[2011] FWA 6956 |
|
DECISION |
Fair Work Act 2009
s.236 - Application for a majority support determination
Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union known as the Australian Manufacturing Workers’ Union (AMWU)
v
Christie Tea Pty Ltd
(B2011/3380)
COMMISSIONER HAMPTON |
ADELAIDE, 13 OCTOBER 2011 |
Majority support determination - whether employer not yet agreed to bargain - employee petition - meaning and explanation of petition in issue - whether evidence sufficient to demonstrate that a majority of eligible employees want to bargain with the employer - whether reasonable in all of the circumstances that a determination be issued - determination made.
BACKGROUND
[1] This matter concerns an application lodged by the Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union known as the Australian Manufacturing Workers’ Union (the AMWU or the union) for a majority support determination to be issued pursuant to s.237 of the Fair Work Act 2009 (the Act). The application has been made in relation to employees of Christie Tea Pty Ltd (Christie Tea or the employer) who are presently covered by the Food, Beverage and Tobacco Manufacturing Award 2010 (the modern award).
[2] Some of the background to this matter concerns a dispute that has been dealt with by Fair Work Australia in the context of a difference of view between the parties regarding the proper application of the modern award. 1 The issues arising in that context mainly concerned the arrangements of ordinary hours and the potential conversion of casual employees to weekly hired positions under the terms of that award. The latter issue was not resolved and in due course the AMWU sought to commence bargaining with Christie Tea about appropriate arrangements for the casual employees and a range of other wages and conditions matters.
[3] In mid July 2011, the AMWU formally approached its members in the form of a petition seeking to confirm support for the commencement of bargaining and it is this petition and the associated circumstances that the union principally relies upon in this case. The AMWU also contends that the employer has not yet agreed to bargain and that all of the statutory requirements for the making of a majority support declaration have been satisfied.
[4] Christie Tea has opposed the application principally on three grounds. Firstly, it contends that it has not refused to bargain and in effect has agreed to bargain at a later time. Secondly, it has challenged the bona fides of the petition. Finally, it contends that in effect it would not be appropriate to issue the determination given the circumstances of the business and its employees.
[5] This matter was heard by me on 11 October 2011 at which time Mr Hardie and Mr Bauer represented the AMWU and Mr Keelan, the employer’s Managing Director and Ms Bird, Office Manager represented Christie Tea. Given the absence of professional representation of the respondent, at the outset of proceedings I outlined and confirmed with both parties the nature of the issues that arose from the application and facilitated the conduct of the hearing.
THE STATUTORY REQUIREMENTS
[6] Sections 236 and 237 of the Act provide as follows:
“236 Majority support determinations
(1) A bargaining representative of an employee who will be covered by a proposed single-enterprise agreement may apply to FWA for a determination (a majority support determination) that a majority of the employees who will be covered by the agreement want to bargain with the employer, or employers, that will be covered by the agreement.
(2) The application must specify:
(a) the employer, or employers, that will be covered by the agreement; and
(b) the employees who will be covered by the agreement.
237 When FWA must make a majority support determination
Majority support determination
(1) FWA must make a majority support determination in relation to a proposed single-enterprise agreement if:
(a) an application for the determination has been made; and
(b) FWA is satisfied of the matters set out in subsection (2) in relation to the agreement.
Matters of which FWA must be satisfied before making a majority support determination
(2) FWA must be satisfied that:
(a) a majority of the employees:
(i) who are employed by the employer or employers at a time determined by FWA; and
(ii) who will be covered by the agreement;
want to bargain; and
(b) the employer, or employers, that will be covered by the agreement have not yet agreed to bargain, or initiated bargaining, for the agreement; and
(c) that the group of employees who will be covered by the agreement was fairly chosen; and
(d) it is reasonable in all the circumstances to make the determination.
(3) For the purposes of paragraph (2)(a), FWA may work out whether a majority of employees want to bargain using any method FWA considers appropriate.
(3A) If the agreement will not cover all of the employees of the employer or employers covered by the agreement, FWA must, in deciding for the purposes of paragraph (2)(c) whether the group of employees who will be covered was fairly chosen, take into account whether the group is geographically, operationally or organisationally distinct.
Operation of determination
(4) The determination comes into operation on the day on which it is made.”
THE EVIDENCE BEFORE FAIR WORK AUSTRALIA
[7] Given the sensitive nature of certain material, and with the acquiesce of both parties, I was provided on a confidential basis with the full employee petition and a list of members of the AMWU amongst the employee group. The employer also provided a full list of relevant employees who were presently employed. These documents have all been declared as confidential pursuant to s.594 of the Act.
