Bechtel Australia Pty Limited v Construction, Forestry, Mining and Energy Union

[2014] FWCFB 8490

[2014] FWC 5476 [Note: Appeals pursuant to s.604 (C2014/5826 and C2014/6133) were lodged against this decision - refer to Full Bench decision dated 15 December 2014 [[2014] FWCFB 8490] for result of appeal.]

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.418—Industrial action

Bechtel Construction (Australia) Pty Ltd; Bechtel Australia Pty Limited
v
Construction, Forestry, Mining and Energy Union
(C2014/5792)

SENIOR DEPUTY PRESIDENT WATSON MELBOURNE, 12 AUGUST 2014

Application to stop industrial action at Curtis Island - decision issued.

[1] On 8 August 2014, Bechtel Construction (Australia) Pty Ltd and Bechtel Australia Pty Limited (Bechtel) applied under s.418 of the Fair Work Act 2009 (the Act) for orders to stop and prevent alleged unprotected action, and the organisation of it, being taken by employees in respect of its operations at the Curtis Island LNG Projects and/or PJET at Curtis Island. The orders were directed to the Construction, Forestry, Mining and Energy Union (CFMEU), (and its officers, employees and agents) and persons employed to work at the Curtis Island LNG Projects and/or PJET who were participating in or did participate in the industrial action.

[2] Bechtel Australia Pty Limited is undertaking construction of three Curtis Island LNG projects (Queensland Curtis LNG Project; Australia Pacific LNG project and Gladstone LNG project (the LNG Projects). Bechtel Construction (Australia) Pty Ltd is contracted by Bechtel Australia Pty Limited to provide construction services on each project. Each of the LNG Projects involves the construction of a liquefied natural gas processing plant. PJET is a division of Bechtel Australia Pty Limited that is specific to the LNG Projects with responsibility for procurement, purchase and delivery of all cargo to the LNG Projects.

Service

[3] Service of the initial hearing on 8 August 2014 occurred by way of an order for substituted service which required service of the application, order and the notice of hearing on the CFMEU and the posting of the notices on notice boards usually accessible to employees. In the hearing of 8 August 2014, I expressed a concern that a substantial number of employees to whom the order was directed – “several hundred” according to Bechtel – would have received no notice because they were neither members of the CFMEU and had no access during the stoppage of work on Curtis Island to notice boards. This concern was addressed by Bechtel sending a text message to all employees advising them of the application, notice of the 10 August 2014 hearing and directing them to a web-page on which the application, order and notice of listing were posted. I am satisfied that all employees potentially subject to the order sought by Bechtel were given notice of the application, order and the hearing and had an opportunity to defend the application.

[4] On 11 August 2014, an Interim decision was published 1 It stated:

“[1] On Sunday 10 August 2014, I made an interim order under s.420 of the Act. 2

[2] After proceedings concluded on 10 August 2014, Bechtel requested that the matter be relisted. The matter was relisted on 11 August 2014 and Bechtel sought that the interim order be amended in light of a communication by the CFMEU to its members indicating that the interim order prohibits only unprotected industrial action. I issued an amended interim order on 11 August 2014. 3

[3] However, uncertainty clearly exists as to what industrial action is protected and unprotected action. In light of that uncertainty, I have decided to expedite the making of the final order and to publish brief reasons which disclose my reasons in respect of industrial action, said by CFMEU to be protected industrial action by way of this interim decision. These reasons will be supplemented by full reasons in due course.

[4] The industrial action concerns two groups of employees:

1. Those employees subject to the notice of protected industrial action issued by the CFMEU on 31 July 2014, following a protected action ballot 4 in respect of “those employees for whom the CFMEU is the bargaining representative and who will be covered by the proposed enterprise agreement. The proposed enterprise agreement covers those employees currently employed by Bechtel Construction (Australia) Pty Ltd in on-site construction work on LNG Projects in Queensland”; and

2. A significant number of employees not subject to that notice.

[5] There is a dispute between the CFMEU and Bechtel as to whether a group of CFMEU members are eligible to be members and, as a result, whether they are subject to the notice of protected industrial action. Depending on the outcome of that issue, such employees are either in group 1 or group 2 above. It is unnecessary to determine that matter for present purposes, given my decision that the industrial action by each group is unprotected action subject to the final order I have made.

[6] In respect of each group of employees, I am satisfied on the uncontested evidence of Bechtel witnesses that industrial action is happening and is threatened, probable and impending. I am satisfied that it is being organised by the CFMEU in respect of the employees in group 1.

