Construction, Forestry, Mining and Energy Union v Mammoet Australia Pty Ltd
[2011] FMCA 802
•20 October 2011
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| CFMEU v MAMMOET AUSTRALIA PTY LTD | [2011] FMCA 802 |
| INDUSTRIAL LAW – Alleged breach of collective agreement – failure to provide accommodation – whether obligation to provide accommodation. |
| INDUSTRIAL LAW – Alleged contravention of general protection – adverse action – protected industrial action – withdrawal of accommodation – whether withdrawal of accommodation authorised under the Fair Work Act 2009 (Cth) – whether payment in relation to industrial action. |
| PRACTICE AND PROCEDURE – No case to answer submission – whether election required – factors for consideration. |
| WORDS AND PHRASES – “payment” – “earnings” – “remuneration” – “in relation to”. |
| Fair Work Act 2009 (Cth), ss.12, 16(1), 18, 19(2), 81(5), 117(2)(b), 237, 328, 332, 340, 323, 342, 361, 382, 443, 470, 471(2) Fair Work (Registered Organisations) Act 2009 (Cth) Fair Work (Transitional Provisions and Consequential Amendments) Act2009 (Cth), Schedule 3, Item 2 Fair Work Regulations 2009 (Cth), reg.3.21 Workplace Relations Act 1996 (Cth), ss.187AA, 330, 507 |
| Australian Communications Network Pty Ltd & Anor v Australian Competition & Consumer Commission (2005) 224 ALR 344; [2005] FCAFC 221 Dothie v Robert MacAndrew & Co [1908] 1 KB 803 Fortron Automotive Treatments Pty Ltd v Jones & Ors (2008) 222 FLR 1; [2008] FMCA 622 Messervy v Maldoc Pty Ltd (1995) 63 IR 61 Metro Farms Pty Ltd v Black (1993) 53 IR 289 Rosenqvist v Bowring & Co Ltd [1908] 2 KB 108 Skailes v Blue Anchor Line Limited [1911] 1 KB 360 |
| The Oxford English Dictionary (2nd Edition) Volumes XI and XIII, (Oxford: Clarendon Press, 1989) |
| Applicant: | CONSTRUCTION FORESTRY MINING AND ENERGY UNION |
| Respondent: | MAMMOET AUSTRALIA PTY LTD |
| File Number: | PEG 76 of 2010 |
| Judgment of: | Lucev FM |
| Hearing date: | 26 October 2010 |
| Date of Last Submission: | 26 October 2010 |
| Delivered at: | Perth |
| Delivered on: | 20 October 2011 |
REPRESENTATION
| Counsel for the Applicant: | Mr T Dixon |
| Solicitors for the Applicant: | Construction Forestry Mining and Energy Union |
| Counsel for the Respondent: | Mr S Wood and Mr M Follett |
| Solicitors for the Respondent: | Lander & Rogers |
ORDERS
That the applicant’s application be dismissed.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT PERTH |
PEG 76 of 2010
| CONSTRUCTION FORESTRY MINING AND ENERGY UNION |
Applicant
And
| MAMMOET AUSTRALIA PTY LTD |
Respondent
REASONS FOR JUDGMENT
Introduction
The Construction Forestry Mining And Energy Union[1] applies for orders against Mammoet Australia Pty Ltd[2] with respect to:
a)an alleged breach of the Mammoet Australia Pty Ltd Pluto Project Greenfields Agreement[3] with respect to the failure to provide board and lodging[4]; and
b)an alleged contravention of the Fair Work Act 2009 (Cth)[5] by threatened or actual adverse action with respect to the same employees by the threat of removal of, and removal of, the Accommodation,
to certain employees of Mammoet.
[1] “CFMEU”.
[2] “Mammoet”
[3] “Greenfields Agreement”.
[4] “Accommodation”.
[5] “FW Act”.
Facts
The CFMEU is, and was at all material times:
a)an organisation of employees registered under the Fair Work (Registered Organisations) Act 2009 (Cth);[6]
b)an “industrial association” as defined in s.12 of the FW Act; and
c)subject to the rules of the CFMEU[7] under the FW (RO) Act.
[6] “FW (RO) Act”.
[7] “CFMEU Rules”.
Mammoet is, and was at all material times:
a)a corporation engaged in trade and carrying on business in the State of Western Australia; and
b)a constitutional corporation for the purposes of the FW Act.
At all material times Mammoet employed:
a)Mr Peter Schwarz;
b)Mr Lyle Bolton;
c)Mr Ken Walker; and
d)Mr Nick Landgren;[8]
as crane operators for construction work on the Pluto Project at Karratha in the north-west of Western Australia.[9]
[8] Collectively the “Affected Employees”; individually, Mr Schwarz, Mr Bolton, Mr Walker and Mr Landgren respectively.
[9] “Pluto Project”.
The Affected Employees are, and were at all material times, eligible to be members of, and members of, the CFMEU.[10]
[10] Exhibit 3.
Mr Malcolm Robinson was employed by Mammoet Global BV and engaged as Mammoet’s Project Manager for the Pluto Project, and acted in that capacity and within the scope of the actual or apparent authority of that role, at all material times.
The Greenfields Agreement:
a)at all material times applied to the employment of the Affected Employees;
b)prior to 1 July 2009 was an employer Greenfields Agreement made under s.330 of the Workplace Relations Act 1996 (Cth);[11]
c)at all material times since 1 July 2009 has continued in existence as a collective agreement-based transitional instrument under Item 2 of Schedule 3 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth);[12]
d)passed its nominal expiry date on 19 September 2009; and
e)has not been terminated or replaced.
[11] “WR Act”.
[12] “FW (Transitional) Act”.
On 24 December 2009, Fair Work Australia[13] made a majority support determination[14] under s.237 of the FW Act in relation to a proposed enterprise agreement for the Pluto Project.[15] The Majority Support Determination determined that a majority of employees of Mammoet wanted to bargain for the Proposed Enterprise Agreement.
[13] “FWA”.
[14] “Majority Support Determination”.
[15] “Proposed Enterprise Agreement”.
On 22 March 2010, FWA made an order under s.443 of the FW Act that a protected action ballot be held of employees, including the Affected Employees.[16] The Ballot Order provided for various matters, including the following:
[16] “Ballot Order”.
a)that the CFMEU hold a protected action ballot;[17]
[17] “Protected Action Ballot”.
b)the Protected Action Ballot be conducted by the Australian Electoral Commission;
c)the employees to be balloted were those employees of Mammoet engaged to undertake construction work at the Pluto Project who were members, or eligible to be members, of the CFMEU, and employed as either crane operators or forklift operators (telescopic boom);[18]
d)the date for the closing of voting in the Protected Action Ballot was 20 April 2010;
e)the Protected Action Ballot questions were to ask for authorisation for the following types of industrial action in support of the Proposed Enterprise Agreement;
i)24 hour stoppages of work organised or engaged in for consecutive periods;
ii)48 hour stoppages of work organised or engaged in for consecutive periods;
iii)7 day stoppages of work organised or engaged in for consecutive periods;
iv)28 day stoppages of work organised or engaged in for consecutive periods; and
v)2 hour stop work meetings organised or engaged in for consecutive periods.
[18] “Crane and Forklift Employees”.
The Protected Action Ballot authorised the taking of the proposed industrial action.
On or about 21 April 2010 Mammoet was notified of an intention on the part of the Crane and Forklift Employees to take protective industrial action with effect from 28 April 2010.[19]
[19] “Protected Industrial Action”.
On 27 April 2010, the day before the Protected Industrial Action was due to commence, Mammoet:
a)notified responsive industrial action by way of a 28 day lockout to commence the day following the 28 day Protected Industrial Action by the Crane and Forklift Employees; and
b)advised that it would no longer be responsible for the provision of the Accommodation at the camp annexed to the Pluto Project to the Crane and Forklift Employees (who included the Affected Employees).
