[Note: refer to the Federal Court decision dated 19 July 2012 [2012] FCA 764 for result of appeal.]

[2012] FWAFB 1891

FAIR WORK AUSTRALIA

DECISION

Fair Work Act 2009
s.604 - Appeal of decisions

Endeavour Coal Pty Ltd
v
Association of Professional Engineers, Scientists and Managers, Australia (Collieries’ Staff Division)
(C2012/2265)

JUSTICE BOULTON, SENIOR DEPUTY PRESIDENT
SENIOR DEPUTY PRESIDENT HARRISON
COMMISSIONER DEEGAN

SYDNEY, 22 MARCH 2012

    

Appeal against decision to make bargaining order and orders made - permission to appeal - consideration of legislative scheme for making bargaining orders - whether good faith bargaining requirements met - role of FWA to facilitate bargaining - obligation on parties to make reasonable efforts to make agreement - parties must put bargaining positions but not compelled to make concessions - jurisdictional requirements for making bargaining orders must be met - Consideration of appropriate matters to be dealt with in bargaining order - parties to indicate clearly their positions on making an agreement - not make unilateral changes to conditions which are subject of bargaining - disclosure of relevant information except where confidential or commercially sensitive.

[1] This is an appeal under s.604 of the Fair Work Act 2009 (the Act), for which permission is required, by Endeavour Coal Pty Ltd (the Company) against a decision 1 and order2 made by Commissioner Roberts on 4 January 2012. The Commissioner decided that the Company was not bargaining with the Association of Professional Engineers, Scientists and Managers, Australia (Collieries’ Staff Division) (APESMA) in good faith and made orders as to actions which the Company should take in relation to the bargaining process.

[2] The background to the matter before the Commissioner may be set out briefly as follows.

The relevant legislative provisions

[3] The general role of FWA in facilitating the bargaining process is set out in Division 8 of Part 2-4 of the Act. The Division sets out the good faith bargaining requirements which bargaining representatives are required to meet and provides for FWA to make orders to ensure the integrity of the bargaining process. Section 228 lists the good faith bargaining requirements. Sections 229-233 provide for the making of bargaining orders by FWA to enforce compliance with the requirements.

[4] The relevant provisions are as follows.

...

Prerequisites for making an application

Bargaining orders

Agreement to bargain or certain instruments in operation

Good faith bargaining requirements not met

Bargaining order must be in accordance with section 231

Decision and order of the Commissioner

[5] The application by APESMA for bargaining orders was heard by the Commissioner on 29 and 30 November 2011. In the proceedings, evidence was given by Ms. Kylie Rooke-Davis, Industrial Officer/Organiser with APESMA, and by Mr. Martin Aicken, Human Resources Manager - Employee Relations with the Company, as well as by other witnesses.

[6] After considering the evidence and submissions, the Commissioner was satisfied that the Company was not meeting the good faith bargaining requirements. The Commissioner considered that the Company was bargaining with APESMA with no real intention to negotiate an enterprise agreement and that this did not constitute bargaining in good faith in the terms envisioned by s.228(1)(d) of the Act. The Commissioner’s conclusions regarding the good faith bargaining requirements are set out in his decision as follows.

[7] The Commissioner was satisfied that the prerequisites for making a bargaining order were established by APESMA and, pursuant to s.230 of the Act, made orders in the following terms.

The appeal

[8] In the appeal proceedings, the Company was represented by Mr R. Kenzie Q.C. and Mr S. Prince of Counsel and APESMA was represented by Mr I. Taylor and Mr D. Mahendra of Counsel.

[9] In its grounds of appeal and submissions, the Company contended that the Commissioner had erred in finding that it had breached the good faith bargaining requirements and in concluding that the prerequisites in the Act for making a bargaining order were satisfied. In particular it was submitted that the Commissioner erred in taking the view that good faith bargaining means that parties must bargain in a manner intended to conclude an agreement and in finding that the Company did not wish to conclude an agreement with APESMA and had no real intention to do so. It was also submitted by the Company that the orders made by the Commissioner were made without jurisdiction. It was said that the orders are much more prescriptive than other bargaining orders which have been made by FWA, go beyond procedural or process matters and do not assist in ensuring that the parties meet the good faith bargaining requirements of the Act.