[7] I am satisfied that the action by the employees in group 2 is unprotected industrial action.

[8] In respect of the group 1 employees, the CFMEU contends that the action is protected industrial action, being action authorised by the ballot pursuant to the protected action ballot order and having been subject to the requisite notice of the protected industrial action on 31 July 2014 under s.414 of the Act.

[9] I find that the notice of 31 July 2014 is not a valid notice under s.414 of the Act in that it did not specify the nature of the action as required by s.414(6) of the Act. The notice set out each of the forms of industrial action authorised in the ballot (and one which was not put to the ballot) and did not, in my view, make Bechtel aware of the nature of the intended action, 5 which on the basis of the notice could have been any one of, or any combination of several, or all of the types of industrial action notified, and did not provide Bechtel with an opportunity to respond to the actions by making relevant preparations.6 As a result, I find that the industrial action taken in reliance of the 31 July 2014 notice is not protected industrial action and should be subject to the order to stop and prevent industrial action.

[10] I note that subsequent notices of protected industrial action were issued by the CFMEU on 7 August 2014, in relation to action to commence on 13 August 2014 and 8 August 2014 in relation to action to commence on 14 August 2014. The notices were in similar terms as the 31 July 2014 notice and, in my view, suffer from the same deficiencies. A further notice was issued by the CFMEU to Bechtel on 10 August 2014. It revoked the notice of 8 August 2014 and provided further notice of industrial action to commence on 14 August 2014 in different terms to the earlier notices. The notice of 10 August 2014 gave notice of a stoppage of work for an indefinite period commencing 12.01 a.m. on Thursday, 14 August 2014 and does not suffer from the same deficiencies as the earlier notices.

[11] The final order will, to make it effective, include a requirement on both Bechtel and the CFMEU to bring the terms of this interim decision to the attention of the employees subject to it.”

[5] These are my full reasons.

[6] In the proceedings Bechtel brought evidence from a number of managers, which was not challenged by cross-examination by the CFMEU. The CFMEU brought no evidence.

The alleged industrial action

[7] On 26 June 2014, the CFMEU obtained a protected action ballot order (the PAB order) 7 in respect of “those employees for whom the CFMEU is the bargaining representative and who will be covered by the proposed enterprise agreement. The proposed enterprise agreement covers those employees currently employed by Bechtel Construction (Australia) Pty Ltd in on-site construction work on LNG Projects in Queensland”.

[8] In the proceedings leading to the PAB order, Bechtel raised an objection to the making of the PAB order sought on the basis of the group of employees to be covered by the order and balloted. In brief, the objection concerned CFMEU’s ability to cover and represent “scaffolders, riggers, trade assistants, doggers, frame workers, steel fixers, concrete finishers and labourers” (the disputed classifications) who are engaged in the LNG projects, arguing that such classifications are outside of the eligibility rules of the CFMEU and the order sought would seek to have workers included on the roll and therefore participate in the ballot for whom the CFMEU is not the bargaining representative and accordingly not eligible to vote. 8

[9] Bechtel submitted that the coverage issue was a “legal issue” which could only be effectively determined by the “Federal Court of Australia” (FCA) and initially sought that the PAB order not be made pending the matter be taken to FCA or, in the context that the ballot agent nominated was not the “Australian Electoral Commission to grant orders or directions which would enable any disputation with regard to the inclusion of workers on the roll being brought back before the commission” for determination. 9

[10] To meet the concerns of Bechtel and to avoid a delay in the making of a ballot order, the CFMEU agreed to amend the directions as to the compilation of the roll, without concession regarding eligibility of employees to be members of the CFMEU, such that they provided for a roll of voters to be “compiled from names that appear on both the CFMEU’s list and Bechtel Construction (Australia) Pty Ltd’s list”, with the effect that those employees who do not appear on both lists were not included in the roll. 10 The effect was that only those employees regarded by Bechtel as being eligible to vote in the ballot were included on the roll and able to cast a vote.

[11] The CFMEU acknowledged that “that means there will be members of the CFMEU, who we say are eligible to be members of the CFMEU, that will not be on the list of voters compiled by the balloting agent. That is what will happen as a consequence of the amending of that part of the order”. 11

[12] Bechtel did not oppose the making of the order on that basis. 12

[13] Reflecting that agreed position, the directions issued to the ballot agent included the following:

“(c) A roll of voters is compiled by the Protected Action Ballot Agent in conjunction with the CFMEU and Bechtel Construction (Australia) Pty Ltd (the employer);

(d) The roll of voters . . . comprises the names of the employees whose names appear in both the lists . . . to be provided to the Protected Action Ballot Agent by the employer and the CFMEU.” 13

[14] 148 employees were on the roll for the ballot, of which 90 voted in the ballot, with a majority of those voting authorising each form of industrial action.