Issues
The issues to which the substantive application give rise are these:
a)whether the threat of removal of, and the removal of, the Accommodation was adverse action taken because of a workplace right, that is the right to take Protected Industrial Action, and whether Mammoet did so either because of that right, or for reasons that included that right;
b)whether s.470(1) of the FW Act authorised the action taken by Mammoet because it prohibits payment to employees during a period of industrial action, and is therefore not adverse action under s.342 of the FW Act;
c)whether the provision of the Accommodation is a payment for the purposes of s.470(1) of the FW Act; and
d)whether there was a breach of the Greenfields Agreement because of the failure to provide the Accommodation.
No case to answer
Following the leading of evidence by the CFMEU Mammoet indicated that it intended to submit that there was no case to answer. The question then arose as to whether Mammoet was required to elect to go into evidence prior to making the no case to answer submission.
No case to answer – election
In Fortron Automotive Treatments Pty Ltd v Jones & Ors[20] this Court, having reviewed the relevant authorities and legislation, observed as follows:
29. On the above analysis s.43 of the FM Act and r.16.01 of the FMC Rules prescribe the procedure for this Court in relation to a judgment arising from a no case to answer submission, and when read together with s.81(2) of the FM Act, provide the source of power for the Court to make a judgment in relation to a no case to answer submission, and to deal with all matters incidental thereto, which must include the question of whether an election is or is not made by the party moving the no case to answer submission as to whether to call evidence.[21]
[20] (2008) 222 FLR 1; [2008] FMCA 622 (“Fortron”).
[21] Fortron FLR at 6 per Lucev FM; FMCA at para.29 per Lucev FM.
The Court also went on to observe in Fortron, in determining that an election was not required in the circumstances of that case, as follows:
59. Finally, the Court must consider the objects of the FM Act and FMC Rules. The objects of the FM Act and FMC Rules have been conveniently summarised as follows:
“Reading together the objects of the FM Act in s.3, the mode of operation in s.42, and having regard to the objects of the FMC Rules in r.1.03, it is apparent that the Court is intended to operate in a manner:
(a) as informal as possible in the exercise of judicial power;
(b) which is not protracted in its proceedings;
(c) which resolves proceedings justly, efficiently and economically;
(d) uses streamlined procedures; and
(e) avoids undue delay, expense and technicality.”
60. The procedure in relation to whether an election ought to be made or not in relation to a no case to answer submission is rooted deep in pre-Judicature Act procedure of trial of actions (including civil actions) by juries. Those formalistic procedures adapted to modern civil actions by a judge alone are not necessarily compatible with the object of informal exercise of judicial power by this Court. The informal exercise of judicial power favours no election being required to be made. Similarly, streamlined procedure favours no election being required to be made. Further, insofar as the putting of a no case to answer submission has the capacity to truncate proceedings, and the requirement that an election be made is more likely not to truncate proceedings because it is more likely that the submission will not be made, then the requirement for an election to be made is inconsistent with the objects of the FM Act and the FMC Rules. Given the objects of the FM Act and the FMC Rules it may be that the general rule that an election must be made does not apply, or apply with the same force in this Court as in other courts. That said, each case must be assessed on the merits of the relevant factors as outlined in Amcor Printing, recognising that those factors are not necessarily rigid and that the categories of factors are not necessarily closed.[22]
[22] Fortron FLR at 12-13 per Lucev FM; FMCA at paras.59-60 per Lucev FM (footnote omitted).
By contrast to what this Court said in Fortron the parties’ submissions here were relatively orthodox. Both parties accepted that the general rule was that the proceedings ought not advance without the election being made. Mammoet however argued that there was flexibility in relation to the application of the general rule, and that ultimately the matter was one for the judicial officer hearing the matter.[23]
[23] Cahill v Construction Forestry Mining and Energy Union & Anor (No 2) (2008) 250 ALR 223 at 229 per Kenny J; [2008] FCA 1292 at para.17 per Kenny J..
Mammoet submitted that this was an appropriate case to be disposed of on a no case to answer submission without the election being made because, at least in part, it rested upon points which required no evidence, insofar as the submission was that there was no adverse action under s.342(3) of the FW Act because the action was authorised under s.470(1) of the FW Act, which law prohibited payment for periods of industrial action. That in turn depended upon whether “payment” for the purposes of s.470 meant payment in money or kind. If Mammoet was successful on this point, it also followed that there could be no breach of the Greenfields Agreement. Mammoet submitted that these “knockout points” were appropriately dealt with on a no case to answer basis without the necessity for an election.
The CFMEU argued that an election was required because this was a matter in respect of which s.361 of the FW Act reversed the onus, and that once the applicant had established that there had been Protected Industrial Action, and that accommodation was denied because of the Protected Industrial Action, the onus was then cast on Mammoet, and in order to meet that onus it must present its evidence. The CFMEU went further and said that on the admitted evidence it was apparent that part of the reason for which the accommodation was withdrawn was the Protected Industrial Action. In that regard the CFMEU drew the Court’s attention to a letter dated 23 April 2010 from Mammoet to Woodside Burrup Pty Ltd,[24] which provides as follows:
[24] “Woodside Burrup”; Exhibit 7.
Following the Order for a protected action ballot under the Fair Work Act … and the subsequent ballot … Mammoet … was, on Wednesday 21st April 2010 notified that the 12 employees, consisting of crane operators and forklift operator (telescopic boom), intend to take protected industrial action for a period of 28 days, commencing 06:30 on 28th April 2010.
It is the intention of Mammoet to take appropriate action(s) to endeavour to continue the contracted work as quickly as possible in these circumstances.
Based on this objective, we believe that it is necessary to raise the profile of the issue and take charge, instead of leaving the initiative with the employees taking Protected Industrial Action.
We propose to respond to the protected industrial action by:
(a) Notifying the employees taking the action that, if resident in company provided accommodation, they are to vacate the accommodation at the commencement of the action. If receiving LAHA [living away from home allowance] or Local Living allowance, payment will cease until they return to work.
(b) notifying the employees taking the action that Mammoet is exercising the right to initiate “employer response action” in the form of a 28 day lockout of the employees taking industrial action commencing 06.30 on 26th May 2010.
Mammoet will of course make no payments of wages, expenses, air fares or accommodation during the period of Protected industrial action and Employer response action to the employees involved in the action.
The CFMEU argues that the above evidence was sufficient to:
a)negative the no case to answer submission by putting the evidentiary onus squarely on Mammoet; and
b)require Mammoet to make the election as to whether or not to go into evidence before putting the no case to answer submission.
At hearing, the Court determined that Mammoet would not be required to make the election, and indicated that more detailed reasons would be provided in these Reasons for Judgment.
The Court considers that it is not appropriate in the circumstances of this case, to require an election to be made, as it is not consistent with the objects of the Act and Rules which govern this Court, the effect of which is set out above.
Importantly, consideration of the matter without an election:
a)involves no resort to disputed facts; and
b)may result in a complete answer to the alleged contravention and breach, without the need for a hearing and cross-examination of Mammoet’s witnesses. The question of the reversal of the onus of proof is therefore irrelevant, because even if the case were heard in its entirety, the legal submission at the end of the case would be the same: that is, that there is no adverse action because the provision of the Accommodation is “payment” and must not be made to the Affected Employees during the period of the Protected Industrial Action.
The Court also takes into account the fact that the Court is of the view that hearing time, and therefore cost, is likely to be saved if the no case submission were to be successful, and that no hearing time would be lost if the no case submission is unsuccessful. It is inevitable that there will be a second day of hearing if the matter proceeds because the Court would also require oral submissions from Counsel so that the Court can test the propositions put in any written submissions.
The Court also takes into account:
a)that it appears to have been anticipated, at least, that a no case to answer submission would be run in some shape or form; and
b)what the Court said in Fortron about formalistic no case procedures not necessarily being compatible with the informal exercise of judicial power by this Court, and not necessarily being in accordance with the objects of the Act and the Rules, and that the general default rule therefore might not apply either at all in this Court, or apply with the same degree of force that it applies in other courts.
The Court therefore did not require an election to be made.
