Application by DP World Melbourne Limited
[2019] FWC 6788
•4 OCTOBER 2019
| [2019] FWC 6788 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.418—Industrial action
Application by DP World Melbourne Limited
(C2019/4525)
| Deputy President Mansini | MELBOURNE, 4 OCTOBER 2019 |
Application that industrial action by employees stop – alleged “go slow” – whether industrial action happening.
This decision relates to an application by DP World Melbourne Limited (DP World) for orders under s.418 of the Fair Work Act 2009 (Cth) (the Act) that alleged industrial action stop.
On the evidence before the Commission, it does not appear that the alleged unprotected industrial action (in the form of a “go slow”) is happening. The application by DP World for orders under s.418 must therefore be dismissed. The reasons for this decision follow.
Industrial context
DP World operates a container stevedoring terminal at West Swanson Dock, Port of Melbourne, Victoria (the Terminal).
At the time of the application, DP World employed 566 employees who perform work at the Terminal, are or are eligible to be members of the Construction, Forestry, Maritime, Mining and Energy Union (CFMMEU) and covered by the DP World Melbourne Enterprise Agreement 2016 (the Melbourne Agreement) (the Employees).[1] The Melbourne Agreement nominally expired on 28 February 2019 and bargaining for a replacement agreement has been ongoing since March 2019.
In the course of bargaining, the CFMMEU has organised and the Employees have taken protected industrial action, including a range of indefinite bans and restrictions and a complete stoppage of work extending for 96 continuous hours.
The application alleges that, since the Employees returned to work after the 96 hour stoppage on 14 July 2019, DP World has experienced a material and unexplained reduction in productivity at the Terminal; the only reasonable inference is a coordinated effort on the part of the Employees to work slower than is customary; and this is linked to bargaining and related disputation.
The CFMMEU and two Employees deny there is a “go slow” and dispute the productivity data yet offer a range of possible explanations, none of which are accepted by DP World.
Also in the period since March 2019, the parties have consulted about DP World’s proposal to introduce change, in response to having lost a large number of contracts to its competitors. It is anticipated that 138 jobs will be affected. On 21 July 2019, an initial 47 voluntary redundancies took effect by agreement. Further redundancies were announced around that time.
Procedural history
The application was made on 23 July 2019, initially alleging that unprotected industrial action in the form of a “go slow” was being organised by the CFMMEU and taken by the Employees.
The hearing of the application commenced on 24 July 2019. The CFMMEU sought and was granted an adjournment on procedural fairness grounds because it had not been able to obtain full instructions.[2] The CFMMEU’s request was granted, interim orders issued and, by consent of the parties, a program for filing of materials was directed and the hearing was adjourned until 2 August 2019. [3]
In the intervening period, on 1 August 2019, the Federal Court granted an initial interim injunction by application of DP World against the CFMMEU for breach of the Commission’s Interim Orders. In doing so, Justice Snaden determined there existed a prima facie case not only that the Employees had embarked upon and continued to maintain a “go slow” but also that the CFMMEU was and had been organising that action. Further, that the balance of convenience strongly favoured the grant of interim injunctive relief.[4] All notices of protected industrial action were withdrawn by the CFMMEU later that day.[5]
The hearing of the application in this matter continued over a further two days, on 2 and 9 August 2019. The materials before the Commission include 13 witness statements, a series of written submissions, oral evidence and submissions.
Further, on 2 August 2019:
a) DP World discontinued the application as against the CFMMEU, on the basis that the Court’s injunction provided “coverage” such that, although it did not resile from the possibility that the CFMMEU was continuing to organise the alleged go slow, DP World was not in a position to advance evidence or make submissions in that respect;[6] and
b) The CFMMEU, conscious of the serious bargaining implications of breaching an order of the Commission (which, by s.413(5), it apprehended would prevent it from taking any, even protected, industrial action), simultaneously made applications for:
i)Retrospective variation of the Interim Orders;
ii)Retrospective discharge of the Interim Orders;
iii)Revocation of the Interim Orders;
iv)To appeal the decision to make the Interim Orders; and
v)Retrospective variation of four separate directions of the Commission.
The Interim Orders were subsequently amended to cover only the Employees, on and from 2 August 2019 being the date of discontinuance of the s.418 application against the CFMMEU.[7]
On 13 August 2019, after the conclusion of the hearing of this application, the Court made further orders for injunctive relief in relation to the application before it.[8]
On 19 September 2019, the Interim Orders and Amended Interim Orders were quashed by a Full Bench of the Commission.[9] That decision has naturally dispensed with the CFMMEU’s applications referred to at paragraph 13(b)(i) to (iv).
