"Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union" known as the Australian Manufacturing Workers' Union (AMWU) v McCain Foods (Aust) Pty Ltd

[2021] FWC 4661

[2021] FWC 4661

FAIR WORK COMMISSION

DECISION

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

"Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union" known as the Australian Manufacturing Workers' Union (AMWU)
v
McCain Foods (Aust) Pty Ltd
(C2021/4418)

DEPUTY PRESIDENT CLANCY MELBOURNE, 31 JULY 2021

Application for order under s.418 to stop industrial action – meaning of ‘industrial action’ in s.411 considered -lock out found to be employer response action – application dismissed.

[1] On 30 July 2021, the Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union known as the Australian Manufacturing Workers’ Union (AMWU) made an application under s.418 of the Fair Work Act 2009 (the Act) for an order that unprotected industrial action stop or not occur. The parties are currently covered by the McCain Foods (Aust) Pty Ltd., Tasmania Enterprise Union Collective Agreement 2018. 1 The nominal expiry date of the Agreement was 28 February 2021.

[2] At 11:00am on Friday, 30 July 2021, I conducted a Conference. Attendees for McCain Foods (Aust) Pty Ltd (McCain Foods) were Ms Leah McRae (HR Business Partner), her colleague Mr Gordon Gillies and their representative Mr Ian Dixon (Ai Group). Attendees for the AMWU were Mr Josh Martin (National Legal Officer), Mr John Short (Tasmania State Secretary), Mr Michael Wickham (State Organiser) and Ms Brieanna Munoz (Assistant Legal Officer). I heard the application at 4.00pm that day. The AMWU’s position is that the action of McCain Foods (Aust) Pty Ltd (McCain Foods) in locking out AMWU members from its Smithton site from 7.00pm on 29 July 2021 is not protected industrial action and that the Commission should order that the action stop or not occur under s.418 of the Act.

[3] At the hearing of the matter, the AMWU tendered a statement of Mr Philip Stanley, 2 AMWU site delegate. Evidence in the form of a statement made on 31 July 20213 was adduced from Ms McRae. Neither Mr Stanley nor Ms McRae were required for cross-examination. The parties rely on the evidence of these witnesses in relation to their respective positions in the Application.

Background

[4] The AMWU is a bargaining representative for a proposed enterprise agreement on behalf of its members employed by McCain Foods at the McCain Foods Smithton site in Tasmania.

[5] On 12 May 2021, Deputy President Gostencnik issued a protected action ballot order 4 and on 25 June 2021, the Australian Electoral Commission issued a declaration of results with respect to the protected action ballot, concluding that at least 50% of voters wished to take protected industrial action.

[6] On 16 July 2021, the AMWU gave written notice to McCain Foods stating it intended to take employee claim action via five notices, as follows:

i. “12 hours stoppage of work commencing at 7.00am on Thursday 22 July 2021 by employees of McCain Foods (Aust) Pty Ltd who are members of the “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) who would be subject to the proposed enterprise agreement and for whom the AMWU is the bargaining representative.”

ii. “4 hours stoppage of work commencing at 3.00am on Friday 23 July 2021 ...”

iii. “8 hours stoppage of work commencing at 5.30am on Friday 23 July 2021 ...”

iv. “8 hours stoppage of work commencing at 6.00am on Friday 23 July 2021 ...”

v. “8 hours stoppage of work commencing at 6.30am on Friday 23 July 2021 ...”

[7] On 19 July 2021, McCain Foods issued a notice that stated it would effect a lockout from 7.00am on Thursday 22 July 2021 to 7.00pm on Friday 23 July 2021.

[8] At 11.06am on 29 July 2021, the AMWU sent an email to McCain Foods attaching a notice of intention to take protected action. The email stated, “The protected action will commence today, Thursday 29 July 2021.” The attached notice, also dated 29 July 2021, indicated that the AMWU intended to take industrial action, which was for the purpose of responding to industrial action by McCain Foods. It set out the nature of the intended industrial action as follows:

“Employees of McCain Foods located at Smithton, Tasmania who are members of the AMWU who would be subject to the proposed enterprise agreement, and for whom the AMWU is the bargaining representative, will take the following employee response action within the meaning of section 410 of the Fair Work Act 2009 (Cth) commencing on Thursday, 29 July 2021 in response to the McCain Foods’ response action on 22 and 23 July 2021:

•  An unlimited number of 1-hour stoppages regarding the performance of work involving fryers;

•  An unlimited number of 1-hour stoppages regarding the performance of work involving forklifts;

•  An unlimited number of meal breaks to be taken at the same time, rather than across staggered breaks;

•  An indefinite refusal to answer two-way radio or telephones, or otherwise perform any working during meal breaks, in accordance with the ordinary custom and practice of McCain Foods; and

•  An indefinite refusal to perform any paperwork or computer work in any areas on site.

