Construction, Forestry, Maritime, Mining and Energy Union v DP World Brisbane Pty Ltd T/A DP World and Others
[2019] FWCFB 1150
•4 MARCH 2019
| [2019] FWCFB 1150 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.604 - Appeal of decisions
Construction, Forestry, Maritime, Mining and Energy Union
v
DP World Brisbane Pty Ltd t/a DP World and Others
(C2019/974)
VICE PRESIDENT HATCHER | SYDNEY, 4 MARCH 2019 |
Appeal against decision [2019] FWC 908 of Deputy President Bull at Sydney on 12 February 2019 in matter numbers B2019/96, B2019/97, B2019/98 and B2019/99.
Introduction and background
[1] The Construction, Forestry, Maritime, Mining and Energy Union (CFMMEU) has lodged an appeal, for which permission to appeal is required, against a decision of Deputy President Bull issued on 12 February 2019 1 (Decision) and orders issued on the same day2 (Orders) to give effect to the Decision. The Decision concerned applications made by the CFMMEU pursuant to s 437 of the Fair Work Act 2009 for protected action ballot orders in relation to certain employees of four related entities, namely DP World Brisbane Pty Ltd, DP World (Fremantle) Ltd, DP World Melbourne Ltd and DP World Sydney Ltd. We will refer to these entities collectively as “DP World”. These entities operate container terminals at Brisbane, Fremantle, Melbourne and Sydney respectively, each of which is covered by a separate enterprise agreement. The only issue in dispute in relation to the applications was that DP World sought, with respect to each protected action ballot order to be made, that an extended period of 5 days’ notice of employee claim action be ordered pursuant to ss 443(5) of the FW Act. The Deputy President determined that the required period of notice should be extended as sought by DP World, and the terms of each of the Orders reflects this. The CFMMEU contends in its appeal that the Decision was attended by appealable error. The relief it seeks is that permission to appeal be granted, the appeal be upheld, and that each of the Orders should be varied to remove the provision concerning the extended notice period.
Statutory framework
[2] Under the scheme for the taking of protected industrial action in relation to a proposed enterprise agreement contained in Pt 3-3 of the FW Act, the taking of such action must first be approved in a ballot of relevant employees. Section 437 provides for the making of an application for an order for the conduct of such a ballot by a bargaining representative. Section 443(1) provides, in relation to such an application:
(1) The FWC must make a protected action ballot order in relation to a proposed enterprise agreement if:
(a) an application has been made under section 437; and
(b) the FWC is satisfied that each applicant has been, and is, genuinely trying to reach an agreement with the employer of the employees who are to be balloted.
[3] Section 443(3)-(5) concern requirements as to the content of a protected action ballot. Section 443(5) 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, the protected action ballot order may specify a longer period of up to 7 working days.
[4] Section 443(5), as its terms disclose, operates in conjunction with s 414, which concerns the notice requirements for engagement in protected industrial action. In relation to employee claim action authorised by a protected action ballot of employees, section 414 relevantly 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) 3 working days; 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.
Notice of employee claim action not to be given until ballot results declared
(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.
The Decision
[5] After identifying the relevant statutory provisions and outlining DP World’s services and activities, the Deputy President set out the evidence of Mr Mark Hulme, General Manager, Port Botany Terminal, as to the basis for the application for an extension of the written notice period. At paragraphs [18]-[21], the Deputy President said:
“[18] DP World’s customers include shipping lines whose services call at Australian ports to be discharged and loaded. The shipping lines operate on a regular rotation in which they call at a designated sequence of ports and at each port the vessel will be discharged and/or loaded (commonly both) where the shipping line will contract with a stevedoring operator. The regular shipping intervals are achieved by having an optimum speed at which vessels steam and having a certain number of vessels work the same service based on the time taken to complete the voyage.