[10] An appeal under s.604 of the Act may only be pursued with the permission of FWA. This would normally require an appellant to demonstrate an arguable case of appealable error and refer to other considerations which would justify the granting of permission to appeal. Subsection 604(2) requires FWA to grant permission to appeal if it is satisfied that it is in the public interest to do so. Where permission to appeal is granted, the appeal proceeds by way of rehearing, with the powers of the Full Bench being exercisable only if there is error on the part of the primary decision-maker: see Coal and Allied Operations Pty Ltd v Australian Industrial Relations Commission 6.

Permission to appeal

[11] It was submitted by the Company that permission to appeal should be granted in this matter because of important and novel questions raised as to the proper construction and application of s.228 of the Act. It was said that the new statutory scheme for making bargaining orders has not previously been considered by a Full Bench of FWA and that such consideration is appropriate in the present matter as the approach of the Commissioner has the effect of extending the requirements of good faith bargaining under s.228(1) in a manner inconsistent with s.228(2). It is therefore a matter of public importance that the scope, operation and construction of the provisions be authoritatively considered by a Full Bench.

[12] It was also submitted by the Company that other aspects of the orders made by the Commissioner give rise to matters of public interest. These concerns relate to the proper operation of FWA and the exercise of its powers under Division 8 of Part 2-4 of the Act, the treatment of commercially sensitive information and the ability of an employer to vary the terms of an employment contract during the bargaining period.

[13] APESMA conceded that the appeal in respect of the first order made by the Commissioner, namely the directions as to proposals and responses to be provided by the Company in the negotiations, raises important questions as to the proper construction and application of s.228 of the Act. Therefore it would be appropriate for permission to appeal to be granted on this aspect of the Company’s case. However APESMA opposed the granting of permission in relation to other aspects of the appeal. It was said that the decision of the Commissioner in respect of the other orders involved a straightforward application of the legislative provisions, and established authority, and therefore did not give rise to issues of public interest.

[14] We are satisfied that the appeal as a whole raises issues of significant importance regarding the application of the legislative provisions in relation to the making of bargaining orders. This is because of the nature of the orders sought by APESMA and the questions raised as to the proper role and powers of FWA in facilitating bargaining under the new statutory scheme. It is appropriate that the range of issues raised in relation to the orders made be considered in the context of the overall orders made by the Commissioner, and not just part of those orders. Accordingly we are satisfied that it is in the public interest to grant permission to appeal (s.604(2)).

Issues in the appeal

[15] Senior Counsel for the Company submitted that three main issues arise in the appeal. These are:

[16] These matters go both to the jurisdictional basis and the discretionary considerations relating to the making of the bargaining order. They need to be considered in the context of the facts and circumstances of the negotiations between the Company and APESMA and the findings made by the Commissioner.

[17] We now turn to consider the issues raised in the appeal.

(i) Did the Company meet the good faith bargaining requirements?

[18] The Commissioner was satisfied that the Company was not meeting the good faith bargaining requirements (see s.230(3)(a)(i)). 7 He found that the unwillingness of the Company to enter into enterprise agreement negotiations with APESMA had continued in modified form after the making of the majority support determination. In particular, it was noted that the Company had refused in the bargaining process to make any substantive contribution to the possible content of an enterprise agreement or to put any proposals of its own.8 The Commissioner concluded that the Company was bargaining with APESMA with no real intention to negotiate an enterprise agreement and contrary to the good faith bargaining requirement in s.228(1)(d) of the Act.9

[19] In the appeal proceedings, we were taken to the evidence before the Commissioner regarding the history of the negotiations between the parties. Much of the evidence in relation to the bargaining meetings and positions taken by the parties was not substantially in dispute. In general, APESMA had put forward a proposed draft agreement and other proposals and the Company had responded by making comments and raising concerns about the proposals. There was discussion in the meetings about the concerns raised and APESMA on several occasions provided revised proposals for consideration by the Company. In the April 2011 meeting the Company provided a written response to APESMA’s revised draft agreement setting out the Company’s objections and reasons for the objections. In the May 2011 meeting the objections were discussed, but APESMA did not provide any updated draft or revised proposal in the light of the concerns raised by the Company. In the August 2011 meeting it became clear that there was an impasse between the parties, there being a number of significant matters in relation to which the parties were unable to agree. These included dispute resolution procedures, the individual flexibility provision proposed by APESMA, and the provision in the proposed agreement of mandatory terms for inclusion in contracts of employment.

