Pelican Point Power Limited
[2010] FWA 8666
•10 NOVEMBER 2010
[2010] FWA 8666 |
|
DECISION |
Fair Work Act 2009
s.424 - Application to suspend or terminate protected industrial action - endangering life etc.
Pelican Point Power Limited
(B2010/297)
SENIOR DEPUTY PRESIDENT O'CALLAGHAN | ADELAIDE, 10 NOVEMBER 2010 |
Application to suspend or terminate protected industrial action - endangering life etc.
[1] On 5 November 2010 Pelican Point Power Ltd (Pelican Point) lodged an application pursuant to section 424 of the Fair Work Act 2009 (the Act), through which it sought the termination of protected industrial action which was proposed by the Australian Services Union (ASU) to commence on 11 November 2010.
[2] The application was the subject of a hearing on 8 November 2010. At this hearing Pelican Point was represented by Mr Short of counsel and the ASU, by Mr White.
[3] The background to this matter is complex but, for the immediate purposes of the application, can be simply summarised.
[4] Pelican Point operate a gas fired electricity generation facility in South Australia. Pelican Point employ around 37 employees. Currently, fifteen of these employees are involved in production activities and seven are involved in maintenance activities. Approximately five employees are covered by current Australian Workplace Agreements and are hence excluded from any proposed industrial action.
[5] A protected action ballot order was issued on 6 May 2010 1. A further protected action ballot order was issued by Bartel, DP on 18 October 20102 and is the subject of an appeal which is yet to be heard. The declaration for this protected action ballot was made on 29 October 2010 such that the proposed actions were approved.
[6] The question put to eligible employees was:
“In support of reaching an enterprise agreement with your employer do you wish to organise and/or engage separately, concurrently and/or consecutively in industrial action against your employer in the form of taking all of the actions set out below?
i. Taking the power station off generation for 24 hour periods. In those 24 hour periods generation from the station will be 0 megawatts.
ii. Placing the station in safe shutdown mode for the 24 hour periods in which the station is taken off generation.
iii. Not issuing permits to work during the 24 hour periods in which the station is placed in safe shutdown mode.
iv. In cases where any steam or gas turbine main circuit breaker opens, placing the affected steam or gas turbine in safe shutdown mode and not returning it to service.
v. When affected plant is in safe shutdown mode not issuing permits to work in respect of that plant.”
[7] On 3 November 2010 the ASU gave notice pursuant to section 414(1) of the Act of its intention to commence the above actions on 11 November 2010.
[8] The Pelican Point application is made on the grounds that Pelican Point supply approximately 25% of South Australian electricity needs as a participant in the National Electricity Grid. Further, that the cessation of power generation in the manner proposed by the ASU is likely to give rise to electricity outages affecting the South Australian population and hence threatens to endanger the welfare of part of the population, being the people of South Australia who receive energy through this National Electricity Grid. Secondly, Pelican Point argues that section 424(1)(d) applies such that the proposed protected industrial action is threatening to cause significant damage to an important part of the Australian economy.
[9] Evidence was given in support of the application by Mr Taylor, who is the South Australian Asset Manager for International Power (Australia) Pty Ltd. Pelican Power is a subsidiary of International Power (Australia) Pty Ltd and Mr Taylor is responsible for the overall management of the Pelican Power power station and a wind farm electricity generation facility operated by Pelican Power.
[10] Mr Taylor’s evidence went to power generation arrangements in South Australia as a participant in the National Electricity Grid, including the function undertaken by the Australian Energy Market Operator (AEMO) to manage that Grid. Mr Taylor explained the operation of the Pelican Power electricity generation facility, the agreement negotiation process and the two means by which he understood the industrial action proposed could be implemented. In this respect he stated:
“22. In order to take Pelican Point off generation, as set out in paragraph 20(i) above, one or more of the eligible employees would be required to take positive action. Specifically, the eligible employee(s) would have to use a control system located at, and owned by, Pelican point. Such conduct will not be immune from action due to section 415 of the Fair Work Act 2009 (Cth).
23. A short time after performing these tasks, the electrical output of Pelican Point would begin to reduce. The amount of electricity produced by Pelican point would reduce incrementally over a short period of time, until it reached 0 megawatts. At the time when electrical output reached 0 megawatts, the Pelican Point turbines would shut down completely.
24. There is another way that plant at Pelican Point could be shut down. That is by pressing two ‘trip buttons’. That would stop electricity generation immediately. It would be expensive, risk damage to the turbines and greatly increase the likelihood of blackouts. There would be a huge change in supply to the National Electricity Grid and consequential risk of blackouts.”
