PROTECTED INDUSTRIAL ACTION BALLOTS – AN EMPIRICAL VIEW

Breen Creighton Graduate School of Business and Law, RMIT University

Catrina Denvir The University of Sydney Law School, University of Sydney

Richard Johnstone Faculty of Law, QUT

Shae McCrystalThe University of Sydney Law School, University of Sydney

Abstract

Workplace relations in Australia, including requirements relating to the use of industrial action in the context of enterprise bargaining, are governed by the Fair Work Act 2009 (Cth) (FW Act). Legally protected industrial action by employees and their bargaining representatives can lawfully be taken only in the context of, and is conditional upon, approval through a secret ballot of the employees to whom the proposed agreement is to apply. Conducting such a ballot is itself conditional upon first obtaining a protected action ballot order (PABO) from the Fair Work Commission (FWC). Whilst there is a relatively large body of published industrial relations research exploring both the frequency, and the impact, of strike action, there is significantly less published material on the regulation of decisions relating to industrial action by workers and their trade unions. This paper provides a preliminary report on a research project which is intended to help fill this gap in the literature. Drawing on data resulting from an analysis of every PABO application made to the FWC during the reference period, the article describes the PABO process in practice. This, in turn, facilitates understanding of the regulatory contribution made by the provisions and raises significant questions over whether the administrative burden is justified by the outcomes achieved.

Funding

This research is funded by ARC Discovery Grant ‘Protected Action Ballots and Protected Industrial Action under the Fair Work Act: The Impact of Ballot Procedures on Enterprise Bargaining Processes’, DP140100902.

KeywordsIndustrial Action; Collective Bargaining; Ballots; Protected Action Ballots; Quorum; Negotiations; Voting Methods

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Introduction

Federal workplace relations in Australia have changed significantly over the past 30 years. The system has transitioned from one of centralised conciliation and arbitration with no capacity lawfully to take industrial action to one where terms and conditions of employment are determined at the enterprise level through a negotiation process which can include access to lawful industrial action (See Stewart et al., 2016: [3.40]-[3.81]). There has been, and still is, a broad political consensus in favour of this shift, but there is continuing controversy and tension in relation to the circumstances in which it should be possible lawfully to take industrial action and how decisions as to the timing of such action should be made.1

The current system is enshrined in the FW Act. Amongst other things, this measure provides that employees and their bargaining representatives can take protected industrial action (PIA) to support negotiations for a single-enterprise agreement in prescribed circumstances. These ‘circumstances’ include that the bargaining representative(s) of the employees concerned have obtained a PABO from the FWC which authorises the conduct of a ballot to approve the proposed action.2 Engaging in industrial action without approval through a balloting process would expose those who organise or participate in the action to liability at either or both of common law and statute (see Stewart et al., 2016: ch 26). Viewed in these terms, PABOs mediate access to lawful industrial action for employees and their representatives.

The introduction of the PABO requirement was contested. Before 2006, the decision by a trade union or a group of employees as to whether to take PIA was left to the union or group concerned to determine, acting in accordance with any applicable internal rules. A procedure which allowed union members to apply to the Australian Industrial Relations Commission (AIRC) for the imposition of a secret ballot prior to industrial action was not mandatory and was rarely used in practice (see Creighton et al., 2016b: 156).

In 2006, the Howard Coalition Government secured passage of the Workplace Relations Amendment (Work Choices) Act 2006 (Cth). Among many other things, this introduced the PABO requirement. The relevant provisions were substantially re-enacted in the FW Act (for background see Creighton et al., 2016b: 155-9).

Under s 437 of the FW Act, applications for a PABO may be made by bargaining representatives of affected employees. The FWC must grant the order if the 1 This is reflected in many of the submissions to the 2016 Productivity Commission Inquiry into Workplace Relations available at http://www.pc.gov.au/inquiries/completed/workplace-relations/submissions. See more specifically submissions by the Australian Council of Trade Unions, pp 224-34; Australian Industry Group, pp 53-8; Australian Mines and Metals Association at pp 183-93; and Australian Chamber of Commerce and Industry at pp 103-8. 2 FW Act s 411 enables employers who are faced with PIA by their employees to take ‘employer response action’ in the form of a lockout of employees. This is the only circumstance in which employers can engage in a lockout under the FW Act – in other words, unlike the situation under the former Workplace Relations Act 1996, there is no provision for pre-emptive lockouts under the FW Act.

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requirements in s 443 of FW Act have been satisfied. These are that: a bargaining representative(s) has made a valid application; has been genuinely trying to reach an agreement with the employer(s) of the employees to be balloted; and the ‘notification time’ has passed.3 Ballots are almost invariably conducted by the Australian Electoral Commission (AEC), and approval requires that a majority of employees represented by the ballot applicant and to whom the proposed agreement will apply, cast a vote, and that a majority of that majority vote in favour of the action. Once authorised, PIA may occur provided those taking and organising the action comply with the relevant statutory provisions concerning notice and timing (see further Stewart et al., 2016: ch 27; Creighton et al. 2016b: 160-5).

The net effect of these requirements is that there are substantial and complex statutory rules governing decisions by unions and groups of employees to take PIA. The process is not straightforward. It requires both time and expertise. How this impacts upon industrial actors in their decision-making around PIA is unclear. It is easy to assert, for example, that requiring unions to undertake a secret ballot of members before taking strike action will lead to more democratic decision making in trade unions and less strike action (see e.g. Reith 1998: 2-7). Demonstrating that this is the case in practice, and that the regulatory burden of imposing this requirement is justified in terms of the outcomes, is another thing altogether.

