Patrick Stevedores Holdings Pty Limited v Maritime Union of Australia

[2011] FWA 3059

[2011] FWA 3059

FAIR WORK AUSTRALIA

REASONS FOR DECISION

Fair Work Act 2009
s.425—Industrial action

Patrick Stevedores Holdings Pty Limited
v
Maritime Union of Australia
(B2011/2812 - 2816)

SENIOR DEPUTY PRESIDENT KAUFMAN MELBOURNE, 18 MAY 2011

Cooling off period - suspending protected industrial action - refusal to bargain during protected industrial action.

[1] On 3 May 2011 I dismissed five applications made under s 425 of the Fair Work Act 2009 by Patrick Stevedores Holdings Pty Limited for the making of an order suspending protected industrial action that was being taken or threatened at several port facilities operated by Patrick. These are my reasons for that decision. Each application related to a different Patrick facility. Each facility is covered by a separate industrial instrument for its bulk and general operations, the nominal expiry date of which has expired. The matters were heard together and, in these reasons, it is not necessary to deal with them separately.

[2] By way of background, it suffices to note that Patrick provides bulk and general stevedoring services at several sites throughout Australia and employs approximately 1300 stevedores across those facilities. The employees who perform the stevedoring work are, or are eligible to be, members of the Maritime Union of Australia.

[3] The industrial instruments, being enterprise agreements, have different nominal expiry dates ranging between June 2010 and March 2011. In around May 2010 there were preliminary discussions between Patrick and the MUA about the making of new agreements, and in or about July 2010 Patrick issued a Notice of Representational Rights in accordance with s 173 of the Fair Work Act 2009 to all its employees who were proposed to be covered by the new agreements.

[4] Each current agreement is in three parts, A, B and C. Parts A & B deal with matters of national application, whereas part C deals with issues specific to the site to which the agreement applies. It is apparently intended that the proposed agreements also be in three parts. Since July 2010 there have been some 20 meetings between the parties at a national level and some 40 local site meetings.

[5] Little progress having been made in the negotiations, employee protected industrial action was taken at various sites over a period of approximately two weeks in December 2010 and January 2011. After Patrick agreed to make a formal offer to the MUA the protected industrial action was suspended by the MUA on or about 4 February 2011. No further protected industrial action was taken until April 2011. During that period little progress was made beyond an offer that Patrick had made in early February 2011. On 31 March 2011 the MUA notified Patrick that further industrial action would commence in April. Since 6 April 2011 various forms of protected employee action have been taken. It is fair to say that the scope and nature of the protected action has escalated leading to the making of these applications.

[6] At the hearing Mr C Gardner, solicitor, appeared for Patrick and Mr H Borenstein, S.C. appeared for the MUA.

[7] Section 425 of the Act provides:

425 FWA must suspend protected industrial action—cooling off

(1) 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 taking into account the following matters:

(a) whether the suspension would be beneficial to the bargaining representatives for the agreement because it would assist in resolving the matters at issue;

(b) the duration of the protected industrial action;

(c) whether the suspension would be contrary to the public interest or inconsistent with the objects of this Act;

(d) any other matters that FWA considers relevant.

(2) FWA may make the order only on application by:

(a) a bargaining representative for the agreement; or

(b) a person prescribed by the regulations.

[8] The thrust of Mr Gardner’s submissions was that, having regard to the history and complexity of the negotiations, it was appropriate to suspend the protected industrial action because it would be beneficial to the bargaining representatives. It was put that given the number of sites at which Part C negotiations must take place together with the national negotiations the human resources required are substantial. Having to deal with industrial action and the necessity to work around bans and limitations whilst dealing with customers in order to try to fulfil commitments detracts from Patrick’s ability to devote its resources to negotiations. Having a moratorium on industrial action would enable Patrick to devote its resources to the negotiations in a calmer atmosphere that would be more conducive to fruitful talks. Although this submission has some attraction, in the circumstances of the case, it was not sufficient to persuade me that it was appropriate to suspend the industrial action.