[11] Mr Taylor’s evidence went to his assessment of the effects of taking the Pelican Point gas turbine facility off generation. He stated:
“36. Without being provided with prior notice, AEMO cannot schedule rolling blackouts prior to Pelican Point being taken off generation. AEMO will likely schedule rolling blackouts soon after Pelican Point begins to go off generation, in an effort to minimise the impact of Pelican Point being off generation. However, there will be a time lag in this process, during which time unscheduled blackouts may occur.
37. If Pelican Point is taken off generation without notice during a period of peak demand, blackouts will occur. These blackouts may be rolling, unscheduled, or both. I note the forecast for Thursday 11 November 2010 and Friday 12 November 2010 is 30-31 degrees. If that happens, there will be a higher demand for electricity. I also note the proposed action could occur on any day as of 11 November 2010, without further notification. At this time of year, there is an increasing likelihood of hot weather and therefore, if the proposed action is taken, also of blackouts.”
[12] Finally, Mr Taylor’s evidence went to his assessment of the effect of power outages in South Australia.
[13] While the ASU did not call evidence in support of its position, I was provided with a number of AEMO documents upon which, together with the evidence of Mr Taylor, the ASU relied so as to assert that the basis for the application had not been established.
[14] Before considering the application I should also note that, in the course of the hearing I was provided with a substantial amount of material that went to the various negotiations which have occurred as the parties pursue an agreed position. Whilst I will return to this issue later in this decision, both parties drew to my attention that a further negotiating meeting was set for 9 November 2010. The ASU expressed the hope that this meeting would allow for further progress toward an agreed position. At the conclusion of the hearing I advised the parties that a decision in this matter would be issued at some time after 5.00 pm on 9 November 2010 unless the parties advised me that the progress at this meeting was such that the notice of protected industrial action issued on 3 November 2010 was withdrawn.
[15] At 4.22 pm on 9 November 2010 my office received e-mail advice from Mr Short to the effect that whilst good progress was made an agreement had not been reached and that Mr White had advised that he would communicate with Fair Work Australia that good progress had been made, that action would not be taken before Tuesday, 16 November 2010 but that the notice of action would not be withdrawn. Mr Short sought that the application be determined in accordance with section 424(3).
[16] I received further advice from the ASU this morning. This advice confirms that significant progress was made at the meeting on 9 November 2010 and that the parties are meeting again on 16 November. In this advice the ASU state that whilst it is still considering revocation of the notice of protected industrial action, it undertakes that no action will occur before next Wednesday. Whilst the ASU refers to this date as 17 October 2010, I have taken it to mean Wednesday 17 November.
[17] Sub sections 424(3) and (4) state:
“Application must be determined within 5 days
(3) If an application for an order under this section is made, FWA must, as far as practicable, determine the application within 5 days after it is made.
Interim orders
(4) If FWA is unable to determine the application within that period, FWA must, within that period, make an interim order suspending the protected industrial action to which the application relates until the application is determined.”
[18] Consequently, while the advice of good negotiation progress is clearly positive, given that the notice of protected industrial action remains in place, the Act imposes an obligation on me to determine the matter on either an interim or final basis. I have done this.
[19] Section 424(1) states:
“424 FWA must suspend or terminate protected industrial action—endangering life etc.
Suspension or termination of protected industrial action
(1) FWA must make an order suspending or terminating protected industrial action for a proposed enterprise agreement that:
(a) is being engaged in; or
(b) is threatened, impending or probable;
if FWA is satisfied that the protected industrial action has threatened, is threatening, or would threaten:
(c) to endanger the life, the personal safety or health, or the welfare, of the population or of part of it; or
(d) to cause significant damage to the Australian economy or an important part of it.
[20] There is no dispute that the notice of protected industrial action of 3 November 2010 represents a threat to engage in industrial action. This threat has been made through a notice issued consistent with the requirements of the Act, as part of the bargaining process which is currently underway. Further, there is no dispute that the position adopted by Pelican Power with respect to the application of section 415 and the possibility that the action taken by employees would not be immune from other proceedings, is not a matter which is relevant to this particular application.
[21] What is in dispute, is the extent to which the material provided to me establishes that industrial action proposed for 11 November 2010, which may now not occur until 17 November 2010, has threatened to endanger the life, personal safety or health, or the welfare of South Australians dependent on the National Electricity Grid for their electricity supplies. For the application to be successful I must be satisfied about two questions. Firstly, does the proposed industrial action represent a threat to continuing electricity supplies in South Australia? Secondly, if such a threat applies, would the interruption of electricity supplies endanger life, personal safety or health, or the welfare of South Australians?
[22] Information provided to me by the ASU goes to the proportion of electricity generated in South Australia as distinct from other states, participants in the National Electricity Grid. Further, it goes to the proportion of South Australian generated electricity which is produced by this particular Pelican Power facility. In these respects, the ASU may be correct in its position that this particular Pelican Power electricity generation function is less significant in its contribution to South Australian power generation than Mr Taylor has asserted. However, there is insufficient evidence before me, particularly relative to the contribution of wind turbine power generation facilities, to allow a definitive conclusion.
