Automotive, Metals, Engineering, Printing and Kindred Industries Industrial Union of Employees, Queensland v Townsville Engineering Industries Pty Ltd [2004] QIRC 208 (2004) 177 QGIG 783

17 December, 2004 QUEENSLAND GOVERNMENT INDUSTRIAL GAZETTE 783 QUEENSLAND INDUSTRIAL RELATIONS COMMISSION Industrial Relations Act 1999 – s. 149 – application for arbitration Automotive, Metals, Engineering, Printing and Kindred Industries Industrial Union of Employees, Queensland AND Townsville Engineering Industries Pty Ltd (Case No. B1291 of 2004) COMMISSIONER BLADES 2 December 2004 Certified agreement – Employer refuses to enter into a certified agreement – Refuses to negotiate at all – Conciliation conferences before Commission – Application by Union for Commission to arbitrate under s. 149 of the Industrial Relations Act 1999 – Matter referred to Commission to arbitrate – Question of jurisdiction to arbitrate – Employer objects to arbitration – Employer’s submission upheld – No “matters at issue during negotiations” – Commission lacking in jurisdiction – Employer is not required to enter into a certified agreement – Arbitration struck out. DECISION At the heart of this arbitration is the question whether an employer can be forced to make a certified agreement. Perhaps also connected with the question is whether a Commissioner can refer for arbitration under s. 149 of the Industrial Relations Act 1999 (the Act), a matter where one of the parties has refused to enter into negotiations at all. A short chronology of events is: • 22 July 2004 – The Automotive, Metals, Engineering, Printing and Kindred Industries Industrial Union of Employees, Queensland (AMEPKU) sent a letter to Townsville Engineering Industries Pty Ltd (Townsville Engineering) seeking to negotiate a certified agreement in accordance with Chapter 6 of the Act. This notice was in accordance with s. 143(2) of the Act and was effective in commencing the peace obligation period provided for in s. 147(2). This peace obligation period expired on 12 August 2004. • 28 July 2004 – Townsville Engineering responded to the AMEPKU’s letter, advising that it did not seek to negotiate a certified agreement. It claimed it was already paying its employees over the award. • 26 August 2004 – AMEPKU made an application to the Queensland Industrial Relations Commission under s. 148 of the Act seeking assistance to make a certified agreement. • 13 September 2004 – A Commissioner convened a conference where the company advised the Commissioner that it was not prepared to enter into negotiations for a certified agreement with the AMEPKU. • 14 September 2004 – Registrar issued a certificate pursuant to s. 152(2) of the Act. • 5 October 2004 – A further conference convened where Townsville Engineering reiterated its position that it was not prepared to enter into negotiations with the AMEPKU. At the conclusion of the conference, the Commissioner referred the matter to arbitration. Townsville Engineering has submitted as follows: • Section 141 of the Act specifies that a certified agreement may be made by an employer and a group of employees. It does not state that a certified agreement “will” or “must” be entered into or made between an employer and a group of employees. The use of the word “may” reflects our understanding that the employer or employees have an option of whether they wish to enter into a certified agreement or not. • Section 142 describes who can make a certified agreement. Again, the opening sentence to this section refers to the word “may”. If it was the intention of the legislature to make it mandatory to negotiate a certified agreement, then it would have been a simple drafting exercise to use the word “shall” or “will” in lieu of the word “may”. • It is our contention that the Honourable the Minister, in the Second Reading Speech, was clearly stating that there is a choice for the parties of either remaining under an award which has been updated and which are now no longer safety net awards but reflect prevailing community standards or opting to enter into some form of an agreement. • The final heading of any relevance is under the heading of “Agreement Making”. Clearly this section deals with the process that the parties must follow after they agree to make an agreement, as reflected in the heading. The intention of the Government was that after the 21 day peace obligation period and evidence that the parties wish to negotiate an agreement and those negotiations have broken down, one or more of the parties can request assistance from the Commission to make an agreement. • It is our submission that this section must be premised on the understanding that both parties seek to enter into negotiations for a certified agreement. • It is our submission that after the 21 day peace obligation period has expired, if a party does not wish to negotiate then the discussions cease. • Section 146 (Negotiations must be in good faith) in our submission is based on the assumption that the parties have agreed to enter into negotiations. • Section 148 (Assistance in negotiating by conciliation) establishes a mechanism to allow the parties to obtain assistance in negotiating a certified agreement. This can only occur when the parties have agreed to enter into negotiations. The Commission cannot provide assistance if the parties are not negotiating. • Section 149 specifies the action that the Commission can take when conciliation has been unsuccessful. Section 149 cannot be enacted unless s. 148 has been complied with. We would contend that if a party has not entered into negotiations and that no conciliation could have occurred, then arbitration cannot follow. • There were no “matters at issue” in terms of s. 149(4) because Townsville Engineering has not put any issues on the table for negotiation. • There is no requirement under any section of the Act to force an employer to negotiate and to make concessions. AMEPKU submits there is jurisdiction and says: • The respondent is asking the Commission to revisit the