Holcim (Australia) Pty Ltd v Transport Workers Union of New South Wales o/b LLL Holdings Pty Ltd & Ors

Position of the parties 13In proceedings on 23 April 2012, counsel for Holcim outlined the company's position. It was contended that the TWU's objections to the ballot were an artificial construct and no sound reason existed as to why a ballot should not proceed. Short minutes of order were tendered regarding the holding of a ballot should the Commission determine the matter in Holcim's favour. Counsel submitted that the company had negotiated the Agreement in good faith and had always intended - and had advised the TWU and four carriers accordingly - the Agreement be subject to the approval processes of the Commission. Holcim submitted the TWU and carriers could not have been under a misapprehension about the Agreement being made under the Act as opposed to a common law contract and that if the carriers failed to honour their obligation in that respect, for which the company had provided valuable consideration, it may be open to Holcim to have the Agreement declared void ab initio. The consequence would be that no agreement would exist between Holcim and the four carriers and the company, in those circumstances, would have to consider its options. 14Senior counsel for the TWU and the four carriers outlined their position. It was essentially that: (i) the proposed Agreement was not one capable of being approved by the Commission because of some of its terms and that the Agreement was expressed in language more appropriate to an individual common law contract; (ii) that a number of terms of the Agreement were not permitted by the Act; and (iii) Holcim had failed to observe the requirements of the Act, which identified a number of prerequisites that had to be met before any secret ballot could occur. Accordingly, it would be futile to order a secret ballot.

Relevant legislation 15Section 322 of the Act defines who may enter in to a contract agreement: 322 Agreements concerning contract conditions (1) An association of contract drivers may enter into an agreement with a bailor of a public vehicle, or with an association of employing contractors representing bailors of public vehicles, with respect to the conditions of contracts of bailment made with that bailor or with bailors represented by the association. (2) An association of contract carriers may enter into an agreement with a principal contractor, or with an association of employing contractors, with respect to the conditions of contracts of a specified class made with carriers by that principal contractor or with principal contractors represented by the association. (3) A group of carriers may enter into an agreement with a principal contractor, or with an association of employing contractors, with respect to the conditions of contracts of a specified class made with those carriers by that principal contractor or with principal contractors represented by that association. Those carriers are taken to be one of the parties to the agreement for the purposes of this Part. (4) An agreement under this section is required to be in writing and signed by or on behalf of the parties to it. (4A) An agreement under this section must identify the parties to the agreement and describe the class of contracts to which it relates. In particular, an agreement under subsection (3) must identify each member of the group of carriers that enters into the agreement. (5) An agreement under this section is called a contract agreement. 16Holcim seeks to have the Agreement approved under s 324 of the Act. That section provides: 324 Application for approval of contract agreement (1) Application for approval of a contract agreement may be made by lodging the agreement with the Industrial Registrar in accordance with this Part and the rules of the Commission. (2) At proceedings of the Commission relating to any such application for approval, the following may appear or be represented: (a) any party to the agreement, (b) any association registered under this Chapter if its members or persons eligible to become members are affected by the agreement (but only with leave of the Commission), (c) a State peak council (but only with leave of the Commission), (d) the President of the Anti-Discrimination Board (but only with leave of the Commission). 