Construction, Forestry, Maritime, Mining and Energy Union v Victoria International Container Terminals Limited T/A Victoria International Container Terminals (Vict)
[2020] FWC 6623
•10 DECEMBER 2020
| [2020] FWC 6623 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.437—Protected action
Construction, Forestry, Maritime, Mining and Energy Union
v
Victoria International Container Terminals Limited T/A Victoria International Container Terminals (VICT)
(B2020/792)
COMMISSIONER WILSON | MELBOURNE, 10 DECEMBER 2020 |
Proposed protected action ballot of employees of Victoria International Container Terminals Limited – Section 443(5) - Whether exceptional circumstances justify extended notice period for employee claim action – Exceptional circumstances found – Period extended
[1] The Maritime Union of Australia Division of the Construction, Forestry, Maritime, Mining and Energy Union (MUA) has made an application for a protected action ballot order (PABO) pursuant to s.437 of the Fair Work Act 2009 (the Act). The application seeks a ballot to be conducted of 130 employees of Victoria International Container Terminals Limited (VICT) engaged in the servicing of shipping containers for import and export. The employees are bargaining for an enterprise agreement to replace the one presently in operation, the Victoria International Container Terminal Operations Agreement 2016 1 the nominal expiry date of which was 19 October 2020.
[2] The MUA is the bargaining representative for the employees in question.
[3] Section 441 of the Act provides that the Commission must, as far as practicable, determine an application for a PABO within two working days after the application is made. The application was lodged with the Commission on Thursday, 3 December 2020 and on Monday, 7 December 2020, in response to correspondence from the Commission, VICT advised it sought the Commission exercise its discretion under s.443(5) of the Act to extend the period of written notice beyond 3 working days on the basis that exceptional circumstances exist that would justify such an extension. In the usual course, the matter was referred for listing and was received by my Chambers on Tuesday, 8 December 2020. Although a hearing was initially listed for 4.15PM on Wednesday, 9 December 2020 that did not proceed as the matter was determined on the papers after substantial agreement on an order was reached between the parties.
[4] Agreement followed correspondence to my Chambers on Tuesday, 8 December 2020 from Seyfarth Shaw Australia on behalf of VICT who advised that the parties agreed 5 working days' notice of protected industrial action is acceptable in the circumstances. The MUA also confirmed this position in correspondence to my Chambers.
[5] I indicated to the parties that I would consider the matter on the papers if the parties provided submissions and a statutory declaration addressing the matter of “exceptional circumstances” in s.443(5) of the Act.
[6] Mr Aarin Moon, an Organiser with the MUA, provided the statutory declaration required by the Fair Work Commission Rules in support of the making of the application.
[7] VICT provided an outline of submissions and a statutory declaration from Patrick Chan, the Respondent’s Chief Commercial Officer.
[8] After reviewing all the material filed, I advised the parties that I would determine the matter on the papers unless either party pressed for a hearing. As neither party requested a hearing, the scheduled listing was vacated, and the matter determined on the papers.
[9] The application made by the MUA is for a ballot to be conducted of employees by the Australian Electoral Commission (AEC) with the ballot closing 6-weeks after the ballot opens. The initiating application had a single question with 20 elements proposed to be put to employees. The proposed question asks those being balloted whether they “for the purpose of advancing claims in the negotiation of an enterprise agreement to govern the terms and conditions of your employment with VICT, authorise protected industrial action, separately, concurrently and/or consecutively”. Correspondence received from the MUA on Tuesday, 8 December 2020 advised that the MUA wished to remove item 10 from the proposed questions to be put to employees. This was confirmed in an amended draft order filed by the MUA on Wednesday, 9 December 2020. Four of the elements of the question ask authorisation for successively increasing length of “stoppages of work” ranging from 1-hour duration to 24-hours duration. Six elements are for “unlimited number of bans on the performance of work”. The remaining items are for “unlimited number of bans” on matters including but not limited to the working of overtime, work duties and the use of personal mobile phones.
[10] Section 437 of the Act enables a bargaining representative to apply for a PABO subject to the requirements set out therein and the Commission must make a protected action ballot order in relation to a proposed enterprise agreement in the circumstances set out in s.443. Section 443 is in the following terms:
“(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.”
[11] In particular it is to be noted that the Commission must make an order if there is an application under s.437 and it 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.
