Construction, Forestry, Maritime, Mining and Energy Union v DP World Melbourne Ltd

[2020] FWC 4147

[2020] FWC 4147

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.526—Stand down

Construction, Forestry, Maritime, Mining and Energy Union
v
DP World Melbourne Ltd
(C2020/2381)

DEPUTY PRESIDENT COLMAN MELBOURNE, 6 AUGUST 2020

Alleged stand down dispute – employees refused to unload vessel on safety grounds related to COVID-19 – employees not paid – whether employees stood down – distinction between stand down and stand aside – relief sought requires judicial power – application dismissed

[1] This decision concerns an application brought under s 526 of the Fair Work Act 2009 (Act) by the Construction, Forestry, Maritime, Mining and Energy Union (CFMMEU) in relation to an alleged stand down of employees employed as stevedores by DP World Melbourne Ltd (DP World) at its container terminal at West Swanston in Melbourne.

[2] The union contends that DP World stood down employees who from 31 March to 2 April 2020 refused to unload the Xin Da Lian on safety grounds connected with the COVID-19 pandemic. It says that the company did not comply with the requirements of s 524, because none of the circumstances identified in that section were engaged. In particular, it says that employees were not engaged in industrial action for the purpose of s 524(1)(a), the first of the trilogy of bases upon which a stand down is permissible under s 524(1). The union asks the Commission to determine that the company invoked s 524 of the Act but that this section was not validly engaged. It also asks the Commission to determine that there was no basis for the company to withhold payment from employees during the relevant period.

[3] DP World contends that it did not stand down employees at all, but instead refused to pay them for a period of unprotected industrial action, as it is required to do by s 474 of the Act. It says that in any event, the Commission has no power to grant the relief sought by the union, which in substance seeks a declaration of right and would require the exercise of judicial power. In the alternative, the company submits that if it did stand down employees, it did so in accordance with s 524.

[4] The application was listed for hearing before me on 27 July 2020. Three witnesses gave evidence for the union: Mr Mick O’Brien, a foreman employed by DP World who is also a workplace health and safety representative; Mr Craig Smith, a stevedore employed by DP World; and Mr Shane Stevens, secretary of the Victorian branch of the Maritime Union of Australia division of the CFMMEU. Mr Sean Jeffries, general manager operations, and Mr Luke Gravell, operations manager, gave evidence for the company.

Background

[5] DP World operates a container terminal at West Swanson in Melbourne. Shipping containers are brought to and from the quayside by employees operating straddle carriers. Trucks and trains enter the terminal to load and unload containers. The terminal operates continuously.

[6] In the course of March 2020, DP World implemented certain measures to mitigate the risk of its employees contracting COVID-19 from working on vessels. In late March 2020, the CFMMEU published a document called ‘COVID-19 Maritime Industry Framework’. The document stated that vessels ‘must meet the government’s 14-day quarantine guidelines’, and that ‘vessels do not start until 14 days have elapsed since last port.’ Mr Jeffries gave evidence that he became aware of this document and considered that it did not align with the relevant government requirements. There were no negotiations between the company and the union in relation to the document.

[7] On 31 March 2020, the Xin Da Lian berthed at the West Swanson terminal. It had left Taiwan 11 days earlier and had previously stopped in mainland China. Before it was allowed to dock at the terminal, the vessel was required to obtain a range of clearances, including from the Australian Border Force (ABF) and the Department of Agriculture. From 17 March 2020 all vessels arriving in Australia had been required to submit additional notifications in connection with COVID-19. The Xin Da Lian had obtained all relevant clearances and was granted ‘pratique’ to enter port. It was piloted to the terminal with authorisation from the Port of Melbourne.

[8] Mr Jeffries gave evidence that on the afternoon of 31 March 2020, he telephoned Mr Stevens and said that he understood that there would be an issue with the vessel being worked that evening. Mr Stevens said that this was the case, because fewer than 14 days had passed since the vessel had left its last port. Mr Jeffries said that ’14 days from last port’ was not consistent with ABF advice. Mr Stevens said that ‘our position’ was that there must be ‘14 days from the last port’, and that the Xin Da Lian had not passed the ‘14 day quarantine period’.

