PJ Walsh Constructions Pty LtdvConstruction, Forestry, Maritime, Mining and Energy Union
[2019] FWC 1677
•15 MARCH 2019
| [2019] FWC 1677 |
| FAIR WORK COMMISSION |
REASON FOR DECISION |
Fair Work Act 2009
s.418—Industrial action
PJ Walsh Constructions Pty Ltd
v
Construction, Forestry, Maritime, Mining and Energy Union
(C2019/1579)
COMMISSIONER HUNT | BRISBANE, 15 MARCH 2019 |
Alleged industrial action at PJ Walsh Construction Pty Ltd at the North Queensland Stadium Project, Townsville Queensland.
[1] An application for an order under s.418 of the Fair Work Act 2009 (the Act) was made to the Fair Work Commission (the Commission) at 6.30pm on 12 March 2018 by PJ Walsh Constructions Pty Ltd (the Employer). The application was accompanied by an unsigned statement of Mr Patrick Walsh dated 12 March 2019.
[2] It was alleged that on 11 March 2019, approximately 24 employees at the North Queensland Stadium site in Townsville (the Project) elected against returning to work to undertake formwork and concrete pours after having spoken with an organiser from the Construction, Forestry, Maritime, Mining and Energy Union (CFMMEU).
[3] At the time of making the application on 12 March 2019, the employees had refused to work.
Hearing
[4] On 13 March 2019 I listed the application for hearing at 4.00pm on 14 March 2019. Evidence was provided by the Employer that the CFMMEU, together with the relevant employees of the Employer alleged to have taken the industrial action had been served with the application, a draft order, and the notice of listing.
[5] At the hearing Mr Martin Belfield, Manager – Workplace Relations of Master Builders Queensland appeared for the Employer, together with Ms Emma Kirkby, Principal Advisor Workplace Relations. Mr Walsh gave evidence by telephone. Mr Ashley Borg, Senior Industrial Officer appeared for the CFMMEU. No witnesses were called for the CFMMEU.
Procedural matters
[6] The application sought orders be made by the Commission against:
(a) the CFMMEU;
(b) the delegates, officers, employees and agents of the CFMMEU; and
(c) all CW construction employees employed by the Employer pursuant to the PJ Walsh Constructions Pty Ltd and Advanced Concrete Cutting and Drilling, Multi-Enterprise Agreement 2014-2018 (the Agreement).
Legislative context
[7] The application has been made pursuant to s.418 of the Act. Section 418 provides:
“418 FWC must order that industrial action by employees or employers stop etc.
(1) If it appears to the FWC that industrial action by one or more employees or employers that is not, or would not be, protected industrial action:
(a) is happening; or
(b) is threatened, impending or probable; or
(c) is being organised;
the FWC must make an order that the industrial action stop, not occur or not be organised (as the case may be) for a period (the stop period) specified in the order.
Note: For interim orders, see section 420.
(2) The FWC may make the order:
(a) on its own initiative; or
(b) on application by either of the following:
(i) a person who is affected (whether directly or indirectly), or who is likely to be affected (whether directly or indirectly), by the industrial action;
(ii) an organisation of which a person referred to in subparagraph (i) is a member.
(3) In making the order, the FWC does not have to specify the particular industrial action.
(4) If the FWC is required to make an order under subsection (1) in relation to industrial action and a protected action ballot authorised the industrial action:
(a) some or all of which has not been taken before the beginning of the stop period specified in the order; or
(b) which has not ended before the beginning of that stop period; or
(c) beyond that stop period;
the FWC may state in the order whether or not the industrial action may be engaged in after the end of that stop period without another protected action ballot.”
[8] The meaning of industrial action is contained at s.19 of the Act:
“419 Meaning of industrial action
(1) Industrial action means action of any of the following kinds:
(a) the performance of work by an employee in a manner different from that in which it is customarily performed, or the adoption of a practice in relation to work by an employee, the result of which is a restriction or limitation on, or a delay in, the performance of the work;
(b) a ban, limitation or restriction on the performance of work by an employee or on the acceptance of or offering for work by an employee;
(c) a failure or refusal by employees to attend for work or a failure or refusal to perform any work at all by employees who attend for work;
(d) the lockout of employees from their employment by the employer of the employees.
