Australia: MUA Versus TMS – Analysis Of A Dispute

Enterprise - April 2010

At the time of writing it appears that the longstanding bargaining dispute between Total Marine Services Pty Ltd (TMS) and the Maritime Union of Australia (MUA) has finally resolved. The parties have been engaged in a bargaining stalemate and ongoing legal proceedings since August 2009.

The outcome of the dispute is highly controversial because the MUA has won members of the TMS workforce a 30% wage increase over an anticipated four year agreement, and an extremely generous suite of allowances. The most contentious of these allowances is a daily construction parity allowance of $180 per day (double the present entitlement) which increases to $200 during the course of the agreement. This claim for an allowance for construction work is part of the MUA's industry-wide bargaining campaign.

There are a number of reasons why the dispute has assumed considerable importance.

There are immediate concerns that benefits secured by MUA will flow through to agreements that the MUA is currently negotiating with two of TMS' competitors.

More broadly, the outcome of the dispute is an indication of demands the MUA and other unions will seek in bargaining negotiations, and the ability of unions to rely on the new bargaining provisions of the Fair Work Act 2009 (the FW Act).

Already the result of the TMS negotiations has raised questions of the relative pay and conditions earned by members of the Australian Institute of Marine and Power Engineers (AIMPE) who work as marine officers and engineers in Australia's offshore industries (and are generally significantly better qualified than members of the MUA). Will members of AIMPE be prepared to temper demands for improved terms and conditions of employment in the current environment?

The MUA relied upon its bargaining rights under the provisions of the FW Act throughout the dispute and ultimately engaged in various periods of protected industrial action. For its part TMS resorted to numerous legal applications in an effort to prevent the MUA from engaging in industrial action. Is this resort to legal claim and counterclaim a harbinger of how bargaining disputes will be fought out under the new laws?

The earliest legal decision in this ongoing battle was the decision of Commissioner Thatcher in Maritime Union of Australia v Total Marine Services Pty Ltd [2009] FWA 187 (1 September 2009). Here the MUA sought to obtain orders for the conduct of a protection action ballot order and TMS responded that the union had not genuinely tried to reach agreement. The principal argument of the employer was that the union had not provided it with sufficient detail of its claims, and had not responded to proposals made by TMS. The MUA's position was that it was not prepared to provide specific details of its proposed wages claim until after it had achieved a "landing" on its construction allowance claim. Did this mean that the MUA was not "genuinely trying to reach agreement?

What is perhaps important about this particular issue is the difference of view between the individual Commissioner hearing the matter, and the Full Bench of FWA which heard an appeal of that decision ([2009] FWAFB 368, 9 October 2009). In his original decision Commissioner Thatcher considered that any uncertainty about detail concerning the wages claim and the construction allowance did not necessarily mean that the MUA was not genuinely trying to reach agreement. He stated that his experience in industrial relations persuaded him that "absence of detail at this stage of the bargaining process is not unusual". He found that the MUA had not acted prematurely in making an application for a protected action ballot order. Further the Commissioner considered that the claim for the construction parity allowance (even though it was rumoured to be something like $400-500 per day) was not "so extravagant or fanciful as not to be a serious claim, even if the achievement of such an outcome may seem remote".

Ultimately the decision of the Full Bench in the appeal proceedings took a somewhat different view about this question whether the MUA had satisfied the statutory test of "genuinely trying to reach agreement". The appeal decision strongly indicates that an application for protected ballot orders cannot be made "prematurely", and that one would normally expect the applicant for such an order to have "clearly articulated the major items it is seeking for inclusion in the agreement", and also to have "provided a considered response to any demands made by the other side". Here the Full Bench found that there had been limited face to face meetings, and the MUA had failed to properly articulate its claims. Some items may have been set out in a list of headings but were not explained or discussed. While the MUA may have been "genuine", the Full Bench found that it had not satisfied the statutory test of "genuinely trying to reach agreement".

There was a subsequent consideration of these issues in a decision of Senior Deputy President Harrison ([2009] FWA 815, 26 October 2009), and by this time the MUA had provided details of the wage claim it sought in negotiations and satisfied other concerns raised by the Full Bench. Her Honour proceeded to grant a protected ballot order which allowed the MUA to engage in protected industrial action. The dispute eventually resulted in further FWA proceedings in January 2010 with TMS attempting to obtain orders to prevent industrial action. This action took place shortly before the apparent resolution of the dispute in early February.

The ongoing imbroglio between the MUA and TMS also involved legal proceedings that provided one of the earliest discussions of the new good faith obligations. In Total Marine Services Pty Ltd v Maritime Union of Australia [2009] FWA 290 (16 September 2009) TMS sought to rely on the good faith provisions to compel the MUA to disclose the reasons for its bargaining position. This case was also heard by Commissioner Thatcher who appears to have wanted to reach a practical resolution to the legal and industrial conflict that had arisen between the parties. According to the Commissioner the bargaining parties were experienced industrial practitioners engaged in 'hard fought' negotiations, but neither party had actually acted in 'bad faith'. The Commissioner stated that good faith bargaining orders should only be made where 'necessary' and he did not consider that making an order would promote bargaining in the particular case. The decision stands for the principle that good faith bargaining issues are likely to be considered on a strictly case-by-case basis. Here the Commissioner's view was that the union had provided 'sufficient' information to allow ongoing negotiations, and the level of detail sought by the employer was 'excessive and oppressive'.

At a practical level the most important aspect of the TMS/MUA dispute is that it is part of the MUA's current industry-wide campaign. There is also concern among employers that the benefits and the wage increases achieved by the MUA may flow through to comparable industries. The dispute also provides a clear illustration of how union parties may seek to utilise the bargaining provisions of the FW Act. On the other hand, however, the Full Bench decision in this matter does propose some clearer guidelines about the nature of the statutory test for "genuinely trying to reach agreement". It is evident that a negotiating party needs to do something more than taking steps "preparatory to developing an agreement" to meet the statutory test. An application for a protected action ballot order will not be granted where it is made "prematurely".

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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