Australian Workers' Union, The v Rocla Pty Ltd T/A Rocla Pipeline Products

[2020] FWC 2425

[2020] FWC 2425

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.739—Dispute resolution
s.533—Application for an FWC order

Australian Workers’ Union, The
v
Rocla Pty Ltd T/A Rocla Pipeline Products
(C2020/2722)

Australian Workers’ Union, The
v
Rocla Pty Ltd T/A Rocla Pipeline Products
(C2020/2723)

DEPUTY PRESIDENT DEAN SYDNEY, 8 MAY 2020

Application for an urgent interim order.

[1] This decision determines two urgent applications made by the Australian Workers Union (AWU) for an interim order restraining Rocla Pty Ltd (Rocla) from dismissing any of its employees covered by the Rocla Pty Ltd - Emu Plains Agreement 2016 - 2019 (the Current Agreement).

[2] The applications have been made pursuant to sections 739 and 533 of the Fair Work Act 2009 and arise as a result of a decision by Rocla to close its site located in Emu Plains, New South Wales.

[3] The urgent applications were heard on 29 April 2020. At the conclusion of the hearing the parties were advised that I declined to make the interim order sought by the AWU. These are the reasons for that decision.

Background

[4] On 20 April 2020, Rocla announced that it had made a decision to close its Emu Plains site (the site). There are around 96 employees employed at the site. The decision was announced verbally to affected employees and each employee received a letter, as part of an information pack, which included the following by way of explanation:

“We operate in a challenging market and have continued to focus on safely producing high quality products, at the lowest possible cost, whilst always providing exceptional customer experiences. A significant amount of effort has gone into improving the performance of our Emu Plains site, however, despite this, Emu Plains is forecast to lose almost $3m this financial year alone. With limited scope for further operational improvements in the short term and an obligation to manage the financial performance of our business, it is no longer viable to continue to operate the Emu Plains site. In turn this decision will also affect the Dubbo distribution site which will close in the near future at a date to be advised.

It is important to be clear that this decision is not related to the global challenges resulting from COVID19.

The decision regarding our Emu Plains and Dubbo sites does not impact other Rocla sites however, we are making this decision to mitigate future losses that would inevitably impact the overall performance of the Rocla business.

We expect that we may take up until the end of June to completely fulfil all of the current orders and cease distribution completely from Emu Plains. Other than for product that is still required to be manufactured for current orders, production is expected to cease this week.

What does this decision mean?

This decision means that your position of [position] would become redundant effective from 30 April 2020. We will continue to consult with you individually and with all employees that may be affected by the proposed changes over the next week. The purpose of the consultation period is to:

•  Allow Rocla to fully explain the facts and circumstances relating to the proposed change;

•  Perform a thorough redeployment search for other suitable employment opportunities within the business;

•  Allow you the opportunity to consider any proposals the Company may have for suitable alternative employment; and

•  Provide any additional support to you as required.

At the end of the consultation period, we will arrange to speak with you again to discuss your feedback and inform you of the outcome. We will keep you informed of any updates between now and when we cease operating. Your feedback is important to us and we request you provide this in writing to [email address] by 24 April 2020.

What happens now?

Whilst we work through the next week, we will provide an opportunity to provide your views regarding today’s decision, we will focus on answering your questions as best as we can. We have prepared an extensive list of Q&As contained in your information pack which will help to answer some of your questions.

Please review your information packs so that if you have any other queries you can take the time to work through them with us. Please feel free to contact anyone from the senior management team, your manager or your HR business partner.

We will also provide you career transitioning support to assist you to transition to your next role. We have communicated with the AWU regarding the decision we have outlined to you today. The final outcome will be provided to you in writing as well as verbally.

We appreciate that this is unsettling news and we will continue to support you through the next period. If you wish to discuss anything about your personal situation with our site leaders, you can do so at any time. We encourage you to call the Employee Assistance Program (EAP) if you feel you need further support. EAP is a fully funded Employee Assistance Program that is completely confidential and offered to you as an employee of Rocla. You may contact EAP on [number].

Whilst we work through this next week, it is critical that we continue to focus on keeping safe and support each other.”

[5] The AWU were advised almost immediately after the announcement was made to employees.

