The Fair Work Commission’s (FWC) recent decision in Woolworths Group Limited T/A Woolworths Group Limited v United Workers' Union [2024] FWC 3428 highlights the importance of a party’s good faith enterprise bargaining obligations and how the FWC can step in to address a party’s capricious or unfair conduct that undermines these obligations.

This case involved Woolworths Group (Woolworths) making an application to the FWC for a bargaining order to cease the United Workers' Union (UWU) from hindering and obstructing access in and out of its distribution centres, which had an enormous impact on its business and operations.

The decision highlights that employers are able to manage any improper conduct of employee bargaining representatives during enterprise bargaining, such as by escalation to the FWC.

It is of comfort to employers that the FWC was prepared make specific performance orders, rather than having to take the more cumbersome route of an industrial tort claim in a common law Court. For employers facing damaging industrial action, this decision illuminates a worthy and efficient option for resolution.

Background

Enterprise bargaining negotiations had been occurring between Woolworths, the UWU and Shop Distributive and Allied Employees Association regarding four proposed enterprise agreements covering several Woolworths’ distribution centres. 

As a result of protracted negotiations, the UWU obtained permission from the FWC that Woolworths’ employees at the relevant sites were able to participate in lawful protected industrial action, such as by taking one hour work stoppages. However, some employees joined picket lines at some of Woolworths’ distribution centres, which obstructed and hindered access or egress from Woolworths’ distribution centres and caused a major supply impact on its supermarkets.  

On 27 November 2024, Woolworths outlined its concerns to the UWU regarding the unlawfulness of the picket line and that the UWU had not met its good faith bargaining requirements. This request was approximately two months after an earlier request from Woolworths to the UWU that it not impede or obstruct access to the entrances of its distribution centres.

On 1 December 2024 Woolworths sent a further letter to the UWU.

The UWU did not respond to any of these communications from Woolworths. Woolworths then applied to the FWC for an interim (interlocutory) order.

Legislative Framework

The Fair Work Act 2009 (Cth) (FW Act) imposes various good faith bargaining requirements on bargaining representatives for a proposed enterprise agreement, such as participating in meetings at reasonable times and refraining from capricious or unfair conduct that undermines freedom of association or collective bargaining. 

The FW Act allows the FWC to make a bargaining order in relation to a proposed enterprise agreement if:

• one or more of a relevant bargaining representative has not or are not meeting their good faith bargaining requirements; and
• where the applicant for the order has complied with its procedural requirements of notifying the relevant bargaining representative of its concerns.

Decision

In examining Woolworths’ procedure in applying for a bargaining order, Deputy President Boyce found that the UWU not responding to Woolworths’ communications supports the proposition that Woolworths complied with its procedural requirements, particularly as there was a reasonable time for the UWU to respond.

At the hearing, the UWU sought to challenge Woolworths’ claims however it did not adduce sufficient evidence to support its claims, which Deputy President Boyce was critical of.

Ultimately, Deputy President Boyce found that the UWU organised, promoted and/or participated in obstructive picketing which prevented access into and out of relevant distribution centres, which was “capricious” and “unfair” conduct that undermined freedom of association and collective bargaining.  Deputy President Boyce also found that the UWU’s picket line was an attempt to place illegitimate pressure on Woolworths during the bargaining process.

Deputy President Boyce found that (amongst other things) the picket line was not part of any authorised protected industrial action and affected third parties such as individual employees and truck drivers of goods seeking to enter distribution centres.

On that basis, the UWU was found to have not met its good faith bargaining obligations under the FW Act.

The FWC subsequently made an order restraining the UWU form preventing, hindering, interfering or otherwise obstructing with free access to and free egress from Woolworths’ distribution centres.

Further information / assistance regarding the issues raised in this article is available from the authors, Nick Duggal, Partner, James Farrugia, Senior Associate or your usual contact at Moray & Agnew.