[20] In the appeal, the Company maintained that it had engaged fairly in the bargaining process even though it had not put forward a counter proposal for an agreement. It took the view that it was entitled, having regard to the express provisions of s.228(2), to avoid making any concessions or reaching an agreement on terms to be included in an agreement. It was submitted that the Commissioner erred in finding that the Company had not bargained in good faith because it did not put forward positive proposals or a counter offer to APESMA, and in adopting APESMA’s submissions to the effect that ‘good faith bargaining’ means that parties must bargain in a manner intended to conclude an agreement. In particular, it was incorrect to apply s.228(1) in a way which requires a party to put forward positive proposals with the intention of concluding an agreement and which makes it unacceptable for a party to simply consider and respond to proposals with reasons. The Company also disputed the Commissioner’s finding of fact that it did not wish to conclude an agreement.

[21] In the course of the proceedings we were taken to provisions in labour legislation in other countries which might provide some guidance in relation to good faith bargaining obligations. Particular reference was made to labour laws in New Zealand 10 and Canada11 which impose an obligation on bargaining parties to conclude a collective agreement unless there are reasonable grounds for not doing so. Whilst the various approaches taken in ensuring parties bargain in good faith are of interest, the jurisprudence developed in different industrial relations and legislative contexts must be viewed with caution in considering the good faith bargaining obligations under the Fair Work Act. In this regard, we note that there is no comparable express requirement in the Act for bargaining parties to conclude a collective agreement and that the obligation on the parties to bargain in good faith is subject to the proviso in s.228(2) that they are not required to make concessions.

[22] We were also taken to the decisions of Full Benches of the Australian Industrial Relations Commission in Asahi Diamond Industrial Australia Pty Limited v Automotive, Food Metals and Engineering Union 12(Asahi) and in Public Sector, Professional, Scientific, Research, Technical, Communications, Aviation and Broadcasting Union v Australian Broadcasting Commission 13 (the ABC case). In Asahi, the Full Bench considered the construction of s.170QK of the Industrial Relations Act 1988 (the IR Act) which provided for the Commission to make orders for the purpose of ensuring that the parties negotiating an agreement do so in good faith or otherwise facilitating the making of such an agreement.14 Although s.170QK contained some provisions somewhat similar to s.228 of the Act, it did not contain any provision equivalent to s.228(2). Notwithstanding this, the Full Bench in Asahi15 found that the terms of s.170QK of the IR Act did not extend to requiring the parties to make concessions in negotiations. The Full Bench said:

[23] Although the concept of not requiring negotiating parties to make concessions has been adopted in s.228 of the Act, there are many differences between the current legislative scheme and that under the IR Act.

[24] Under Division 8 of Part 2-4 of the Act, the general role of FWA is to facilitate the bargaining process. Although the primary responsibility for bargaining remains with the parties, there are processes provided under the Act to facilitate agreement-making and assist the parties to bargain effectively.

[25] The following extracts from the Explanatory Memorandum to the Fair Work Bill 2008 provide a general description of the current scheme in relation to good faith bargaining.

[26] The good faith bargaining requirements which bargaining representatives are required to meet are set out in s.228 of the Act. Importantly, these requirements go beyond what might be considered procedural matters such as attending meetings, disclosing relevant information and responding to proposals. Under the good faith bargaining requirements the parties must

In effect the parties must take reasonable steps and make reasonable efforts towards making an enterprise agreement. However the good faith bargaining requirements do not require parties to make concessions during bargaining or to reach agreement on terms to be included in an agreement (s.228(2)).

[27] The objects of the Act and Part 2-4 support an interpretation of s.228 as requiring parties to approach bargaining on the basis that they are to attempt to conclude an enterprise agreement. The object of the Act as set out in s.3 includes reference to: “achieving productivity and fairness through an emphasis on enterprise-level collective bargaining underpinned by simple good faith bargaining obligations...” Good faith bargaining is intended to bring about enterprise agreements and the parties are under an obligation to try and conclude an agreement. The objects of Part 2-4 (which contains s.228) support this view. Subsection 171(b) states that one of the objects of the Part is to: “enable FWA to facilitate good faith bargaining and the making of enterprise agreements, including through (i) making bargaining orders...” In general the legislative scheme might be described as one which seeks to promote agreement making but which does not compel parties to make concessions or to reach agreement. There is nothing inconsistent about encouraging parties to make agreements - and imposing an obligation upon them to try to do so - but at the same time not compelling parties to make concessions in bargaining. An agreement remains what the name implies.