[8] At the outset of the hearing of this matter, I disclosed to the parties the factual consequences of the confidential material. There were a total of 24 relevant employees within the employee group. Having compared the lists, all 13 of the names on the petition coincide with names of the employees. Further, all 15 AMWU members coincide with the names of employees as provided by the employer. Although it is not significant, I note all 13 of those who signed the petition are also AMWU members. There is no basis to doubt the veracity of the confidential material supplied by both parties in this matter.
[9] As a result, it is evident that a majority of the employee group have signed the petition and that a majority of the employees are also members of the AMWU.
[10] Mr Bauer, the Regional Secretary of the AMWU provided two affidavits and gave sworn evidence in this matter. This evidence went to the background of the matter, the veracity of the petition and his understanding as the views of the AMWU members at the workplace. I accept the evidence of Mr Bauer.
[11] Christie Tea did not provide evidence and despite being given an opportunity to do so, did not meaningfully challenge the evidence of Mr Bauer.
[12] The AMWU also tendered a letter that was provided to AMWU members in the lead up to the petition 2 and an abridged version of that petition.3
CONSIDERATION
[13] The operation of a majority support determination within the scheme of the Act was usefully set out by the Full Bench in Liquor, Hospitality and Miscellaneous Union v Coca-Cola Amatil (Aust) Pty Ltd 4 (LHMU v Coca-Cola ) in the following terms:
“[24] Before going to the competing contentions about the operation of s.237(2)(b) of the Act advanced by the parties, there is some value in considering the role of majority support determinations within the bargaining processes contemplated by the Act. The statutory provisions dealing with majority support determinations form part of Division 8 of Part 2–4 of the Act, which deals with Fair Work Australia’s general role in facilitating bargaining. The bargaining system includes a number of processes designed to facilitate agreement making and assist bargaining representatives to bargain effectively when it is required. 5 As noted in s.169 of the Act, Division 8 provides for Fair Work Australia to facilitate bargaining by making bargaining orders, serious breach declarations, majority support determinations and scope orders and permits bargaining representatives to apply to Fair Work Australia to deal with bargaining disputes.
[25] A majority support determination might be sought in circumstances where an employer is aware that a majority of its employees wish to bargain but declines to do so or in circumstances where an employer is not aware or certain of the views of a majority of its employees in relation to their desire to bargain. If made in either of those circumstances, a majority support determination provides a means by which the bargaining processes within the Act are commenced within the meaning of the “notification time” in s.173(2)). Once the bargaining processes commence, an employer is required by s.173 of the Act to take all reasonable steps to give notice to each employee of their right to be represented by a bargaining representative. A majority support determination, in itself, does not require bargaining to occur. There is no penalty, as such, for contravening a majority support determination. However, once the bargaining process commences, the employer’s bargaining representative is obliged to meet the good faith bargaining requirements in s.228 of the Act and is subject to the statutory consequences of a failure to do so (for example, good faith bargaining orders (s.229) and serious breach declarations (s.234)).
[26] If, upon the commencement of the bargaining process following a majority support determination, an employer declines to bargain, the employee bargaining representative may seek a bargaining order to address a failure of the employer to meet the good faith bargaining requirements.
[27] Division 8 of Part 2–4 of the Act also provides a number of other functions for Fair Work Australia to facilitate fair and efficient bargaining, including:
[28] Division 8 also contains a variety of processes designed to facilitate agreement making. Within those processes, the role of a majority support determination is to commence the bargaining process when there is majority support among employees to collectively bargain, when their employer has not agreed to do so. The effect of a majority support determination itself extends no further. However, once a determination is made, the bargaining process under the Act is enlivened, including the good faith bargaining requirements under s.228 of the Act.”
[14] Given the positions of the parties and the statutory requirements, the following issues arise in this matter.
Has a valid application been made?
[15] In this case, this means:
[16] This issue arises from s.236 of the Act and I note that ground 2 in the application cites the group as being employees of Christie Tea who are presently covered by the modern award. There is no dispute that the AMWU is a relevant bargaining representative and I find that a valid application has been made in accordance with the Act.
Is Fair Work Australia satisfied that a majority of the employees, who are employees of the employer at a time to be determined, and would be covered by the agreement, want to bargain with the employer?
[17] This arises from s.237(2)(a) and s.237(3) of the Act. The AMWU rely upon the petition of employees and the prevailing circumstances, and as outlined above, this element of the matter is in dispute.
[18] The AMWU contend that the petition was undertaken in an appropriate manner and that it permitted the employees to express a genuine view regarding their desire to bargain. The union also strongly denied any suggestion that the employees were misled or coerced in any way. In that context, the union also referred to the absence of any evidence that would support the suggestions or concerns of the employer.
