Australian Manufacturing Workers' Union v McCain Foods (Aust) Pty Ltd
[2021] FWCFB 4808
•5 AUGUST 2021
| [2021] FWCFB 4808 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.604 - Appeal of decisions
Australian Manufacturing Workers’ Union
v
McCain Foods (Aust) Pty Ltd
(C2021/4446)
VICE PRESIDENT HATCHER | SYDNEY, 5 AUGUST 2021 |
Appeal against decision [2021] FWC 4661 of Deputy President Clancy at Melbourne on 31 July 2021 in matter number C2021/4418.
DECISION OF VICE PRESIDENT HATCHER AND VICE PRESIDENT CATANZARITI
Introduction and background
[1] The Australian Manufacturing Workers’ Union (AMWU) has lodged an appeal, for which permission is required, against a decision made by Deputy President Clancy on 31 July 2021 1 concerning an application made by the AMWU pursuant to s 418 of the Fair Work Act 2009 (FW Act) for an order to stop unprotected industrial action, in the form of a lockout, being undertaken by McCain Foods (Aust) Pty Ltd (McCain). The Deputy President dismissed the AMWU’s application on the basis that the lockout being undertaken by McCain constituted “employer response action” within the meaning of s 411 of the FW Act and was therefore protected industrial action within the meaning of s 408 of the FW Act. The AMWU contends in its appeal that the Deputy President’s findings in this respect were in error and that, accordingly, he erred in dismissing the AMWU’s application.
[2] The AMWU’s application arose out of bargaining for a new enterprise agreement to replace the McCain Foods (Aust) Pty Ltd., Tasmania Enterprise Union Collective Agreement 2018, 2 the nominal term of which expired on 28 February 2021. This agreement covers food manufacturing workers at McCain’s site at Smithton in Tasmania. The AMWU is the bargaining representative for its members employed at the site. The first bargaining meeting for the proposed replacement agreement occurred on 6 October 2020, and there were subsequent meetings in January, March, April, May and July 2021. The negotiations appear to have reached an impasse by July 2021.
[3] On 12 May 2021, the Commission made a protected action ballot order upon application by the AMWU. 3 The ballot was declared on 25 June 2021, with a majority voting in favour of taking protected industrial action. On 16 July 2021, the AMWU in its capacity as bargaining representative sent five notices to McCain stating that the AMWU intended to engage in “employee claim action” pursuant to s 409 of the FW Act commencing at 7.00am on 22 July 2021. The intended action notified consisted of stoppages of work to occur on 22 July and 23 July 2021 to be undertaken by members of the AMWU who would be covered by the proposed agreement and for whom the AMWU was the bargaining representative (AMWU members).
[4] On 19 July 2021, McCain sent the AMWU a notice to the effect that it intended to take employer response action by locking out AMWU members from 7.00am on 22 July 2021 until 7.00pm on 23 July 2021. McCain implemented its lockout before any AMWU members actually undertook industrial action.
[5] On 29 July 2021, the AMWU sent McCain a notice of intended employee response action to be undertaken by AMWU members commencing the same day, consisting of 1-hour stoppages regarding the performance of work involving fryers, 1-hour stoppages regarding the performance of work involving forklifts, meal breaks to be taken at the same time rather than staggered, an indefinite refusal to answer two-way radios or telephones or to otherwise perform any work during meal breaks, and an indefinite refusal to perform any paperwork or computer work in any areas on site. At 9.36am that morning, after the notice had been sent, an AMWU official sent the following text message to an AMWU delegate at the Smithton site:
“I have emailed to a the notice to the Company sent this morning. [sic]
Please print off and keep handy and ensure that we keep well disciplined and keep the ½ hour notice to the Supervisor prior to any actions.
I have sent a series of questions to the legals regarding our position if the Company again decide to take the ultimate response action.”
[6] The AMWU sent a revised notice of intended employee response action at 11.06am and revoked the earlier notice. There was subsequently that day an exchange of correspondence between the parties concerning how the employee response action would be taken consistent with health and safety requirements.
[7] Notwithstanding the AMWU’s notice, AMWU members did not take any industrial action on 29 July 2021. At 5.17pm the same day, McCain notified that it intended to lock out AMWU members from 7.00pm that evening. Its notification in this respect was entitled “Notification to all Employees” and was addressed to “All Smithton employees”, but was apparently copied to the AMWU. The notification relevantly stated:
“… Unfortunately, the notice we have been served by the Union today gives us no certainly [sic] on the structure of any further industrial action, but the actions as outlined to us constitute an unacceptable risk to the safety of our people, and to food safety.
As such, we will halt all production at the Smithton plant from 7:00pm this evening – effectively closing the plant until there is a resolution. We cannot operate the plant if we cannot confidently maintain product safety and safety of all our employees. The uncertainty of potentially multiple one-hour shut downs, with the line being emptied each time, increases the risk of fryer fire. This is an unacceptable safety risk, and a process we typically only undertake once every three weeks.
The below outlines our response to this action.
1. McCain Foods Limited will not provide any payment to employees who are engaged in industrial action.
2. We acknowledge that the AMWU has advised that the employees at McCain Foods Limited Smithton site who are members of the AMWU and would be subject to the proposed EBA and for whom the AMWU is the bargaining representative are those that will be undertaking protected industrial action as per the notice.
3. For an employee at McCain Foods Limited Smithton site who are not described in the above dot point (2) are not eligible to engage in protected industrial action, alternate duties during those periods will be provided and will be expected to attend their scheduled shifts.
