Australasian Meat Industry Employees Union, The v JBS Australia Pty Ltd

[2014] FWC 2254

[2014] FWC 2254

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.418 - Application for an order that industrial action by employees or employers stop etc.

Australasian Meat Industry Employees Union, The
v
JBS Australia Pty Ltd
(C2014/3731)

DEPUTY PRESIDENT BARTEL ADELAIDE, 4 APRIL 2014

Application to stop (unprotected) industrial action at JBS Australia Pty Ltd.

[1] The Australasian Meat Industry Employees Union (the AMIEU) has made application for an order pursuant to s.418 of the Fair Work Act 2009 (the Act) that industrial action taken by JBS Australia Pty Ltd (JBS or the employer) commencing 2 April 2014, stop. I issued a decision on transcript at the conclusion of the hearing on 2 April 2014, and subsequently issued an order as sought by the AMIEU. These are the expanded reasons for decision.

[2] The relevant background to the application is as follows. JBS operates a meat works plant in Bordertown SA. It is in negotiations with the AMIEU for an enterprise agreement to replace the current, expired, JBS Australia Pty Limited - Bordertown Production Employees Enterprise Agreement 2012 (the 2012 Agreement). 1

[3] A protected action ballot order was issued by the Fair Work Commission (the Commission) on 18 February 2014 on application of the AMIEU. 2 The ballot was declared on 14 March 2014 with a majority of employees voting in favour of each of the various forms of industrial action set out in the ballot.

[4] On 27 March 2014, the AMIEU provided written notice to JBS of protected industrial action which was to commence on 2 April 2014 in the form of:

● Multiple stoppages of all work each of 20 minutes duration during the AM shift
● Multiple stoppages of all work each of 20 minutes duration during the PM shift
● A stoppage of the performance of work for 2 hours in the AM shift. 3

[5] Subsequent email correspondence between Mr Kaine Sic, AMIEU Organiser, and various officers of JBS on 27 and 28 March 2014, clarified that if further industrial action was to take place beyond 2 April then further written notice of industrial action would be provided by the AMIEU. 4

[6] On Monday 31 March 2014 Mr Clinton Jaftha, HR Manager for the Bordertown plant, forwarded an email to Mr Sic advising as follows:

“Please find attached an industrial action notice which has been communicated today. Due to the Industrial Action and the uncertainty of available time to process our stock this Wednesday 2nd. We will be unable to provide employment on this day, or any other day the (sic) in which employees cannot be reasonably employed.” 5

[7] The notice referred to in the email stated:

“NOTICE TO ALL EMPLOYEES

Monday 31st March 2014

NO OPERATIONS

On Thursday 27 March 2014 the Company was advised that Industrial Action would take place on Wednesday 2^nd April 2014.

The Company wishes to notify all employees covered by the JBS Australia Pty Limited - Bordertown Production Employees Enterprise Agreement 2012 will be stood down in accordance with clause 2.1.4 of that Agreement. Due to the above mentioned Industrial Action the Company cannot usefully employ any employees on Wednesday the 2nd April 2014.

Normal operations will resume on Thursday the 3^rd April 2014.

Trevor Schiller

Plant Manager”

[8] The AMIEU then filed the application which is the subject of the present proceedings, arguing that the action notified by JBS was not protected industrial action. Mr Smith, the Federal Secretary of the AMIEU, submitted that the action taken by JBS was not employer response action as defined in s.411 of the Act as no industrial action had taken place by the employees. In addition, it was submitted that the action taken by the employer was contrary to the intention of the Part 3-3 of the Act because it could potentially deprive the employees of the opportunity to take protected industrial action within the 30-day time frame specified in s.459(1)(d)(i) of the Act and require an application to be made to extend the time within which protected industrial action can be taken.

[9] Mr Smith argued that clause 2.4.1 of the 2012 Agreement had no application, as the covering email to JBS’ notice of 31 March 2014 made it clear that the notice was “an industrial action notice”. Further he contended that that the JBS had misconstrued the intent of clause 2.1.4.

[10] Mr Reabel, Industrial Relations Manager for JBS, 6 stated that the employer had no option but to close its Bordertown plant operations on 2 April as the industrial action notified by the AMIEU was not specific as to the number of stoppages that would take place and whether they would be back-to-back or split over the course of the shift. He said that strict requirements as to animal welfare, food safety, product quality and health and safety meant that JBS had to “assume the worst” and take action accordingly.

[11] Mr Reabel was critical of the fact that the AMIEU’s s.418 application identified that only one stop work meeting was to take place at 8.00am on 2 April, while the notice of industrial action led the employer to believe that the industrial action was to be far more extensive.

