Perth-based AMMA principal workplace relations consultant, Peter Robertson, reviews a recent decision by a Full Bench of the Fair Work Commission which granted, in part, a union application that Esso Australia provide financial, forecasting and bargaining claims documents pursuant to s.590(2)(c) of the Fair Work Act 2009 (Act).

Peter Robertson

The Full Bench matter heard by Vice President Joe Catanzariti, Deputy President Val Gostencnik and Commissioner Michelle Bissett, followed current proceedings before the Commission conducted pursuant to s.266 of the Act concerning the making of an industrial action-related workplace determination.

Background

The Australian Workers’ Union (AWU), the Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union known as the Australian Manufacturing workers Union (AMWU) and the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU) (collectively the Unions) sought an order requiring Esso Australia Pty Ltd (Esso), Esso Resources Australia Pty Ltd (Esso Resources) and ExxonMobil Australia Pty Ltd (Exxon) to provide copies of documents or records, to the Fair Work Commission (Commission) pursuant to s.590(2)(c) of the Fair Work Act 2009 (Act).

The Full Bench heard that without further investment the Gippsland Basin Joint Venture (GBJV) operated by Esso, was ‘in peril’, ‘is currently in a distressed position’, that ‘soon the cost of producing oil will exceed revenue’, and, that ‘revenues are ‘just enough’ to cover costs’ because ‘gas production is falling while costs of production are rising’.

The Unions argued the documents were needed to test the companies’ claims as Esso contended that the Unions’ proposed increases in pay and allowances were excessive, and the documents would help the Unions gain a sense of Esso’s ‘real financial position’.

Principles for making the order

While Esso opposed the making of any section 590(2)(c) order, the Full Bench reiterated the principles to be applied in determining whether, and if so in what form, order should be made.

“It is sufficient to observe that the power under s.590(2)(c) to require a person to provide copies of documents or records, or to produce any other information to the Commission is a discretionary power, the exercise of which is to be guided by the principles adopted by courts in civil proceedings when compelling a person to produce documents, records or other things,” the Full Bench stated.

“Matters that will guide the exercise of the discretion to require production include relevance, the particularity with which the documents or category of documents that are to be the subject of the order sought are described, the extent to which the burden placed on a person required to comply with the order is reasonable, the extent to which particular documents sought amount to no more than fishing, and the proper administration of justice in the sense that material that is relevant to an issue or issues that fall for determination is available to parties to enable the parties to advance their respective cases.”

Decision

The Full Bench in part granted the Unions’ application only for documents setting out the financial position of Esso, Esso Resources, Exxon and the GBJV on two grounds:

  1. In justifying the roster changes and pay increases Esso proposes, it claims that it has poor profitability and needs to improve; and
  2. Esso contends that the Unions’ proposed increases in pay and allowances are excessive.

The Unions said that they required the documents to establish that the proposed increases are not excessive, having regard to Esso’s “real financial position”.

Esso objected on the basis that the categories presented by the unions lacked precision and would potentially cover an enormous array of documents.

The FB concluded both Esso and the Unions had ‘differing views about the kinds of documents that might fall within the categories’ and, given the dispute over what was required to be produced, adopted the Unions’ version with a few modifications so that the documents showed ‘income, expenses, profit and loss, assets and liabilities’.

The Full Bench observed the definition of ‘document’ or ‘documents’ carried a wider meaning than merely paper documents and stated: “We would not expect the production of every single document held by the relevant entity containing, for example annual statements for a requisite financial year showing expenses to be produced”.

“The production of a multiplicity of documents containing the same information is neither helpful nor necessary if one or a few documents will suffice,” the FB said.

It was concluded that a ‘sensible approach’ to ‘construction of the categories of documents’ and the ‘production of documents’ was needed but the documents required was not ‘oppressive’.

Loans

The Unions sought documents to investigate whether the ‘related party loans’ related to the Bass Strait operations and, if they did, whether they were ‘genuine loans made on commercial terms’. And the documents would help in establishing the ‘true position’.

Esso objected on the basis of ‘relevance and oppressiveness’ and that the Unions’ submissions revealed the ‘fishing nature’ in seeking this documentation and that ‘it is not the place of the Commission in these proceedings to embark on an exercise of determining whether loans are un-commercial’ and that the documents were ‘highly sensitive in nature’.

The FB did not order the production of ‘unrelated-party loan’ documents.

‘We have some sympathy for Esso’s position that a request for production of (these) documents amounts to a fishing expedition based on a suspicion and nothing more that the related party loan was made in relation to the Bass Strait operations,’ The FB stated.

Company witness statements triggered unions’ call for evidence to test claims

The Unions sought a number of documents to test Esso’s claim that it suffers from “poor profitability” and that the Unions’ claims are “excessive”.

The Unions said these claims could only be tested by ‘inspecting the long term contracts Esso already has in place’.

The Full Bench did not make orders requiring the production of documents identified by Esso as being ‘oppressive’. However it stated that Esso and GBJV’s current profitability was an issue and if the documents ordered did not give sufficient information for the Unions to test that issue, the Unions could apply for another order for more documents’.

Catering documents

The FB agreed with Esso’s argument that its catering documents were irrelevant and oppressive and would require the disclosure of confidential contractual documents.

Union files rejoinder on whether company needs to send raw data

On 18 April, the unions applied for a rejoinder raising a question of principle where Esso asserted it was not required to ‘manipulate and assemble raw electronic data” to create the documents sought.

The FB stated this raised an important legal question of the Commission’s powers to inform itself under s.590(1) to ‘require a party to configure data held electronically into a meaningful form for presentation to the Commission’.

The Full Bench stated: “To inform the exercise of the discretionary power, the Commission would need to know the nature of the data actually held and the form in which it is held, and the difficulty of converting or collating it into the required form for production to the Commission. That would be a matter for evidence to be adduced by the objecting party’.

”In circumstances where Esso does not lead evidence suggesting that creation of the document would be oppressive difficult, and in circumstance where the document is highly relevant to the proceeding, it is clear which way the discretion should be exercised,” the FB said.

The FB did not find it appropriate to deal with the submission contained in the rejoinder in the context of the current applicationfor an order requiring a person to produce documents or records or other information in accordance with s.590 (2)(c) of the Fair Work Act 2009’.

“The draft order also relies only on s.590(2)(c) of the Act. It is therefore that application with which we deal in this decision. We are not persuaded that we should in this decision explore the breadth of power in s. 590(1) of the Act,” the FB stated.

Implications

This matter indicates members may need to be able to justify adopted bargaining positions.

In this matter, seeking to present a case for financial distress as part of its enterprise bargaining position meant Esso needed to be able to provide evidence in terms of financial statements, contracts and investor information which contained the income, expenses, profit and loss, assets and liabilities, in the event that the company’s claims were tested.

Employers also need to be mindful in the statements they make in providing evidence as in this case the Full Bench found the documents it ordered to be produced were relevant to Esso’s witness statements.

AMMA provides expertise across negotiating both new enterprise agreements and the review, re-negotiation or restructuring of existing agreements to deliver sustainable outcomes for all resource sector employers. Contact Peter Robertson for more information via [email protected].