decision of another Commissioner on 5 October 2004 to refer the matter for arbitration. This is a de facto appeal. • The jurisdiction requirements for s. 149(2) of the Act to furnish to the Commission the power to make a determination are present. • There is no jurisdiction pre-requisite in Chapter 6 of the Act, requiring both parties to be desirous of making an agreement before arbitration. • If the respondent believed the Commissioner erred in law in its decision of 5 October, the appropriate mechanism was to appeal and because of that failure, the matters now raised are res judicata. • In the alternative, the applicant submits that Chapter 6 is clear in providing the jurisdictional requirements for the exercise of the power under s. 149(2). • The requirements are that the proposed certified agreement be about the relationship between the employer and a group of employees; the proposed agreement is between an employer on one hand and either an employee organisation or employees on the other; the proposer of the agreement must advise the other proposed parties of its intention to negotiate a certified agreement; the peace obligation period has expired; a -- 1 of 3 -- 784 QUEENSLAND GOVERNMENT INDUSTRIAL GAZETTE 17 December, 2004 party who has attempted to negotiate a certified agreement has sought the Commission’s assistance by declaring a breakdown in negotiations; and the Commission must be satisfied that one of the grounds in s. 149(1) of the Act has been met. • Neither the specific provisions nor the scheme of the Act provide support for the contention that both parties must be seeking to make a certified agreement. • The very nature of the determination under s. 149(2) is that it is non-consensual. A determination pursuant to s. 149(2) requires neither the consent of any of the parties nor the approval of employees. • Section 149(2) is not part of the agreement making process but is the consequence of the parties being unable to reach an agreement. • The determination process pursuant to s. 149(2) does not provide that a party can choose not to be involved. • Section 143 requires only that there be a proposer of a certified agreement to commence the peace obligation period. There is no requirement that the other proposed parties must accept their role as proposed parties. • Sections 149(1)(a) and 149(1)(b) do not require that both parties must be desirous of entering into a certified agreement. This should be contrasted with the provisions of s. 149(1)(c) which requires the consent of both parties to proceed to a determination under s. 149(2). • If the respondent be correct, it would allow proposed parties to the agreement to withdraw their willingness to make an agreement in order to avoid the making of a determination pursuant to s. 149(2). The proposer of a certified agreement would also be required to prove that the other proposed party wanted a certified agreement. • The power to arbitrate is the power the Commission would have under s. 230, a section which does not require that both parties consent to the existence of a dispute or the arbitration thereof. In reply, Townsville Engineering has submitted: • The application is not intended to revisit the Commission’s decision on 5 October. • The issue of whether a party is required to negotiate a certified agreement has not been determined by that Commissioner. • If it be accepted that the AMEPKU’s proposition is correct that negotiations are mandatory so that if a party does not want to negotiate and a certified agreement can be imposed by arbitration, it will result in all unions undertaking mass mail outs of letters to employers seeking to enter into a certified agreement. If the employer does not wish to negotiate then the employer will be forced into a certified agreement by arbitration. • The arbitration under s. 149 can only apply when parties have firstly agreed to enter into negotiations and secondly, where issues in contention cannot be resolved. • Before s. 149 can be enlivened, negotiations must have started. An employer cannot be forced to negotiate under duress. Refusing to enter into negotiations is not “negotiating”. In further oral submissions, AMEPKU again stated that the employer had the opportunity to appeal the decision of the Commissioner referring the matter to arbitration and that if the employer’s submission be upheld, it allows an employer to opt out of negotiations at the stage when an arbitration about unresolved issues becomes inevitable, making s. 149(1)(c) meaningless. AMEPKU is not saying that there is an obligation on an employer to negotiate a certified agreement but that when one is proposed, s. 149 provides a resolution. The employer has reiterated that this is not a case of an employer opting out of negotiations when they get a little difficult, that it has opted for the award rather than a certified agreement and has in fact made an agreement with employees to pay more than the award rate. The Industrial Relations Act 1999, so far as appears to be relevant, provides as follows: “Certified agreements 141.(1) A certified agreement may be made about the relationship between an employer and a group of employees (whether all employees, or a category of employees) of the employer. (2) … (3) … Who may make certified agreements 142. A certified agreement may be made between – (a) on the one hand, the employer; and (b) on the other hand – (i) 1 or more employee organisations who represent, or are entitled to represent, any employees who are, or are eligible to be, members of the organisation; or (ii) the employees at the time the agreement is made. Proposed parties to be advised when agreement is proposed 143.(1) This section applies when a person (the ‘proposer’) proposes to make a certified agreement. (2) The proposer must advise the following persons, in writing, of the proposer’s intention to begin negotiations for the agreement – (a) the other proposed parties to the agreement; and (b) for a project agreement – all relevant employee organisations and the commission. (3) The proposer must advise the persons at least 14 days before the negotiations are proposed to begin. (4) … (5) … (6) … (7) … (8) … Negotiations must be in good faith 146. When negotiating the terms of a proposed agreement, the proposed parties to the agreement must negotiate in good faith. Peace obligation period to assist negotiations 147.