[12] He stated that JBS could not risk having approximately 8,000 sheep standing under duress for a whole day and that it had an obligation to vendors that their weight and grade animals are slaughtered within 24 hours of receipt of stock, for payment on weight. He was of the view that the action taken by JBS was a stand down of employees in accordance with the 2012 Agreement.

Consideration

Was the action of JBS on 2 April 2014 a stand down of employees?

[13] Clause 2.1.4 of the 2012 Agreement provides as follows:

“2.1.4 Standing down of employees

Employees are paid by the week and notwithstanding anything elsewhere contained in this clause, the employer shall have the right to deduct payment for any complete day or days on which an employee cannot be usefully employed because of any strike, or through any breakdown of machinery or any stoppage of work in the meat industry by any cause for which the employer cannot reasonably be held responsible.

Stoppages in work due to stock shortages as a result of the Company’s decision not to purchase stock due to price and/or condition shall not be valid grounds to stand down employees under this clause.

Employees may be stood down without pay for part of a day only where an employee cannot be usefully employed because of any strike in the meat industry.

Where a break down occurs and it is unlikely that production will resume for the day the employer and employees may reach agreement go home for the remainder of the day and no further payment for the day will be made from the agreed time.”

[14] JBS relied on the third paragraph of clause 2.1.4 in support of its actions. Putting to one side the legal relationship between the stand down provisions of the 2012 Agreement and the protected action provisions of the Act, I consider that the circumstances giving rise to an employer’s entitlement to stand down employees were not in existence on 2 April 2014. The standing down of employees is directed to circumstances where the employees who are to be stood down are otherwise ready, willing and able to work. Standing down of employees enables an employer to withhold payment from such employees in specified circumstances.

[15] Consequently, where the clause refers to “... an employee [who] cannot be usefully employed because of any strike in the meat industry” it can only be referring to a strike conducted by employees other than those who are being stood down. In the present circumstances, the stand down of employees took place in circumstances where there was no strike in the meat industry.

[16] The history of stand down provisions, albeit in the context of awards, was canvassed by Her Honour Justice Gaurdron in Food Preservers Union of Australia and All States Ready Foods and Others, 7 where her Honour noted that:

“The purpose of a stand down clause ought no longer to be seen as an automatic, albeit partial, safeguard for the employer against economic loss. Society now claims and expects reasonable economic security for the wage earner and recent decisions of this Commission illustrate the growing trend to grantstand down clauses only as a variation of an award to deal with specific situations and then as a last resort so as to preserve as many facets of the employment relationship as possible. Where suchstand downclauses have been granted, there has also been a tendency to provide some relief to the employee by granting the right to take annual leave and/or to terminate on short notice.” (emphasis added)

[17] This passage confirms that the ability to stand down an employee in accordance with a stand down clause has the effect of depriving the employee of income which he or she would have otherwise received under the industrial instrument and is not directed to action taken by an employer in response to industrial action by its employees. The context of the present dispute between the parties is the negotiation of an enterprise agreement. The taking of protected action, in the form of employee claim action by employees in accordance with the scheme of the Act and with the aim of reaching an agreement with the employer, is not a matter that entitles that employer to utilise the stand down provision with respect to those employees.

Was the action of JBS on 2 April 2014 employer response action?

[18] Section 408 of the Act specifies three possible forms of protected industrial action: employee claim action, employee response action and employer response action. The latter is defined in s.411 of the Act as follows:

“411 Employer response action

Employer response action fora proposed enterprise agreement means industrial action that:

(a) is organised or engaged in as a response to industrial action by:

(i) a bargaining representative of an employee who will be covered by the agreement;

or

(ii) an employee who will be covered by the agreement; and

(b) is organised or engaged in by an employer that will be covered by the agreement against one or more employees that will be covered by the agreement; and

(c) meets the common requirements set out in Subdivision B.”

[19] The first point to be made is that employer response action must be organised or engaged in as a response to industrial action. Industrial action is defined in s.19 of the Act, and relevantly for present purposes, provides as follows:

“19 Meaning of industrial action

(1) Industrial action means action of any of the following kinds:

(a) the performance of work by an employee in a manner 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 the work;

(b) a ban, limitation or restriction on the performance of work by an employee or on the acceptance of or offering for work by an employee;

(c) a failure or refusal by employees to attend for work or a failure or refusal to perform any work at all by employees who attend for work;

(d) the lockout of employees from their employment by the employer of the employees.