[15] On 31 July 2013, the CFMEU gave notice:

“of the intention of our organisation, officers and employees of our organisation and members of our organisation and employees for whom we are a bargaining representative employed by Bechtel Construction (Australia) Pty Ltd, to organise and engage in protected industrial action pursuant to s.409 of the Act . . .

The industrial action will take the following form:

• Stoppages of work for 1 hour periods on Thursday, 7 August 2014;

• Stoppages of work for 2 hour periods on Thursday, 7 August 2014;

• Stoppages of work for 4 hour periods on Thursday, 7 August 2014;

• Stoppages of work for 8 hour periods on Thursday, 7 August 2014;

• Stoppages of work for 12 hour periods on Thursday, 7 August 2014;

• Stoppages of work for 24 hour periods on Thursday, 7 August 2014;

• Stoppages of work for 48 hour periods on Thursday, 7 August 2014;

• Stoppages of work for indefinite periods on Thursday, 7 August 2014;

• An Overtime Bans; and

• The industrial action will commence on Thursday 7, August 2014.” 14

[16] The industrial action notice replicated the ballot questions save that the ballot asked a question about stoppages of work for 10 hour periods and did not seek authorisation of stoppages of work for 12 hour periods.

[17] On 7 August 2014, over 1700 employees did not work on the LNG Projects and PJET and their absence was not explained. On 8 August 2014 over 1200 employees did not work on the LNG Projects and PJET and their absence was not explained. On the basis of the unchallenged evidence of Bechtel witnesses I am satisfied that the employees were engaged in industrial action on those days, in the form of a stoppage of work for an indefinite period.

[18] It is not disputed that this group of employees engaging in industrial action included CFMEU members within the more limited group claimed by Bechtel to be eligible to be members of the CFMEU, persons within the disputed group CFMEU members and employees not members of the CFMEU on either the Bechtel or CFMEU view of the CFMEU eligibility rules.

[19] On 8 August 2014 Bechtel gave notice to all bargaining representatives and all employees who would be covered by the proposed agreement of the employer response to the protected industrial action in the form of a lock out on the days of 9 and 10 August 2014 of “all employees who took the purported protected industrial action”. The notice was limited to CFMEU members purporting to take protected industrial action. In addition, Bechtel cancelled overtime for other employees on the weekend of 9 and 10 August 2014, with weekend work being undertaken on an overtime basis.

[20] I am satisfied that industrial action was occurring on 7 and 8 August 2014.

[21] In respect of the CFMEU members who had taken industrial action on the basis of the notice of protected industrial action, I am satisfied that their industrial action – a stoppage of work for an indefinite period – continued. No attempt was made to rescind the 31 July 2014 notice of protected industrial action. The CFMEU’s Facebook page contained a media release which attributed to CFMEU Divisional Branch Secretary, Mr Ingham the comment “These workers . . . will stop work for as long as it takes to come to a fair arrangement that benefits everyone”. 15 The CFMEU’s written submissions indicated that the action was an “indefinite stoppage”.16 I am satisfied that the industrial action was continuing and happening.

[22] I am satisfied that for the remaining workers engaged in industrial action, their industrial action was not happening on the weekend of 9 and 10 August 2014, because they were not offered work on those days, in the circumstances of the industrial action on 7 and 8 August 2014, further industrial action was probable following the weekend when ordinary time work was to resume.

[23] On the basis of the evidence of the CFMEU’s notice of protected industrial action and the evidence of Bechtel witnesses as to the events of 7 and 8 August 2014, I am satisfied that the industrial action in respect of the CFMEU members was and is being organised by the CFMEU. This extends to the disputed members as given in Bechtel’s evidence as to site visits undertaken to conduct meetings with them.

[24] I am not satisfied on the evidence that the CFMEU organised the industrial action by employees other than the CFMEU members (including the disputed members). Whilst there is evidence of actions by CFMEU officials and members directed to disrupt entry to the workplace, the evidence suggests that the action, including picketing, was action directed to dissuading other workers to attend work and deterring them from attending work rather than organising industrial action in the sense of coordinating and planning industrial action by those employees. 17

[25] There was no suggestion that the industrial action by the non-CFMEU employees was protected industrial action. I find that it was unprotected industrial action.