4. McCain Foods Limited will undertake lockout of employees who are described in dot point (2) as per the AMWU industrial action notice…”
[8] The foreshadowed lockout of AMWU members commenced at the notified time.
[9] The AMWU filed its application pursuant to s 418 the following morning, 30 July 2021. In its application, it contended that the lockout which commenced on 29 July 2021 was not protected “employer response action” within the meaning of s 411 of the FW Act because it was not in response to any industrial action by AMWU members actually occurring at the time (or since). It contended that the Commission was consequently required to make an order under s 418 that the lockout stop.
[10] The Deputy President heard the AMWU’s application at 4.00pm on 30 July 2021. There was no dispute about the facts at the hearing, with the contest between the parties being confined to the question of whether the lockout constituted protected employer response action. The Deputy President issued his decision at 2.24 pm on 31 July 2021.
[11] The AMWU filed its notice of appeal at 12.29pm on 2 August 2021. The AMWU sought an expedited hearing of the appeal on the basis that McCain’s lockout was continuing. The appeal was listed for hearing at 2.00pm on 4 August 2021. On the evening of 3 August 2021, McCain advised employees that it was ending the lockout, and normal work resumed on 4 August 2021.
Statutory framework
[12] Section 418(1) of the FW Act requires the Commission to make orders in respect of industrial action that is not protected 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.
[13] Section 408 provides that there are three species of protected industrial action: “employee claim action” (defined in s 409), “employee response action” (defined in s 410) and “employer response action” (defined in s 411). Section 409 relevantly provides:
409 Employee claim action
Employee claim action
(1) Employee claim action for a proposed enterprise agreement is industrial action that:
(a) is organised or engaged in for the purpose of supporting or advancing claims in relation to the agreement that are only about, or are reasonably believed to only be about, permitted matters; and
(b) is organised or engaged in, against an employer that will be covered by the agreement, by:
(i) a bargaining representative of an employee who will be covered by the agreement; or
(ii) an employee who is included in a group or groups of employees specified in a protected action ballot order for the industrial action; and
(c) meets the common requirements set out in Subdivision B; and
(d) meets the additional requirements set out in this section.
(2) The industrial action must be authorised by a protected action ballot (see Division 8 of this Part).
. . .
Industrial action must not relate to a demarcation dispute etc.
(5) The industrial action must not, if it is being organised or engaged in by a bargaining representative, relate to a significant extent to a demarcation dispute or contravene an FWC order that relates to a significant extent to a demarcation dispute.
. . .
Officer of an employee organisation
(7) If an employee organisation is a bargaining representative of an employee who will be covered by the agreement, the reference to a bargaining representative of the employee in subparagraph (1)(b)(i) of this section includes a reference to an officer of the organisation.
[14] Section 410 provides:
410 Employee response action
Employee response action
(1) Employee response action for a proposed enterprise agreement means industrial action that:
(a) is organised or engaged in as a response to industrial action by an employer; and
(b) is organised or engaged in, against an employer that will be covered by the agreement, 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
(c) meets the common requirements set out in Subdivision B; and
(d) meets the additional requirements set out in this section.’
Industrial action must not relate to a demarcation dispute etc.
(2) The industrial action must not, if it is being organised or engaged in by a bargaining representative, relate to a significant extent to a demarcation dispute or contravene an FWC order that relates to a significant extent to a demarcation dispute.
Officer of an employee organisation
(3) If an employee organisation is a bargaining representative of an employee who will be covered by the agreement, the reference to a bargaining representative of the employee in subparagraph (1)(b)(i) includes a reference to an officer of the organisation.
[15] Section 411 provides:
411 Employer response action
Employer response action for a 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
[16] A number of the terms used in ss 409, 410, 411 or 418 are defined or explicated elsewhere in the FW Act. Firstly, the expression “industrial action” is defined in s 19(1) 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.
[17] Section 19(1) is subject to certain exceptions prescribed in s 19(2) which are not presently relevant.
[18] Secondly, in respect of non-greenfields agreements, who may be a “bargaining representative” is set out in s 176(1) as follows:
176 Bargaining representatives for proposed enterprise agreements that are not greenfields agreements
Bargaining representatives
(1) The following paragraphs set out the persons who are bargaining representatives for a proposed enterprise agreement that is not a greenfields agreement:
(a) an employer that will be covered by the agreement is a bargaining representative for the agreement;
(b) an employee organisation is a bargaining representative of an employee who will be covered by the agreement if:
(i) the employee is a member of the organisation; and
(ii) in the case where the agreement is a multi-enterprise agreement in relation to which a low-paid authorisation is in operation—the organisation applied for the authorisation;
unless the employee has appointed another person under paragraph (c) as his or her bargaining representative for the agreement, or has revoked the status of the organisation as his or her bargaining representative for the agreement under subsection 178A(2); or
(c) a person is a bargaining representative of an employee who will be covered by the agreement if the employee appoints, in writing, the person as his or her bargaining representative for the agreement;
(d) a person is a bargaining representative of an employer that will be covered by the agreement if the employer appoints, in writing, the person as his or her bargaining representative for the agreement.
[19] Section 176(4) provides that, for the avoidance of doubt, an employee who will be covered by an agreement may appoint themselves as their bargaining representative pursuant to s 176(1)(c).