17Section 325 lays down certain conditions that must be fulfilled before an agreement may be approved: 325 Approval of contract agreement by Commission (1) The Commission is to approve each contract agreement lodged for approval, but only if the Commission is satisfied that: (a) the agreement complies with all relevant statutory requirements (including the requirements of this Part and of the Anti Discrimination Act 1977, and (b) the agreement does not, on balance, provide a net detriment to the drivers or carriers who are to be covered by the agreement when compared with the aggregate package of conditions of engagement under relevant contract determinations that would otherwise apply to the drivers or carriers, and (c) the parties understand the effect of the agreement, and (d) the parties did not enter the agreement under duress. (2) This subsection applies to a contract agreement that applies to contracts of carriage entered into by some but not all of the carriers engaged by the principal contractor or contractors bound by the agreement, unless those carriers comprise a distinct geographical, operational or organisational unit. The Commission is not to approve such a contract agreement if it is satisfied that: (a) the contract agreement fails to cover other carriers engaged by the principal contractor or contractors who would reasonably be expected to be covered, given the nature of the work performed under the contracts to which the agreement applies and the organisational and operational relationships between the carriers bound by the agreement and those other carriers, and (b) it is unfair not to cover the carriers excluded from the contract agreement. (3) The Commission is to follow the principles for approval set under section 33 (Principles for approval of enterprise agreements), with any necessary modifications, when deciding whether to approve a contract agreement, unless satisfied that any departure from those principles would not prejudice the interests of any of the parties to the agreement. 18Section 325A provides for certain special requirements to be met where there is a group of carriers that is party to the contract agreement, which is the case here: 325A Special requirements relating to contract agreements to which groups of carriers are parties (1) A contract agreement to which a group of carriers is a party is not to be approved unless the requirements of this section have been complied with. (2) Before or at the time the principal contractor, or association of principal contractors, first undertakes formal negotiations with a group of carriers for the purposes of a contract agreement, the principal contractor or association is to advise the Industrial Registrar in writing of the following: (a) that a contract agreement is proposed or under negotiation, (b) the contract determinations or contract agreements that then apply to the carriers. (3) The Industrial Registrar is to advise such persons or bodies as are prescribed by the regulations of the proposed contract agreement. (4) The contract agreement must be approved in a secret ballot by not less than 65% of the carriers who enter into the agreement. (5) The Industrial Registrar must, after the contract agreement is lodged for approval, prepare a report for the Commission comparing the conditions of engagement under the agreement and the conditions of engagement that would otherwise apply to the carriers under relevant contract determinations. (6) Section 37 applies to secret ballots under this Part in the same way as it applies to secret ballots under Part 2 of Chapter 2. Section 344 extends to that application of section 37. 19Section 37 of the Act, referred to in s 325A(6), provides: 37 Secret ballots under this Part (1) Except as provided by subsection (2), a secret ballot under this Part must be conducted by a person (other than the employer or a person selected by that employer) on behalf of the employees entitled to vote in the ballot, being a person who meets any other requirement that may be imposed by the regulations or the principles established by the Commission. (2) If, within 14 days next following the holding of such a ballot, the Industrial Registrar receives a written complaint from at least 20% of the persons entitled to vote in the ballot alleging specified irregularities in the conduct of the ballot and requesting that a further secret ballot be conducted by an independent person, the Industrial Registrar may (if of the opinion that such action is justified) arrange with the persons concerned: (a) for the conduct of such a further secret ballot, and (b) for evidence of the result of the further ballot to be supplied to the Industrial Registrar. (3) The Commission may adjourn proceedings for the approval of an enterprise agreement if a request is made for a further ballot. (4) The Industrial Registrar may, in any special case, extend the time for receiving a request for a further ballot. (5) The result of a further ballot is to be disregarded if the Industrial Registrar is not satisfied that it has been conducted in accordance with the Industrial Registrar's directions. 