[19] Mr Hulme’s evidence was that vessels need to be stevedored and able to sail again within the planned shipping window wherever possible because delays in a particular port can have a cascading effect contributing to delays in the subsequent ports of call. In some cases it is possible to make up part of the delay by a vessel steaming faster but this comes at a cost to the vessel operator as a result of increased fuel consumption and cannot be guaranteed to make up the delay. A ship may also reduce its container exchange and spend less time in port where containers which were intended to be loaded at a port remain at that port and the vessel needs to depart before they can be loaded. Vessels may need to omit a port completely.
[20] The issue of delays in port becomes acute where delays in Australia flow on further and require that a service omit a port of call in another region. The cost of this will be borne by the vessel operator which may or may not be the shipping line. Depending on the relevant arrangements Mr Hulme estimated the cost of omitting a port can be in the range of AU$200,000 to $400,000.
[21] This cost is brought about by the need for:
• containers to be discharged at an alternative port and reloaded onto a different vessel or vessels;
• the vessel to increase speed to match a new schedule; and
• additional storage charges applicable to export containers which are unable to be loaded onto the original vessel due to the port omission.”
[6] As to the practice of subcontracting to other stevedore providers during periods of industrial action, the Deputy President outlined Mr Hulme’s evidence as to why this is not an attractive option at [27]:
“[27] Mr Hulme’s evidence was that subcontracting is not an attractive option for DP World as invariably the cost paid to another stevedoring operator foregoes most of the revenue from the shipping service, and in some cases DP World would lose money. Subcontracting is particularly more difficult where ports have lesser capacity, for example in Fremantle where there are only two container stevedoring terminals as opposed to the three in Brisbane Melbourne and Sydney.”
[7] The Deputy President also referred to the evidence of Mr Warren Smith, the Union’s Divisional Assistant National Secretary, in opposition to the extended notice period. This is found at [32] and reads:
“[32] In opposing the DP World application to extend the notification period, the CFMMEU relied upon the witness statement of Mr Warren Smith and his oral evidence. Mr Smith was also subject to cross examination. The evidence of Mr Smith indicated that enterprise negotiations resulting in protected action occurring in respect to DP World had previously occurred in the enterprise agreement negotiations commencing in September 2011 and September 2014. During both these negotiations, Mr Smith’s evidence was that the default three day notice period under the Act had applied.”
[8] The Deputy President also highlighted at least two usual exemptions made by the CFMMEU during periods of industrial action, namely for perishable goods and for CFMMEU bus drivers who escort personnel through a terminal or transfer ship crews.
[9] The Deputy President then set out the relevant principles concerning the correct interpretation and application of the phrase “exceptional circumstances” in s 443(5) of the FW Act and, after referring to the submissions of the parties and noting in particular the CFMMEU’s rejection of DP World’s justification for extension of the notice period as “no more than mere inconvenience”, the Deputy President concluded as follows:
“[44] There is no question that should the Commission exercise a discretion under s.443(5) of the Act to increase the notification period, the result is an interference with the right of the CFMMEU to otherwise provide three working days’ written notice of industrial action that is to be organised and engaged in by employees in support of a proposed agreement. Such a right should not be lightly exercised. There must be “exceptional circumstances” justifying a longer period in relation to the proposed industrial action the subject of the order.
[45] The CFMMEU submit that the justification for the additional 2 working days’ notice put forward by DP World is no more than mere inconvenience to DP World and do not provide exceptional circumstances. It was submitted that DP World simply wants more notice to prepare for the proposed protected industrial action. Attention was also drawn to occasions where in response to protected industrial action having been taken previously DP World has responded with a lock out. I accept that, as put by the CFMMEU, where inconvenience and delay is caused to DP World this is generally part of what protected industrial action is designed to cause and cannot be seen as creating an exceptional circumstance.
[46] I have had regard to the reasons put forward by DP World relating to the extension of the notice period and note as stated in the cross examination of Mr Hulme that delays in providing stevedore services can arise from a variety of events unconnected to the taking of protected industrial action by employees.
