In a recent decision,1 a Full Bench of the Fair Work Commission (Commission) found that three employee associations were genuinely trying to reach agreement, and were therefore entitled to a protected action ballot order (PABO). This was despite the fact that they were pursuing claims related to a non-permitted matter.

Background

Esso Australia Pty Ltd was bargaining with the AMU, CEPU and AWU (the Unions) in respect of four enterprise agreements, each with nominal expiry dates of 1 October 2014 (collectively, the Agreements).

On 10 November 2014, the Unions each made PABO applications. Esso argued that the Commission should not make the PABOs, as the Unions had been seeking the insertion of a clause which was not a permitted matter under the Fair Work Act 2009 (Cth) (FW Act). This clause was a provision which restricted or qualified Esso’s right to use independent contractors (Draft Contractors Clause).

Esso argued that this meant that the Unions were not genuinely trying to reach agreement and, as such, the Commission was precluded by the FW Act from making the PABOs.

During the hearing before Commissioner Cribb, the Unions withdrew the Draft Contractors Clause but reserved their right to put forward an alternative clause at a later time relating to the security of employment of Esso employees.

At first instance, Commissioner Cribb found that the Unions were genuinely trying to reach agreement with Esso and she therefore made the PABOs sought by the Unions.

In making this finding, the Commissioner noted that, in light of the Unions’ withdrawal of the Draft Contractors Clause, she was not satisfied that they were necessarily continuing to pursue non-permitted matters. According to Commissioner Cribb, this was because a re-worded claim by the Unions would be valid if it had a sufficient connection to the job security of employees and the terms and conditions of contractors performing similar works.

Esso appealed, arguing amongst other things, that irrespective of whether or not  the Unions were continuing to pursue a non-permitted matter, the fact that they had been pursuing a substantive claim which was not about a permitted matter meant that they were not genuinely trying to reach an agreement within the meaning of the FW Act.

Decision

The Full Bench ultimately upheld the Commissioner’s decision and dismissed Esso’s appeal.

The Full Bench said that whether a party has been, and is, genuinely trying to reach an agreement is a question to be decided having regard to all of the facts and circumstances of the particular case. The fact that a union is bargaining for a non-permitted matter - while relevant to the overall assessment - will not, of itself, lead to a finding that a union is not genuinely trying to reach agreement.

The Full Bench said that a range of factors relating to the alleged ‘non-permitted matter’ were potentially relevant, including the manner in which the claim has been advanced, its significance in the union’s overall bargaining position and whether the employer had put a union on notice of its belief that the claim pertained to a non- permitted matter.

In its analysis of the approach taken by the parties to the Draft Contractors Clause during the enterprise bargaining, the Full Bench noted the following:

  • It was satisfactorily clear that the Draft Contractors Clause was a draft proposal which the Unions had not adopted a rigid position in relation to. The Draft Contractors clause was not part of the Unions’ initial claim.
  • The Draft Contractors Clause did not feature prominently in discussions during bargaining meetings.
  • At no stage during the negotiations did Esso’s representatives express the view to the Unions that the Draft Contractors Clause contained non-permitted content.
  • When Esso raised at the initial hearing that the Draft Contractors Clause was not a permitted matter, the clause was withdrawn by the Unions before the end of that hearing.

On the basis of the above, the Full Bench upheld Commissioner Cribb’s decision that the Unions were genuinely trying to reach agreement.

Bottom line for employers

  • It is not difficult for a union bargaining representative to show that it is “genuinely trying to reach agreement” with the employer for the purposes of the FW Act.
  • In determining whether a party is genuinely trying to reach agreement, the Commission will consider all of the relevant facts and circumstances for that particular matter.
  • The fact that a party is bargaining for a non-permitted matter, will not in itself, lead to a finding that the party is not genuinely trying to reach agreement.
  • Where an employer believes that a union is seeking the insertion of non-permitted content into an enterprise agreement, the employer should put the union on notice about this and ask for the union’s response soon after the union raises the insertion of non-permitted content.