[9] Later that afternoon, Mr Stevens sent Mr Jeffries an email, stating that the vessel was still inside the ‘Department of Health’s 14 day quarantine period’, and asking him to confirm that employees would not be required to work the vessel before the end of the 14 day period. Shortly afterwards, Mr Jeffries replied to Mr Stevens, requesting that he provide details of the advice from the Commonwealth Department of Health (DOH) to which he referred, and asking Mr Stevens to explain how any such advice, if it existed, could override the ABF conditions that apply to commercial vessels entering port. Mr Stevens did not reply. In his evidence, Mr Stevens gave a similar account of his interaction with Mr Jeffries that afternoon. He said that he told Mr Jeffries that everyone travelling to Australia should be quarantined for 14 days, and that, for the Xin Da Lian, this period would end only on 3 April 2020.

[10] It is convenient at this point to address the question of whether there were any regulatory restrictions or requirements that prevented employees from working the Xin Da Lian on the evening of 31 March 2020. Mr Jeffries and Mr Stevens both attached to their witness statements a copy of an ABF maritime advice dated 20 March 2020 entitled ‘restrictions on entry to Australia by commercial vessels’, as well as a copy of advice from the DOH dated 30 March 2020 and titled ‘COVID-19 information for the maritime industry’. Neither of these documents establishes a general 14 day quarantine rule for commercial vessels. The ABF advice of 20 March 2020 states that vessels may berth in Australia at any time, but that if a vessel arrives within 14 days from its last international port of call, certain restrictions apply. Among these are that the vessel’s crew must use personal protective equipment in public spaces on board the vessel while non-crew are on board. Clearly, this recognises and anticipates that vessels may be worked by waterside workers during the 14 day period since the vessel’s last international berth. Mr Stevens agreed in cross-examination that these ABF and DOH documents did not prevent employees from working on the Xin Da Lian on 31 March 2020.

[11] In his witness statement, Mr Stevens referred to a different ABF statement, dated 17 March 2020, concerning restrictions on entry to Australia for commercial vessels. This document, which was appended to Mr Stevens’ statement, states that all persons entering Australia after 16 March 2020 must undertake precautionary self-isolation for up to 14 days upon entry. It also states that travel restrictions remained in place in respect of entry to Australia for all travellers, including maritime crew, from mainland China, Iran, South Korea and Italy. However, it does not say that vessels arriving in Australia are to be quarantined for 14 days, and it does not say that vessels cannot be unloaded.

[12] I find that there was no regulatory requirement or restriction that prevented employees of DP World from unloading the Xin Da Lian on 31 March 2020 or on the following days. In the course of the hearing, the focus of the union’s argument shifted from the question of whether there were regulatory requirements that prevented work on the vessel to the question of whether the company had in place adequate occupational health and safety arrangements in light of the relevant COVID-19 risks.

[13] I now return to the night of 31 March 2020. The night shift was due to commence at 10.00 pm. Employees were to start work on the Xin Da Lian. They did not do so. Mr Jeffries said that around 10.00 pm he and Mr Gravell attended the crib room, and that one of the employees said to them that 14 days had not passed since the vessel had left China. Mr Jeffries replied that the vessel had met biosecurity and ABF requirements and had been granted access to port. He said that the vessel’s last port of call had been Taiwan, and that it had stopped in mainland China over 14 days ago. Another employee said that the vessel had to pass a 14 day quarantine period. Mr Gravell replied that the restrictions placed on vessels were different from the restrictions placed on their crew. He read through the ABF advice, confirming among other things that crew are required to wear PPE when stevedores are on board. There was further discussion, in the course of which several employees said that there was a safety issue associated with working on the vessel. Mr Jeffries replied that he did not believe that there was a genuine safety issue. He then told employees:

‘If you refuse to work the vessel as directed, I will be treating this as unprotected industrial action, you will be stood down and not paid for the shift for not following a reasonable direction and you will be subject to disciplinary action.’