[20] Thirdly, the process by which industrial action be “authorised by a protected action ballot” (as referred to in s 409(2)) is set out in Div 8 of Pt 3-3 of the FW Act. It is sufficient for present purposes to refer to s 459(1), which provides:
459 Circumstances in which industrial action is authorised by protected action ballot
(1) Industrial action by employees is authorised by a protected action ballot if:
(a) the action was the subject of the ballot; and
(b) at least 50% of the employees on the roll of voters for the ballot voted in the ballot; and
(c) more than 50% of the valid votes were votes approving the action; and
(d) the action commences:
(i) during the 30-day period starting on the date of the declaration of the results of the ballot; or
(ii) if the FWC has extended that period under subsection (3)—during the extended period.
Note: Under Division 2, industrial action by employees for a proposed enterprise agreement (other than employee response action) is not protected industrial action unless it has been authorised in advance by a protected action ballot.
[21] The FW Act does not contain any provisions which suggests industrial action by anyone other than employees to be covered by a proposed enterprise agreement may be authorised by a protected action ballot.
[22] Finally, “the common requirements set out in Subdivision B” in s 409(1)(c), s 410(1)(c) and 411(c) refers to requirements prescribed by s 413 for industrial action to be protected industrial action for a proposed enterprise agreement. One of the requirements is contained in s 413(3) as follows:
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.
[23] Relevantly, s 413(4) also requires that the notice requirements in s 414 must have been complied with in relation to the industrial action. The notice requirements for employer response action are prescribed by s 414(5):
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.
[24] In addition, the notice for any form of action must “specify the nature of the action and the day on which it will start”: s 414(6).
The decision
[25] In response to the AMWU’s case that s 411 requires there to have been industrial action taken before McCain can take employer response action, the Deputy President commenced by observing that s 411 is “broader in compass” and that s 411(a)(i) refers to industrial action by a bargaining representative of an employee who will be covered by the agreement. 4 The Deputy President then proceeded to address what might constitute industrial action by a bargaining representative.5 He first referred to the definition of industrial action in s 19(1), and said that nowhere in that provision, or in that part of the Explanatory Memorandum relating to clause 19 of the Fair Work Bill 2008, does there appear to be a definition of industrial action specifically applicable to bargaining representatives.6
[26] The Deputy President then referred to ss 409 and 410 and said:
“[36] Having regard to sections 409 and 410 of the Act, industrial action by a bargaining representative includes industrial action that is ‘organised or engaged in’ by them (my underlining). This informs how ‘industrial action by a bargaining representative’ in s.411(a)(i) is to be interpreted. I do not accept the proposition that a lock out by an employer in response to industrial action by a bargaining representative will only be protected industrial action when it is in response to industrial action that has been ‘engaged in’. When read with both s.409 and s.410, it is clear that ‘industrial action by a bargaining representative’ in s.411(a)(i) also includes industrial action that is organised by a bargaining representative.”
[27] The Deputy President also observed that s 418 refers to industrial action that is happening, or threatened, impending or probable, or is being organised, and noted that in MUA v Patrick Stevedores Holdings Limited 7it had been held that a union could under s 418 be ordered not to organise industrial action.8 The Deputy President found that the AMWU had organised employee response action on 29 July 20219 and then concluded:
“[39] I have therefore concluded that there was employee response action organised by the AMWU and that in response to this industrial action, McCain Foods organised and engaged in employer response action in the form of the lockout which commenced at 7.00pm on 29 July 2021, having notified its employees and the AMWU. As such, I am satisfied employer response action was taken by McCain Foods in accordance with s.411 of the Act. The action taken by McCain Foods was protected industrial action within the meaning of s.408 of the Act and this being the case, the requirements for the making of an order under s.418 are not met. Accordingly, the AMWU’s application under s.418 is dismissed.”
Appeal submissions
[28] The AMWU submitted that because the lockout by McCain was implemented before any employee took industrial action of any kind, and was responsive only to a notification of potential future action, McCain was responding at best only to foreshadowed industrial action rather than industrial action itself. It submitted that the Deputy President’s conclusion, notwithstanding this, that the lockout constituted protected employee response action was in error because s 411, properly construed, only protects employer action taken in response to industrial action that has actually occurred, rather than action which is threatened, impending, probable or otherwise being organised, and that pre-emptive employer action is never protected action. In support of this, it submitted:
• the fact that notice of industrial action has been provided in advance is neither a concern nor determinative;
• the provision of notice by the AMWU did not meant that the AMWU “took” industrial action, since notice is facilitative rather than definitional and its provision does not guarantee that industrial action will be taken or mean that it has occurred;
• s 411 requires that a lockout be organised or engaged in in response to industrial action by a relevant employee or bargaining representative, which connotes a direct causal connection between the lockout and the action by employees;
• s 411 did not expand the concept of industrial action to encompass prospective industrial action including action organised by a non-employee bargaining representative;
• the definition of “industrial action” in s 19 is concerned with an event of some kind, and does not contemplate any degree of prospectivity or deal with events which have not yet, but might, occur;
• this interpretation is reinforced by s 418, which provides for the Commission to make orders in respect of non-protected industrial action which is either happening or which is threatened, impending, probable or being organised, which drives toward a conclusion that the term “industrial action” itself does not, absent more, encompass action which has not actually occurred;
• the matters contemplated by ss 409 and 410 are necessary to establish a separate concept and cannot be used to expand the fundamental meaning of “industrial action”; and
• as a consequence, employer response action must necessarily be reactive such that a lockout will not be protected unless industrial action by or for employees has been taken first.