No case to answer – principles
In determining a no case submission the Court must consider its ultimate aim to be the attainment of justice.[25]
[25] Rasomen Pty Ltd v Shell Company of Australia Ltd (1997) 75 FCR 216 at 224 per von Doussa, Drummond and Finn JJ; Australian Competition & Consumer Commission v Amcor Printing Papers Group Ltd & Ors (2000) 169 ALR 344 at 357 per Sackville J; [2000] FCA 17 at para.62 per Sackville J.
In Protean (Holdings) Ltd (Receivers and Managers appointed) & Ors v American Home Assurance Co[26] it was said that where a no case to answer submission was entertained without requiring election, as is the case here, three results might ensue. First, that the evidence can sustain a finding against the party making the no case submission, in which case the submission is overruled and the case allowed to proceed. Second, that the case is so finely balanced that the presiding judicial officer is not satisfied that even if the evidence can sustain a finding against the party making the no case submission that the presiding judicial officer is prepared to make the necessary finding, and in those circumstances the no case submission is overruled and the case allowed to proceed. The third possible result is that the submission of no case to answer is persuasive and is upheld.[27]
[26] [1985] VR 187 (“Protean Holdings”).
[27] Protean Holdings at 215 per Young CJ.
In reaching a conclusion that the no case submission ought to be upheld, the Court is entitled to draw all proper inferences from the evidence, but is not entitled to draw inferences against the party making the no case submission based upon absence of evidence from the moving party. This entails a conclusion that the evidence could not sustain a finding against the party making the no case submission, and that judgment must be entered for that party because the other party has not discharged the burden of establishing the case. In this sense the third possibility requires the Court, to ask whether it, on the evidence given, would decide for the party against whom the submission is made.[28]
[28] Protean Holdings at 215 per Young CJ, citing in respect of the third possible result Jones v Dunkel (1959) 101 CLR 298 at 330-331 per Windeyer J.
In an oft cited passage in Residues Treatment & Trading Co Ltd v Southern Resources Ltd[29] four situations in which a submission of no case to answer might be made were identified as follows:
1.Where no reference at all to the evidence is required.
2.Where a reference to the evidence is required only to establish that there is an evidentiary hiatus or failure to adduce any evidence as to an essential element in the cause of action.
3. Where it is argued that on a consideration of the evidence adduced by the plaintiff taken at its highest from the plaintiff's point of view, the evidence could not support the causes of action pleaded.
4. The situation where it is contended that although there is some evidence to support the plaintiff's claim, it is so weak and unreliable that it should be dismissed without calling upon the defendant.[30]
[29] (1989) 52 SASR 54 (“Residues Treatment”).
[30] Residues Treatment at 68 per Perry J.
Mammoet’s submissions
Mammoet submitted that there was no case to answer with respect to either the alleged breach of the Greenfields Agreement or the alleged adverse action contravention.
Mammoet submitted that the Greenfields Agreement must be interpreted as a whole. Mammoet points to a number of clauses throughout the Greenfields Agreement which:
a)require the performance of work;[31]
b)provide for payments of various kinds for “work”, “each hour worked”, “per day worked” and “all work outside ordinary hours” relating respectively to site allowance, first aid allowance, meal allowance and overtime;[32] and
c)do not require the respondent to pay for any day on which work is not performed, and allow entitlements to be reduced, or deductions to be made, when work is not performed.[33]
[31] Greenfields Agreement, cll.8(iii) and 12(i).
[32] Greenfields Agreement, cll.13 (site allowance); 16 (first aid allowance); 17 (meal allowance); and 25 (overtime).
[33] See Greenfields Agreement, cll.34(v) (where employee absent from work without authorisation of Mammoet) and 38(xi) (Mammoet entitled to deduct payment for any day or part of a day on which an employee cannot be usefully employed because of any strike).
Mammoet relies upon clause 38(xii) and (xiii) of the Greenfields Agreement which provides as follows:
(xii)With the exception of authorised paid absences, the company shall not pay for any day not worked by an employee.
(xiii)Employees shall have no right to be paid for any time that they are not ready, willing and available to follow all lawful directions of the company or to carry out all duties that they are capable of performing.
There is no dispute that each of the Affected Employees were “Distant Workers” as defined in Appendix 1 of the Greenfields Agreement, that is, essentially, employees unable to return to their usual place of residence each night.
Mammoet argued that the relevant provisions of Appendix 7 of the Greenfields Agreement dealing with the provision of the Accommodation and Living Away From Home Allowance[34] allow Mammoet to choose whether to provide the Accommodation or pay LAFH Allowance.
[34] “LAFH Allowance”.
Clause (6) of Appendix 7 of the Greenfields Agreement provides that:
(6)The Company shall have the choice of providing each Distant Worker with either suitable board and lodging or paying the Living Away from Home Allowance set out in this Appendix.
Clause (10) of Appendix 7 of the Greenfields Agreement provides that:
(10)A Distant Worker who is not provided with board and lodging by the Company will be paid a Living Away from Home Allowance in accordance with the table below.
There follows a table which sets out LAFH Allowance rates effective from certain dates. At the relevant dates the LAFH Allowance was $490 per week.
Mammoet therefore argued that there cannot be a breach of paragraph 26 of the Amended Statement of Claim insofar as it alleges a breach of clause (6) of Appendix 7 of the Greenfields Agreement because there is no absolute entitlement to the Accommodation, but rather a choice given to Mammoet as to whether it provides the Accommodation or pays LAFH Allowance. Therefore, to not provide the Accommodation is not itself a breach of the Greenfields Agreement.
Mammoet also point to clause (11) of Appendix 7 of the Greenfields Agreement which provides for deduction of the LAFH Allowance for each day or part thereof that a Distant Worker is not ready, willing and available for work, and which is in the following terms:
(11)Where a Distant Worker is absent with respect to any unauthorised absence, the Company shall deduct one seventh (1/7th) of the Living Away from Home Allowance for each day or part thereof that the Distant Worker is not ready, willing and available for work.
Mammoet says that by reason of the Protected Industrial Action from 28 April 2010 the Affected Employees were not ready, willing and available for work, and were engaged in an absence which was not authorised by Mammoet.
Mammoet argued that by reason of the definition of “industrial action”[35] industrial action does not include action that is authorised or agreed to by the employer. Protected Industrial Action is, in Mammoet’s argument, taken following the meeting of certain obligations imposed upon employees, but none of which require authorisation or agreement of the employer per se.
[35] FW Act, s.19(2).
Mammoet therefore argued that if the Accommodation is provided, and it is suitable board and lodging for the purposes of clause (6) of Appendix 7 of the Greenfields Agreement, then there is no obligation to pay LAFH Allowance. But in these circumstances, the Accommodation was not provided at all in the relevant period, and there was also no obligation to pay LAFH Allowance, because there was no authorised absence. If there is any ambiguity about the provisions of clause (11) of Appendix 7 of the Greenfields Agreement then Mammoet argued that it is resolved by clause 38(xii) and (xiii) of the Greenfields Agreement which precludes payment in any event where any day is not worked or an employee does not carry out all duties that they are capable of performing. Mammoet observed that had it been intended that the Accommodation continue to be provided, or LAFH Allowance be paid, then provisions of that type could have been provided.
Mammoet therefore says that there was no obligation to provide any of the Affected Employees with the Accommodation, or to pay them LAFH Allowance, and, therefore, as a matter of construction of the Greenfields Agreement, there was no breach in relation to the Affected Employees. Therefore, taking the CFMEU’s case at its highest, there is no case to answer with respect to the alleged breach of the Greenfields Agreement.
Mammoet also argues that there can be no breach of the Greenfields Agreement in relation to the provision of the Accommodation for the Affected Employees because of the provisions of s.470 of the FW Act. Section 470 of the FW Act provides as follows:
(1) If an employee engaged, or engages, in protected industrial action against an employer on a day, the employer must not make a payment to an employee in relation to the total duration of the industrial action on that day.
Note: This subsection is a civil remedy provision (see Part 4‑1).
(2) However, this section does not apply to a partial work ban.
Note: For payments relating to periods of partial work bans, see section 471.
