Construction, Forestry, Maritime, Mining and Energy Union v SA Construct Pty Ltd

[2021] FWC 1167

[2021] FWC 1167

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
Section 437 - Application for a protected action ballot order

Construction, Forestry, Maritime, Mining and Energy Union
v
SA Construct Pty Ltd
(B2021/129)

DEPUTY PRESIDENT ANDERSON ADELAIDE, 4 MARCH 2021

Proposed protected action ballot of employees of SA Construct Pty Ltd – whether notification time should be extended – no exceptional circumstances – orders made

[1] This matter concerns an application made to the Commission on 1 March 2021 by the Construction, Forestry, Maritime, Mining and Energy Union (CFMMEU or the Union) under section 437 of the Fair Work Act 2009 (the FW Act) for a protected action ballot order in relation to certain employees of SA Construct Pty Ltd (SA Construct or the employer).

[2] Section 441 of the FW Act requires such applications to be determined within two working days so far as practicable.

[3] On 2 March 2021 the employer advised that it did not oppose the making of the order but sought that the notification time for any protected action be extended from 3 days to 5 days.

[4] The Union opposes that extension.

[5] Both the employer and the Union have made written submissions on the disputed issue. 1 Each have agreed to the notification-time dispute being determined on the papers.

Facts

[6] SA Construct is a private business operating in the construction industry. It provides construction services to the private and public sector in both Adelaide and regional South Australia.

[7] SA Construct employs persons under the SA Construct Pty Ltd On-site Enterprise Agreement 2016 (the current Agreement).

[8] The current Agreement was approved by the Commission on 6 February 2017 and took effect on 13 February 2017. 2 It reached its nominal expiry date on 6 February 2020. It continues to operate since that date by force of law.

[9] Bargaining for a new Agreement commenced in May 2020. Bargaining meetings were held on 17 July 2020, 16 September 2020 and 15 December 2020. Agreement has not yet been reached.

[10] On 1 March 2021 the CFMMEU made this application for a protected action ballot order.

Consideration

Statutory requirements

[11] Part 3-3 Division 8 of the FW Act establishes a detailed scheme concerning protected action in support of bargaining. 3 That scheme prescribes formal obligations on an applicant including the form and content of its application (section 437), when an application may be made (section 438) and notice and service requirements (section 440).

[12] The statutory scheme also imposes requirements on the Commission including the content of an order (section 443(3)), time in dealing with applications (section 441) and giving notice of a protected action ballot order where one is made (section 445).

[13] The substantive provision governing the determination of such applications is set out in section 443 of the FW Act. Section 443(1) provides:

“443 When the FWC must make a protected action ballot order

(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.

(2) The FWC must not make a protected action ballot order in relation to a proposed enterprise agreement except in the circumstances referred to in subsection (1).

(3) A protected action ballot order must specify the following:

(a) the name of each applicant for the order;

(b) the group or groups of employees who are to be balloted;

(c) the date by which voting in the protected action ballot closes;

(d) the question or questions to be put to the employees who are to be balloted, including the nature of the proposed industrial action.

(3A) For the purposes of paragraph (3)(c), the FWC must specify a date that will enable the protected action ballot to be conducted as expeditiously as practicable.

(4) If the FWC decides that a person other than the Australian Electoral Commission is to be the protected action ballot agent for the protected action ballot, the protected action ballot order must also specify:

(a) the person that the FWC decides, under subsection 444(1), is to be the protected action ballot agent; and

(b) the person (if any) that the FWC decides, under subsection 444(3), is to be the independent advisor for the ballot.

(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.

Note:          Under subsection 414(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.”

[14] Section 443 does not confer a broad discretion on the Commission. A protected action ballot order “must” be made if an application is made in proper form and “if 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.” 4

[15] The onus is on an applicant Union to establish, on the evidence, that it has met the requirements of section 443. 5

Formal requirements

[16] I am satisfied that the Union application is made under section 437 and that the Union has complied with the formalities required by the FW Act.

[17] In particular, I am satisfied that:

•  the Union is a bargaining representative of employees who will be covered by the proposed Agreement;

•  that bargaining had commenced and there is thus a notification time;

•  that the application specifies the group of employees to be balloted, and the questions to be put;

•  that the application was accompanied by a statutory declaration dated 1 March 2021 by Clarence Fellowes in the prescribed form as required by the Fair Work Regulations 2009 and Fair Work Commission Rules 2013; and

•  that the Union did, within 24 hours after making the application, give a copy to the employer and to the proposed ballot agent (the AEC).