[12] There is no argument before me that the requirements of s.443 have not been met. The statutory declaration of the MUA’s Aarin Moon states his union is a bargaining representative along with the Australian Maritime Officer Union (AMOU) and the Electrical Trades Union (ETU). The statutory declaration sets out the process of bargaining to date with the key events outlined below:
• 11 March 2020, VICT issued employees with the Notice of Employee Representational Rights and a marked-up version of the first proposed agreement;
• 24 March 2020, the log of claims on behalf of MUA members was provided to VICT;
• 25 March 2020, VICT provided a second proposed agreement;
• 27 March 2020, VICT confirmed the second proposed agreement would be put to a vote on 6 April 2020;
• An email exchange followed between the MUA and VICT with the MUA attempting to set dates for bargaining meetings;
• 3 April 2020, an email exchange occurred between the MUA and VICT over the MUA’s concerns about employees being threatened that they would return to the Stevedoring Industry Award 2010 if they did not vote in favour of VICT’s second proposed agreement. VICT denied any threats being made;
• 6-9 April 2020; VICT conducted a vote on the second proposed agreement. The vote was unsuccessful;
• 17 April 2020, the MUA made an application to the Commission for a bargaining order against VICT;
• 29 May 2020, a revised log of claims was provided by the MUA;
• 5 June 2020, first bargaining meeting;
• 15 June 2020, second bargaining meeting;
• 23 June 2020, VICT provided employees with a “marked up” version of the second proposed agreement, the second proposed agreement itself and a letter from the VICT Chief Operating Officer supporting the second proposed agreement;
• 10 July 2020, VICT provided employees with the Ballot Version of the proposed second agreement, the “marked up” version of the proposed second agreement, an explanatory document for the proposed second agreement and the Stevedoring Industry Award 2020;
• 20-23 July 2020, VICT conducted a vote on the proposed second agreement;
• 24 July 2020, VICT confirmed to MUA that the vote was unsuccessful;
• 28 July 2020, MUA contacted VICT with concerns about good faith bargaining;
• 31 July 2020, VICT contacted the MUA advising they would later discuss dates and times for bargaining meetings;
• Mid-August 2020, the lead negotiator for VICT changed;
• 8 September 2020, third bargaining meeting;
• 1 October 2020, fourth bargaining meeting;
• 20 October 2020, fifth bargaining meeting;
• 30 October 2020, sixth bargaining meeting;
• 6 November 2020, seventh bargaining meeting;
• 17 November 2020, eight bargaining meeting;
• 20 November 2020, ninth bargaining meeting;
• 27 November 2020, tenth bargaining meeting;
• Meetings continue to be scheduled.
[13] I am satisfied on the material before me that the statutory criteria are met and that the Commission must therefore make an order pursuant to s.443 of the Act.
[14] Before making an order, I must consider VICT’s submission that the circumstances of the matter enliven the discretion in s.443(5) to extend the notification period for the taking of protected industrial action from 3 working days to 5 working days. The MUA agrees that the provisions of the section are enlivened and submit the notification period should be extended to 5 working days, but because of the limited situation of COVID-19 pandemic related “exceptional circumstances”.
[15] 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.”
[16] VICT’s submissions about whether there are exceptional circumstances justifying a longer period for the notification of protected industrial action include that industrial action impacts on all parties in the supply chain including importers and exporters of goods, trucking companies, the shipping lines and the end customer.
[17] The Full Bench has held in National Tertiary Education Industry Union v Charles Darwin University 2 (NTEU) and endorsed in Construction, Forestry, Maritime, Mining and Energy Union v DP World Brisbane Pty Ltd and Others3 (DP World) that applications for an extended notice period under s.443(5) require probative evidence, with the Commission needing to be satisfied both that there are exceptional circumstances that would warrant an extended period, and that it is appropriate to grant an extended notice period. In this regard, the Full Bench in NTEU stated that to grant an extended period of notice is to interfere with the right of a bargaining representative and its right to provide three working days’ written notice of industrial action and therefore it should not lightly be curtailed without evidence justifying the grant of such power.4 The Full Bench went on to summarise the steps to be taken by the Commission when determining whether to grant such power:
“[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).” 5
[18] The expression “exceptional circumstances” requires consideration of all the circumstances; “[t]o 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.” 6 There is not exceptionality merely on the basis that industrial action might result in adverse consequences for third parties, since a consequence of industrial action is that detrimental effects on suppliers, customers or subcontractors of the employer is an ordinary incident of protected industrial action,7 with DP World finding that “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”.8
[19] VICT submitted about s.443(5) that there is a tendency for exceptional circumstances to be found where interests beyond those of the immediate parties are impacted by the taking of proposed industrial action. 9 It submitted that the exceptional circumstances in this matter arise because of the nature of the services provided by the company as a shipping container terminal operator. Potentially 130 of the 169 employees proposed to be covered by the enterprise agreement were to be balloted, which lead to a conclusion that the impact of protected industrial action on its operations may be substantial:
“15. Ultimately, every supply chain that involves the import or export of goods or raw materials depends on shipping and the services which support it. Stevedoring therefore is a vital link in innumerable supply chains, in a way that few other industries can match.