(3) A partial work ban is industrial action that is not:
(a) a failure or refusal by an employee to attend for work; or
(b) a failure or refusal by an employee who attends for work to perform any work at all; or
(c) an overtime ban.
(4) If the industrial action is, or includes, an overtime ban, this section does not apply, in relation to a period of overtime to which the ban applies, unless:
(a) the employer requested or required the employee to work the period of overtime; and
(b) the employee refused to work the period of overtime; and
(c) the refusal was a contravention of the employee’s obligations under a modern award, enterprise agreement or contract of employment.
(5) If:
(a) the industrial action is, or includes, an overtime ban; and
(b) this section applies in relation to a period of overtime to which the ban applies;
then for the purposes of this section, the total duration of the industrial action is, or includes, the period of overtime to which the ban applies.
Mammoet argued that it is the policy of the FW Act that employees not be paid by an employer if they engage in industrial action, whether protected or otherwise.[36]
[36] Citing a series of cases on the former ss.187AA and 507 of the WR Act, namely, Independent Education Union of Australia v Canonical Administrators & Ors (1998) 87 FCR 49 (“Canonical Administrators”), Ponzio v B&P Caelli Constructions Pty Ltd & Ors (2007) 158 FCR 543; [2007] FCAFC 65 (“Caelli Constructions”); and O’Shea v Heinemann Electric Pty Ltd (2008) 172 FCR 475; [2008] FCA 1799 (“Heinemann Electric”).
Mammoet argues that by reason of s.470 of the FW Act LAFH Allowance cannot be paid to the Affected Employees. It is also argued that Mammoet cannot provide the Affected Employees with the Accommodation because the Accommodation amounts to payment contrary to the terms of s.470 of the FW Act, being payment in kind rather than in money. In relation to the total duration of the industrial action each day Mammoet says that the Protected Industrial Action by the Affected Employees was intended to last all day every day for a 28 day period during which the Affected Employees were not prepared to work, at all, on any of those days. Therefore, Mammoet argues that the terms of s.470 of the FW Act are met, and Mammoet has no case to answer because it cannot either pay LAFH Allowance or provide the Accommodation for the Affected Employees during the period of Protected Industrial Action.
In relation to the claim of actual or threatened adverse action with respect to the Affected Employees by Mammoet, Mammoet argues that adverse action does not include action authorised under the FW Act. Mammoet argues that once it is established that it was not required to pay the Affected Employees for the period of the Protected Industrial Action, its action of not paying them cannot therefore be adverse action for the purposes of s.342 of the FW Act.
Mammoet also argues that the action taken by Mammoet which is relied upon by the CFMEU to establish the actual or threatened adverse action, namely Mr Robinson’s direction to the Affected Employees to leave the camp because there was no longer financial support for the Accommodation, is not adverse action because at the time that those statements were made they related to a period during which the Affected Employees were not entitled to have the Accommodation provided for them by Mammoet or to be paid the LAFH Allowance. In that regard it says that there was no change, in either absolute or relative terms, in the conditions of employment of the Affected Employees and no alteration of their employment terms and conditions to their prejudice. Because the Affected Employees were not entitled to the Accommodation or LAFH Allowance, Mammoet submits it is not something that they can be deprived of, or prejudiced in relation to. Mammoet therefore says that there was no actual or threatened adverse action by it in relation to the Affected Employees.
CFMEU’s submissions
The CFMEU argued that clause 38(7) of the Greenfields Agreement, which is as follows:
(7)Except for Probationary Employees, the Company may terminate the employment of a weekly hired Employee with not more than twelve (12) months continuous service, by informing the Employee on the day on which the employment is to end and paying the Employee compensation in lieu of notice equal to the total of all amounts that, if the Employee had worked thirty-six (36) Ordinary Hours, the Company would have become liable to pay to the Employee for that work.
and clause 40(5) of the Greenfields Agreement which provides as follows:
(5)When an employee is terminated, all entitlements owed to the employee will be paid no later than two working days after the date of termination.
recognises that the amounts to be paid are the amounts contemplated by the Greenfields Agreement, and do not include some form of “payment” for accommodation, because this would result in non Distant Workers working on site being paid different amounts and different entitlements for work performed for performing exactly the same work as Distant Workers.
The CFMEU also submitted that “accommodation in the context of this agreement … [is] something anterior to that wages work bargain” and that it was only once Mammoet provided to prospective employees “the opportunity to be accommodated” that the employees “then go ahead and perform work and are paid according to these provisions in the certified agreement.”[37] It was therefore said that the Accommodation did not form part of the remuneration under the wages-work bargain, and stood outside of the concept of remuneration as it is understood in the Greenfields Agreement. Rather than being remuneration it was argued that the Accommodation was compensation for a situation which is unique to a remote area where those who were Distant Workers had to be accommodated because it was not their normal place of residence.
[37] Transcript at page 52.
The CFMEU also submitted that once Mammoet had chosen to accommodate the Affected Employees there was no longer a choice as to whether they would be accommodated or paid LAFH Allowance, and therefore the basis for the submission by Mammoet that they had a choice as to whether to provide accommodation or LAFH Allowance was wrong. Support was said to be obtained for this by the provisions of clause (7) of the Appendix to the Greenfields Agreement which provides as follows:
(7)Where a Distant Worker seeks to be paid LAFHA rather than reside in Company supplied accommodation, they shall raise the matter with the Company and the following issues shall be taken into account:
(a)the availability of Company provided accommodation;
(b) the availability of alternative accommodation;
(c) the suitability of alternative accommodation;
(d) the personal circumstances of the Distant Worker; and
(e)the expected duration of the Distant Worker’s engagement on the Project.
and clause (9) of the Appendix to the Greenfields Agreement which provides that:
(9)Where the Company elects to provide a Distant Worker with board and lodging and the Distant Worker is not provided with a single occupancy room with an ensuite, the Distant Worker shall be paid an additional flat allowance of $26 for each day they are at work on the Project.
The CFMEU also argued that the Affected Employees made elections as to whether or not the Accommodation would be provided or LAFH Allowance would be provided, and that once those things were sorted out, it is then that work commences. Therefore, it was argued that the provision of the Accommodation was different to the form of remuneration that was contemplated under the Greenfields Agreement.
In relation to the factual circumstances in which the Accommodation was withdrawn the CFMEU referred to a letter from Mr Robinson dated 27 April 2010 in which he advised as follows:
You are advised that Mammoet … will not be responsible for providing Board and Lodging or Living Away From Home Allowance during this period. [The period of the Protected Industrial Action]. Therefore you must vacate the accommodation in Sea Ripple and hand in the key to the room by 06.30 Wednesday 28th April 2010. The management at Sea Ripple will be advised that your accommodation has been removed from that date. It is your responsibility to ensure that all your belongings are removed, as neither Mammoet nor the camp will accept any responsibility for their safekeeping.[38]
[38] Affidavit of Michael Landgren, sworn 28 September 2010, Annexure ML 1 (Exhibit 1).
The CFMEU argues that there was no provision which gives Mammoet a right to ask the Affected Employees to leave the accommodation at any time. It was argued that once an Affected Employee went into the Accommodation that there was a right to the Accommodation. Support was sought for that argument by reference to provisions of a contract between Mammoet and Woodside Burrup which contained provisions as follows:
For invoicing purposes, occupancies shall be deemed to commence on the day of arrival of an occupant and cease on the day of departure of the occupant regardless of the actual time of ‘booking in’ or ‘out’ of the accommodation village.
and
In the event that an occupant, for whom the Contractor is directly or indirectly responsible, leaves the village on recreational or short-term leave, not exceeding seven (7) days, the Contractor will not be charged for that period of leave providing that the occupant was booked ‘out’ of the village in accordance with the procedures and requirements of the Company.[39]
[39] The “Company” referred is Woodside Burrup, and the “Contractor” is Mammoet. Exhibit 12 (“Accommodation Contract Provisions”)
The Court notes a further arguably relevant provision of the Accommodation Contract Provisions, which was noted by the Court in argument, namely that:
Rooms shall be allocated at the Company’s [Woodside Burrup’s] absolute discretion[40]
[40] Exhibit 12, cl.4.2.
