When negotiating enterprise agreements parties are only permitted to negotiate certain matters. A non-permitted matter is any matter which falls outside those matters pertaining to the relationship between an employer and employee as set out in s 172(1) Fair Work Act 2009 (Cth) (FWA). Under the FWA the Fair Work Commission (FWC) is compelled to make a protected action ballot order, so that employees may take protected industrial action, if an application is appropriately made and the FWC is satisfied that the parties are, and have been, 'genuinely trying to reach an agreement'.

The question of whether a party, while negotiating for non-permitted matters, is 'genuinely trying to reach an agreement' was raised in Esso Australia Pty Ltd v AMWU, CEPU and AWU [2015] FWCFB 210. Previous FWC decisions on the question failed to provide a clear answer. In this case the Full Bench sought to clarify the confusion.

BACKGROUND

Esso Australia Pty Ltd (Esso) and its upstream oil and gas workforce (the Employees) were covered by four enterprise agreements (the Agreements). Each of the Agreements was due to expire. The AMWU, AWU and CEPU (the Unions) were appointed as bargaining representatives of the Employees. The Unions applied for, and were granted by the Commissioner, a protected action ballot order. Esso appealed the granting of this order on the grounds that the Unions were pursuing a non-permitted matter. Esso argued that the non-permitted matter in this instance was the restriction on Esso's use of contractors (the contractors clause). Subsequent to the initial negotiations the Unions amended the contractors claim and replaced it with a more general claim which was linked to security of employment.

THE FULL BENCH OF THE FAIR WORK COMMISSION

The question before the Full Bench was whether an applicant for a protected action ballot order can be said to be genuinely trying to reach an agreement in circumstances where they are, or have been, pursuing claims which include a claim for a non-permitted matter.

The Full Bench said the test for determining whether an applicant was genuinely trying to reach an agreement should not be "too rigid". It held a range of factors were potentially relevant in determining the question. These included:

  • The subject matter and the timing of the advancement of the claim;
  • The basis upon which the claim is advanced;
  • The significance of the claim in the negotiations;
  • The claimant's belief as to whether the claim is a permitted matter;
  • Whether there is legal clarity about the claim's 'permitted status;
  • Whether the other party has asserted the claim is about a disputed matter; and
  • Whether the claim has been withdrawn and if so, when and in what circumstances.

The Full Bench noted that the "diversity of the factual circumstances and nuances which will be found in different cases means that it is not possible to say that any particular factor or consideration will always be determinative of the result." In saying this it was held that there was no legislative reason to adopt a rule which says that "if an applicant is, or has been, pursuing a substantive claim which is not about a permitted matter it is not genuinely trying to reach an agreement".

Finding in favour of the unions and dismissing Esso's appeal, the Full Bench held that it was clear the contractors clause was a draft proposal and one to which the unions had not adopted too rigid a position. The clause did not feature prominently in the discussions between the parties and at no stage during the negotiations did Esso's representatives express the view that the proposed clause contained non-permitted content. It was noted that once Esso raised concerns with the contractors clause it was withdrawn by the unions.

HOW DOES THIS AFFECT ME?

The Full Bench in Esso Australia Pty Ltd v AMWU, CEPU and AWU clarified the previously conflicting case law on the question as to whether an applicant for a protected action ballot order can be said to be genuinely trying to reach an agreement in circumstances where they are, or have been, pursuing claims which include a claim for a non-permitted matter. In short, applicants are not automatically excluded from seeking from seeking protected ballot orders on the grounds that they were bargaining for non-permitted matters.

As an addendum to this case the Australian Industry Group, the AiG, has called on the Federal Government to amend the FWA to prevent unions taking industrial action when they are bargaining for non-permitted matters.

For a copy of the full decision please click here.