DECISION

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

Construction, Forestry, Mining and Energy Union
v
Kane Constructions Pty Ltd
(B2016/1126)

Proposed protected action ballot of employees of Kane Constructions Pty Ltd; whether CFMEU has been and is genuinely trying to reach agreement; application granted.

[1] Kane Constructions Pty Ltd (Kane) conducts a building and construction business predominately focused on building and construction projects within government and government related sectors. Certain employees of Kane are covered in their employment with Kane by the Kane Construction Pty Ltd and the CFMEU Building and Constructions Industry Enterprise Agreement 2011-2015 (Agreement), the nominal expiry date of which , has passed. Some of these employees are members of the Construction, Forestry, Mining and Energy Union (CFMEU).

[2] On application by the CMFEU, Commissioner Ryan made a majority support determination 1 on 17 August 2016 and on 29 August 2016, Kane gave relevant employees a Notice of Employee Representational Rights. The CFMEU is a bargaining representative for the proposed agreement. The notification time for the proposed agreement is 17 August 2016.

[3] Since bargaining commenced there have been a number of meetings between representatives of Kane and the CFMEU about the proposed agreement through the period of late August 2016 to October 2016.

[4] By application lodged on 24 October 2016, the CFMEU has applied for a protected action ballot order (PABO) pursuant to s.437 of the Fair Work Act 2009 (Act). The group of employees that are proposed to be balloted are employees of Kane who are members of the CFMEU and for whom the CFMEU is a bargaining representative, and who will be covered by the proposed enterprise agreement. The application was amended without objection on 4 November 2016. 2 The amended application removed a form of purported industrial action from the questions proposed and sought a period of 21 days from the date of any order as the date by which any ballot should close. Kane opposes the making of a PABO but in the event that a PABO is made, it seeks that the date by which voting in the protected action ballot closes be 20 working days after the date of any order.3

[5] Section 437 of the Act enables a bargaining representative to apply for a PABO. Section 437(1) provides:

“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 FWC for an order (a protected action ballot order) requiring a protected action ballot to be conducted to determine whether employees wish to engage in particular protected industrial action for the agreement.”

[6] Excepting the restriction on making an application in ss.437(2A) and 438(1), the Commission must make a PABO in relation to employees who will be covered by a proposed agreement in the circumstances set out in s.443. There is no contest that the restrictions do not apply in the instant case. Section 443 relevantly provides:

“443 When FWC must make a protected action ballot order

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

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

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

(2) FWC must not make a protected action ballot order in relation to a proposed enterprise agreement except in the circumstances referred to in subsection (1).

(3)  A protected action ballot order must specify the following:

(a)  the name of each applicant for the order;

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

(c) the date by which voting in the protected action ballot closes;

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

(3A) For the purposes of paragraph (3)(c), the FWC must specify a date that will enable the protected action ballot to be conducted as expeditiously as practicable.”

[7] The concept of genuinely trying to reach an agreement involves a finding of fact applied by reference to the circumstances of the particular bargaining. It is not useful to formulate any alternative test or criteria for applying the statutory test because it is the words of s.443 which must be applied. In the course of examining all of the circumstances it may be relevant to consider related matters but ultimately the test in s.443 must be applied. Neither is it appropriate nor possible to establish rigid rules for the required point of bargaining that must be reached. All of the relevant circumstances must be considered in assessing whether an applicant for a PABO has met the test in s.443 of the Act. This will frequently involve considering the extent of progress in negotiations, and the steps taken in order to try and reach an agreement. 4

[8] To the extent that it may suggested that there has been a failure to meet good faith bargaining requirements, it must be borne in mind that although there is a relationship between the good faith bargaining requirements and the concept of genuinely trying to reach an agreement, it would be wrong to conflate these terms. An applicant for a PABO may not meet a particular good faith bargaining requirement, but may nevertheless be genuinely trying to reach an agreement. 5

[9] Kane maintains that it cannot be said that the CFMEU has been and is genuinely trying to reach an agreement with Kane. 6 Kane submits that when consideration is given to the conduct of the CFMEU during bargaining, that conduct shows that the CFMU has not been genuine in trying to reach agreement with Kane. In substance, this submission relies upon an assertion made by Kane that the CFMEU and Kane had agreed on a process for bargaining which involved the bargaining parties working through a number of identified issues, and that the CFMEU, in effect has reneged on the agreed process.7 It follows, according to Kane, that the conduct of the CFMEU in failing to work through the agreed process, has the result that the Commission cannot be satisfied as required by s.443(1) of the Act and so a PABO must not issue. Essentially that which is being alleged is bad faith conduct on the part of the CFMEU.