Evidence from the United Kingdom, where secret ballots of union members are a prerequisite to protection against civil liability for industrial action (see Deakin & Morris 2012: 1072-89), suggests that: ballot requirements pose more problems for smaller than for large unions; offer a ‘credible way of demonstrating the resolve of union members before strike action was taken’; and encourage union moderation as to the forms of action proposed in ballot papers (Undy et al. 1996: 229-30).

Prior to the project under discussion in this paper, there had been no large scale study of the operation of the Australian ballot provisions, although there was some empirical consideration of the PABO process for purposes of the Fair Work Act Review in 2012 and the Productivity Commission Inquiry in 2015 (Australian Government 2012, 2015). The Fair Work Act Review suggested that the PABO provisions ‘have a significant impact on employees and their union representatives’ (Australian Government 2012: 180), but did not focus on the PABO process sufficiently precisely to make it possible to draw any more detailed conclusions. The Productivity Commission also undertook a study of the ballot process, and suggested some avenues for simplification of the existing provisions, although again the scale of the analysis was limited (Australian Government, 2015: 877).

The impact of the PABO process on enterprise bargaining behaviour has also been subject to comment by international agencies in the context of their examination of Australian compliance with relevant international standards. In particular, in 2012 the International Labour Organisation’s (ILO) Committee of Experts on the Application

3 The ‘notification time’ requirement in s 443(2A) was included in the FW Act by the Fair Work Amendment Act 2015 (Cth). It requires that bargaining for a proposed enterprise agreement have commenced (through the requirement in s 173 for the employer to issue a notice of representational rights) before a PABO application can be approved. See further Stewart et al. 2016: 984-5 with respect to the introduction of this amendment.

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of Conventions and Recommendations, in the context of its examination of the effect given to the Freedom of Association and Protection of the Right to Organise Convention, 1948 (No 87), requested the Australian Government ‘to continue to take steps to ensure that the exercise of the right to strike in practice is not restricted by unduly challenging and complicated strike ballot procedures and to continue providing statistics on the number of protected action ballots authorised out of a total number of applications, as well as to any important or excessive delays resulting from this procedure’.4

An awareness of the need for a more detailed empirical study of the operation of the ballot provisions in Division 8 of Part 3-3 of the FW Act led the authors to frame a large-scale project aimed at meeting this need. Supported by an ARC Discovery grant, research commenced in 2015, and focussed principally upon collecting empirical data on the application of the PABO provisions for the period 1 July 2015 to 30 June 2016 (reference period).The principal objects of the project were:

empirically to describe the PABO process in practice and the subsequent extent of use of PIA by industrial actors;

to explore the effect of the PABO requirements on the enterprise bargaining behaviour of ballot applicants; and

to determine the extent to which the requirements place restraints upon the taking of PIA.

This article addresses part of the first principal object of the project by providing an empirical description of the PABO process in practice. Drawing on data resulting from an analysis of every PABO application made to the FWC during the reference period, the article describes the PABO process in practice. This, in turn, facilitates understanding of the regulatory contribution made by the provisions and raises significant questions as to whether the administrative burden is justified by the outcomes achieved. These questions will be addressed in other publications resulting from the project.

METHODS5

The authors developed a database which captured information about all PABO applications submitted to the FWC during the reference period (n=1302). Information in the database was drawn from five principal sources:

ballot applications to the FWC; applications to the FWC to vary or withdraw an order; ballot decisions and orders made by the FWC in relation to PABO

applications;

4 Report of the Committee of Experts on the Application of Conventions and Recommendations, ILC, 101st Session, Report III (Part 1A), 60. See also the decision of the Freedom of Association Committee of the Governing Body of the ILO in Case No 2698, which was to the same effect - 357th Report of the Committee on Freedom of Association, June 2010, para 229(f) (see further McCrystal 2011).5 Full details of the variables extracted from each data source and the methodological approach adopted can be found in Creighton et al 2016a.

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ballot vote outcomes; and applications to the FWC for approval of new enterprise agreements (EAs).

The final database was hierarchical in nature, with PABO applications nested within ‘negotiations’ for an EA. The 1302 applications submitted during the reference period related to 399 EA negotiations.

The disparity between the number of applications received and the number of negotiations is explained by the fact that some negotiations gave rise to more than one ballot application. For example, if an EA negotiation involved more than one union, each union would submit a separate PABO application, with the consequence that a single EA negotiation could give rise to more than one PABO application.

A negotiation could also give rise to multiple PABO applications by the same union in situations where a single interest authorisation under FW Act ss 248-252 was in place. Obtaining such an authorisation means that multiple enterprises can bargain together for a single enterprise agreement without the need to conduct separate ballots to approve the agreement at each site. However, employees of these enterprises can remain separate for the purposes of applying for, and voting on, a PABO even where they are represented by the same bargaining representative. In consequence, EA negotiations for single interest employer agreements may produce multiple PABO applications and multiple ballots across separate work sites. Multiple ballots will also occur in the case of PABO applications pertaining to the negotiation of multi-enterprise agreements.6

These quantitative data were supplemented by qualitative data derived from 74 in-depth semi-structured interviews with ballot applicants and respondents listed in PABO applications submitted to the FWC during the reference period.7 Participants were contacted via email in the first instance. Where an interview with the PABO applicant or respondent had been secured (eg the union applicant), additional effort was made to engage the other side (eg the employer respondent), via further email and phone contact. Where permission was granted (which was provided in all but three instances), interviews were recorded via digital voice recorder. All audio recordings were later transcribed in full for analysis. Interviews were typically approximately 40 minutes in duration. The interview topic guide explored:

factors influencing decisions to apply for ballots; stakeholder perceptions of the state of negotiations at the time of the

application;