[9] Patrick has adopted an attitude that it generally will not engage in negotiations whilst industrial action, protected or otherwise, is occurring. Such a stance is open to Patrick and no criticism is levelled at it for adopting it. By the time the matter had come on for hearing, Patrick had modified its position and indicated that it would be prepared to negotiate whilst some forms of industrial action continued if certain other aspects of the protected action were removed.

[10] Whilst, so long as its actions are consistent with the good faith bargaining provisions in s 228 of the Act, a party to negotiations may choose not to talk whilst protected industrial action is occurring, it is difficult to see how, in those circumstances, it can contend that a suspension of the action is desirable in order that negotiations may commence or recommence. The choice not to participate whilst industrial action was occurring was Patrick’s. The resumption of negotiations merely requires a reversal of that stance. Had the state of the bargaining process reached the position that it has, whilst negotiations had been taking place, Patrick might have had a stronger case that the industrial action should be suspended.

[11] In Construction, Forestry, Mining and Energy Union v Woodside Burrup Pty Ltd 1a full bench considered the requirements for the suspension of industrial action under s 426 of the Act. Although that case dealt with an application made under s 426 and not s 425, as in the present case, it provides a useful analysis of the scheme of the Act insofar as the taking of protected industrial action, as well as its suspension, is concerned.

[12] After dealing with the authorities on construing provisions in an Act, the full bench made the following observations, with which I agree.

[25] Turning to the context of the Act as a whole, we note first that for many decades prior to the WorkChoices amendments to the Workplace Relations Act 1996 (WR Act), the Australian Industrial Relations Commission and its predecessors had the power to settle (interstate) industrial disputes through compulsory arbitration. Where a dispute over terms and conditions of employment was resolved by arbitration this occurred through the making of an award, binding the disputants, that had statutory effect. That long standing power to settle disputes by compulsory arbitration was essentially removed by the WorkChoices amendments to the WR Act and has not been restored by the FW Act. Rather, enterprise bargaining may now be seen as a central component of the industrial relations regime provided for in the FW Act by which employees may act collectively to secure improvements in their terms and conditions of employment.

[26] Industrial action is defined broadly in s.19 of the FW Act. Section 408 defines “protected industrial action”. Subject to various requirements, industrial action taken for the purpose of advancing claims for a proposed enterprise agreement is “protected industrial action”. FW Act which (sic) confers immunity from civil action in relation to protected industrial action (s.415). The taking of industrial action that is not protected industrial action is effectively proscribed. Once an enterprise agreement has been made and approved, any industrial action taken by employees covered by the agreement before the nominal expiry date of the agreement will be unprotected (s.417). A person affected by unprotected industrial action that is happening, threatened pending, probable or being organised can apply to FWA for an order that the industrial action stop, not occur or not be organised. If FWA is satisfied that industrial action, that is not, or would not be, protected industrial action, is that (sic) happening, threatened pending, probable or being organised then FWA must make an order that the industrial action stop, not occur or not be organised (s.418). Contravention of such an order is prohibited and both civil remedies and injunctive relief are available for such a contravention (s.421) and, in the case of injunctive relief, with all the consequences that flow from breaching an injunction.

…

[28] The FW Act makes provision for the suspension or termination of protected industrial action in certain circumstances. FWA has been given the power to suspend or terminate protected industrial action where such action

(a) is causing or threaten to cause “significant economic harm” to any employer or employees who will be covered by the proposed enterprise agreement, provided such harm is imminent (s.423); or

(b) has threatened, is threatening or would threaten to endanger the life, the personal safety or health, or the welfare, of the population or a part of it; or to cause “significant damage” to the Australian economy or an important part of it (s.424); or

(c) is threatening to cause significant harm to a third party (that is, a person other than a bargaining representative for the proposed agreement or an employee who will be covered by the proposed agreement) (s.426).

[29] FWA also has the power to suspend protected industrial action to facilitate a ‘cooling off’- that is, where the suspension would be beneficial to the bargaining representatives for the proposed agreement because it would assist in resolving the matters in dispute (s.425).

...