[6] On 22 April 2020, the AWU wrote to Rocla indicating it had serious concerns as to Rocla’s handling of the proposed closure and the implications for its members. In particular, it alleged that Rocla had failed to appropriately consult with both the AWU and its members. The AWU sought further information from Rocla, including that Rocla provide it with:

a. access to its financial records to demonstrate the losses being incurred at the site;

b. an explanation as to why Rocla was not applying for government assistance such as low interest loans;

c. the date the decision was made by the board to close the site; and

d. assurances that the site would be permanently closed and the land put up for sale.

[7] The AWU also sought an urgent meeting with Rocla management and confirmation that Rocla would immediately rescind the notification of the proposed redundancies and instead begin a process of genuine consultation with the AWU and its members.

[8] The AWU filed these two applications on Friday 24 April 2020. The applications were listed for conference that afternoon and again on Monday 27 April 2020. During the conferences, a number of options designed to minimise the impact on affected employees were explored with the parties. Rocla agreed to make its profit and loss statements available to the AWU, and the AWU took up this offer. Rocla further agreed to extend its consultation period until midday on Monday 27 April, and give further consideration to a number of proposals that were discussed during the conferences.

[9] At midday on Monday 27 April, the AWU provided Rocla with a number of suggestions to mitigate the impact of the closure of the site. The suggestions covered matters such as:

a. A delay in closing the plant for a further two weeks whilst alternatives are considered and further consultation occurs;

b. Downsizing of the work force at the Emu Plains site.

c. Members who wish to take voluntary redundancy be able to do so on 30 April 2020.

d. Members who wish to remain in employment be able to do so until 30 June 2020.

e. Where necessary members can job share until 30 June 2020 for 20 hours a week.

f. Members have access to free financial advice and be able to access this in work time.

g. Fletcher Building Group consider any vacancies elsewhere within their business and give priority assessment to anyone who wishes to remain employed by the business.

h. Rocla to allow Members with extensive Personal/Carers leave, the ability to cash out all or some of this entitlement.

i. An additional eight weeks’ severance pay additional to the agreement entitlement in light of the current economic circumstances.

[10] Rocla’s response, provided later that day, acknowledged that the AWU’s suggestions comprehensively covered the types of action that could be seen to mitigate the impacts of the potential redundancies. It then set out a detailed written response to each of the AWU’s suggestions which, given the length of the response, is not repeated in this decision.

[11] Further email correspondence between the parties was exchanged on Tuesday 28 April 2020.

[12] On the afternoon of Tuesday, 28 April 2020, the AWU sought an urgent relisting of the applications to seek interim orders to prevent Rocla from closing the site or ceasing to continue work as usual.

Relevant Legislative Provisions

[13] Section 589 of the Act provides as follows:

589 Procedural and interim decisions

(1) The FWC may make decisions as to how, when and where a matter is to be dealt with.

(2) The FWC may make an interim decision in relation to a matter before it.

(3) The FWC may make a decision under this section:

(a) on its own initiative; or

(b) on application.

(4) This section does not limit the FWC’s power to make decisions.

The principles to be applied to an interim decision

[14] The application the Commission is asked to now determine is whether or not to make an interim decision or order. While it is not in dispute that the Commission has the power to make an interim order, the question is whether such an order ought be made. The general approach to such a question is to consider whether the applicant, in this case the AWU, has established that there is a serious question to be tried, and that the balance of convenience favours the grant of the order.

[15] In Australian Manufacturing Workers’ Union v WW Wedderburn Pty Ltd, 1 Gooley DP was dealing with an application for bargaining orders under s.228 of the Act and made an interim order. The Deputy President said:

“[5] The AMWU submitted that in deciding whether to issue an interim order, the Commission must determine if there is a serious issue to be tried and balance of convenience.

[6] These principles were discussed by Bromberg J in Quinn v Overland where His Honour said:

‘[45] In determining an application for interlocutory relief, the Court addresses two main inquiries. First, whether the applicant has made out a prima facie case in the sense that if the evidence remains as it is, there is a probability that at the trial of the action the applicant will be held entitled to relief. Second, whether the inconvenience or injury which the applicant would be likely to suffer if an injunction were refused outweighs or is outweighed by the injury which the respondent would suffer if an injunction were granted: Australian Broadcasting Corp v O’Neill [2006] HCA 46; (2006) 227 CLR 57 at [65], [19].