[10] In order to make good this point, Kane relied on the evidence of Mr Geoff Purcell, who is the Director of Kane. Mr Purcell is responsible for Kane’s Victorian construction department. He has been involved in the bargaining process and has attended all of the bargaining meetings. Mr Purcell gave evidence about the bargaining and the conduct of the CFMEU during bargaining. Mr Purcell’s evidence is summarised as follows below:

● The CFMEU bargaining representatives have attended four meetings with Kane. The meetings were held on 30 August 2016, 13 September 2016, 22 September 2016 and 28 September 2016;

● Mr Purcell met with Mr Edwards from the CFMEU, Mr Richard Frisina from Kane and Mr Daniel Hodges from the Masters Building Association of Victoria (MBAV) on 30 August 2016;  8

● Mr Purcell’s evidence was that during the meeting:

● The CFMEU presented Kane with a draft enterprise agreement which the CFMEU had previously provided to Kane. The agreement is in the style of a pattern agreement, with the name of the employer to be inserted but with all other details already completed (CFMEU Pattern Agreement); 9

● Mr Hodges expressed a desire for the proposed agreement to comply with the Federal Government’s proposed Building and Construction Industry (Fair and Lawful Building Sites) Code 2014 (Proposed Building Code) as Kane carried out a significant amount of Federal government work;  10

● Three principal issues were raised by Kane at the meeting of 30 August 2016. Firstly, clauses within the CFMEU Pattern Agreement that Kane did not believe would meet the requirements of the Proposed Building Code. Secondly, clauses which were not necessarily affected by the Proposed Building Code, but which Kane understood were intended to impact productivity, to justify the annual 5% increases proposed by the CFMEU Pattern Agreement, and thirdly, clauses within the CFMEU Pattern Agreement that Kane wished to negotiate specific to Kane’s business and circumstances; 11

● Kane indicated that it needed to understand how the productivity clauses would impact the business’ productivity and that it required time before coming to a position in relation to proposed wage levels and superannuation contributions. Clause 4.2 of the CFMEU Pattern Agreement was discussed between the parties. Kane does not generally work on new residential apartment buildings and so Kane asked what alternative productivity arrangements the CFMEU would propose instead of clause 4.2; 12

● Not all three issues were discussed in detail during the 30 August 2016 meeting. It was agreed that the process for negotiation would be for the parties to work through each of these issues in turn; 13

● The CFMEU requested that Kane “quantify” its objections to the CFMEU Pattern Agreement; 14

● The 30 August 2016 meeting ended after approximately 90 minutes; 15

● On 6 September 2016, Mr Edwards sent an email to Mr Purcell confirming the three broad issues for negotiation stating that he believed the parties had reached an “impasse” in negotiations. The email did not provide any response in relation to the matters concerning clause 4.2. Mr Purcell replied to Mr Edwards’ email listing the clauses that Kane believed might not meet the Proposed Building Code and denying that they had reached an “impasse”; 16

● On 7 September 2016, Kane proposed to meet with the CFMEU on either September 12 or 13; 17

● Later on 7 September 2016, Ms Swayn sent an email to Mr Purcell attaching a document published by the MBAV. The document referred to some, but not all, of the Proposed Building Code clauses which Mr Purcell referred to in his email dated 7 September 2016; 18

● No response was provided by the CFMEU in relation to clause 4.2; 19

● On 8 September 2016, the CFMEU indicated that it would be available to meet on 13 September 2016; 20

● A second meeting took place on 13 September 2016 at or around 8.00am. Mr Hodges, Mr Edwards and Ms Swayn were present. The meeting lasted for one hour and 45 minutes; 21

