DP World (Fremantle) Limited

[2014] FWC 4094

[2014] FWC 4094

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.418 - Application for an order that industrial action by employees or employers stop etc.

DP World (Fremantle) Limited
(C2013/7801)

VICE PRESIDENT WATSON MELBOUNRE, 7 JULY 2014

Application by DP World (Freemantle) Limited that industrial action by employees stop -alleged industrial action - alleged “go-slow” - whether industrial action happening - whether industrial action is threatened, impending or probable - whether industrial action being organised - Fair Work Act 2009 s.418.

Introduction

[1] This decision relates to an application by DP World (Fremantle) Limited (DP World) for orders under s.418 of the Fair Work Act 2009 (the Act) that alleged industrial action stop, not occur and not be organised at the DP World Fremantle container terminal.

[2] The application was initially made on 22 December 2013. At the conclusion of the hearing of the matter on 23 December 2013 Commissioner Cambridge refused the application.

[3] An appeal against that decision was lodged by DP World on 30 December 2013. The appeal was heard on 2 January 2014. At the hearing of the appeal DP World sought orders allowing the appeal and the making of an interim order in the terms sought in the application. While disputing the existence of industrial action the MUA did not oppose the making of these orders. By decision dated 3 January 2014 a Full Bench granted permission to appeal, allowed the appeal and made interim orders pending the determination of whether final orders should be made. The Full Bench remitted the matter to me for that purpose.

[4] Hearings on the matter were conducted in Perth on 12 and 13 February and 3 June 2014. At these hearings Mr D Perry, of counsel, appeared for DP World, and Mr L Edmonds appeared on behalf of the Maritime Union of Australia.

Background

[5] There is a history of industrial conflict at the DP World Fremantle terminal resulting in previous orders under s.418 of the Act. On 10 August 2010 Commissioner Cloghan found that industrial action in the form of a “go-slow” had occurred and made an order of limited duration that it stop and not be engaged in. On 2 April 2012 I made a similar finding and made a similar order. On 12 April 2013 Commissioner Cloghan again found the existence of a “go-slow” and made a further order under s.418 of the Act.

[6] Productivity at the Fremantle terminal is typically measured by ‘shift crane rate’ which is a measure of the total number of containers moved divided by the adjusted working hours multiplied by 8. The target shift crane rate across the Fremantle terminal is 172.5. This target was agreed in May 2012 as part of the negotiation of the current enterprise agreement and confirmed in September 2013 following discussions between senior site employee representation committee members, senior officials of the MUA, including its National Secretary, Paddy Crumlin, and Assistant Branch Secretary, Will Tracey, and then DP World Managing Director, Ganesh Raj.

[7] In October 2013 DP World dismissed two employees on grounds of serious misconduct and non-compliance with personal leave requirements and disciplined another on the grounds of the role he played in another employee’s misconduct.

[8] On 31 December 2013 K-Line, DP World’s largest customer at Fremantle, terminated its contract with DP World at Fremantle citing poor service as the reason for its decision. This loss of contract triggered consultations about potential redundancies at the terminal. Approximately 38 redundancies occurred in the early months of 2014.

The Duty of the Commission

[9] Section 418 of the Act requires the Commission to issue an order that industrial action stop, not occur or not be organised if it appears to the Commission that industrial action by one or more employees or employers is happening; is threatened, impending or probable; or is being organised. This requires a finding of fact based on the assessment of the evidence led in the matter. If satisfied of the requisite conduct, the Commission is required to make an order to redress that conduct. Where, as in this case, an interim order is in place, it remains necessary to make a finding of fact as to whether the conduct is occurring at the time the matter is determined. Whether industrial action has occurred in the past is not the relevant question.

Evidence

[10] DP World led evidence from Mr Adam Holland, the Director and General Manager of the Fremantle terminal. He gave evidence that since the discipline of employees at the Fremantle terminal in October 2013 industrial action in the form of a “go-slow”, a ban on performing shift extensions and a ban on performing work on public holidays has occurred. He initially gave evidence about these forms of industrial action on 23 December 2013. In February 2014 he gave evidence that the industrial action was continuing.

[11] Although the taking of industrial action had never been communicated to DP World, and no industrial action was observable to management representatives, Mr Holland said that the productivity performance and lack of cooperation to work shift extensions and on public holidays demonstrated that employees were deliberately and covertly working at a slower pace than the pace they are expected to work. He produced monthly shift crane rate figures that demonstrated a drop in crane rates in November (149) and December (146) to levels experienced in April 2013 that led to orders made by Commissioner Cloghan before they subsequently rose to higher levels after the order was issued. In February 2014 Mr Holland said that the rate for the week ending 9 February 2014 was 144. Mr Holland gave evidence that other possible causes of the industrial action could not explain what he described as the sharp decline in productivity. He suggested that representations by the MUA and its members concerning various industrial disputes suggested that there was a relationship between the disputes and the lower productivity performance.

[12] DP World led evidence that the shift crane rates for subsequent months were:

January - 150.3,

February 149.9,

March - 152.1,

April - 156.5 and

May 143.1.

It was agreed between the parties that this data is accurate while noting that the May figures were affected by some adverse weather and mechanical issues.

[13] In relation to shift extensions and availability of labour DP World tendered a memorandum to the workforce issued in March 2014 expressing its concern that customers’ requirements were not being met because of labour availability problems. A high number of skilled employees indicated their unavailability of a shift extension in May 2014. The extension was only able to be worked after extensive discussions involving MUA delegates and officials led to employees making themselves available at a very late stage.