The Court also observes that the Accommodation Contract Provisions provide that:
Accommodation … for the Contractor’s personnel or those of its Subcontractors in excess of the numbers detailed in the said data shall be subject to availability as may be determined by the Company. In the event that the Company is unable or unwilling to provide such excess accommodation, such inability or unwillingness shall not constitute or otherwise be cause for a or any Variation under the Contract[41]
[41] Exhibit 12, cl.4.2.
The CFMEU argued that the Greenfields Agreement dealt only with obligations to pay the LAFH Allowance but did not deal with the situation where there was an entitlement to remove the Affected Employees from the Accommodation once they were in the Accommodation, notwithstanding that they were not ready, willing and able to work.
The CFMEU further noted that the Greenfields Agreement provides that one week’s LAFH Allowance is payable to a Distant Worker who is being paid a LAFH Allowance and is terminated. It is therefore argued that it cannot be implied that there is a right to “eject”[42] the Affected Employees from the Accommodation when there is a recognition in the Greenfields Agreement that Distant Workers paid LAFH Allowance may take at least a week to make appropriate arrangements to leave the area.
[42] Transcript at page 56.
In relation to s.470 of the FW Act the CFMEU says that there is no suggestion in sub-clause (6) of Appendix 7 of the Greenfields Agreement, which provides for Mammoet to have a choice of providing each Distant Worker with either suitable board or lodging or paying a living away from home allowance, that the Accommodation is a payment. The CFMEU submits that payment properly understood does not include the provision of the Accommodation under the Greenfields Agreement. The CFMEU buttresses this argument by pointing to the fact that s.470 of the FW Act is different to s.187AA of the WR Act, which is one of its predecessors, in that it focuses on and calculates the duration of industrial action on a day-to-day basis, and that the non-payment can only occur in respect of the period of industrial action. It argues that a partial work ban, as contemplated by s.471 of the FW Act, is not industrial action in respect of which payment could be calculated for the withdrawal of the Accommodation. This proposition is said to be further supported by reference to reg.3.21 of the Fair Work Regulations 2009 (Cth) which sets out certain steps for determining the proportion of reduction in an employee’s payments where a partial work ban has been in place.[43]
[43] FW Act, s.471(2).
The CFMEU also made reference to the concept of “pay” as it appears in the FW Act. In that regard, s.16(1) of the FW Act defines “base rate of pay” of a “national system employee” as the “rate of pay payable” for “ordinary hours of work, but not including any of the following:
a)incentive-based payments and bonuses;
b)loading;
c)monetary allowances;
d)overtime or penalty rates;
e)any other separately identifiable amounts.”
Under s.18 of the FW Act “full rate of pay” is defined in the same way as “base rate of pay” save that the items listed in sub-paras.(a)-(e) as set out above are included in the “full rate of pay”.
The CFMEU relied on Batley v Cocos Islands Co-operative Society Limited[44] which was a case dealing with the definition of “earnings” in relation to unfair dismissal, where it fell to FWA to determine whether or not accommodation and the provision of a motor vehicle fell within the definition of “earnings”, under s.332(1)(b) of the FW Act which provided that:
[44] [2010] FWA 2289 (“Batley”).
(1) An employee's earnings include:
…; and
(b) amounts applied or dealt with in any way on the employee's behalf or as the employee directs
The CFMEU particularly relied on the following paragraphs of the FWA decision in Batley to support the proposition that accommodation was not a payment to an employee:
[33] The Employer submitted that the provision of accommodation and private use of a motor vehicle after hours, is an “amount applied or dealt with on the employee’s behalf” because it was expended and is of benefit to the employee. For the Tribunal to accept this conclusion, I would also have to accept the proposition, if put to the Tribunal, that the cost of locating Mr Batley on Cocos Islands, workers’ compensation premiums, subsidised food and any assortment of other amounts, expended by employers in connection to employees is, for the purposes of the Act, “earnings”. For this reason, I am unable to accept the proposition put by the Employer.
[34] For s.332(1)(b) to be enlivened, it would be essential for the “amounts” to be distinguishable as a discrete amount expended on behalf of the employee as part of their total “cashable” salary or wages and not an amount which is indistinguishable from the normal operational costs of employing employees. In this particular case, it is all the more difficult for the Employer to persuade the Tribunal that the provision of accommodation and the use of a motor vehicle after business hours, is anything but, an attraction and retention cost associated with the position, particularly given its location and unique circumstances.
[35] While the Act has been framed in such a way to describe a benefit as something which an employee is “entitled” to in return for the performance of work, employers would probably cast many “benefits” as a cost of doing business. For example, most employers in the mining sector would see the provision of accommodation in remote locations as an essential prerequisite to having a workforce to undertake mining activity. Simply not to provide the accommodation, would be unthinkable. In such circumstances, the cost of travel, food and accommodation for workers is an expense incurred in bringing the stuff out of the ground. In my view, employees in the mining sector do not see such matters as a benefit, any more than office workers would see an air conditioned office, as a benefit..[45]
[45] Batley at paras.33-35 per Cloghan C.
It was conceded at hearing by Counsel for the CFMEU that a decision of a single Commissioner of the FWA was not binding on this Court.[46]
[46] Transcript, page 65.
The CFMEU also made reference to the South Australian Supreme Court case of Quality Lodges International Pty Ltd v Bibby and Kelm (No 2)[47] where the Court quoted the decision of the Dispute Resolution Committee under review as follows:
Remuneration can take a variety of forms. These may include, access to cheap loans, payment of school fees, hospital insurance, medical benefits, entertainment allowances, accommodation and the provision of a company vehicle for private use. If the provision of such a benefit is in substitution for wages that would otherwise be payable, it forms part of the earnings of the worker and therefore ought to feature in the assessment of weekly payment. That, is a well established principle of workers compensation.[48]
[47] [2002] SASC 147 (“Quality Lodges International”).
[48] Quality Lodges International at para.24 per Perry J, citing Cleggett v Coca Cola Amatil (1995) A 156/1995 at paras.4-5 per Gilchrist DP. The South Australian Supreme Court went on to quash the decision under review because it did not properly distinguish between “wages” and “earnings”: Quality Lodges International at para.30 per Perry J.
The CFMEU argued that in the context of this case the Accommodation was not referable to or a substitution for wages because it did not relate to the employee’s output.
The CFMEU also made reference to s.323 of the FW Act which provides as follows:
(1) An employer must pay an employee amounts payable to the employee in relation to the performance of work:
(a) in full (except as provided by section 324); and
(b) in money by one, or a combination, of the methods referred to in subsection (2); and
(c) at least monthly.
Note 1: This subsection is a civil remedy provision (see Part 4-1).
Note 2: Amounts referred to in this subsection include the following if they become payable during a relevant period:
(a) incentive-based payments and bonuses;
(b) loadings;
(c) monetary allowances;
(d) overtime or penalty rates;
(e) leave payments.
(2) The methods are as follows:
(a) cash;
(b) cheque, money order, postal order or similar order, payable to the employee;
(c) the use of an electronic funds transfer system to credit an account held by the employee;
(d) a method authorised under a modern award or an enterprise agreement.
(3) Despite paragraph (1)(b), if a modern award or an enterprise agreement specifies a particular method by which the money must be paid, then the employer must pay the money by that method.
Note: This subsection is a civil remedy provision (see Part 4-1).
The CFMEU appeared to argue that the Accommodation was not an amount payable because it could not be paid by the means provided for in s.323 of the FW Act.
Consideration
Adverse action
It is convenient to commence with a consideration of the assertion that the denial of accommodation to the Affected Employees is adverse action under s.342 of the FW Act, and the defence of Mammoet that the denial of the Accommodation to the Affected Employees is authorised and required by s.470(1) of the FW Act. Section 470(1) of the FW Act essentially provides that Mammoet “must not make a payment to an employee” who is “engaged … in protected industrial action”, “in relation to the total duration of the industrial action on that day.”
