Construction, Forestry, Mining and Energy Union v Laing O'Rourke Australia Construction Pty Ltd

[2014] FWC 5434

[2014] FWC 5434

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.437—Protected action

“Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU); Construction, Forestry, Mining and Energy Union
v
Laing O’Rourke Australia Construction Pty Ltd
(B2014/1006)

Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia
v
Laing O’Rourke Australia Construction Pty Ltd
(B2014/1007)

DEPUTY PRESIDENT MCCARTHY PERTH, 15 AUGUST 2014

Proposed protected action ballot of employees of Laing O’Rourke Australia Construction Pty Limited - extension of the period of written notice for industrial action.

The background

[1] This matter concerns applications by the Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union known as the Australian Manufacturing Workers’ Union (AMWU) and the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (the CEPU) for protected action ballot orders (PABOs) pursuant to s.437 of the Fair Work Act 2009 (the FW Act).

[2] As I was satisfied that dealing with the applications at the same time would not unreasonably delay the determination of any of the applications I dealt with the applications together. The Construction, Forestry, Mining and Energy Union (the CFMEU) sought to be joined to the AMWU application at the commencement of proceedings on 7 August 2014. I approved the CFMEU being joined. The AMWU, CEPU and CFMEU will collectively be referred to as “the Unions” throughout this decision.

[3] The application states that the agreement being sought will cover members of the Unions engaged by Laing O’Rourke Australia Construction Pty Ltd (the Employer) at Rio Tinto Expansion Projects at Cape Lambert.

[4] The Employees are currently covered by the Laing O’Rourke Australia Construction Pty Limited and Employees, Western Australian Construction Projects Collective Agreement 2009 (the 2009 Agreement). The 2009 Agreement covers employees throughout Western Australia. It is not disputed that the nominal expiry date has past.

[5] The works being undertaken by the Employer at Cape Lambert were described as follows:

● Cape Lambert is the port facility, comprising of one of the three shipping terminals operated by Rio Tinto for the purposes of exporting iron ore from its operations in the Pilbara. It is approximately 60km from Karratha, in Western Australia.

● Since 2010, Rio Tinto has been expanding its Cape Lambert facilities in order to increase its export capacity. The Employer has been engaged to assist with various packages of those works.

● The Employer is currently engaged by Rio Tinto to undertake three projects at Cape Lambert:

• The project known as ‘G51’ which involves the assembly and installation of 4 machines for the client, Sandvik. These include two stackers, a reclaimer and a ship-loader.



• The project known as ‘G65’ which involves the construction of 28 facilities, being transfer stations and conveyors for the loading and unloading of iron ore for export; and



• The project known as ‘G70’ (Package 3) which involves the expansion of the existing Cape Lambert Port A facility with the installation of 4 transfer stations and conveyors. The scope of work also includes modification works to the existing transfer stations and conveyors.

● Currently, there are approximately 200 employees employed by Laing O’Rourke to perform work at Cape Lambert. Of these Employees, approximately 145 are onsite at Cape Lambert at any one time.

● In the coming months the following is scheduled to occur on the Employer’s projects at Cape Lambert:

• Completion of the works on the G51 project by approximately 2 August 2014;



• Demobilising the Employees currently performing work on the G51 project (approximately 20 Employees), other than a team of 8 personnel which will remain for a further period, until approximately October 2014, to assist in commissioning activities;



• Completion of the works on the G65 project by approximately early to mid-September 2014. Penalties may apply to the Employer for late delivery under its contract with Rio Tinto; and



• Demobilising some of the Employees currently performing work on the G65 project (approximately 130 Employees) and transitioning others to other projects of the Employer, including a number of riggers, crane operators, mechanical fitters boilermakers and trade assistants to the G70 project. The G70 project is expected to continue until between the end of 2014 and March 2015 and will involve approximately 110 employees.

[6] I am satisfied that the applications have been properly made pursuant to s.437 of the FW Act and that the Unions have been and are genuinely trying to reach an agreement or agreements. I am thus obliged to issue a PABO or PABOs.