● Mr Purcell’s evidence was that during the meeting:

● The clauses of concern to Kane were discussed and Mr Purcell indicated that he would put Kane’s concerns in relation to the Proposed Building Code in writing later that day; 22

● Mr Edwards indicated that the CFMEU’s position was that clause 4.2 would not change, that there would be no change to suit Kane and that the CFMEU would not change the “scope” of the agreement; 23

● Kane indicated that it would send an email to the CFMEU relating to the Proposed Building Code issues for the CFMEU’s consideration. It was agreed that the CFMEU would review the list and advise whether it agreed that the clause did or did not comply with the Proposed Building Code. The CFMEU was to advise of any proposed amendments that ensure compliance with the Proposed Building Code without changing intent; 24

● The CFMEU was to also send an email to Kane about the productivity clauses; 25

● On 13 September 2016, Mr Purcell sent an email to Ms Swayn listing Kane’s concerns with the CFMEU Proposed Agreement; 26

● On 16 September 2016, Ms Swayn provided by email a written response to the proposed list of changes. Her email indicated that “the CFMEU does not accept revising claims on the sole basis of attempting to achieve compliance with a draft code”;  27

● On 21 September 2016, Mr Purcell sent an email to Ms Swayn and Mr Edwards clarifying what clauses would be considered as “productivity clauses”; 28

● On 22 September 2016, the parties conducted a further bargaining meeting. The meeting was attended by Mr Edwards, Ms Swayn, Mr Frisina and Mr Hodges; 29

● Mr Purcell’s evidence was that during the meeting:

● The parties did not discuss in any detail the CFMEU’s response to Kane’s concerns regarding the Proposed Building Code. Instead, attention was focused on the “productivity clauses”; 30

● During the meeting, Mr Purcell made annotations beside each of the productivity clauses as to which party would need to provide a response;  31

● Clause 4.2 was rejected by the CFMEU and it was agreed that Kane would submit a revised proposal for that particular clause. Clause 12.2 was discussed in detail and it was agreed that Kane would draft a clause for the CFMEU’s consideration which would better reflect the specifics that it was seeking. Clauses 13.3, 15, 15.4 and 16 were discussed in some detail; 32

● On 26 September, Ms Swayn sent Mr Purcell an email confirming the CFMEU’s position on some of the clauses. The email indicated that “the parties are currently at an impasse” in relation to clauses 9.1(a), 13.3 and 15.2; 33

● On 27 September 2016, Mr Purcell sent an email to Ms Swayn providing suggested wording for clauses 4.2 and 12.2; 34

● A fourth meeting was held on 28 September 2016. Ms Swayn, Mr Christopher, Mr Frisina, Mr Hodges and another individual attended the meeting; 35

● Mr Purcell’s evidence was that during the meeting:

● During the meeting, the parties continued to discuss the “productivity clauses”. The CFMEU had made an error in its calculation in relation to clause 25.15(b)(ii). It was agreed that the CFMEU would come back to Kane on this issue. Kane considered that clause 30.3(b)(ii) required some changes in its wording; 36

● The CFMEU agreed that it would clarify its position in regards to clauses 30.3(f)(v) and 30.5(a)(v). The CFMEU indicated that Mr Edwards would provide a response in regards to clause 34.1; 37

● The parties discussed a number of other clauses. At this stage the parties had not had a chance to discuss the CFMEU’s response regarding the Proposed Building Code and the parties had not begun discussing the third issue. The parties agreed to meet again to continue bargaining; 38

● On 28 September 2016, Ms Swayn sent Mr Purcell an email advising that the CFMEU had been unable to obtain instructions on the clauses discussed at the fourth meeting; 39

● On 29 September 2016, Ms Swayn sent another email to me with the CFMEU’s response with regards to the clauses discussed at the fourth meeting. Ms Swayn also sought Kane’s position with respect to wage rates, allowances, and industry fund contributions; 40

● On 6 October 2016, Mr Purcell emailed Ms Swayn indicating that the CFMEU’s additional concerns should be dealt with after the three substantive issues were resolved; 41

● On 6 October 2016, the CFMEU provided Kane with its response in respect to clauses 30.3(f)(v) and 30.5(a)(v); 42