20Section 33 of the Act, referred to in s 325(3), is in the following terms: 33 Principles for approval of enterprise agreements (1) A Full Bench of the Commission is required to set principles to be followed by the Commission in determining whether to approve enterprise agreements. (2) In determining those principles, the Full Bench is to have regard, in particular, to the following: (a) the objects of this Act and the public interest, (b) the relevant criteria for approval imposed by this Part, (c) the need for an appropriate process for approving agreements to be followed by the Commission, (d) the need for an appropriate process for ensuring sufficient information about the effect of the agreement is provided to employees who are to be covered by the agreement, (e) the need for an appropriate negotiating process for the agreement. (3) A Full Bench of the Commission is to review the principles for approval at least once every 3 years. (4) Principles for approval may be set or reviewed on the application of any party that can apply for approval of an enterprise agreement or on the Commission's own initiative. (5) Industrial organisations are entitled to be notified of any proceedings of a Full Bench under this section and to make submissions on the setting or review of the principles for approval. (6) The Industrial Registrar is to publish the principles for approval on the NSW industrial relations website. (7) Principles for approval are to be set and published under this section within 6 months after the commencement of this Act. 21The principles to be followed by the Commission in determining whether to approve enterprise agreements may be found in Re Review of the Principles for Approval of Enterprise Agreements 2002 [2002] NSWIRComm 342; (2002) 121 IR 144. 22The power of the Commission to order a secret ballot is to be found in s 172 of the Act: 172 Power to order secret ballot (1) The Commission may order that a secret ballot be taken of any group of employees in order to find out their opinion about an industrial matter. (2) The Commission may order a secret ballot for the purpose of the exercise of any of its functions, for example, the resolution of industrial disputes, the approval of enterprise agreements and the registration of organisations. (3) The Commission is to have regard to the result of a secret ballot under this section when exercising a function relating to any matter on which persons expressed an opinion in the ballot. (4) A secret ballot may (but need not) be limited to some or all of the members of an industrial organisation of employees. (5) The Commission may order a secret ballot on the Commission's own initiative or on application by: (a) any industrial organisation of employees, being an organisation with members who are affected by the industrial matter, or (b) at least 5% of the members of an industrial organisation of employees or 250 members of that organisation (whichever is the lesser number), or (c) an employer of the employees concerned or an industrial organisation of employers a member of which is such an employer. (6) When the Commission orders that a secret ballot be taken under this section, it must by its order: (a) give directions about the manner in which the secret ballot is to be conducted (including the type of ballot, the question to be put and the persons eligible to vote), and (b) give directions about the person who is to conduct the ballot (whether an industrial organisation of employees, the Industrial Registrar, the Electoral Commissioner or some other person), and (c) give such other directions as the Commission considers necessary to ensure that the ballot is effectively conducted. (7) The expenses incurred in the conduct of a secret ballot under this section are to be borne by the State. (8) This section does not apply to criminal proceedings. 23Section 343(1)(f) of the Act provides that s 172 applies to and for the purposes of Ch 6 which includes ss 306 to 355. See also s 344. 24Clause 33 of the Industrial Relations (General) Regulation 2001 should also be mentioned. That provision is as follows: 33 Notification of proposed contract agreements to which groups of carriers are parties The Industrial Registrar is to advise, pursuant to section 325A (3) of the Act, the following of a proposed contract agreement under which a group of carriers is a party that is notified to the Industrial Registrar: (a) the secretary or chief executive of each State peak council, (b) the secretary or chief executive of any association of contract carriers that is a party to the making of a contract determination, or to a contract agreement, that then applies to the conditions of engagement of those carriers under contracts to which the proposed contract agreement is to apply, (c) the secretary or chief executive of any association of employing contractors that is a party to the making of a contract determination, or to a contract agreement, that then applies to the conditions of engagement of those carriers under contracts to which the proposed contract agreement is to apply (unless the association is to be a party to the proposed contract agreement).

