Australia: Full Court dismisses JJ Richards appeal
Enterprise update

Introduction

In J.J. Richards & Sons Pty Ltd and Australian Mines and Metals Association Inc. v Fair Work Australian and Transport Workers' Union of Australia[2012] FCAFC 53 (20 April 2012), the Full Court of the Federal Court (Full Court) dismissed the appeal against the decision of a Full Bench of Fair Work Australia (FWA) that a union (on behalf of employees) can be 'genuinely trying to reach agreement' even where an employer refuses to bargain, without the need to obtain a majority support determination.

This decision resolves a long running dispute that has been the subject of two Full Bench decisions, and provides certainty on two important issues:

Firstly, that an employer's refusal to bargain will not stop a union from obtaining a protected action ballot order under section 443 of the Fair Work Act 2009 (FW Act); and Secondly, there is no obligation for a union to secure a majority support determination or scope order prior to making a protected action ballot application.

Facts

In late 2010, the Transport Workers' Union of Australia (TWU) wrote to JJ Richards (JJR), seeking to enter negotiations for an enterprise agreement covering employees on its Canterbury site. JJR declined to negotiate and the TWU responded by making a protected action ballot application under section 443 of the FW Act. The Full Bench upheld the appeal on a technical point, however held that it was not necessary for JJR to agree to bargain in order for an order to be made under section 443.

On 1 February 2011, the TWU made a further protected action ballot application. FWA granted the application on 16 February 2011 and JJR (with the Australian Mines and Metals Association (AMMA) intervening) appealed the decision to the Full Bench of FWA. On 11 June 2011, the Full Bench reaffirmed the original Full Bench's position that bargaining was not necessary for an order to be granted, and dismissed the appeals.

The Full Court's decision

Before the Full Court, the Applicants sought orders of certiorari (that the previous orders be quashed) and mandamus (that on the proper construction of section 443, the Full Court must not make an order for a protected action ballot where bargaining has not commenced).

The Applicants argued that where bargaining had not commenced, a majority support determination or scope order must first be obtained before a union could obtain a protected action ballot order under section 443.

The Respondents (being the TWU and FWA) argued that the words and effect of section 443 of the FW Act are clear and that the words "genuinely trying to reach an agreement" did not import a requirement that an employee and employer be engaged in formal negotiations or bargaining, only that the Applicant is genuinely trying to reach an agreement.

Jessup J of the Full Court agreed with the Full Bench of FWA that the operation of section 443 was not conditional upon bargaining having commenced. However, Jessup J disagreed with the Full Bench's finding 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."

Jessup J held that, to the contrary, the availability of majority support determinations and scope orders under the FW Act demonstrated that the legislature had contemplated mechanisms that could be utilised to commence the bargaining process.

While Jessup J appeared to have some sympathy for the Applicants' position, he ultimately concluded that section 443 could not be construed as the Applicants' proposed and held that "the applicants' case really amounts to no more than the proposition that the legislature ought, consistent with the structure and policy of the [FW] Act as a whole, have conditioned the power to make an order under s 443 upon the circumstance of bargaining having commenced."

Justices Tracey and Flick provided separate judgements but echoed Jessup J's decision in dismissing the application.

Lessons for employers

Given the Full Court's decision in JJR, and subject to any future legislative change, employers who are preparing enterprise bargaining strategies should be aware that protected industrial action will continue to be accessible by employees and their unions, even where the employer refuses to bargain.

We recommend that employers develop an industrial relations strategy in preparation for the development of any new agreement and/or for the expiry of a current agreement. The strategy should include issues like dealing with unions and employee bargaining representatives; developing an appropriate communication campaign; and identifying key issues for bargaining.

Norton Rose has significant industrial relations and agreement making expertise and can assist businesses across all employment related issues.

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