Fair Work Australia|2010-08-26|Before: Mr J

National Union of Workers v SKF Australia Pty Ltd [2010] FWA 6557 (26 August 2010)

s.437 - Application for a protected action ballot order

[1] These reasons for decision relate to an application by the National Union of Workers (the NUW) for a protected action ballot order pursuant to s.437 of the Fair Work Act 2009 (the Act) in relation to employees of SKF Australia Pty Ltd (SKF). The application was filed in Fair Work Australia on 17 August 2010. The application was decided on 23 August 2010 with reasons to follow which are set out below. An order under s.443 of the Act was issued on 24 August 2010.

[2] On 17 August 2010 the application was listed for Hearing on 18 August 2010. At the Hearing on 18 August 2010 Mr D Mujkic and Mr J Cartwright appeared for the NUW. Mr N Harrington of counsel, and Ms R Newman, a solicitor, appeared for SKF.

[3] The circumstances in which Fair Work Australia must make a protected action ballot order are contained in s.443 of the Act and are set out below:

"443 When FWA must make a protected action ballot order

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

[4] During the Hearing on 18 August 2010 SKF opposed the application for a protected action ballot order on the ground that the NUW was not genuinely trying to reach agreement in accordance with s.443(1)(b) of the Act. SKF did not contest the validity of the application having been made under s.437 of the Act.

[5] SKF submitted that there was a gap of five weeks from 13 July 2010 to 17 August 2010, between a communication in relation to negotiations between the parties for an enterprise agreement from SKF to the NUW. In this time SKF submit the NUW did not comply with the good faith bargaining provisions of the Act. SKF submit that because of this 'gap' in communication, the NUW cannot discharge the onus to satisfy the requirement of s.443(1)(b) of the Act.

[6] The Hearing was adjourned and recommenced on Monday 23 August 2010. Between the dates of the first and second Hearings the NUW, on 19 August 2010, responded in writing to the letter of SKF of 13 July 2010. At the second Hearing on 23 August 2010 SKF submitted that not only was the reply inadequate, but that the reply did not alter the fact of the 5 week gap of silence between the issuance of their letter of 13 July 2010 and the filing of the application.

[7] SKF submitted that in these circumstances, it could not be said that the statutory requirements of s.443 of the Act have been met because an order pursuant to s.443 of the Act must only be issued if the NUW "has been and is genuinely trying to reach an agreement with the employer of the employees to be balloted".

[8] The NUW has provided information concerning the history of the relevant bargaining between them and SKF for a proposed enterprise Agreement. The NUW stated at the first Hearing that the NUW had communicated with SKF concerning the letter of 13 July 2010 by telephone but did not deny that no written response to the letter had been made prior to the filing of the application for the protected action ballot order.

[9] SKF submitted that the communication by telephone referred to by the NUW did not comply with the requirements of s.228 of the Act because it merely constituted an expression of intention to seek a protected action ballot order and a willingness to meet for negotiations rather than a considered and reasoned response to the letter of 13 July 2010.

[10] For the purposes of my decision I note that the subject of industrial action and protected action ballot orders, are dealt with in Chapter 3, Part 3-3 of the Act. In my view, the provisions of Part 3-3 is a code complete unto itself in relation to industrial action and should only be otherwise construed if it cannot be comfortably applied without reference to other parts of the Act dealing with different subjects which the legislature has codified separately.

[11] The concept of "genuinely trying to reach agreement" is exclusively formulated in Part 3-3-Industrial action, and only in ss.412, 413 and 443 of the Act. The statutory requirement for a bargaining agent to be genuinely trying to reach an agreement in various circumstances is a unique feature of the industrial action provisions of the Act. The concept therefore, in my view, is otherwise unconditional. It is a jurisdictional threshold provision for compliance by Fair Work Australia with a mandatory statutory direction to make an order for the conduct of a ballot. The words "genuinely trying to reach agreement" should be given their ordinary natural meaning in this context.

[12] In Total Marine Services Pty Ltd v Maritime Union of Australia1 (Total Marine), the Full Bench of Fair Work Australia determined that while the conduct of an applicant for a protected action ballot order in relation to good faith bargaining is a relevant consideration for the purpose of s.443(1)(b) of the Act, it is not appropriate to equate the concepts of "good faith bargaining" and "genuinely trying to reach agreement".