[7] The only contentious issue involved here is the period of written notice of industrial action required to be given to the Employer. The Employer asserts that there are exceptional circumstances and that the period of 3 working days should be extended to 7 working days (the extension of the notice). The Unions dispute that any circumstances exist that would justify an extension of the notice.

The legislative task

[8] The powers of the Fair Work Commission (the FWC) for an extension of the notice are provided in s.443(5) of the FW Act as follows:

“(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.”

[9] The issue therefore to be addressed here is whether there are exceptional circumstances that justify extending the time for notification. Thus the task for the FWC is to apply the natural meaning of the words and phrase used. The approach as to the meaning to be applied in interpreting s.443(5) is that described in Commissioner for Railways (NSW) v Agalianos 1 by Dixon CJ as follows “the context, the general purpose and policy of a provision and its consistency and fairness are surer guides to its meaning than the logic with which it is constructed.”2

[10] I note that the FW Act provides no mandatory considerations to be taken into account. 3 There also does not appear to me to be any Object in the FW Act that compels any particular construction other than the language used.4

[11] The context of the provision for notice to be given to take industrial action was canvassed in Davids Distribution Pty Ltd v National Union of Workers 5(Davids Distribution). At the time of Davids Distribution the notice period that was provided in the Workplace Relations Act 1996 in s170MO(5) was 3 days but without any capacity for that time to be extended. The observations made in that matter are nevertheless relevant here. It was stated in Davids Distribution that:

“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.”

[12] The parties here all referred to the decision of Vice President Lawler in Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Australian Postal Corporation 6 (Australian Postal Corporation) and urged me to follow the approach there.

[13] The Unions summarised and itemised the approach there as follows:

“5.1 the legislature intended that the period of 3 working days is an appropriate period for an employer faced with protected action to undertake “appropriate defensive action” unless there are “exceptional circumstances justifying the period of written notice referred to in paragraph 414(2)(a) being longer than 3 working days”;

5.2 The test under s.443(5) is correctly understood to require:

5.2.1 the identification of exceptional circumstances; and

5.2.2 satisfaction that the exceptional circumstances, if any are identified, justify an extension of the notice period;

5.3 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 vary rare;

5.4 circumstances will not be exceptional if they are regularly, or routinely, or normally encountered;

5.5 exceptional circumstances can include a single exceptional matter, a combination of exceptional matters or a combination of ordinary factors that when taken together are exceptional;

5.6 the limits on the extent of notice required by s.443(5) (and s.414(2)) are explained by an understanding that the FW Act provides only a very limited opportunity to take protect action, that taking protected action costs workers and that increased notice diminishes the effectiveness of protected industrial;

5.7 if exceptional circumstances are identified, the Commission is required to balance the interests of the employer (and third parties) in having a greater opportunity to take appropriate defensive action, against the diminution in the effectiveness of the employees’ bargaining power that results from such an extension.” (references omitted)

[14] The Employer also accepted the approach adopted by Vice President Lawler in Australian Postal Corporation. They submitted that the approach requires the identification of:

● exceptional circumstances in relation to the proposed industrial action; and

● factors “justifying” the extension of the period of notice.

[15] I agree with the parties and that the approach outlined in Australia Postal Corporation should be followed.

The circumstances

The Employer

[16] The Employer here argued that the following circumstances made them exceptional:

“(a) [The Employer’s] works at Cape Lambert are performed by a fly-in-fly-out workforce, which is accommodated on site;

(b) Cape Lambert is a remote location, with the workforce being flown from Perth in order to perform the Employer’s works, on flights which tend to book out quickly;

(c) During cyclone season (after October) there are additional processes required to ensure the site at Cape Lambert is compliant with the site’s cyclone procedure. The process to shut down [the Employer’s] works at Cape Lambert during that period cannot occur within 3 days and would be more likely to take a week;