6 An EA negotiated by multiple employers under a single interest authorisation is a single-enterprise agreement. Ultimately only one ballot is conducted to approve the agreement but if PIA is involved, the employees may choose to ballot separately. By contrast, multiple employers may negotiate a ‘multi-enterprise agreement’ but approval of such agreement requires successful ballots at each enterprise; in negotiations for such agreements, PABO ballots will also be conducted separately.7 Applicants were almost invariably union officials or union legal officers, who were either: (a) directly involved in the negotiations with an employer which gave rise to the PABO application; or (b) union legal officers who were less involved in the EA negotiation, but who took responsibility for submitting the PABO application and the legal process governing the granting of a ballot order (including appearing at a FWC hearing to determine the outcome of the application where necessary). PABO application respondents were employer representatives (typically HR Managers or small business owners) involved in negotiations with union representatives for an EA.

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perceptions of why ballot applications and subsequent ballots were successful or unsuccessful;

factors influencing the number of ballots leading to PIA; and factors influencing the time between ballot application and any subsequent

PIA.

In total, the 74 interviews included 32 ‘paired interviews’ (employer and union); one triple pair (in which two unions and one employer were interviewed in relation to the same EA negotiation); nine single employer interviews; and 30 single union interviews. Although 74 interviews were conducted, they covered approximately 713 ballot applications submitted during the reference period, meaning that the 74 interviews undertaken covered 54.76% of ballot applications submitted in relation to 922 different worksites.8 Interviewees, particularly employee representatives, typically spoke ‘globally’ about negotiations (which may have given rise to more than one PABO application) rather than confining their comments to specific PABO applications. In total, the interviews covered 55 EA negotiations or 13.78% of the total number of negotiations for which one or more PABO applications were submitted during the reference period.

OVERVIEW OF THE OPERATION OF THE PABO PROVISIONS

This section provides an empirical snapshot of the operation of the PABO provisions derived from the quantitative data. The discussion looks specifically at: the characteristics of PABO applications; employer contest of PABO applications; forms of industrial action proposed; the duration of EA negotiations; and, FWC approval rates and ballot vote outcomes.

Characteristics of the Ballots Submitted

As indicated, the 1302 PABO applications that were made during the reference period covered 399 EA negotiations involving 922 worksites. They included five sets of negotiations which between them generated more applications than the remaining 394 negotiations combined. This is because the applications involved either single interest employers or multiple enterprise agreements.9 More specifically: - 496 applications related to the Catholic Employing Authorities Single Enterprise

Agreement Collective Agreement - Diocesan Schools of Queensland 2012 negotiation;

- 43 related to the Catholic Employing Authorities Single Interest - South Australian Catholic Schools Enterprise Agreement 2013 negotiation;

- 144 related to the Nurses and Midwives (Victorian Public Sector) (Single Interest Employers) Enterprise Agreement 2012-2016 negotiation;

8 This can be explained by the fact that the 1302 applications pertained to just 399 EA negotiations, which in turn involved 922 different worksites.9 ‘Single interest employers’ are defined in FW Act s 172(5) as employers engaged in a joint venture or common enterprise; employers that are related bodies corporate; or employers specified as such in a single interest employer authorisation. Single interest employer authorisations can be made by the FWC under s 249 or the Minister under s 247.

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- 35 related to the Victorian Public Health Sector (Health Professionals, Health and Allied Services, Managers and Administrative Officers) Multiple Enterprise Agreement 2011-2015 negotiation;10 and

- 23 related to the Victorian Public Mental Health Services Enterprise Agreement 2012-2016 negotiation.

Table 1 shows the range of industries in which ballots were submitted. It counts each application individually, and does not remove multiple applications in relation to the same negotiations and/or the same worksite. Industries are taken directly from the PABO application forms and categorised into overarching industry groups. Consistent with the findings in the previous paragraph, the Table shows that almost 42% of ballots submitted arose out of negotiations in the education industry, followed by just over 18% in health, and just under 10% in manufacturing and engineering.

Table 1. Number of PIA Ballots submitted to the FWC July 2015- June 2016.

Number Ballots SubmittedIndustry N %Health 241 18.5Food Production & Manufacturing 60 4.6Transport 72 5.5Building, Construction & Labour 55 4.2Manufacturing & Engineering 122 9.4Public Services & Utilities 103 7.9Education 545 41.9Other Services 59 4.5Maritime 10 0.8Metal, Mining, Oil & Gas 35 2.7

Counting applications individually, the majority of applications were made to the Brisbane Registry ─ principally because of the large Queensland Catholic Schools EA negotiation taking place in that State. A large number of applications were also made in Melbourne. When duplication is removed,11 it emerges that applications are lodged most frequently in Melbourne, Sydney and Brisbane, as Table 2 shows.

Table 2. Number and Percentage of Applications Submitted by Registry

RegistryCounted as Single Applications

Counted as EA negotiations

10 FW Act s 413(2) provides that industrial action must not relate to a multi-enterprise agreement and as such a PABO would not be available in support of such. Therefore, this would appear to be a single employer enterprise agreement has been mislabeled. 11 That is, not counting duplication resulting from: more than one union submitting a ballot in respect of the same EA; single unions balloting worksites for the same EA separately; re-ballots of the same workplace (a re-ballot may occur where there was a problem with the initial ballot or where the bargaining representatives have not taken initial PIA within the time limit set by statute); and multiple ballots where negotiations where a single interest authorisation was in place. However, duplications within individual EA negotiations were retained where ballots relating to those negotiations were lodged in more than one State (n=16).

