‘Prohibited Matter’ Claim not a Deal Breaker

Esso Australia Pty Ltd v AMWU, CEPU and AWU [2015] FWCFB 210 (10 February 2015)

Just because non-permitted matters are contained in bargaining claims does not mean a party is not genuinely trying to reach agreement, a senior Fair Work full bench has found.

This apparent contradictory view came about as a result of an appeal by a major energy company against such a finding at first instance. The unions has demanded, in their claims, that the employer’s use of independent contractors be subject to various restraints and conditions – a routine union claim which has been perennially found to be beyond the employer-employee relationship and hence prohibited.

The company argued that the FWC had permitted the unions to withdraw the more offensive aspects of this claim and substitute it with a watered down version only after the company had complained. Therefore, the company said, at the time when the unions had sought a protected action ballot, they clearly were not bargaining in good faith.

The FWC rejected these views, making the salient point that the company had not complained about the claim until the hearing at first instance (following a long period of negotiations) and as soon as the company did that, the unions altered the claim anyway. So the offending matter was no longer there.

The full bench referred to earlier full bench decisions which had taken a stricter view of similar circumstances and went on to say that while each situation needs to be assessed on its own merit, the parties and the FWC should not take a narrow and technical approach to deciding these issues.

For example, matters such as the true nature of the claim, its timing in the negotiation process, its overall significance during negotiations, and whether the other party has complained about the claim, ought to be taken into account. The bench also made the important point that sometimes the parties are not in agreement that a claim is prohibited, or non-permitted. If it is subsequently found to be, then another consideration would be if it were withdrawn. In this particular case, that is what happened, it was immediately modified by the unions when complained of.

The decision means that companies ought to check claims at the outset. If any appear to be non-permitted matters, then the company should alert the unions there and then, not wait. It won’t help arguments against protected action ballots now that this senior full bench has rejected that approach. If the claims are outside what can be put in an agreement, then that should be highlighted at the start, with the unions left in no doubt that the company will argue the unions are not fair dinkum if they don’t withdraw them