The above employee response action may be taken separately, concurrently and/or consecutively, and will be taken indefinitely until further notice.

For the avoidance of doubt, all safety protocols will be adhered to during the employee response action as required, including food safety and quality protocols.”

[9] At 1.03pm on 29 July 2021, Ms McRae sent correspondence to the AMWU requesting that it clarify how the proposed employee response action would be undertaken because McCain Foods had concerns with respect to health and safety.

[10] At 3.26pm on 29 July 2021, Mr Josh Martin sent correspondence in reply outlining the AMWU’s proposed employee response action and proffering that its members would ensure that there would be no risks to health and safety, or to the quality of McCain Foods’ product.

[11] At 5.17pm on 29 July 2021, McCain Foods sent an email to the AMWU attaching a notice, which outlined that McCain Foods intended to lock out AMWU members from 7.00pm that same evening and advising that the notice had been emailed to McCain Foods Smithton employees and posted in the canteen.

[12] The Notification to all Employees stated:

“NOTIFICATION TO ALL EMPLOYEES
McCain Foods Smithton
Re: Industrial Action – Smithton Site

All Smithton employees,

As you would be aware, there are still ongoing negotiation with the AMWU. We are continuing to negotiate in good faith with the Union, and we continue to focus on the welfare of our people as our priority. We acknowledge this action is tough on you, and extremely disruptive.

Unfortunately, the notice we have been served by the Union today gives us no certainly 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.

We maintain that we continue to negotiate with the union in good faith, and that our offer to our people is extremely fair, and well in excess of the rate of inflation. We consider it even more reasonable in the context of a global pandemic that is causing havoc in our economy and causing us to incur significant cost as we support our food service customers who are enduring ongoing lockdowns. We are proud of the continued investment and support we have demonstrated in our people over the past 18 months, and this negotiation is no exception.

We do not wish to engage in protracted negotiations. As of this afternoon, we have made an urgent application to the Fair Work Commission and seek to have the dispute dealt with as soon as possible. We are hopeful the meeting with Commissioner will take place early next week so we can return to work, or sooner if we come to a resolution.

If you have any questions, please reach out to myself, Gordon Gillies or Leah McRae.

Regards,
Siobhan McGlinchey
Regional VP Human Resources APACSA”

[13] McCain Foods proceeded to lock out AMWU members from 7.00pm on 29 July 2021.

Statement of Mr Philip Stanley and Submissions of AMWU

[14] Mr Stanley stated that McCain Foods gave notice two days before the intended employee claim action notified for 22 July 2021 and 23 July 2021 that they would be taking employer response action in the form of a lockout from the Smithton site from 7.00am on 22 July 2021. Mr Stanley said that when he arrived at site at approximately 6.50am on 22 July 2021, the gate was locked and that employees were not allowed onto site.

[15] Mr Stanley further stated that at 9.36am on 29 July 2021, he received a text message from Mr Michael Wickham, AMWU State Organiser, which directed him to ensure that the McCain Foods supervisor was provided with 30 minutes’ notice before the taking any industrial action. The text message was:

“Morning

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

Cheers”

[16] Mr Stanley stated this was not enacted and the position of the AMWU is that no employee response action was taken on 29 July 2021 by employees who will be covered by the proposed agreement for which the parties are bargaining.

[17] The AMWU submits that it did not engage in any employee response action at any time on 29 July 2021 and because McCain Foods proceeded to lock out AMWU members prior to the AMWU undertaking employee response action, the lock out does not fall within s.411 of the Act and is unlawful employer response action.