[26] However, the CFMEU submitted that the industrial action by the CFMEU members, including the disputed group, was protected industrial action.

[27] Bechtel submitted that it was not protected industrial action on three bases:

1. The 31 July 2014 notice of intended protected action (and those of 7 and 8 August 2014) are fundamentally deficient and do not comply with s.414(6) of the Act.

2. The group of persons who have taken protected purported industrial action is broader than the group subject to the ballot and, as a result, s.409(1)(b)(ii) of the Act is not satisfied; and

3. There are persons taking industrial action that are not able to be represented by the CFMEU as they are not persons who the CFMEU, pursuant to its rules, are entitled to represent in relation to work under the agreement, such that the CFMEU cannot be a bargaining representative in relation to them.

The 31 July Notice

[28] Section 408 of the Act defines protected industrial action. Relevantly, it includes, in s.408(a) “an employee claim action for the agreement” and refers to s.409.

[29] Section 409 of the Act defines and sets out the requirements for an employee claim action. Relevantly, it includes in s.409(1)(c) the requirement that it “meets the common requirements set out in Subdivision B”.

[30] Section 413 of the Act sets out the common requirements that apply for industrial action to be protected industrial action. They include, in s.413(4) a requirement that the “notice requirements set out in section 414 must have been met in relation to the industrial action”.

[31] Section 414 of the Act sets out the notice requirements for industrial action. Relevantly, in s.414(6) a requirement is that a “notice given under this section must specify the nature of the action and the day on which it will start”.

[32] The terms of the 31 July 2014 CFMEU notice are set out above. It specifies that the industrial action will commence on Thursday, 7 August 2014. However, it is unclear in its specification of the nature of the protected industrial action proposed.

[33] Relevant authorities as to the specification of the industrial action proposed are usefully summarised in the Full Bench decision in EnergyAustralia Yallourn Pty Ltd v Construction, Forestry, Mining and Energy Union. 18 Those authorities indicate that:

• Whilst it would be unrealistic to require a party to specify, “three clear working days in advance, exactly what steps it would take”, the notice is “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”. 19

• The “purpose of the notice requirement is to give the employer the opportunity to respond to the action by making relevant preparations”. 20

• “Whether a particular notice meets the requirements in s.414(6) will depend upon the terms of the notice and the industrial context.” 21

• “It is critical that the particularity be sufficient to enable the parties to be aware of the nature of the intended action and whether the action actually taken in reliance on the notice is or is not protected action when it is taken.” 22

• “Section 414(6) should be construed with an understanding that under the FW Act the respondent has the right to engage in protected industrial action. Generally, the reason for industrial action is to cause a degree of inconvenience and expense to the employer as a legitimate bargaining tool. The fact that the applicant may suffer a loss of profits and its operation and staff may be inconvenienced is no reason of itself to find that a notice should as specific as the applicant in this case would like it to be”. 23

• “The adequacy of the notice must take account of the practical applied circumstances of the workplace and whether the purpose of a notice is served by giving the addressee an understanding of what is contemplated and when it will occur so as to provide the recipient with an opportunity to consider his or her position and act or respond in a particular way.” 24

[34] I find that the CFMEU notice of 31 July 2014 is not a valid notice under s.414 of the Act in that it did not specify the nature of the action as required by s.414(6). I have had regard to the particular context, in this case, which involves work being undertaken over three separate projects where some understanding of what action is intended to be taken by the workforce in each project is a material consideration. The 31 July 2014 notice sets out each of the forms of industrial action authorised in the ballot (save that one was not included and one which was not put to the ballot was added). It did not, in my view, make Bechtel aware of the nature of the intended action, which on the basis of the notice could have been any one of, or any combination of several, or all of the types of industrial action notified, undertaken in common or differently by employees taking the action, and did not provide Bechtel with an opportunity to respond to the actions by making relevant preparations. 25 As a result, I find that the industrial action taken in reliance of the 31 July 2014 notice is not protected industrial action and should be subject to the order to stop and prevent industrial action issued on 11 August 2014 by the Fair Work Commission.