● No response was provided from the CFMEU in relation to a proposed time to reconvene despite a number of requests; 43

● On 10 October 2016, Mr Purcell sent an email to Ms Swayn indicating Kane’s position on a number of matters, including the wages and industry fund contribution rates, namely that “these are not substantive issues for Kane subject to the outcome of our discussion…”;  44

● On 18 October 2016, Mr Edwards indicated via email that Ms Swayn was away and that he would conduct negotiations instead; 45

● The parties organised the fifth meeting via email correspondence. The meeting was scheduled to be held at 3.00pm on 27 October 2016; 46

● The CFMEU lodged its application for a PABO on 24 October 2016 and the matter was set down for Directions Hearing for 2.30pm on 27 October 2016. Mr Purcell understood that the Directions Hearing would not interfere with the agreed meeting; 47

● The 3.00pm meeting was not attended by the CFMEU. The CFMEU failed to advise Mr Purcell of their nonattendance; 48

● On 29 October 2016, Mr Purcell sent an email to Mr Edwards noting the CFMEU’s non-attendance at the 27 October 2016 meeting. Mr Purcell requested that Mr Edwards propose times to meet; 49 and

● On 30 October 2016, Mr Edwards indicated that he had been told to appear at the Commission but that this was changed “at the last minute” and that he would get back to Mr Purcell after the Melbourne Cup weekend. 50

[11] The CFMEU through Mr Edwards maintained that at the bargaining meeting of 30 August 2016, Kane was requested to provide a list of issues in respect of the CMFEU Pattern Agreement, in writing. 51The CFMEU pointed to annexure 5 of Mr Purcell’s witness statement to demonstrate its argument. Annexure 5 is a copy of the notes taken by Mr Frisina. Under the subheading of ‘Kane’, the first dot point concludes with “Kane to log issues”. The CFMEU maintains that Kane failed to provide its list or log of issues.52 Though Mr Purcell had a different recollection of the 30 August 2016 meeting, the contemporaneous notes taken by his colleague support the evidence of Mr Edwards and I accept that evidence.

[12] The CFMEU maintained and Mr Purcell accepted that Kane had not specified to the CFMEU the issues pertaining to the third substantive issue described as “Kane specific issues” and that the first time these issues have been articulated was in Mr Purcell’s witness statement filed in these proceedings. 53

[13] The CFMEU says that to date, Kane has not articulated a position on wages, allowances or industry fund. 54 Mr Purcell accepted that this is the case but explained that Kane’s position on these matters was contingent on assessing the productivity clauses proposed and that this had not yet occurred.55 The CFMEU says that it has made some concessions and taken on board some of the points that Kane has raised during the course of negotiations.56 This is accepted by Mr Purcell though the significance of the concessions seem to be in issue.57

[14] The CFMEU maintains that Kane did not want to bargain for an enterprise agreement with the CFMEU, which it says is evident by the CFMEU’s application for a majority support determination. 58 Be that as it may, it is clear that Kane is now bargaining.

[15] Furthermore, it says that Kane’s reluctance to provide the CFMEU with a specific response to its wages, allowances and industry funds proposal and by failing to detail Kane’s specific issues is the result of a desire, on the part of Kane, not to make an agreement with the CFMEU. 59 This is disputed.

[16] Mr Purcell gave evidence that the reason for objecting to the application is because Kane has not “finished what we had agreed to do”. 60 Mr Purcell’s explanation was that the principal issues were in a logical order and that the parties had been working through the issues progressively and that the parties had not finished its discussion in relation to two productivity clauses and Kane’s specific issues.61 Mr Purcell says that these discussions would have allowed Kane to form a view on the agreement as a whole.62

[17] The CFMEU says that Kane’s objection seems to boil down to this: that a bargaining representative is not genuinely trying to reach an agreement unless the parties have reached a particular point in negotiations where a decision can be made about whether it accepts or rejects the proposal. 63

[18] The CFMEU submits that Kane’s objection is nonsense and that the uncontroverted evidence is that meetings have occurred, they have been lengthy meetings and they have been attended by the CFMEU. 64 The CFMEU says that it has provided extensive responses to issues raised by Kane, it has clarified its position in relation to a number of clauses and it has moved its position in relation to a number of clauses, all of which speak of an attempt to genuinely reach agreement.65

