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Home | Member Updates | FWC rejects first contested intractable bargaining order application

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FWC rejects first contested intractable bargaining order application  

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10 January 2024

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Summary: The Fair Work Commission denied Ventia Australia Pty Ltd's application for an intractable bargaining declaration regarding a new enterprise agreement with the United Firefighters’ Union. Despite prolonged negotiations since September 2022 and unresolved issues including wages and redundancy, Deputy President Hampton found no reasonable prospect that an agreement was improbable. Factors like meaningful negotiations, altered bargaining contexts, and history of successful outcomes influenced the decision. Hampton encouraged further assisted bargaining through a new s240 application.

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The Fair Work Commission has declined to grant the first contested application for an intractable bargaining declaration order made by an employer.

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Background

Bargaining for a proposed new enterprise agreement between Ventia Australia Pty Ltd and the United Firefighters’ Union of Australia had been underway since September 2022, without agreement being reached on a number of terms, notably: wages (outcomes and timing), redundancy, long service leave benefits, and the life of the proposed agreement.  Following s 240 conciliation meetings between April and June 2023, Ventia had put a proposed agreement to staff in August 2023, which had been rejected by a significant proportion of those balloted.  Ventia therefore made application in September 2023 pursuant to s 234 of the Fair Work Act 2009 (Cth) for an Intractable Bargaining Declaration and provision for further negotiations ahead of a Full Bench determination if ultimately required. 

The UFU opposed the application on the basis that the bargaining was not intractable, and further that Ventia had engaged in inappropriate bargaining conduct by in effect ‘’threatening’’ employees with the IBD application in the context of the failed staff ballot for the proposed agreement. 

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Decision

Deputy President Hampton noted that pursuant to s 235(2) of the FW Act, in deciding whether to make an intractable bargaining declaration he must be satisfied that:

(a) the FWC has dealt with the dispute about the agreement under section 240 and the applicant participated in the FWC’s processes to deal with the dispute; and 

(b) there is no reasonable prospect of agreement being reached if the FWC does not make the declaration; and 

(c) it is reasonable in all the circumstances to make the declaration, taking into account the views of all the bargaining representatives for the agreement. 

Item (a) was not in dispute.  In considering the competing factors in regard to Item (b), Hampton DP found as follows:

Section 235(2)(b) does not require a ‘’certain and concluded determination’’ that agreement will not be reached if a declaration is not made, but rather, on the ordinary meaning of the words used, requires an evaluative judgment that it is rationally improbable that an agreement will be reached.  Hampton DP noted that Paragraph [846] of the Revised Explanatory Memorandum for the Fair Work Legislation Amendment (Secure Jobs, Better Pay) Bill 2022, which explains this provision, is consistent with this approach: … “This does not require the FWC to be satisfied that an agreement could never be reached but rather that the chance of the parties reaching agreement themselves is so unlikely that it could not be considered a reasonable chance”.  

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Factors considered

Factors in favour of granting the application were:

  • That the parties had been bargaining for an extended period of time, and despite numerous bargaining meetings there were a number of significant outstanding (unresolved) matters.
  • The fact that the Commission had been involved in assisting parties through the s.240 process not only satisfied s.235(2)(a) of the FW Act but this, along with the other factors above, was supportive of the notion that the bargaining has become intractable in a general sense.  
  • There was little doubt that the bargaining was presently at an impasse, including by virtue of the positions adopted by the parties on some of the key outstanding items. 
  • Ventia’s most recent proposal had been soundly rejected by the employees in a ballot. 

There were, however, countervailing factors: 

1. There had been meaningful negotiations in the time since the s 240 conferences were held 

2. There had been changes in the bargaining context that altered the prospect of reaching an agreement particularly: 

  • The union potentially being prepared to enter into an agreement of longer duration.
  • Ventia now being the sole tenderer for a key contract, leading to a better understanding of its cost base and the context in which the work might be performed under the proposed agreement, 
  • The parties had a history of successfully negotiated outcomes. 

On balance, Hampton DP did not consider that at this point it was “rationally improbable” that an agreement might be reached, or that there was “no reasonable prospect of an agreement being reached” if the FWC did not make the declaration sought by Ventia. 

Given his conclusion in respect of Item (b), Hampton DP did not deem it necessary to consider Item (c).  Although he declined to grant the application, the Deputy President encouraged the parties to lodge a new s 240 application and seek further assisted bargaining from the FWC. 

There will be the opportunity to discuss this case at the next Sector Check In on Friday 19 January at 2.00 pm AEDT. 

Ventia Australia Pty Ltd v United Firefighters Union of Australia [2023] FWC 2041

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