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N % N %Sydney 137 10.5 95 22.9Perth 34 2.6 28 6.7Melbourne 445 34.2 188 45.3Hobart 35 2.7 17 4.1Canberra 6 0.5 6 1.4Brisbane 565 43.4 53 12.8Adelaide 80 6.1 28 6.7

Employer Contests of PABO Applications

Employers may contest the granting of a PABO by the FWC on the ground that the ballot applicant has failed to satisfy the statutory tests in FW Act s 443 outlined above.12 Employers may also challenge aspects of the proposed order (for example by arguing that the proposed industrial action is not sufficiently clearly stated)13 or under s 443(5) seeking an extension of the notice period for taking PIA.14

The data provide a picture of how often employers contest a PABO application, and where the FWC seeks alterations to a PABO of its own motion.

Proposed ballot questions were changed in 1.2% of cases, with 0.5% of changes (n=6) requested by the employer, and 0.7% of changes (n=9) occurring at the request of the Commission.

In 27.5% of cases (n = 358), employers indicated that they would not challenge a ballot application if the notice period was changed, and such changes were agreed by the applicant in all but eight instances. In 65.9% (n=858) of cases the employer did not seek a change to the notice period. Where a change was made to the notice period, the mean length of days’ notice was changed from a minimum of 3 working days to 5.08 working days (min=4, max =7, SD =0.44).

Applications were contested by the respondent employer in 279 (21.4%) cases, not contested in 312 (24%) cases and assumed not contested in 668 (51.3%) cases. Assumed non-contest is the conclusion drawn by the research team when an order for a ballot is published without a decision also being published. The FWC does not always publish a decision when it publishes an order. Whilst some FWC Members will invariably provide a written decision, in other cases decisions are only published where there was a hearing which involved discussions relating to a change of notice period or where a ballot was contested. For a further 43 applications (3.3%) it could not be determined whether or not the ballot was contested, as the order or decision relating to the application could not be located or was not made (eg due to withdrawal by the applicant).

12 See, eg, Australian Postal Corporation v CEPU (2009) 189 IR 262.13 See, eg, John Holland Pty Ltd v AMWU (2010) 194 IR 239.14 FW Act ss 414(1) and (2)(a) require that before engaging in PIA a bargaining representative for the employees concerned must give at least three working days’ written notice of the proposed action. However, s 414(2) contemplates that the PABO may specify a longer period of notice, and according to s 443(5) such extended notice period can be up to a maximum of seven working days. See further Stewart et al. 2016: [27.12].

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The making of ballot orders was most often contested on the grounds that: (i) the applicant was not genuinely trying to reach agreement (n=14); (ii) a longer notice period was required (n=14); (iii) the questions proposed were ambiguous or not within the definition of IA (n=7); (iv) the ballot had typographical errors (n=1); the ballot; (v) no valid NEER had been given (n=2); or (v) the ballot failed adequately to specify the group to be balloted (n=228)(see further Stewart et al. 2016: [27.20]-[27.27]). There were a further 5 ballots in which no reason was given for the objection, and a further 10 ballots where more than one reason was given. As indicated, in most ‘notice’ cases the employer concerned indicated that they would not formally contest the ballot if the notice period was changed with the agreement of the applicant. Thus, (ii) was only a basis for contest in cases where the applicant had refused to agree to this change or where the respondent had decided to contest without first ascertaining whether the application would be willing to change the notice period. The making of ballot orders was most often contested on the grounds that: (i) the applicant was not genuinely trying to reach agreement; (ii) a longer notice period was required; (iii) the questions proposed were ambiguous; or (iv) the ballot failed adequately to specify the group to be balloted (see further Stewart et al. 2016: [27.20]-[27.27]). As indicated, in most ‘notice’ cases the employer concerned indicated that they would not formally contest the ballot if the notice period was changed with the agreement of the applicant. Thus, (ii) was only a basis for contest in cases where the applicant had refused to agree to this change or where the respondent had decided to contest without first ascertaining whether the application would be willing to change the notice period.

Length of Negotiations

In the vast majority of PABO applications (n=1279), applicants specified the date that negotiations with the employer commenced. This made it possible to measure the length of time from commencement of negotiations to lodgement of a PABO, which in turn provides insight into the extent of pre-PABO negotiations. Such negotiations may commence at any time, but if there is a pre-existing EA, an application for a PABO may only be made if the agreement has passed its nominal expiry date (NED) or is within the last 30 days of the nominal life of the agreement term (FW Act s 439(1)).

In order to avoid distortion in average duration of negotiations, some applications were excluded on the grounds of duplication or replication when calculating the statistics presented below.15

15 As discussed previously, some negotiations generated multiple applications by different unions and some generated multiple applications by the same union. The figures were adjusted accordingly. For example, in the case of the Queensland Catholic Schools EA, 496 applications were submitted in three rounds occurring in August, September and December 2015. The December ballots were primarily a re-ballot of August applications. Only one application from each round was included in the final count. In contrast, multiple ballots submitted in relation to the Victorian Public Health Sector (Health Professionals, Health and Allied Services, Managers and Administrative Officers) Multiple Enterprise Agreement 2011-2015 were submitted in one round and re-balloting did not occur (see above n 10 which suggests that this agreement may be mislabelled). Therefore, only one application was counted towards the total number of applications for the purpose of the data that follow.

