meeting and rejected the Employer’s final offer.
 On 21 October 2011, the Employer received the requisite notice of the employees’ intention to hold a stoppage of 24 hours commencing at 6:00am on 27 October 2011 and a ban on call backs from 27 October to 3 November 2011.
 On 27 October 2011, the Employer received the requisite notice of the employees’ intention to hold a stoppage of work for one week commencing at 6:00am on 2 November 2011.
 With the exception of call backs, normal production occurred from 6:00am on 28 October 2011 to 6:00am on 2 November 2011.
 On 3 November 2011, the Employer received correspondence from the UCIW of its intention to hold a total stoppage of work up until 1 December 2011. This intention to stop work was facilitated by the requisite notice under the FW Act over the period of the stoppage.
 On 24 November 2011, the Employer gave notice to the UCIW and employees of a “lock out” of employees of an indefinite duration.
 On 25 November 2011, the Employer received the requisite notice that members of the UCIW would stop work for a further week from 6:00am on 1 December 2011 to 6:00 am on 8 December 2011.
 In my view, it is necessary to address and analyse what negotiations occurred between the parties from 20 October 2011 until 2 December 2011 when I issued the Order, of my own motion, that industrial action stop, not occur or not be organised.
 The first exchange between the parties occurred on 2 November 2011 and consisted of a two to three minute conversation between the Acting General Secretary of UCIW, the Employer’s Chief Operating Officer and Mr Alfred Chong, Resident Manager. No negotiations between the parties took place which is not surprising given the brevity of the exchange.
 On 15 November 2011, the Employer issued a notice to all employees advising that the offer outlined in its earlier notice would be extended to 21 November 2011.
 On 17 November 2011, the parties met for 1.5 hours. No agreement was reached.
 On 18 November 2011, the Hon Brian Lacy, Administrator for Christmas Island and Cocos Keeling Island chaired a meeting of the parties. The Administrator was a member of the Australian Industrial Relations Commission (AIRC) for nine years and prior to that a member of counsel at the Victorian Bar, practising primarily an industrial law.
 The Administrator’s intervention in the dispute, apart from his concern regarding the impact on Christmas Island, had resulted from employees approaching him concerning the amount of time proposed for industrial action. The Hon B Lacy contacted the parties and having concluded that discussions were not taking place, suggested that he convene a meeting. At the employer’s suggestion, the Hon B Lacy was asked to chair the meeting.
 The Administrator chaired a meeting but the parties were unable to reach agreement after four (4) hours of discussions.
 A further and final negotiation meeting took place for one (1) hour on 20 November 2011. No agreement was reached.
 On 21 November 2011, the Employer’s offer to the UCIW lapsed.
 In summary, as at 21 November 2011, after three (3) weeks of continuous and complete stoppage of work, the parties had met for 2.5 hours at their own instigation and for four (4) hours at the instigation of the Island Administrator.
 On 22 November 2011, the Employer received correspondence from the UCIW regarding a new proposed claim. The Employer responded on the same day reinstating its previous proposal and setting a deadline for expiry of 24 November 2011. The UCIW, in turn, responded wishing to discuss a better offer from the Employer. This, in turn, led to the Employer responding that it would not waste any further time in discussions unless it received practical achievable written proposal from the UCIW first.
 On 24 November 2011, the Employer issued its lock out notice to commence at 6:00am on 30 November 2011.
 On 25 November 2011, the UCIW gave notice of a further stoppage of one (1) week commencing at 6:00am on 1 December 2011.
 On Friday 25 November 2011, the Tribunal became aware of the industrial action taking place between the parties on Christmas Island.
 On Monday 28 November 2011, the parties were advised of a conference to be held on the following day (Tuesday 29 November 2011) for the Tribunal to inform itself of the status of bargaining for a replacement agreement. At the conclusion of the conference, I advised the parties that, on my own motion, I would conduct a hearing on Friday 2 December 2011, pursuant to s.418 and/or s.423 of the FW Act.
 At the conclusion of the hearing on 2 December 2011, I issued an Order that industrial action stop, not occur or not be organised for a period of 42 days.
 I also advised the parties that I would again travel to Christmas Island for the purpose of seeking to conciliate an agreed replacement enterprise agreement.
 The taking of industrial action, defined in s.19 of the FW Act, by employees and employers is permissible and protected, so long as certain prerequisites are met.