[47] I have not been persuaded by the potential spoilage arguments put by DP World of delays in transporting perishable goods, particularly as the additional 2 working days’ notice would not appear to add greatly to the time already spent in such goods either departing or arriving from/at their destination.
[48] I am of the view however, that where the reasons for the extension application are beyond the immediate interests of DP World and the employees concerned and extend to the interests of third parties primarily the shipping lines, they are exceptional. While not being unique or unprecedented they are out of the ordinary course. In respect of whether the exceptional circumstances justify the specification of a longer notice period, I am satisfied on the evidence of Mr Hulme that three working days’ notice is an insufficient period where DP World determines to subcontract out the stevedoring (assuming this is possible) in an attempt to mitigate the potential disruption to shipping schedules of third parties and the resultant costs to be borne by the shipping operator, transport companies and/or exporters and as such justifies the extension sought.
[49] In accordance with s.443(5) of the Act, I am therefore satisfied that there are exceptional circumstances justifying an extension to the period of written notice contained in paragraph 414(2)(a) of the Act from 3 working days to 5 days, noting this period is short of the maximum extent possible of 7 working days.”
Appeal submissions
[10] The CFMMEU submitted that:
● it was not sufficient for the Deputy President to make reference to the correct sections of the FW Act and the authorities without giving active and genuine consideration to the three stage process identified in the Full Bench decision in National Tertiary Education Industry Union v Charles Darwin University 3 (NTEU);
● in respect of the first stage concerning the existence of exceptional circumstances, the Deputy President erred by relying upon DP World’s reasons for bringing the extension application rather than the actual circumstances of the business;
● further, the Deputy President’s finding of exceptional circumstances was based solely on the effect on the interests of third parties, which was not unusual, or out of the ordinary but rather the usual and likely consequence of industrial action in a service industry;
● insofar as the Deputy President took into account disruption to shipping, that could occur for numerous reasons such as delays in arrival or loading of vessels and bad weather;
● the evidence of Mr Hulme went no higher than identifying a potential for disruption which had always existed in the industry;
● in relation to the second stage, the Decision failed to disclose how the exceptional circumstances made it reasonable or necessary to require a longer period of notice, and there was no analysis concerning this issue but merely a reiteration of the matters taken into account in the first stage;
● there was also no balancing exercise undertaken which weighed the exceptional circumstances relating to third parties with the findings in paragraphs [45]-[47] that DP World’s circumstances were not exceptional and that a diminution of employees’ bargaining power would result from an extension;
● the Deputy President also failed to assess the extent of the diminution of the effectiveness of employee’s bargaining power and weigh this against the exceptional circumstances;
● as to the third stage, the Deputy President failed to undertake a separate consideration of whether to exercise the discretion and merely repeated his findings as to the first two stages;
● the effect of the Decision would be that any protected industrial action in the stevedoring industry and perhaps generally would lead to an extended notice period merely because of effects upon third parties;
● accordingly permission to appeal should be granted, the appeal upheld and the Orders amended to remove the provisions extending the notice period for protected industrial action.
[11] DP World submitted that the Decision had to be read fairly and as a whole, not with an eye attuned to detecting error. It was not necessary for the Deputy President to expose every step of his chain of reasoning, nor did his reasons need be elaborate or lengthy, particularly given the command in s 441 that protected action ballot order applications must be determined, where practicable, within 2 working days. Further, it was submitted, it might reasonably be inferred from the Decision that the Deputy President accepted the evidence of Mr Hulme and balanced all of the other relevant matters in finding that exceptional circumstances had been established. In relation to the Deputy President’s consideration in paragraph [48] of the Decision of the three stages identified in NTEU, DP World submitted:
● the Deputy President’s conclusion concerning the existence of exceptional circumstances took into account Mr Hulme’s evidence concerning disruption to shipping lines;
● the CFMMEU’s challenge to the Deputy President’s conclusion in this respect constituted a mere disagreement with an evaluative judgment;
● it was open to the Deputy President to take into account the evidence of Mr Hulme, and the submissions, as to the period of notice that may be required to abate the effect on third parties; and
● reading the Decision as a whole and fairly, the Deputy President gave active and genuine consideration as to whether there were ‘exceptional circumstances’ justifying an extension of the notice period.