[29] The AMWU submitted that it was factually clear here that the lockout which commenced on 29 July 2021 was undertaken in response to the threat or potential of industrial action, not industrial action itself. For that reason, it is clear that McCain is engaging in unprotected industrial action.
[30] It was submitted that permission to appeal should be granted because the decision under appeal raises novel issues of importance and general application pertaining to the operation of ss 409, 410 and 411, is disharmonious with other decisions of the Commission and the courts and is attended by sufficient doubt to warrant its reconsideration, and because substantial injustice may result if permission is refused. The AMWU sought in its notice of appeal that the appeal be upheld and an order issued pursuant to s 418 requiring McCain to stop the lockout it is currently conducting. However, at the hearing of the appeal the AMWU accepted that, because the lockout has now ended, there was no longer a proper basis for an order under s 418 to be made on the basis of the material before the Commission. It sought that its application be remitted to a single member for further consideration.
[31] McCain submitted that permission to appeal should be refused because the lockout the subject of the AMWU’s application has now ended and the Commission therefore does not have the power to make the “stop” order sought by the AMWU. Alternatively, it submits that if permission is granted, the appeal should be dismissed because the decision was correct in interpreting the words “industrial action” in s 411 as encompassing the organisation of industrial action by a bargaining representative and that, as a consequence, McCain’s lockout in response was “employer response action” pursuant to s 411 and was therefore protected industrial action.
[32] McCain accepted that a bargaining representative cannot itself take industrial action as defined in s 19 but contended that, in order for the words “bargaining representative” in s 411(a)(i) to have any work to do, the phrase “industrial action…by a bargaining representative” must include the organisation of industrial action by a bargaining representative. If it does not, it was submitted, there is nothing a bargaining representative could do that would permit an employer to take employer response action pursuant to s 411(a)(i). The term “industrial action” in s 411 should not be interpreted in a way that renders the words “bargaining representative” superfluous.
[33] It was submitted that the AMWU organised industrial action by coordinating and planning it, as evident by the issue of the notice, the text message to AMWU members, the implementation of safety measures attendant to the industrial action pursuant to the communications between the AMWU and McCain, the liaison between the AMWU and its lawyers, and the inference to be drawn from the role of the AMWU as bargaining representative for the AMWU members. McCain submitted that neither the Explanatory Memorandum nor the decision in AMIEU v JBS Australia Pty Ltd 10dealt with the question of industrial action taken by bargaining representatives as distinct from employees.
Consideration
[34] Notwithstanding that the lockout the subject of the AMWU’s application before the Deputy President has now come to an end, we consider that permission to appeal should be granted. The appeal raises an important question concerning the construction and practical operation of s 411 of the FW Act which is likely to arise again in the future. Additionally, the Deputy President’s decision is at odds with previous single-member decisions of the Commission, most notably AMIEU v JBS Australia Pty Ltd 11in which it was held that employer response action cannot by definition be in response to industrial action that is only threatened, impending, probable or even imminent, and that a lockout by an employer occurring before employees have taken any industrial action is not protected industrial action.12
[35] The Deputy President appears to have accepted in his decision that, in respect of s 411(a)(ii), McCain’s lockout was not organised or engaged in as a response to industrial action by AMWU members, because they had not engaged in any such action. Instead, he found that the AMWU itself had organised industrial action on 29 July 2021 and that such organisation constituted “industrial action by … a bargaining representative of an employee who will be covered by the agreement” within the meaning of s 411(a)(i) to which the lockout was responsive. The factual premise of the Deputy President’s conclusion in that respect - that the AMWU had organised industrial action (which had not yet occurred), and that the lockout was responsive to this – was not the subject of challenge in the appeal. The sole question that needs to be determined, therefore, was whether the Deputy President was correct in determining that the AMWU’s organisation of industrial action itself constituted “industrial action” of the type referred to in s 411(a)(i).
[36] For the following reasons, we consider that the Deputy President’s determination in this regard was, with respect, incorrect.
[37] First, the definition of the expression “industrial action” in s 19(1) makes it clear that, for the purpose of the FW Act, it is constituted by the prescribed types of action taken by employees or employers. It does not include the organisation of such action, or the circumstance where such action is merely threatened, impending or probably. Further, it cannot within the scope of the definition be taken by a third party who is not, in relation to the relevant work or employment, the employer or an employee. Thus, the organisation of industrial action by a registered organisation acting in the capacity of bargaining representative does not fall within the s 19(1) definition and cannot itself constitute “industrial action” for the purpose of the FW Act, including for the purpose of s 411. This was made authoritatively clear by a Full Court of the Federal Court in CFMEU v BHP Coal Pty Ltd. 13
[38] Second, it was unnecessary and erroneous for the Deputy President to search the FW Act for some alternative or extended conception of “industrial action”, notwithstanding the plain words of s 19(1), in order to give content to the expression “industrial action by … a bargaining representative of an employee who will be covered by the agreement” in s 411(a)(i). The Deputy President appeared to consider that s 411(a)(i) necessarily referred to industrial action by a person other than an employee, but that assumption was incorrect. As s 176(1)(c) and (4) make clear, an employee of the relevant employer can be a bargaining representative for a proposed agreement, either on their own behalf or on behalf of other employees. This frequently happens in practice. Thus, for the purpose of s 411(a)(i), “industrial action” within the meaning of s 19(1) can be taken by a bargaining representative who is themself an employee. And, lest it be said that s 411(a)(ii) renders (a)(i) superfluous on this approach, an employee can be a bargaining representative without being an “employee who will be covered by the agreement”. Thus s 411(a)(i) and (ii) overlap but are not coterminous. Under both limbs, what is required is industrial action by an employee consistent with the definition in s 19(1).