(2) However, industrial action does not include the following:
(a) action by employees that is authorised or agreed to by the employer of the employees;
(b) action by an employer that is authorised or agreed to by, or on behalf of, employees of the employer;
(c) action by an employee if:
(i) the action was based on a reasonable concern of the employee about an imminent risk to his or her health or safety; and
(ii) the employee did not unreasonably fail to comply with a direction of his or her employer to perform other available work, whether at the same or another workplace, that was safe and appropriate for the employee to perform.
(3) An employer locks out employees from their employment if the employer prevents the employees from performing work under their contracts of employment without terminating those contracts.’
Mr Walsh’s evidence
[9] Mr Walsh made two witness statements, admitted into evidence. Relevant paragraphs from his first witness statement dated 12 March 2019 are as follows:
“…
4. On 11 March 2019 the Company had 24 employees engaged on the Stadium undertaking formwork and concrete pours.
..
6. The employees stopped work for “smoko” as usual at 10.30am.
7. During this break a CFMMEU organiser, known to me as Grant Harradine entered the site sheds where the employees where [sic] having their break.
8. After the completion of smoko, the employees stayed in the sheds and refused to return to work despite being instructed to do so on several occasions.
9. I instructed the employees to return to work and saw my site supervisor also do so.
10. The employees stayed in the sheds until the end of ordinary hours at 2pm.
11. Work was due to start again at 6am on the 12th March 2019. The employees attended site but did not commence work.
12. At 6.10am I was approached by the CFMMEU organiser Grant Harradine who told me that he had been elected to represent the employees and that he was to pursue a project agreement made with the CFMMEU.
13. Grand Harradine informed me that people in the state government told him that the only way the boys will get the money that is being sought onsite is to sign the project agreement.
14. I attempted to talk to the employees and inform them that the Company had committed to paying the project rates on an individual basis but Grant Harradine repeatedly interrupted and said that this was not sufficient.
15. The employees remained in the sheds until 2pm and then left site for the day.
16. On the 13th March we scheduled the employees working on the stadium to attend the PJWALSH main office on 1 jay st bohle @ 6:30am to discuss the stadium and how we could fix the perceived problems with pay condition only 5 showed up the rest went to the stadium I spoke to the employees that attended and they were receptive what we were doing. Nathan smith our site foremen went to the stadium and showed the boys the draft pays conditions that were being proposed they then left the stadium with the CFMMEU organiser Grant Harradine and went to the CFMMEU Townsville office.
17. The tasks of the employees are to set forms for concrete, pour and finish concrete. The employees have not undertaken these tasks since 10.30am on 11th March 2019.
18. I am unaware of any safety issues on the site.”
[10] Relevant paragraphs from Mr Walsh’s second witness statement dated 14 March 2019 are as follows:
“….
4. At 6am, 14 March 2019, I observed the employees had attended the site but had not commenced work. The employees had gathered in the site crib hut. I noticed that the employees had not brought their crib or lunch boxes.
5. At approximately 6.30am on 14 March 2019, I observed my supervisor instructing the employees to commence work. The employees did not commence work. The employees gave no reason for the refusal to commence work.
6. At approximately 8am, 14 March 2019 all the employees left the site.
7. I have not been advised if the employees will return to work later today or at any time in the future.
8. I am unaware of any safety issues on the site on 14 March that could pose a hazard to the employees.
9. In considering the activities of the employees and the CFMMEU organiser in the past week, I have serious concern that the employees will not attend or commence work tomorrow (15 March 2019).”
[11] In cross-examination, Mr Walsh stated that of the 24 employees employed by the Employer, he thinks that five employees are permanent employees (including himself), and the remaining 19 are casual employees. He stated that only the casual employees were involved in the stoppage of work. In re-examination he stated that the other four permanent employees asked to perform work at other sites. Of the 19 casual employees at the Project, on 12 March 2019, four employees asked to perform work on other sites.
[12] Mr Walsh’s evidence is that the casual employees typically work five days per week, approximately 40-45 hours per week.
[13] Mr Walsh stated that he did not see Mr Harradine enter the shed [on 11 March 2019], but he did see him in the shed. His evidence is that he looked through the window of the shed and saw him sitting in front, addressing the men. The door was closed and he did not hear what he said.
[14] Mr Harradine was not in the shed when the employees were directed to go back to work.
[15] Mr Walsh has been encouraged to enter into an enterprise agreement with employees, with the CFMMEU to be covered by the agreement. He agreed that he had been to the CFMMEU office in Townsville in November 2018, and he had been given an expression of interest document from a CFMMEU official to consider. His evidence is that he will never enter into an agreement with the CFMMEU.