[18] The AMWU relies on Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union v Pinnacle Career Development Pty Ltd 5 (Pinnacle), for the proposition that while an employer is not required to wait until foreshadowed employee claim action occurs before standing is conferred upon it to give a notice of foreshadowed employer response action, the employer response action itself can only be taken after the employee response action has been taken.6

[19] The AMWU also cites the statement of Justice Perram in Australian and International Pilots Association v Fair Work Australia (AIPA)  7:

“The terms of 411(a) make clear that, for industrial action to be employer response action, it must be “organised or engaged in as a response to industrial action” by an employee or a bargaining agent of an employee (which includes a union). The words “as a response” require only that the lockout be seen as causally connected to employees’ industrial action. It does not have to be reasonable, proportionate or rational.” 8

[20] The AMWU further relies on the decision of Commissioner Cloghan in United Voice v MSS Security Services Pty Ltd 9 and the decision of Deputy President Bartel in Australasian Meat Industry Employees Union v JBS Australia Pty Ltd,10 in which the Deputy President stated:

“… employer response action must be in response to industrial action, as defined, that is happening. It cannot, by definition, be in response to industrial action that is threatened, impending, probable or even imminent at the time that the employer’s industrial action is implemented.” 11

[21] The AMWU submits it had only outlined its intention to take employee response action and had never actually taken such action prior to (or after) McCain Foods locked out employees. The AMWU contends that the lockout therefore was not ‘employer response action’ within the meaning of s.411 of the FW Act and, therefore, constitutes unprotected industrial action.

[22] The AMWU submits the requirement for the employer response action to be causally connected to the employee response action has not been met because:

a) It was never afforded the opportunity take its employee response action, in that the employer response action by McCain Foods took place before any employee response action;

b) There is no causal connection between the 29 July 2021 lock out and its initial proposed industrial action commencing on 22 June 2021 because the earlier proposed industrial action did not pose the health and safety risks that McCain Foods cited as justification for its lock out commencing on 29 July 2021;

c) The notice given by McCain Foods on 29 July 2021 made no reference to the industrial action the AMWU proposed to commence on 22 June 2021; and

d) The industrial action the AMWU proposed to commence on 22 June 2021 never took place.

[23] The AMWU made the further submission that there is no legislative requirement that industrial action once notified must be taken, relying on the Full Bench decisions Boral Resources (NSW) Pty Ltd v AWU  12 and Construction, Forestry, Mining and Energy Union v Thiess Pty Ltd.13 The AMWU submits that when these authorities are read in conjunction with the decision in Pinnacle, it is evident there is a clear distinction between notifying an employer or an employee about proposed industrial action, and the taking of that action. The AMWU submits that industrial action has only been taken once it occurs, not when the notice is given to the relevant party.

[24] The AMWU submits the McCain Foods’ proposed industrial action of locking out the AMWU members on 29 July 2021 took place prior to it engaging in any employee claim or employee response action and therefore, it does not fall within the meaning of ‘employer response action’ in s.411 of the Act. As such, it asserts the industrial action of McCain Foods is unlawful and the Commission must make orders under s 418(2)(b) of the FW Act preventing McCain Foods from continuing to lockout the AMWU members.

Evidence of Ms McRae and Submissions of McCain Foods

[25] Ms McRae confirmed notice of industrial action to commence on Thursday 29 July 2021 was given by the AMWU and in response, McCain Foods gave notice of employer response action and instituted a lockout commencing at 7:00pm on 29 July 2021.

[26] McCain Foods submits the notice issued by the AMWU that they would take industrial action in the form of the employee response action stated that that industrial action was “commencing on Thursday 29 July 2021”. The AMWU submits that because the notice does not have any other specified time or times for any particular events, it must be given its ordinary meaning and must mean the industrial action started at 12:01am and could be constituted by any one or all or any combination of the listed activities at any time. It asserts it is entitled to respond to that industrial action by giving the notice it did and imposing the lockout.

[27] McCain Foods also submits the lockout that commenced at 7.00pm on 29 July 2021 is in response to the AMWU “campaign” commenced as employee claim action and protected by the ballot declaration obtained earlier. It says that this is sufficient to justify its employer response action and submits that when viewed generally in light of the history of bargaining, the lockout is clearly causally connected to the employees’ campaign of industrial action.

Consideration

[28] Section 418 of the Act provides as follows:

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

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

(a) is happening; or

(b) is threatened, impending or probable; or

(c) is being organised;

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

Note: For interim orders, see section 420.

(2) The FWC may make the order:

(a) on its own initiative; or

(b) on application by either of the following:

(i) a person who is affected (whether directly or indirectly), or who is likely to be affected (whether directly or indirectly), by the industrial action;

(ii) an organisation of which a person referred to in subparagraph (i) is a member.

(3) In making the order, the FWC does not have to specify the particular industrial action.