16. Accordingly, a significant impact would likely be felt by third-party shipping lines and trucking companies and their customers, and ultimately the consumer both in Australia and internationally, were additional time not granted to enable the Respondent sufficient time to take steps to mitigate or ameliorate the impact of any industrial action on third parties.” 10
[20] VICT’s Chief Commercial Officer, Patrick Wai-Kit Chan, provided a statutory declaration in support of his company’s submissions about s.443(5) which cogently addressed the potential impact of protected industrial action upon the VICT’s business and the wider supply chains.
[21] Mr Chan noted that VICT is one of three terminal operators in the Port of Melbourne, responsible for about 34% of the port’s container movements. Mr Chan also noted a situation unique to VICT:
“Because of VICT’s unique position in Port Phillip Bay, it is the only container terminal capable of regularly servicing “large” vessels (being those which carry 8,500 TEU or more). This is because the Site is located on the bay side of the West Gate Bridge and large vessels either cannot get under, or it is difficult for them to get under, the bridge. On average, VICT would service between 2 to 3 large vessels per week. This includes, but is not limited to, the vessels listed at items 15 to 20 of section 2.3 of the Application.” 11
[22] He stated there would be an impact of protected industrial action on trucking company schedules owing to the need for VICT’s export gates to be opened at least 5 days before the expected arrival of a vessel in order to allow sufficient time for goods to be unloaded, processed and transported. Trucking companies’ advance bookings would be likely disrupted if truck spots were missed because of industrial action. There would likely be disruption of shipping lines more generally, beyond Melbourne, since vessels have “windows” at each port for the vessel to be discharged, processed and reloaded. A delay in Melbourne could lead to the need for shipping lines to reduce container exchanges in other ports or skip a port altogether. Further, there would likely be an impact on importers and exporters with goods either not received on time or being stranded in foreign ports, each potentially for a significant period of time. This would likely have a consequential impact for retailers, customers and exporters.
[23] Mr Chan’s evidence also addressed the question of whether a longer period of notice for the taking of protected industrial action might mitigate its impact. He considered five working days’ notice of planned industrial action would assist in mitigation efforts. If it had sufficient time VICT could put in place subcontracting arrangements for its containers to be dealt with by others. Those efforts would require enquiries to be made with other stevedores about the capacity to take on subcontracted work.
[24] Although there may be some difficulty in Melbourne because the other two stevedores, DP World and Patrick have both recently been impacted by industrial action in their own terminals in Melbourne, causing congestion and limiting their ability to further subcontracting work, Mr Chan’s view was that “the more notice that is provided, the better the chances of being able to subcontract work out”. 12 There would also be a need to reach commercial terms about the subcontracting arrangements, as well as to provide advice to supply chain parties that containers would be serviced at another terminal.13 Mr Chan’s evidence also included that five working days’ notice of any industrial action would assist trucking companies to themselves make alternative loading arrangements.14 In relation to the shipping lines, Mr Chan stated that five working days’ notice of any industrial action would assist the lines in dealing with the impact of the delay; notifying their own ultimate customers being the importers and exporters; and to put in place alternative plans which might include adjusting the shipping schedule, or for import containers to be dropped off or collected from a different terminal at the Port of Melbourne.15
[25] The MUA submitted that it did not accept that exceptional circumstances justifying an extended period of notice existed generally, but they did in connection with what was submitted by VICT about the impact of the COVID-19 pandemic, about which VICT had submitted:
“In reaching a conclusion as to “exceptional circumstances” the Commission can, and we respectfully urge, ought take “judicial notice” of the impact of COVID-19. It is well understood that COVID-19 has had an impact on Victorian, Australian and indeed world economies. The importance of trade to economic wellbeing is also obvious. The importance of VICT’s operations to the Port of Melbourne is significant having regards to the volumes it moves as mentioned in the evidence of Mr Chan. Additional notice of protected action will provide some potential to avoid the impact on third parties, left vulnerable by this year’s turn of events, and who will inevitably depend on reliable trade for their economic recovery into 2021.” 16 (footnote omitted)
[26] The MUA submitted about these matters that “[w]e accept that the impact of COVID-19 upon this particular employer at this particular point in time is sufficient to demonstrate that exceptional circumstances exist justifying an extended notice period before the taking of any action”. 17 The MUA did not seek to be heard further if the Commission determined the application in favour of the extended notice period on the COVID-19 ground (or including the ground) outlined above by VICT.