Consideration 25The Commission should preface its consideration of this dispute by indicating a degree of disquiet about it. Holcim is seeking to have a contract agreement approved with four of its carriers on terms that the TWU consider are a "radical departure from the traditional industrial arrangements at Holcim". That, in itself, is unobjectionable, but I am concerned at what might be the unequal bargaining positions of Holcim on the one hand and the four carriers on the other (notwithstanding the TWU's involvement) and how that might have affected the outcome of negotiations. I am also concerned that Holcim is seeking to achieve a new or different standard of industrial arrangements by obtaining an agreement with only four of its 140 carriers when it does not appear, on the material before me, that there is any good reason why there should be differential arrangements, other than some historical happening that did not relate to the present four carriers in any event. 26That having been said, in circumstances where it is alleged a party has not complied with the provisions of the legislation governing the approval of an agreement, the failure to do so will be a consideration for the Commission at the time the agreement is submitted for approval pursuant to s 325 of the Act. In the normal course, the Commission would not see a contract agreement prior to it being filed for the purpose of approval. It is at that stage the Commission would need to satisfy itself the agreement met the requirements of the Act. Thus, in the normal course the Commission would not need to consider whether a proposed agreement met the necessary legislative requirements before it was submitted to a secret ballot. 27In the present proceedings the TWU submitted that certain provisions of Ch 6 of the Act had not been complied with. In those circumstances it was contended the proposed Agreement was not capable of being approved by the Commission and, therefore, it was futile to conduct a secret ballot. 28Matters such as whether the proposed Agreement meets the test in s 325(1)(b) - no net detriment, or in s 325(1)(c) - parties understand the effect of the agreement, or in s 325(1)(d) - no duress, or in s 325(3) - principles for approval of enterprise agreements, or whether the Agreement identifies the parties to the agreement and describes the class of contracts to which it relates (s 322(4A)), are matters that may conveniently be examined when the Commission comes to consider whether to approve the Agreement. In any event, at this stage the Commission has no evidence before it one way or the other whether these requirements have been satisfied and does not know whether it would be futile or not to hold a secret ballot. 29The TWU submitted that when one considered the structure and content of s 325A it is clear that the requirements of sub-ss (2) and (3) must be met before a secret ballot is conducted in accordance with s 325A(6). Sub-section (2) relevantly requires that before or at the time the principal contractor first undertakes formal negotiations with a group of carriers for the purposes of a contract agreement, the principal contractor is to advise the Industrial Registrar in writing of the following: (a) that a contract agreement is proposed or under negotiation, (b) the contract determinations or contract agreements that then apply to the carriers. 30That then allows the Registrar to carry out his obligation under sub-s (3) to advise such persons or bodies as are prescribed by the regulations of the proposed contract agreement. In the present circumstances cl 33 of the Regulation would require the Registrar to notify the secretary or chief executive of each State peak council and the TWU. It is apparent that the TWU has been involved from the outset and it would be artificial to refuse to order a ballot on the grounds the TWU had not been notified in accordance with cl 33. There does not appear to be any need to notify the secretary or chief executive of any association of employing contractors because none appear to be relevant parties. 31By notifying a State peak council the Registrar would enable the council to exercise its right under s 167(3) of the Act to "intervene in any proceedings before the Commission if it establishes that it or any one or more of its members has a sufficient interest in the proceedings." As far as I am aware, the peak councils have not been notified because Holcim has not complied with s 325A(2) of the Act. 32Whilst s 325A(2) requires Holcim to notify the Registrar before or at the time it first undertakes formal negotiations, and that requirement has clearly not been complied with, it seems to me that provided peak councils are notified before any proceedings commence before the Commission in order that they may intervene if they choose to do so, then the purpose of s 325A(2) will be satisfied. Proceedings before the Commission would normally commence once an application for approval had been made under s 325. Proceedings would not normally commence prior to the conduct of a secret ballot. Whilst an application for approval of the Agreement has been filed by Holcim, the proceedings are not at the stage of considering whether the Agreement should be approved. The opportunity for a peak council to intervene if it wishes to do so for the purpose of making submissions on behalf