Mammoet Australia Pty Ltd v Construction, Forestry, Mining and Energy Union
[2010] FWA 4389
•14 JUNE 2010
[2010] FWA 4389 |
|
DECISION |
Fair Work Act 2009
s.425 - Application to suspend protected industrial action, cooling off
Mammoet Australia Pty Ltd
v
Construction, Forestry, Mining and Energy Union
(B2010/3005)
DEPUTY PRESIDENT MCCARTHY | PERTH, 14 JUNE 2010 |
Application to suspend protected industrial action, cooling off.
Background
[1] I heard this application on 31 May 2010. On 2 June 2010 I issued a decision refusing the application. In that decision I indicated I would give written reasons for the decision at a later date. These are those written reasons.
[2] This matter concerns an application lodged pursuant to s.425 of the Fair Work Act 2009 (the FW Act) by Mammoet Australia Pty Ltd (Mammoet) seeking a suspension of industrial action. Mammoet is a contractor engaged for works at the Pluto Liquid Natural Gas Project on the Burrup Peninsula (the Project).
[3] The Project involves the extraction and processing of gas from the Pluto and Xena gas fields located in the Carnarvon Basin, about 190 kilometres north-west of Karratha, into either LNG or condensate for export 1.
[4] The Project includes the construction of an offshore platform in 85 metres of water, connected to 5 sub-sea wells on the Pluto gas field. This gas will then be piped in a 180 kilometre trunk line which is 36 inches in diameter (which needs to be laid) leading to the onshore facility on the Burrup Peninsula, Western Australia, approximately 25 kilometres from the township of Karratha and 2.5 kilometres from the Port of Dampier. The onshore facility is an LNG processing plant, and the plant and associated land infrastructure will cover approximately 80 hectares.
[5] Onshore infrastructure includes a single LNG processing train with a forecast production capacity of 4.3 million tonnes a year. The LNG train is being built in Thailand and shipped to site in 264 modules and supporting structures. Storage and loading facilities at the plant include two LNG tanks with a combined capacity of 120,000 cubic metres, three smaller condensate tanks and an LNG and condensate export jetty.
[6] Mammoet was awarded a contract from Woodside to perform the heavy lift and transportation of the pre-assembled LNG train modules referred to above (Contract). These modules are built in Thailand in a steelwork frame, and then shipped to the Port of Dampier. Mammoet then transports them the 2.5 kilometres from the port to the site, before positioning the modules in the appropriate position on the Project for installation.
[7] Mammoet uses SPMTs, Prime Movers and conventional trailers to transport the modules from the port to site, and also on-site to place the module to where it is to be installed. Mammoet utilises large cranes to install the equipment and uses smaller cranes and ancillary equipment to assist in the necessary preparation and installation.
[8] Mammoet has been engaged on the Project site since September 2008. The original Contract was due to have all equipment installed by the end of February 2010 and Mammoet cranes removed in March 2010. This has not occurred and at this stage, Mammoet still has approximately 4-6 weeks' worth of work involved on the Project, pursuant to the Contract. The majority of modules and equipment have been installed and only two large cranes, one of which is being mobilised, are required for the completion of the contracted work.
[9] The terms and conditions of employment of non-staff employees of Mammoet on the Project are regulated by the Mammoet Australia Proprietary Limited Pluto Project Greenfields Agreement 2008 (the 2008 Agreement). The 2008 Agreement is an employer greenfields agreement approved under the provisions of the Workplace Relations Act 1996 and has a nominal expiry of 18 September 2009.
[10] Mammoet is one of approximately 60 or so contractors performing work on the Project for the performance of specific packets of work. Almost all of the contractors engaged on site have a current enforceable employee collective agreement. Each of these agreements covers the relevant contractor for its period of contracted works on the Project with most of the terms expiring in 2014. These agreements collectively provide for the same terms and conditions to apply consistently across the Project, and they substantially reflect the contents of the Agreement. Indeed, the pay scales, rates and allowances are uniform among all agreements on the Project, which is not unusual for large infrastructure projects of this type.
