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Dec 1797/94 A Print L5622


Industrial Relations Act 1988 s.170PD notice of initiation of bargaining period

Australian Rail, Tram and Bus Industry Union (C No. 20619 of 1994)

s.170PD notice of initiation of bargaining period

Australian Municipal, Administrative, Clerical and Services Union (C No. 31311 of 1994)

RAILWAYS METAL TRADES GRADES AWARD 1953 (ODN C No. 00169 of 1950) [Print H5660 [R0009]]

RAILWAYS SALARIED OFFICERS AWARD, 1960 (ODN C No. 00403 of 1959) [Print B7349 [R0013]]

Various employees Public transport industry


Enterprise bargaining - negotiations - good faith - s.170QK Industrial Relations Act 1988 - orders under s.170QK(2) cannot impose substantive term upon bargaining parties - Commission can make orders under s.170QK(3) Commission if any one of the "tests" identifies a possible ground for finding bad faith regardless of good performance in other respects - bargaining in good faith does not require willingness to make concessions or moderation of demands - a hard line as adopted by PTC and PTU may be adopted - if a hard line or extravagant demands evince an intention of obstructing the agreement then the tactic is bad faith - time frame scheduled - Commission cannot act on recommendation of one party - arbitration would displace bargaining - hearing date set.


The Australian Rail, Tram and Bus Industry Union (PTU) on 28 April 1994 gave notice of initiation of a bargaining period, the employer party to the proposed agreement being the Public Transport Corporation of Victoria (PTC). A similar notice was given on 20 May by the Australian Municipal, Administrative, Clerical and Services Union (ASU). Initial proceedings in the Commission about these matters were conducted by Cross C. Because of his impending retirement, the matters were subsequently reallocated to me.

On 26 August, the PTU gave notice of authorisation to engage in industrial action. The ASU did likewise on 8 September.

The PTU on 4 August submitted an application for orders about the conduct of bargaining. This was amended during subsequent proceedings. It is supported by the ASU, the Automotive, Food, Metals and Engineering Union, the Association of Railway Professional Officers of Australia and The Association of Professional Engineers and Scientists, Australia, which were among the unions listed as proposed parties to an agreement in the notifications of 28 April and


20 May. The Australian Council of Trade Unions and the Victorian Trades Hall Council also expressed their support for the application. This decision deals with the application of 4 August.

Section 170QK of the Industrial Relations Act 1988, in conjunction with paragraph 111(1)(t), is the basis for orders "ensuring that the parties negotiating an agreement . . . do so in good faith". Sub-section 170QK(3) provides:

"In deciding what orders (if any) to make, the Commission:

(a) must consider the conduct of each of the parties to the negotiations, in particular, whether the party concerned has:

(i) agreed to meet at reasonable times proposed by another party; or

(ii) attended meetings that the party has agreed to attend; or

(iii) complied with negotiating procedures agreed to by the parties; or

(iv) capriciously added or withdrawn items for negotiation; or

(v) disclosed relevant information as appropriate for the purposes of the negotiations; or

(vi) refused or failed to negotiate with one or more of the parties; or

(vii) in or in connection with the negotiations, contravened section 170RB by refusing or failing to negotiate with a person who is entitled under that section to represent an employee; and

(b) may consider:

(i) proposed conduct of any of the parties (including proposed conduct of a kind referred to in paragraph (a)); and

(ii) any other relevant matter."

Having regard to issues raised by the application or in the proceedings, I think it convenient to refer initially to certain threshold subjects.

First, I do not believe that an order under sub-section 170QK(2) can impose substantive terms upon bargaining parties. The PTU's application included proposed orders specifying wage increases which the PTC would be obliged to concede. At the conclusion of the unions' initial submissions, I told Mr E. Quigley (for the PTC) that I did not require him to address me in relation to those parts of the application because I was satisfied that I had no power to make such orders. This view is consistent with opinions expressed by a Full Bench in the ABC case in its decision of 31 August 1994 [Print L4605 [P0253]]. I do not think it necessary to comment further.