[35] The CFMEU contended that, when considered in the context of both parties knowledge of the project and its features, whilst the 31 July, 2014 is “far from perfect”, it makes “tolerably clear that all members would be taking industrial action in the form of an indefinite stoppage from 7 August 2014. I do not accept that industrial action in the form of an indefinite stoppage emerges from the terms of the notice. The CFMEU whilst accepting that Bechtel “would not necessarily have known either way” whether there was an indefinite stoppage or one or some combination of the other forms of industrial action listed, as matters unfolded and there was apparent an indefinite stoppage, that is consistent with both parties interpreting the matter in that way from the beginning. 26 The proposition is to the effect that because the industrial action was ultimately in the form of an indefinite stoppage, Bechtel ought to have been aware on 31 July 2014 that the notice was to that effect and able to consider any responsive action on that basis. That proposition is unsustainable.

[36] As noted in my interim decision, subsequent notices of protected industrial action were issued by the CFMEU on 7 August 2014, in relation to action to commence on 13 August 2014 and 8 August 2014 in relation to action to commence on 14 August 2014. The notices were in similar terms as the 31 July 2014 notice and, in my view, suffer from the same deficiencies. A further notice was issued by the CFMEU to Bechtel on 10 August 2014. It revoked the notice of 8 August 2014 and provided further notice of industrial action to commence on 14 August 2014 in different terms to the earlier notices. The notice of 10 August 2014 gave notice of a stoppage of work for an indefinite period commencing 12.01 a.m. on Thursday, 14 August 2014 and does not suffer from the same deficiencies as the earlier notices.

[37] In light of my conclusion that the industrial action taken in reliance of the 31 July 2014 notice is not protected industrial action, it is unnecessary to consider and determine the additional grounds – the group of persons and the CFMEU eligibility grounds – in support of Bechtel’s proposition that the industrial action by CFMEU members was and is not protected industrial action.

Conclusion

[38] I am satisfied that the jurisdictional basis for the making of an order under s.418 of the Act in respect of the industrial action in the form of an indefinite stoppage that commenced on 7 August 2014 by the CFMEU members and other employees exists. Industrial action by them is happening, threatened, impending and probable. It is not protected industrial action.

[39] An order was published on 11 August 2014. 27

SENIOR DEPUTY PRESIDENT

Appearances:

C Murdoch (of Counsel) for Bechtel Construction (Australia) Pty Ltd and Bechtel Australia Pty Limited.

D Kent (QC) for the Construction, Forestry, Mining and Energy Union.

Hearing details:

2014.

Melbourne via video link to Brisbane:

August 8, 10 and 11.

 1   [2014] FWC 5435.

 2   PR554105.

 3   PR554109.

 4   PR552432.

 5   Energy Australia Yallourn Pty Ltd v CFMEU, [2013] FWCFB 3793.

 6   Davids Distribution Pty Ltd v National Union of Workers, [1999] FCA 1108.

 7   PR552432.

 8   Transcript in B2014/891 at para 12.

 9   Transcript in B2014/891 at para 13.

 10   Transcript in B2014/891 at paras 41–42.

 11   Transcript in B2014/891 at para 47.

 12   Transcript in B2014/891 at para 48.

 13   First statement of Mr Prior, at TP6.

 14   First statement of Mr Prior, at TP10.

 15   Second statement of Mr Prior, at para 35.

 16   CFMEU written submissions at para 33.

 17   Maritime Union of Australia, The v Patrick Stevedores Holdings Ltd, [2013] FWCFB 7736, BHP Coal Pty Ltd v Construction, Forestry, Mining and Energy Union, [2013] FCA 1291 and in relation to picketing activity, Williams v “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU), (2009) 178 IR 458.

 18   [2013] FWCFB 3793 at paras 36–49.

 19   Davids Distribution and the National Union of Workers, [1999] FCA 1108, at paras 84 and 87.

 20   Telstra Corporation Limited v Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia, [2009] FWAFB 1698, at para 12.

 21   Telstra Corporation Limited v Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia, [2009] FWAFB 1698, at para 18.

 22   Construction, Forestry, Mining and Energy Union v Yallourn Energy Pty Ltd (Yallourn), [2000] FCA 1070, at para 17.

 23   Alcoa of Australia Limited v The Australian Workers’ Union, [2010] FCA 278, at para 35.

 24   Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union v Pinnacle Career Development Pty Ltd,[2010] FCA 1350, at para 58.

 25   Davids Distribution Pty Ltd v National Union of Workers, [1999] FCA 1108.

 26   Transcript, at para 734.

 27   PR554130.

Printed by authority of the Commonwealth Government Printer

<Price code C, PR554173>