[13] The views of the Full Bench accord with the Fair Work Bill 2008 Explanatory Memorandum at paragraph 1661 which is set out below:

"1664. Clause 413 contains the common requirements that an employee, employer or their bargaining representatives must meet in order for industrial action to be considered protected industrial action for a proposed enterprise agreement. These common requirements are additional to any other requirements that must be met under clauses 409, 410 or 411, and they are that:

• The industrial action cannot relate to a proposed greenfields agreement or multi-enterprise agreement (subclause 413(2)).

• Specified persons organising or engaging in industrial action must be genuinely trying to reach an agreement (subclause 413(3)). The question whether a person is genuinely trying to reach an agreement requires a subjective assessment of the actual intention of the person and the overall circumstances. It is not limited to an assessment of whether the person is complying with the good faith bargaining requirements.

• The notice requirements set out in clause 414 must be met (subclause 413(4)).

• Specified persons organising or engaging in industrial action must not have contravened any orders that apply to them relating to the industrial action, the proposed enterprise agreement or a matter that arose during bargaining for the proposed enterprise agreement (subclause 413(5)). Examples of orders are bargaining orders made by FWA in response to a failure to meet the good faith bargaining requirements.

• Industrial action must not contravene clause 417 (i.e., it must not be organised or engaged in before the nominal expiry date specified in an enterprise agreement)."

[14] It is not appropriate to formulate or apply rigid rules concerning what negotiating history is necessary to be satisfied that an applicant for a protected action ballot order is genuinely trying to reach agreement. However, one would normally expect that the demands of the applicant had been communicated to the employer and a response to any counter demands made by an employer. Although, judgment would be required in relation to the second aspect in all the circumstances. Counter demands, their nature, substance, timing, frequency and the actions of the applicant in relation thereto, all in the relevant context, can be balanced for the purposes of the requisite satisfaction. This will require a global and discretionary judgment of the factual circumstances of any history of negotiations on the basis of the material submitted by the applicant.

[15] Fortunately, in this case the issue is a narrow one and a question of the required judgment of the implications of the behaviour of the applicant between 13 July 2010 and 17 August 2010 and between 18 and 23 August 2010 in all the circumstances. There is no suggestion that the applicant has not articulated its demands, met and conferred with SKF and sought to advance negotiations. There is also evidenced in the materials and submissions an eagerness expressed on the part of the NUW to progress negotiations over a substantial period of time. In fact, it can be reasonably said that the NUW is impatient to reach an agreement with SKF.

[16] The NUW has expressed frustration at what it alleges is stalling tactics by SKF. It is not necessary for me to engage with SKF's bargaining conduct or its intention or lack thereof to reach agreement. Those issues are provided for under different provisions of the Act. I am here concerned exclusively with what the NUW is trying to do, its attempts to do so and its genuineness in those attempts.

[17] Mr Harrington submitted that the applicant must have at all times been complying with the good faith bargaining requirements of s.228 of the Act at the time the application was made for the jurisdictional basis of the Order sought to arise under s.443 of the Act.

[18] Mr Harrington further submitted that the response of the NUW dated 19 August 2010, even if adequate to comply with the relevant provisions of s.228 of that Act, as of that date, was effectively irrelevant and the gap between the communication of 13 July 2010 from SKF to the NUW and the filing of the application could not be cured. He submitted that the Tribunal could not be satisfied that the NUW "has been" genuinely trying to reach agreement because the gap between 13 July 2010 and either 17 or 19 August 2010 represents a time in the negotiations which have occurred between SKF and the NUW during which the NUW was required by ss.228(c) and (d) to either respond to proposals made for the Agreement in a timely manner, give genuine consideration to the proposals of SKF for the agreement and give reasons for the responses to those proposals. Mr Harrington submitted that the NUW failed to do these things in relation to SKF's letter of 13 July 2010 and had not done so at the time the application in this matter was made. Accordingly, it is submitted the Tribunal should conclude that the NUW has not complied with the relevant good faith bargaining requirements and thus has not been genuinely trying to reach agreement.