[28] A key difference in the current legislative scheme to that under the IR Act is the provision for majority support determinations to be made. Once a determination is made, the employer has an obligation to issue a notice of employee representational rights 18 and must meet the good faith bargaining requirements. It cannot continue to refuse to “bargain”. The obligation of an employer to bargain upon a majority support determination being made is explained in the Explanatory Memorandum in the following paragraphs:

[29] Where a majority support determination is made, there is an expectation that the employer will recognise the wishes of its employees to bargain collectively for an agreement, and enter into negotiations in an endeavour to reach an agreement. Where this does not happen, a bargaining order may be sought to ensure that the obligation to bargain is fulfilled.

[30] The main question in the present case concerns whether the Company was meeting its obligation to bargain in good faith. This involved a consideration as to whether there was a real or serious endeavour being made by the Company to negotiate an agreement, having regard to the finding by FWA that a majority of its staff employees want to bargain for an agreement. If the conduct of an employer in engaging in the bargaining process is a mere sham or pretence, such as going through the motions of bargaining without any real intention to enter into an agreement, then this would be contrary to the good faith bargaining requirements. In particular, such conduct might involve a failure to give genuine consideration to the proposals of other parties (s.228(1)(d)) or it might constitute capricious or unfair conduct that undermines freedom of association or collective bargaining (s.228(1)(e)). Such conduct might also amount to a failure to recognise and “bargain” with other parties (s.228(1)(f)).

[31] In the ABC case it was said that the determination of whether or not a negotiating party is “negotiating in good faith” may depend upon the conduct of the party when considered as a whole. The Full Bench gave the following example:

[32] The evidence in the present case is that in many respects the Company complied with the formal requirements of the bargaining process by participating in meetings and responding to proposals put by APESMA. However, on our consideration of the evidence as a whole, it was open to the Commissioner to conclude that the Company’s conduct was not such as to demonstrate a genuine endeavour to negotiate an agreement with APESMA. The Company has not previously had a collective agreement covering staff employees at the Mine and it is clear from the evidence that it would prefer not to have such an agreement at this time. The Company participated in the bargaining process but did not make any substantive contribution to the possible content of an enterprise agreement or put proposals of its own.

[33] In these circumstances it was open to the Commissioner, and appropriate on the evidence, to conclude that the good faith bargaining requirements envisioned by s.228(1)(d) were not being met by the Company in that it was not giving “genuine consideration” to the proposals being put by APESMA. In our view, it would have also been open on the evidence for the Commissioner to conclude that the requirements in s.228(1)(f) were not being met by the Company.

[34] The Commissioner also found that the Company had not met the good faith bargaining requirements as it refused to supply APESMA with information which it was reasonable for the union to possess in order to adequately bargain with the Company (see.s228(1)(b)). 20

[35] It is an important element of the bargaining process that parties provide a formal indication of the issues and proposals sought by them in relation to a proposed agreement. The failure to do so might be held to be contrary to the good faith bargaining requirements established by s.228(1)(b) of the Act. 21 In the present case the Company has never put any proposals of its own as to the terms of an enterprise agreement which would be acceptable. The Commissioner took the view that this amounted to an unreasonable refusal by the Company to supply APESMA with information and was contrary to the requirements of s.228(1)(b). Although we have reservations as to whether the reference in s.228(1)(b) to the disclosure of relevant information is intended to cover the negotiating positions and agreement proposals of the parties, we recognise that it is a crucial part of the bargaining process that parties disclose such matters in the negotiations. The failure to do so may be found to be contrary to the good faith bargaining requirements in s.228(1) of the Act, and in particular the requirement to “bargain” (s.228(1)(f)) and to refrain from unfair conduct that undermines collective bargaining (s.228(1)(e)).

[36] It is a prerequisite to the making of a bargaining order that FWA be satisfied that a party is not meeting the good faith bargaining requirements (see s.230(3)(a)). For all the above reasons, there was an appropriate basis for FWA being satisfied in the circumstances of this matter that the Company was not meeting the good faith bargaining requirements.

