Industrious Conversations: Key changes and practical tips on protected action ballot orders

Julia Sutherland:

Hello everyone, and welcome to Ashurst's Legal Outlook. Thank you for joining us for the second of our podcasts in our Industrious Conversations podcast series. My name is Julia Sutherland, an employment practice partner, and in today's episode I am joined by my colleague, James Hall. James and I will be talking all things protected action ballot orders (PABOs) and protected industrial action (PIA). One of the questions that many of our clients have been keen to understand is what, if anything, has changed when employees wish to take PIA? We'll cover this today, looking at both what the technical legal changes are, but most critically for all of you, what does this mean in practice?

James Hall:

Thanks Julia, and hello, everyone. That's right. What we'll explain is that in terms of strict legal amendments, not much has really changed. There is a bit more to share in terms of what you can expect in practice which, hopefully, will be of some assistance to you. It seems to my mind that the best place to start would be to set out the changes at a high level in relation to applications for PABOs.

Julia Sutherland:

Absolutely, I am happy to do that. The Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022 (Cth) amendments to the Fair Work Act 2009 (Cth) (the Act) made some minor, but important, changes to how protected action ballots are conducted. Most notably, the amendments introduced the concept of a section 448A conference, which requires the attendance of bargaining representatives at a compulsory conference conducted by the Fair Work Commission (Commission) before voting on a protected action ballot concludes. The purpose of that conference is to attempt to get the parties to resolve outstanding bargaining issues, with a view to avoiding protected action being taken by employees. That's the critical change, and we'll talk about that in a bit more detail.There is a new provision that applies to a PABO for multi-enterprise agreements. In those circumstances, an application for a PABO that includes employees of different employers, operates as if you have the same application, or multiple applications for different employers. Aside from those changes, the process is the same as that which we have been used to.

James Hall:

Thanks, Julia. In that context, it might be useful to take us through the process of how PABOs are made under the Act more generally, notwithstanding that there haven't been a whole lot of changes.

Julia Sutherland:

Yes, absolutely. If we start off with the first step in relation to the application for a PABO, as discussed a moment ago, there are almost no changes to that process. However, I might just recap on those requirements. A bargaining representative may apply to the Commission for a PABO requiring a ballot to be conducted. The purpose of that is to determine whether employees want to engage in particular types of PIA in support of the applicant's bargaining position. An application for a PABO cannot be made until after bargaining has commenced – noting that this position has not changed but is important to keep in mind. As the next step, we move on to consider the various specific requirements that an application for a PABO needs to meet.

I know that many of you listening have been served with applications for PABOs. As you would be aware, one of the first things that we need to do upon receipt of the application is to review it against a certain set of requirements. Those requirements, some of which are quite technical, require an application for a PABO to specify:

• the groups of employees to be balloted;
• the questions to be put to the employees, including the nature of the proposed industrial action (which is quite important);
• the name of the person or entity that the applicant wishes to conduct the ballot (e.g., the ballot agent); and
• the group of employees to be balloted, which can only include employees who will be:
  • covered by the proposed agreement; and
  • who are represented by the bargaining representative applying for the order, or personal bargaining representatives who are members of union that are applying for the order.

I know that this is quite technical, but it is technical for a reason. This is why our Ashurst Employment team is being asked to review these applications and ascertain whether the requirements have been complied with.

At this stage, some of the questions you might ask continue to be, "Are the questions put to the employees clear?", "Is the nature of the proposed action clear?", and "Have the employees been correctly identified?". We know that this can sometimes can be an issue. If there is an issue with the questions, the strategic consideration at this point is whether you try to resolve that issue at the time that the application is served, noting that the Commission can amend the questions and resolve the issue entirely. Alternatively, is it better to wait and make an application under section 418 to stop industrial action when industrial action is notified, because then you can challenge the protected nature of the action.

