The CFMEU has lost an appeal against a finding that it was not ‘genuinely trying to reach an agreement’ during bargaining, with a Full Bench of the Fair Work Commission (FWC) saying the union’s protected action ballot order (PABO) application had been rightly rejected. Here, AREEA principal adviser – workplace relations, Lisa Matthews, discusses the key points of the decision and implications for employers.

The original decision

IN his 1 July 2016 decision, Deputy President Richard Clancy noted the CFMEU had been bargaining with AGL Loy Yang for eight months.

In May 2016, the union applied to the commission for a Protected Action Ballot Order (PABO) so it could have its members endorse protected industrial action in support of the enterprise agreement.

AGL Loy Yang opposed the PABO on the grounds the union’s application did not specify the group of employees to be balloted, and was not genuinely trying to reach an agreement as required under s443(1)(b) of the Fair Work Act.

DP Clancy noted that the CFMEU was the only one of three union bargaining representatives to apply for a PABO, something the union later argued on appeal was ‘irrelevant’.

In deciding whether the CFMEU had been genuinely trying to reach an agreement, DP Clancy said he had to look at all the circumstances, ‘not just the CFMEU’s ultimate object of an agreement but also the genuineness of its conduct’.

While bargaining had occurred, he was not persuaded the CFMEU had satisfied the Fair Work Act’s requirements. Virtually all of its bargaining had been characterised by periods during which it pursued an agreement:

• Covering employers that had never agreed to or initiated bargaining;
• With claims for non-permitted matters that it had only recently withdrawn; and
• In relation to which the union was involved in appointing six individual bargaining representatives – ‘a highly unusual development that has, of itself, disrupted the bargaining, altered its process and is ongoing’, the DP said.

Additionally, the ‘tone adopted by the CFMEU’ in correspondence and other exchanges with the employer had ‘tended not to have been conciliatory and has, on occasion, been unhelpfully combative’.

“There is no hard and fast rule as to when past behaviour is no longer relevant for the purposes of assessing whether an applicant has been, and is, genuinely trying to reach agreement,” the DP observed.

“Nor is it clear what comprises what might be regarded as an acceptable ‘cooling off’ period between the cessation of behaviour that is or may be deemed to be of a nature that offends the notion of genuinely trying to reach agreement and the making of a PABO application.”

He said ‘it seems to me’ that a period of bargaining ‘in an atmosphere free of the behaviour that lacks the requisite genuineness’ should be achieved before the requirements of s.443(1)(b) of the Act, to genuinely try to reach agreement, are satisfied.

Given those facts, the DP said the PABO application had been ‘prematurely made’ and therefore rejected it.

The appeal

In a Full Bench decision on 21 September 2016 – Senior Deputy President Lea Drake, Deputy President Ingrid Asbury and Commissioner Ian Cambridge – declined to overturn the earlier decision and orders.

The CFMEU unsuccessfully argued that DP Clancy had erred in his original decision by:

• Failing to take into account all the circumstances in the period leading up to his determination;
• Concluding that a ‘cooling off period was necessary between the cessation of behaviour that offend’ and the making of a PABO application;
• Failing to take into account the CFMEU and the employer had been unable to agree on meeting arrangements;
• Concluding that the CFMEU had made ‘non-permitted’ claims and withdrawn them despite not having made findings himself about whether the matters were permitted;
• Failing to consider the union had denied it was pursuing non-permitted matters;
• Concluding that the union was not genuinely trying to reach an agreement because the language it used was ‘not conciliatory’;
• Considering ‘irrelevant’ matters such as the CFMEU was the only bargaining representative that had applied for a PABO; and
• Failing to put the CFMEU on notice that he was going to factor in a ‘cooling off’ period.

Counsel for the CFMEU argued that characterising the union’s attitude as ‘combative’ or ‘unhelpful’ was not a factor that could be taken into account.

“Such conduct is conduct in bargaining and it may be hard bargaining or an industrial tactic,” the union said.

Additionally, there was no “rational negative inference to be drawn from the appointment of extra bargaining representatives impugning the genuineness of the CFMEU in trying to reach an agreement”, the union said.

Only conduct that demonstrated a lack of genuineness in trying to reach an agreement could be taken into account, it said.

Full Bench findings

The Full Bench found that a member ‘cannot have regard to irrelevant matters’ in such cases and ‘the weight given to matters must be proportionate’.

However, matters such as the ‘tone’ of the CFMEU’s communications had not been material to the DP’s decision, and were only laid out to provide the overall ‘context’, according to the Bench.

“Lack of gentility is not necessarily indicative of a lack of genuineness in trying to reach an agreement,” the Bench said.

“However, we are not persuaded that this matter was determinative or significant in the present case.”

The Bench said the purpose of the union’s strategy in appointing extra bargaining representatives was ‘difficult to appreciate’. However, the late appointment of extra bargaining representatives did interrupt bargaining, and that was a matter the DP was entitled to consider in his assessment.

The DP had also taken into account the ‘extensive’ bargaining that had taken place, despite his characterisation of the PABO as ‘remature’, the Bench said.

The fact that the DP did not make a finding as to whether certain matters being pursued were prohibited did not render his decision in error. Even if claims had been non-permitted, that did not mean the union was not genuinely trying to reach an agreement, the Bench said.

In the Bench’s view, the DP was able to take into account the late removal of those items from the bargaining table in arriving at his decision.

While declining to overturn the DP’s orders, the Bench said if the CFMEU made a ‘fresh’ application for a PABO, based on the material before it, a PABO would ‘more than likely issue’.

Implications for employers

This decision shows that the FWC can take numerous matters into account in determining whether a union is ‘genuinely trying to reach an agreement’ prior to issuing a PABO.

While issues such as the ‘tone’ of the parties should not be determinative factors in arriving at a decision, they can be laid out for context.

Other factors that will tend to delay bargaining, such as appointing numerous extra individual bargaining representatives, can be taken into account in deciding whether a union is genuinely trying to reach an agreement.

For the original decision, click here.

For the original order, click here.

For the appeal decision, click here.

AREEA’s workplace and legal consultants are highly experienced in enterprise bargaining matters and in representing members in the Fair Work Commission. To learn how we can assist you, contact your local AREEA office.