National Union of Workers v Ridley AgriProducts Pty Ltd

[2017] FWC 6242

[2017] FWC 6242

FAIR WORK COMMISSION

REASONS FOR DECISION

Fair Work Act 2009
s.437—Protected action

National Union of Workers
v
Ridley AgriProducts Pty Ltd
(B2017/1078)

DEPUTY PRESIDENT MASSON MELBOURNE, 28 NOVEMBER 2017

Proposed protected action ballot by employees of Ridley AgriProducts Pty Ltd - whether additional notice of proposed industrial action required - whether exceptional circumstances exist warranting an extension - exceptional circumstances found - extension granted for certain forms of action

Background

[1] The National Union of Workers (NUW) made an application for a protected action ballot order (PABO) under s.437 of the Fair Work Act 2009 (the Act) on 13 November 2017. The PABO was sought in relation to bargaining for a proposed enterprise agreement concerning employees of Ridley AgriProducts Pty Ltd (Ridley) employed at its Lara, Victoria site. Ridley advised the Fair Work Commission (the Commission) on 14 November 2017 that it opposed the PABO and sought to be heard in relation to the NUW application.

[2] A Mention/Directions Hearing was conducted on 16 November 2017. Permission to appear was sought by legal counsel on behalf of Ridley and which was granted by the Commission pursuant to s.596(2) of the Act. Directions were set for the filing of submissions and materials and a Hearing was programmed for 27 November 2017.

[3] During the Hearing conducted in relation to this application, Ridley confirmed that it did not oppose the PABO, however pressed its submission that an extension to the period of notice be provided by the NUW in relation to certain forms of industrial action that were set out in the proposed ballot questions.

[4] There was no contest that the NUW was eligible to bring this application and that all of the relevant statutory requirements for the making of a PABO had been met.

Context in which ballot order was sought

[5] Ridley is engaged in the manufacture and sale of agricultural animal feed products for a range of animal species including poultry, dairy cows, dogs, pigs, horses and sheep. Ridley has a number of sites across Australia including the Lara site. The Lara site commenced operations in December 2016 and produces approximately 3,500 tonnes per week of commercial stock feed for the intensively fed poultry and pig markets in southwest Victoria.

[6] The NUW is a bargaining representative for at least one of the employees to be covered by the proposed enterprise agreement. Bargaining commenced in July 2017 with the provision of an NUW log of claims and various meetings (approximately six) have since been held between the bargaining representatives. Whilst progress has been made in bargaining there is no agreement between the representatives on the full terms of the proposed enterprise agreement.

Statutory requirements for making a ballot order

[7] The Act provides relevantly as follows:

“437 Application for a protected action ballot order

Who may apply for a protected action ballot order

(1) A bargaining representative of an employee who will be covered by a proposed enterprise agreement, or 2 or more such bargaining representatives (acting jointly), may apply to the FWC for an order (a protected action ballot order) requiring a protected action ballot to be conducted to determine whether employees wish to engage in particular protected industrial action for the agreement.

(2) Subsection (1) does not apply if the proposed enterprise agreement is:

(a) a greenfields agreement; or
(b) a multi-enterprise agreement.

Matters to be specified in application

(3) The application must specify:

(a) the group or groups of employees who are to be balloted; and
(b) the question or questions to be put to the employees who are to be balloted, including the nature of the proposed industrial action.

(4) If the applicant wishes a person other than the Australian Electoral Commission to be the protected action ballot agent for the protected action ballot, the application must specify the name of the person.

Note: The protected action ballot agent will be the Australian Electoral Commission unless the FWC specifies another person in the protected action ballot order as the protected action ballot agent (see subsection 443(4)).

(5) A group of employees specified under paragraph (3)(a) is taken to include only employees who:

(a) will be covered by the proposed enterprise agreement; and
(b) either:

(i) are represented by a bargaining representative who is an applicant for the protected action ballot order; or
(ii) are bargaining representatives for themselves but are members of an employee organisation that is an applicant for the protected action ballot order.

Documents to accompany application

(6) The application must be accompanied by any documents and other information prescribed by the regulations.

438 Restriction on when application may be made

(1) If one or more enterprise agreements cover the employees who will be covered by the proposed enterprise agreement, an application for a protected action ballot order must not be made earlier than 30 days before the nominal expiry date of the enterprise agreement, or the latest nominal expiry date of those enterprise agreements (as the case may be).
(2) To avoid doubt, making an application for a protected action ballot order does not constitute organising industrial action.

440 Notice of application

Within 24 hours after making an application for a protected action ballot order, the applicant must give a copy of the application to the employer of the employees who are to be balloted, and:

(a) if the application specifies a person that the applicant wishes to be the protected action ballot agent—that person; or
(b) otherwise—the Australian Electoral Commission.