[39] The correctness of this interpretation of s 411, which is consistent with the plain language of the provision and the s 19(1) definition, is explicitly confirmed by the Explanatory Memorandum for the Fair Work Bill 2008 14which, in relation to clause 411, states:
“1653. Employer response action for a proposed enterprise agreement has four elements. First, it is industrial action that is organised or engaged in as a response to industrial action taken by an employee bargaining representative or an employee who will be covered by the proposed enterprise agreement (paragraph 411(a)). This means that industrial action by an employer is only protected if it is taken in response to industrial action taken by its employees. For example, a pre-emptive employer lockout of employees is never protected industrial action.
1654. Secondly, it is industrial action organised or engaged in by an employer against an employee or employees that will be covered by the enterprise agreement (paragraph 411(b)).
1655. Thirdly, the action must not affect the continuity of the employees' employment for purposes that are prescribed by the regulations (paragraph 411(d)).
1656. Fourthly, it must meet the common requirements in Subdivision B (paragraph 411(c)).” (underlining added)
[40] The underlined parts of the passage make it entirely clear that:
(1) The reference in s 411(a)(i) to “industrial action by … a bargaining representative of an employee who will be covered by the agreement” is to industrial action taken by a bargaining representative who is an employee. It is not a reference to a third party bargaining representative because such a bargaining representative cannot take industrial action within the meaning of s 19(1).
(2) In order for an employer lockdown to constitute protected employer response action, it must be taken in response to industrial action taken by its employees. It will not be protected if it is taken merely in response to action (including the organisation of industrial action) taken by a non-employee bargaining representative.
(3) An employer lockdown will never be protected employer response action if it pre-empts the taking of industrial action by employees. It is not sufficient that industrial action is being organised, or that it is threatened, imminent or probable.
[41] Third, ss 409 and 410 do not support the Deputy President’s approach whereby the conception of “industrial action” may be extended to encompass the mere organisation or industrial action by a bargaining representative. In respect of s 409(1), “employee claim action” must, as the chapeau makes clear, meet the basal requirement of being “industrial action”. There is nothing in the context of the section as a whole which indicates that “industrial action” has a meaning in the provision which is different to that in s 19. The requirement of paragraphs (a)-(d) set out additional requirements or characteristics of the “industrial action” which are necessary for it to constitute “employee claim action”, but they do not operate to alter the meaning of the expression “industrial action”. Section 409(1)(b) prescribes who must either organise or engage in the relevant “industrial action” in order for that action to be “employee claim action”, but it does not operate to render the mere organisation of industrial action to be, itself, industrial action, nor does it operate to bring action by a non-employee bargaining representative within the FW Act’s conception of “industrial action”. The words “organised or engaged in” in s 409(1)(b) operate dispersively in respect of sub-paragraphs (i) and (ii), so that a bargaining representative or employee may, as applicable, organise or engage in the relevant action. As earlier explained, an employee bargaining representative may both organise and engage in industrial action, and a non-employee bargaining representative may organise it but not engage in it, and nothing in s 409(1)(b) is inconsistent with these propositions. Subsections (5) and (7) operate consistently with this. The same reasoning applies to s 410 (and, by logical extension, to s 413).
[42] Further, s 409(2) predicates that industrial action that meets the requirements or characteristics prescribed by s 409(1) is capable of being authorised by a protected action ballot. However, as s 459 makes clear, only industrial action by employees is capable of being authorised by a protected action ballot. That indicates that s 409(1) is not concerned with action by anyone apart from employees.
[43] Fourth, s 418 of the FW Act does not support the position preferred by the Deputy President. If the conception of “industrial action” in the FW Act encompasses industrial action that is merely threatened, impending, probable or being organised, then paragraphs (b) and (c) of s 418(1) would be tautological and otiose. An important feature of s 418 is that it provides a mechanism for the prevention as well as the cessation of non-protected industrial action by requiring the making of an order in the requisite circumstances before the relevant industrial action actually happens. That an order can be made against a union to cease organising industrial action is consistent with this statutory purpose, 15 but it does not follow that the organisation of industrial action by a union itself constitutes industrial action.
[44] Fifth, we consider that the following analysis of the circumstances in which a lockout will constitute protected employer response action by the Federal Court (Greenwood J) in CEPU v Pinnacle Career Development Pty Ltd 16to be consistent with our reasoning above:
“[50] In order to satisfy the common requirements, the employer was required to satisfy the notice requirements of s 414. The notice requirement under s 414(5) casts an obligation upon the employer to give written notice (as reflected in the quoted section at [34]) before the employer engages in employer response action. The giving of the notice is not predicated upon employee claim action occurring. The giving of the notice is a pre-condition to the employer ultimately engaging in its responsive conduct. Section 408 contemplates that industrial action taken by an employer is protected industrial action provided the responsive action satisfies the integers of s 411. The structure of Division 2 of Chapter 3, Part 3-3 contemplates employee claim action for a proposed enterprise agreement which might be protected industrial action having regard to s 409, and responsive action by an employer which satisfies s 411. Notices are to be given by either side before engaging in the conduct said to fall within the statutory requirements of protected industrial action. Consistent with the structure of the Act, responsive employer action will involve receipt of a notice, the organisation of proposed responsive action, notice of that proposed action to the bargaining representative (and employees) and, subject to what might emerge by reason of particular conduct occurring (or not occurring), the engaging by the employer in the foreshadowed conduct.