[34] The objects of the FW Act are set out in s.3:

“3 Object of this Act

The object of this Act is to provide a balanced framework for cooperative and productive workplace relations that promotes national economic prosperity and social inclusion for all Australians by:

(a) providing workplace relations laws that are fair to working Australians, are flexible for businesses, promote productivity and economic growth for Australia’s future economic prosperity and take into account Australia’s international labour obligations; and

...

(f) achieving productivity and fairness through an emphasis on enterprise-level collective bargaining underpinned by simple good faith bargaining obligations and clear rules governing industrial action; and

...

[36] Since protected industrial action is confined to the process surrounding the making of agreements Section 171 which sets out the object of Part 2-4 of the Act is also relevant. Section 171 provides:

“171 Objects of this Part

The objects of this Part are:

(a) to provide a simple, flexible and fair framework that enables collective bargaining in good faith, particularly at the enterprise level, for enterprise agreements that deliver productivity benefits; and

(b) to enable FWA to facilitate good faith bargaining and the making of enterprise agreements, including through:

(i) making bargaining orders; and

(ii) dealing with disputes where the bargaining representatives request assistance; and

(iii) ensuring that applications to FWA for approval of enterprise agreements are dealt with without delay.”

[37] The objective to “facilitate good faith bargaining and the making of enterprise agreements” is of particular relevance. Like the Workplace Relations Act 1996 before it, the FW Act creates what the Explanatory Memorandum justifiably describes as a “right” in employees to take protected industrial action in support of claims for an enterprise agreement. That legislation may properly be seen as the means by which Australia has given effect to its important obligations under the International Labour Organisation Conventions particularly Convention no. 87 Freedom of Association and Protection of the Right to Organise 1948 and Convention No, 98 Right to Organise and Collective Bargaining 1949, both ratified by Australia in 1973.

[39] The Explanatory Memorandum for the FW Act includes the following in the introductory remarks in relation to Part 3-3 which deals with “Industrial Action”:

“Division 6 – Suspension or termination of protected industrial action by FWA

1706. Division 6 sets out the grounds upon which FWA may suspend or terminate protected industrial action organised, or engaged in, in relation to a proposed enterprise agreement.

1707. Suspension or termination of protected industrial action brings to an end the right to take protected industrial action. Protected industrial action may be resumed after any period of suspension, but will be subject to any requirements for the giving of notice before any action may be taken. A termination of protected industrial action may lead to FWA making a workplace determination under Part 2-5.

1708. The Bill recognises that employees have a right to take protected industrial action during bargaining. These measures recognise that, while protected industrial action is legitimate during bargaining for an enterprise agreement, there may be cases where the impact of that action on the parties or on third parties is so severe that it is in the public interest, or even potentially the interests of those engaging in the action, that the industrial action cease — at least temporarily.

1709. It is not intended that these mechanisms be capable of being triggered where the industrial action is merely causing an inconvenience. Nor is it intended that these mechanisms be used generally to prevent legitimate protected industrial action in the course of bargaining.

1710. Under the Bill, FWA:

• may suspend or terminate protected industrial action if the action is causing (or threatening to cause) significant economic harm to the employer and/or employees (clause 423);

• must suspend or terminate protected industrial action if the action has threatened, is threatening or would threaten to endanger life, personal safety or the health of the population or cause significant damage to the economy (clause 424);

• must suspend protected industrial action to provide for a cooling-off period (clause 425); and

• must suspend protected industrial action if the action is adversely affecting the employer and its employees and is threatening to cause significant harm to a third party (clause 426).”

(original emphasis deleted)

[13] In relation to s 425, the Explanatory Memorandum states:

“Clause 425 – FWA must suspend protected industrial action – cooling off

1723. This clause enables FWA to suspend the taking of protected industrial action to provide for a cooling-off period. Protected industrial action cannot be terminated on this ground.

1724. FWA is required to make an order suspending protected industrial action if it is satisfied that it would be appropriate to do so taking into account the following matters (subclause 425(1)):

• whether suspension would assist the bargaining representatives to resolve the matters at issue;

• the duration of the protected industrial action;

• the public interest and the objects of the Act; and

• any other relevant matters.