 One of the prerequisites for the industrial action to be protected is that it is organised and taken in the context of collective bargaining after the nominal expiry date of the applicable enterprise agreement or workplace determination has passed. That prerequisite was satisfied in this application.
 However, having met the prerequisite that the nominal expiry date of the current enterprise agreement has passed, does not mean a “free for all” situation exists; industrial action can be unprotected for what may be described as procedural or substantive reasons. Where the procedural requirements have been satisfied, industrial action may be unprotected for a variety of reasons including that the bargaining representatives are not meeting the good faith bargaining requirements and/or genuinely trying to reach agreement. Whether these requirements are being met, it is fruitful to consider the good faith bargaining requirements that bargaining representatives must meet in s.228 of the FW Act to give integrity to negotiations for a replacement agreement.
 While it may come as a surprise, after a total stoppage of work by employees for one month and further employee industrial action planned, and an indefinite lock out of employees by the Employer, there was little dispute over the facts of what had or was occurring in relation to bargaining.
 What does come as a surprise is that between 20 October 2011 when conciliation was unsuccessful and 2 December 2011 when the Tribunal ordered all industrial action to cease, is that the parties had met of their own motion for 2.5 hours and at the instigation of the Christmas Island Administrator for 4 hours in an attempt to resolve the dispute. By any measurement, in the circumstances, such a short period of time for negotiations would fail to meet an essential feature of good faith bargaining, that is, the parties communicate with each other to achieve a resolution to the dispute.
 As the various stages of negotiations change, the extent of verbal communication may lessen, for example, when the parties move into recording their settlement and documents are exchanged. However, in this case, verbal communication had almost ceased to exist during a stage where settlement had not been reached. If the lack of verbal communication was supplemented by productive written communication, the Tribunal’s concerns may have been reduced, but it would appear that the only written communication between the parties was to advise the other party when industrial action was to take place.
 Both the objects of the FW Act in its totality and Part 2-4 which deals with enterprise bargaining, emphasise that there is an obligation to bargain in “good faith”. Bargain means to discuss the terms of any transaction. Discuss means to engage in conversation, examine by argument - to debate 2. At its most fundamental, enterprise bargaining is about communication both before and during formal negotiations. To emphasise this situation, an examination of paragraphs 228(1)(a)-(d) and (f) of the FW Act will see that each requirement for good faith bargaining has as its aim, purposeful or meaningful communication.
 The conditions set out in paragraphs 228(1)(d)-(f) of the FW Act are mandatory. Put simply, the conditions are indispensable to good faith bargaining. The conditions can be described as purposeful or performatory - that is, actions which bargaining representatives must carry out when bargaining for a replacement enterprise agreement. A bargaining representative cannot be genuinely trying to reach agreement if they are not bargaining in good faith.
 Determining whether a bargaining representative is bargaining in good faith is not a conclusion which can be drawn from the fact that bargaining exists, but from an objective assessment of the actions of the bargaining representatives against the requirements in paragraphs 228(1)(a)-(f) of the FW Act.
 I have used the expression “meaningful communication” as being at the core of the required conditions for good faith bargaining. I use the term “meaningful” as communication with a purpose, sense or desire to achieve a replacement agreement. This sort of communication can be distinguished from perfunctory or indifferent communication which is to give the appearance that good faith bargaining is taking place.
 At this point, I should interpose that I have not overlooked the fact that good faith bargaining does not require bargaining representatives to make concessions or to reach agreement - what is commonly referred to as “hard bargaining”. However, an examination of the circumstances leading to this Order was that industrial action had replaced bargaining. Industrial action had become the chloroform to any meaningful communication.
 The circumstances attaching to the industrial action subject of this matter demonstrates that:
 Having made an objective assessment of the facts, I was satisfied that the bargaining was not taking place in good faith, the bargaining representatives had not met the good faith bargaining requirements and were not genuinely trying to reach agreement; for these reasons I issued an Order that industrial action stop, not occur or not be organised.
 Having made the Order on 2 December 2011 that industrial action stop, not occur or not be organised for a period of 42 days, I informed the parties that I expected them to enter into meaningful good faith bargaining and that I would travel to Christmas Island to facilitate further conciliation.
 On 16 and 17 December 2011, I facilitated conciliation on Christmas Island where the parties reached agreement to resolve their dispute.
 On 5 January 2012, I approved an enterprise agreement between the parties which will nominally expire on 2 December 2015.
1 Exhibit PRL 3G
2 The Australian Concise Oxford Dictionary
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