Consideration
Permission to Appeal
[12] We have decided to grant permission to appeal. We consider that the appeal raises an important matter in respect to the Commission’s exercise of its powers and functions when determining an application to extend the period of written notice of protected industrial action under s 443(5) of the Act. Specifically, the appeal raises the question of whether and how the interests of third parties, here the shipping lines serviced by the stevedoring industry, should be taken into account when determining the existence or otherwise of “exceptional circumstances” for the purposes of the subsection.
The appeal
[13] The principles to be applied in relation to an extension of the notice period for engagement in employee claim action were comprehensively stated in the Full Bench decision in National Tertiary Education Industry Union v Charles Darwin University. In relation to s 443(5) generally, the Full Bench observed:
“[20] The exercise of a discretion under s.443(5) results in an interference with the right of a bargaining representative to otherwise give three working days’ written notice of industrial action that is to be organised and engaged in by employees in support of a proposed agreement. That this right should not lightly be curtailed by the imposition of a longer period of notice is evident in the grant of power itself. There must be “exceptional circumstances” in relation to the proposed industrial action the subject of the order justifying a longer period.”
[14] In relation to the meaning of the expression “exceptional circumstances”, the Full Bench quoted and applied a decision of the Australian Industrial Relations Commission 4 relating to the equivalent provision in the Workplace Relations Act 1996 which relevantly stated:
“[10] … In summary, the expression “exceptional circumstances” requires consideration of all the circumstances. To be exceptional, circumstances must be out of the ordinary course, or unusual, or special, or uncommon but need not be unique, or unprecedented, or very rare. Circumstances will not be exceptional if they are regularly, or routinely, or normally encountered. Exceptional circumstances can include a single exceptional matter, a combination of exceptional factors or a combination of ordinary factors which, although individually of no particular significance, when taken together are seen as exceptional. It is not correct to construe “exceptional circumstances” as being only some unexpected occurrence, although frequently it will be. Nor is it correct to construe the plural “circumstances” as if it were only a singular occurrence, even though it can be a one off situation. The ordinary and natural meaning of “exceptional circumstances” includes a combination of factors which, when viewed together, may reasonably be seen as producing a situation which is out of the ordinary course, unusual, special or uncommon.”
[15] The Full Bench then set out the three-step decision-making process required in order to determine whether there should be an extension to the notice period pursuant to s 443(5):
“[23] The determination of whether the circumstances in a particular case are ‘exceptional’ involves an evaluative judgement. A proper approach to the exercise of the Commission’s discretion under s.443(5) requires first that a member identify or make findings about the particular facts or circumstances in relation to the proposed industrial action which are said inform the evaluative judgement that such factors or circumstances are exceptional circumstances. The phrase “exceptional circumstances” carries its ordinary meaning.
[24] Secondly, there must be a consideration whether the identified exceptional circumstances are circumstances “justifying” a longer notice period. This also involves an evaluative judgement made on the basis of probative material. The use of the verb “justifying” in s.443(5) signifies that the identified exceptional circumstances must show or prove that it is reasonable or necessary or the circumstances warrant or provide good reason to require a longer period of written notice.
[25] Thirdly, if the member is satisfied there are exceptional circumstances justifying a longer period of notice, there must be a consideration of whether to exercise the discretion and, if so, the additional period of notice that should be given in the circumstances (noting the maximum period).”
[16] Both parties proceeded on the basis that the above were the correct principles to be applied in this matter. The focus of the CFMMEU’s appeal was its contention that the Deputy President had not properly applied these principles. Its most cogent argument in this respect was, we consider, that the Deputy President had found the requisite exceptional circumstances to exist merely on the basis of adverse consequences to third parties (here, the shipping lines with which DP World dealt).