Of the various applications made in the course of these proceedings, the following remain:
a)DP World’s substantive application for orders under s.418, now confined to stop unprotected industrial action that is alleged to be happening by the Employees;
b)The CFMMEU’s application for standing to be heard in relation to the substantive application; and
c)The CFMMEU’s application to retrospectively vary the Commission’s directions.
PART A: RELATED APPLICATIONS
Application to be heard (as a non-party) in the substantive proceeding
As the s.418 application was discontinued against the CFMMEU, there was a question as to the role of the CFMMEU in the substantive proceedings.
Since the outset, the CFMMEU was granted permission to be represented by Mr White of Counsel in all related proceedings pursuant to s.596. At the hearing of evidence in the s.418 application, Mr White sought permission to appear on behalf of two of the Employee respondents, Mr Christopher Bassett and Mr Stephen McGowan.
DP World (whose Counsel, Mr Follett, was also granted permission to appear in the proceedings) did not oppose permission for representation of Mr Bassett and Mr McGowan but opposed the CFMMEU’s application for standing to be heard in relation to the s.418 application, on the basis that they are no longer a party and indeed a stranger to the proceeding. The CFMMEU argued it could establish an interest, including as a bargaining representative whose rights may be affected if “bargaining is foreshortened by some operation of [section] 413(5)”, which it apprehended may flow from these proceedings.[10]
Concerning the substantive s.418 application, the CFMMEU was invited to inform the Commission pursuant to s.590 and Mr White was granted permission under s.596 to represent the CFMMEU in that respect. The CFMMEU was afforded full opportunity to appear, address and inform the Commission, call and cross examine witnesses and make submissions including in reply. Accordingly, there is no utility in determining the question of standing.
Application to retrospectively vary the Commission’s directions
On 25 July and 2 August 2019, the Commission issued procedural directions by consent of the parties in each case.
The CFMMEU did not strictly comply with those directions, on four separate occasions. It sought retrospective variation for the following reason:
“The issue as you apprehend, Deputy President, is the operation of section 413(5) which if it applies has the consequence that industrial action that might otherwise be protected ceases to be protected which means it is immune from suit, which means that not only DP World but other persons might sue persons who fail to comply with, or do not satisfy the condition of 413(5) in respect of what would otherwise be protected industrial action.”[11]
It was not disputed that the Commission has the power to vary an order with retrospective effect. DP World did not oppose the CFMMEU’s application for retrospective variation. [12]
Whilst the need to comply with directions of the Commission ought not be waived lightly, and the discretion for retrospective variation exercised rarely,[13] in all of the circumstances of this case I have determined to grant the CFMMEU’s application for retrospective variation of the directions of 25 July and 2 August 2019.[14]
PART B: APPLICATION TO STOP (UNPROTECTED) INDUSTRIAL ACTION
Summary of legal principles
Section 418 requires the Commission to issue an order that industrial action stop, not occur or not be organised if it appears to the Commission that industrial action by one or more employees or employers is happening; is threatened, impending or probable; or is being organised.
This requires a finding of fact based on an assessment of the evidence led in the matter.
In circumstances where direct proof is not available, it is enough if the circumstances appearing in evidence give rise to a reasonable and definite inference; they must do more than give rise to conflicting inferences of equal degrees of probability so that the choice between them is mere matter of conjecture.[15] It must be a conclusion that is available as a reasonable and definite inference on the primary facts and be more probable than any alterative explanation proffered for what is occurring.[16]
If satisfied of the requisite conduct, the Commission is required to make an order to redress that conduct. Ordinarily, in a case of this nature which is not determined within two days (as is commonly the case where a “go slow” is alleged and complex legal and evidentiary cases ensue), an interim order would operate until the substantive application has been finally determined.[17] Indeed, in this case, interim orders were ostensibly in place and subject of alleged breach proceedings and interim injunctions, from 24 July 2019 until quashed on 19 September 2019.[18] In any event, it remains necessary to make a finding of fact as to whether the conduct is occurring at the time the matter is determined. Whether industrial action has occurred in the past is not the relevant question.[19]
Summary of the evidence
What does the productivity data show?
DP World’s General Manager – Operations (Mr Sean Jeffries) gave evidence that since the Employees’ return from the 96 hour stoppage on 14 July 2019, industrial action in the form of a “go slow” was happening. His evidence was predominantly in reliance on statistics supplied to him by Operations Manager (Mr Luke Gravell) who also gave evidence.[20] Their evidence was updated during the proceedings until and as at 7 August 2019. At the hearing on 9 August 2019, both witnesses maintained that the go slow was continuing, in reliance on that data.