[27] I am satisfied from the evidence and submissions before the Commission that the impact of the COVID-19 pandemic combined with two other matters are the requisite exceptional circumstances. The matters to be taken account of in combination with the pandemic are the supply chain factors identified by VICT, as well as the location of VICT’s terminal in the port of Melbourne, making it the only container terminal able to be accessed by some of the larger vessels because of the physical structure of the West Gate Bridge.
[28] Matters associated with the COVID-19 pandemic and the potential of the impact of industrial action on the supply chains of trucking companies, shipping lines, importers and exporters and their respective customers create an unusual volatility. Although it must be hoped that the worst of the pandemic is now behind Victoria at least, that is by no means certain.
[29] In combination these exceptional circumstances justify a longer notice period for the taking of protected industrial action. Mr Chan’s evidence suggests that the negative impacts of protected industrial action can be ameliorated through additional time being given to VICT and its contractors and suppliers to make alternative arrangements. A further factor justifying a longer notice period is VICT’s location and the consequential capacity factors with the largest ships unable to navigate under the West Gate Bridge, meaning that a mitigation strategy to simply direct shipping to other stevedores may not be open to VICT, to some extent at least.
[30] I am persuaded it is appropriate to exercise the Commission’s discretion to allow a longer period of notice in the circumstances of this case. In doing so however it should be noted that the tipping point in that regard is the connection of the community impact of the COVID-19 pandemic with the supply chain circumstances referred to above. There have been at least two points in the course of the pandemic where the Victorian community was concerned about sustainable supply chains. It is foreseeable, although by no means certain, that the same or similar concerns may again arise in the event of any future COVID-19 spread (which is itself not objectively certain). While general supply chain issues could arise for many reasons if there were to be further pandemic health issues, it is possible that disruption of shipping at VICT and distribution of unloaded product into supply chains may exacerbate the problem.
[31] A further consideration associated with the pandemic is the need for exporters to have certainty their products will be loaded and shipped. Such need is likely more acute as they recover from the worst of economic impact of the recent Victorian Stage 4 restrictions.
[32] Were the pandemic related factors not present, I may not have been disposed to exercise discretion and grant VICT’s request that a longer period of notice for the taking of protected industrial action is justified.
[33] In summary, I am therefore 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 s.414(2)(a) being longer than 3 working days, and that the protected action ballot order issued separately to this Decision will specify a longer period of 5 working days.
COMMISSIONER
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1 AE421804.
2 [2018] FWCFB 4011.
3 [2019] FWCFB 1150, [13] – [16].
4 [2018] FWCFB 4011, [20].
5 Ibid.
6 Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Australian Postal Corporation[2007] AIRC 848, [10], endorsed in NTEU v Charles Darwin University[2019] FWCFB 1150, [14], and Construction, Forestry, Maritime, Mining and Energy Union v DP World Brisbane Pty Ltd and Others[2019] FWCFB 1150, [15].
7 Ibid, [17].
8 Ibid, [17] – [18]; with reference to Davids Distribution Pty Ltd v National Union of Workers [1999] FCA 1108, 91 FCR 463, at [87], (per majority, Wilcox and Cooper JJ).
9 Respondent’s Outline of Submissions, 9 December 2020, [8] – [10].
10 Ibid.
11 Statutory Declaration of Patrick Wai-Kit Chan, 9 December 2020.
12 Ibid, [29(a)].
13 Ibid.
14 Ibid, [30].
15 Ibid, [31].
16 Respondent’s Outline of Submissions, 9 December 2020, [20]
17 Email from the MUA to the Fair Work Commission, 9 December 2020.
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