Protected Industrial Action: FWC Full Bench provides guidance on genuinely trying to reach agreement test and non-permitted matters

13 February 2015
Employers sometimes oppose protected action ballot orders (PABO) claiming that unions have sought non-permitted matters in bargaining.

By By Kamal Farouque & Jenna Vardi

Background

Employers sometimes oppose protected action ballot orders (PABO) claiming that unions have sought non-permitted matters in bargaining. 

In these cases, employers oppose the PABO by submitting that FWC cannot be satisfied that the union “has been, and is, genuinely trying to reach agreement” under s 443(1) of the Fair Work Act.

A new FWC Full Bench decision provides clear guidance on how FWC will approach this issue.

The case concerned a PABO application by the AWU, AMWU and ETU in bargaining with Esso. At first instance, Commissioner Cribb granted the PABO.   Esso appealed the PABO to the FWC Full Bench. 

Maurice Blackburn Lawyers acted for the Unions in the appeal. 

One of Esso’s grounds of appeal was that the Unions were not genuinely trying to reach agreement because they had sought a non-permitted matter in bargaining.  The non-permitted matter was a clause which restricted the Esso’s use of contractors.

The Full Bench Decision: Esso v AMWU, CEPU and AWU [2015] FWCFB 210

The Full Bench accepted that at least part of the contractor clause was non-permitted. 

However, the Full Bench was nevertheless prepared to accept that the Unions were still genuinely trying to reach agreement having regard to all of the facts and circumstances including that:

  • the contractor clause was not part of the Unions’ initial claims and only advanced in response to a request by Esso for greater details of the claims
  • the contractor clause was a draft proposal
  • the Unions had not adopted a rigid position on the contractor clause and were prepared for Esso to modify the clause and come back with an alternative
  • the contractor clause had not featured prominently in the negotiations
  • at no stage in the negotiations had Esso expressed the view that the contractor clause was non-permitted
  • the first time Esso had claimed that the contractor clause was non-permitted was during the PABO hearing before Commissioner Cribb and the claim was withdrawn by the Unions before the end of the hearing.

The FWC Full Bench considered previous FWC decisions concerning the approach to the genuinely trying to reach agreement test and non-permitted matters.  The Full Bench set down the following clear principles about how the issue should be approached:

  • whether a union “has been, and is, genuinely trying to reach an agreement” is a question of fact to be decided having regard to all the circumstances of the case
  • the fact that a union is, or has been, pursuing a claim about a non-permitted matter is relevant to whether they have genuinely been trying to reach agreement, but it is not determinative of the issue
  • A range of factors were potentially relevant to whether a union was genuinely trying to reach agreement, including but not limited to:

    • the subject matter and timing of the claim
    • the basis upon which the claim is advanced
    • the significance of the claim in the negotiations
    • the Union’s belief as to whether the claim is about a non-permitted matter or not
    • whether there is legal clarity about the claim's permitted status
    • whether the other party has disputed the claim's permitted status
    • whether the claim has been withdrawn and, if so, when and in what circumstances

In rejecting Esso’s appeal, the Full Bench noted that to require FWC to scrutinise whether each claim was a permitted matter would be inconsistent with the statutory scheme's object that PABO applications should be dealt with quickly and informally.

Conclusion

It is clear from the Full Bench decision that the genuinely trying to reach agreement test should not be applied in a “tick a box” style manner.   However, there will be circumstances when pursuing a non-permitted matter in bargaining means that FWC is not satisfied that a union has been and is genuinely trying to reach agreement.  But the mere fact that a union has sought a non-permitted matter in bargaining is not an automatic fetter.   The Commission will determine whether the test of genuinely trying to reach agreement has been met having regard to all of the bargaining circumstances.