1725. FWA may only make an order suspending protected industrial action upon application by a bargaining representative for the proposed enterprise agreement or a person prescribed by the regulations (subclause 425(2)).”

[14] The full bench further observed:

[42] In National Tertiary Education Industry Union v University of South Australia 2 a Full Bench was concerned with an appeal against a decision suspending protected industrial action pursuant to s.424 of the FW Act. The Full Bench observed:

“[8] Within the scheme of the Act, the powers in relation to the suspension or termination of protected industrial action are intended to be used in exceptional circumstances and where significant harm is being caused by the action. This is clear from the Explanatory Memorandum to the Fair Work Bill 2008:

The Bill recognises that employees have a right to take protected industrial action during bargaining. These measures recognise that, while protected industrial action is legitimate during bargaining for an enterprise agreement, there may be cases where the impact of that action on the parties or on third parties is so severe that it is in the public interest, or even potentially the interests of those engaging in the action, that the industrial action cease — at least temporarily.

It is not intended that these mechanisms be capable of being triggered where the industrial action is merely causing an inconvenience. Nor is it intended that these mechanisms be used generally to prevent legitimate protected industrial action in the course of bargaining.” [paras. 1708-1709]”

(emphasis added)

[43] Just as that Full Bench considered that the power in s.424 was intended to be used only in “exceptional circumstances”, we consider that the power in s.426 is likewise intended only to be used in exceptional circumstances. That outcome is determined by a proper construction of the expression “significant harm’ and also by a proper appreciation of when it will be “appropriate” to make an order within the meaning of s.424(5). It is also consonant with the approach taken by the majority of the Full Court of the Federal Court in relation to s.170MW of the Workplace Relations Act 1996 in Re Polites; Ex parte Construction, Forestry, Mining and Energy Union 3 and paragraphs 1709 and 1728 of the Explanatory Memorandum in particular.

[15] Although sections 423, 424, 425 and 426 are all to be found in Chapter 3, Part 3-3, Division 6 of the Act, s 425 is not concerned with whether the protected industrial action is causing significant economic harm, endangering life or causing significant harm to a third party. Indeed, in deciding whether to suspend protected industrial action under s 425, Fair Work Australia is not required to have regard to the impact of the industrial action, other than in the context of determining whether suspending it would assist in resolving the matters at issue. Nevertheless, the comments of the full bench in relation to the scheme and objects of the Act in relation to the taking of protected industrial action seem to me to be apposite. In my view, whilst the power to suspend industrial action under s 425 is not confined to “exceptional circumstances” - it would be unexceptional to find that a suspension of industrial action will assist bargaining - the approach of Fair Work Australia when dealing with s 425 applications should be a cautious one.

[16] In the circumstances of this case, where the decision not to negotiate whilst industrial action is occurring is Patrick’s, it seems to me that, in addition to suspension not being beneficial to the bargaining representatives in assisting them to resolve the matters in issue, it would be contrary to the scheme and objects of the Act to suspend the protected industrial action.

[17] I am able to deal briefly with the other matters to which I am to have regard under s 425 of the Act. Insofar as the duration of the protected industrial action is concerned, it seems to me that although it has now been occurring since April this year, this factor would have borne greater weight had Patrick been prepared to negotiate during this period.

[18] I need not have regard to whether the suspension would be contrary to the public interest or inconsistent with the objects of the Act given that, for other reasons, I have decided not to suspend the protected industrial action.

[19] Although the industrial action is causing significant financial harm to Patrick and adversely affecting its customers, these are the natural, expected and intended consequences of the taking of protected industrial action.

[20] It is for these reasons that I was not satisfied that the suspension was appropriate and dismissed the application.

SENIOR DEPUTY PRESIDENT

Appearances:

C Gardner, solicitor, on behalf of Patrick Stevedores Holdings Pty Ltd.

H Borenstein S.C, counsel, on behalf of the Maritime Union of Australia.

Hearing details:

2011.

Melbourne

May 3.

 1 (2010) 198 IR 360; [2010] FWAFB 6021

 2   [2010] FWAFB 1014

 3 (2002) 117 FCR 212 per Lee and Madgwick JJ esp. at [54]

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