Australian Rail, Tram and Bus Industry Union v Genesee & Wyoming Australia Pty Ltd

[2019] FWC 6977

[2019] FWC 6977

FAIR WORK COMMISSION

REASONS FOR DECISION

Fair Work Act 2009
s.437 - Application for a protected action ballot order

Australian Rail, Tram and Bus Industry Union
v
Genesee & Wyoming Australia Pty Ltd
(B2019/1157)

"Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union" known as the Australian Manufacturing Workers' Union (AMWU)
v
Genesee & Wyoming Australia Pty Ltd
(B2019/1159)

Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia
v
Genesee & Wyoming Australia Pty Ltd
(B2019/1160)

COMMISSIONER HAMPTON ADELAIDE, 10 OCTOBER 2019

Proposed protected action ballots of employees of Genesee & Wyoming Australia Pty Ltd - whether additional notice of proposed industrial action required - whether exceptional circumstances exist warranting an extension - exceptional circumstances found - extension granted for certain forms of action - ballot orders issued.

1. Background

[1] The Australian Rail, Tram and Bus Industry Union (RTBU), the “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) and the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU) have each made an application for a protected action ballot order (PABO) under s.437 of the Fair Work Act 2009 (the Act). The PABOs were sought in relation to bargaining for a proposed enterprise agreement concerning employees of Genesee & Wyoming Australia Pty Ltd (GWA).

[2] The three applications concern a common bargaining process and each seeks a PABO largely in the same terms. With the support of all parties, the applications were heard together.

[3] In the lead up to the hearing conducted in relation to these applications on 9 October 2019, GWA indicated, in effect, that it did not oppose the PABOs; however, the employer sought that an extension to the period of written notice be provided by the applicant Unions in relation to certain forms of industrial action that were set out in the proposed ballot questions.

[4] The applicant Unions opposed the granting of any extended period of written notice.

[5] There was no contest that the applicant Unions were eligible to bring these applications and that all of the relevant statutory requirements for the making of a PABO had been met.

[6] Having considered the matters arising from the applications, including the evidence led by the applicant Unions and GWA, I issued ballot orders¹ later on the day of the hearing. The PABOs included granting an extended notice period in relation to certain forms of proposed industrial action. In so doing, I indicated that I would subsequently issue reasons for that decision.

2. The general context in which the applications were made

[7] GWA is a major rail freight company operating in various States and Territories including in South Australia and the Northern Territory. This relevantly includes rail services between Adelaide, Port Augusta, Thevenard, Alice Springs and Darwin. The freight transported includes grain, condensates, ores, mining equipment, groceries and other retail goods.

[8] The major rail corridor operated by GWA from South Australia is the Adelaide-Darwin corridor and this services both the major cities at each end, Alice Springs and a number of regional centres on the line. In general terms, there are two train movements on this corridor on each day of the week, except Sundays.

[9] The employees relevant to the PABO applications perform maintenance services on locomotives and rolling stock. They are presently covered by the Genesee & Wyoming Australia Pty Ltd (SA/NT) Rollingstock Maintenance Enterprise Agreement 2016 and this has passed its nominal expiry date. Bargaining for a replacement agreement has been underway for some time.

[10] Each of the PABOs seeks that up to 18 forms of industrial action be authorised by a ballot of the relevant members of each applicant Union. Questions 13 to 17 inclusive involve various forms of work stoppage, ranging from up to 4 hours to a stoppage of up to 7 days duration, with each form of stoppage being able to be undertaken separately, concurrently and/or consecutively.

3. Satisfaction that the requirements for the making of each PABO had been met

[11] I have considered all of the material before the Commission, including the statutory declarations of Ms Brown of the RTBU, Mr McMillan for the AMWU and Mr Mitropoulos of the CEPU. Each of these declarations sets out the steps taken by the applicant Unions in bargaining with GWA and confirms that each has been, and is, genuinely trying to reach agreement with the respondent employer. I was also satisfied that there is a notification time in relation to the proposed agreement, valid applications had been made pursuant to s.437, and that all of the requirements in s.443(1) of the Act had been met. Accordingly, I was obliged to issue an order in each matter.

4. The extended period of notice required for some forms of proposed industrial action

[12] GWA sought that written notice of seven days be required in relation to some of the proposed industrial action.