There is no dispute that the Affected Employees were engaged in Protected Industrial Action on a day in respect of which the Accommodation was denied by Mammoet.
Central to a resolution of this matter is whether the provision of the Accommodation is “payment” to the Affected Employees by Mammoet.
The ordinary meaning of “payment” includes payment in kind, that is payment other than in money. The word “payment” carries as its primary meaning:
The action, or an act, of paying; the remuneration of a person with money or its equivalent; the giving of money, etc. in return for something or in discharge of a debt.[49]
[49] The Oxford English Dictionary (2nd Edition) Volume XI (Oxford: Clarendon Press, 1989) page 379 (“Oxford English Dictionary”).
Consistent with the definition, various authorities indicate that the ordinary meaning of “payment” includes payment in kind, that is, in terms of the above definition, “money or its equivalent”.
Paterson v Stanmorr Pty Ltd & Anor[50] concerned Victorian workers’ compensation legislation under which an employee was entitled, while incapacitated for work, to weekly “payments” calculated on the basis of pre-injury average weekly “earnings”. Ms Paterson had been employed as the manager of a guest house, Stanmorr, on terms which provided for payment of $450 per week, plus food and accommodation (including power and telephone).[51] It was unanimously held by the Victorian Court of Appeal that non-pecuniary benefits, that is the accommodation and food, constituted part of the employee’s “earnings”.[52]
[50] (2000) 2 VR 460; [2000] VSCA 220 (“Paterson”).
[51] Paterson VR at 461 per Winneke P; VSCA at para.2 per Winneke P.
[52] Paterson VR at 469 and 471 per Winneke P; VSCA at paras.18-19 and 22 per Winneke P; VR at 479 and 482 per Phillips JA; VSCA at paras.44 and 48 per Phillips JA; VR at 485-486 per Batt JA; VSCA at para.60 per Batt JA.
In Paterson, one member of the Victorian Court of Appeal suggested that inclusion of payments in kind as earnings was because “the value of earnings in kind … are intended to form a valuable part of the reward for the appellant’s services, in the sense that it can be inferred that the value of the non-pecuniary benefits played a part in depressing the amount of monetary wages paid to her.”[53]
[53] Paterson VR at 469 per Winneke P; VSCA at para.19 per Winneke P.
Because remuneration means “payment”[54] authorities on what is meant by “remuneration” are relevant to the question of whether board and lodging is “payment” for the purposes of s.470(1) of the FW Act.
[54] Oxford English Dictionary, Vol XIII, page 604.
The meaning of “remuneration” was said in The Queen v The Post-Master General[55] to be as follows:
… The word “remuneration” is a wider term and means a quid pro quo. If a man gives his services, whatever consideration he gets for giving his services seems to me a remuneration for them. Consequently, I think if a person was in the receipt of a payment, or in the receipt of a percentage, or any kind of payment which would not be an actual money payment, the amount he would receive annually in respect of this would be “remuneration,” …[56]
[55] [1876] 1 QBD 658 (“The Post-Master General”).
[56] The Post-Master General at 663-664 per Blackburn J, with whom Quain J at 665 agreed.
In May v Lilyvale Hotel Pty Ltd[57] the Industrial Relations Court of Australia held that remuneration was not confined to cash payments, and in determining remuneration account had to be taken of non-salary benefits provided to an employee.[58]
[57] (1995) 68 IR 112 (“Lilyvale Hotel”).
[58] Lilyvale Hotel at 116-117 per Wilcox CJ.
Courts have frequently held that remuneration includes the provision of board and lodging or accommodation.[59] Remuneration has also been held to include:
a)the value to an employee of the use of a uniform;[60]
b)in the case of a ship’s purser, the profit on sales of nips of whisky;[61]
c)a serviceman’s family allowance paid direct to his wife;[62]
d)the value of the use of a motor vehicle;[63] and
e)superannuation contributions.[64]
[59] Dothie v Robert MacAndrew & Co [1908] 1 KB 803 (followed, as to the meaning of “remuneration” not being the same as salary or cash payment by the employer but involving precisely the same considerations as earnings, in Skailes v Blue Anchor Line Limited [1911] 1 KB 360 at 363 per Cozens-Hardy MR) (“Skailes”); Messervy v Maldoc Pty Ltd (1995) 63 IR 61; Rosenqvist v Bowring & Co Ltd [1908] 2 KB 108; Black v Metro Farms Pty Ltd (1993) 60 SAIR 459 (“Metro Farms (No 1)”), overturned on appeal, but not on this point: Metro Farms Pty Ltd v Black (1993) 53 IR 289 (“Metro Farms (No 2)”).
[60] Great Northern Railway Company v Dawson [1905] 1 KB 331.
[61] Skailes.
[62] Doncaster Amalgamated Collieries Limited v Leech [1941] 1 KB 649.
[63] Brookton Holdings Pty Ltd No V & Ors v Kara Kar Holdings Pty Ltd & Anor (1994) 57 IR 288 at 291 per Young J.
[64] Lilyvale Hotel; Izdes v LG Bennett & Co Pty Ltd (1995) 61 IR 439; Rigby v Technisearch Ltd (1996) 67 IR 68; Re The Manufacturing Grocers’ Employees Federation of Australia & Anor; Ex Parte The Australian Chamber of Manufacturers & Anor (1986) 160 CLR 341 at 356 per Gibbs CJ, Mason, Wilson, Brennan Deane and Dawson JJ; Hastings Deering (Australia) Ltd v Smith (No 2) (2004) 18 NTLR 1; [2004] NTCA 13.
In Quality Lodges International which concerned the meaning of “wages” the South Australian Supreme Court drew a distinction between “wages” and “remuneration” or “earnings”, and held that “wages” did not ordinarily extend to include non-pecuniary benefits.[65]
[65] Quality Lodges International at para.30 per Perry J.
Based on the above authorities the Court is of the view that the provision of the Accommodation to the Affected Employees was a “payment”.
The primary argument of the CFMEU as to why the provision of the Accommodation was not a “payment” appeared to be that it was the result of an agreement anterior to the wages – work bargain between Mammoet and the Affected Employees. It was thus suggested also that the provision of the Accommodation stood outside the remuneration arrangements for the Affected Employees. This argument fails on several accounts.
Firstly, it is not supported by the CFMEU’s evidence. Nothing in the two affidavits tendered by Affected Employees, taken at their highest, suggests that the Affected Employees would not have accepted the employment with Mammoet on the Pluto Project without the provision of the Accommodation.
Secondly, the Greenfields Agreement contemplates that some employees will not be provided with board and lodging, and that they will be paid LAFH Allowance,[66] and that some employees who are provided with the Accommodation may request to be paid LAFH Allowance instead.[67]
[66] Greenfields Agreement, Appendix 7, cll.(6), (9) and (10).
[67] Greenfields Agreement, Appendix 7, cl.(7).
Thirdly, the terms of the Greenfields Agreement do not indicate that if an employee is provided with the Accommodation that the employee must continue to be provided with the Accommodation. Indeed the contrary is the case, because Mammoet has the “choice” to provide the Accommodation or LAFH Allowance, and there is nothing to indicate that such an election is irrevocable. Indeed, it appears it may be revoked at the request of the employee,[68] or, on the evidence, if rooms, which are provided at the sole discretion of Woodside Burrup, are not available,[69] in which case it would have to revoked by Mammoet and LAFH Allowance paid, assuming that no other suitable accommodation could be found.
[68] Greenfields Agreement, Appendix 7, cl.(7).
[69] Accommodation Contract Provisions (Exhibit 12).
Fourthly, there is no obligation, other than under the Greenfields Agreement, for Mammoet to provide the Accommodation for an employee, and at common law no obligation on an employer to provide accommodation for an employee at all, and thus the entitlement to the provision of the Accommodation only arises under the Greenfields Agreement. There is no evidence that it is a contractual entitlement. There is no reason to imply the terms of the Greenfields Agreement into the Affected Employees’ contract of employment.[70] Indeed, the Greenfields Agreement appears to recognise that the terms of any contract of employment of an employee covered by it does not incorporate the terms of the Greenfields Agreement. In clause 8(3) of the Greenfields Agreement the Greenfields Agreement and the contract of employment are distinguished in relation to the obligations of the employees to perform work in accordance with each of them at all times.