The answer to that question will depend on the circumstances, including what your operations are and your broader industrial strategy. I know for many of our clients, if there is a legitimate safety concern about the impact of the proposed action or a worry about the impacts on the community (e.g., continuity of supply of essential services), these tend to be the things that employers want to raise at the outset, and at the time the application is made. This may result in undertakings being given by the applicant, and sometimes, it may mean that the proposed industrial action does not occur. But at least it gives our clients the comfort that you have undertakings to rely upon and that your operations can continue safely. On the flip side, if you think the questions are ambiguous and you don't have those considerations, it may be the case to hold off and bring a section 418 application.

Sorry James, that was quite a long answer there. But I think it's important, particularly given that there haven't been significant changes, just to step those things out because what we have been doing for the last few years in this area continues to be relevant.

James Hall:

That's right, Julia. The points you make about whether or not to challenge the questions at the time the PABO application is made, or waiting for a section 418 application, are really important considerations. These are also the types of considerations that employers need to undertake through a lens of, not only the nature of the industrial action, but their broader bargaining strategy. It is important that due consideration is given to those matters.

One of the things that we should have mentioned at the outset is that the protected action ballot provisions essentially commence at section 437, Part 3-3, Division 8 of the Act.
Julia, one of the issues with these applications, is that they come on really quickly. Have there been any changes made to the Commission's time limits to determine an application?

Julia Sutherland:

No, no changes there either. You're right, they do come on quickly, and the Commission must still, as far as practicable, determine the PABO within two working days after the application is made. Our experience tells us that if the PABO is opposed, that can stretch out a little bit longer.

James Hall:

Yes, that's right. Are there any other criteria the Commission must follow when making a PABO?

Julia Sutherland:

Yes, but again, no substantial changes. As we spoke about earlier, the Commission must make a PABO if an application is made and the Commission is satisfied that each applicant for the order has been, and is genuinely trying, to reach agreement. This is another active area for consideration when you get your application to really test and explore whether you want to make a point about the applicant's genuineness in trying to reach an agreement.

Now, my turn to ask some questions of you, James. As I said, a lot of what I have talked about is not strictly new. Although, in your experience, what are we starting to see from the Commission in relation to how this area of the law is being applied in practice?

James Hall:

There's not a lot of decided cases yet, Julia. I'll start off by talking about section 437A. You mentioned earlier about PABOs in the context of multi-employer agreements. Back in March, Deputy President Hampton approved the first PABO application for a proposed multi-enterprise agreement in Australian Education Union v Bendigo Kangan Institute and Others [2024] FWC 608. It was a case involving the Australian Education Union (AEU) and 12 Victorian TAFE Colleges and technical colleges. They have been negotiating a multi-enterprise agreement. They were covered by a single interest employer authorisation made the previous November. And the issue was, how to deal with a PABO when you have different employers subject to one of these multi-enterprise agreement applications. Ultimately, and consistent with the scheme of section 437A, DP Hampton held that there had to be separate ballots for each of the employers covered by the PABO. Essentially, if there were 12 different employers there would be 12 different ballots, for the purposes of determining whether or not PIA would be taken at one or more of those employers.

The biggest issue is the section 448A conference that Julia touched on. This is the concept of a mandatory conciliation conference before the Commission. As I have said, this has been introduced under section 448A. It requires the Commission to make an order requiring the bargaining representatives to attend a Commission conference. Whilst the Commission has a discretion to determine the timing and the place of a conference, the conference must end before the day that the PABO vote closes.

Those experienced in this area will remember that when the Australian Electoral Commission (AEC) was doing the ballots for PABOs, they could sometimes take up to 30 days. There have been other amendments which now mean that the AEC is no longer the default ballot agent for the purposes of a PABO. Certainly our experience is that some of these ballots are occurring within 10 days of that initial order being made by the Commission. What that means is, the timing of a section 448A conference is very compressed. Sometimes, the Commission has as little as 10 days in which to conduct the conference with the bargaining parties. The section 448A conference provision provides the Commission with the discretion to either mediate, conciliate, make a recommendation, or express an opinion.

Julia Sutherland:

James, I might ask you in a moment to comment on your practical experience with these conferences because I know you have appeared in many.

