Workplace Relations: Endeavour Coal v APESMA

Endeavour Coal Pty Limited v Association of Professional Engineers, Scientists and Managers, Australia [2012] FCA 764

The Federal Court has recently handed down its decision in the long running dispute between Endeavour Coal Pty Ltd (a BHP subsidiary) and the Association of Professional Engineers, Scientists and Managers, Australia.  The application concerns APESMA’s application to Fair Work Australia for good faith bargaining orders in relation to its Appin Mine in New South Wales.  The Federal Court’s decision is the second appeal in this dispute.

The essential arguments are relatively straightforward and clearly demonstrate the tension at the heart of the good faith bargaining provisions under the Fair Work Act.  APESMA has, since Appin 2010, been attempting to negotiate an enterprise agreement with Endeavour Coal in respect of its Appin Mine.  In July 2010, APESMA obtained a majority support determination, a step which enables FWA’s intervention despite an employer’s reluctance to bargain.

There were numerous meetings between July 2010 and August 2011, but no enterprise agreement was reached.  APESMA’s position, simply put, was that Endeavour did not engage in the process.  In particular, APESMA alleged that Endeavour:

  • did not put any positive proposals in relation to the bargaining,
  • did not agree with any of APESMA’s proposals,
  • did not identify the subject matter it was prepared to put into an agreement,
  • did not state a bargaining position, and
  • did not provide any information to APESMA

Fair Work Australia, at first instance and on appeal agreed in substance with these contentions and noted that Endeavour’s stated intention was to have no agreement.

The good faith bargaining requirements arise under s. 228 of the Fair Work Act and, in particular, include a number of positive obligations on bargaining representatives including attending meetings, responding to proposals, providing information and the obligation to recognize and bargain with other bargaining representatives.  The Act explicitly states that the bargaining requirements do not extend to making concessions or reaching agreement.

In his decision, Flick J, discussed the nature of good faith bargaining under s. 228 of the Fair Work Act.  In particular, his Honour stated that a party cannot sit ‘mute’ or act as a ‘disinterested suitor’ by merely rejecting proposals put by others.  Bargaining requires an ‘open mind’ and some level of ‘give and take’.  Whilst his Honour noted that good faith bargaining would differ from case to case, he identified that it may require the making of a counter proposal or the disclosure of a position acceptable to the negotiating party.  His Honour also noted that the end objective is an enterprise agreement rather than the continuation of the status quo and parties’ behaviour would be judged against that objective.

However, whilst finding that the Full Bench had made the correct decision in relation to the obligations on bargaining representatives, Flick J held that three of the four orders requiring Endeavour Coal to participate in the bargaining were beyond the power of the Full Bench.

Order 1 required Endeavour to ‘provide a list of subject matter that Endeavour … would be prepared to include in an enterprise agreement’ to APESMA.  It also required Endeavour to identify its points of agreement and disagreement with the latest draft of the enterprise agreement and to propose terms that it would be prepared to enter into.  Flick J held that this term was beyond the power of the Full Bench.  His Honour stated the power of the Bench is confined to making orders which ensure compliance with the good faith bargaining requirements under s. 228(1) of the Act.  Order 1 in its terms required Endeavour to identify the terms to which it would agree and thus violated the negative stipulations in s. 228(2) including requiring Endeavour to make a concession or concessions.  His Honour noted that the order would eliminate Endeavour’s ‘give and take’.

His Honour noted that it may be possible to formulate an order around possibilities – things that Endeavour ‘may’ be prepared to include, but not ‘would’ propositions.

Order 3 made stipulations as to the nature of Endeavour’s bargaining representative.  His Honour noted that there is no power to make stipulations as to the identity of a bargaining representative.  Order 4 was consequential upon Order 1.  His Honour struck both of these Orders down.  However, His Honour permitted Order 2, which prohibited Endeavour from dealing with staff or staff contracts outside of the enterprise bargaining process.

It is too early to determine the ramifications of this decision for the good faith bargaining process.  On the one hand, the decision contributes to the strength of the good faith bargaining jurisprudence and the fight against ‘surface’ bargaining.  However, it will be difficult for tribunals and courts to formulate orders which do not violate the express requirements of s. 228.  Whatever the jurisprudence that is developed the Court must develop orders that are sufficiently certain and produce real outcomes for good faith bargaining to have any meaning.  Endeavour Coal v APESMA demonstrates the very real challenge to courts and tribunals – whatever their view of the merits – in formulating such orders.

* PCC Lawyers are a team of employment practitioners based in Sydney, with many years of combined knowledge and experience in workplace law, industrial relations, workplace investigations and training.  They provide a high standard of excellence and an exceptional level of personal service to a variety of clients in the Sydney metropolitan area, Central Coast, regional NSW and interstate.

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