[14] Mr Smith gave evidence that Mr Jeffries told the employees that they were stood down, but that he did not recall either Mr Jeffries or Mr Gravell stating that they considered employees’ actions to constitute illegal industrial action. I prefer the evidence of Mr Jeffries on this point. His evidence was clear and detailed. It is consistent with the position of the company set out in its disciplinary letters to employees in early April, and in the letter that the company sent to the union on 2 April 2020. Mr Smith may simply not have heard Mr Jeffries refer to unprotected industrial action.

[15] Mr Jeffries’ evidence was that, in using the words ‘stood down’, he did not intend to convey the meaning suggested by the union. He said that he used these words to convey to employees that they would be ‘off pay’ and that there would be financial consequences for them if they refused to do the work that they had been allocated. I accept this evidence. It is consistent with the context of the discussions Mr Jeffries had with employees.

[16] Mr Jeffries said that he and Mr Gravell later went through the labour sheets and identified the employees who had refused to work the vessel. Mr Jeffries said that he and Mr Gravell considered their conduct to be unlawful and that these employees were later subjected to disciplinary action.

[17] Mr Jeffries gave evidence that early on the following morning, 1 April 2020, he attended the start of day shift. Employees rostered to work the vessel failed to commence work. The foreman, Mr Wayne Saunders, said that the vessel had not met its 14 day quarantine and that employees did not think it was safe. Some of the other employees said that there was a safety issue. Mr Jeffries told the employees that he did not believe that there was a valid safety issue because the vessel had been approved by the ABF, that employees were taking unprotected industrial action and that they would be stood down and disciplined accordingly.

[18] On the afternoon shift of 1 April 2020, Mr Gravell attended the pre-shift toolbox meeting. Employees rostered on shift did not commence work on the Xin Da Lian. Mr Gravell’s evidence was that he told employees that, given they were refusing to work, the company considered them to be taking unprotected industrial action and that they would be ‘stood down off pay’ and were not required to remain on site. Seventeen employees reported sick for that shift. Mr O’Brien’s evidence of this meeting generally aligned with that of Mr Gravell. He said that employees were told that the company believed that they were taking industrial action, and that they were stood down without pay.

[19] On the night shift of the same day, 34 employees called in sick. The five remaining employees were deployed to landside operations. Employees who reported sick on this and other shifts were asked to provide medical certificates and those who did not do so were considered by the company to have taken unprotected industrial action.

[20] At the commencement of day shift on 2 April 2020, 22 employees called in sick, leaving ten employees available for work. They were deployed on a lashing gang to work on the Xin Da Lian. The employees refused to perform work on the vessel. Mr Jeffries told employees that they were refusing to follow a reasonable direction, that he would treat this as unprotected industrial action, and that they were ‘stood down’ for the shift, and ‘off pay’.

[21] A similar series of events unfolded on the afternoon shift on 2 April 2020. Normal work recommenced on the night shift of 2 April 2020. Employees rostered on that shift worked on the Xin Da Lian as required by the company.

Findings

[22] I make the following factual findings. First, from 31 March to 2 April 2020, employees on the five shifts in question were required by the company to work the Xin Da Lian but refused to do so and were not paid. Secondly, on each occasion, Mr Jeffries or Mr Gravell told employees that they were ‘stood down’ and that the company considered their refusal to work the vessel to be unprotected industrial action.

[23] Thirdly, I find that Mr Jeffries and Mr Gravell intended to convey from their use of the words ‘stood down’ that employees would not be paid because they would not do the work that the company required of them, which was to work the Xin Da Lian. I further find that this was the objective meaning of the words ‘stood down’ in the context in which they were used.

[24] Fourthly, I find that, from 31 March to 2 April 2020, there was work for the employees to perform, namely the unloading of the vessel Xin Da Lian.

