Fair Work Commission Full Bench issues first workplace determination (Transport Workers’ Union of Australia v Cleanaway Operations Pty Ltd)

Background

The parties commenced bargaining in October 2022, following the nominal expiry of the Cleanaway Erskine Park Drivers Enterprise Agreement 2020, on 23 September 2022. Over the course of 12 months, the parties participated in 17 bargaining meetings and Cleanaway Pty Ltd (Cleanaway) put two versions of a replacement agreement to its employees for a vote, however, both agreements were comprehensively rejected by the employees who cast a valid vote.

On 16 October 2023, the Transport Workers’ Union (TWU) made an application for an intractable bargaining declaration pursuant to s 234 of the FW Act. On 12 January 2024, the Fair Work Commission (FWC) made an intractable bargaining declaration, with a post-declaration negotiating period from 12-25 January 2024. During this period, the FWC conducted three private conferences with the parties and at the conclusion of those conferences, the FWC issued a statement which identified the following matters were still at issue:

• ordinary hours of work;
• weekend penalty rates;
• wages increases;
• consultation; and
• the nominal expiry date for the replacement agreement.

The matter was programmed and listed for hearing on 10-12 April 2024.

Under s 269 of the FW Act, the FWC must make an intractable bargaining workplace determination ‘as quickly as possible’ after the end of the post-declaration negotiating period.

The decision

At the hearing, the FWCFB heard evidence from witnesses for both parties in respect of the claims around the matters at issue.

The FWCFB made general observations about its obligations under s 275(a)-(h) of the FW Act, including s 275(ca) which had not previously been considered by the FWC and requires the FWC to have regard to:

‘the significance, to those employers and employees, of any arrangements or benefits in an enterprise agreement that, immediately before the determination is made, applies to any of the employers in respect of any of the employees.’

The application of s 275(ca) was relevant to the FWCFB’s determination of the issue relating to the ordinary hours of work. In respect of this issue, Cleanaway advocated for maintaining the hours of work clause in the current enterprise agreement (which would give the employer the ability to roster ordinary hours of work over the weekend), while the TWU contended that Cleanaway had not relied on this clause for at least 15 years and, accordingly, the hours of work clause in the replacement agreement should reflect the existing practice at the workplace (whereby ordinary hours were worked between Monday to Friday, and employees were given the option to work additional hours, for additional remuneration, over the weekend).

The FWCFB determined that the employer would maintain the ability to roster ordinary hours of work over the weekend, however, included a clause that would give employees the ability to opt out and confine their ordinary hours of work to weekdays. The FWCFB determined that ordinary hours worked on the weekend would attract overtime rates, rather than penalty rates (as advocated by the TWU).

The FWCFB’s determination provided for a pay rise significantly higher than that submitted by Cleanaway, and partially backdated the raise to July 2023, on account of the extended nature of the bargaining and the corresponding financial disadvantage to employees. The FWCFB accepted the nominal expiry date advanced by Cleanaway and specified that the determination will nominal expiry on 30 June 2027.

Agreed matters

An underlying issue in the proceedings was the extent to which there were agreed terms during the course of the bargaining, and whether Cleanaway’s attempts to withdraw from all previously agreed claims constituted an unreasonable act or a failure to comply with good faith bargaining requirements, for the purpose of s 275(f) and (g) of the FW Act, respectively.

In making the intractable bargaining declaration, Deputy President Wright distinguished Cleanaway’s conduct from the decision in United Firefighters’ Union of Australia v Fair Rescue Victoria T/A FRV [2024] FWCFB 43, and noted that:

Cleanaway has not produced evidence that it articulated a position to the TWU and employees in writing that any agreements-in-principle on individual items were always subject to agreement on an entire package. Instead, the evidence shows that Cleanaway reserved for itself the right to change or withdraw agreed items and ultimately purported to do so on 19 December 2023. Whereas the FRV’s position appears to be that there has never been an agreement about any terms with the UFU, the correspondence from Cleanaway shows that there were terms that were agreed with the TWU, but that Cleanaway purported to withdraw from agreement in relation to those terms on 19 December 2023.

It is verging on disingenuous for Cleanaway to now be urging the Commission to specify a post-declaration negotiating period for the purpose of narrowing the issues when it appears to be the actions of Cleanaway, two days before the hearing of this matter, that have significantly increased the issues in dispute… [I]t is probable that Cleanaway’s actions in purporting to withdraw the proposed Erskine Park Agreement will have heightened the tensions between the parties and reduced the likelihood that any further discussions will be productive.

While the FWCFB agreed with this observation, it regarded the conduct as ‘neutral considerations’ in its determination of the matters at issue.

Key takeaways

• The case highlights the uncertainty inherent in taking bargaining out of the hands of the parties and placing it in the hands of the FWC. While Cleanaway was partially successful in securing its preferred ordinary hours of work clause, it comes at the financial cost associated with larger pay increases, awarded and backdated by the FWCFB.
• Parties who intend to argue that no terms are agreed until a complete agreement is finalised, should take care to clearly and unambiguously set out this position (which comes with its own risks), or face the prospect of criticism and potentially adverse findings from the FWC.

Read the full text of the court’s judgment here: Transport Workers’ Union of Australia v Cleanaway Operations Pty Ltd T/A Cleanaway Operations Pty Ltd [2024] FWCFB 287

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