[14] The MUA led evidence from the Deputy Branch Secretary of the WA branch of the MUA, Mr Adrian Evans. Mr Evans said that the target for shift crane rates was “aspirational” and was never intended to represent an average or a rate that was ordinarily achieved. He gave evidence of the various ongoing disputes being dealt with at the Fremantle terminal and changes in vessel usage which he said significantly impacted on productivity statistics. This included the loss of the K-Line contract because its ships were easier to unload and commonly achieved higher productivity rates. He said that implementation of Marine Order 32 in the workplace also impacted on productivity.

[15] Mr Evans denied knowledge of any ‘go-slow” and stated that the he has not instructed, directed or procured any DP World employee to implement a “go-slow”. He said that a number of days work were lost in December and January because of excessive heat and a gas leak on board a vessel in December resulted in the attendance of the Fire Brigade, employees requiring medical assistance and this also impacted on productivity. He also denied the existence of any ban on shift extensions and work on public holidays.

[16] In June 2014 Mr Evans gave further evidence that there had been significant changes over the first few months of 2014 but that he had received no complaints about alleged industrial action over that time. He produced figures on productivity performance that he said showed that there had been continuous improvement in productivity to the point that the year-to-date average excluding K Line is around 160 movements per shift. He said that delegates had assisted in encouraging volunteers to work on public holidays, there had been no problems with shift extensions, delegates had also been assisting the company in this regard and consultation had improved in prior months.

Is Industrial Action Happening?

[17] DP World submitted that the measure of the existence of a “go slow” is to be found in productivity figures achieved as against the agreed target of 172.5. It accepts that 2013 was a low base, less than the agreed target, and submits that as there had been little or no improvement in the intervening period, the sub-optimal performance figures, is explicable because of a “go-slow”.

[18] DP World submits that the availability problems being experienced are also evidence of a form of industrial action. It submits that there is evidence of a public holiday ban in place in the past and no evidence that it has been lifted such that it would not present a difficulty at some point in the future.

[19] The MUA denies that any industrial action is currently happening. It submits that the agreed target is aspirational rather than the norm and contrasts with a long term average of about 150 crane lifts per shift. It submits that the only alleged shift extension problem recently, on 29 May, was resolved with assistance of the delegates and that public holidays in 2014 had been worked without complaint from DP World.

[20] I have carefully considered the evidence in this matter. I have no doubt that the industrial conflict over various issues in 2013 led to sub-optimal performance in the latter part of 2013. That triggered a loss of business and redundancies which exacerbated the level of industrial tension.

[21] More difficult questions arise from the productivity statistics. A target shift crane rate of 172.5 was confirmed in September 2013. But the evidence does not demonstrate that this intended level of productivity was ever achieved. DP World suggests that the situation is akin to driving with the handbrake on, and productivity that should be achieved is deliberately not being achieved.

[22] I note that there has been some improvement over the course of 2014, combined with the loss of work that has led to the elimination of ships that can be worked at higher productivity rates. The interim order in place since January 2014 may have had some effect in this regard. If so, then the alleged “go-slow” has either been ended or limited. It is also relevant to note that there has been no action taken by the company for breach of that order - suggesting that it does not believe that it should or can establish that the order is being breached. Problems experienced in 2013 with shift extensions and work on public holidays have significantly reduced in 2014.

[23] In a stevedoring operation, achieving high productivity levels is dependent on employees making the necessary effort to operate safely, carefully and diligently. Unanticipated demands require flexibility and cooperation to enable the employer to meet customer requirements. There is not a clear established productivity benchmark that reflects current customer requirements, and it is therefore very difficult to find that there is a failure to reach such targets arising in whole or in part from industrial action. I am satisfied that the attributes of a cooperative and productive workforce may have been missing in the past, but I am not satisfied on the evidence that industrial action is happening now.

Is Industrial Action Threatened, Impending or Probable?

[24] DP World submits that the underlying causes of industrial tension remain, new areas of disputation have arisen, the MUA has been pressing for these issues to be “fixed”, productivity related industrial action has been an industrial tool regularly used by the MUA and its members at this workplace in the past and there is a high degree of risk of industrial action, such as has occurred in the past, recurring.

[25] The MUA submits that the other disputes are being processed under legitimate channels, there is no evidence of any threat or impending action and the nature of any productivity problems make it better that they be dealt with by management resolving performance or productivity issues with employees in the workplace.

[26] I am not satisfied that, at the present time, industrial action is threatened, impending or probable. The state of relationships at the workplace suggests that future industrial action is possible. That is not sufficient to make the necessary finding under the Act.

Is Industrial Action being organised?

[27] DP World submits that the denials of Mr Evans of action at all previous times is not consistent with the facts and renders his denials about MUA involvement unreliable. It also relies on direct evidence of comments made to Mr Holland by employees to the effect that the union needed to take responsibility for the service difficulties that led to K Line cancelling its contract with DP World.

[28] The MUA submits that the evidence merely establishes that Mr Evans was doing his job to try to resolve disputes with the employer and that nothing in the evidence leads to a finding of the MUA organising industrial action.

[29] As I am not satisfied that industrial action is happening, threatened, impending or probable, it is difficult to be satisfied that industrial action is being organised, even unsuccessfully. It is clear that workforce morale is not high, the MUA has a close relationship with the workforce and productivity levels are not what DP World would like them to be. A consideration of the past involvement of the MUA might be a more difficult question to answer. However at the present time I am not satisfied that industrial action is being organised by the MUA and/or Mr Evans.

Conclusions

[30] The findings I have made that industrial action is not happening, threatened, impending or probable or is being organised, do not provide a basis for making an order under s.418 of the Act. The application by DP World for orders under s.418 must therefore be dismissed.

VICE PRESIDENT

Appearances:

D. Perry of counsel, for DP World

L. Edmonds, for Maritime Union of Australia

Hearing details:

2014

Perth

VC Sydney

12 -13 February

3 June

Final written submissions:

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