Since the Full Bench decision in Construction, Forestry, Mining and Energy Union-Mining and Energy Division v Tahmoor Coal Pty Ltd, it has been accepted that if bargaining parties to a proposed enterprise agreement reach an 'impasse' in negotiations, an employer will not be in breach of the good faith bargaining requirements in the Fair Work Act 2009 (FW Act) if the employer puts the agreement to employees to vote.
However, a recent successful application by the CFMEU for an injunction to stop a scheduled ballot has highlighted other potential issues with such an approach – in particular, the need to ensure that the employer does not misrepresent to employees that the proposed agreement has been endorsed by the relevant union. It has also dispelled the common misunderstanding that unions must be described as a party or signatory to an agreement, in order to be bound.
In Construction, Forestry, Mining and Energy Union v Mirage Industries Pty Ltd [2012] FCA 490 (10 May 2012), the employer and the CFMEU had reached an 'impasse' in their negotiations for a proposed enterprise agreement. Notwithstanding this, the Agreement itself was entitled 'Mirage Industries and CFMEU (Vic) On-Site Installers Enterprise Agreement 2012', and clause 2.1 of stated that the CFMEU was a party to the Agreement, 'subject to an application to FWA to be bound by the Agreement'.
After the Employer wrote to the CFMEU to advise that it intended to proceed to a vote, the CFMEU responded that the Agreement, as drafted, was a 'misleading representation' as at no time had the CFEMU endorsed the Agreement for approval. The CFMEU then made an urgent application to the Federal Court for orders that the scheduled ballot not take place.
At the interlocutory application, Dodds-Streeton J agreed with the union that there was a serious question to be tried that the Employer had breached section 345 of the FW Act by misrepresenting to employees that the union had endorsed the Agreement for approval. Her Honour held that it was "probable that the inclusion of the CFMEU's name in the title to the proposed agreement would indicate to an ordinary reader that the CFMEU was a party to the agreement", and made orders restraining the Employer from proceeding with the ballot.
A key issue for the Court in reaching this decision was that the Employer took no steps to explicitly advise employees that the CFMEU did not agree with the Agreement and that it was not a party to the Agreement. While this seems like it could have easily been remedied, in practice it sounds even more confusing – i.e. telling employees that a union is not bound, even though the Agreement says they are bound!
This decision is important for all employers who simply accept or assume that unions must be listed as parties to an Agreement, or must sign the Agreement on behalf of employees. Section 183 of the FW Act provides the mechanism for unions to write to FWA to advise that they wish to be covered by an Agreement. Provided that the union is a bargaining representative, this step is available regardless of whether the union endorses the Agreement or the employer agrees with their participation. There are no other requirements or obligations to refer to a union in making an enterprise agreement (however in practice unions often insist on being referred to).
If it is the case that an employer wishes to proceed to a vote despite union opposition to an Agreement, it may be that the safer approach is to remove any references to the union in the Agreement – after all, if the agreement is approved by employees and Fair Work Australia, it will be a matter for the union as to whether they still want to be covered.
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