(d) [The Employer] owes contractual obligations to its client in relation to the practical completion of its current works and the commencement of its next package of works;

(e) [The Employer’s] ability to perform its scheduled works at Cape Lambert will impact upon the ability of another contractor on site, Monadelphous, to perform its works as scheduled;

(f) There are a large number of employees of [the Employer] (approximately 200), who will be covered by the proposed agreement, who currently perform work at Cape Lambert. Those numbers will fluctuate greatly over August to November 2014, as the dates for practical completion of [the Employer’s] current works at Cape Lambert and the commencement of [the Employer’s] next package of works at Cape Lambert falls within that period;

(g) [The Employer] is in the process of finalising its response strategy to any industrial action taken by its employees at Cape Lambert. Those plans have had to be made despite there being a number of unknown factors, in particular:

• the number of employees who will be included on the ballot and, if it is approved, will be entitled to take the industrial action proposed;



• whether those numbers will justify [the Employer] utilising an alternative workforce for the period of industrial action and what workforce is appropriate; and



• the duration of the industrial action, given the bans proposed have been drafted to be ’for an indefinite period of time’;

(h) Whilst [the Employer] may have an alternative workforce available to it, a time consuming process would need to be undertaken, at the time of notification of the particular type of industrial action, in order to bring in that alternative workforce to replace the employees engaging in the industrial action, including:

• Determining, on the basis of the type and duration of the industrial action and the numbers of employees engaging in it, whether an alternative workforce can be sourced from a contractor or from [the Employer’s] workforce on another project;



• Communicating any temporary transfer to the employees in Queensland who are to be transferred;



• Making accommodation and transportation arrangements in relation to the alternative workforce; and



• Ensuring that the alternative workforce successfully undertake the medical assessment and inductions which are required before access to Cape Lambert will be provided and have been adequately briefed on the work to be performed.”

[17] The Employer submitted that the various forms of industrial action proposed have the potential to prevent the Employer from undertaking its works, ensuring safety on site and meeting its contractual obligations to its client. It was argued that defensive action may be able to be taken in relation to potential consequences but only if adequate notice of the industrial action was given. The issues with respect to safety arose from some of the original questions intended to be included in the ballot however agreement has been reached between the parties which has overcome that issue.

[18] Mr Declan Matthew Larkin, Project Leader, Cape Lambert for the Employer gave evidence. The crux of his evidence is that:

“If the Employees stop work for less than a single day, [the Employer] would look to make arrangements to replan its works scheduled for that day to ensure that it can continue by utilising only the employees who are not taking industrial action. That planning would likely be able to occur within a 3 day period. However, if a stoppage is for a longer period or involves stoppages for consecutive periods, [the Employer] would need to take steps to bring in an alternative workforce, which would require at least 7 days’ notice. It is likely that any stoppage of works that continued for consecutive periods would require [the Employer’s] works at Cape Lambert to be shut down if an alternative workforce could not be mobilised in time.”

[19] This evidence is the foundation of the request by the Employer for an extension of the notice period beyond 3 days, the contention being that if there was a stoppage for more than one day then the Employer will consider implementing its plans for an alternative workforce.

[20] It was argued by the Unions that it is a common occurrence in the resources and resources construction sectors for fly-in fly-out arrangements. They argue that the circumstances here are not of an exceptional nature and that fly-in fly-out arrangements are commonplace.

Conclusion

[21] Here the circumstances are that:

● The worksite is remote.
● Logistical arrangements to get employees to and from the site are complex.
● Site Admission and work commencement requirements are stringent and time consuming.
● Accommodation arrangements for employees whilst they are at the site are tight and logistically complex.

[22] I accept and find that because of the nature of the work arrangements being a fly-in fly-out arrangement that exceptional circumstances do exist here. However that fact and finding alone does not of itself meet the exceptional circumstance test of s.443(5). The exceptional circumstances must be such that they justify an extension of the notice period. Circumstances will differ depending on the nature of the industrial action proposed and factors such as the nature of the roster arrangements, the location of the worksite, the facilities available for accommodating employees whilst they are at the worksite, and the proportion of employees that are on a fly-in fly-out arrangement.