[19] Christie Tea contended that the information provided to the employees was not appropriate and that the petition itself was open ended and the employees may not have been fully aware of and understanding of their rights under the Act. The employer also speculated that there could have been undue pressure applied to individuals to sign the petition.
[20] The petition followed a series of discussions concerning the issues associated with the original dispute. In that context, there was a also dispute about the veracity of an earlier union “petition” and the employer’s countervailing indication of employee support for its position. Those matters were resolved through an agreed process.
[21] More importantly, in the lead up to the July 2011 petition, the AMWU sent a letter to their members which set out some of the background and the union’s view that the issues could be pursued, along with other matters, through an enterprise agreement bargaining process. Mr Bauer also gave evidence about the related discussions and the manner in which the petition was organised on the ground.
[22] Without outlining all of contents of the letter, I do not consider that it misled the employees or misrepresented the circumstances in any relevant way. Indeed, I consider that it fairly set out the option being pursued and emphasised that members were under no obligation to support the proposal.
[23] The petition itself was headed in the following terms:
“PETITION
To The Australian Manufacturing Workers Union/Fair Work Australia
Re: Majority Support Determination
1. We, the undersigned, petition the Australian Manufacturing Workers Union (AFMEPKIU) to start Enterprise Agreement negotiations with Christie Tea Pty Ltd management and represent us in relation to all matters pertaining to the negotiation, making, certification and/or approval of enterprise agreement/s, including meeting and conferring with the employer..
2. We at Christie Tea Pty Ltd request the Australian Manufacturing Workers Union represent workers in Enterprise Agreement Negotiations.
3. Fair Work Australia recognises this petition as a majority support for the Australian Manufacturing Workers Union to represent workers in Enterprise Agreement negotiations.
...”
[24] Section 237(2)(a) of the Act provides that the assessment of the majority of the employees is to be made at a time determined by Fair Work Australia. This is in part linked to the power under s.237(3) for the Tribunal to work out whether a majority of employees want to bargain by any method that it considers appropriate.
[25] The petition was undertaken in July 2011 and this application was made in September 2011 and is now being determined in early October. There is no indication that the views, or more importantly, the composition of the workforce has changed to any relevant degree and in the context of assessing the views of the majority for present purposes, nothing hangs off the determination of the relevant time. Given the view that I have ultimately taken about the petition, I have however determined that the appropriate reference point is the time of this decision.
[26] A majority of relevant employees have signed the position indicating support for the commencement of bargaining.
[27] Having considered the evidence before Fair Work Australia and the positions advanced by both parties, I am satisfied that the petition is a fair and reliable indication of the views of the employees and is an appropriate method to assess the intent of the employee group. I am also satisfied that a majority of the relevant employees want to bargain with Christie Tea for a single enterprise agreement.
Has the employer not yet agreed to bargain, or initiated bargaining, for the agreement?
[28] This arises under s.237(2)(b) of the Act and whilst it is evident that the employer has not initiated bargaining, there is a dispute about whether it has not yet agreed to bargain.
[29] It is common ground that the AMWU has sought to engage with Christie Tea in a bargaining process for an enterprise agreement on a number of occasions. The AMWU contend that the employer has refused to enter into negotiations for an enterprise agreement and has not yet agreed to bargain.
[30] Christie Tea contends it has not refused to bargain but rather has indicated that it would be willing to do so in the first quarter of next year.
[31] On 14 June 2011, the AMWU wrote to Christie Tea and formally sought the commencement of bargaining for an enterprise agreement. 6 The formal response of the employer communicated to the AMWU on 20 June 2011 was that it was seeking six months delay. Further, it confirmed its position as follows:7
“...
Christie Tea continues to believe it’s employment practices are legal and is operating within the terms of the Modern Award and has not been directed otherwise by Fair Work therefore it declines your request.
...”
[32] It is clear from the approach of the Full Bench in LHMU v Coca-Cola that an employer may indicate its willingness to bargain during the course of the process leading to the determination of an application of this nature. 8 In that light I have also considered the statement of the employer in the lead up to this matter as represented by its submissions. This however relies on the above communications.
[33] The requirement established by the Act is not simply whether the employer has refused to bargain. Rather, it is relevantly whether the employer has not yet agreed to do so.
[34] In all of the circumstances of this matter, I find that Christie Tea has not yet agreed to bargain with the AMWU as a bargaining representative or with its employees. In June 2011 it formally declined the union’s request to commence bargaining, and the absence of any formal commitment to do so at any time - other than the vague notion that a delay until next year was sought, confirms that finding. This remains the case today.
Has the group to be covered by the agreement been fairly chosen, taking into account whether it is geographically, operationally or organisationally distinct?