[11] Works that are currently being undertaken at the Project involve the onshore infrastructure for a single LNG processing train. It is hoped, if not expected, that a further one or two trains 2 will be built for the project. Works for any further trains are hoped to begin in 2011 and would most likely take a further two or three years.3
[12] On 20 April 2010 the Australian Electoral Commission (the AEC) issued a Declaration of Results of a protected action ballot (the Ballot Declaration) undertaken in April. The Ballot Declaration shows that there were 12 employees eligible to vote and that eight employees did vote. The Ballot Declaration shows that there were five forms of industrial action authorised to be able to be taken ranging from two hour stop work meetings to 28 day stoppages of work which could be engaged in for consecutive periods.
[13] On 21 April 2010 the Construction, Forestry, Mining and Energy Union (the CFMEU) notified Mammoet of industrial action to be taken involving a 28 day stoppage of work commencing on 28 April 2010 (the employee claim action).
[14] On 27 April 2010 Mammoet notified the CFMEU and relevant employees with a notice of industrial action (employer response action) involving a lockout of employees for a period of 28 days commencing on 26 May 2010.
[15] The operations of Mammoet have been brought to a halt for most, if not all, of the period from 28 April 2010. A significant number of employees of Mammoet (21 employees) have been stood down for most, if not all, of the period and on 25 May 2010 their employment had been terminated. A small number of employees have been transferred, presumably to other sites (7 employees) and three employees have resigned.
[16] Mr Milne and Mr Sneddon gave evidence regarding the meetings and negotiations that had been held over the agreement being sought. There have been a significant number of meetings, telephone calls and exchanges of emails. Each have their own version of the progress and positions being taken and assumptions about the others approaches. Suffice for me to say is that there seems to have been a lot of activity.
[17] The main issues that remain in contention between them is:
- The term of the agreement;
- The amount of any wage and allowances increases; and
- Operative date for any wage and allowance related increases.
Jurisdiction
[18] The FW Act provides in s.425 that Fair Work Australia (FWA) must make an order suspending protected industrial action for a proposed enterprise agreement that is being engaged in if FWA is satisfied that the suspension is appropriate. The conditions precedent for an order to be able to be made are therefore that:
- Industrial action is "being engaged in";
- The industrial action being engaged in is "protected" industrial action;
- The industrial action is for a proposed enterprise agreement; and
- The application has been made by a bargaining representative or a person prescribed by the Regulations.
[19] If those conditions are met then FWA must issue an order if it considers it to be appropriate. In considering the appropriateness of issuing an order a number of matters must be taken into account and they are specified in s.425(1)(a) to (d).
[20] Here there is no controversy that Mammoet, as a bargaining representative, made the application. There is also no dispute that protected industrial action being employer response action was occurring at the time the application was heard. The employer response action was a 28-day lockout instituted by Mammoet which commenced on 26 May 2010. There was no contention by Mammoet that protected industrial action was not being engaged in by employees who would be covered by the agreement at the time of the hearing. The CFMEU also agreed that protected industrial action was being engaged in by Mammoet.
[21] Mammoet submitted that if FWA was satisfied that protected industrial action of any description is being engaged it is seized of jurisdiction to make orders, provided that the matters enumerated in s.425(1) are satisfied and FWA reaches a conclusion that a suspension of action is appropriate.
[22] Mammoet argued further that FWA could and should issue an order not just suspending its own employer response action but all forms of protected industrial action pursuant to the ballot order.
[23] The CFMEU submitted that the application was lodged on the basis of protected industrial action being taken by the CFMEU and its members. They argued that the application being pursued at the time of the hearing was a different application, as the protected industrial action being sought to be suspended was different industrial action in that it was employer response action. They argue that the application is directed to a suspension of the industrial action that was authorised by the protected action ballot. The CFMEU submitted that as a consequence of what they considered to be such a fundamental change in the grounds relied upon by Mammoet that the application should be dismissed and Mammoet be required to lodge a fresh application outlining the grounds they now relied upon.
[24] I do not accept that part of the CFMEU's argument as it is a mischaracterisation of the application. The application may have been lodged when the protected industrial action being engaged in was industrial action by employees and the CFMEU. However the application does not confine itself to that being the only industrial action it was directed at. Rather, the protected industrial action referred to in the application is both the employee claim action and the employer response action. I consider the application covers the protected industrial action of the employer and therefore properly covers all of the industrial action including the lockout by the employer.