Before I do, I know we also recently asked our clients in our recent Bargaining Trends Survey about how the compulsory conference under section 448A was impacting their bargaining outcomes (i.e., their practical experiences). I just thought it was interesting to hear that the majority of the responses were to the effect that the conference did not really result in the PABO application being withdrawn, or really otherwise have significant impact on bargaining from their perspective. One respondent said the conference resulted in the issues in bargaining being narrowed – which is good news. However, concerningly, one respondent indicated that the conference had a negative impact on bargaining as well. With that background in mind, James, what are your observations or what has your experience been of the effectiveness of the section 448A conference process?

James Hall:

So far my experience has been mixed, in the sense that some conferences that I have attended and have been given leave to appear at, or our clients have participated in, have not had a really significant impact on bargaining. The parties have turned up, the Commission has asked the parties what has occurred to date and whether there is any scope for the parties to come together and nut out a deal. The parties are generally a bit lukewarm on that idea. Everyone goes home feeling a bit unsatisfied. Although, at the end of the day, that is a function of the approach taken by employers and unions to these conferences to date. And that's not being critical of employers or unions in that sense. It is a function of the compressed timeframe to some degree and the fact that this is early days with this sort of a process.

Julia Sutherland:

How then, with all of that in mind, do you make one of these conferences successful?

James Hall:

Ultimately, the success of these types of conferences hinge on a number of factors. First, the amount of preparation that can be undertaken by the employer before the conference with a view to actually seriously seeking to try to resolve the outstanding bargaining issues, depending on how many there might be. Of course, the other factor is the willingness of the union bargaining representatives to participate in a meaningful way in such a conference. Thirdly, is the level of engagement of the member allocated to conduct the conference.

In my experience to date, if the employer does some work before the conference, clearly understands and has planned in advance what its objectives are and what it is prepared to concede to get a deal done, then that can provide the member conducting the conference with something to work with in order to achieve an outcome. It is important to note that these conferences are only allocated a very short period of time. You might get two hours or four hours. I had one before one member who allocated, very generously, a day to the matter – which was very useful for all of the parties. But the point is, it is not always long enough in the time that you might have allocated to resolve all of the issues that are outstanding in bargaining with a view to try to avoid the PIA. However, if real progress is being made, my experience is that a member of the Commission can be very persuasive in convincing a union party to give an undertaking not to take PIA pending further conferences, with respect to bargaining.

As I mentioned earlier, it is important to note that the section 448A conference must conclude before the protected action ballot has concluded. Although, this does not stop the parties from filing a section 240 application (i.e., a bargaining dispute) and then having the matter listed before the same member if they are agreeable, to continue discussions with respect to trying to resolve the issues that remain in dispute between the parties.

Those who are familiar with the Federal Court and the Federal Circuit Court jurisdiction and the mediation process, will be familiar with needing to file a confidential issues statement or issues paper, with the Registrar or whoever is conducting the mediation at that time. I think there is real scope for something of that nature to be done by employers. Indeed, there is nothing to stop an employer for asking directions by the Commission that the parties file meaningful statements, that don't have to be shared with one another but can be shared with the member, outlining what their particular positions are. To my mind, it's simply unrealistic to think that a member of the Commission can influence an outcome with respect to bargaining, when the first she or he hears of the matter is when parties make their opening statements at a conciliation conference. It is quite unfair to think that a Commissioner, in those circumstances, is going to be able to have any meaningful influence.

For these conferences to be successful, if the employer and the union parties provide a proper background and some realistic ultimate bargaining positions, then there is some sort of pathway, or some bright light at least, which a member of the Commission can follow in order to assist the parties in reaching an outcome.

Julia Sutherland:

That point that you make about the sharing of information is a good one. For many of us who have been in those Commission conferences, the first half an hour or 45 minutes is taken up with openings, and then we might break into private conference. If you're only listed for a couple of hours, you have lost half your time. It seems like a good idea if you can cut through that to make the best use of the time at the conference.