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Duration of Negotiations

The time between negotiations commencing and a PABO being submitted spanned a minimum of four days and a maximum of 1199 days (3.3 years).16 The median number of days was 124, the mode 88, which the mean was 219.8 days coupled with a relatively high standard deviation (197.2 days) suggesting that the length of time between negotiations and application varied considerably across the dataset. The time between negotiations commencing and a PABO being submitted spanned a minimum of four days and a maximum of 1199 days (3.3 years). The mean number of days was 219.8 although this was coupled with a relatively high standard deviation (197.2 days) suggesting that the length of time between negotiations and application varied considerably. Figure 1 shows the average length of time spent negotiating prior to a PABO application being submitted. It shows that just over a third of applications were submitted between three and six months after negotiations commenced, and a further 20 per cent% between six and nine months.

Up to a month

>1 month to < 2 months

> 2 months to <3 months

>3 months to < 6 months

>6 months to <9 months

> 9 months to < 1 year

>1 year to < 2 years

>2 years

0 5 10 15 20 25 30 35

% of Applications

Figure 1. Length of Negotiations Prior to a PABO being submitted

Number of Meetings During Negotiations

The mean number of meetings attended by the respondent and the applicant prior to lodgement of a PABO application was 8.20 (Min=0, Max=33); however, this varied substantially across applications (SD 5.7). A Spearman rank-order correlation was conducted to determine if there was a relationship between the number of days spent in negotiations prior to applying and the number of meetings held. Spearman rank 16 This was the second PABO lodged by the workforce in relation to the negotiation, the first PABO having been successful, but not having resulted in any industrial action being taken. The length of negotiation was due to the employer negotiating a contract with a third party contractor who was placing them under extreme pressure to lower the costs of the contract. As a result, the expired EBA was rolled over for a number of years post-expiry whilst the workforce waited on the result of the employers contract negotiations with this third party.

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order correlation is a non-parametric measure of statistical dependence between the ranking of two variables. Put simply, it is a number that shows how closely two sets of data are linked. In the present case, the question was the extent to which the number of meetings, and the time spent negotiating, are related. A two-tailed test of significance17 indicated that there was a clear positive relationship between the time spent negotiating prior to lodging a PABO application and the number of meetings attended (rs (500) =0.48, p<0.001). This suggests that the longer the interval between the start of negotiations and the lodgement of a PABO application, the greater the number of meetings that took place. This may seem intuitive, but the two-tailed test helps confirm that this is indeed the case.

Commencement of Negotiations Related to Nominal Expiry of existing agreement

Analysis of the length of time between the start of negotiations and the NED of an existing agreement showed that there were significant differences between different negotiations. The minimum number of days between the start of negotiations and the NED of an EA was -631, that is, at the lower end, negotiations commenced 20 months in advance of the NED of a pre-existing EA. At the other end of the spectrum, the maximum number of days was 3594 or approximately 9.85 years after the NED of the pre-existing agreement.18 On average, negotiations commenced 29 days after the NED of an old agreement. The mean number of days between the NED and the start date of negotiations was 29 days, coupled with a large standard deviation of 349.83 days, suggesting that the number of days was not consistent across the data and tended to vary substantially. As shown in Figure 2 negotiations most often commenced in the two to six months prior to the NED of the existing EA (36.6%).As shown in Figure 2 in most cases (36.6%) negotiations commenced in the two to six months prior to the NED of the existing EA.

17 A two-tailed test means that it is not clear which direction the relationship might take. It might be anticipated that the number of meetings would increase in line with the number of days between the start of negotiations and a PABO application. Conversely, it might be anticipated that difficulty in securing meetings is related to the length of a negotiation, and that the number of meetings does not increase in line with the number of days spent negotiating.18 There is little by way of additional explanation to account for the length of time between expiry and negotiation in this case. The Union had been attempting to engage the employer in negotiations for a long period of time. The employer had indicated that it had yet to finalise its intent to negotiate a new agreement. In 2014 it had put an agreement to vote without the input of the employees or employee representatives and this was rejected.

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> year to < 2 years prior to expiry

> 6 months to a year prior to expiry

2 months to 6 months prior to expiry

> 1 month to < 2 months prior to expiry

< month prior to expiry to date of expiry

A month or less after expiry

> month to 2 months after expiry

> 2 month to 6 months after expiry

> 6 months to a year after expiry

> a year to 2 years after expiry

>2 years after expiry

0 5 10 15 20 25 30 35 40

Percentage of Applications

Wh

en N

egot

iati

on C

omm

ence

d

Figure 2. When negotiation commenced prior to/after EA nominal expiry19

Industrial Action Proposed

Representatives proposed a wide range of industrial actions in PABO applications submitted during the reference period. Table 3 shows the range of actions proposed, both as a proportion of overall actions proposed and as a proportion of PABO applications made to FWC. The Table contains two columns – one setting out all PABO applications made during the reference period (n=1302). Column two refers only to non-duplicate, unique applications (n=481), where adjustments have been made for multiple applications made in relation to the same EA negotiations.20 As can be seen from Table 3, overtime and job function bans were common in the applications submitted, with overtime and recall bans being slightly more prevalent as a proportion of overall actions proposed when the duplication arising from multiple ballots submitted in relation to the same EA was removed. Looking at unique actions only (i.e. the column with duplicates removed) highlights the fact that strike/stop work action of shorter duration was more often proposed than strike/stop work action of longer duration, with 46.2% of unique ballots proposing one-hour strikes, 43.7% proposing two-hour strikes and 66.7% proposing four-hour strikes. This may be linked to the fact that unique applications also commonly proposed indefinite strikes (66.7%), and this may have been used instead of specifying strikes of longer duration. Analysis of the data on all ballots submitted shows that that the duplicate ballots

19 64 applications were excluded from this table due to the absence of EA expiry dates and/or negotiation start dates.20 Unique ballot applications (n=481) refers to the total number of ballot applications submitted in which the action proposed was unique to that EA negotiation. Thus, these data remove applications where a ballot was submitted in respect of the same EA negotiation and the same actions were proposed. However, they retain instances where the application was submitted in respect of the same EA, but the actions proposed were different. For example, the Queensland Catholic Schools EA generated 496 PABO applications; however the industrial action proposed was repeated across many of these applications. Of these 496 applications, only four unique combinations of industrial action were proposed. In the duplication removed column, the Catholic Schools EA would contribute four to the overall count and the remaining 492 applications which proposed the same form of industrial action are removed from the count.