[70] Byrne & Frew v Australian Airlines Ltd (1995) 185 CLR 410 at 420-423 per Brennan CJ, Dawson and Toohey JJ; and 444-446 per McHugh and Gummow JJ.
Fifthly, the provision of the Accommodation does not stand outside the remuneration arrangements for the Affected Employees. Where the Accommodation is provided to an Affected Employee, it is generally considered to be remuneration for reasons set out above. In this case the Accommodation is provided under the Greenfields Agreement which:
a)is made in full and final settlement of all claims in relation to work covered by the Greenfields Agreement;[71] and
b)contains a “complete statement of mutual rights and obligations” applicable to the Affected Employees and Mammoet.[72]
Notably, the alternative to the provision of the Accommodation is the payment of the LAFH Allowance, and this could not possibly be said to fall outside the concept of remuneration. Given that the two are alternative forms of entitlement provided to Distant Workers (which includes the Affected Employees) because they work away from home it would be illogical to find that one was remuneration and the other not.
[71] Greenfields Agreement, cl.5(2).
[72] Greenfields Agreement, cl.5(3), and cl.3.
Finally, the suggestion that the provision of the Accommodation is not payment because it would result in Distant Workers working on the Pluto Project being paid different amounts and entitlements for work performed for performing exactly the same work as non Distant Workers does not establish that the provision of the Accommodation is not payment. It is axiomatic that non Distant Workers will not be paid the same as Distant Workers because Distant Workers are entitled to LAFH Allowance if not provided with suitable board and lodging.
For all of the above reasons the Court has concluded that the provision of the Accommodation is not an entitlement which is anterior to the wages – work bargain for the Affected Employees, or any employees, employed under the Greenfields Agreement. It is also not something that falls outside of the remuneration arrangements for the Affected Employees.
The fact that s.470 of the FW Act requires non-payment for the period of the total duration of the Protected Industrial Action poses no difficulty in this case. As indicated above, the Protected Industrial Action period is 28 days, which is the same period for which Mammoet withdrew the provision of the Accommodation. The fact that s.471 of the FW Act and reg.3.21 of the FW Regulations provide steps for the calculation of reduction of payment to an employee in respect of a period of industrial action in the event of partial work bans does not arise in this case, and if it did it would not be covered by s.470(1) of the FW Act.[73] It may also be that in the case of partial work bans the issue does not arise because an employer does not give the written notice under s.471(1)(c) of the FW Act. However, if a notice were given there is nothing to preclude a proportionate reduction in payment, including a proportionate reduction for the provision of accommodation from being calculated. The question of the value of accommodation in such circumstances would be a question of fact to be determined in the circumstances of the case. There is nothing inherently unusual in quantifying the value of accommodation. Courts and industrial tribunals are required to do it in assessing the value of damages or compensation for the denial of benefits, and the actual value of accommodation if not expressly set out in some relevant document is then a matter for determination.[74]
[73] FW Act, s.470(2).
[74] Metro Farms (No 1) at 466; Lindsay v Queens Hotel Company, Limited [1919] 1 KB 212 at 214 per Bray J (with whom Avory J agreed at 214); Barossa Co-operative Winery Ltd v Kolarovich (1977) 16 SASR 392 at 397 per Sangster J where it was held that an employer company was entitled to recover possession of a house provided to an employee by way of a provision in the contract for free accommodation, and that if it should subsequently be found that if the employee had not been given reasonable notice of termination of his employment, his remedy with respect to the failure to provide free accommodation for the term of the reasonable notice would be in damages.
The Court is fortified in the view that a proportionate payment for the provision of accommodation might be made by the fact that it would be necessary, in any event, for an employee being paid LAFH Allowance to be the subject of a proportionate reduction. As the Court has otherwise observed above, it would be incongruous if during the industrial action a Distant Workers being paid LAFH Allowance was subject to a partial reduction in payment by reason of a partial work ban, but a Distant Worker provided with accommodation was not subject to such a reduction.
The CFMEU also relied upon the definitions of “base rate of pay” and “full rate of pay” in ss.16(1) and 18(1) of the FW Act. Those definitions relate to the use of those terms or phrases in the FW Act. They are used for particular purposes, and as the Explanatory Memorandum to the FW Act makes clear:
a)the definition of “base rate of pay” is relevant to the calculation of the amount to be paid to an employee for paid annual leave, paid personal carers leave, payment for absence from work on a public holiday or payment to a female employee who takes paid no safe job leave under the National Employment Standards in the FW Act; and
b)the definition of “full rate of pay” is the rate payable to an employee for the entitlement to payment at the full rate of pay of a female employee who is transferred to a safe job under s.81(5) of the FW Act and an employee’s entitlement to pay in lieu of notice on termination under s.117(2)(b) of the FW Act.
These definitions have been enacted for a limited purpose, and do not purport to otherwise limit or amend the meaning of “pay” or “payment” in other sections of the FW Act.
The CFMEU argued that the provision of the Accommodation is not a payment because it cannot be paid by one of the means set out in s.323 of the FW Act. This argument also fails.
Section 323 of the FW Act refers to amounts payable to the employee. Whilst the provision of the Accommodation is a payment to an employee it is not paid by way of an “amount payable” for the purposes of s.323 of the FW Act which refers to amounts payable “in money”, and methods by which “money must be paid”.[75] As in the ordinary definition of “payment”, that is, “money or its equivalent”, and the judicial definition of “remuneration”, that is, “payment which would not be an actual money payment”, the Accommodation is provided in money’s worth, not actually paid “in money”, and therefore falls outside the scope of s.323 of the FW Act which is only directed to payments made in money, not in money’s worth or the equivalent of money.
[75] FW Act, s.323(1)(b).
By reference to the reasoning in judgments relating to workers’ compensation matters,[76] the CFMEU argued that the Accommodation can only be considered to be earnings (or remuneration), and therefore “payment” for the purposes of s.470(1) of the FW Act, if it diminished the earnings that would otherwise be payable to an employee, and that in this case there was no such diminution.
[76] Paterson and Quality International Lodges.
The workers’ compensation judgments such as Paterson and Quality International Lodges are but examples of the endorsement of the application of a general principle to the specific circumstances concerning workers’ compensation. This case rests on the application of general principles to the specific circumstances of the provision of the Accommodation to the Affected Employees in the circumstances of the Protected Industrial Action. Thus, the question is whether or not the provision of the Accommodation is “payment”, not whether the provision of the Accommodation diminishes the earnings otherwise payable. In any event, even in cases where the provision of accommodation did not diminish earnings, accommodation has been held to be earnings or remuneration, and thereby “payment” to the employee concerned. Finally, it can in any event be argued that the provision of the Accommodation to the Affected Employees does diminish the amount of money that they actually receive from Mammoet, because if they were not provided with the Accommodation Mammoet would be obliged to pay the LAFH Allowance, which for the requisite period was $490 per week.[77] For these reasons, the CFMEU’s argument by analogy to the workers’ compensation judgments must fail.
[77] Greenfields Agreement, Appendix 7, cl.(10).
The CFMEU also relied upon the decision in Batley to argue that the provision of the Accommodation did not fall within the concept of “earnings”, and therefore was not remuneration or payment for the purposes of s.407(1) of the FW Act.
Batley is of limited assistance. That is so for a number of reasons.
Firstly, the FWA was dealing with a particular definition of “earnings” in s.332 of the FW Act, which defines earnings for the purposes of an employer’s obligation in relation to a guarantee of annual earnings to an employee,[78] which also applies for the purposes of determining whether an employee who has made an application to the FWA in relation to alleged unfair dismissal meets the eligibility criteria for such an application, one of the eligibility criteria being that the annual rate of earnings must be less than a particular threshold, which falls to be determined by the meaning of “earnings” in s.332 of the FW Act.[79] That limitation with respect to the definition of earnings is not applicable to the Affected Employees.