441 Application to be determined within 2 days after it is made

(1) The FWC must, as far as practicable, determine an application for a protected action ballot order within 2 working days after the application is made.
(2) However, the FWC must not determine the application unless it is satisfied that each applicant has complied with section 440.
…
443 When the FWC must make a protected action ballot order

(1) The FWC must make a protected action ballot order in relation to a proposed enterprise agreement if:

(a) an application has been made under section 437; and
(b) the FWC is satisfied that each applicant has been, and is, genuinely trying to reach an agreement with the employer of the employees who are to be balloted.

(2) The FWC must not make a protected action ballot order in relation to a proposed enterprise agreement except in the circumstances referred to in subsection (1).

(3) A protected action ballot order must specify the following:

(a) the name of each applicant for the order;
(b) the group or groups of employees who are to be balloted;
(c) the date by which voting in the protected action ballot closes;
(d) the question or questions to be put to the employees who are to be balloted, including the nature of the proposed industrial action.

(3A) For the purposes of paragraph (3)(c), the FWC must specify a date that will enable the protected action ballot to be conducted as expeditiously as practicable.

(4) If the FWC decides that a person other than the Australian Electoral Commission is to be the protected action ballot agent for the protected action ballot, the protected action ballot order must also specify:

(a) the person that the FWC decides, under subsection 444(1), is to be the protected action ballot agent; and
(b) the person (if any) that the FWC decides, under subsection 444(3), is to be the independent advisor for the ballot.

(5) If the FWC is satisfied, in relation to the proposed industrial action that is the subject of the protected action ballot, that there are exceptional circumstances justifying the period of written notice referred to in paragraph 414(2)(a) being longer than 3 working days, the protected action ballot order may specify a longer period of up to 7 working days.

Note: Under subsection 414(1), before a person engages in employee claim action for a proposed enterprise agreement, a bargaining representative of an employee who will be covered by the agreement must give written notice of the action to the employer of the employee.”

[8] There is no contest that the NUW is eligible to bring the application and that it has been, and is, genuinely trying to reach an agreement with the employer of the employees who are to be balloted. The evidence and other material before the Commission is also sufficient to demonstrate to the satisfaction of the Commission that all of the other requirements of s.443 of the Act have been met.

Should an extended period of notice be required for some forms of industrial action

[9] Ridley sought that written notice of seven working days be required in relation to some forms of the proposed protected industrial action. Section 443(5) of the Act provides, in effect, that if there are exceptional circumstances justifying the period of written notice (referred to in s.414(2)(a)) being longer than three working days, the protected action ballot order may specify a longer period of up to seven working days in relation to the proposed industrial action that is the subject of the protected action ballot.

[10] The approach to exceptional circumstances in this context was discussed by Lawler VP in CEPU v Australian Postal Corporation 1(CEPU), which concerned an equivalent provision of the Workplace Relations Act 19962where he concluded:

“[10] In this passage his Honour was concerned with the ordinary meaning of the expression “exceptional circumstances” and the approach identified is, in my view, equally applicable to the use of that expression in s.465(3). In summary, the expression “exceptional circumstances” requires consideration of all the circumstances. To be exceptional, circumstances must be out of the ordinary course, or unusual, or special, or uncommon but need not be unique, or unprecedented, or very rare. Circumstances will not be exceptional if they are regularly, or routinely, or normally encountered. Exceptional circumstances can include a single exceptional matter, a combination of exceptional factors or a combination of ordinary factors which, although individually of no particular significance, when taken together are seen as exceptional. It is not correct to construe “exceptional circumstances” as being only some unexpected occurrence, although frequently it will be. Nor is it correct to construe the plural “circumstances” as if it were only a singular occurrence, even though it can be a one off situation. The ordinary and natural meaning of “exceptional circumstances” includes a combination of factors which, when viewed together, may reasonably be seen as producing a situation which is out of the ordinary course, unusual, special or uncommon.

[11] However, it is important to note that when considering whether to make an order pursuant to s.463(5) the Commission is not simply concerned with determining whether there are exceptional circumstances. There must be exceptional circumstances “justifying” the specification of a longer notice period. The notion of justification is critical and calls for a consideration of the purpose of the notice required by s.441.

[21] Essentially, what is required in determining whether exceptional circumstances justify an extension of the required notices period is a weighing of the interests of the employer and third parties in the employer having a greater opportunity to take appropriate defensive action as against the diminution in the effectiveness of the employees’ bargaining power that results from such an extension. The fact that the legislature has seen fit to condition the ordering of an extension of the required notice period on the presence of exceptional circumstances justifying it, as distinct from merely conferring a simple discretion to extend the required notice period, indicates that ordinarily there should be no extension.