[25] Fifthly, although it is not necessary for me to make a finding about whether there was other work that employees could have been assigned to do during this period, I will record that in my opinion, the evidence does not establish that other useful work, aside from working the Xin Da Lian, was available on the shifts in question.

[26] As will become apparent, it is not necessary for me to determine whether employees were engaged in unprotected industrial action. I therefore do not propose to make findings about the appropriateness of the company’s safety arrangements, or whether the employees’ concerns about the safety of working the Xin Da Lian were well-founded and within the compass of s 19(2). I would however reiterate that there was no regulatory restriction or requirement that prevented employees from working on the vessel from 31 March to 2 April 2020. I also note that I accept the evidence of Mr Smith that he was genuinely fearful of contracting the virus, given his particular family circumstances.

The relevant provisions

[27] Section 524(1) provides:

‘An employer may, under this subsection, stand down an employee during a period in which the employee cannot usefully be employed because of one of the following circumstances:

(a) industrial action (other than industrial action organised or engaged in by the employer);

(b) a breakdown of machinery or equipment, if the employer cannot reasonably be held responsible for the breakdown;

(c) a stoppage of work for any cause for which the employer cannot reasonably be held responsible.’

[28] Section 526(1) provides that the Commission may deal with a dispute about the operation of Part 3-5. Section 526(2) states that it may do so by arbitration. Section 526(3) sets out certain standing requirements, which are clearly met in this case.

Submissions of the parties

[29] The CFMMEU contended that the company invoked and purported to implement a stand down under s 524 of the Act, but that there was no proper basis for it to do so. It said that company managers clearly told employees on the relevant shifts that they were ‘stood down’, and that the reason for this was because employees were engaging in unprotected industrial action, which is the circumstance identified in s 524(1)(a).

[30] The CFMMEU contended that the employees were not in fact engaged in industrial action at all, because their refusal to unload the vessel was based on their reasonable concern about an imminent risk to their health or safety, namely the risk of contracting COVID-19 while working the vessel, and that their actions fall within the exception to the definition of industrial action in s 19(2) of the Act.

[31] The union submitted that, either in terms or in substance, the company effectuated a stand down of employees that did not conform to s 524, and that the Commission should exercise its power under s 526 of the Act to arbitrate the dispute. In this regard, the union said that s 526(3) requires the Commission to take into account fairness between the parties concerned, and that in the present case this requires recognition of the safety risk posed to the employees in question by the COVID-19 pandemic. The union said that employees were stood down when they should not have been, as none of the circumstances identified in s 524 were present. It further submitted that, as no industrial action occurred, s 474 of the Act was not applicable, and no deductions were required or authorised by that section.

[32] DP World submitted that the union’s application was misconceived, because the company never purported to stand down employees. Although its managers told employees that they were ‘stood down’, it was clear from the context that this meant employees would not be paid because they would not work as directed. The company says that there was no ‘period in which the employees cannot usefully be employed’ for the purpose of s 524. The employees were able to be usefully employed unloading the vessel, which is what the company wanted the employees to do, but they refused to work.

[33] The company further submitted that there were no genuine safety concerns or risks that would bring employees’ refusal to work within the exception in s 19(2), and that, because the employees had engaged in unprotected industrial action, the company was right to withhold pay, as s 474 of the Act requires.

[34] In the alternative, the company submitted that, if the Commission were to find that it had stood down employees under s 524, there was in any event no other available work for employees to do, aside from unloading the vessel, and that there was no obligation to pay the employees for the shifts in question. I understand that in this respect, the company would seek to rely on the circumstance in s 524(1)(c).

Consideration

[35] Section 526 states that the Commission may deal with a dispute about the operation of Part 3-5. In the present case, there is a threshold dispute about whether the company in fact stood down employees in purported compliance with s 524. This is a dispute about whether Part 3-5 has any operation at all in the present circumstances. It is a dispute about jurisdiction. If there was no stand down for the purpose of s 524, the Part has no operation, the Commission has no power, and the application must be dismissed.