[51] An employer is not required to wait until the foreshadowed employee claim action occurs before standing is conferred upon the employer under the Fair Work Act to give a notice of foreshadowed employer response action. In fact, the Explanatory Memorandum for the Bill at para 1671 describes the obligation of the employer as one of giving written notice to the relevant persons of “intended industrial action” and nothing in Division 2 of Chapter 3, Part 3-3 suggests that notification of “employer response action” cannot be given until the employees engage in the conduct the subject of a notification of “employee claim action”.”
[45] The above passage makes a careful distinction between giving notice of employer response action, which may be done before the employee claim action to which it is intended to be responsive actually occurs, and engagement in the foreshadowed employer response action, which is “subject to what might emerge by reason of particular conduct occurring (or not occurring)”.
[46] For the above reasons, we consider that the appeal should be upheld. We conclude that McCain’s lockout was not protected industrial action.
[47] It remains necessary to dispose of the AMWU’s application. Because the lockout has ended, and there is nothing before us to suggest that a further lockout is threatened, imminent or probable, or is being organised by McCain, there is now no basis to make an order under s 418. Accordingly, the AMWU’s application is dismissed. If the position changes, the AMWU can of course make a further application.
Orders
[48] We order that:
(1) Permission to appeal is granted.
(2) The appeal is upheld.
(3) The decision of Deputy President Clancy of 31 July 2021 ([2021] FWC 4661) is quashed.
(4) The AMWU’s application in matter C2021/4418 is dismissed.
DECISION OF DEPUTY PRESIDENT COLMAN
[49] I have had the benefit of reading in draft form the decision of the Vice Presidents. I agree that the appeal raises an important question concerning the construction and application of s 411 of the Fair Work Act 2009 (FW Act) and that permission to appeal should be granted. I respectfully disagree with their Honours’ conclusion about the legal character of the lockout. In my opinion, the lockout was employer response action, and the Deputy President was therefore correct in concluding that the AMWU’s application for an order under s 418 should be dismissed.
[50] The relevant facts are not in dispute. On the morning of 29 July 2021, the AMWU gave to McCain Foods (Australia) Pty Ltd (company) a notice stating that employees of the company who would be covered by a proposed enterprise agreement, and for whom the AMWU was a bargaining representative, would take ‘employee response action within the meaning of s 410’ (the AMWU notice). The AMWU notice was given in accordance with s 414 of the FW Act, which prescribes a minimum notice period for the taking of protected industrial action. It followed upon an earlier lockout notice that had been issued by the employer, and for this reason, simple written notice, rather than 3 working days’ notice, was required. The AMWU notice stated that the action would include one hour stoppages in respect of the performance of certain work and indefinite bans on other work. It did not indicate any start time for the action that would commence that day. Late that afternoon, the company gave notice to the AMWU and employees of a lockout commencing that evening at 7.00pm, noting that the industrial action referred to in the AMWU notice gave rise to an unacceptable safety risk. It transpired that no employees took industrial action pursuant to the AMWU notice. The lockout however commenced as scheduled.
[51] The AMWU contends that the lockout was not ‘employer response action’ as defined in s 411, because it was not taken ‘as a response to industrial action by’ a bargaining representative or employee who would be covered by the agreement. It contends that the action of the union in issuing the AMWU notice cannot constitute industrial action, because only employees may engage in ‘industrial action’, as that expression is defined in s 19.
[52] The relevant provisions are extracted in the majority decision. I briefly reprise them. ‘Employee claim action’ is defined in s 409. ‘Employee response action’ is defined in s 410. Both provisions refer to ‘industrial action that is organised or engaged in’ against an employer by either a bargaining representative of an employee who will be covered by the agreement, or an employee who will be covered by the agreement. ‘Employer response action’ is defined in s 411 as industrial action by an employer that is organised or engaged in ‘as a response to industrial action by’ either a bargaining representative of an employee who will be covered by the agreement, or an employee who will be covered by the agreement. Section 19 defines ‘industrial action’. In CFMEU v BHP Coal Pty Ltd 17(BHP), the Full Court of the Federal Court held that only employees could engage in industrial action for the purposes of that section.
[53] The question for determination in the appeal is whether the company’s lockout was ‘a response to industrial action by’ the AMWU as a bargaining representative of employees who would be covered by the agreement. It is clear that the employees did not engage in industrial action. It is also clear, in light of the decision in BHP, that the AMWU did not engage in such action. However, despite an apparent concession by the company to the contrary, I consider that the issuing of the AMWU notice of protected action clearly constituted the organisation of industrial action. There is no need to look further, as the company did, to the other things done and said by the AMWU that afternoon to establish that the union had organised industrial action. The AMWU notice advised the company of a range of stoppages and bans that would commence that day by employees who would be covered by the agreement. The notice bears out the union’s planning of the industrial action. The fact that employees did not engage in the industrial action notified in the AMWU notice does not alter the fact that the AMWU planned the action. And although the AMWU did not ‘engage in’ this industrial action, it nevertheless ‘organised’ it, within the meaning of s 410.