(ii) Is it reasonable to make the bargaining order?

[37] After considering the evidence and submissions of the parties, the Commissioner stated in his decision that “All in all, I am satisfied that the prerequisites for the making of an order have been established by APESMA”. 22

[38] It was submitted by the Company that there was no finding by the Commissioner to the effect that he was “satisfied that it is reasonable in all the circumstances to make the order”, as required by s.230(1)(c) of the Act. Although the Commissioner sets out the relevant legislative provisions including s.230 in his decision and specifically states that the prerequisites for the making of a bargaining order were satisfied, we do not consider that this demonstrates that the Commissioner gave appropriate consideration to the requirement in s.230(1)(c). This is a jurisdictional requirement in relation to the making of a bargaining order and one that needed to be addressed before an order could be made. The Commissioner makes no specific mention of the requirement and does not provide any analysis of the evidence and submissions of the parties leading to a conclusion that the requirement was met. In particular, the Commissioner makes no finding that it was “reasonable in all the circumstances” for the order to be made.

[39] Given the error in the decision on this requirement, we have considered whether it is reasonable in all the circumstances of the present matter for a bargaining order to be made. In this regard, we have had regard to the evidence and submissions before the Commissioner and to what has been put in the appeal proceedings. Earlier in this decision, we have provided a summary of the bargaining between the parties and the stage reached in the negotiations which led to the making of the application for the bargaining order. Having regard to the findings regarding the position taken by the Company in the negotiations and failures to observe the good faith bargaining requirements, we are satisfied that it is reasonable in all the circumstances of the present matter to make a bargaining order. Such an order can address deficiencies identified in the bargaining process and the observance of the good faith bargaining requirements and can assist the parties to move beyond the impasse reached in their negotiations.

(iii) Are the orders made appropriate?

[40] The Commissioner decided to issue orders in the terms sought by APESMA but with various amendments and deletions. We have set out the orders made by the Commissioner earlier in this decision.

[41] In the appeal, the Company submitted that the orders made by the Commissioner were of a nature not contemplated by s.231 of the Act and went beyond the purposes for which such orders may be made. It was submitted that the Commissioner erred in ordering that the Company make positive proposals and, in effect, propose an agreement and terms for inclusion in any agreement for consideration by APESMA. It was said that the orders were made without jurisdiction and do not assist in advancing the bargaining process and ensuring that the parties meet the good faith bargaining requirements. The Company also made submissions as to particular problems and objections in relation to specific orders made by the Commissioner.

[42] Section 231 deals with what a bargaining order must specify and describes the kinds of orders that may be made. Where the basis for making an order is that one of the parties has not met the good faith bargaining requirements, the order must specify the actions to be taken by the parties and requirements imposed upon them to ensure that the good faith bargaining requirements are met (s.231(1)(a)). An order can also specify the actions required to ensure that the parties meet the good faith bargaining requirement of refraining from capricious or unfair conduct that undermines freedom of association or collective bargaining (s.231(1)(b) and (c)).

[43] Whilst FWA is given discretion as to the kinds of bargaining orders to be made, the orders should be directed towards ensuring that the good faith bargaining requirements are met. They should address deficiencies identified in the bargaining process and be tailored to remedy any failure to meet the good faith bargaining requirements. The role of FWA is to facilitate bargaining by making orders dealing with those aspects of the good faith bargaining requirements which have not been met. The orders should be appropriate and practical having regard to the circumstances of the bargaining between the parties. Although the orders might identify further steps to be taken by the parties in the bargaining process and towards making an agreement, they should not be such as to require the parties to go beyond the good faith bargaining requirements and to make concessions or to agree on terms to be included in an agreement (s.228(2)).

[44] We now turn to consider the specific orders made by the Commissioner.

[45] The first order requires the Company to take various actions including: to provide APESMA with a list of the subject matter it would be prepared to include in an enterprise agreement; to identify what aspects of the latest version of the APESMA proposed agreement, if any, can be agreed; to advise what changes should be made to the proposed agreement to make it acceptable to the Company; and to propose terms of an enterprise agreement that the Company would be prepared to enter into.