[17] If the Decision was to be read as finding exceptional circumstances on that basis alone, we would accept that it would be in error. In our view, it is difficult to contemplate a situation where the taking of industrial action by employees in the form of a stoppage of work would not involve some impact, with cost implications, on third parties. Detrimental effects on suppliers, customers or subcontractors of the employer are an ordinary incident of the legitimate “duress” 5 or “coercive influence”6 of protected industrial action. It has long been recognised that part of the purpose of the standard notice requirement for protected industrial action is to allow the employer to attempt to ameliorate the consequences for such third parties. For example, in relation to the equivalent provisions in the former Workplace Relations Act 1996, the Federal Court Full Court majority (Wilcox and Cooper JJ) in Davids Distribution Pty Ltd v National Union of Workers7 said (emphasis added):
“[87] We think s170MO(5) was designed to ensure that industrial disputants who are to become affected by protected action, in relation to which their usual legal rights are significantly diminished, are at least able to take appropriate defensive action. For example, an employer may operate a sophisticated item of equipment that will be damaged if precipitately shut down. If warned in advance of a ban that might affect the continued operation of that plant, the employer might choose a controlled shut down during the period of the notice. More commonly, perhaps, an employer might use the notice time to communicate with suppliers and customers, and thereby reduce the consequences for them of the notified industrial action. Very often, the recipient of the notice will respond in a way that has a legal dimension. For example, a union might react to a notice by an employer of intent to lockout some employees by giving notice that all employees will strike indefinitely as from the commencement of the lockout. Similarly, an employer might respond to an employees' notice of bans by giving notice of a lockout of some or all employees.”
[18] Consequently on no basis could it be said that the simple fact that protected industrial action has effects upon third parties requiring ameliorative steps to be taken is “out of the ordinary course”, “special”, “rare” or “uncommon” such as to constitute the requisite exceptional circumstances. Were it otherwise, extensions to the standard notice period under s 443(5) would be granted as a matter of course.
[19] The question here is whether the Deputy President took that approach in his consideration of the exceptional circumstances requirement in paragraph [48] of the Decision. It may be accepted that, taken in isolation, the first two sentences of the paragraph may be read as meaning that the Deputy President erroneously considered that the existence of effects of the protected industrial action on third party shipping lines by itself constituted exceptional circumstances absent any other consideration. However a decision under appeal must be read as whole and not narrowly, 8 and it must be borne in mind that it was not necessary for the Deputy President to set out every step in his chain of reasoning or make findings on every piece of evidence.9 We consider that on a fair reading of the Decision in its entirety, the Deputy President’s reference to the “reasons for the extension application” in the first sentence of paragraph [48] was referring to the detail of the evidence of Mr Hulme, and the submissions based on that evidence, which he had earlier set out in the Decision. Insofar as the Deputy President was satisfied that these “reasons” were exceptional, we consider that in substance this amounted to a conclusion that the particular circumstances described in Mr Hulme’s evidence concerning the specific effects on shipping lines of protected industrial action, and the limited capacity of DP World to mitigate those effects within the standard notice period, constituted exceptional circumstances. Implicit in that conclusion was an acceptance of Mr Hulme’s evidence. Therefore we do not accept the CFMMEU’s contention that the Deputy President found that exceptional circumstances existed merely on the basis of effects upon third parties.
[20] The requirement for exceptional circumstances calls for the particular facts and circumstances of a case to be considered and an evaluative judgment to be made. When the Decision is read in the way we have identified, it does not have any wider implications beyond the particular circumstances of the current negotiations between the parties, nor does it represent any precedent generally or for the stevedoring industry. It cannot even stand as a precedent for DP World itself, noting that in respect of protected industrial action in past enterprise bargaining rounds at DP World there has not even been an application for an extension of the notice period. There can be no doubt that one of the factors to be weighed by the Commission in determining whether exceptional circumstances justify an extension of the written notice period is the impact of the industrial action proposed to be put to a ballot upon the interests of third parties. 10 Plainly, the magnitude of the impact and its ramifications will be a matter of degree in each case, depending on a range of factors, inter alia, the nature, extent of, and duration of the proposed industrial action. This is a matter which may be taken into account together with a range of other relevant factors including but not limited to the direct effect upon the employer, the effect of an extension upon the bargaining power of employees, the range of mitigative strategies which an employer may adopt within the standard notice period, and the capacity of the employer to take protected response action.