Productivity at the Terminal is measured in three standard ways: Total Straddle Moves Per Shift (total moves or containers handled per straddle operator per eight hour shift, for both land side and quay side straddles); Crane Lifts and Gross Moves Per Hour (total quay crane moves per shift / operational hours that a crane is available to work a vessel). The data is collated through DP World’s terminal operating systems and summarised by DP World managers using a range of internal operating systems and shift reporting tools.
DP World relied on the period April to June 2019 as the relevant comparator, which it said was appropriate because there were no significant or unusual interruptions, it was overall quieter than the comparable time in 2018 (those figures were not produced) and the operating environment was relevantly the same.[21]
In summary, when compared to the same productivity metrics for DP World’s nominated period of April to June 2019, the data shows a sharp decline in the figures for 14 to 23 July 2019, followed by “slight but not significant” increases in productivity after the issue of the Interim Orders on the evening of 24 July 2019 to the morning of 27 July 2019,[22] and some ongoing improvements as at 7 August 2019.[23] An extract of the data presented by Mr Gravell, updated to 7 August 2019, is at Attachment 1.[24]
The CFMMEU challenged the integrity of the data, including to argue that averaged statistics are not appropriate where orders are sought against individuals. It also disputed the selection of April to June 2019 as an appropriate comparative period, because there was protected industrial action and changed work practices happening at the Terminal during that time. DP World said that it had suitably discounted and adjusted some of the data points to account for a range of factors, including those identified by the CFMMEU.
Was there any communication of a “go slow”?
Mr Jeffries sought to give evidence that he had received reports from a manager of comments by, and had direct conversations with, unidentified stevedoring employees to the effect that the Employees had been instructed to go slow, to work safely and to rule.[25] Although the Commission is not strictly bound by the rules of evidence, in the particular circumstances of this case it is not appropriate to, and I do not, have regard to this evidence which is obviously unsourced hearsay.
Assistant Secretary of the Maritime Union of Australia – Victoria Branch (the CFMMEU’s Maritime Division) (Mr Robert Patchett) gave evidence that he was not aware of any Employee going slow or working in a way other than they would usually do and that no delegate or member at DP World had communicated to him that they are engaging in a go slow.[26] Further, Mr Patchett said he had attended a roadside meeting outside of DP World on 25 July 2019 at which he instructed the Employees about the Interim Orders; the circumstances in which the Interim Orders were made; that the allegations of a go slow were “news to the MUA, but in any event there is now an interim order that says workers can’t go slow and if there is a go slow they have to stop”; and “I told the members we will deal with the matter in the foreseeable future and will let them know the outcome”.[27]
Crane Driver and elected CFMMEU Delegate (Mr McGowan) and Stevedore/Straddle Driver (Mr Bassett) gave evidence on behalf of themselves. They respectively denied engaging in a go slow and having received any communication that the union was organising a go slow.
Mr Bassett said he addressed the workforce on 26 July 2019 (in his role as Employee Representative Committee member) about the Interim Orders, in terms to the following effect:
“We cannot take unprotected action and you must do the job to the best of your abilities. That does not mean we go out there and knock ourselves out. We work to the rules that the company has given us, and that is to be safe and make sure we all go home at the end of the day.”[28]
Also in his written evidence, Mr Bassett maintained that he did not in this address say to work to rule or work to a rule. He said he understood the phrase “working to rule” to have the particular industrial meaning of working slower with the effect of reducing productivity.[29]
Then, in cross examination, Mr Bassett said of the phrase “working to rule”:
“It’s not a terminology that’s used on the wharf at all.”[30]
Also in cross examination, DP World put to Mr Bassett that his address to the workforce was the same as instructing the workforce to take industrial action by working to rule. Mr Bassett repeatedly denied that he had, or that he had instructed the Employees to, work to rule or work slower than normal.[31]
Mr McGowan said he addressed the workforce on 29 July 2019, in response to news of a 15 minute reduction to breaks, as follows:
“I want to make sure everyone knows that a go slow is illegal industrial action, that there is no go slow, that there is no work to rule, that there is a case in the Commission alleging this is happening, that we have industrial action and it is protected so don’t go slow.”[32]
In cross examination, this statement was explored further:
Counsel for DP World: Why would you have to go out of your way to say there will be no go slows or no work to rules?
Mr McGowan: Well, I was concerned that everyone was upset and I didn’t want anyone saying anything over the radio or anything like that incidentally. I just really wanted to draw the line in the sand so people knew we were going to follow the processes and we were going to follow the rules.
Counsel for DP World: You were worried that because everyone was upset that when they did get back from the 96-hour stoppage, they would go on a go slow?