[54] The AMWU contended that the organisation of industrial action is not relevant to the question of whether the company locked out employees ‘as a response to industrial action’ for the purposes of s 411, because that section is concerned only with responses to the taking of industrial action. I disagree.
[55] Section 411 does not state that the employer’s action must be a response to industrial action that is engaged in by a bargaining representative or an employee. In describing the conduct to which the employer’s action is responsive, s 411(a) is conspicuous in eliding the verb or verbs that might otherwise be expected to appear in the provision. In other words, it does not say that the employer action must be in response to industrial action engaged in, or taken, or organised by the bargaining representative or an employee. It employs a prepositional construction, referring simply to industrial action ‘by’ these persons. By contrast, as noted above, both ss 409 and 410 refer to the industrial action of bargaining representatives and employees in verbal phrases (‘industrial action that is organised or engaged in’). In my view, when read in the context of ss 409 and 410, and given the obvious relationship s 411 has to those provisions, the reference in s 411 to industrial action ‘by’ a bargaining representative or an employee embraces the modalities of action referred to in the earlier provisions: engaging in or organising industrial action. Contrary to what was suggested during the course of argument, there is no need, in order for the company’s construction of s 411 to succeed, for words to be read into that section to link it with the organisation of industrial action in ss 409 and 410. The link is contextually clear. I note that there was good reason for the legislature not simply to state in s 411 that employer response action may be referrable to ‘employee claim action’ and ‘employee response action’, which might have been a more obvious way for s 411 to cover both ‘engaging in’ and ‘organising’ industrial action, because that would have had the effect of precluding the possibility of a lockout in response to other forms of industrial action, including action that takes place outside the bargaining framework, which was evidently not intended.
[56] I consider therefore that a lockout may be taken ‘as a response to industrial action’ that is either engaged in by employees or organised by an employee bargaining representative.
[57] The proposition that a union can organise industrial action is well-accepted. It is very common, for example, for this Commission to issue orders under s 418 directing that employees not engage in unprotected industrial action, and that unions not organise such action. One such case, MUA v Patrick Stevedores Holdings Limited, 18 was cited by the Deputy President in his decision. It is also clear from the decision of the Full Court in BHP that unions may organise industrial action. I note that in BHP, the Full Court held that a union could not be considered to have organised industrial action in contravention of s 417, which prohibits relevant persons from organising or engaging in industrial action prior to the nominal expiry date of an enterprise agreement, if the industrial action was not engaged in by employees. However, the decision did not consider ‘employer response action’ or the provisions that are at issue in this appeal.
[58] It is not the case that the company’s interpretation of s 411 leads to extraordinary or unreasonable results. It was suggested by the AMWU that if employer action could be responsive to the mere organisation of industrial action, the very suggestion by a union of the possibility of industrial action by employees could justify an employer lockout of employees. It seems to me unlikely that conduct of this kind could fairly be described as organising industrial action, particularly when one considers the distinction drawn by the Full Court in BHP between organising industrial action and organising for industrial action (at [145]). The same can be said of the other scenario referred to by the AMWU, namely an application for a protected action ballot order (PABO). This is simply a preliminary step, expressly authorised by the Act, taken to attract the immunity that applies to protected industrial action under s 415. In any event, s 438(2) expressly states that making an application for a protected action ballot does not constitute organising industrial action. Whether a lockout is properly to be characterised as a response to the organisation of industrial action would be a question of fact that requires determination in each case. But the legal scenarios said to involve unreasonable consequences flowing from the company’s interpretation are in my view unrealistic, and in the case of the PABO example, illusory.
[59] In the present matter, the organisation of the industrial action involved the preparation and service on the company of an industrial action notice. The company’s decision to lock out its employees was, on any practical view of the matter, a response to the AMWU’s planning of the industrial action in various forms that would commence at unspecified times that day. The company’s lockout notice made plain that it held concerns for the safety of employees and its product. There is nothing to suggest that these concerns were not genuinely held. Moreover, these circumstances serve to illustrate what would in my opinion be an extraordinary consequence of the AMWU’s construction of s 411, namely that an employer that held safety concerns about the implications of employee industrial action notified under s 414, and that wished to mitigate the risks by shutting down a plant by way of lockdown, would need to wait until employees’ industrial action had begun before commencing its lockout.
[60] A further consideration telling against the AMWU’s construction is that it attributes an improbable significance to s 411(a)(i), whereby the reference to bargaining representatives is understood to mean employees other than those who will be covered by the agreement who might happen to be bargaining representatives for employees who are so covered. To recap, on the union’s construction, the industrial action to which an employer may respond by lockout is industrial action engaged in by employees, and not industrial action organised by a union. Therefore, a bargaining representative in s 411(a)(i) must be an employee. But s 411(a)(ii) refers to industrial action by ‘employees who will be covered by the agreement’. To avoid redundancy, s 411(a) would need to refer to other employees. It is of course possible, and certainly not unheard of, for employees not covered by the proposed agreement to be appointed as a bargaining representative for employees who will be so covered. But it is not common. A much more prominent candidate for the role of bargaining representative in s 411 is of course the default bargaining representative prescribed by s 176(1)(b): a union whose members will be covered by the agreement. Furthermore, the reality of the industrial world is that industrial action rarely happens without the involvement of a union. I think it unlikely that ss 409, 410 and 411, provisions directed at industrial action and employer response action, would be relevantly concerned only with the role of a bargaining representative who is an employee not covered by the agreement. These provisions are much more likely to be concerned with the role of any bargaining representative for an employee, including in particular the role of a union. I note that the Explanatory Memorandum makes reference to industrial action organised or engaged in by an ‘employee bargaining representative’ but this is not a term of art, and it may simply mean a bargaining representative of an employee, which includes a union. In any event, the Explanatory Memorandum could not be called in aid of a construction that would defeat the plain words of the Act.
