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Maritime union fails in PABO bid as FWC finds disingenuous conduct

In this decision summary, AREEA consultant Karen Nelson provides an example of how the Fair Work Commission will consider a union’s conduct at the time of it applying for a protected action ballot order.

IN Australian Institute of Marine and Power Engineers [2016] FWC 3495, an application by the AIMPE for a protected action ballot order (PABO) in relation to offshore vessel operator MMA Offshore Vessel Operations (trading as Mermaid Marine Vessel Operations (MMVO)) was dismissed on the grounds that the AIMPE was not genuinely trying to reach agreement at the time they made the application.

This decision highlights the requirement that the applicant to a PABO must currently be genuinely trying to reach agreement, not only previously genuinely trying to reach agreement in order to satisfy s.443(1)(b) of the Fair Work Act 2009.

The AIMPE made an application to the Fair Work Commission (FWC) for a PABO in May, in relation to negotiations which commenced in 2013, for a replacement EBA covering marine engineers employed by MMVO.

MMVO had appointed AREEA to bargain on their behalf with AIMPE.

The Negotiation Timeline

Negotiations between the parties proceeded initially for about 12 months, with a number of bargaining meetings held to which both parties attended and participated. In March 2014, the AIMPE made a PABO application which was dismissed by the FWC on the grounds that the union was not genuinely trying to reach agreement.

The AIMPE then provided AREEA with a revised log of claims, and a further bargaining meeting was held in September 2014. In December 2014, the union made an application for the FWC to deal with a bargaining dispute which resulted in the convening of a conference, however the parties could not resolve the dispute.

No bargaining meetings took place from December 2014 to October 2015. During this time, the employer sought to provide an opportunity for employees to vote on a proposed replacement agreement, with a vote scheduled for October 2015. This intention was communicated to the AIMPE, and consequently four bargaining meetings were held in the month of October with no agreement reached on the replacement enterprise agreement.

The proposed enterprise agreement was therefore put to vote in November 2015, the outcome of which was unsuccessful. A further vote was held in January 2016 which also resulted in an unsuccessful outcome. Since that time, no further bargaining events had occurred.

In May 2016, the AIMPE made an application for a PABO to the FWC, which was subsequently listed for hearing. After receiving the notice of listing for the hearing, the AIMPE contacted AREEA and the employer proposing the parties resume bargaining at the earliest convenient time.

The Relevant Legislative Framework

The FWC is required to make a PABO in relation to a proposed agreement if the following two criteria are satisfied:

  1. the application has been made under section 437 (which relates to who is eligible to make the application and what the application must specify); and
  2. the FWC is satisfied that each applicant has been, and is, genuinely trying to reach agreement with the employer of the employees who are to be balloted (s.443(1)(b)).

Reasons for the Decision

In his decision, Commissioner Cloghan noted that at various times throughout the bargaining period commencing in March 2013, he was satisfied that the AIMPE was genuinely trying to reach agreement in relation to a replacement enterprise agreement. However, at other times during the bargaining period Commissioner Cloghan observed that there was no evidence to suggest any bargaining occurred between the parties. Commissioner Cloghan found that in the six months prior to making the most recent PABO application, AIMPE took no action to try and reach agreement with the parties on a replacement enterprise agreement, and therefore had not been trying to genuinely reach agreement during that time.

Emphasis was placed on section 443(1)(b) of the Fair Work Act 2009, which requires the FWC to be satisfied that ‘each applicant has been, and is, genuinely trying to reach an agreement with the employer of the employees who are to be balloted’ before making a PABO.

Commissioner Cloghan noted that the attempt of AIMPE to set up a bargaining meeting after receiving details of the date set for the PABO hearing was not a convincing attempt to genuinely reach agreement, and further that the attempt suggested AIMPE ‘has reasonable and probable cause to question whether it could demonstrate the case, as asserted in the application, that it is genuinely bargaining to reach agreement’.

Based on the evidence presented, Commissioner Cloghan was not convinced that at the time of making the application, AIMPE was genuinely trying to reach agreement pursuant to s.443(1)(b) of the Fair Work Act 2009, and he dismissed the PABO application.

Implications for employers

This decision is a positive indicator to employers that the FWC will emphasise scrutiny on the immediate status of bargaining when ruling on a PABO application, and should not take into consideration the status of bargaining at an earlier (and potentially less relevant) time during a bargaining campaign. For instance, just because a union could be viewed as ‘genuinely trying to reach agreement’ for a short period in 2013 doesn’t mean the union should be granted a PABO in 2016, particularly when it appears to union hasn’t been genuinely trying to reach an agreement in the period since.

Such precedent is particularly important for protracted bargaining campaigns where unions have a tendency to sporadically change their appetite for genuine bargaining depending on what suits their strategy or members’ wishes at the time.

Click here for the full decision.

For more information on this case or any other matter related to enterprise bargaining, email [email protected] or contact your local AREEA office.

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