Mr McGowan: No, that was after that. I wasn’t really concerned but I just thought it was best if I put it out there straight away.[33]
Any other possible explanations?
Mr Jeffries and Mr Gravell respectively gave evidence that none of the weather, operational and the various other possible causes posed by the two Employees and the CFMMEU could explain the sharp decline in productivity and spike in reported equipment faults.
Mr Jeffries also suggested a relationship between the ongoing bargaining and related disputation and lower productivity performance including by reference to a bundle of materials taken from social media.[34]
Regarding the bargaining, Mr McGowan gave evidence that the protected industrial action had been stressful and, as DP World would not negotiate whilst the protected industrial action was continuing, he was relieved that it had been withdrawn so that talks could continue.[35]
The two Employees also gave evidence of the personal impact of the redundancies:
a)Mr Bassett, regarding his involvement in consultations about the need for change at the Terminal said that prior to the 47 departures it was still his understanding that the priority was to attempt mitigations which might result in minimising the number of jobs that were going to be lost;[36]
b)Mr McGowan, about the personal (adverse) impact of the 47 departures in the week of 14 to 22 July 2019, and a DP World announcement of further redundancies to take place delivered on around 18 July 2019.[37]
Is (unprotected) industrial action happening?
Presently before the Commission is an application under s.418 for orders to stop industrial action alleged to be happening by one or more of the Employees, in the form of a “go slow”. Specifically, within the statutory definition of “industrial action” at s.19(1)(a), it is alleged that the industrial action happening is “the performance of work by an employee in a manner that is different from that in which it is customarily performed, or the adoption of a practice in relation to work by an employee, the result of which is a restriction or limitation on, or a delay in, the performance of work”.[38]
I have carefully considered the evidence in this matter.
I have no doubt that a loss of business and the need for redundancies, in parallel with the commencement of bargaining and the exercise of protected rights to strike inflicting further harm on the business, has exacerbated the level of industrial tension at the Terminal.
I consider it unlikely that a sustained go slow in an operation of this kind would happen without a high degree of coordination which, by its nature, would typically be covert. In this respect, the evidence of Mr Bassett and Mr McGowan extracted above does not necessarily speak for all of the Employees, is inconsistent in parts and reveals motives which may point to a sufficiently proximate effort to coordinate covert industrial action at least at that time. Their concessions that they were frustrated and unhappy are also gravely concerning. On the other hand it is not entirely surprising that, by 29 July 2019, Mr McGowan was “going out of his way” to ensure that the Employees understood not to engage or continue to engage in a go slow in breach of the Interim Orders. Particularly given the serious ramifications of s.413(5), which would remove the Employees’ ability to strike for the duration of the bargaining campaign, and of which the CFMMEU was acutely aware.
Notably there was some improvement in the productivity metrics following the issue of the Commission’s Interim Orders and the Court’s initial interim injunction and some improvement continuing as at 7 August 2019, albeit not a return to productivity levels recorded for April to June 2019.
Notwithstanding the above, which strikes a fine balance, difficult questions arise from the productivity data. DP World’s case hinges on the premise that the measure of a go slow is to be found in productivity figures achieved in the period 14 July 2019 to 7 August 2019 as against the average figures for the period April to June 2019. I accept that averaged data may, in a case of this nature, be useful to establish a significant reduction in productivity. However, in this case it is not contentious that there were other coinciding events during DP World’s selected comparative period. Those events included protected industrial action taken during April, March and June 2019 and changed work practices over the same period. Further, it was Mr Jeffries evidence that the quay crane and straddle productivity at DP World had been “steadily increasing” over the period April to June 2019 due to a strong focus on attempting to improve customer service and turnaround times, suggesting these figures do not represent a common or normal business scenario.[39] Even having regard to Mr Gravell’s justifications for selecting this period and his evidence of discounts and adjustments, in all of the circumstances and given the significance and seriousness of what is alleged, the discrete period of April to June 2019 does not appear to be an ideal comparator or sound foundation on which to proceed.
In these circumstances, it is difficult to draw a clear inference substantially on the basis of the statistical evidence.
It must be acknowledged that DP World’s hypothesis is not without merit, particularly as it relates to events at and around 23 July 2019. I do not necessarily accept the broad denials of Mr Bassett, Mr McGowan and the CFMMEU, particularly in light of their respective concessions that the Employees were frustrated and unhappy and the identified inconsistencies in the evidence.
However, having considered the totality of the evidence as at the conclusion of proceedings on 9 August 2019, I am not able to conclude that a clear inference may be drawn that industrial action in the form of a go slow is happening now.