[13] As outlined earlier, I issued each of the PABOs with a provision requiring certain additional written notice to be given of specified industrial action. This was in the following form:

“Being satisfied that there are exceptional circumstances justifying the extension of the period of written notice referred to in s.414(2)(a) of the Act, pursuant to s.443(5), the Fair Work Commission specifies that a five (5) working day period of written notice of industrial action is to apply to any industrial action taken that is authorised by questions 13 to 17 inclusive where that action would impact on work performed in connection with rail transport services on the Adelaide – Darwin rail corridor.”

[14] Questions 13 to 17 inclusive related to various forms of work stoppage.

[15] Section 443(5) of the Act provides, in effect, that if the Commission is satisfied that there are exceptional circumstances justifying the period of written notice (referred to in s.414(2)(a)) being longer than 3 working days, the protected action ballot order may specify a longer period of up to 7 working days in relation to the proposed industrial action that is the subject of the protected action ballot.

[16] GWA contended that there were exceptional circumstances associated with the fact that the proposed work stoppage forms of industrial action would prevent the provision of rail services between Adelaide and Darwin and that this would adversely impact upon many rural communities and centres that rely upon the rail service to supply general groceries and medical provisions. GWA sought the full 7 days’ written notice on all of the relevant forms of industrial action so as to organise alternative means of transport and to put measures into place that would see essential services delivered to the regional and other community centres.

[17] GWA relied upon the evidence of Mr Ian Hall, its Chief Operating Officer.

[18] The applicant Unions rejected the notion that there were exceptional circumstances and opposed the requirement to provide additional notice. That position included submissions to the effect that:

•  On the Adelaide-Darwin rail corridor, there are 12 train movements a week and there was a reasonable opportunity to make arrangements during the normal period of notice such as moving additional freight before (or after) the work stoppage;

•  A stoppage by the maintenance employees concerned would not necessarily lead to the cancellation of train movements or the failure to load the trains; and

•  The issues raised by GWA largely involved third parties and not its own circumstances and obligations.

[19] The approach to exceptional circumstances in this context was discussed by Lawler VP in CEPU v Australian Postal Corporation², which concerned an equivalent provision of the Workplace Relations Act 1996³ where he concluded:

“[10] In this passage his Honour was concerned with the ordinary meaning of the expression “exceptional circumstances” and the approach identified is, in my view, equally applicable to the use of that expression in s.465(3). In summary, the expression “exceptional circumstances” requires consideration of all the circumstances. To be exceptional, circumstances must be out of the ordinary course, or unusual, or special, or uncommon but need not be unique, or unprecedented, or very rare. Circumstances will not be exceptional if they are regularly, or routinely, or normally encountered. Exceptional circumstances can include a single exceptional matter, a combination of exceptional factors or a combination of ordinary factors which, although individually of no particular significance, when taken together are seen as exceptional. It is not correct to construe “exceptional circumstances” as being only some unexpected occurrence, although frequently it will be. Nor is it correct to construe the plural “circumstances” as if it were only a singular occurrence, even though it can be a one off situation. The ordinary and natural meaning of “exceptional circumstances” includes a combination of factors which, when viewed together, may reasonably be seen as producing a situation which is out of the ordinary course, unusual, special or uncommon.

[11] However, it is important to note that when considering whether to make an order pursuant to s.463(5) the Commission is not simply concerned with determining whether there are exceptional circumstances. There must be exceptional circumstances “justifying” the specification of a longer notice period. The notion of justification is critical and calls for a consideration of the purpose of the notice required by s.441.

...

[21] Essentially, what is required in determining whether exceptional circumstances justify an extension of the required notices period is a weighing of the interests of the employer and third parties in the employer having a greater opportunity to take appropriate defensive action as against the diminution in the effectiveness of the employees’ bargaining power that results from such an extension. The fact that the legislature has seen fit to condition the ordering of an extension of the required notice period on the presence of exceptional circumstances justifying it, as distinct from merely conferring a simple discretion to extend the required notice period, indicates that ordinarily there should be no extension.

[22] The first example provided in Davids Distribution provides an illustration of where exceptional circumstances may justify an extension of the required notice period. A sophisticated piece of plant, such as a smelter, may take many days to shut down without damage. The employer is exposed to wholly disproportionate damage if it is prevented by too limited a notice period from undertaking an orderly shutdown of the plant. A further example may be afforded by a strike by teachers where the school needs to be able to notify parents of the strike so as to give them an opportunity to make alternative arrangements for the care of their children on the days of the strike. Typically, three working days will be insufficient for this purpose.”

