[2023] FWC 1337

Fair Work Act 2009

s.437 - Application for a protected action ballot order

"Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union" known as the Australian Manufacturing Workers' Union (AMWU)

Otis Elevator Company Pty Limited T/A Otis Elevator Company

Proposed protected action ballot of employees of Otis Elevator Company Pty Limited Trading as Otis Elevator Company.

[1] This is an application by the "Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union" known as the Australian Manufacturing Workers' Union (AMWU) made under s.437 of the Fair Work Act 2009 (Act) for a protected action ballot order (PABO) in relation to certain employees of Otis Elevator Company Pty Limited (Otis). The application was lodged on 6 June 2023.

[2] This application is amongst the first to be considered by the Commission following the commencement of a number of bargaining changes brought about by the Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022 (Amending Act). These changes commenced on 6 June 2023 and amongst other matters, impact upon the making of PABOs and the approval of protected action ballot agents who might conduct the ballot should an order be made.

• [3] For context, I observe that a related application involving another bargaining representative[1] has also been made, but this was lodged prior to 6 June 2023 and has been dealt with under the Act as it stood at that time. The related application involves the same bargaining process and proposed enterprise agreement with Otis. Further, the proposed agreement in each case is not a greenfields agreement, or a multi-enterprise agreement that is a cooperative workplace agreement, and this application is permitted.[2]

• [4] There has also been a notification time for the proposed agreement, the present enterprise agreement has passed its nominal expiry date, and the application and accompanying documentation is in order. The application and proposed order have also been provided by the AMWU to Otis and the proposed ballot agent. This meets various requirements[3] for the making of a PABO.

[5] On 6 June 2023, the Commission was advised that Otis objected to the application and a hearing was conducted on 7 June 2023 to deal with that objection and some other aspects that arise from the Amending Act.

• [6] Having heard the matter, I advised the parties that an Order would be issued largely in terms as sought by the applicant. This has been done.[4] My reasons for so doing are set out herein.

2. The Objection advanced by Otis - whether the AMWU has been and is genuinely trying to reach an agreement

[7] Amongst the approval requirements for a PABO, in this case the Commission must be satisfied that AMWU has been, and is, genuinely trying to reach an agreement with Otis. This arises from s.443 of the Act which relevantly provides:

"443 When the FWC must make a protected action ballot order

(1) The 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) the 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) The 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)."

[8] The Commission's power to make a protected action ballot order under s.443 of the FW Act is not discretionary in nature. Section 443(1) imposes a duty on the Commission to make an order if two conditions have been met: first (in paragraph (a)), that an application for such an order has been made under s.437 and, second (in paragraph (b)), that the Commission is satisfied that each applicant for an order has been, and is, genuinely trying to reach an agreement with the employer of the employees to be balloted. If these conditions are not met, the Commission is prohibited from making an order: s.443(2). It is common ground that the first requirement has been met in this matter.

[9] Otis contended that the AMWU has failed to give genuine consideration to the proposals of other bargaining representatives for the agreement, and giving reasons for the bargaining representative's responses to those proposals. This arises from the good faith bargaining requirements of s.228(d) of the Act.

• There have been insufficient meetings for 'genuine consideration' of other proposals;

• It only made an offer to employees in the bargaining meeting on Friday 26 May 2023, so insufficient time for 'genuine consideration' has been given, prior to the PABO application being filed;

• This offer addressed all claim items of both Otis and the employees. In this offer and the following meeting on 2 June 2023, Otis confirmed that it was continuing to review Superannuation and the proposed Income Protection Policy; and

• In the meeting on 2 June 2023, there was a clear misunderstanding of some of the offer that Otis will address, which may affect whether the AMWU has given 'genuine consideration'.

[11] The good faith bargaining requirements established by the Act are set out below:

"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.

Note: See also section 255A (limitations relating to greenfields agreements).

(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."

[12] In relation to the prerequisites of s.443(1) of the Act, the s.228 requirements do set some of the context for the bargaining regime in which the assessment of the AMWU's intentions is made. However, they are not a substitute for the necessity that a bargaining representative has been, and is, genuinely trying to reach an agreement with the employer of the employees to be balloted.