[46] The requirement of a “prima facie case” does not mean that the applicant must show that it is more probable than not that the applicant will succeed at trial. It is sufficient that the applicant show a sufficient likelihood of success to justify in the circumstances the preservation of the status quo pending the trial. How strong the probability needs to be depends upon the nature of the rights the applicant asserts and the practical consequences likely to flow from the order the applicant seeks. In that context there is no objection to the use of the phrase “serious question” to convey the strength of the probability: Australian Broadcasting Corp v O’Neill per Gummow and Hayne JJ at [65]-[72], Gleeson CJ and Crennan J agreeing at [19].’”

Submissions by the AWU

[16] The AWU did not call any evidence in support of its application for interim orders.

[17] The AWU submitted that Rocla had not commenced consultation “as soon as is practically possible” after a definite decision was made, because the decision to close the site was made on 9 April and employees were not notified until 20 April 2020.

[18] The AWU also made submissions as to the proposals that it had put to Rocla, and the communications and discussions that occurred between the parties. It contended that there had been insufficient consultation due to the fact that:

a) Rocla did not commence consultation as soon as practicable after making a definite decision.

b) Rocla has not properly explored alternatives to forced redundancies.

c) Rocla has not adhered to its commitments and has therefore not been properly consulting.

[19] It referred to the principals for interlocutory injunctions set out in the decision of Castlemaine Tooheys Ltd v South Australia 2, which it submitted were as follows:

a) That there is a serious question to be tried or that the Plaintiff has made out a prima facie case;

b) That he will suffer irreparable injury which will not be adequate compensation unless an injunction is granted; and

c) That the balance of co-incidence favours the injunction.

[20] The AWU also made the following submissions:

“If employees are forcibly retrenched there is little purpose in continuing consultation and no alternative action including compensation would suffice. The damage of forced redundancies is irreparable. Once the employment relationship is terminated there is no purpose in further consultation occurring.

It is of little inconvenience to the respondent to refrain from retrenching employees for a short period of time whilst consultation is occurring. The circumstances facing employees losing jobs under current economic circumstance are substantial. The aforementioned submissions also demonstrate how inconvenient forced redundancies would be for employees. However it will only be a small cost to the business, whilst mitigation measures are explored. Therefore on the balance of convenience the Applicant submits that the injunction should be granted.

The Applicant refers to the recent decision of Australian Municipal, Administrative, Clerical and Services Union v Auscript Australasia P/L (Auscript) PR718104 (Auscript case), Commissioner Yilmaz made an order for Auscript to refrain from compulsory redundancies until options between employees and their representatives were explored. The Applicant submits that such an injunction occur so that options can be explored between the parties.

Time is of the essence due to the fact that redundancies are due to be made on 30 April 2020. It is for these reasons that the Applicant seeks an interlocutory injunction and that this will enable the parties be able to explore further options.”

Submissions by Rocla

[21] Rocla opposed the making of any interim order.

[22] Rocla contended that the timeframe between the decision to close the site and the notification to employees was reasonable because of the public holidays falling during that period, the difficulty for its HR staff working remotely during the COVID-19 crisis, and because it required time to prepare detailed information packs for each affected employee (of which there are 96). Rocla argued that the decision was communicated as soon as practicable, taking into account those considerations and the need to have meaningful, accurate and comprehensive information before the relevant employees at the time they were notified.

[23] In respect of the consultation period following the notification to employees, Rocla submitted that it had provided information in response to each request made by the AWU and had considered every suggestion made to avoid or mitigate the impacts that had been put.

[24] Rocla submitted that it had adopted some suggestions made by the AWU, and where it had not adopted a suggestion it has given a reasoned response that was consistent with its reasons for the underlying decision. It highlighted that AWU did not and could not say otherwise, and that the AWU did not and could not allege the underlying reason or the responses to suggestions are ingenuine, or not prompt.