James Hall:

I think you're right, Julia. Certainly in my experience, if you ask Commission members not to share a particular position with another party, then they never do. They are very respectful of that. However, giving them all of the information allows you an opportunity for the Commission to provide its views to your client, or the employer as the case may be, with respect to what their ultimate position might look like. It may be whether the Commission is able to maintain that position, or where the Commission might be able to move, etc. There is certainly some scope there. It's not always going to be successful, but certainly the great thing about the section 448A conference is that it gives the opportunity for the parties to reset. If you have had a "knockdown drag them out" bargaining process to date, it really does allow someone to come in and try to get the parties to reset their position. It may not ultimately avoid the PIA and it may not ultimately result in an agreement being reached then and there, but it does allow that reset, which can be very useful for parties in some circumstances.

Julia Sutherland:

It gives that last opportunity. Most of our clients are incentivised to try to avoid the industrial action if possible. Often, it was a bit like a road train. You got the application, and then it just happened. At least now this gives a little bit of time for parties to take a breath and have a further conversation about it, with the assistance of the Commission.

Finally, I wanted to mention because it can be helpful for us all to remember this, that it is the case that all bargaining representatives remain subject to the good faith bargaining requirements during one of these section 448A conferences as well.

James Hall:

Yes, that's right. In fact, section 409 which deals with employee claim action, has been amended such that each bargaining representative who has applied for the PABO must have not contravened an order of the Commission. So in this context, these bargaining representatives must have attended that compulsory section 448A conference. The effect of this amendment is that, if they don't turn up to the conference, then any industrial action taken will not meet the definition of an employee claim action and is therefore unprotected.

Julia Sutherland:

Okay, thank you. Well, even with some relatively minor amendments to the law, there is still plenty food for thought when it comes to PABOs. James, do you have any final words of wisdom to share today before we say goodbye?

James Hall:

Only that there's been a bit of mixed commentary about the section 448A conference. I appreciate that, to some degree early on in the piece, it might not have been as successful as they might otherwise have been. Certainly, my sense is that as we move along, and having attended a number of them and with the benefit of reports from the clients who have attended them, they are getting better. The Commission is becoming more attuned to trying to make them a more meaningful opportunity for parties to reach agreement.

Obviously, employers see any application for protected action as a retrograde step in bargaining. But as I alluded to earlier, these conferences do provide a potential circuit breaker. It is sometimes the case that unions and their members will take some sort of industrial action as a flex. Without wishing to be unkind or controversial, I do get the sense that sometimes, it is so that their members can feel like they are "in the fight" so as to speak. However, these conferences do present an opportunity to reset bargaining in that Commission or respectful environment. Although employers really need to be prepared because, I think, the only way that you are going to have success is to do the work before you get there. Your thoughts, Julia?

Julia Sutherland:

Yes, I agree with you. You stole my line. I was going to say the same thing about the importance of being prepared. Again, these things come on quickly and you are not going to get the best out of your opportunity at a conference if you are not anticipating that it might happen. To my mind, the key thing is, if you prepare for PABOs as part of your overall industrial strategy in advance, then you do have these mechanisms now available to you under the Act. That might be something that you can utilise to your advantage.

When talking about industrial strategy, we are often asked to comment on what defensive steps can be taken, or in the inverse, what steps might be taken against us. However, if we view this as an opportunity, you might be able to weave it into your overall strategy. In that context, while they are not significant changes to the law, that extra opportunity that the compulsory conference brings might just be the step that assists to make a practical difference.

James Hall:

Couldn't agree more.

Julia Sutherland:

Well, James, we might leave it there. Thanks to you, and to all our listeners for joining us. To hear more Ashurst podcasts, and to ensure you don't miss any future episodes in the series, please subscribe now on Apple Podcasts, Spotify, or your favourite podcast platform. We hope you'll join us next time, as we continue to explore key developments in industrial relations in Australia to gain insights from other members of our leading employment team here at Ashurst. Until then, thank you for listening, and goodbye for now.