[22] The first example provided in Davids Distribution provides an illustration of where exceptional circumstances may justify an extension of the required notice period. A sophisticated piece of plant, such as a smelter, may take many days to shut down without damage. The employer is exposed to wholly disproportionate damage if it is prevented by too limited a notice period from undertaking an orderly shutdown of the plant. A further example may be afforded by a strike by teachers where the school needs to be able to notify parents of the strike so as to give them an opportunity to make alternative arrangements for the care of their children on the days of the strike. Typically, three working days will be insufficient for this purpose.”

[11] The exceptional circumstances relied upon in this case relate to the impact of work stoppages on the supply of chicken stock feed by Ridley from its Lara facility to its customers. Specifically, a shortage of stock feed from the Lara site, if not ameliorated, would likely result in poultry suffering a range of adverse impacts including stress, panic, suffocation, starvation and death.

[12] The forms of potential industrial action for which Ridley has sought to obtain the additional notice were:

•  Question 1 - An unlimited number of stoppages of work of 4 hours duration;

•  Question 2 - An unlimited number of stoppages of work of 24 hours duration;

•  Question 3 - An unlimited number of stoppages of indefinite duration; and

•  Question 7 - An unlimited number of bans on the unloading of trucks of indefinite duration.

[13] The forms of industrial action where additional notice was not sought involved three other forms of industrial action being:

•  Question 4 - An unlimited number of bans on overtime of indefinite duration;

•  Question 5 - An unlimited number of bans on paperwork of indefinite duration; and

•  Question 6 - An unlimited number of bans on the loading of trucks of indefinite duration.

[14] In order to warrant an extended period of notice, the Commission must be satisfied both as to the existence of exceptional circumstances and the fact that these justify the granting of the extended notice.

[15] As made clear in CEPU above, this also requires a weighing up of the opportunity for Ridley to take appropriate defensive action against the diminution of the effectiveness of the NUW members’ bargaining power that is contemplated by the scheme of the Act. In that light, it would not be a relevant exercise of discretion to grant additional notice simply to allow the employer to neutralise the impact of the industrial action.

[16] In this case, Ridley relied upon the following factors to demonstrate exceptional circumstances that warranted the extended period of notice:

•  The inability of Ridley to effectively respond to certain forms of industrial action within a 3 day period, thus limiting their ability to ameliorate the impact of the proposed industrial action on the production and supply of chicken stock feed to customers;

•  The consequent effects of chicken stock feed interruption on the welfare of chickens in terms of avoidable stress, suffering, suffocation, starvation and death;

•  The absence of adequate alternative supplies of chicken stock feed from competitors within the Victorian market; and

•  The capacity of Ridley to partially mitigate the animal welfare impacts by producing an additional 1000 tonnes per week of stock feed from its Dandenong plant subject to an increased notice period being obtained in respect of some forms of industrial action.

[17] Ridley led evidence from Mr Russell Lyons, General Manager Corporate Development at Ridley. Mr Lyons gave the following evidence in chief:

•  That the Lara plant currently produces approximately 3,500 tonnes of chicken stock feed per week; 3

•  That the poultry farms that Ridley supplies will generally hold enough stock feed storage capacity for its poultry of between twelve and seventy two hours; 4

•  Delivery of stock feed to poultry farms occurs Monday to Friday and sometimes on weekends and public holidays. The frequency of deliveries to specific farms may vary between that of daily and every two or three days depending on the life cycle of the chickens; 5

•  Interruption to the supply of chicken stock feed to farms can quickly impact on the welfare of the birds:

“Any interruption to the supply of feed to chickens can very quickly have deleterious effects on the stress and health of the bird, resulting in panic within the flock within eight hours, malnutrition and undernutrition, and serious welfare issues. This can, in turn, very quickly lead to starvation” 6

•  Ridley’s primary competitors in producing chicken stock feed are Inghams and Riverbank Stockfeeds however they have “very little capacity” to cover any shortfall at short notice; 7

•  Ridley has some capacity at its Dandenong site to increase production by approximately 1000 tonnes per week to partially offset supply interruption at its Lara site arising from protected industrial action; and

•  Production from Dandenong that would alleviate some of the bird welfare issues would require at least seven days’ notice of certain forms of industrial action. This was due to the logistical issues of sourcing raw materials, hiring and training additional labour and arranging delivery trucks. 8

[18] The NUW opposed the contention that additional notice should be provided on the following basis. Firstly, that alternate suppliers of chicken stockfeed were present within the Victorian market. Secondly, that a shortage of chicken stock feed in Victoria was not as acute as contended by Ridley. Thirdly, that Ridley has not put sufficient or reasonable thought into contingency plans to mitigate the impact of the potential industrial action. Finally, that Ridley had not undertaken any general defensive steps in anticipation of potential protected industrial action.