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submitted in relation to negotiations where a single interest authorisation was in place commonly proposed a large number of job function bans, with 97% of the duplicate ballots proposing one or more such ban.

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Table 3. Industrial Actions Proposed in Ballot Applications ALL APPLICATIONS UNIQUE APPLICATIONS

As a proportion of ballots

As a proportion of actions proposed

As a proportion of ballots

As a proportion of actions proposed

N % % N % %One or More Type of Ban on

Overtime 674 51.8 11.8 395 82.1 14.8Job Function 1183 90.9 20.7 382 79.4 14.3Recalls/Callbacks/Weekend work/Shift Changes 185 14.2 3.2 146 30.4 5.5

Stop Work Meetings 21 0.7 0.4 17 3.5 0.6One or more Strike/Stop Work of

Less than 1 Hour 513 39.4 9.0 62 12.9 2.31 Hour 592 45.5 10.3 222 46.2 8.32 Hour 263 20.2 4.6 210 43.7 7.93 Hour 114 8.8 2.0 93 19.3 3.54 Hour 515 39.6 9.0 321 66.7 12.06 Hour 44 3.4 0.8 32 6.7 1.28 Hour 194 14.9 3.4 159 33.1 6.010 Hour 16 1.2 0.3 9 1.9 0.312 Hour 140 10.8 2.4 118 24.5 4.472 Hour 120 9.2 2.1 100 20.8 3.7Shift Length 21 1.6 0.4 16 3.3 0.6Indefinite 296 22.7 5.2 251 52.2 9.4Week Long 146 11.2 2.6 126 26.2 4.7Time Unspecified 9 1.6 0.2 8 1.7 0.3

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PABO Approvals and Ballot Results

Of the 1302 ballot applications submitted to the FWC during the reference period: 1255 (96.4%) were approved by the FWC five (0.4%) were not approved by the FWC 42 (3.2%) were withdrawn by the applicant before the matter was determined.

Of the 1255 that were approved, 54 were withdrawn after the ballot had been approved (4.2% of the original 1254 PABOs granted).

Once approved, ballots are conducted either by the AEC or by an independent ballot agent if this was sought by the applicant and approved by the FWC. Where ballots are conducted by the AEC, the costs are met out of Commonwealth funds, whereas the applicant has to meet the cost of ballots conducted by any other party (FW Act ss 464(2), 465(2)) (for comment see Stewart et al 2016: [27.28]).

Looking at the 1204 PABOs that proceeded to a vote during the reference period, 99.2% (n = 1194) of ballots were conducted by the AEC, and only 0.8% (n=10) by a ballot agent other than the AEC.

In terms of ballot method, the legislative note to FW Act s 451(2)(b) provides three examples of voting methods: attendance, electronic and postal voting, whilst the wording of s 451(1)(b) makes clear that show of hands is not an acceptable voting method. Where the AEC conducts the ballot, it determines the ballot method (s 451(2)(b)); where an independent ballot agent conducts the ballot, the FWC will instruct the ballot agent on the method to be used (s 450(2)(b)).

Of the ballots conducted during the reference period, 83.3% (n =1003) were conducted by postal vote, 0.7% (n=9) by electronic vote, and 14.7% (n=192) by attendance vote. For ballot votes where an agent other than the AEC was used, one ballot was conducted by attendance whilst the remaining nine ballots were conducted electronically.

QuorumOf the 1204 ballots conducted on which data were obtained, 20.4% (n=265) of ballots did not achieve a quorum, whilst 72.1% of cases (n=939) did. Figure 3 depicts the percentage of voters voting in a ballot, demonstrating that voter turn-out varied quite significantly in some instances. Most commonly, ballots reached the quorum by securing turn-out from 50-60% of those on the roll. Some ballots achieved particularly strong turn-out with 80-100% of those on the roll casting a ballot. For those ballots that failed to achieve a quorum, the margin of failure was often narrow, as evidenced by the fact that 110 failed ballots received between 40% to 49.4% turnout, whilst 79 ballots received 30% to 39.4% turnout.

Figure 3. Percentage of Voters on the Roll Voting in the Ballot

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Figure 4, provides an overview of differing levels of voter turn-out across ballots, with reference to mode of balloting. It highlights how electronic and attendance ballots achieved higher voter turnout rates. The Figure shows that the ratio of ballots that achieved a quorum, compared to ballots that did not do so, was higher amongst the attendance and electronic votes. For every three postal ballots which reached quorum, one did not do so. This compares with 11.8 attendance ballots reaching quorum for every one that did not. Similarly high figures were seen amongst electronic ballots where all nine ballots achieved a quorum.

Figure 4. Percentage of Voters turning out for the vote, by mode of ballot.