[20] This approach has been largely adopted by the Commission as recently summarised by the Full Bench in Construction, Forestry, Maritime, Mining and Energy Union v DP World Brisbane Pty Ltd and Others (CFMMEU v DP World) in the following terms: 4

“[13] The principles to be applied in relation to an extension of the notice period for engagement in employee claim action were comprehensively stated in the Full Bench decision in National Tertiary Education Industry Union v Charles Darwin University. In relation to s 443(5) generally, the Full Bench observed:

“[20] The exercise of a discretion under s.443(5) results in an interference with the right of a bargaining representative to otherwise give three working days’ written notice of industrial action that is to be organised and engaged in by employees in support of a proposed agreement. That this right should not lightly be curtailed by the imposition of a longer period of notice is evident in the grant of power itself. There must be “exceptional circumstances” in relation to the proposed industrial action the subject of the order justifying a longer period.”

[14] In relation to the meaning of the expression “exceptional circumstances”, the Full Bench quoted and applied a decision of the Australian Industrial Relations Commission relating to the equivalent provision in the Workplace Relations Act 1996 which relevantly stated:

“[10] … In summary, the expression “exceptional circumstances” requires consideration of all the circumstances. To be exceptional, circumstances must be out of the ordinary course, or unusual, or special, or uncommon but need not be unique, or unprecedented, or very rare. Circumstances will not be exceptional if they are regularly, or routinely, or normally encountered. Exceptional circumstances can include a single exceptional matter, a combination of exceptional factors or a combination of ordinary factors which, although individually of no particular significance, when taken together are seen as exceptional. It is not correct to construe “exceptional circumstances” as being only some unexpected occurrence, although frequently it will be. Nor is it correct to construe the plural “circumstances” as if it were only a singular occurrence, even though it can be a one off situation. The ordinary and natural meaning of “exceptional circumstances” includes a combination of factors which, when viewed together, may reasonably be seen as producing a situation which is out of the ordinary course, unusual, special or uncommon.”

[15] The Full Bench then set out the three-step decision-making process required in order to determine whether there should be an extension to the notice period pursuant to s 443(5):

“[23] The determination of whether the circumstances in a particular case are ‘exceptional’ involves an evaluative judgement. A proper approach to the exercise of the Commission’s discretion under s.443(5) requires first that a member identify or make findings about the particular facts or circumstances in relation to the proposed industrial action which are said inform the evaluative judgement that such factors or circumstances are exceptional circumstances. The phrase “exceptional circumstances” carries its ordinary meaning.

[24] Secondly, there must be a consideration whether the identified exceptional circumstances are circumstances “justifying” a longer notice period. This also involves an evaluative judgement made on the basis of probative material. The use of the verb “justifying” in s.443(5) signifies that the identified exceptional circumstances must show or prove that it is reasonable or necessary or the circumstances warrant or provide good reason to require a longer period of written notice.

[25] Thirdly, if the member is satisfied there are exceptional circumstances justifying a longer period of notice, there must be a consideration of whether to exercise the discretion and, if so, the additional period of notice that should be given in the circumstances (noting the maximum period).”” (footnotes omitted)

[21] The onus to demonstrate the exceptional circumstances rests with the employer seeking the additional notice. In this case, GWA relied upon the evidence of Mr Hall and that evidence went largely unchallenged by the applicant Unions, other than to the extent of the frequency of train services and the fact that derailments can occur without notice that would interrupt the services. This meant that the factual basis for the first propositions advanced by the applicant Unions was largely not put to Mr Hall who had set out contrary propositions in his sworn evidence. I did however, in order to inform myself about the matters, seek clarification from Mr Hall about the basis of the claimed exceptional circumstances, the impact of the claimed disruption to services, and the measures that would be undertaken in any extended notice period.

[22] Having regard to the evidence and submissions of the parties, I was satisfied that there are relevant exceptional circumstances in these matters. The degree or reliance on the Adelaide-Darwin rail corridor for the delivery of fresh food and medical supplies to remote and regional centres is a significant consideration in that regard. Despite the genuinely held position of the applicant Unions about the potential impact of work stoppages, the only evidence before the Commission is that work stoppages of the kind contemplated in the relevant questions will, or more accurately, may prevent the provision of the rail services with the consequences claimed. These consequences are largely to be felt by third parties and the Full Bench in CFMMEU v DP World also dealt with this aspect on appeal in the following terms:

“… Its most cogent argument in this respect was, we consider, that the Deputy President had found the requisite exceptional circumstances to exist merely on the basis of adverse consequences to third parties (here, the shipping lines with which DP World dealt).