[21] In respect of the Deputy President’s consideration concerning the second and third decision-making stages identified in NTEU, we likewise consider that an appropriately broad and generous reading of the Decision discloses that this consideration proceeded upon an assessment of the particular circumstances described in the evidence of Mr Hulme and the other relevant matters set out in the Decision, and did more than pay mere lip service to the statute and the applicable principles. We reject the submission that the Deputy President did not take into account or weigh the effect of an extension upon the employees’ bargaining power; we consider the contrary to be demonstrated by paragraph [44] of the Decision.
[22] It would have been preferable for the Deputy President to have made explicit findings as to his acceptance of the evidence of Mr Hulme and the weighing of the various factors necessary to his statutory task. However, when the Decision is read as a whole and in context, it is tolerably clear that the Deputy President was alive to the necessary factors he was required to have regard to when weighing up all the relevant facts and circumstances. This is evident from the Deputy President’s consideration, and rejection, of certain matters relied upon by DP World as constituting exceptional circumstances in paragraphs [45]-[47] and the comprehensive review of the evidence and submissions. Consistent with Barach, we are satisfied that the Decision captures and explains the essential grounds for the Deputy President’s conclusion that an extension of the notice period should be granted.
[23] We would add further in this respect that s 441 requires applications of this kind to be heard and determined, where practicable, within two working days. In this case, the Deputy President listed the application on 11 February 2019, received written and oral evidence and submissions, and delivered his decision the following day. As a matter of practicality and common sense, it could not be expected that the rigours the Commission usually or at least desirably adopts in the drafting, redrafting and editing of reserved decisions will necessarily be possible within such limited time constraints, or that an entirely pristine or impeccably drafted decision can necessarily be expected. We have taken this into account in our consideration as to whether the Decision was attended by appealable error. In our opinion, and by adopting the conventional approach of considering the Decision as a whole and in context, there was no error of law or principle which warrants appellate intervention.
[24] Having set out the necessary approach and applied himself to that task, the Deputy President determined to exercise his discretion in favour of granting an additional notice period in each case. In that respect, it does not matter that the Full Bench may, in all of the circumstances, have reached a different conclusion. We do not consider that the Deputy President has erred in the exercise of that discretion or that based upon the facts the outcome was so unreasonable or plainly unjust such as to justify the appeal being upheld.
Orders
[25] For the above reasons, we make the following orders:
(1) Permission to appeal is granted.
(2) The appeal is dismissed.
VICE PRESIDENT
Appearances:
Mr S Crawshaw of Senior Counsel with Ms L Doust of Counsel appeared for the appellant. Mr P Wheelahan of Counsel with Mr S Crilly, Solicitor of Seyfarth Shaw appeared for the respondents.
Hearing details:
2018.
Sydney:
February 20.
Printed by authority of the Commonwealth Government Printer
<PR705181>
1 [2019] FWC 908
2 PR704771, PR704773, PR704774, PR704775
3 [2018] FWCFB 4011
4 Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Australian Postal Corporation [2007] AIRC 848
5 See Australasian Meat Industry Employees' Union v G & K O'Connor Pty Ltd [2000] FCA 794 at [10]
6 See Schanka v Employment National (Administration) Pty Ltd [1999] FCA 1334, 166 ALR 663 at [38]
7 [1999] FCA 1108, 91 FCR 463
8 Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259 at 291 per Kirby J
9 Barach v University of New South Wales [2010] FWAFB 3307, 194 IR 259 at [16]
10 See CEPU v Australian Postal Corporation [2007] AIRC 848, 167 IR 4 at [37]
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