[19] Kane says that it may be the case that the CFMEU’s intent, object and purpose is to reach an agreement with Kane, however, that alone is not enough to satisfy the jurisdictional requirement in s.443(1)(b). 66

[20] Kane submits that since the first meeting the CFMEU has set about the course of attempting to jump the gun and claim an “impasse”. 67 It says that the CFMEU is keen to declare an “impasse”, so that it can proceed to the step of taking protected industrial action, rather than sit down and engage with Kane.68 Kane submits that the parties have not had an opportunity to stick to the process to which the parties had committed.69

[21] Kane says that the time between the third and fourth meeting during which nothing occurred, the failure by the CMFEU to work through the agreed issues, together with the no show at the 27 October meeting supports a finding that the Commission cannot be satisfied that the CFMEU has been and is genuinely trying to reach agreement. 70 Mr Boncardo provided an explanation for the so called “no show,” which I accept.71 There was no deliberate conduct by the CFMEU aimed at aborting the meeting. Mr Edwards believed he was required to attend at the Commission to give evidence.

[22] Kane also says that the failure on part of the CFMEU to bargain in relation to the third issue for negotiation, supports a conclusion that the Commission cannot be satisfied that the CFMEU has been and is genuinely trying to reach agreement. This submission is not supported by the evidence given by Mr Purcell who indicated that the parties had not yet had an opportunity to discuss the matters concerning this issue. As earlier indicated, the substance of this issue was first articulated by Kane in Mr Purcell’s witness statement filed in this proceeding. The CFMEU cannot be criticised for a failure to discuss that which was not identified.

[23] As to the central thesis of Kane’s submission, I do not accept that there was any agreement or understanding about a bargaining process that the parties would follow, and by implication, that the parties would not resort to other available tools in the bargaining tool kit until the process had been completed.

[24] On the evidence, I am satisfied that Kane wished to discuss three broad categories of issues described in Mr Kane’s evidence. The CFMEU was prepared to consider and discuss these issues but requested details in respect of some of the issues. The evidence does not establish that there was an agreement or understanding between the parties that Kane’s categories of issues was a process that would guide bargaining or that discussions about those issues needed to be completed or even well advanced before other available avenues might be pursued. The combined evidence of Mr Purcell and Mr Edwards, viewed with the correspondence between the parties shows a course of bargaining that seems wholly unremarkable.

[25] I do not discount the possibility that where bargaining parties have agreed to a bargaining process, that a failure to follow through or abide by the agreed process might lead to a conclusion that the offending party is not genuinely trying to reach an agreement with the other. But this is not such a case. The evidence does not support the case theory advanced by Kane.

[26] Moreover, I accept the evidence given by Mr Edwards about the content and conduct of the various bargaining meetings and the written communications passing between the parties about the proposed agreement. In truth, with the exception of the “bargaining process agreement” and the “list of issues” request, there is little dispute between the evidence of Mr Purcell and Mr Edwards about the course of bargaining.

[27] Mr Purcell’s own evidence was that the CFMEU had been devoting both time and resources into negotiations with Kane for the purpose of obtaining an agreement. 72

[28] I well understand Kane’s desire that the issues it seeks to discuss with the CFMEU about the proposed agreement be worked through in an orderly fashion and without disruption. Equally, the CFMEU is entitled, subject to the Act, to apply for the order it now seeks. That it has done so before all of Kane’s issues had been addressed, is not, without more, a basis for concluding that the CFMEU has not been and is not genuinely trying to reach agreement with Kane, in light of the evidence about the steps that the CFMEU has taken in bargaining for the proposed agreement. In my view that evidence establishes that the CFMEU has been and is genuinely trying to reach agreement with Kane and I am so satisfied.

[29] The CFMEU seeks that the date by which voting in the protected action ballot closes is 21 calendar days after my decision. Both of the parties had no objection to my associate conferring with the Australian Electoral Commission (AEC) to establish whether the requested timeframe was appropriate. The AEC maintains a preferred period of 20 working days and this remained its position during discussions with my associate. I am not persuaded that there are any particularly important factors which would warrant a departure in this case from the AEC’s preferred timeframe for the organisation and conduct of a ballot.