[35] This arises from s.237(2)(c) and s.237(3A) of the Act. There has been no issue taken with this element and the group appears to be objectively and clearly defined on the basis of the modern award coverage. I am satisfied for present purposes that the employee group has been chosen fairly.
Is it reasonable to make the majority support determination in all of the circumstances?
[36] This arises from s.237(2)(d) of the Act and Christie Tea has raised some issues to be considered in this context.
[37] The position of the AMWU is that the intent of the legislation is that employees have the capacity to seek the commencement of negotiations including in circumstances where the employer does not wish to do so. In this case, it was said that the employees have indicated a desire to commence negotiations over many months and had been frustrated by the employer’s failure to recognise that legitimate desire. In that light, the union contends that it is appropriate for the determination to be made.
[38] Although not articulated as such, I understand that Christie Tea has raised a number of issues that it intends the Tribunal to consider under this consideration. These include the notion that it is reasonable for the employer to remain on the modern award and have Fair Work Australia determine wage adjustments; that the issue of casual conversion should be sorted out through other mechanisms; and that the bargaining process will be a distraction to the business at a time when recent capital commitments are being incorporated into the operations. 9
[39] It is apparent from the Act that Fair Work Australia must have regard to all of the relevant circumstances when assessing the reasonableness of making a determination. The factors cited by both parties need to be considered having regard to scheme of the Act.
[40] In Australian Municipal, Administrative, Clerical and Services Union v Equity Valet Parking Pty Ltd, 10 Watson VP said:
“[24] The scheme of the Fair Work Act is that terms and conditions of employment are determined at the enterprise level on the foundation of “fair, relevant and enforceable minimum terms and conditions.”
[25] Where employees wish to engage in bargaining the legislation gives them rights to engage bargaining agents and engage in bargaining processes. In circumstances where an employer has not agreed to bargain, bargaining orders under s230 of the Act are not available unless, among other things, a majority support determination is in operation.
[26] Both parties have rights in the bargaining process. They are free to discuss and agree on relevant matters and formulate any agreement in any available manner. They are equally free to disagree and exercise rights that may arise in such an eventuality.”
[41] As noted by the Vice President, there are of course other objects of the Act including those set out in s.3(f) concerning the achievement of productivity and fairness through an emphasis upon enterprise level collective bargaining and in s.3(g) concerning the special needs of small and medium-sized businesses.
[42] The desire of the majority of employees is an important consideration and supported by the scheme of the Act. There is also nothing unreasonable or inappropriate about seeking to advance a resolution of the issues proposed by the union for consideration in the bargaining process. The circumstances within the business are relevant considerations however particularly given the timing of this determination and the nature of the good faith bargaining obligations 11 these do not mean that it would be unreasonable to issue the determination sought.
[43] Indeed, I am satisfied that it is reasonable in all of the circumstances of this matter to issue the majority support determination.
THE DETERMINATION
[44] Given that all of the requirements of s.237(2) of the Act have been met, I am obliged to issue the determination in accordance with s.237(1).
[45] A majority support determination is being issued by Fair Work Australia in conjunction with this decision. 12 Consistent with s.237(4) of the Act, the determination comes into operation on the day on which it is made.
[46] As a result, the consequences as earlier noted in LHMU v Coca-Cola will operate including the fact that Christie Tea must now take all reasonable steps to issue a notice of employee representational rights to each relevant employee as required by s.173 of the Act and the good faith bargaining obligations as set out in s.228 will now apply to all parties.
COMMISSIONER
Appearances:
T Hardie with P Bauer for the Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union known as the Australian Manufacturing Workers’ Union (AMWU).
D Keelan with G Bird of Christie Tea Pty Ltd.
Hearing details:
2011
Adelaide
11 October
1 C2010/5546 - notified 17 November 2010 and involving a series of conferences and recommendations by Fair Work Australia.
2 Exhibit A3.
3 Exhibit A4 - with the names and signatures of the employees obscured.
4 [2009] FWAFB 668, 28 October 2009 per Watson SDP, Richards SDP and Smith C.
5 Explanatory Memorandum, at item r.165.
6 Attachment ‘A’ to exhibit A1.
7 Extract from letter by Christie Tea to AMWU dated 20 June 2011 - Attachment B to Exhibit A1.
8 At pars [44] and [45].
9 There was no evidence as to the actual circumstances of the business however in the absence of any contrary contentions I have accepted the general notions of the employer regarding its business investments for the purposes of determining this matter.
10 [2011] FWA 2036, 4 April 2011 per Watson VP.
11 The good faith bargaining requirements in s.228 are broad enough to allow the circumstances of the business to be factored into the negotiations along with other considerations.
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