[23] Irrespective of this issue, the evidence of Mr Taylor about the likelihood of power outages arising from the Pelican Point facility being taken off generation without notice represents compelling evidence to support the proposition that the proposed industrial action would represent a threat to continuing electricity supplies in South Australia. Further, Mr Taylor’s evidence does not enable me to conclude that the use of electricity inter-connectors with other states or other electricity generators in South Australia would avoid the very real potential for unscheduled power outages. In this respect, I accept that the role of AEMO is to manage the market and power system, and that this role is undertaken from the control centres to enable AEMO to best respond to changes in the market or the power system. However, the evidence of Mr Taylor is that:
“34. If AEMO is unable to source sufficient electricity in a period of low demand to compensate for the decrease in electricity production at Pelican Point, there may be an unscheduled blackout. This would occur as the demand for electricity would exceed to amount being supplied to the National Electricity Grid.
35. In a period of peak demand, as mentioned above, other electricity generators are already operating at or near capacity. As such, it is unlikely that AEMO will be able to source electricity from other electricity generators in South Australia or interstate to compensate for the decrease in electricity generation at Pelican Point.”
[24] I have concluded that it is the unscheduled nature of the cessation of the Pelican Point electricity generation disruption that represents the most significant threat to the interruption of power supplies and significant harm in the context of section 424. I note the comments of the Full Bench in National Tertiary Education Industry Union v University of South Australia 3:
“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]”
[25] I have considered the extent to which Pelican Power could initiate action of its own motion to cease power generation, having provided advice to AEMO to this effect. Whilst such an action has the capacity to avoid the risk of unscheduled power outages in that it would allow AEMO to arrange for the generation and purchase of electricity from other sources, I do not consider that such a consideration is relevant to whether an order should be made pursuant to section 424. This section requires that I be satisfied that the protected industrial action has, is, or would threaten to endanger the life, the personal safety or health or the welfare of the population or a part of it. It does not require, or provide a licence to consider whether the employer’s closure of its business, with the potential for that to affect other employees, should occur so as to counteract the threat that would otherwise exist.
[26] On the same basis, while it may be possible for Pelican Power to operate the electricity function for a time through the use of other staff or staff of other companies, I am not satisfied that this is either practical nor obligatory in terms of the assessment that I am required to make.
[27] Accordingly, I am satisfied that the proposed protected industrial action represents a threat to continuing electricity supplies in South Australia.
[28] Mr Taylor’s evidence extended to his assessment of the effect of power outages. I accept that in this respect, Mr Taylor's assessment represents a personal view. However, in the absence of any alternative view and, given the realities of modern life, I consider that power outages would threaten to endanger the personal safety or health, or the welfare of South Australians. Numerous examples associated with safety issues are obvious and include the operation of road traffic controls and health services. Further, power outages are likely to affect the efficiency of other businesses in so far as they are likely to cause stock damage and constrain business operations.
[29] Consequently, I am satisfied that the disruption of electricity supplies would threaten the personal safety or health, or the welfare of a substantial component of the South Australian population.
[30] Section 424 requires that in these circumstances I must make an order suspending or terminating protected industrial action. I have considered the nature of the industry and the status of the negotiations as factors relevant to the form of this order.
[31] Pelican Point urged that I terminate the protected industrial action on the basis that negotiations since September 2009 had not resolved the conflict between the parties and the ASU had not properly responded to proposals presented by Pelican Point. The ASU indicated that, notwithstanding that it did not consider the prerequisites for the making of any order had been made out, a suspension was more appropriate than termination of the protected industrial action.
[32] The ASU has detailed to me its position with respect to the 11 substantial outstanding issues including five issues which it described as absolutely critical. The ASU advice received today further detailed its position that significant progress had now been made with respect to a number of those issues that the parties were close to an agreement in relation to certain of these matters and were optimistic that further progress could be made at the next meeting on 16 November 2010. Indeed, Mr Short’s e-mail to me of 9 November 2010 confirms this significant progress.
[33] It may well be that the possibility of protected industrial action has contributed to this significant progress. Given the extent to which I consider that an agreement might be able to be achieved in the near future, termination of the protected industrial action would, at the present time, be premature. Accordingly, I will suspend the protected industrial action for a very limited time to allow the parties to continue to work toward an agreed position. I consider that a suspension of three weeks duration is appropriate in these circumstances.
[34] An Order (PR503750), giving effect to this decision will be published.
SENIOR DEPUTY PRESIDENT
Appearances:
A Short counsel for Pelican Point Power Limited.
A White representing the Australian Municipal, Administrative, Clerical and Services Union.
Hearing details:
2010.
Adelaide:
November 8.
1 [2010] FWA 3571
2 [2010] FWA 7739
3 [2010] FWAFB 1014
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