[16] Watpac is the principal contractor on the Project, and the State of Queensland, the State Government is the client. Since approximately May 2018, additional monies are available to contractors of Watpac, to allow for contractors to pay to employees increased wages for work on the Project. The State Government has introduced a ‘Best Practice’ procurement policy on projects of $100 million or more.
[17] Mr Walsh’s evidence is that he is comfortable in seeking a deed of variation pursuant to the Best Practice procurement policy, so long as he is not required to enter into an enterprise agreement with the CFMMEU. He has obtained legal advice and is working with Watpac to attempt to have a deed of variation approved. If that occurs, it is Mr Walsh’s understanding that the $40 hourly rate paid to casual employees will increase to $59.67, with the State Government covering the difference.
[18] Mr Walsh agreed that he had provided to employees a draft one-page common law contract specifying the higher rates that could be paid if the employees agreed to the contract.
[19] Mr Walsh was asked whether relevant named persons are employed as employees, or engaged as contractors within the Employer. He answered that the first named person is a contractor. As for the second and third named persons; Mr Walsh was not sure if they are employees or contractors, despite having foremen responsibilities.
CFFMEU submissions
[20] The following, helpful submission was made by the CFMMEU to assist in explaining the interaction between the Project, the State Government and the Federal building code:
“North Queensland Stadium Project
5. The North Queensland Stadium Project is a major project in Townsville (the Project).
6. The client with respect to the Project is the State of Queensland (State Government).
7. Accordingly, to perform work on the Project, an employer must comply with the State Government’s Procurement Policy 2018, which requires ‘best practice industrial relations’, which includes compliance with all relevant State and Commonwealth industrial laws, instruments, and other legislative requirements such as under superannuation legislation. It further requires compliance with the Code for the Tendering and Performance of Building Work 2016 (the Building Code).
8. In late 2018, the Hon Mick de Brenni, Queensland Minister for Housing and Public Works, Minister for Digital Technology and Minister for Sport, announced significant State Government funding in order for subcontractors on the Project who are required to vary their contracts with the Principal Contractor, Watpac (the Principal), in order to comply with the ‘best practice principles’.
9. The funding is intended, for the most part, to enable subcontractors that had priced their packages on pre-existing industrial and legislative arrangements, to pay their employees at levels that are equal to, or no less beneficial, than the terms of a template agreement negotiated between the CFMMEU, other Trades Unions, the Principal and the State Government as a benchmark.
10. Accordingly, for a subcontractor and its employees to receive variation funds from the State Government, the State Government is required to be satisfied by a subcontractor to honour additional wages, allowances and other priced conditions to its employees.
11. The CFMMEU has been in discussions with various subcontractors, including the Applicant, since at least late November and the Minister’s announcement of a funding injection.
12. The Applicant does not currently have industrial arrangements that are satisfactory for the State Government such that it can grant variation funding, and accordingly does not comply with the ‘best practice principles’.
13. The Applicant proposes that all of its employees enter into individual flexibility arrangements that provide for increased rates of pay whist performing work on the Project.”
[21] Mr Borg stated during the hearing that there is no compulsion on the Employer to agree to a CFMMEU agreement. He agreed that another way to secure a Federal code-compliant agreement and the State Government additional funding is for the Employer to make an agreement directly with employees. The CFMMEU template that has been prepared will ensure that employers meet all of their obligations, including code-compliance.
[22] Further submissions relevant to alleged coercion of employees, sham contracting, failure to meet obligations under industrial laws and superannuation laws were made without any evidence led by the CFMMEU, other than the cross-examination of Mr Walsh.
[23] It was submitted that it would be unconscionable for the Commission to grant the relief sought by the Employer, notwithstanding the provisions of section 418 of the Act, taking into account in particular the requirements in section 578 of the Act:
“578 Matters the FWC must take into account in performing functions etc.
In performing functions or exercising powers, in relation to a matter, under a part of this Act (including this Part), the FWC must take into account:
(a) the objects of this Act, and any objects of the part of this Act; and
(b) equity, good conscience and the merits of the matter; and
(c) the need to respect and value the diversity of the work force by helping to prevent and eliminate discrimination on the basis of race, colour, sex, sexual orientation, age, physical or mental disability, marital status, family or carer's responsibilities, pregnancy, religion, political opinion, national extraction or social origin. (Emphasis added)
[24] It was submitted that granting the orders sought would encourage unscrupulousness on the part of the Applicant at the expense of low-paid and precariously-engaged employees.