[23] A justification to extend the notice period must arise from the exceptional circumstances diminishing the capacity of the Employer to mitigate or minimise the impact of the industrial action due to those circumstances and but for those circumstances the employer would be in a similar position to other employers where such circumstances do not exist.

[24] The Unions seemed to suggest that I should not extend the notification period if it would have the effect of reducing the potency of the industrial action. If that is what they were suggesting I do not accept that proposition. The very purpose of the notification is to provide the Employer with a capacity to reduce the potency of any industrial action. The purpose of the extension of the notice period is not concerned with the potency of the industrial action but the impotency of a defence to that action.

[25] Here that capacity is only limited to circumstances related to the logistical complexities when a decision is made for other employees to go to the site to perform the work of those that are taking the industrial action and the implementation of that decision. In my view that circumstance would only occur if an extended stoppage of work was proposed.

[26] I do not find the evidence here convincing that the Employer would take, or indeed need to take, any action to engage and reassign and relocate persons or workers from elsewhere unless there was proposed industrial action that would result in a decision to mobilise other workers.

[27] I acknowledge that a problem that arises here is that the some types of industrial action could be for short periods but the Employer might still decide to mobilise other persons to perform the work because of the cumulative effects of different industrial actions. For example if industrial action occurred for say two days and then there was a day of normal work and then another two days industrial action and so on these would be circumstances where I think the Employer would be likely to endeavour to reassign or engage other employees.

[28] The difficulty therefore is endeavouring to forecast and predict what type of industrial action will occur and its impact. The defences available to the Employer are thus somewhat speculative. However the legislation requires that the predictions be made at the time the PABO is issued and not at some later time when there is more certainty about the type, duration and effect of the actual industrial action proposed such as when notice is given. The FWC is therefore left with a significant degree of uncertainty upon which it must judge potentials that may never eventuate.

[29] I am satisfied that the combination of the factors identified above creates exceptional circumstances and that the existence of those circumstances justify an extension of the notice period. Only some of the types of industrial action proposed in the ballot would give rise to the mobilisation requirements and that depends on the cumulative effect of the industrial action. I would prefer to establish a longer notice period beyond 3 days after a decision is taken by the Employer to mobilise other persons to perform the work of those persons taking the industrial action. The problem is the Employer can only make that assessment and decide about mobilisation after the notice has been given. Thus the only practical way around that conundrum is to identify a proxy for that purpose. The only practical proxy I can identify is where the industrial action proposed is going to result in the cumulative number of hours for any group or groups of Employees being more than 30 hours in any five day period. I have based this on a ten hour day.

[30] I therefore will extend the time required for the notice period for industrial action to 7 days but only for industrial action where the industrial action proposed is going to result in a cumulative number of hours of 30 hours in any five day period. A draft of the Order I propose to issue will be provided to the parties. Given the nature of the proposed Order I will have a speaking to the Minutes of the Order.

DEPUTY PRESIDENT

Appearances:

P Lim for the “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU).

J Nicholas for the Construction, Forestry, Mining and Energy Union.

N Ireland for the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia.

A Longland with R Dawson of Herbert Smith Freehills for the Respondent.

Hearing details:

2014.

Perth and Cape Lambert (video hearing)

7 August

Final written submissions:

Applicants, 8 August 2014.

Respondent, 12 August 2014.

 1 (1955) 92 CLR 390.

 2   Ibid at 397 per Dixon CJ.

 3 As contrasted to extensions of time for unfair dismissal applications e.g. s.394(3) of the FW Act.

 4   Kelly v The Queen (2004) 218 CLR 216.

 5 [1999] FCA 1108.

 6   [2007] AIRC 848.

Printed by authority of the Commonwealth Government Printer

<Price code C, PR554112>