(4) If the FWC is required to make an order under subsection (1) in relation to industrial action and a protected action ballot authorised the industrial action:

(a) some or all of which has not been taken before the beginning of the stop period specified in the order; or

(b) which has not ended before the beginning of that stop period; or

(c) beyond that stop period;

the FWC may state in the order whether or not the industrial action may be engaged in after the end of that stop period without another protected action ballot.

[29] Section 418 makes clear that if it appears to me that the lock out that McCain Foods has imposed since 7.00pm on 29 July 2021 is unprotected industrial action that is happening, I must make an Order that it stop, not occur or not be organised.

[30] The basis of the AMWU’s application is that the McCain Foods lock out is not ‘employer response action’ within the meaning of s.411 of the Act. Section 411 provides:

“411 Employer response action

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

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

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

or

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

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

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

[31] The AMWU assertion is that s.411 requires there to have been industrial action taken by it before McCain Foods can take ‘employer response action’ in response. The AMWU’s application has proceeded on the basis that what has not occurred in this case is any of the action described in its notice of 29 July 2021, i.e. action that would be taken by employees of McCain Foods. However, s.411 is broader in compass. Section 411(a)(i) refers to industrial action by a bargaining representative of an employee who will be covered by the agreement. Neither the decision of Commissioner Cloghan in United Voice v MSS Security Services Pty Ltd 14 nor the decision of Deputy President Bartel in Australasian Meat Industry Employees Union v JBS Australia Pty Ltd15addressed industrial action ‘by a bargaining representative.’

[32] What then is ‘industrial action by a bargaining representative’ for the purposes of s.411 of the Act? In s.19 of the Act, ‘industrial action’ is defined as meaning:

“(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.”

[33] While the Explanatory Memorandum to the Fair Work Bill 2008 notes at [86] that this definition of industrial action identifies the kind of action that can be taken by an employee, employer and their bargaining representatives, it is then stated in [87] that subclause 19(1) (s.19(1) of the Act) sets out the types of conduct by an employee that constitute industrial action. At [88], it describes industrial action by employers as locking out employees from their employees. Nowhere in the clause 19 of the Explanatory Memorandum, or in s.19 of the Act, does there appear to be a definition of industrial action specifically applicable to bargaining representatives.

[34] Section 409 of the Act defines ‘employee claim action’ and makes reference to a bargaining representative as follows:

‘409(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.’

(my underlining)

[35] Similarly, and of relevance to this matter, s.410 defines ‘employee response action’ as follows:

‘410(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.’

(my underlining)

[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.

[37] Section 418 of the Act describes industrial action in terms of that which is ‘happening’, that which is ‘threatened, impending or probable’ and that which ‘is being organised’ and in the context of s.418, the Full Bench in Maritime Union of Australia v Patrick Stevedores Holdings Limited (Patrick Stevedores) 16 stated that a union can plainly be ordered not to organise industrial action.17

[38] In this case, the statement of Mr Stanley and the text message of Mr Wickham reveal there was industrial action organised by the AMWU, a bargaining representative of employees who will be covered by the proposed enterprise agreement. The AMWU had organised industrial action to be taken commencing on 29 July 2021 with 30 minutes notice to be given to the McCain Foods supervisor, called upon its members to be disciplined and sought pre-emptive legal advice in the event McCain Foods took ‘the ultimate response path’. 18 I have noted and agree with the view expressed by the Full Bench in Patrick Stevedores that the coordination and planning of industrial action constitutes organisation of it.19

[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.

DEPUTY PRESIDENT

Appearances:

Mr J Martin on behalf of the AMWU
Mr I Dixon (Ai Group) for McCain Foods (Aust) Pty Ltd

Hearing details:

2021.
Melbourne (via Microsoft Teams):
30 July.

Printed by authority of the Commonwealth Government Printer

<PR732352>

 1   [2018] FWCA] 4170, AE429199.

 2   Exhibit A1.

 3   Exhibit R1.

 4   PR729782.

 5 [2010] FCA 1350.

 6   Ibid at [51] and [66].

 7 [2012] FCAFC 65.

 8 Ibid at [155].

 9   [2013] FWC 4087.

 10   [2014] FWC 2254.

 11 Ibid at [20].

 12   [2010] FWAFB 1771 at [14].

 13   [2015] FWCFB 5530 at [68]-[69].

 14   [2013] FWC 4087.

 15   [2014] FWC 2254.

 16   [2013] FWCFB 7736.

 17 Ibid at [44].

 18   See Exhibit A1.

 19 Ibid at [34].