[25] Given the employees are casual employees, it was submitted that there is no commitment of work beyond each day, and therefore it could not be said that industrial action is to be taken.
[26] It was submitted that there is no evidence of the CFMMEU organising unprotected industrial action. It was put that Mr Walsh’s evidence goes no higher than Mr Harradine entered the site sheds where employees of the Employer were having their smoko break on 11 March 2019, and, further, that the following day he is alleged to have indicated that he was elected to represent the employees and was tasked with pursuing a collective agreement on their behalf. It follows that the inference to be drawn from Mr Harradine’s attendance at the site is to take instructions from his members to negotiate on their behalf.
[27] The CFMMEU relies on the Federal Circuit Court decision in Director, Fair Work Building Industry Inspectorate v Myles & Ors [2019] FCAA (BRG 1165 of 2014) (Myles), paragraphs [152] – [167], in which a finding of organising unprotected action could not be sustained.
[28] If an order is made by the Commission against the relevant employees, it was submitted that it should not take effect until the commencement of work on Monday, 18 March 2019, due to the stated difficulty of attempting to communicate with employees by text and email on the evening of 14 March 2019, directing them to attend for work at 6.00am on 15 March 2019.
[29] No objection was made to the length of the order sought, that being 5.00pm on 5 April 2019.
Employer submissions
[30] It was submitted for the Employer that if the Commission is satisfied at s.418 that industrial action by one or more employees that is not protected industrial action is happening, or is threatened, impending or probable, or is being organised, the Commission must make an order; there is no discretion.
[31] It was contended that Mr Walsh’s evidence was clear that such action is happening and it is being organised by the CFMMEU. The industrial action has continued beyond 11 March 2019, having occurred throughout 12, 13 and 14 March 2019, and it was submitted that without an order it would continue on 15 March 2019.
[32] The action said to be taken is a refusal to comply with lawful and reasonable directions to perform usual duties. Employees are engaged as concretors who usually perform tasks of pouring concrete, settling concrete in place and finishing the surface according to standard practices. The employees are refusing to undertake their usual duties.
[33] It was submitted that it was open to the Commission to draw an inference that Mr Harradine did organise the taking of industrial action by employees. The Employer pressed for orders to be made against the CFMMEU and its officers, etc.
[34] Mr Belfield and Ms Kirkby gave undertakings that if an order was made following the hearing, it would be communicated to employees on the evening of 14 March 2019 by text and email by them, and not by the Employer. In recent days they have been serving on employees by email and text the relevant documents in these proceedings. Both advocates committed to providing evidence of such service in the form of a statutory declaration on 15 March 2019.
Order made
[35] Having satisfied myself that the Employer had made out to the requisite degree of satisfaction that industrial action that would not be protected industrial action was happening for the purposes of s.418(1)(a) of the Act, I informed the parties towards the end of the hearing that I would make an order following the hearing relevant to the employees, but would consider the Myles decision and determine if an order would be made against the CFMMEU and its officers, etc.
[36] An order [PR705850] was issued by me on 14 March 2019, to come into effect at 11.00pm on 14 March 2019, and to cease to have effect at 5.00pm on 5 April 2019. The order is made relevant to the employees, but I declined to make the order against the CFMMEU and its officers, etc.
Consideration
[37] Having heard the evidence of Mr Walsh and the submissions from the parties, I am satisfied that following the conclusion of the ‘smoko’ break some short time after 10.30am on 11 March 2019, approximately 19 employees of the Employer commenced unprotected industrial action, and it had been continuing on 12, 13 and 14 March 2019.
[38] Work as it is ordinarily performed had not resumed at the conclusion of the hearing. There was no evidence before me that work would be resumed by the relevant employees.
[39] Relevant to the employees being casual employees, I do not accept the argument that the employees may not be engaged beyond a daily engagement, resulting in them being unable to be said to be taking industrial action on 15 March 2019 if they do not perform work. On the evidence before the Commission the casual employees are typically working up to five days per week, 40-45 hours. They have been attending the Project over the last few days at their prescribed starting time, and sitting in the shed for some hours, without performing work, before they have elected to leave the Project. I am satisfied the casual employees have been taking industrial action and would have continued to take industrial action on 15 March 2019 in the absence of an order of the Commission.
[40] No evidence has been led to satisfy me that the Employer is or may be ‘unscrupulous’. I do not accept the submission at [23] that there is any reason not to make the order taking into consideration the equity, good conscience and the merits of the matter.