of members with sufficient interest in the proceedings remains open. 33Thus, provided Holcim takes immediate steps to notify the Registrar in accordance with this decision of its failure to comply with s 325A(2) and advises the Registrar of the current state of affairs so that the Registrar may communicate with peak councils, I would be satisfied the intention underlying s 325A(2) had been met. 34The TWU submitted there had been no "formal negotiations with a group of carriers for the purposes of a contract agreement": see s 325A(2). On the information available to the Commission it is apparent that formal negotiations did occur and involved various members of the Commission in providing assistance to the parties through conciliation. Initially, the TWU were clearly opposed to elements of the draft agreement proposed by Holcim and Holcim did make a number of changes to its original proposal. Whilst I understand these changes were not what the TWU or the four carriers wanted, nevertheless, it could not be said there were no negotiations. 35Notwithstanding the TWU's concern the Agreement was accepted by the carriers out of fear that if they did not do so Holcim would no longer engage them, the negotiations culminated in a signed agreement. Whether that Agreement is one that meets the requirement of the Act, such as the no net detriment and no duress tests, and whether the Commission may approve it, is another question yet to be determined. 36Whilst there were formal negotiations, were they for the purposes of a contract agreement? The TWU contended that it was never its intention or the intention of the four carriers to negotiate a contract agreement. The difficulty with that position is that Holcim signalled in October 2011, when it initially put forward a draft agreement, that it "intended to register this draft agreement with the Industrial Relations Commission of New South Wales." In January 2012, after the agreement was signed Holcim stated, "We will proceed immediately to register the new contract with the IRC of NSW. ..." 37Neither the TWU nor the four carriers could have been mistaken about Holcim's intention. Whilst the TWU and the carriers may have wanted common law contracts, it is not evident from any of the material before the Commission in these proceedings that the TWU or the four carriers said to Holcim at any relevant stage during the negotiations that they did not regard the negotiations as being for the purpose of achieving a contract agreement. The carriers signed the Agreement knowing of Holcim's intention to seek to have the Agreement approved by the Commission as a contract agreement. As I have said, questions of duress may be dealt with, if they arise, in the proceedings for approval of the Agreement. 38In the circumstances, the Commission can see no good reason why the secret ballot should not proceed. Orders for the conduct of the ballot are set out below.

Orders 39The Commission makes the following orders:

1. That a secret ballot be conducted in relation to matter No IRC 46 of 2012 - Application by Holcim (Australia) Pty Ltd for Approval of a Contract Agreement.
2. That the secret ballot be conducted as follows: a. Each of the respondents to the proceedings, being LLL Holdings Pty Ltd, Fishers Ghost Roofing Pty Ltd, Blackmack Pty Ltd and TKMC Pty Ltd, be eligible to vote by a person having authority to bind the company. b. Voting will be a secret postal ballot conducted by the Industrial Registrar as returning officer. c. One ballot paper, initialled by the Industrial Registrar, will be sent by registered post to each of the companies eligible to vote on 4 May 2012: i) the ballot shall contain the question at Annexure A of these orders; ii) completed ballot papers are to be returned in an unmarked envelope enclosed in the supplied envelope addressed to: Industrial Registrar Private and Confidential GPO Box 3670 SYDNEY NSW 2001 iii) the date on which the ballot will be closed and on which votes will be counted will be 18 May 2012; iv) the result of the ballot will be determined immediately if all votes are cast before the close of the ballot; v) the question will be taken to have been answered by any marking which indicates selection of either option; vi) the Industrial Registrar shall advise the Commission in writing of the result of the ballot no later than 21 May 2012; included in the written advice shall be the number of votes cast, the number of voters in favour of the question, the number of votes not in favour of the question and the number of votes abstained. 3.Annexure A shall be as follows: Annexure A The carrier to whom this ballot is issued being a carrier who has entered into the agreement that is the subject of proceedings in matter No IRC 46 of 2012 and which has been entitled the "Holcim NSW Concrete Cartage Agreement": О approves*; or О does not approve* of the contract agreement.

• The question will be taken to have been answered by any marking that indicates selection of either option.

4.The Registrar shall act in accordance with orders 1 to 3 inclusive hereof. 5.The parties shall attend the Commission at 9.30 am on 23 May 2012 to receive the result of the secret ballot and any further directions that are deemed necessary by the Commission. 6.Liberty to apply on reasonable notice.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 30 April 2012