[25] In respect of the relief sought by the AWU, Rocla made the following submissions:

“The AWU seeks relief that includes that Rocla ‘engage’ with it for an indefinite period which may be at least many weeks. Given the AWU cannot point to any particular way in which Rocla has to date failed to ‘engage’ with it, the ‘nature and extent of the obligation entailed is rendered uncertain’. This begs the question, if relief were to be granted, what is it the AWU says would be done that would have any prospect of further mitigating or avoiding redundancies? If nothing can be pointed to and no undertaking as to damages is offered (which is apparently the case) the balance of convenience lies strongly against the issue of interim relief. Critically, the application alleges ‘irreparable harm’ from loss of some undefined opportunity for ongoing employment. However, the application also plainly accepts that the site will close and there is no potential for ongoing employment at the site. Those two propositions cannot stand together. It is clear that no prospect of harm is alleged by the AWU that could not be remedied by compensation. No suggestion is made by the AWU that any employee, production or non-production, would continue for more than a month or so even on the AWU case at its highest. The obligation the AWU points to is to give prompt and genuine consideration to any suggestions made during consultation. It is not to draw out consultation beyond the point it has some serious prospect of producing an alternative to redundancy. Obligation is just the opposite, to give prompt as well as genuine consideration to proposals.”

[26] In response to the AWU’s reliance on the decision in Auscript, Rocla submitted that the circumstances here were not comparable to that applying to Auscript. It made the following submissions in this regard:

“… it was clear that there was evidence before the Commission that Auscript had not given genuine consideration to alternative proposals put to it. No such evidence is available in this case and no such finding is available on a ‘serious question’ or other basis. Second, the nature of the issue Auscript faced was temporary, with ongoing contracts and a stream of profitable work that will resume in circumstances where it has few real competitors. That circumstances affects what could amount to ‘genuine consideration’ of alternatives to redundancy, in that temporary measures that could sustain employment for a period are relevant to deal with the underlying reasons for redundancy. That is not the position here. Here, Rocla has provided access confidentially to the AWU’s qualified and senior professional staff that confirms the deep and ongoing losses driving the decision there has been no suggestion that information does not confirm the level of losses identified to the employees, the AWU and the Commission.”

Consideration

[27] Having conducted two conferences with the parties during the consultation period in which a number of options were explored, and having seen the detailed communications provided by Rocla both to its employees and the AWU, and the communications between the parties, I am satisfied on a preliminary basis that Rocla has met its obligation to consult.

[28] I accept in these circumstances that Rocla notified its employees as soon as was reasonably possible after a definite decision was made. The time period was necessary taking into account the public holidays, the current COVID-19 crisis, and the time required to produce a detailed information pack for each employee. I agree with the submissions made by Rocla that it was necessary and appropriate to have “meaningful, accurate and comprehensive information before the relevant employees at the time they were notified”.

[29] Having had confidential access to Rocla’s profit and loss statements, the AWU did not contend that the financial position of the site was different to that submitted by Rocla. I accept that Rocla was suffering a significant loss at the site, and the losses were not related to the COVID-19 pandemic.

[30] All of the suggestions or proposals made by the AWU to mitigate the impact of the closure were properly considered by Rocla. This is evident given that it took on board some of the proposals, and provided an appropriate explanation as to the reason(s) why it could not or would not implement others. For example, at the request of the AWU it did seek expressions of interest for ‘early retrenchment volunteers’ in order to ascertain whether some ‘job swaps’ or job sharing might have been feasible for a period of time. No employees volunteered.

[31] Further, Rocla’s responses to the AWU were provided in a timely manner.

[32] I accept the submissions made by Rocla set out in paragraph 24 above. In my view, there was a comprehensive process of identifying options to minimise or avoid the impact of the site closure, all of which were explored and responded to by Rocla. It is difficult to see what possible further steps could be left to be considered. It is also clear given the financial situation that ongoing employment at the site was not an option, and the AWU did not suggest otherwise.

[33] The AWU has failed to demonstrate that that there is a serious question to be tried or that the balance of convenience favours the making of the order. Accordingly, I am satisfied that it is not appropriate to make the order sought by the AWU.

DEPUTY PRESIDENT

Appearances:

J Shaw for the Australian Workers’ Union.
T Lange for Rocla Pty Ltd T/A Rocla Pipeline Products.

Hearing details:

2020.
Sydney (By telephone):
April 29.

Printed by authority of the Commonwealth Government Printer

<PR719231>

 1   [2016] FWC 2260.

 2 (1986) 161 CLR 148 at page 153.