Enterprise bargaining under the Fair Work Act can be a highly technical and, if not managed properly, risky exercise for even experienced employers. In this decision summary, one of AREEA’s Legal Services professionals Tayissa Popowicz explains the principles behind a recent injunction sought by the CFMEU against an employer it says ‘misled’ employees before a ballot took place.

When an enterprise bargaining agreement is put up for a vote of employees, it does not mean that the negotiations are at that point done and dusted.  In the Federal Court decision Construction, Forestry, Mining and Energy Union v CUB Pty Ltd [2015] FCA 692 handed down earlier this month, it was made clear that misleading statements made prior to voting can halt the approval process.  To avoid this, employers should directly guide their site managers to minimise the potential of misleading statements being made during negotiations.

In this case it was alleged that a manager of CUB had made an incorrect representation to employees about the outcome and effect of a related dispute in the Fair Work Commission.  Although the voting process had commenced for the approval of an agreement, the CFMEU applied for an injunction to stop the second day of the voting and the counting of votes cast.

The Federal Court considered the following:

• Misleading representations: The Fair Work Act 2009 (the Act) provides that a person must not knowingly or recklessly make a false or misleading representation about the workplace rights of another person or the exercise of a workplace right. In this case, the CFMEU contended that the misrepresentation made by CUB could allegedly have a material effect on the outcome of the ballot.
• Action taken to correct the misrepresentation: The Federal Court took into account the fact that CUB had taken steps to correct the misrepresentation made by posting notices with correct detail. These notices were placed where the voting (which was being run by the Australian Electoral Commission (AEC)) was being conducted.
• Material effect on the voting: The Federal Court also considered the extent to which the misrepresentation was made and its material effect on the voting intentions of the employees. It found that despite actions taken to correct the misrepresentation, it was still possible that employees to whom the representation was made may not have seen the notices rectifying the misrepresentation, or further, that there was a possibility that employees had chosen not to vote in the ballot because of the earlier misrepresentation.

To grant or not to grant the injunction?

The Federal Court was mindful of the ‘wastage of resources’ that would flow on from an injunction stopping the vote.

This would include the cost of the AEC engagement for the ballot, efforts of the employer in advocating the approval process and efforts of the parties in coming to a mutual agreement.

In light of this, the Court did not order for the ballot to be stopped, but alternatively ordered that the results of the ballot be passed onto the Court for consideration and not released to the parties.

In ordering this, the Court noted it would be able to gain a better understanding as to whether the misrepresentation had a material effect on the vote.

What can employers learn from this?

At all stages of bargaining, employers and their managers need to be clear and truthful with what they convey to employees. This includes providing correct factual reports of outcomes reached in any Fair Work Commission hearings.

Although not strictly a contemporary factor, the current environment has made the distinction between conflicting objectives of parties clearer in that they generally hold a mixture of analogous (such as to reach agreement) and yet polarised positions (e.g. to save costs versus salary increases).

Increased tension and ‘roadblocks’ in discussions thus result and employers often find themselves at the Fair Work Commission. The outcome of such proceedings must be accurately conveyed when reported to employees, but what is the best way to ensure this is done?

Once the ‘access period’ (being the seven day period before the ballot takes place) has commenced, operations managers should guide site managers by keeping them updated via informal discussions and importantly, providing written scripts for them to follow. They should also confer with their legal representatives to ensure that decisions and outcomes are interpreted and summarised correctly before being conveyed to employees.  To do otherwise puts the enterprise agreement at risk of unravelling and may lead to the employer facing further costs and efforts, or in the words of the Federal Court, may result in a ‘wastage of resources’.

Although employers are not able to control what employee or union delegates convey to employees, it is in the power of employers to ensure that from their end, employees are not misled during any period of the negotiation or approval process in bargaining.

For advice on any enterprise bargaining procedures, contact an AREEA Legal Services or Consulting professional at your local AREEA office.