On 20 April 2012, the Federal Court delivered its judgment in the JJ Richards case, confirming that unions facing an employer who refuses to bargain are not obliged to seek a majority support order or overcome other obstacles before asking members to authorise industrial action.
In JJ Richards & Sons Pty Ltd v Fair Work Australia, the Court upheld FWA decisions that permitted the Transport Workers' Union ("TWU") to seek a protected action ballot after waste contractor JJ Richards declined the Union's request to commence bargaining.
On 24 December 2010, the TWU (second respondent) wrote to JJ Richards (first applicant) stating that it sought to "bargain for an enterprise agreement with your company covering your employees on the Canterbury Council contract". The "major elements of the agreement" were thereafter summarised. On 7 January 2011, JJ Richards responded, saying that it did not "believe that bargaining for an enterprise agreement is viable". One of the reasons provided was that the Canterbury Council contract was to cease on 26 February 2012.
On 1 February 2011, the TWU applied to Fair Work Australia for a protected action ballot order under section 443 of the Fair Work Act 2009 (Cth). A Commissioner made the order which was sought on 16 February 2011. JJ Richards filed a Notice of Appeal on 7 March 2011. On 9 March 2011, the Australian Mines and Metals Association Inc ("AMMA") (second applicant) also filed a Notice of Appeal.
A Full Bench of Fair Work Australia heard the appeal on 18 April 2011. On 1 June 2011, the Full Bench delivered its judgment. Both appeals were dismissed. The Full Bench rejected the principal argument put forward by both appellants, namely, that a protected action ballot could not be granted pursuant to section 443 of the Act unless bargaining has commenced, or, where an employer is unwilling to bargain, unless an applicant has exhausted the steps available to it under the Act to force the employer to do so.
In these proceedings, a writ of certiorari was sought to quash the decisions of Fair Work Australia (first respondent) made on 1 June 2011 and 16 February 2011. Mandamus was sought requiring Fair Work Australia "to hear and determine the… application… according to law". The applicants submitted that FWA had misconstrued the terms of section 443 and regarded itself as subject to a statutory obligation to make the order when, in fact, on a proper construction of the section, there was a statutory prohibition upon the making of the order. The applicants' case was that the correct construction of section 433 is to be found not merely in the words of the section itself, but in other provisions of the Act which establish the setting in which a protected action ballot order might be sought, and made.
The Bench rejected the applicants' arguments that the Act prohibited FWA from making a protected action ballot under section 443 unless bargaining commenced.
Justice Tracey submitted that there was no warrant to read into the sub-section words of limitation which do not appear. He said that the legislature required FWA to make a protected action ballot order if the two conditions set out in section 443(1) were satisfied, even if bargaining between the employer and employees had not commenced.
Similarly, Justice Flick said that the subsection only imposed two express statutory constraints on the mandatory obligation imposed on FWA to make an order:
there must be an application made under sections 437; and
FWA must be satisfied that each applicant has been, and is, genuinely trying to reach an agreement.
His Honour felt that implying any further constraint on the operation of section 443(1) would "confront the difficulty of reading into a statutory provision words which are not there" and would propel the Court "from its accepted role of interpreting the will of the Legislature into the territory of itself redrafting legislation".
His Honour submitted that the TWU had satisfied the "genuinely try" requirement by writing to JJ Richards on 24 December 2010. His Honour felt that the exchange of correspondence – the TWU letter and JJ Richards' response – was sufficient to satisfy the precondition to the exercise of power conferred by section 443(1).
The Bench did depart from the findings of the FWA Full Bench on one point. Justice Jessup said that FWA was incorrect in its conclusion that there was "nothing in the legislative provisions to suggest that a bargaining representative should not be permitted to organise protected industrial action to persuade an employer to agree to bargain". He said that unions could use bargaining orders to "bring an employer to the bargaining table… without taking industrial action." He suggested that "although limited to an extent, the legislature has, both specifically and in some detail, turned its mind to the means by which an unwilling employer might, to use the Full Bench's metaphor, be persuaded to come to the bargaining table".
Justice Jessup also suggested that there was much to be said for the applicants' case "as a matter of broad statutory purpose". He said "in the sense that protected industrial action must, necessarily, relate to a proposed enterprise agreement (section 408), it is legitimate to point out, as the applicants did in their submissions, that the ability to take protected industrial action is to be seen as a part and parcel of the statutory regime for bargaining in pursuit of, or in resistance to, the making of such agreements".
Justice Tracey shared Justice Jessup's reservations about the Full Bench's reservations, commenting that "the other provisions of the Act to which [Justice Jessup] refers suggest that a less confrontational and more ordered process was available to the Union had it wished to avail itself of it".
Notwithstanding the aforementioned observations, the Bench felt that it was impossible to construe section 443(1)(b) as the applicants proposed. While there might be reason to perceive in section 443(1)(b) a departure from the scheme of regulated bargaining set out by Pt 204 of the Act, this contributed little to the task of construction which confronted the Full Bench. There was no basis for the introduction of additional requirements or conditions which might have been, but which have not been enacted.
Ultimately, the Bench dismissed the appeal, suggesting that both of the decisions made by FWA were a valid exercise of the power conferred by section 443(1) of the Act.
This decision turns on its head the conventional wisdom about the stages of the bargaining process. The decision provides a powerful tool in the arsenal of unions to pursue bargaining objectives.
This article was written when Joe Catanzariti was a partner at Clayton Utz and does not necessarily reflect his views as Vice-President of the Fair Work Commission.
This article was first published in the Law Society Journal, May 2012