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Figure 4 suggests that postal ballots were less successful in achieving a quorum than other forms of ballot. Yet, most ballots were conducted by post, so it is difficult to know whether ‘like’ is being compared with ‘like’: is success actually associated with mode, or is it simply an effect of uneven sample sizes? This can be tested using a chi-squared test. This statistical test helps determine whether the number of postal ballots and attendance ballots that fall in each category (achieved quorum/did not achieve quorum) differs significantly from the number that would otherwise be anticipated. In the event, the test demonstrated that failure to reach the quorum did differ within groups at a statistically significant level.21 The differences between success in achieving a quorum is a real difference, and not simply due to the fact that more postal ballots are conducted. This is an interesting preliminary finding, and strongly suggests that mode of ballot impacts outcome, but more investigation is needed as it would be necessary to take account of the fact that the data are ‘nested’ and must, therefore, be considered hierarchically.

Approval of Industrial Actions

Approval of proposed PIA requires both achieving a quorum and securing a majority vote of those who cast valid ballots. A quorate ballot might not approve PIA; conversely only some forms of PIA may be approved where multiple actions are put to vote.

Ballot questions were expressed either as: (i) a single ‘rolled up’ question in which a yes on the ballot paper equated to approval of all the proposed actions; or (ii) a series of yes/no statements on particular actions to which an individual would have to provide an individual response. 787 ballots were ‘rolled up’ question ballots, although 415 of such ballots required respondents to express approval against each specific form of action proposed. In the vast majority of ballots (96.6%) at least one form of 21 (2(1) = 24.93, p<0.001). In testing differences in success between groups, it does not matter that most applications submitted over the course of the reference period were postal ballots. The disproportion in numbers is not relevant to the association between mode and success.

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industrial action was approved, with only 3.4% of ballots failing to approve any industrial action. Figure 5 shows the rate of approval by quorum reached/not reached.

Figure 5: The rate of approval by quorum reached/not reached

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As can be seen in the Figure, where the quorum was achieved (n=937), 98.08% (n=919) of ballots supported taking industrial action, whilst for ballots where the quorum (n=265) was not reached, 91.32% (n =242) supported action. There were relatively few instances (n = 18) where a quorum was achieved, but no actions were approved, and only slightly more instances (n = 23) where a quorum was not achieved and no actions were approved.

OVERVIEW

The statistical findings described above offer some interesting insights into the nature of PABO applications submitted to the FWC and the results of subsequent ballots. Specifically, the data suggest that over the reference period:

ballot applications varied by industry and were most frequently lodged in Brisbane, Melbourne and Sydney;

the overwhelming majority of PABO applications were approved by the FWC;

withdrawals of PABO applications were rare; applications were largely uncontested by respondent employers; PABO questions were changed at application stage only infrequently; the AEC was selected as the ballot agent in the overwhelming majority of

cases; ballots were most often conducted by post; there were significant variations in the length of time spent negotiating

and the number of meetings conducted prior to the lodging of a ballot application;

job function bans were the preferred form of industrial action proposed whilst indefinite action was more commonly proposed in preference to longer time specific durations (e.g. 8 hours, 10 hours etc);

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a quorum was achieved in the majority of ballots conducted, however achieving a quorum varied according to the mode of ballot used; and

there were a substantial number of ballots where one of more actions would have been authorised, had a quorum been achieved.

These findings suggest that the current legislative regime imposes a burden on applicants which may well be out of proportion to the benefits achieved. This is supported by: (i) the high proportion of orders granted without change or even a hearing; (ii) the inefficiency associated with the requirement to ballot sub-groups separately; (iii) the low number of successful contested applications; and, (iv) the timeframes within which applications are made. As it stands the regime appears to operate as little more than a pro forma exercise, rather than as a means of promoting democratic decision-making, promoting collective bargaining, or reducing levels of industrial disputation.22

The data show that PABO applicants enjoy an extremely high success rate. During the reference period only 0.4% (n =5) of 1302 PABO applications were refused by the FWC. In other words, the FWC had to process 1302 applications in order to deny just five of them. One interpretation of this is that the FWC process is an unnecessary bureaucratic exercise designed to scrutinise the use of a right (taking industrial action) that was already being exercised responsibly. Alternatively, it may suggest that the FWC process has given rise to greater compliance on behalf of applicants, due to the costs (by way of time and energy) associated with an order that is refused. It is anticipated that analysis of the qualitative data will help further to inform this debate.

A complicating factor is that the 1302 PABO applications made during the reference period related to only 399 discrete sets of EA negotiations. As indicated, just five of those negotiations (involving single interest employers or single interest authorisations) generated 741 of the total applications made. In cases where a single interest authorisation is in place, the legislation permits the balloting of a group of workers to be covered by a proposed EA, collectively or as sub-groups. Given that the legislation permits such an approach, it might be asked whether separate applications for each sub-group (or site) are a necessary, proportionate and efficient use of stakeholder resources. This question takes on greater significance when it is appreciated that the FWC itself routinely treats these applications on a collective basis, even although they have to be submitted separately. However, while the quorum requirement is retained, the ability to ballot separately must also be retained.

Extensions to notice requirements were the most frequent variation of ballot applications, but even these were typically effected outside the framework of an official ‘contest’. In 358 cases during the reference period, employers indicated that they would not challenge the application if the notice period was changed and as a result, the applicant agreed to the change in all but eight of these cases (n=350). An alternative approach to the current legislative regime might do away with the requirement to seek a PABO in favour of a process which allows employers to seek an order to stop a ballot proceeding if there are substantial grounds for doing so, or to seek extra notice of PIA in the event that a ballot is successful. Given that most issues around notice periods are resolved without resorting to a formal ‘contest’, an amended

22 Cf. rationales for the introduction of the balloting requirement discussed in Creighton et al 2016b: 155-9, 167-70; see also Creighton & McCrystal 2016.

