Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v BAE Systems Australia Limited T/A BAE Systems Australia
[2023] FWC 2746
•23 OCTOBER 2023
| [2023] FWC 2746 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.437—Protected action
Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia
v
BAE Systems Australia Limited T/A BAE Systems Australia
(B2023/1123)
| COMMISSIONER LIM | PERTH, 23 OCTOBER 2023 |
Proposed protected action ballot of employees of BAE Systems Australia Limited
This is an application by the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU) pursuant to s 437 of the Fair Work Act 2009 (Act) for a protected action ballot order (Application) in relation to certain employees of BAE Systems Australia Limited T/A BAE Systems Australia (BAE or Employer).
The Application was made on 19 October 2023. That same day, BAE informed the Fair Work Commission (FWC or Commission) that they object to the Application. The Application was subsequently allocated to my Chambers and listed for hearing on 20 October 2023.
Hearing
At the hearing, BAE sought to be represented by Ms Erin Hawthorne of Seyfarth Shaw. This was not contested by the CEPU, and I was satisfied pursuant to s 596(2)(a) of the Act that it would enable the matter to be dealt with more efficiently, noting the complexity of the matter. I accordingly exercised my discretion to grant leave to appear. I am pleased to note that the professionalism and courtesy of Ms Hawthorne and Mr Fox of the CEPU did indeed result in the matter proceeding more efficiently and purposefully.
Prior to the hearing, BAE filed submissions outlining its position as:
· some of the ballot questions as drafted do not meet the criteria set out in section 443(3)(d) of the Act, and accordingly should not be included in the protected action ballot order (PABO) as drafted; and
· if the Commission considers it is required to grant the PABO, there are exceptional circumstances in this matter justifying an extension to the period of written notice referred to in s 414(2)(a) of the Act in respect of all the ballot questions to five working days’ notice for all action.
It otherwise does not challenge the Application.
At the hearing, a short adjournment was granted to allow the parties to engage in private conference discussions. As a result of these discussions, the parties provided to my Chambers agreed amendments to the ballot questions in the Draft Order.
The CEPU provided the declaration of Mr Mark Mocerino, which set out:
(a)the notification time for the proposed enterprise agreement is 17 May 2023;
(b)the steps taken by the CEPU in bargaining with BAE since the notification time; and
(c)that the CEPU has been, and is, genuinely trying to reach agreement with BAE.
Mr Mocerino’s evidence was unchallenged by BAE.
Notice period – evidence
BAE filed the witness statement of Blake Lachlan Pilgrim, the Head of Operations for BAE’s Henderson site.
The CEPU did not contest Mr Pilgrim’s witness evidence and did not file any evidence on the issue of the notice period.
Mr Pilgrim’s evidence is in summary:
The Henderson Site is a 14.5-hectare waterfront, vessel berthing and docking, lay down and fabrication area located within the Australian Marine Complex (AMC).
The AMC provides infrastructure and support to Defence, local marine and mining and minerals industries.
Some parts of the workforce who would be covered by the proposed agreement perform highly specialised work.
BAE’s work on vessels is normally undertaken at three sites, including the Common User Facility (CUF) which is leased from the WA State Government. The lease of the CUF is subject to certain restrictions and flow on effects to other organisations.
There is a standard on-boarding process that is not usually possible to complete in under seven business days, and often takes much longer.
Any engaged labour hire must also comply with the on-boarding process.
BAE is in an alliance agreement with Saab Australia Pty Ltd, Naval Ship Management (Australia) Pty Limited and the Commonwealth to provide maintenance, capability enhancement and sustainment services for the fleet of ANZAR Frigate Ships (Alliance Agreement).
The parties to the Alliance Agreement operate on a “painshare gainshare” basis. This means that any over-performance or under-performance by an Alliance entity is shared on a pro-rata basis across all Alliance entities.
There are multiple contractors on the Henderson site who would be adversely affected by protected industrial action against BAE.
A significant focus of BAE’s work relates to the repair or maintenance of Defence vessels. These vessels are required to be operational and available to Defence at particular points in time.
With regards to BAE’s contact with Defence, it is not suggested that the CEPU’s members going on strike would pose an urgent threat to national security. However, Mr Pilgrim says that delays in BAE’s work on Defence vessels would likely trigger financial penalties or affect the capacity of the Navy to deploy vessels if required.
On the impact of the 15 different types of proposed industrial action, Mr Pilgrim’s evidence examined the impacts of some, but not all the proposed actions.
In his evidence on the proposed ballot questions, Mr Pilgrim states:
Ballot questions (vi), (vii) and (viii) –bans on the use of different trades tools – are a critical part of providing a safe environment. In the absence of using one or any of the tools specified, there is an increased risk of exposure to live electrical connections. Further, bans on the use of trades tools affect the completion of electrical isolations, which means work could not proceed.
Ballot question (ix) – an indefinite or periodic ban on testing – could include a variety of tests, which if not completed could increase the risk of serious injury to the worker or other workers.
Ballot question (xi) – which at the time of the hearing was a ban on the climbing of stairs – is ambiguous and could pose a risk to health and safety of others. I note that this ballot question was amended during the parties’ discussions.