[17] If the Decision was to be read as finding exceptional circumstances on that basis alone, we would accept that it would be in error. In our view, it is difficult to contemplate a situation where the taking of industrial action by employees in the form of a stoppage of work would not involve some impact, with cost implications, on third parties. Detrimental effects on suppliers, customers or subcontractors of the employer are an ordinary incident of the legitimate “duress” or “coercive influence” of protected industrial action. It has long been recognised that part of the purpose of the standard notice requirement for protected industrial action is to allow the employer to attempt to ameliorate the consequences for such third parties. For example, in relation to the equivalent provisions in the former Workplace Relations Act 1996, the Federal Court Full Court majority (Wilcox and Cooper JJ) in Davids Distribution Pty Ltd v National Union of Workers said (emphasis added):

“[87] We think s170MO(5) was designed to ensure that industrial disputants who are to become affected by protected action, in relation to which their usual legal rights are significantly diminished, are at least able to take appropriate defensive action. For example, an employer may operate a sophisticated item of equipment that will be damaged if precipitately shut down. If warned in advance of a ban that might affect the continued operation of that plant, the employer might choose a controlled shut down during the period of the notice. More commonly, perhaps, an employer might use the notice time to communicate with suppliers and customers, and thereby reduce the consequences for them of the notified industrial action. Very often, the recipient of the notice will respond in a way that has a legal dimension. For example, a union might react to a notice by an employer of intent to lockout some employees by giving notice that all employees will strike indefinitely as from the commencement of the lockout. Similarly, an employer might respond to an employees' notice of bans by giving notice of a lockout of some or all employees.”

[18] Consequently on no basis could it be said that the simple fact that protected industrial action has effects upon third parties requiring ameliorative steps to be taken is “out of the ordinary course”, “special”, “rare” or “uncommon” such as to constitute the requisite exceptional circumstances. Were it otherwise, extensions to the standard notice period under s 443(5) would be granted as a matter of course.” (footnotes omitted)

[23] In this case, I consider that the impact on the third parties is potentially significant, is not common and represents relevant exceptional circumstances, at least as it applies to work stoppages impacting upon the Adelaide-Darwin rail corridor services. The circumstances of those third parties, and the impact if rail services are not provided as expected, is beyond the normal impact of industrial action and is exceptional within the contemplation of s.443(5) of the Act. This includes the prospect that even the shorter periods of stop-work action may be taken consecutively and in combination with other industrial action including stoppages. However, I am not satisfied that the exceptional circumstances apply to other forms of industrial action raised in the PABOs.

[24] I was also satisfied that these exceptional circumstances justified a longer period of written notice. The evidence before the Commission supports the notion that a period longer than 3 working days’ notice is reasonably required to make some appropriate arrangements to ameliorate the consequences of the relevant industrial action, including by arranging for alternative freight haulage (directly or via the freight forwarders) to the remote and distant locations concerned. In my view, an extended notice period will permit reasonable defensive action but will still lead to negative consequences of such industrial action for GWA and not significantly diminish the effectiveness of the employees’ bargaining power.

[25] I also considered that I should exercise my discretion to grant an extension of the notice period given all of the circumstances of these matters. However, the extension was limited to the exceptional circumstances as found. Further, noting that the term “working days” is defined in s.12 of the Act to be “a day that is not a Saturday, a Sunday or a public holiday” and the notice required under the Act is to be given by reference to “working days”, I considered that the notice period should only be five working days. This is also consistent with the evidence of Mr Hall about the minimum time necessary to implement some reasonable alternative options.

5. Conclusion and Orders

[26] I found that the statutory requirements of s.443 of the Act had been met in each case and that the proposed PABOs were in order.

[27] Accordingly, I was obliged to, and did, issue the PABOs on 9 October 2019. Orders were issued by the Commission reflective of the above findings, containing the questions proposed by each of the applicant Unions and defining the group of employees to be balloted as discussed with all parties during the hearing of the matters. The additional notice period was included as indicated earlier.

[28] I have noted the status of the negotiations in the material provided by the parties in these matters and observe that if any party seeks the Commission’s assistance to deal with the bargaining dispute, an application may be made be made under s.240 of the Act.

COMMISSIONER

Appearances:

K Brown for the Applicant, the Australian Rail Tram and Bus Industry Union.

S McMillan for the Applicant, the “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU).

J Adley for the Applicant, the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia.

E Lawrie, for the Respondent, Genesee & Wyoming Australia Pty Ltd.

Hearing details:

2019

Adelaide

9 October.

Printed by authority of the Commonwealth Government Printer

<PR713163>

1 PR713024, PR713036 and PR713042.

2 [2007] AIRC 848.

3 Section 463(5).

 4   [2019] FWCFB 1150.