(1) To enable the proposed parties to reach agreement about the terms of the proposed agreement, the proposed parties can not during the peace obligation period – (a) take industrial action for the purpose of – (i) supporting or advancing claims made in relation to the proposed agreement; or (ii) responding to industrial action by the employer or the relevant employees; or (b) ask the commission to help the parties to make the agreement under section 148. (2) ... -- 2 of 3 -- 17 December, 2004 QUEENSLAND GOVERNMENT INDUSTRIAL GAZETTE 785 Assistance in negotiating by conciliation 148.(1) This section applies if, after the peace obligation period has ended – (a) a party who has attempted to negotiate a certified agreement (a ‘negotiating party’), by a declaration o a breakdown in negotiations, has asked the commission to help the parties to make a certified agreement; or (b) the commission becomes aware that a negotiating party is engaging in industrial action that – (i) is threatening, or has caused, significant damage to the economy, community or local community, or part of the economy; or (ii) is threatening to endanger, or has endangered, the personal health, safety or welfare of the community or part of it. (2) To help the parties to reach agreement, the commission has the conciliation powers it would have under section 230 if that section applied to certified agreement negotiations instead of to industrial disputes. (3) Also, the commission may make orders to – (a) promote the efficient conduct of negotiations; or (b) ensure the parties negotiate in good faith; or (c) otherwise help the parties to negotiate the agreement. (4) … (5) … (6) … (7) … Arbitration if conciliation unsuccessful 149.(1) This section applies if – (a) … (b) the commission considers it is not likely that further conciliation will result in the matter being settled within a reasonable time, considering, among other things, the history of industrial relations in the enterprise or industry to which the proposed agreement is to relate; or (c) all the negotiating parties consider conciliation has been unsuccessful and ask the commission to determine the matter by arbitration. (2) … (3) … (4) In exercising the arbitration powers, the commission must limit its consideration to the matters at issue during negotiations for the proposed agreement. (5) … (6) … (7) … (8) … (9) … (10) …”. It is my respectful view that the submissions of the respondent Townsville Engineering must be correct. Part 1 of chapter 6 of the Act is all about agreement making, about negotiating and about breakdowns in that negotiating process. The Commission’s involvement comes about when there is a breakdown in that process. There is nothing in the Act, the Explanatory Notes, the Second Reading Speech of the Honourable the Minister or the Report of the Taskforce on Industrial Relations which requires that an employer must make an agreement or the Commission will arbitrate an “agreement”. In my view that would be a contradiction in terms. When it is proposed that an agreement be made, then any negotiations must be in good faith but if the employer does not wish an agreement at all and does not want to negotiate at all, then nothing in the Act operates to prevent that position. When the Commission is called upon to arbitrate, it must limit its considerations to the matters at issue during negotiations – s. 149(4) of the Act. If the employer does not want to enter into an agreement at all and there have been no negotiations, then there has been nothing at issue “during negotiations”. This is different to the situation arising where an employer enters upon negotiations but then makes a decision to opt out when “matters at issue” become too complicated. What happens in that circumstance can be left to another day to determine although I would prophesy a different outcome might ensue. The Macquarie Concise Dictionary 2 nd ed defines “negotiate” as: “1. to treat with another or others, as in the preparation of a treaty, or in preliminaries to a business deal. 2. to arrange for or bring about by discussion and settlement of terms.”. The noun “negotiation” means: “mutual discussion and arrangement of the terms of a transaction or agreement”. The Concise Oxford Dictionary gives the meaning of “negotiate” as: “Confer (with another) with a view to compromise or agreement. Arrange (affair), bring about (desired result), by negotiating.”. There have been no mutual discussions nor any discussions designed to bring about an agreement. There has been no “conferring” with a view to a compromise or agreement. There has been no negotiation. It is my view that s. 149 of the Act has no application and this Commission lacks the jurisdiction to proceed further. Whether the Commissioner who referred the matter for arbitration had the power to do so in my view is irrelevant and it is submitted that the question whether a party is required to enter into negotiations for a certified agreement was never put in issue. But what is now in question in this hearing is the authority of this Commission to arbitrate under s. 149. The Commissioner who referred the matter for arbitration cannot give this Commission the jurisdiction to arbitrate if none otherwise exists. The proceedings are struck out. B.J. BLADES, Commissioner. Hearing Details: 2004 19 October 1 December Released: 2 December 2004 Appearances: Mr E. Moorhead for the Automotive, Metals, Engineering, Printing and Kindred Industries Industrial Union of Employees, Queensland. Mr S. Nance, Queensland Chamber of Commerce and Industry Limited, Industrial Organisation of Employers for Townsville Engineering Industries Pty Ltd. -- 3 of 3 --