Secondly, the PTC submitted that I should adopt a "holistic" approach to the specific aspects of conduct identified in sub-section 170QK(3). The PTU had stated that it had no complaint about the PTC's performance in relation to some of the "tests". It was the PTC's contention that these credits should be weighed against alleged debits. I reject this interpretation of the sub-section. Any one of the "tests", in my opinion, identifies a possible ground for a finding of bad faith, regardless of "good performance" in other respects. Of course, the nature of the deficiency might well affect the terms of any order issued to deal with the problem.

Thirdly, bargaining in good faith does not require a willingness to make concessions. It is consistent with adopting a "hard line". Equally, it does not imply moderation of demands. It does imply a preparedness to consider seriously offers and proposals made by the other side and to take account of arguments; but if, having done these things, a bargaining party is unmoved, it may still be bargaining in good faith. The inability of parties to reach an agreement is not evidence that either is acting in bad faith. The adoption of a hard line or the making of extravagant demands may evince an underlying intention of obstructing agreement. This tactic would constitute bad faith, but in few cases, if any, could its existence be inferred from the bargaining stance alone. Of course, the Commission's acceptance of a party's stance as being one adopted in good faith does not entail approval. The Commission's responsibility for promoting good faith bargaining does not empower it to arbitrate or to impose the prevailing wage-fixing principles.

The negotiations which gave rise to this decision are directed toward "Enterprise Bargaining Agreement Mark II", which would be a certified agreement. "EBA I", which was negotiated in 1992, took the form of a consent award.

In April 1993 unions representing employees of the PTC entered into an agreement - known as the Transport Reform Agreement (TRA) - with the Victorian Minister of Transport. The TRA flowed from an earlier-announced program wherein the Minister sought to achieve reductions in the budgetary burden of public transport. Under the TRA, the program was modified, but the Minister's requirement was that the reforms provide annual savings of $245 million by the end of 1995. Most of these savings were expected to be generated by measures announced by the Minister which were not altered by the TRA. In the subsequent negotiations about EBA II, the parties differed about the implications of the TRA. The unions insisted that the savings justified a wage increase. They state that, when entering into the TRA, they gave no contrary indication. The PTC asserts that the measures which are embodied in the TRA were directed toward restoring a viable public transport system and that the alterations to which the Minister agreed enabled the unions to achieve objectives related to services and employment. There was no acceptance by the Government that TRA measures would be the basis for negotiated wage increases. The PTC points out that some wage increases have occurred because of work-value changes inherent in the reform measures and contends that additional increases negotiated with reference to the TRA would entail double-counting.

The unions, co-ordinated by the Trades Hall Council, formally served claims on the PTC in September 1993. The response of the PTC was that it was prepared to negotiate about increases on a business-unit basis. This intimation was unacceptable to the unions, which desired that there be "across - the - board" negotiations leading to general increases. They nevertheless agreed to the establishment of bargaining units within the business units under a peak co-ordinating committee. There were also to be site committees which would


identify possible measures of reform, directed to the further enhancement of productivity, for the consideration of the bargaining units. The unions' position was that they were prepared to consider further workplace reforms for EB II, but not to the exclusion of wage increases related to the TRA; nor did they agree to differentiation in increases as between business units.

Negotiations, obviously, have been protracted. At various times, the Commission attempted to help the parties. On 24 June 1994, Cross C issued a statement which had been agreed between the parties and gave some ground for hope that the impasse might be broken. This recorded the parties' agreement on various points, including conducting a review of the TRA "for the purpose of

(a) establishing clear agreement as to the measures comprehended by the 'Reform Agreement 1993', including specific provision for implementation of the reform measures (if not already implemented), the financial impact of each measure over the period of the 'Reform Agreement 1993' and the processes for 'Benchmarking' and 'Competitive Bidding' as referred to in the 'Reform Agreement 1993'.

(b) including the 'Reform Agreement 1993', as amended and/or clarified by (a) above, in the proposed Enterprise Bargaining agreement, without prejudicing the savings of $245 m from the PTC Budget as provided for in the 'Reform Agreement 1993'."

These paragraphs indicate that the TRA would be taken into account, but without reducing the savings below $245 million. In the hearing, Mr P Parkinson (for the PTU) was at pains to insist that the agreement not to prejudice the $245 million was not equivalent to guaranteeing those savings against the effects of other measures taken by the PTC which might impact adversely on its finances. This, in my view, is a fair stipulation. Subject to it, however, the statement does imply that savings from the TRA are relevant for wage increases if they exceed $245 million (as at the end of 1995) but not otherwise. Unfortunately, the statement of 24 June has not yielded the early resolution of the disagreements which might have been anticipated.