[13] There are no rigid rules regarding the required point of negotiations that must be reached before this requirement is met. All the relevant circumstances must be assessed to establish whether this test has been met.[5]

[14] The AMWU contended that there have been 6 meetings conducted with Otis and the other bargaining representatives in the bargaining process and it has been willing to discuss its claims with the employer and has considered any counteroffer or proposal that Otis has made. Further, it has conducted, along with the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU), 2 mass meetings that have considered and rejected offers from Otis that did not address certain key outstanding claims. The AMWU also confirmed that it continued to seek an agreement with Otis through the bargaining process. The basis of these propositions was confirmed in a declaration provided by Mr Steven Isberg, Organiser with the AMWU. It is also common ground that further bargaining is contemplated where Otis's most recent proposals will be further discussed and considered by the 2 Unions acting as bargaining representatives.

[15] This provides a sound basis to demonstrate that the AMWU has been and is genuinely trying to reach an agreement with Otis.

[16] The proposition advanced by Otis also includes the notion that the PABO application is unnecessary at this juncture. Even if this was the case, this would not of itself mean that the AMWU was not genuinely trying to reach an agreement.

[17] On the basis of the material before me, I was satisfied that the AMWU has been, and is, genuinely trying to reach an agreement with Otis. This meets the requirements of s.443(1)(b) of the Act.

[18] Section 444 of the Act now relevantly provides as follows:

(1A) The FWC must, in accordance with subsections (1B) to (1D) of this section, decide the person or entity that is to be the protected action ballot agent for the protected action ballot.

(1B) The person or entity must be the person or entity specified in the application for the protected action ballot order as the person or entity the applicant wishes to be the protected action ballot agent, unless:

(a) the person or entity specified in the application does not meet the requirements of subsection (1C) (unless subsection (1D) applies); or

(b) the FWC is satisfied that there are exceptional circumstances that justify another person or entity being the protected action ballot agent.

(1C) The person or entity must be an eligible protected action ballot agent.

(1D) Subsection (1C) does not apply in relation to a person if the FWC is satisfied that:

(a) there are exceptional circumstances that justify the ballot not being conducted by an eligible protected action ballot agent; and

(b) the person is a fit and proper person to conduct the ballot; and

(c) any other requirements prescribed by the regulations are met.

Note: Other than the Australian Electoral Commission, an entity that is not a person cannot be the protected action ballot agent for a protected action ballot."

[19] There are presently no eligible protected action ballot agents approved by the Commission beyond the Australian Electoral Commission (AEC). The AMWU propose that Democratic Outcomes Pty Ltd T/A CiVS (CiVS) be the ballot agent and, in effect, rely upon the exceptional circumstances contemplated in s.444(1D)(a). CiVS has agreed to be the ballot agent, and this has been confirmed in evidence that is before the Commission.

• [20] The phrase 'exceptional circumstances' is not defined under s.444(1D)(a) or in any other provision of the Act. In R v Kelly[6] (Kelly), Lord Bingham of Cornhill CJ of the English Court of Appeal noted that exceptional circumstances are those that form an exception, which are out of the ordinary course, unusual, special or uncommon.[7] His Lordship further noted that the circumstances cannot be those that are regularly or normally encounter.[8]

[21] Considering the above, my view is that the test for whether exceptional circumstances exist is whether the circumstances are such that they are out of the normal course of events, unusual, uncommon or extraordinary. It is open to conclude that the recency of the amendments to the protected action ballot agent provisions of the Act are exceptional circumstances. The recency of these changes, and the fact that the scheme of the Act contemplates that there will be a choice of eligible ballot agents, are unusual and are not something that have occurred before, making it uncommon.

• [22] Importantly, if it is found that exceptional circumstances do exist, those circumstances must justify the FWC granting an order for a non-eligible person to act as the protected action ballot agent. This arises from the language of s.444(1D)(a) and calls for consideration of the purpose of the relevant provision.[9]

[23] Section 444 of the Act aims to protect the interests of the employees participating in the ballot and those of the employer involved. Further, there is a statutory imperative arising from the scheme of the Act and the associated regulations that any ballot that might authorise the taking of industrial action be conducted in a proper, democratic, prompt and robust manner by agents that are fit and proper persons to undertake that task.

[24] Accordingly, the exceptional circumstances that might justify why the FWC should appoint an agent which is not an eligible protection action ballot agent should be assessed in that context.

[25] I have found that exceptional circumstances do arise associated with the recency of the new provisions. However, whilst each case must be assessed on its own merits, I would not necessarily consider that by itself, the absence of eligible protected action ballot agents beyond the AEC at this point would constitute exceptional circumstances warranting the exercise of the discretion. However, in this case, the proposed ballot agent is already conducting a ballot for another bargaining representative as part of the same bargaining process. Further, it would be problematic if significantly different processes and timeframes were adopted for the related PABOs. I have also taken into account that Otis took no issue with the approval of the proposed ballot agent in all of the circumstances, and that the proposed agent can undertake the ballot in a prompt manner. On balance, I am satisfied that there are exceptional circumstances that justify the approval of the non-eligible ballot agent proposed in this matter.