[46] The Company submitted that the order made was inconsistent with s.228(2) and beyond power. It was said that the order goes beyond mere issues of process and requires the Company to put positions which it does not wish to put, to make concessions by indicating what terms of an agreement it would accept and propose terms of an agreement that it would be prepared to enter into. It was submitted that the order involves a compulsion on the Company to make concessions during bargaining and to reach agreement on the terms that are to be included in the agreement. It was said that a party is not required by s.228 of the Act to provide a counter offer or put a “positive proposal” to the other party.

[47] We do not agree that the first order made by the Commissioner is to be so construed or that it imposes obligations on the Company to make concessions during bargaining or to reach agreement with APESMA. The orders must be read in the context of the circumstances before the Commissioner including the evidence as to the impasse reached in the negotiations between the parties. The Company did not indicate during the bargaining which aspects of the APESMA proposed agreement it agreed could be included in an enterprise agreement. The Company did not put its own proposal. Given the finding that the Company was not meeting the good faith bargaining requirements as it had no real intention to make an agreement, the order would assist the parties to get over the impasse in the negotiations either by identifying a way forward towards making an agreement or by concluding that any further efforts in bargaining with a view to making an agreement would be futile.

[48] The good faith bargaining requirements in s.228 require bargaining representatives to “bargain” but do not require them to make concessions or to reach agreement. An order would be beyond power if it required a party to put a different negotiating position to that which it wished to put. However it is not beyond power to require a party to put its negotiating position. Such an order requires no concessions to be made.

[49] In our view the first order does not go beyond requiring the Company to state clearly its position on the making of an agreement. This will assist the bargaining process and allow the parties to assess the possibilities of an agreement being made. It also addresses the conduct which led to the finding that the good faith bargaining requirements were not being observed. It does not require the Company to make concessions or to reach agreement. It does not require the Company to put a different negotiating position than that which it wishes to put. It simply requires the Company to put its negotiating position. The order thereby seeks to facilitate the bargaining process between the parties in a practical way even though, given the previous position taken by the Company in the negotiations, the effect of such an order might only be to bring the process between the parties to a conclusion.

[50] The first order made by the Commissioner was within power and appropriate in the circumstances of the matter before him.

[51] The second order made by the Commissioner requires the Company not to “unilaterally determine” the terms of a new standard contract for staff or to alter existing terms of staff contracts outside the bargaining process. Orders of such a nature may be made under s.230 of the Act provided an appropriate case is made out.23

[52] There is little in the decision of the Commissioner which discloses the reasoning process followed or the essential reasons for making the second order, apart from the reference to the following passage from the decision in Finance Sector Union of Australia v Commonwealth Bank of Australia 24:

[53] In the appeal proceedings, the Company submitted that there were only minor changes made to the contracts of employment and these were made after the impasse had been reached in the negotiations for an enterprise agreement. It was said that these changes were advised to APESMA, beneficial to employees and not the subject of complaint. It was also submitted by the Company that the order has the effect of preventing the Company from making changes, however minor, to staff contracts of employment outside the enterprise bargaining process and without reaching agreement with APESMA. Such a requirement would be contrary to s.228(2) of the Act.

[54] In its submissions, APESMA referred to evidence before the Commissioner showing that it had opposed the Company addressing issues, which had been raised in the negotiations, by making changes to policy and practices rather than through making an enterprise agreement. Notwithstanding its opposition, it was said that the Company, whilst the negotiations about the agreement were continuing, proceeded to issue policies regarding new contracts and overtime payments and to invite direct feedback from staff. In response to a letter from APESMA expressing concerns that such conduct was undermining bargaining, the Company indicated that it would continue to make necessary changes to its standard letter of offer and to discuss such changes with staff.

[55] Despite the deficiencies in the Commissioner’s decision, we are satisfied having examined the relevant evidence that there is an appropriate basis for making the second order. It is directed towards preserving the integrity of the bargaining process by ensuring that changes are not made unilaterally in relation to matters which are still the subject of negotiation between the parties. It addresses unfair conduct by an employer which might undermine freedom of association or collective bargaining. This is not an unreasonable restriction during the bargaining process and whilst the parties are endeavouring to make an agreement. It seeks to preserve the status quo during the bargaining and does not require the parties to make concessions or to reach agreement on terms to be included in an enterprise agreement.