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regime of this kind might offer a way to streamline the PABO process, whilst preserving a means by which to contest applications where this is warranted. That is not necessarily to suggest that there is no need for a ballot requirement, but rather that there may be viable alternatives to a system which places the onus of satisfying largely routine requirements on applicants – especially in circumstances where employers only rarely perceive it to be necessary or appropriate to oppose ballot applications.

When assessing possible alternative approaches to the current PABO process, it should be noted that the principal substantive issue which is considered by the FWC in making a PABO is whether the applicant has been, and is, genuinely trying to reach an agreement as required by FW Act s 443(1)(b). The data described above suggest that PABO applicants commonly spend between 3 and 6 months in negotiations prior to applying for a PABO, whilst very few applications occur within a month of negotiations commencing. This does not suggest that employee bargaining representatives are commonly making premature PABO applications. Nevertheless, the interplay of the statutory requirement to apply for a PABO and union behaviour in this respect cannot be ascertained from the statistical data alone, and requires further examination by reference to the qualitative data.

Interestingly, in December 2016 the FWC sought stakeholder comment on a proposal to enable uncontested PABO applications to be dealt with on the papers by means of a requirement that ballot applicants provide a statutory declaration setting out the basis upon which the FWC could be satisfied that the applicant has been genuinely trying to reach agreement (Fair Work Commission 2016). This proposal was reportedly driven in part by the findings described in this article (Workplace Express 2016).

As concerns the ballot itself (as distinct from the requirement to apply for a PABO), the statistical data confirm that the primary difficulty faced by applicants in having proposed industrial action approved is the quorum requirement. If that requirement is satisfied, it is extremely unlikely that the ballot will be unsuccessful. The quorum failure rate of 20.4% of all ballots in the study was higher than that reported by either the Fair Work Act Review in 2012 (10%) (Australian Government 2012: 182 (50 ballot sample)) or the Productivity Commission in 2015 (18%) (Australian Government 2015: 871 (133 ballot sample)), but it is significant that even unsuccessful ballots almost invariably endorse taking PIA.

Electronic voting has been permissible since 2012,23 but seems to have had little substantive impact in practice, with only 10 electronic ballots being conducted in the reference period. It seems probable that the reason for this modest uptake is that the AEC does not currently offer the option of electronic balloting and consequently where applicants wish to use electronic balloting they must bear the entire cost of conducting the ballot. This is, however, an issue which requires further investigation.

In terms of the manner in which the majority of ballots are conducted, postal and attendance ballots, the analysis indicates that failure to achieve a quorum was more common with postal rather than attendance ballots (and, as indicated, this was not just

23 See also s 255(2)(b). This change was effected by Part 1 of Schedule 7 to the Fair Work Amendment Act 2012, and was introduced in response to a recommendation of the Fair Work Act Review in the same year.

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because there were more postal ballots). The reason for this requires further analysis by reference to the qualitative data, but clearly suggests that the method by which ballots are conducted can impact upon levels of failure to achieve a quorum. If that is indeed the case, the current statutory requirements may not be best suited to ensuring respect for the democratic wishes of employees – assuming that that is indeed part of the rationale for the ballot requirements.

These empirical data make it possible to draw only tentative conclusions as to the impact of the PABO provisions on trade union decision-making concerning industrial action, and on the bargaining behaviour of both employer and employee bargaining representatives. Further insight into these issues will emerge from the qualitative component of the study, and provide more nuanced answers to the questions raised in this paper.

References

Australian Government, (2012) Towards More Productive and Equitable Workplaces: An Evaluation of the Fair Work Legislation. Commonwealth of Australia, Canberra

Australian Government, (2015) Workplace Relations Framework. Productivity Commission Inquiry Report, Commonwealth of Australia, Canberra.

Creighton, B, Denvir, C, Johnstone, R & McCrystal, S (2016a) Protected Action Ballots and Protected Industrial Action Under the Fair Work Act: The Impact of Ballot Procedures on Enterprise Bargaining Processes – Methodological Approach. October 25, available at SSRN: https://ssrn.com/abstract=2858757 .

Creighton, B, Denvir, C & McCrystal, S, (2016b) Strike Ballots and the Law in Australia. Australian Journal of Labour Law 29(2): 154-170.

Creighton, B & McCrystal, S (2016) Strike ballots and the law in comparative perspective. Australian Journal of Labour Law, 29(2): 121-32.

Deakin, S & Morris, GS (2012) Labour Law. 6th ed, Hart Publishing, Oxford.

Fair Work Commission (2016) For comment: draft Fair Work Commission amendment (Applications for Protected Action Ballot Orders) Rules 2016. Available at: https://www.fwc.gov.au/about-us/news-and-events/comment-draft-amendment-the-fair-work-commission-rules-2013.

McCrystal, S (2011) Fair Work in the International Spotlight: The CEPU Complaint to the ILO’s Committee on Freedom of Association. Australian Journal of Labour Law 24(2): 164-172.

Reith, P, (1998) Pre-industrial Action Secret Ballots. Ministerial Discussion Paper, Minister for Workplace Relations and Small Business, August.

Stewart, A, Forsyth, A, Irving, M, Johnstone, R, & McCrystal, S. (2016) Creighton and Stewart’s Labour Law. 6th ed, Federation Press, Annandale.

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Undy, R, Fosh, P, Morris, H, Smith, P & Martin, R (1996), Managing the Unions: The Impact of Legislation on Trade Union Behaviour. Clarendon Press, Oxford.

Workplace Express (2016) ‘FWC considering accelerated PABO process...’ Available at www.workplaceexpress.com.au (accessed 15 December 2016).

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