[61] I will briefly address the other contentions of the AMWU. First, as to the contention that s 19 is of basal significance, it is accepted, as it must be in light of BHP, that a union does not engage in any of the actions listed in s 19. However, a union may organise such action, and the organisation of industrial action by bargaining representatives such as unions is covered by ss 409 and 410. Employer action under s 411 may be responsive to such organisation. It is true that employer response action may be responsive to any industrial action, not just employee claim and employee response action, but I do not see why this should affect the analysis. Further, in the present matter at least, the lockout was in fact responsive to employee response action.
[62] Secondly, the AMWU contended that the ‘organising’ of industrial action is a nebulous concept and not one likely to have been intended to be the reference point for employer response action. I disagree. I do not accept that the concept is nebulous. As noted above, organised and its cognates are used in the various provisions that are relevant to this appeal, as well as elsewhere in Part 3-3 (see ss 413 and 438) and, in other contexts, elsewhere in the FW Act (see for example, s 342 and 348). It is hardly an unworkable concept.
[63] Thirdly, I agree that it is relevant to consider the interpretative significance of other provisions within Part 3-3, and I take note of the fact that s 418 distinguishes between industrial action that is happening, threatened, impending or probable, whereas s 411 does not. But the company’s action in the present case was not responsive to employees’ pending or threatened action. It was responsive to the union’s actual organisation of the industrial action. I would note that s 418, like ss 409 and 410, contemplates the organisation of industrial action.
[64] Fourthly, the AMWU said that the FW Act had pointedly narrowed the circumstances in which employers may lockout their employees. It submitted that s 170ML(3) of the pre Work Choices Workplace Relations Act 1996 (WR Act) had enabled employers to lock out employees either for the purpose of supporting bargaining claims or for the purpose of responding to industrial action, whereas the FW Act had removed the first of these possibilities, and prohibited the use of lockouts on a pre-emptive basis. I agree. So much is clear. However, what is also clear is that s 170ML(3)(b) confined responsive lockouts to circumstances where the employer was ‘responding to industrial action by any of the employees whose employment will be subject to the agreement’. It did not extend to employer action that was responsive to industrial action by bargaining representatives. Section 170ML would not have permitted what has occurred in this case. But the framers of the FW Act expressly allowed employer action to be in response to industrial action by bargaining representatives. In this sense s 411 is more expansive than its WR Act predecessor.
[65] Fifthly, the AMWU placed reliance on the emphasis in the Explanatory Memorandum that ‘pre-emptive employer response action is never protected industrial action’, and that industrial action taken by an employer is ‘only protected if it is taken in response to industrial action that is taken by its employees’. However, the first of these references is compatible with the company’s interpretation of s 411, because a lockout in response to planned industrial action is not pre-emptive, and the second statement in the Explanatory Memorandum is simply inconsistent with the statute, which plainly allows an employer to take responsive action against a bargaining representative.
[66] Sixthly, I consider that the company’s construction of s 411 is not disconsonant with the decision of the Federal Court in CEPU v Pinnacle Career Development Pty Ltd, 19 and the distinction it draws between the giving of notice of a lockout and its implementation. The circumstances of the present case are different from those that came before the Court and I would not read the passage cited by the majority as suggesting that an employer could not take action in response to the organisation of industrial action.
[67] The Deputy President did not conclude that the AMWU had engaged in industrial action. He concluded that it had organised industrial action by issuing the notice of industrial action, and that the company’s lockout was in response to ‘industrial action by a bargaining representative’. His Honour’s construction of s 411 was grounded in the context of the surrounding provisions. In my respectful opinion, this construction was correct.
[68] I would order that permission to appeal be granted, and that the appeal be dismissed.
VICE PRESIDENT
Appearances:
L Saunders of counsel for the Appellant.
M Felman with T Duthie of counsel for the Respondent.
Hearing details:
2021.
Sydney and Melbourne (by video-link):
4 August.
Printed by authority of the Commonwealth Government Printer
<PR732542>
1 [2021] FWC 4661
2 AE429199
3 PR729782
4 [2021] FWC 4661 at [31]
5 Ibid at [32]
6 Ibid at [33]
7 [2013] FWCFB 7736, 237 IR 1
8 [2021] FWC 4661 at [37]
9 Ibid at [38]
10 [2014] FWC 2254
11 Ibid
12 Ibid at [20]-[21]
13 [2015] FCAFC 25, 230 FCR 298 at [132]-[141]
14 See Acts Interpretation Act 1901 (Cth), s 15AB(1)(a) and (2)(e)
15 MUA v Patrick Stevedores Holdings Limited [2013] FWCFB 7736, 237 IR 1 at [37]
16 [2010] FCA 1350, 190 FCR 581, 200 IR 467
17 [2015] FCAFC 25, 230 FCR 298
18 [2013] FWCFB 7736, 237 IR 1
19 [2010] FCA 1350, 190 FCR 581
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