[41] For the purposes of s.418 of the Act, industrial action that is not protected is happening. I note that having satisfied myself that industrial action that is not protected is happening, I must make the order. The decision to make the order is not discretionary.
No order against the CFMMEU
[42] There is no direct evidence from Mr Walsh that Mr Harradine organised the employees to take industrial action. I accept the CFMMEU’s submissions that Mr Walsh’s evidence is that Mr Harradine:
(a) entered the sheds where employees were having a ‘smoko’ break;
(b) addressed employees; and
(c) informed Mr Walsh that the CFMMEU was elected to represent the employees and he was pursuing a project agreement with the CFMMEU.
[43] In addition, I accept Mr Walsh’s evidence that Mr Harradine stated words to the effect, “People in the state government told me the only way the boys will get the money that is being sought onsite is to sign the project agreement.” Further, I accept Mr Walsh’s evidence that Mr Walsh attempted to inform employees in Mr Harradine’s presence that the company had committed to paying the Project rates on an individual basis, but Mr Harradine repeatedly interrupted and said that this was not sufficient.
[44] In Lendlease v CFMEU [2014] FWC 7800, Richards SDP said the following:
“[45] Whilst the direct evidence may rarely be available in the circumstances in which meetings such as this are coordinated, an inferential case would need to be founded on surrounding circumstances. But in my view, the surrounding circumstances are not sufficiently adequate to allow me to draw such an inference on this occasion.
[46] Therefore, no order will be made against the CFMEU for want of sufficient evidence.”
[45] I have considered similar matters, including my decision in Lendlease Building Pty Ltd v CFMEU [2016] FWC 7198. In that matter, some 450 employees across six sites had taken unprotected industrial action. I stated:
“[75] It was put by Lendlease that if the Commission finds that there is no direct evidence of the industrial action being organised by the CFMEU or CFMEU representatives, there should be a finding based on inference that it is being organised. Reference was made to a decision of Barker J in ABCC v CFMEU [2010] FCA 784 at [42]:
‘[42] So far as inferences are concerned, in Holloway v McFeeters (1956) 94 CLR 470 (Holloway), Williams, Webb and Taylor JJ, in a joint judgment, at 480, note that inferences from actual facts that are proved are just as much part of the evidence as those facts themselves. Their Honours referred, at 480-481, to the decision of the High Court in Bradshaw v McEwans Pty Ltd (1951) 217 ALR 1 (Bradshaw) which made the following points (by reference to authority), at 217 ALR 5:
In a civil cause, you need only circumstances raising a more probable inference in favour of what is alleged.
Where direct proof is not available it is enough if the circumstances appearing in evidence give rise to a reasonable and definite inference.
They must do more than give risk to conflicting inferences of equal degree of probability so that the choice between them is (no) mere matter of conjecture.’”
[46] Whilst it is true that reasonable inferences can be drawn, and surrounding circumstances can be considered, 1 the evidence does not, in my view, go far enough to satisfy me that Mr Harradine organised the unprotected industrial action. The evidence is that he spoke with Mr Walsh and encouraged a CFMMEU agreement, and even did so in front of employees, interrupting Mr Walsh’s address to his own employees.
[47] I am not satisfied on the evidence before me that the CFMMEU was ‘organising’ industrial action that the circumstances required for an order to be made under s.418(1)(c) of the Act to have been met. Therefore, no order was made against the CFMMEU.
Commencement of the order
[48] At the conclusion of the hearing I determined that the order would be made that evening, requiring the relevant employees to return to work on 15 March 2019. Having regard to the undertaking given by the Masters Builders Queensland, I was satisfied that there was sufficient time between the making of the order and the commencement of work on 15 March 2019 for the Employer, through its representative to promptly communicate the order to employees via text message and email.
Duration of the order
[49] Having heard from the parties as to the duration of an order if the Commission decided to make an order, and noting that there was no opposition to the duration proposed by the Employer, I determined that the order should be in place through until 5.00pm, 5 April 2019.
COMMISSIONER
Appearances:
Mr M Belfield, Queensland Master Builders Association, for PJ Walsh Construction Pty Ltd
Mr A Borg, Senior Industrial Officer, CFMMEU
Hearing details:
Brisbane, 14 March 2019
Final written submissions:
Outline of submissions for PJ Walsh Construction Pty Ltd, 13 March 2019
Outline of submissions for CFMMEU, 14 March 2019
Printed by authority of the Commonwealth Government Printer
<PR705847>
1 Lend Lease Building Pty Ltd v CFMEU [2014] FWC 7800.
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