The Fair Work Commission (FWC) has held that, where a person holding a right of entry permit under the Fair Work Act 2009 (Cth) (FW Act) seeks to exercise right of entry to meet with employees in a workplace, the permit holder and the employer must take reasonable steps to try and reach agreement as to the location for the meeting. Only after this has occurred will the permit holder be able to rely upon section 492 of the FW Act, which authorises the permit holder to use the employer’s lunch room (or equivalent) if the parties “cannot agree” on a location for the meeting.

Implications for employers

Employers should be aware that:

  • both they and any permit holder seeking entry are obliged to take steps to reach agreement as to the location for a permit holder’s meetings with employees. It is not sufficient for either party to simply assert a position without further discussion and for the permit holder to then insist upon access to the lunch room. In the present case, Deputy President Gostencnik proposed a list of “reasonable steps” that should be taken by the parties before section 492 would operate to make the lunch room the default location. Those reasonable steps (set out in detail below) are likely to provide a useful framework for all employers and permit holders;
  • permit holders are required to comply with statutory obligations when exercising right of entry, including among other things ensuring they only engage in discussions with employees who wish to participate and who are eligible to be members of the permit holder’s union. A relevant factor in determining the appropriate location for discussions will be the potential impact on employees who fall outside this class. If, for example, the permit holder is unable to take steps to prevent adverse effects on such employees when conducting meetings in the lunch room, this may support an employer request to use an alternative venue; and
  • failure by the permit holder to comply with any of his or her statutory obligations may invalidate the right of entry.

Background: law

Under section 484 of the FW Act, a permit holder may exercise the right of entry for the purposes of (among other things) holding discussions with one or more employees who perform work on the premises; whose industrial interests the permit holder’s organisation is entitled to represent; and who wish to participate in those discussions. Under other sections of the FW Act, a permit holder may also enter for other purposes, such as to investigate a contravention of the FW Act. A permit holder may interview employees as a part of such an entry.

In Australasian Meat Industry Employees' Union v Fair Work Australia [2012] FCAFC 85 (FCAFC Decision), it was held that an employer could refuse a permit holder’s request to meet with employees in the employees’ lunch room, where a suitable alternative location was available.

Effective 1 January 2014, the former Labor Government introduced amendments to the FW Act to override the FCAFC Decision. Section 492 now provides that where a permit holder seeks to exercise right of entry to interview employees or pursue discussions and the permit holder and employer cannot agree on a location for those discussions to take place, the permit holder may conduct the interview or discussion in any room or area where the employee ordinarily takes meal or other breaks and which is provided by the occupier for that purpose. Essentially, where the employer and permit holder cannot agree on the location of discussions, the lunch room is the default location.

Background: facts

Mr Flanagan and Mr Roach were representatives of the Construction, Forestry, Mining and Energy Union (CFMEU). Each held an entry permit under the FW Act (together, the Permit Holders).

Austral Bricks (Vic) Pty Ltd (Austral Bricks) operated a manufacturing plant in Wollert, Victoria (Wollert Plant).

During March 2014, the Permit Holders attended the Wollert Plant on three occasions, for the purposes of holding discussions with certain employees.

On the first two occasions on 14 and 17 March 2014, the Permit Holders were permitted to enter and use a lunch room, which was available for use by employees of Austral Bricks to have their meal and other breaks, for the purpose of holding discussions. Evidence was given at hearing that during entry on 17 March 2014, the Permit Holders did not identify themselves to all employees or ask whether they wished to participate in discussions. At least one employee present did not wish to participate. The Permit Holders took no steps to ensure that they did not affect those who did not wish to participate (such as moderating the volume of discussion, confining themselves to a section of the relevant room only or even seeking an alternative room). It was also possible that maintenance workers who were ineligible to join the CFMEU may have been present.

On the third occasion, a representative of Austral Bricks told the Permit Holders that the lunch room would not be available and that instead a different meeting room would be available for that purpose. The Permit Holders did not agree to use the alternative room and left the Wollert Plant. They did not enter into further discussion or assert that they were entitled to use the lunch room because agreement could not be reached.