Conclusion
For the above reasons, as it does not appear that the alleged industrial action is happening there is no basis for making an order under s.418 of the Act. The application by DP World must therefore be dismissed.
DEPUTY PRESIDENT
<PR712931>
Appearances:
M J. Follett and Seyfarth Shaw Australia for the Applicant.
E P. White with J E. Hartley and Maurice Blackburn for the CFMMEU and others.
Hearing details:
2019
Melbourne and Sydney (by video).
24 July, 2 and 9 August.
ATTACHMENT 1 – EXTRACT FROM FOURTH WITNESS STATEMENT OF LUKE GRAVELL
[1] Exhibit A1 (First Witness Statement of Luke Gravell) at paragraph 2.
[2] Transcript of Hearing of 24 July 2019 at PN12 and PN211.
[3] Ibid at PN211 to 217 and Order dated 24 July 2019 (PR710679) (Interim Orders).
[4] DP World Melbourne Limited v Construction, Forestry, Maritime, Mining and Energy Union [2019] FCA 1209.
[5] Exhibit A7 (Third Witness Statement of Sean Jeffries) at paragraph 4 and SBJ-4.
[6] Transcript of Hearing of 2 August 2019 at PN223 and 224.
[7] Amended Order dated 2 August 2019 (PR710992) (Amended Interim Orders).
[8] DP World Melbourne Limited v Construction, Forestry, Maritime, Mining and Energy Union (No. 2) [2019] FCA 1331.
[9] Construction, Forestry, Maritime, Mining and Energy Union v DP World Melbourne Limited and Others[2019] FWCFB 6430.
[10] Transcript of Hearing of 9 August 2019 at PN705.
[11] Transcript of Hearing of 9 August 2019 at PN656.
[12] Transcript of Hearing of 9 August 2019 at PN677.
[13] Re Endeavour Energy[2014] FWC 198 at [8].
[14] Issued 11 August 2019.
[15] Maritime Union of Australia v Patrick Stevedores Holdings Pty Ltd[2013] FWCFB 7736 at [21], citing Tadgell JA in Transport Industries Insurance Co Ltd v Longmuir [1997] 1 VR 125.
[16]Maritime Union of Australia v Patrick Stevedores Holdings Pty Ltd[2014] FWCFB 657 at [63].
[17]s.420 of the Act.
[18] Construction, Forestry, Maritime, Mining and Energy Union v DP World Melbourne Limited and Others [2019] FWCFB 6430.
[19] Application by DP World (Fremantle) Limited [2014] FWC 4094 at [9].
[20]Transcript of Hearing of 9 August 2019 at PN952.
[21] Exhibit A3 (Third Witness Statement of Luke Gravell) at paragraph 3.
[22] Exhibit A6 (Second Witness Statement of Sean Jeffries) at paragraph 4.
[23] For example (but not limited to) quay side straddle rates: see Fourth Witness Statement of Sean Jeffries at paragraph 3(b).
[24] Exhibit A4 (Fourth Witness Statement of Luke Gravell) at paragraphs 5 to 11.
[25] Exhibit A5 (First Witness Statement of Sean Jeffries) at paragraphs 27-28; Transcript of Hearing of 9 August 2019 at PN917.
[26] Exhibit R1 (First Witness Statement of Robert Patchett) at paragraph 7, omitting objections of DP World.
[27] Exhibit R2 (Second Witness Statement of Robert Patchett) at paragraphs 3 to 5.
[28] Exhibit R3 (Witness Statement of Christopher Rae Bassett) at paragraph 9.
[29] Ibid at paragraph 10.
[30] Transcript of Hearing of 9 August 2019 at PN1050.
[31] Ibid at PN1048 to 1052 and PN1066 to 1068.
[32] Exhibit R5 (Second Witness Statement of Stephen McGowan) at paragraph 16.
[33] Transcript of Hearing of 9 August 2019 at PN1112 to 1113.
[34] First Witness Statement of Sean Jeffries at paragraph 30 and SJ-2.
[35] Ibid at PN1159.
[36] Witness Statement of Christopher Rae Bassett at paragraph 22.
[37] Exhibit R4 (First Witness Statement of Stephen McGowan) at paragraphs 20 to 23, omitting objections of DP World.
[38] Outline of the Submissions of the Applicant dated 8 August 2019 and Transcript of Hearing of 9 August 2019 at PN1193. It is not alleged to be threatened, impending or probable within the scope of s.418(1)(b) and the allegations of organising under s.418(1)(c) were withdrawn.
[39] First Witness Statement of Sean Jeffries at paragraph 15.
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