Note: In Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union v The Age Company Limited, PR946290, the Full Bench of the Australian Industrial Relations Commission considered the nature of industrial action and noted that action will not be industrial in character if it stands completely outside the area of disputation and bargaining.

(2) ...

(3) An employer locks out employees from their employment if the employer prevents the employees from performing work under their contracts of employment without terminating those contracts.

Note: In this section, employee and employer have their ordinary meanings (see section 11).”

[20] The provisions of Part 3-3 of the Act concerning, for example, the jurisdiction of the Commission to make orders to stop industrial action that is not protected action, require that the industrial action is happening; threatened, impending or probable; or being organised. 8 By contrast, employer response action must be in response to industrial action, as defined, that is happening. It cannot, by definition, be in response to industrial action that is threatened, impending, probable or even imminent at the time that the employer’s industrial action is implemented.

[21] This finding alone means that the industrial action taken by the employer, being the lock out of employees from the workplace from 6.30am on 2 April 2014 and prior to any industrial action having been taken by the employees, is not protected industrial action.

[22] Section 418(1) of the Act mandates the Commission to issue an order to stop the industrial action, as follows:

“418 FWC must order that industrial action by employees or employers stop etc.

(1) If it appears to the FWC that industrial action by one or more employees or employers that is not, or would not be, protected industrial action:

(a) is happening; or

(b) is threatened, impending or probable; or

(c) is being organised;

the FWC must make an order that the industrial action stop, not occur or not be organised (as the case may be) for a period (the stop period) specified in the order.

Note: For interim orders, see section 420.”

[23] While it is unnecessary to consider any other matters raised in argument, in deference to the genuinely held concerns expressed by Mr Reabel in support of the action taken by JBS, it is appropriate to provide some further comment.

[24] The common requirements in Subdivision B are as follows:

“413 Common requirements that apply for industrial action to be protected industrial action

Common requirements

(1) This section sets out the common requirements for industrial action to be protected industrial action for a proposed enterprise agreement.

Type of proposed enterprise agreement

(2) The industrial action must not relate to a proposed enterprise agreement that is a greenfields agreement or multi-enterprise agreement.

Genuinely trying to reach an agreement

(3) The following persons must be genuinely trying to reach an agreement:

(a) if the person organising or engaging in the industrial action is a bargaining representative for the agreement—the bargaining representative;

(b) if the person organising or engaging in the industrial action is an employee who will be covered by the agreement—the bargaining representative of the employee.

Notice requirements

(4) The notice requirements set out in section 414 must have been met in relation to the industrial action.

Compliance with orders

(5) The following persons must not have contravened any orders that apply to them and that relate to, or relate to industrial action relating to, the agreement or a matter that arose during bargaining for the agreement:

(a) if the person organising or engaging in the industrial action is a bargaining representative for the agreement—the bargaining representative;

(b) if the person organising or engaging in the industrial action is an employee who will be covered by the agreement—the employee and the bargaining representative of the employee.

No industrial action before an enterprise agreement etc. passes its nominal expiry date

(6) The person organising or engaging in the industrial action must not contravene section 417 (which deals with industrial action before the nominal expiry date of an enterprise agreement etc.) by organising or engaging in the industrial action.

No suspension or termination order is in operation etc.

(7) None of the following must be in operation:

(a) an order under Division 6 of this Part suspending or terminating industrial action in relation to the agreement;

(b) a Ministerial declaration under subsection 431(1) terminating industrial action in relation to the agreement;

(c) a serious breach declaration in relation to the agreement.

414 Notice requirements for industrial action

Notice requirements—employee claim action

(1) Before a person engages in employee claim action for a proposed enterprise agreement, a bargaining representative of an employee who will be covered by the agreement must give written notice of the action to the employer of the employee.

(2) The period of notice must be at least:

(a) 3 working days; or

(b) if a protected action ballot order for the employee claim action specifies a longer period of notice for the purposes of this paragraph—that period of notice.

Notice of employee claim action not to be given until ballot results declared

(3) A notice under subsection (1) must not be given until after the results of the protected action ballot for the employee claim action have been declared.

Notice requirements—employee response action

(4) Before a person engages in employee response action for a proposed enterprise agreement, a bargaining representative of an employee who will be covered by the agreement must give written notice of the action to the employer of the employee.

Notice requirements—employer response action

(5) Before an employer engages in employer response action for a proposed enterprise agreement, the employer must:

(a) give written notice of the action to each bargaining representative of an employee who will be covered by the agreement; and

(b) take all reasonable steps to notify the employees who will be covered by the agreement of the action.

Notice requirements—content

(6) A notice given under this section must specify the nature of the action and the day on which it will start.”