Ballot question (xii) – a ban on all work once the temperature reaches 35 degrees Celsius – is confusing. Again, this ballot question has been amended.
Ballot question (xiii) – bans on the signing of electronic permits – work permits are required to be able to perform critical safety functions on site. There are no other businesses that perform this permit work on site. Without the work permits, work cannot be arranged safely on site.
Further, Mr Pilgrim’s evidence is that BAE is limited in its ability to bring in other workers to perform these critical safety functions.
Notice period – submissions
BAE submits that the circumstances of this matter arise “out of the ordinary course” and are “unusual”, “special” or “uncommon”[1] for the following reasons:
· BAE provides certain services on the Henderson site, which are integrated with and provide safety critical functions that are required for the operations of third parties. As a result, BAE will be required to bring in additional resources to perform those functions.
· Even if suitably qualified candidates are available to start work immediately when industrial action is notified (which they may not be), the onboarding processes required to have workers start on site mean that it will not be possible to have those workers commence working on site in less than seven working days.
· The types of industrial action identified in the Draft Order will affect the operations of an estimated 12-15 other businesses, operating with around 270 other workers on site who are not employed by BAE.
· The proposed actions are likely to affect third parties by impacting on their usual work and schedules; vessel operators; defence requirements; and reputation and capacity to secure future contracts.
· Third parties would likely feel significant impact if additional time were not granted to enable BAE sufficient time to mitigate or ameliorate the impact of any industrial action on third parties, or to enable those third parties to put their own contingency arrangements in place.
BAE contended that in seeking an extension to the notice period, BAE is not seeking to place itself in a position to avoid the cost and inconvenience of protected industrial action. Rather, BAE seeks the notice so that the interests of a range of third parties might be best protected.
Further, BAE submitted that five working days’ notice of any protected industrial action would enable BAE to:
implement replacement worker arrangements as quickly as possible to minimise disruptions to the other businesses on site;
notify other businesses on site and work with them to implement alternative arrangements for their operations; and
notify the vessel operators and Defence, and work with them to explore suitable options to deal with any negative impacts.
The CEPU submitted that exceptional circumstances do not exist for the following reasons:
the impacts outlined by BAE are ordinary commercial impacts from the taking of protected industrial action;
much of the impacts on third parties that BAE relies on are merely descriptors of the leverage from industrial action, which is as intended from the Act;
the presence of important clients (such as Defence) do not make the circumstances exceptional; and
BAE seeks the extension so to engage surplus labour, which would unfairly impact the effectiveness of the industrial action ineffective.
Legislation
Section 414 of the Act provides:
414 Notice requirements for industrial action
Notice requirements – employee claim action
(1) Before a person engages in employee claim action for a proposed enterprise agreement, a bargaining representative of an employee who will be covered by the agreement must give written notice of the action to the employer of the employee.
(2) The period of notice must be at least:
(a) subject to paragraph (b):
(i)if subparagraph (ii) of this paragraph does not apply – 3 working days; or
(ii)if the proposed enterprise agreement is a multi-enterprise agreement – 120 hours; or
(b) if a protected action ballot order for the employee claim action specifies a longer period of notice for the purposes of this paragraph – that period of notice.
(3) A notice under subsection (1) must not be given until after the results of the protected action ballot for the employee claim action have been declared.
Section 443(5) of the Act provides:
(5) If the FWC is satisfied, in relation to the proposed industrial action that is the subject of the protected action ballot, that there are exceptional circumstances justifying the period of written notice referred to in paragraph 414(2)(a) being longer than 3 working days or 120 hours (whichever is applicable), the protected action ballot order may specify a longer period of up to 7 working days.
Consideration
Both parties agreed on the relevant case authorities with respect to s 443(5). BAE submitted a thorough list of other decisions where exceptional circumstances have been found and an extension granted, including cases that were factually similar to this matter. However, both parties agreed that every case turns on its own facts.
Relevantly, in the recent case of NTEU v Charles Darwin University (Charles Darwin University),[2] the Full Bench articulated the following three-step process to guide the exercise of the discretion in s 443(5) of the Act:
“[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).”
As per the first step in Charles Darwin University, I accept Mr Pilgrim’s evidence as summarised at paragraphs [9] to [14] of this decision.
Evaluating that evidence, I also accept that BAE’s circumstances – insofar as they relate to the forms of protected industrial action that create a necessity to source alternative labour – are exceptional. In reaching this finding, I have had regard to the process involved with on-boarding new employees, the specialised nature of BAE’s workforce and the impact to third parties should BAE’s operations stop or be significantly impacted due to protected industrial action.
However, I am not satisfied on the evidence that all the proposed actions will create circumstances that require BAE to engage alternative labour.
As has already been observed at [12] of this decision, BAE did not provide evidence on the impact of all the actions. I note that Mr Pilgrim’s evidence did not explicitly analyse questions (i) – (v). However, as they all relate to stoppages of work, I accept that they would create the necessity to source alternative labour, and thus they give rise to exceptional circumstances.