[19] To adopt this submission is fraught with difficulty. It seems to me that the submission somewhat over determines the effect of any lapse in a bargaining agent's good faith bargaining conduct under s.228 of the Act on the requirements of s.443 of the Act in relation to a different statutory concept of "genuinely trying to reach agreement". In my view, a lapse in good faith bargaining conduct does not necessarily mean that a bargaining agent is not genuinely trying to reach agreement. If that were the case it would seem that any such lapse at any time during bargaining would make it impossible for the Tribunal to be satisfied that a bargaining agent "has been" genuinely trying to reach agreement. If adopted, the consequence is that, notwithstanding that at the time of an application or at the time an application is determined a bargaining agent is complying with the good faith bargaining requirements of s.228 of the Act, consideration of the past lapse, applied in the manner submitted, would mean that there could never be a protected action ballot order in relation to the bargaining for the proposed enterprise agreement.

[20] In my view, comprehended fully, at its highest, the submission is that an employee bargaining agent cannot have been genuinely trying to reach agreement unless at all material times, at every moment during negotiations for an agreement, their conduct under s.228 of the Act has been perfect.

[21] In my view, the words "has been and is genuinely trying to reach agreement", should be given their ordinary everyday meaning and should not be equated with the terms of a statutory concept and prescription of the requirements of "bargaining in good faith", in the manner which I think Mr Harrington's submission effectively does. The question here is whether what the NUW was trying to do as an employee bargaining agent was to reach an agreement in relation to the terms of a proposed enterprise agreement between SKF and its employees and whether it was genuine in this. On what is before me it was doing nothing else. I see no lack of intent to reach agreement. I judge from what is before me that this was the NUW's goal and that it was making genuine attempts over a period of some time to achieve that goal.

[22] I should also address another aspect of Mr Harrington's submissions concerning the approach to be taken to the requirements of s.443(1)(b) of the Act. It was submitted that the word "is" when used as part of the phrase "has been and is genuinely trying to reach agreement" should be understood to mean "is at the time an application is made", rather than at the time the satisfaction required by s.443(1)(b) of the Act is to be arrived at by the Tribunal. I gather that this submission disqualifies the letter of the NUW of 19 August 2010 as a relevant consideration for the purposes of the requisite satisfaction.

[23] In my view, an applicant for a protected action ballot order must be genuinely trying to reach agreement with the relevant employer at the time an application for an order is made and at the time the Tribunal determines whether or not the applicant is genuinely trying to reach agreement. An applicant for a protected action ballot order cannot rest on their laurels as at the time the application for the order is made and must, up until the Tribunal is required to determine the application, continue to be genuinely trying to reach agreement. In my view, the application must be determined taking into account the pre-application history of the applicant's attempts to reach agreement and any relevant consideration between the time the application is made and the determination of the application. This is required in order that the Tribunal can be satisfied, at the point of determination that the applicant "has been" and "is" genuinely trying to reach agreement.

[24] I find that, notwithstanding the lack of response complained of by SKF in relation to its letter of 13 July 2010 until 19 August 2010, which I take into account as a relevant consideration, the NUW has been and is genuinely trying to reach agreement with SKF in relation to a proposed enterprise agreement. I arrive at this conclusion having regard to all the circumstances of the negotiations and communications between the NUW and SKF including the alleged deficiencies in the good faith bargaining conduct of the NUW between the letter of SKF dated 13 July 2010 and the date of filing of the application.

[25] I am satisfied that; notwithstanding the alleged imperfection of good faith bargaining relied upon by SKF, even if properly characterised as a failure or lapse of good faith bargaining by the NUW under the provisions of s.228 of the Act, taking all the relevant circumstances into account, both as at the time the application was made and up and until 23 August 2010, the NUW has been and was genuinely trying to reach agreement with SKF.

Mr Nick Harrington, of counsel, for SKF Australia Pty Ltd

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National Union of Workers v SKF Australia Pty Ltd [2010] FWA 6557

At a glance

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Judgment (42 paragraphs)

National Union of Workers v SKF Australia Pty Ltd [2010] FWA 6557 (26 August 2010)

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Legislation Cited (1)