[36] In my view, it is clear that the company did not stand down employees under s 524. I have earlier stated my finding that Mr Jeffries and Mr Gravell did not intend to convey by the words ‘stood down’ that the company was standing down employees under s 524. Rather, they intended to convey that employees would not be paid because they would not do the work that the company required of them, which was to work the Xin Da Lian. Moreover, this was the objective meaning of the words ‘stood down’ in the context in which they were used. It follows from these findings that the union’s contention that the company purported to stand down employees under s 524, in terms or in effect, must be rejected.

[37] Section 524 commences by stating that an employer may, ‘under this section’, stand down an employee during a period in which the employee cannot usefully be employed because of one of the three circumstances that are then identified. The significance of an employer standing down an employee is that the employer is not required to make payments to the employee for the period of the stand down (s 524(3)). The section confers a right on an employer not to pay employees in particular circumstances. In my view, the exercise of the right must be volitional. I find it difficult to see how an employer could be said to have stood down an employee under s 524 if it did not exercise its right under that section.

[38] An employer may only stand down employees ‘during a period in which the employee cannot usefully be employed’ because of one of the three circumstances. Although the section does not explicitly say so, it is clear that the employer would have to at least believe that there was no useful work for employees to perform. In a s 526 matter, the employer’s contention that there is no useful work for employees to perform is typically at the centre of the dispute. But in the present case, the company insisted that there was work to be done, namely the unloading of the vessel. It did not tell employees that they were stood down due to the unavailability of work. It told employees that they were ‘stood down’ because they would not do the work they had been directed to perform. In fact what occurred, in ordinary industrial parlance, is that employees were ‘stood aside’.

[39] A stand down does not occur simply because a manager uses the words ‘stand down’. In Coal and Allied Mining Services Pty Ltd v MacPherson 1, a Full Court of the Federal Court held that, although the employer in that case had used the words ‘stand down’, it was clear from the context that it had not stood down the employee in question due to the unavailability of useful work. Rather, there had been work for the employee to do, but the employee had chosen not to do it. Marshall and Cowdroy JJ said that the employee “was not ‘stood down’ as that expression is usually understood in an industrial context,which connotes an absence of work to be done, for whatever cause.”2 It is clear that in the present case, DP World did not decide to withhold payment because of an unavailability of work. It was because employees would not perform work as directed that payment was withheld. The union sought to distinguish Coal and Allied on the facts, as the employee in that case refused to work only part of a shift, but this is not a material difference. In any event, the decision is simply an illustration that the non-industrial, vernacular, loose usage of the words ‘stood down’ will not create a stand down situation when in substance none exists.

[40] The present matter is not a case where employees could not be usefully employed. There was a vessel docked at the terminal. The company required employees to unload it. Employees refused to do so because of their safety concerns. But even if those safety concerns were legitimate (I make no finding on that subject), this would not alter the fact that there was work that the company wanted employees to perform. Section 524 is simply not applicable to a case such as this.

[41] It is a curious feature of this application that the employees whom the union contends were stood down are the same employees whom the employer considers to have taken industrial action. Usually, where employees are stood down on the basis that they cannot be usefully employed because of industrial action, it is the industrial action of other employees that has caused the unavailability of work. The Explanatory Memorandum to the Act provides an illustrative example of a stand down that involves just such a case. 3 This is in keeping with the context of a provision that is concerned with situations where there is no useful work for employees to perform because of reasons beyond the employer’s control. Further, employees who are taking industrial action cannot be paid for the period of the industrial action because of the operation of ss 470 to 475, so there would be no need for a provision to relieve the employer of its payment obligation in respect of those employees. It would not make sense for s 524 to apply to employees who are themselves taking industrial action.

[42] Much of the CFMMEU’s case focused on its contention that employees’ refusal to work the vessel was not industrial action because it was based on a legitimate concern for their health and safety and therefore fell within the exclusion from the definition of industrial action found in s 19(2). But even if that contention is accepted, and the employees did not engage in industrial action, it does not follow that they were stood down for the purpose of s 524. Rather, the implication would be that the company could not rely on s 474 as a reason not to have paid employees their wages on the days in question. If employees’ refusal to work the vessel falls within s 19(2), the union and employees can bring proceedings in a court for breach of the wages provision in the enterprise agreement.