[25] Save for one matter that I will address shortly, there is no issue that the common requirements in s.413 of the Act have been met by the AMIEU and JBS. The AMIEU accepts, for the purpose of the present proceedings at least, that the notice provided by the employer complies with ss.414(5) and (6) of the Act. 9

[26] The issue concerning s.414 of the Act, although not expressed in these terms by Mr Reabel, appears to be a complaint about the lack of specificity of the AMIEU notice of industrial action, such that the employer felt that it had no choice but to “assume the worst” and close its operations on 2 April 2014. Having regard to Mr Reabel’s evidence concerning animal welfare and other problems that could arise if all the industrial action specified in the AMIEU notice took place, this decision should not be seen as a criticism of the employer’s actions in deferring the delivery of stock on this day. However, the inability to provide work to the employees does not entitle the employer, as part of employer response action, to lock the employees out of the workplace in advance of any employee claim action taking place, for the reasons outlined earlier.

[27] The Act provides an avenue for the employer to challenge the notice provided by the AMIEU if it considers that it does not comply with the requirements of s.414(6) due to a lack of specificity. I am not suggesting that such an action would necessarily be successful or otherwise, simply that an avenue exists.

[28] It is relevant that the AMIEU was not obliged to take any or all of the industrial action as notified to the employer. In Boral Resources (NSW) Pty Ltd 10 a Full Bench of Fair Work Australia considered an appeal by Boral against the refusal of the Tribunal at first instance to issue an order stopping industrial action by the AWU. The relevant facts relied upon by Boral included that the AWU had given notice of industrial action, and upon which Boral took ‘defensive’ action to protect its interests, but no industrial action was taken. The Full Bench stated:

“[14] There is no doubt that the notice requirements in s. 414 are an important part of the scheme of the Act relating to industrial action and provide the employer with an opportunity to take defensive action as may be appropriate to protect its business and custom. Part of the consideration of what defensive action to take will include an assessment of the likelihood of the industrial action being taken. This might cover the possibility of early agreement being reached either as to issues in dispute or the process of addressing those issues as well as the possibility of some or all employees deciding for whatever reasons not to take part in the action. The assessment might also involve consideration of past practice and experience between the parties in relation to bargaining and the taking of industrial action. However there is no legislative requirement that industrial action once notified must be taken and, as the Senior Deputy President noted in her decision, it is not unusual in the current bargaining regime and that under the WR Act for notices to take protected industrial action to be withdrawn or not acted upon.

[15] Even if it was shown that the union had deliberately issued misleading notices of industrial action, we would doubt that such conduct would fall within the description of industrial action in s. 19(1)(a) or (b) of the Act. Rather in industrial parlance the misleading conduct might be described as an industrial tactic employed in the course of bargaining and negotiations. Clearly such practices should not be encouraged and indeed may run counter to the interests of those involved by undermining their credibility in the bargaining process. The conduct might also provide a basis for making application for good faith bargaining orders (s. 230) or lead to responsive action by the employer including lock outs and the standing down of employees (s. 524). However, within the scheme of the Act, we do not see recourse to s. 418 as providing effective relief against such conduct. This is because, even if the conduct was found to be “industrial action”, then it would follow that it could be undertaken in a protected way under Part 3-3 of the Act provided it was approved by employees in a protected action ballot.”

[29] Finally, and as Mr Smith correctly acknowledged, once the first stop work meeting of employees had taken place, employer response action could be implemented including a lock out of employees.

Conclusion

[30] I am satisfied that the action taken by JBS on 2 April 2014 was a lock out of employees and that this action was not protected industrial action because it did not meet the definition of “employer response action” in s.411 of the Act. In these circumstances the Commission is obliged to issue an order that industrial action must stop, and such an order was issued by the Commission at the conclusion of proceedings on 2 April 2014, in Print PR549226.

DEPUTY PRESIDENT

Appearances:

Mr G Smith for Australasian Meat Industry Employees Union

Mr J Reabel for JBS Australia Pty Ltd

Hearing details:

2014:

Adelaide

2 April

 1   PR530084

 2   PR547947

 3   Ex AMIEU 1

 4   Ex JBS 2

 5   Ex AMIEU 3

 6   Witness statement Ex JBS 1

 7 (1976) 182 CAR 391 at 392

 8 Sections 418(1) and 419(1) of the Act.

 9   Mr Smith expressed some concern that the employer’s notice of the lock out was only provided in English to a workforce that included a large proportion of workers for whom English is not their first language.

 10   [2010] FWAFB 1771

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<Price code C, PR549332>