[25] The CFMEU also argued that the purpose of s.425 is to provide a cooling off period and in doing so it could assist the parties resolving the matters in dispute. They appeared to argue that if I was not satisfied that a cooling off would assist the parties to resolve the matters in dispute then FWA could not, in the sense that FWA was not then possessed of the jurisdiction to do so, issue an order. However the argument was put more in the context of endeavouring to persuade me that it was not appropriate to issue an order unless such a view was formed. The essence of the argument being that s.425 should not be used for purposes other than an avenue for agreement to be able to be reached.
[26] I do not consider the CFMEU's submissions to be an argument about whether jurisdiction exists but rather an argument about whether it was appropriate for an order to issue.
[27] In my view it is not necessary to go beyond the actual words of s.425 to ascertain the meaning of the section. If protected industrial action is being engaged in, regardless of who it is being engaged in by, then by operation of s.425 of the FW Act, FWA has the jurisdiction to issue an order for a cooling off period, but only if it considers it appropriate to do so. I do agree with the CFMEU that unless there was a finding that a cooling off period would assist in the resolution of the matter then it would be unlikely that it would be appropriate to issue an order. But in my view that is a matter of discretion rather than a matter of jurisdiction.
[28] I therefore consider that the jurisdiction exists for FWA to issue an order pursuant to s.425.
Consideration
[29] In considering whether it is appropriate for an order to issue I must consider:
1. Whether the suspension would be beneficial to the bargaining representatives for the agreement because it would assist in resolving the matters at issue;
2. The duration of the protected industrial action;
3. Whether the suspension would be contrary to the public interest or inconsistent with the objects of this Act; and
4. Any other matters that FWA considers relevant.
[30] The effect of an order issuing would appear to be that neither party could take protected industrial action during the term of the order. 4
[31] Mammoet argued that the absence of the ability to take industrial action would be beneficial as it would provide an environment free of industrial action and therefore have the effect of the bargaining representatives concentrating on their differences. The CFMEU on the other hand argued that it was the existence of the capacity to take industrial action and indeed the taking of it that had the effect of reducing the differences between the parties and making an agreement more likely.
[32] The history of the matter and the approach taken by Mammoet to date would tend to support the view expressed by the CFMEU. It appears to me that at each step of the process of the CFMEU pursuing its rights Mammoet have endeavoured to prevent the obtaining of rights to take industrial action. Indeed the almost immediate reaction of Mammoet to the taking of employee claim action was to notify its own employer response action, thus immediately creating an expectation of two 28 days of industrial action rather than one.
[33] Mammoet rather than withdrawing its own industrial action, seeks to rely on it as a means of preventing themselves or employees of taking protected industrial action. In my view the issuance of an order of the type sought given the opposition of Mammoet throughout to the obtaining of a right to take protected industrial action is likely to be less conducive to an agreement being reached rather than what Mammoet contends.
[34] I therefore do not consider that a cooling off period would have a beneficial effect in resolving the matters at hand.
[35] The period of the protected action was 28 days by employees and was at the beginning of the 28 day period of the employer response action. Given the time taken to go though the various steps to be able to take protected industrial action I do not consider the period of the action to be such that it should weigh in favour of making an order.
[36] I do not consider it would be contrary to the public interest to issue an order nor do I think it would be inconsistent with the objects of the FW Act.
[37] I also consider the existence of employer response action to be a relevant matter in weighing up whether it is appropriate to issue a cooling off order. It may well be that Mammoet's submission, that there was a likelihood of further employee industrial action in the absence of their own employer response action, may be right. Of course Mammoet itself could decide to withdraw their response action. If Mammoet's predictions proved to be right and further employee industrial action occurred then I would give greater weight to Mammoet's position than a circumstance where they rely upon their industrial action to establish the jurisdiction to cause an inability for any protected industrial action to occur.
[38] I therefore decided that it was not appropriate to issue an order.
DEPUTY PRESIDENT
Appearances:
Mr M Follett for Mammoet Australia Pty Ltd
Mr J Nicholas for the Construction, Forestry, Mining and Energy Union
Hearing details:
2010:
Perth.
May, 31.
1 Paragraphs 2 to 10 inclusive is largely an extract of the evidence of Colin Milne with minor modifications
2 PN 360, 566
3 PN 588
4 See s.413(7)(a)
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