[19] The NUW did not lead evidence in relation to the extended notice period in support of its submissions and did not seek an adjournment or other opportunity to do so. The Union did however cross-examine Mr Lyons and provided evidence going to the merit of the PABO itself.

[20] Under cross examination Mr Lyons gave the following evidence:

•  Ridley had storage capacity on its sites of approximately eighteen percent of its daily production capacity;

•  My Lyons was not aware of any other significant additional storage capacity in the region;

•  There were no other companies in the region with significant capacity to increase production;

•  Coprice’s two plants in Victoria were technically designed and configured to supply the dairy industry and did not have the capacity to produce and supply chicken stock feed;

•  Ridley had not yet initiated the engagement or training of casual labour at its Dandenong site nor contacted alternate suppliers regarding options to mitigate interruptions to Ridley’s chicken stock feed production and supply; and

•  Ridley’s Packenham plant’s additional capacity was limited to 1000 tonnes per week as the balance of its productive capacity of 5000 tonnes per week was committed to other customers.

Consideration

[21] The evidence presented is that an interruption to Ridley’s supply of chicken stock feed from its Lara site will have deleterious effects on the health and welfare of poultry chickens being raised by customers supplied from the Lara site. Such interruption is likely to flow from the inability of Ridley to adequately respond to particular forms of industrial action with only three days’ notice.

[22] Ridley’s evidence is that it is able to take the necessary logistical steps to limit the adverse animal welfare impacts that may arise from protected industrial action taken by the NUW and its members by increasing production at its Packenham plant. For that production capacity increase to be effective in mitigating anticipated adverse animal welfare impacts it (Ridley) would require a lengthened notice period in respect of some of the identified forms of industrial action.

[23] No material was available to the Commission that contradicted the evidence of the company as to the limited sources of alternate production, storage and supply capacity within the region. Nor was any evidence presented that challenged the contentions of the company in relation to the logistical timeline and challenges it confronted in increasing its production from the Packenham plant.

[24] It is clear on the evidence, which I accept, that without an extension of the notice period sought by Ridley in respect of the above-referred questions (para 12), there will be significant and avoidable adverse animal welfare impacts.

[25] In regard to the NUW submission that the company had failed to take general defensive steps it is notable that Ridley has not sought an extension of the notice period in respect of all forms of protected industrial action but has limited its request to certain forms of action. This indicates that the company has turned its mind to the implications of the various forms of potential protected industrial action and its ability to mitigate the foreseeable animal welfare impacts.

[26] Furthermore, Ridley has identified the primary means of mitigation available to it in circumstances of limited alternate production supply, that of increasing production at its Dandenong site. I am satisfied that beyond the general planning that Ridley has outlined it would be unreasonable to require them to take specific steps to mitigate protected industrial action in advance of the precise form and timing of industrial action that the NUW and its members may take.

[27] In terms of the balance of considerations contemplated in CEPU, it is evident that even with the additional notice associated with the relevant proposed action; the industrial action has the potential to cause significant disruption to Ridley’s operations and revenue and to act as an effective part of the NUWs bargaining power.

[28] In all of the circumstances, I am satisfied that there are exceptional circumstances and these justify an extended period of notice in relation to the nominated forms of proposed industrial action. It is the combination of Ridley’s chicken stock feed supply operations; the consequences of the particular proposed action on the continuity of that supply, and the reasonable contingency planning that would be required in these circumstances once the notice of the actual industrial action is given. This is particularly so given the animal welfare considerations at stake.

[29] I am therefore satisfied that a longer notice period of seven days should be provided in respect of those forms of industrial action identified within the NUW draft Ballot Order at questions one, two, three and seven.

Form of ballot order

[30] I have issued the ballot order largely in the terms sought by the NUW. I have nominated a closing date for the ballot which represents 20 working days after the order, given the arrangements with the AEC and the requirements of s.443(3A) of the Act.

[31] I have also included the additional notice of industrial action for the nominated forms of potential industrial action as determined above.

DEPUTY PRESIDENT

Appearances:

Mr D Melling for the National Union of Workers.

Mr M Felman for Ridley AgriProducts Pty Ltd

Hearing details:

2017

Melbourne

27 November

 1   Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Australian Postal Corporation (2007) FWC 6831, at para 49.

 2   Section 463(5) of the Act.

 3   Exhibit R1, Witness Statement of Russell Lyons, dated 22 November 2017 at para 18.

 4   Ibid para 27.

 5   Ibid para 19.

 6   Ibid para 28.

 7   Ibid para 36.

 8   Ibid para 41.

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