[56] We recognise that the order will place restrictions upon the Company being able to make changes, some of which might be of minor nature, to the standard terms of contract for new or existing staff employees during the enterprise bargaining process. These restrictions might become unreasonable having regard to the length of the bargaining process. In this regard we note that s.232 of the Act provides when a bargaining order will cease to be in operation, including when the bargaining representatives agree that bargaining has ceased (s.232(b)(iv)) or if the order is revoked (s.232(b)(i)).

[57] We find that the second order was appropriately made in the circumstances of this matter. We adopt the second order.

[58] The third order made by the Commissioner was for the Company to disclose information to APESMA regarding remuneration structures and pay bands for staff at the Mine. Orders of such a nature may be made under s.230 of the Act provided they do not require the disclosure of confidential or commercially sensitive information (see s.228(1)(b)). The Commissioner was satisfied that the Company unreasonably refused, contrary to s.228(1)(b), to supply APESMA with information which it was reasonable for the union to possess so as to adequately bargain with the Company.

[59] In the appeal proceedings, the Company submitted that some of the information specified in the order is the same as information which was earlier ruled by the Commissioner to be commercially sensitive. It was said that at the outset of the proceedings before him, the Commissioner considered whether to vary an order issued at the request of APESMA requiring the production by the Company of certain documents including:

After examining the documents, the Commissioner ruled that they were commercially sensitive being “documents relating to internal workings of the Company which were not intended to see the light of day in this sort of process”. 25

[60] It was said by the Company that this finding by the Commissioner was consistent with evidence later given in the proceedings before him by one of the Company’s witnesses to the effect that there would be concerns if information about the Company’s remuneration structures and pay bands were to be released and come into the hands of competitors or third parties. There would also be concerns about internal issues arising as between employees given the highly confidential nature of the information. The Company submitted that the Commissioner had not addressed the issue as to whether the information covered by the third order was commercially sensitive or confidential and so within the exception in s.228(1)(b). Further the Company was not put on notice that the interlocutory ruling on the production of documents given early in the proceedings would be departed from by the Commissioner in making the third order.

[61] We note that the ruling made on the first day of the hearing relates to an order sought by APESMA for the production of documents setting out the Company’s “salary review process”. That order was sought under s.590(2) of the Act to ensure that relevant material was before FWA when considering APESMA’s application for a bargaining order. The considerations relating to the making of such an order to produce documents and those relating to the making of a bargaining order are of a different character. In general, it is incumbent upon parties in proceedings to present their submissions and objections in relation to the substantive matter before FWA and not to rely upon rulings made in the course of proceedings on other matters or for other purposes.

[62] Part of the bargaining order sought by APESMA was for the disclosure by the Company to APESMA of certain information relating to the salary structure and pay bands. The order made by the Commissioner requires that such information be disclosed “in a manner which does not identify the actual pay of any individual”. We also note that the Commissioner in making the order did not include reference to some information sought by APESMA. On our consideration of the evidence as to the negotiations and bargaining between the parties, the information covered by the third order is relevant to the negotiations and the bargaining process and is information which should be available to each party. The disclosure of such information can assist in progressing negotiations and can appropriately be the subject of a bargaining order.

[63] However in the present matter we do not consider that it was appropriate to make the third order. The information about the salary structure and pay bands at the Mine which the Company was ordered to disclose to APESMA is, in part, information which the Commissioner ruled earlier in the proceedings to be commercially sensitive. It is possible therefore that the Company was misled as to the views of the Commissioner about the commercially sensitive nature of the material and this may have resulted in a denial of procedural fairness. Further the Commissioner did not make any findings in relation to the making of the bargaining order that the information to be provided was not “confidential or commercially sensitive” within the meaning of the exception in s.228(1)(b). Therefore there is a question as to whether all necessary matters were taken into account in making the third order. There might also be questions as to whether the order is necessary, as it would seem that such information, or at least parts of it, might be obtained by APESMA directly from its members. In these circumstances we have decided that the third order made by the Commissioner should be set aside.

[64] In making a bargaining order under s.230, the power of FWA to order the disclosure of information is limited to information which is not “confidential or commercially sensitive” (s.228(1)(b)). What is confidential or commercially sensitive will involve a decision on a question of fact in each case where that quality is asserted. 26 In this regard we recognise that considerable time and effort might have been expended by the Company upon the development of the salary structure and that an understanding of the overall operation of the structure might be limited to only a few senior employees within the Company. It is understandable that such information might be closely guarded by the Company and be considered confidential by it.