Subsequently, on 27 March 2014 the CFMEU wrote to Austral Bricks stating that as there was no agreement as to the room to be used, the lunch room was the default room. In a written response on 31 March 2014, Austral Bricks confirmed that it would make a room available, as it had done in the past, and sought clarification as to why the proposed alternative room was unsuitable.

The CFMEU made an application to the FWC on 3 April 2014, seeking resolution of the question of where meetings could be held.

Austral Bricks made an application to the FWC on 9 May 2013. Austral Bricks requested that the FWC clarify the extent to which the Permit Holders:

  • were required to ascertain whether the employees with whom discussions are to held were employees who fall within the description in section 484 of the FW Act; and
  • must endeavour to reach an agreement with Austral Bricks about the room or area in which discussions are to be held before it can be said that the parties cannot agree on the room or area to which to hold discussions.

Following the making of the applications, on two occasions in May 2014, Mr Flanagan was refused access to the lunch room at the Wollert Plant to conduct discussions.

Decision

Deputy President Gostencnik heard the applications together and, for the reasons outlined below, ultimately rejected the orders sought by both parties.

Was the conduct of the Permit Holders during the discussions with employees authorised under section 484 of the FW Act?

Deputy President Gostencnik held that:

  • the right to enter pursuant to section 484 is not an unfettered right. Permit holders must comply with the statutory constraints. Among other things, permit holders who enter premises for the purpose of holding discussions with employees do not have a right to hold discussions with employees generally. They are obliged to take reasonable steps to ascertain whether a particular employee or group of employees falls within the prescribed class of employee detailed in section 484 of the FW Act, including ascertaining whether the employees are persons whose industrial interests the permit holder is entitled to represent and whether they wish to engage in those discussions; and
  • in the present case, the evidence indicated that on 17 March 2014 the Permit Holders had not taken steps to ascertain whether employees in the lunch room at which they held discussions fell within the class of employee with whom discussions were permitted. Accordingly, the discussion on 17 March 2014 was not authorised within the meaning of section 484.

In the present case, were the parties unable to agree on a location within the meaning of section 492, so as to activate the default lunch room provision?

Deputy President Gostencnik held that:

  • there is a material difference between a state of affairs where the parties are not in agreement and ones in which the parties cannot agree. The latter state cannot be reached unless the parties have first triedto reach an agreement. Generally, this will involve more than merely attending at a discussion with the other party and proposing a particular venue;
  • in the present case, both parties had “adopted a fixed view about an appropriate location at which discussions with employees may be held, without regard to the point of view of the other party or the reason for that party holding that view”. The Permit Holders wished to use the lunch room as they had used it in the past and did not properly consider the alternative room. Austral Bricks made no effort to reach agreement other than proposing the alternative room. There was no discussion, for example, of whether another room entirely could be used, or of steps that the Permit Holders could take to ensure that discussions in the lunch room took place in an appropriate manner. Accordingly, there was no basis to conclude that the Permit Holders and Austral Bricks could not agree on a location at which discussions be held; and
  • section 492 does not operate to lock in a default venue “in perpetuity”. The occasion for seeking agreement about a location arises each time a permit holder enters under section 484 (although the parties were free to reach an ongoing agreement if they wished).

Resolution

Deputy President Gostencnik made a recommendation regarding the reasonable steps to be taken by the parties to try to reach agreement. If agreement could not be reached after following those steps, the lunch room would be the default location. The reasonable steps were:

  • proposing a room or area at which discussions may be held and giving reasons for proposing that location;
  • giving the other party an opportunity to consider the proposed location and respond;
  • considering whether discussions can take place in the proposed location without interfering in an employee’s right not to participate or their capacity to utilise the location in accordance with its usual purpose; and
  • remaining open to suggestions from the other party regarding alternative locations.

Construction, Forestry, Mining and Energy Union v Austral Bricks (Vic) Pty Ltd [2014] FWC 5407