[43] For the above reasons, the company did not stand down employees under s 524. It did not purport to do so, and it did not in fact do so, because there was available work, namely the unloading of the vessel. Whether employees held reasonable concerns about an imminent risk to their health and safety is not a matter I need to determine in these proceedings. However, there was no regulatory impediment to the unloading of the vessel. It had been granted ‘pratique’. The company believed its safety arrangements were appropriate. Employees and the union disagreed. But on any view, the company considered that employees could be usefully employed and wanted them to work.

[44] Even if the company had purported to stand down employees under s 524 and had done so in a manner that did not meet the requirements of s 524, there is a further impediment to the union’s application, which is related to the determination that the union seeks the Commission to make. The CFMMEU submitted that the Commission should determine that the company invoked s 524 when it was not validly engaged, that there was no basis for the company to withhold payments from the employees, and that the company must ‘rectify’ this.

[45] The union’s F13 application had stated that the relief it sought was an order that any deductions from employees’ wages for the relevant period be reversed. In its submissions the union withdrew this claim and asked in effect that the Commission confine any relief to orders that are within the Commission’s power. In particular, the union said that it was not asking the Commission for declarative relief, and that to the extent its application was inconsistent with this position, it amended its application accordingly.

[46] Despite the union’s submissions, what it seeks, in substance, is a decision that determines that the company stood down employees in a manner that did not comply with s 524. Such a decision would be declaratory in nature. It would purport authoritatively to determine whether the company had a legal justification not to pay employees based on s 524 of the Act. Such a decision would require the exercise of judicial power.

[47] The union does not ask merely that the Commission form an opinion about the employer’s compliance with s 524 as a step in the process of deciding whether to create a new right or obligation by arbitration. The union’s application in essence asks the Commission to determine that the employees were stood down unlawfully, and that the company should make rectification, the implication of which is that it must pay employees wages for the shifts in question.

[48] In Bristow Helicopters Australia Pty Ltd v AFAP, 4 a Full Bench of the Commission overturned a decision that had determined that an employer had contravened s 524. Pursuant to the decision, orders had been issued requiring the employer to treat the stand downs as null and void and to pay the affected employees their wages for the relevant period. The Full Bench held that these orders were beyond power, and referred to the decision of Gibbs CJ inR v Gough; Ex parte Key Meats Pty Ltd,5where his Honour affirmed that the Commission’s predecessor had no jurisdiction to determine the legal rights of employees who had been stood down, or to enforce their award rights.6 The Full Bench upheld a different order made by the Commissioner, which had required that the employer withdraw the stand downs and, prospectively, allow employees to return to work. This order was permissible, as it created new rights and obligations and involved the exercise of arbitral power. In my view, Bristow Helicopters usefully illustrates the proper limits of the Commission’s power under s 526.

Conclusion

[49] The company did not purport to stand down employees under s 524. Although its managers told employees that they were ‘stood down’, the intended meaning of these words, and their objective meaning in the relevant context, was that employees would not be paid because they had refused to work as directed. The application raises a dispute about the operation of Part 3-5. I have determined that Part 3-5 has no operation in the present case. Even if the company had purported to stand employees down, the union’s application asks the Commission for a remedy that is in the nature of declarative relief, which requires the exercise of judicial power and is therefore beyond the Commission’s jurisdiction.

[50] For these reasons, the application is dismissed.

DEPUTY PRESIDENT

Appearances:

B. Baarini for the CFMMEU
S. Crilly for DP World Melbourne Limited

Hearing details:

2020
Melbourne
27 July

Printed by authority of the Commonwealth Government Printer

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 1 (2010) 185 FCR 383

 2   Ibid at 389

 3   Paragraph 2078

 4   [2017] FWCFB 487: see [53] to [57]

 5 (1982) 148 CLR 582

 6   At 587