BAE did not provide evidence on the impact of the industrial actions in ballot questions (x), (xii), (xiv) and (xv). Accordingly, I cannot make a finding that there are exceptional circumstances in relation to those proposed industrial actions.
For the remaining 11 industrial actions, as I have found that they involve exceptional circumstances, I now must consider whether these exceptional circumstances justify a longer notice period. On this evaluative judgment, Vice President Lawler stated the following in Australia Post:
“[20] Taking protected action costs workers. An employer is prohibited from paying employees in respect of periods of protected action and must deduct a minimum of 4 hours pay for any protected action. Employees are prohibited from accepting such payments in any event. A union is prohibited from claiming or taking action to obtain a payment for days employees are engaged in protected industrial action. Contraventions of these prohibitions attract pecuniary penalties. A diminution in the effectiveness of protected industrial action involves an increase in the cost to relevant employees. That is, employees will need to take a given form of industrial action for a longer period in order to inflict a given level of pressure on the employer and thus forego a greater amount of their own pay in order to achieve that level of pressure on the employer. If the employer is able to take effective defensive action the duration of protected action necessary to achieve a given level of pressure on the employer may be greatly increased.
[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.” (emphasis added)
The Vice President further noted that reasonable minds may differ in the assessment of whether circumstances constitute exceptional circumstances that justify a longer notice period.[3]
It is not controversial that the point of industrial action is to create pressure and leverage to advance a party’s bargaining case. The party taking industrial action will seek to maximise the impact of protected industrial action while the party affected by the industrial action will seek to mitigate the impact of the action as much as possible. In the case of employee claim action, the notice period allows for the employer to take mitigation action. It follows that a longer notice period allows the employer a greater opportunity to ameliorate the impact of the employee claim action.
In evaluating whether the exceptional circumstances justify an extension of the notice period pursuant to s 443(5), I find that:
(a)Pressure on third parties and clients can be a part of the leverage of industrial action. The impact on the large number of contractors at the Henderson site is an exceptional circumstance that weighs in favour of justifying the extension of the notice period. However, the Act does provide recourse where protected industrial action is threatening to cause significant harm to a third party. On balance I find that the impact on the large number of contractors in this matter slightly weighs in favour of granting an extension to the notice period.
(b)I am not persuaded that the impact on the Alliance Agreement is a factor that weighs in favour of justifying the extension of the notice period. The Alliance’s ‘painshare gainshare’ agreement is the tacit acknowledgment that there will be under-performance or tough times, and the Alliance entities would have known that this can include one entity’s workforce taking protected industrial action. I further note that the Alliance entities would also have recourse to make an application pursuant to s 426 of the Act.
(c)The time involved in on-boarding alternative labour and the difficulty in sourcing any alternative labour weighs strongly in favour of justifying a longer notice period.
(d)Granting an additional notice period would reduce the potency of the industrial action, which weighs against a finding that an extension of the notice period is justified.
(e)Of the safety concerns outlined by BAE, section 424 the Act provides recourse for BAE to apply to terminate the industrial action should there to be a risk to life, personal safety, or health or welfare. Section 415(1) of the Act also strips away the protection of protected industrial action where that action involves or is likely to involve personal injury. I further note that the amended ballot questions in the Draft Order acknowledges s 415 of the Act and expresses the joint position of the parties that no person should allow any imminent risks to safety that involve, or is likely to involve, personal injury. Accordingly, this circumstance does not weigh in favour of extending the notice period.
(f)Of the services BAE provides to Defence, I similarly note that Defence has standing to make an application pursuant to sections 424 or 426. This does not weigh in favour of extending the notice period.
In this case, considering the competing factors, I am not persuaded that the circumstances justify a longer notice period.
If I had been satisfied that the exceptional circumstances justified a longer notice period for the purposes of s 414(2), given the consideration outlined in [31], I would not be persuaded to exercise my discretion to grant a longer notice period.
Conclusion
On the basis of the material before me, I am satisfied that there is a notification time in relation to the proposed agreement and that all the requirements in s 443(1) of the Act have been met.
The ballot is to be conducted by the Democratic Outcomes Pty Ltd T/A CiVS (CiVS). CiVS has recently been approved as an eligible protected action ballot agent under s 468A of the Act[4] and consequently is authorised to conduct the ballot.
For the purposes of s 443(3)(c) and s 448A(2) of the Act, I have determined that the ballot period will be fifteen (15) working days from the date of the Order (23 October 2023).
An order has been separately issued in PR767451.
Upon issuing a protected action ballot order the Commission is required by s 448A of the Act to also make an order directing the bargaining representatives to attend a conference for the purpose of mediation or conciliation in relation to the proposed agreement. An order and directions will accordingly be issued from my Chambers requiring that the parties attend a conference.
COMMISSIONER
Appearances:
J Fox for the Applicant
E Hawthorne for the Respondent
Hearing details:
2023.
Perth
20 October 2023
[1] Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Australian Postal Corporation[2007] AIRC 848 (Australia Post).
[2] [2018] FWCFB 4011.
[3] Australia Post, at [33].
[4] Democratic Outcomes Pty Ltd T/A CiVS [2023] FWC 1400
Printed by authority of the Commonwealth Government Printer
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