[26] The proposed protected action ballot agent must also meet the requirements of s.444(1D)((b) and (c) of the Act. This involves an assessment of whether the proposed protected action ballot agent is a fit and proper person to conduct the ballot and whether they also meet the requirements established by the regulations.

• [27] As to fit and proper person, the AMWU has provided a Statutory Declaration of Mr Mike Michael, Managing Director of CiVS. I observe that Mr Michael and CiVS have previously been found by the Commission to be a fit and proper person to conduct a protected action ballot based upon Mr Michael's declared education, experience and attributes.[10] The material now before the Commission includes confirmation of extensive ballot and other professional experience and the absence of criminal convictions of any kind within the business.

[28] The Fair Work Regulations 2009[11] now relevantly provide in reg 3.11 as follows:

"(1) For the purposes of paragraph 444(1D)(c) of the Act, this regulation prescribes requirements that the FWC must be satisfied have been met before a person becomes the protected action ballot agent for a protected action ballot.

Note: The person must also be a fit and proper person to conduct a protected action ballot.

(2) The person must be capable of ensuring the secrecy and security of votes cast in the ballot.

(3) The person must be capable of ensuring that the ballot will be fair and democratic.

(4) The person must be capable of conducting the ballot expeditiously.

(5) The person must have agreed to be a protected action ballot agent.

(6) The person must be bound to comply with the Privacy Act 1988 in respect to the handling of information relating to the protected action ballot.

(7) If the person is an industrial association or a body corporate, the FWC must be satisfied that:

(a) each individual who will carry out the functions of the protected action ballot agent for the industrial association or body corporate is a fit and proper person to conduct the ballot; and

(b) the requirements in subregulations (2) to (6) are met for the individual."

[29] The evidence provided on behalf of the proposed ballot agent also confirms to my satisfaction compliance with all of these requirements. This includes details about the nature of the information and other systems to be used for the ballot, compliance with the Privacy Act and related principles, and steps that will be taken to ensure that the ballot is conducted fairly, democratically, and expeditiously by fit and proper individuals.

[30] I have approved CiVS to act as the protected action ballot agent in this matter under s.444(1D) of the Act.

[31] No independent advisor for the ballot was proposed or appointed.

[32] On the basis of the material before me, I was also satisfied that all of the requirements for the issuing of the PABO in this matter were met. Under s.443 of the Act, the Commission was then required to issue the PABO.

• [33] The Commission is now obliged to conduct a compulsory conciliation conference under s.448A of the Act involving all bargaining representatives for the proposed enterprise agreement. I observe that this will also include the CEPU.[12] This conference must be conducted during the ballot period, which has been set at 15 working days from the commencement date of the PABO (7 June 2023). The ballot period has been set having regard to the implications of this requirement and the need to ensure that all bargaining representatives are given proper notice of the conference. An Order will be issued requiring attendance at the conference, and it is likely that Directions will also be issued to ensure that the parties attend the conference ready to conduct meaningful negotiations.

[34] An order has been separately issued in PR762851.

[1] B2023/528 involving the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia.

[5] Total Marine Services Pty Ltd v Maritime Union of Australia [2009] FWAFB 368 (Watson VP, Hamberger SDP, Roberts C), Esso Australia Pty Ltd v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union known as the Australian Manufacturing Workers' Union and Ors [2015] FWCFB 210 (Ross J, Hatcher VP, Simpson C) at 34-35, 57-59.

[6] [1999] UKHL 4; [2000] 1 QB 198.

[8] Ibid. Although in a different statutory context, VP Lawler in CEPU v Australian Postal Corporation [2007] AIRC 848; (2007) 167 IR 4 held that the meaning adopted in Kelly was applicable to section 463(5) of the former Workplace Relations Act 1996 (equivalent to s 443(5) of the current Act). This approach has also been widely adopted by the Commission and its predecessors.

[9] CEPU v Australian Postal Corporation [2007] AIRC 848; (2007) 167 IR 4 at [11].

[10] See amongst many examples The Australian Workers' Union v Jadestone Energy (Australia) Pty Ltd [2021] FWC 227.

[11] As amended by the Fair Work and Other Legislation Amendment (Secure Jobs, Better Pay) Regulations 2023, made on 25 May 2023.

[12] The Commission has been advised that there are no other bargaining representatives for the proposed agreement.

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