In the proceedings before me, submissions were made by PTC representatives drawn from various business units, indicating their objectives for agreements affecting their units. Their stance generally was that if specified reforms were implemented, wage increases should be considered. For the purpose of these submissions, nine business units were identified. Subsequently, I was informed that the PTC had served notices of intention to bargain with respect to 24 sections of the Corporation. Such notices have not come to me.

The PTC has pursued a "hard line" in negotiations. It is entitled to do so. Likewise, the unions are entitled to persist in their demands for across - the - board increases; and, having given the prescribed notice, they are entitled to undertake industrial action in support of their claims. The impasse, of itself, does not imply bad faith on either side. I have considered the various "tests" in paragraph 170QK(3)(a) . With one possible exception, I do not think that any party has "failed" them. It may be that the PTC was dilatory in supplying information about the financial effects of the TRA, especially after the statement of 24 June. Apparently, such information is now being supplied (some on a confidential basis).


The Commission's powers to make orders under sub-section 170QK(2) do not require a prior finding that a party has failed to bargain in good faith. Such orders may be made for the purpose of "ensuring that the parties negotiating an agreement . . . do so in good faith". They may also be made for the purpose of "promoting the efficient conduct of negotiations" and for "otherwise facilitating" the making of an agreement. The Commission, in deciding whether to make orders, is not confined to the "tests" in paragraph 170QK(2)(a), and may consider "any other matter". Having regard to the time which has elapsed since the service of the unions' claims, I think that some effort is required to expedite the negotiations. It is inappropriate, in my view, for the PTC at this stage to propose separate agreements as an alternative to negotiating a single agreement. This does not entail an obligation to agree to a uniform wage increase. The PTC may, within the framework of negotiations for a single agreement, pursue non-uniform outcomes. In my opinion, the PTC should within 21 days:

. provide its best estimate of the savings which will be realised by the end of 1995 as a result of the TRA, disregarding the effects of measures taken since the conclusion of the TRA which may have affected the savings realised;

. state whether it will agree to any "across-the-board" wage increases and, if so, of what order and on what conditions (if any); and

. if it contemplates non-uniform increases for business units, limit the number of units to nine and make specific proposals for them.

The unions should acknowledge that, by the statement of 24 June, they are committed to not prejudicing the savings of $245 million arising from the TRA (with the proviso previously noted). I do not now embody these statements of opinion in formal orders. The parties should have the opportunity to comment on the terms of any such orders; and it may be that they will not find them to be necessary.

The unions have asked me to make a recommendation to the PTC about wage increases. Having carefully considered whether I should do this, I have reached the conclusion that such a step would breach the intent of Part VI B of the Act, which encourages bargaining as an alternative to arbitration. This view does not preclude the possibility of negotiating parties agreeing to seek recommendations about issues which divide them. Such recommendations would be an incident of the bargaining process. A recommendation made at the request of one party, however, would tend to displace bargaining and to substitute arbitration for it.

I propose to convene a hearing on 10 October 1994, when parties will inform me of their positions in the light of this decision, have the opportunity to address me about formal orders and advise me of their intentions for furthering the negotiations. This is not intended to deter any party which desires assistance from making contact with my office.



P. Parkinson with T. P Bourke for the Australian Rail, Tram and Bus Industry Union.

G. McConville with J. Donnelly for the Australian Municipal, Administrative, Clerical and Services Union.

E. Quigley with B. Trewhella, W. Cameron, W. Heywood, M. Bennett, G. Dower, P. Blackman, J. Prince, S. Vosti, B. James, G. Polson, R. Johnston, C. Shaw and P. Templer for the Public Transport Corporation.

B. Lewis for the Victorian Trades Hall Council.

M. Georgio for The Association of Professional Engineers and Scientists, Australia.

M. Ball for the Association of Railway Professional Officers of Australia.

D. Vanderhyde for the Automotive, Food, Metals and Engineering Union.

D. Whelan for the Australian Council of Trade Unions.

Hearing details:

1994. Melbourne: August 30; September 6, 13.

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