[18] It is not contested that the Union is and has been “genuinely trying to reach an agreement” within the meaning of section 443(1)(b) of the FW Act.

Notification period

[19] SA Construct submit that the notification time should be extended to five days for the following reasons:

•  contractual obligations - should construction be delayed by industrial action, the business could face liquidated damages as well as have construction schedules disrupted on public and private projects of importance;

•  logistics – should industrial action occur, time is required to secure alternate labour to maintain construction. Extended time is required to do so, particularly on projects in regional South Australia where labour supply is limited. Time is also required to arrange transportation and accommodation;

•  safety - should industrial action occur and adequate labour replacement not be found, safety on site could be compromised; and

•  nature of the work - should industrial action occur and adequate replacement labour not be found, the specialised work that needs to be carried out in short timeframes may be unable to be carried out.

[20] The CFMMEU submit:

•  only in exceptional circumstances can the Commission extend the time;

•  the circumstances facing this construction company in the face of protected action are not out of the ordinary or usual; and

•  industrial action, by its very nature, is likely to cause disruption and inconvenience to a business including its contractual arrangements and production schedules.

[21] Section 443(5) of the FW 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, the protected action ballot order may specify a longer period of up to 7 working days.”

[22] Are there exceptional circumstances warranting an extension?

[23] The material before me does not establish exceptional circumstances. Whilst it is readily apparent that SA Construct may experience disruption and delay to its operations, that is not an exceptional circumstance. Industrial action, by its very nature, carries such consequences. It is generally designed to impose a burden on the target of such action. The policy of the FW Act is that, within the confines of lawfully taken protected action, there is no insulation offered to a business from such effects. That is a policy decision of the parliament, not the Commission.

[24] Notification time can only be extended if there are “exceptional circumstances”. Exceptional circumstances only exist where they are objectively found to exist. A claim of exceptional circumstances does not make it so. Past consideration of section 443(5) indicates that making a finding to that effect, and exercising a discretion to extend time, should not be undertaken lightly as an order extending time represents a deviation from the default statutory provision requiring three days’ notice.

[25] I have taken into account that SA Construct has time sensitive contracts and operates in regional areas of the State and that labour supply in those areas may be more limited. However, there are three difficulties in accepting the submission that such a circumstance is exceptional.

[26] Firstly, the mere fact that a construction business operates in regional South Australia and is exposed to the vagaries of local labour supply cannot, of itself, be an exceptional circumstance, otherwise all construction businesses in South Australia operating outside of Adelaide would qualify for extended time simply by virtue of the location of their operations.

[27] Secondly, the logical extension of this submission is that exceptional circumstances exist where an employer is likely to experience delay in securing an alternate labour supply to mitigate the impacts of industrial action. Whilst it is rational for an employer to make contingencies in the interests of its business and customers, exceptional circumstances do not exist when premised on the need for extra time to defeat burdens that arise from the statutory scheme. A desire to mitigate a burden that would necessarily flow from the statutory scheme is not exceptional.

[28] Something of an exceptional character needs to exist, and on the material before me, in this matter that is not the case.

[29] Thirdly, the apprehended difficulty in securing alternate labour is not a current circumstance, but a future possibility. That burden is contingent on not just a protected action ballot authorising industrial action, but industrial action actually being taken, and then that circumstance arising. This level of contingency is not a basis for a clear finding of exceptional circumstances.

[30] For these reasons, whilst I recognise that SA Construct is rightly concerned about the impact of potential protected action and keen to ameliorate its effects, I am unable to conclude that exceptional circumstances exist.

Conclusion

[31] That being so, the Commission is not empowered to extend the notification time. Accordingly, the order for a protected action ballot will be issued requiring a notification time of three working days, as required by section 414(2)(a) of the FW Act.

DEPUTY PRESIDENT

Printed by authority of the Commonwealth Government Printer

<PR727482>

 1   Submission by letter from SA Construct 02/03/2021; CFMMEU Submission in Response (undated)

 2   [2017] FWCA 771

 3   JJ Richards & Sons Pty Ltd v Fair Work Australia [2012] FCAFC 53 at [29] per Jessup J

 4   Ibid at [56] and [69] per Flick J

 5   John Holland v Automotive Food Metals Engineering Printing and Kindred Union (2010) 191 IR 239 at [27]