Conclusion

[30] For the reasons given above I am satisfied that the CFMEU, as bargaining representative for the proposed agreement and applicant for a PABO, has been and is genuinely trying to reach agreement. I am satisfied and it was not in contest that the other statutory criteria have been met.

[31] A protected action ballot order will be made and is separately issued in PR587384.

DEPUTY PRESIDENT

Appearances:

Mr P Boncardo on behalf of the CFMEU.

Mr B Avallone on behalf of Kane.

Hearing details:

2016.

Melbourne.

November 4.

 1   PR548305.

 2   Transcript PN9- PN12.

 3   Respondent’s Outline of Submissions dated 2 November 2016 at [55], [58] and [60].

 4   Total Marine Services Pty Ltd v Maritime Union of Australia [2009] FWAFB 368; (2009) 189 IR 407 at [32]-[33]; Esso Australia Pty Ltd v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union known as the Australian Manufacturing Workers' Union (AMWU); Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU); The Australian Workers' Union (AWU) [2015] FWCFB 210 at [34]-[35].

 5   See the decisions of Gostencnik DP in NUW v Riverland Oilseeds Pty Ltd  [2013] FWC 5914 at [17]-[ 19]; Hamberger SDP in TWU v CRT Group Pty Ltd [2009] FWA 425 at [26], and Lewin C in NUW v SKF Australia Pty Ltd [2010] FWA 6557 at [19] - [21]; endorsed by a Full Bench of the Commission in Esso Australia Pty Ltd v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union known as the Australian Manufacturing Workers' Union (AMWU); Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU); The Australian Workers' Union (AWU) [2015] FWCFB 210 at [18].

 6   Ibid at [2].

 7   See Transcript PN410 - 411.

 8   Ibid at [6].

 9   Ibid at [8].

 10   Ibid at [9].

 11   Ibid at [12].

 12   Ibid at [13].

 13   Ibid at [14].

 14   Ibid at [15].

 15   Ibid at [17].

 16   Ibid at [19].

 17   Ibid at [23].

 18   Ibid at [24].

 19   Ibid at [25].

 20   Ibid at [29].

 21   Ibid at [30].

 22   Ibid at [31].

 23   Ibid at [33].

 24   Ibid at [34].

 25   Ibid at [35].

 26   Ibid at [36].

 27   Ibid at Annexure 12.

 28   Ibid at [40].

 29   Ibid at [43], Transcript PN198.

 30   Exhibit 7 at [42].

 31   Ibid at [45].

 32   Ibid at [46], [48] – [49].

 33   Ibid at [51].

 34   Ibid at [53].

 35   Ibid.

 36   Exhibit 7 at [55].

 37   Ibid at [56].

 38   Ibid at [60].

 39   Ibid at [62].

 40   Ibid at [63].

 41   Ibid at [64].

 42   Ibid at [65].

 43   Ibid at [69].

 44   Ibid at Annexure 22.

 45   Ibid at [69].

 46   Ibid at [70].

 47   Ibid at [72].

 48   Ibid at [75].

 49   Ibid at [76].

 50   Ibid at [77].

 51   Exhibit 1 at [12].

 52   Transcript PN219 – 221.

 53   Transcript PN245.

 54   Transcript PN249 – 251.

 55   Transcript PN252 – PN254.

 56   Transcript PN258 – PN282.

 57   Ibid.

 58   Transcript PN298 – PN300.

 59   Transcript PN301.

 60   Transcript PN318

 61   Transcript PN329.

 62   Ibid.

 63   Transcript PN374.

 64   Transcript PN375.

 65   Transcript PN373.

 66   Respondent’s Outline of Submissions dated 2 November 2016 at [34].

 67   Transcript PN411.

 68   Respondent’s Outline of Submissions dated 2 November 2016 at [38].

 69   Transcript PN421.

 70   Transcript PN423.

 71   Transcript PN376.

 72  Transcript PN315 – PN317.

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