[78] FW Act, s.328.
[79] FW Act, s.382(b)(iii).
Secondly, the decision in Batley is distinguishable because the FWA did not deal with, and did not have to deal with that part of an employee’s earnings constituted by “the agreed money value of non-monetary benefits”.[80] Rather, the FWA was dealing with a submission with respect to accommodation and motor vehicle benefits, namely the provision of a fully furnished house and a suitable fully maintained motor vehicle, which were said to fall within that part of the definition of “earnings” constituted by “amounts applied or dealt with in any way on the employee’s behalf or as the employee directs.”[81] Unlike the provision of accommodation in a camp, particularly where, as here, the Accommodation was provided by a third party, or the application of specific amounts to superannuation, the FWA may well have been correct to find that the provision of a fully furnished house and the provision of a fully maintained motor vehicle might not be an “amount” applied for the benefit of the employee because no specific amount is readily discernible for the purpose of the definition of “earnings” and the provision of those benefits therefore falls outside of s.332(1)(b) of the FW Act. However, that would not preclude such benefits from being “earnings” if there had been an agreed value attached to them, which there was not in Batley,[82] because those benefits would then have been within s.332(1)(c) as “the agreed money value of non-monetary benefits”.
[80] FW Act, s.332(1)(c).
[81] FW Act, s.332(1)(b).
[82] Batley at para.40 per Cloghan C.
Thirdly, while the FWA might have been correct in relation to the decision made by reason of s.332(1)(b) it does not support a general principle that the provision of accommodation cannot be earnings, either generally or, more particularly, because of the provisions of s.332(1)(c) of the FW Act.
Fourthly, in the circumstances, the FWA’s comments concerning the provision of accommodation in the mining sector are entirely obiter dicta. Furthermore, they do not accord with a long line of judgments over more than a century in both England and Australia which determine that the provision of accommodation is remuneration, and therefore the subject of “payment” made to an employee by an employer.
Batley therefore does not assist the CFMEU in arguing that the provision of accommodation, or the provision of board and lodging, is not earnings, either under s.332(1) of the FW Act were it to have any application to this case, which it does not, or, more generally, as earnings for which a “payment” is required to be made to the employee. For those reasons the CFMEU’s argument, based on Batley, that the provision of the Accommodation is not a “payment” fails.
The next question is whether or not the “payment” is “in relation to the total duration of industrial action on the day”.
The “total duration of the industrial action on the day” poses no difficulties here for it is clear that the period of Protected Industrial Action to be taken by the Affected Employees was for 28 days from and including 28 April 2010, and that the industrial action was a refusal to perform any work required during the totality of that 28 day period. Thus, to the extent that the Greenfields Agreement required the Affected Employees to provide their services as required, and, for example, to work overtime, the Affected Employees had put Mammoet on notice that they did not intend to so work, at all, on any of the 28 days of Protected Industrial Action.
The only remaining question therefore is whether or not the “payment”, that is the provision of the Accommodation, is “in relation to” the total duration of the industrial action.
In Australian Communications Network Pty Ltd & Anor v Australian Competition & Consumer Commission[83] the Full Court of the Federal Court held that in determining whether a matter was “in relation to” another matter, “the question is whether there is a relevant, sufficient or material connection or relationship, rather than merely a causal connection or relationship.”[84]
[83] (2005) 224 ALR 344; [2005] FCAFC 221 (“Australian Communications Network”).
[84] Australian Communications Network ALR at 351 per Heerey, Merkel and Siopis JJ; FCAFC at para.29 per Heerey, Merkel and Siopis JJ, following an earlier judgment of the Full Court of the Federal Court in J & G Knowles & Associates Pty Ltd v Commissioner of Taxation (2000) 96 FCR 402 at 408 and 410 per Heerey, Merkel and Finkelstein JJ; [2000] FCA 196 at paras.22-23 and 26 per Heerey, Merkel and Finkelstein JJ.
In O’Grady v Northern Queensland Co Ltd[85] it was said that:
The words “in relation to”, read out of context, are wide enough to cover every conceivable connexion. Those words should not be read out of context, which in this case is provided by the … Act …. What is required is a relevant relationship, having regard to the scope of the Act. Where jurisdiction is dependent upon a relation with some matter or thing, something more than a coincidental or mere connexion – something in the nature of a relevant relationship – is necessary ….[86]
[85] (1990) 169 CLR 356 (“O’Grady”).
[86] O’Grady at 367 per Dawson J.
In Australian Communications Network the Full Court of the Federal Court said that the approach set out above in O’Grady emphasised “the need for attention to the legislative context and purpose” and was “an example of the primacy of context”.[87] In context, one of the matters to be considered here is what mischief s.470(1) of the FW Act was intended to remedy.
[87] Australian Communications Network ALR at 350 per Heerey, Merkel and Siopis JJ; FCAFC at para.26 per Heerey, Merkel and Siopis JJ.
The legislative purpose of s.470 of the FW Act, as with its immediate predecessors under the WR Act (variously ss.187AA and 507) is, as it applies to employees taking industrial action, “that employees are to bear the economic loss of their industrial action”.[88]
[88] Heinemann Electric FCR at 487 per Middleton J; FCA at para.32 per Middleton J. See also Canonical Administrators at 73-74 per Ryan J; Caelli Constructions FCR at 543-544 per Lander J; FCAFC at para.83-84 per Lander J.
In the circumstances of this case, the Affected Employees would not, contrary to the legislative purpose of s.470 of the FW Act, bear the financial consequences of the Protected Industrial Action if Mammoet continued to provide them with the Accommodation (at a cost to Mammoet of $90 per person per day)[89] for the 28 day duration of the Protected Industrial Action.
[89] Accommodation Contract Provisions, cl.4.1 (Exhibit 12).
The provision of the Accommodation enables the Affected Employees to live away from home to perform the work so as to earn the other remuneration set out in the Greenfields Agreement. The provision of the Accommodation is therefore:
a)directly related to the work performed by the Affected Employees and to their capacity to earn remuneration for that work; and
b)for reasons set out above, a payment in relation to the work performed by the employee.
There is therefore a direct, or at the very least a sufficient and material, connection between the provision of the Accommodation and the work performed by the employees under the terms of the Greenfields Agreement. Were the Accommodation to be provided during the period of Protected Industrial Action it would therefore be a “payment in relation to the total duration of the industrial action on the day of the action”. It would therefore be a payment which must not be made under s.470(1) of the FW Act.
Therefore, the Court is of the view that the provision of the Accommodation is a payment which Mammoet is prohibited from making to the Affected Employees by reason of s.470(1) of the FW Act. It follows therefore that the failure to provide the Accommodation is not adverse action because the failure to do so is authorised under s.470(1) of the FW Act, and is, therefore, not adverse action by reason of s.342(3) of the FW Act which excludes from the definition of adverse action any action authorised under the FW Act. It follows therefore that Mammoet has no case to answer with respect to the alleged adverse action contravention.
Alleged breach of Greenfields Agreement
Where the FW Act prohibits payment during a period of Protected Industrial Action there can be no breach of a collective agreement, in this case the Greenfields Agreement, for failure to pay the prohibited payment. What the FW Act prohibits a collective agreement cannot permit. The claim for breach of the Greenfields Agreement must also therefore fail because Mammoet is not lawfully able to provide the Accommodation to the Affected Employees during their period of Protected Industrial Action. It follows therefore that Mammoet has no case to answer with respect to the alleged breach of the Greenfields Agreement.
Conclusion and order
In circumstances where the Court has concluded that Mammoet has no case to answer with respect to:
a)the alleged adverse action contravention; and
b)the alleged breach of the Greenfields Agreement,
it follows that the applicant’s application must be dismissed. There will be an order accordingly.
I certify that the preceding one hundred and sixteen (116) paragraphs are a true copy of the reasons for judgment of Lucev FM
Date: 20 October 2011
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