[65] We also recognise that the information specified in the third order is of considerable importance in allowing the parties to negotiate an enterprise agreement, which includes provisions relating to salaries. Indeed the operation of the current salary structure and pay bands for staff at the Mine would seem to be a matter of fundamental importance in bargaining for an enterprise agreement. In most cases the parties to enterprise bargaining are able to share such information in a way and subject to restrictions on use or dissemination as to protect the interests of all concerned and to allow bargaining to proceed. Where such an accommodation cannot be achieved, the matter might be raised in the context of an application for a bargaining order. FWA will then need to consider the evidence and the competing submissions of the parties in determining whether an order for disclosure should be made.

[66] The fourth and fifth orders made by the Commissioner relate to representation in future bargaining meetings and the holding of meetings. Such orders are unexceptional in the requirements placed on the parties in order to facilitate the bargaining process. We adopt these orders.

Conclusion

[67] For the above reasons, we have decided to allow the appeal and to vary the bargaining order made by the Commissioner by deleting the third part of the order.

[68] Given the errors in the decision of the Commissioner, we have considered whether a bargaining order should be made in the circumstances of this matter and the terms of any such order. We have decided that it is appropriate that an order be made and that it should be in the terms determined by the Commissioner, with the abovementioned exception. The bargaining order is appropriate having regard to the circumstances of the bargaining between the Company and APESMA and the findings made. The order is directed towards ensuring that the good faith bargaining requirements are met and, properly understood, does not impose obligations which are contrary to s. 228(2) of the Act. The order will facilitate the bargaining process between the parties and ensure that a genuine endeavour is made to reach an agreement.

SENIOR DEPUTY PRESIDENT

Appearances:

Mr R Kenzie QC and Mr S Prince of Counsel with Mr B Rauf for Endeavour Coal Pty Ltd.

Mr I Taylor and Mr D Mahendra of Counsel for APESMA.

Hearing details:

2012.

Sydney.

23 February.

 1   [2012] FWA 13

 2   PR518734

 3   MA000001

 4   PR999054

 5   PR518734

 6   (2000) 203 CLR 194.

 7   [2012] FWA 13 at [11]-[12].

 8   Ibid at [7]-[8].

 9   Ibid at [11].

 10   See Employment Relations Act 2000 (NZ), s. 33

 11   See Canada Labour Code, s.50.

 12   (1995) 59 IR 385.

 13   (31 August 1994), Print L4605.

 14   See s.170QK(2).

 15   Diamond Industrial Australia Pty Limited v Automotive, Food Metals and Engineering Union (1995) 59 IR 385.

 16   Ibid at 422.

 17   See also Explanatory Memorandum to the Fair Work Bill 2008 at [945]-[969].

 18   See s.173(2)(b). See also the Notice of employee representational rights prescribed in Schedule 2.1 of the Fair Work Regulations 2009, which commences as follows: “[Name of employer] gives notice that it is bargaining in relation to an enterprise agreement ([name of the proposed enterprise agreement]) which is proposed to cover employees that [proposed coverage].”

 19   For a consideration of the concept of ‘good faith’ negotiation by Australian Courts, see also Aiton Australia Pty Ltd v Transfield Pty Ltd (1999) 153 FLR 236, especially at pars. 145-149 (Einstein J.); Brownley v Western Australia (1999) 95 FCR 152 (Lee J.); Strzelecki Holdings Pty Ltd v Cable Sands Pty Ltd [2010] WASCA 222 especially at par 94 (Murphy JA.)

 20   [2012] FWA 13 at [9].

 21   See e.g. Flinders Operating Services Pty Ltd trading as Alinta Energy v ASU, APESMA and Anor [2010] FWA 4821 at [167]-[169].

 22   [2012] FWA 13 at [12].

23 See e.g. Finance Sector Union of Australia v Commonwealth Bank of Australia [2010] FWA 2690.

 24   [2010] FWA 2690.

 25   Transcript, 29 November 2011, at pn462.

 26   See Wright v Gasweld Pty Ltd (1991) 22 NSWLR 317 at 334 (Kirby J). See also at 325 (Gleeson CJ).

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