Swire Cold Storage Pty Ltd v National Union of Workers

[2016] FWC 7964

[2016] FWC 7964

FAIR WORK COMMISSION

REASONS FOR DECISION

Fair Work Act 2009
s.418 - Application for an order that industrial action by employees or employers stop etc.

Swire Cold Storage Pty Ltd
v
National Union of Workers
(C2016/6497)

COMMISSIONER HAMPTON ADELAIDE, 9 NOVEMBER 2016

Application by Swire Cold Storage Pty Ltd to stop alleged unprotected industrial action by employees who are members of the NUW – whether industrial action is threatened, impending or probable – whether organised by NUW – unprotected industrial action occurred – further unprotected action found to be threatened, probable and being organised – order issued – Fair Work Act 2009 – s.418.

1. Background to the application and the orders made

[1] On Wednesday 2 November 2016 an application was made by Swire Cold Storage Pty Ltd (Swire) under s.418 of the Fair Work Act 2009 (the FW Act). The application sought that the Commission make an order that unprotected industrial action not occur and not be organised. The application sought orders against the National Union of Workers (NUW), its delegates, employees, agents and members who are employed by Swire located at its Dry Creek site in South Australia (the Dry Creek site).

[2] Consistent with s.420(1) of the FW Act, which requires that as far as practicable an application under s.418 must be determined within 2 days after the application is made, this matter was listed for hearing on Thursday 3 November 2016. Swire was represented, with permission, by Mr Ey and the NUW by its Industrial Officer, Ms Miflin.

[3] Later on Thursday 3 November 2016, after considering the evidence and submissions provided by the parties, I made an Order 1 (the Order) under s.418(1) of the FW Act to stop unprotected industrial action. At that time, I indicated to the parties that I would provide written reasons for making the Order. Those reasons are set out herein.

[4] Swire is a large provider of cold-chain logistics services, with facilities across Australia, and it supplies temperature-controlled warehousing, refrigerated transport and distribution services to a broad range of retail and food manufacturing businesses. Of relevance to this application, the Dry Creek site has two sites referred to as DC1 and DC2. The DC1 site deals mainly with chilled stock, blast freezing, storing and distribution. The DC2 site is a “retail” environment where stock comes in and is then picked for stores.

[5] Section 418 of the FW Act provides as follows:

“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.”

[6] The grounds set out in the s.418 application stated that:

“A. At or about 8AM (SA-time) on Monday 31 October 2016, 2 NUW Representatives (Mark Whenan & Tim Palmer) attended the Applicant’s Dry Creek site in South Australia - by arrangement with the company - and held a meeting with the Applicant’s employees on site.
B. At the end of that meeting the Applicant’s Supervisor (David Kolbig) was told by Mark Whenan & Tim Palmer that with immediate effect the Applicant’s employees would refuse to work as rostered, and would refuse to perform any work at all. Mr Kolbig instructed the Applicant’s employees to return to work but they refused to comply with his request and walked off the job.
C. The Applicant submits that any such refusal of its employees to attend or perform their work duties, or participate in bans or restrictions on the performance of their work duties, is not protected industrial action and is industrial action as described in s.19(1) of Fair Work Act 2009 (“the Act”).
D. The Applicant’s employees are subject to and covered by Swire Cold Storage Pty Ltd and National Union of Workers SA Enterprise Agreement 2014 (AG2014/7912) which has a nominal expiry date of 13 July 2017.
E Of the 67 Applicant’s employees, who are employed on a permanent basis, a number were rostered for the Morning shift at the Applicant’s Dry Creek site (this includes 2 refrigerated warehouses, Dry Creek 1 and Dry Creek 2) on Monday 31 October 2016 – commencing at either 5AM or 6AM. Out of that group – 25 people walked off the job at or about 9:00AM, following the meeting with the 2 NUW Representatives (Mark Whenan & Tim Palmer), and did not return to work until 1PM.
F. For the Afternoon shift at Dry Creek 1 on Monday 31 October 2016 – 5 people were scheduled to commence work at 13:30 hours. However; following their having a further discussion with the 2 NUW Representatives (Mark Whenan & Tim Palmer), who were still on the Applicant’s site, each of those 5 employees also walked off the job at or shortly after the commencement time of the Afternoon shift.
G. The Applicant’s employees are engaged in receiving, storing, packing, dispatching and/or assembling goods and merchandise for the Applicant’s customers (including: Woolworths, Inghams and Adelaide Poultry). Unprotected industrial action by the Applicant’s employees has the potential to damage the Applicant’s relationships with its customers, and cause financial loss to the Applicant.
H. At 2:35PM (Vic-time) on Monday 31 October 2016; the Applicant sent an email to Sam Roberts, General Branch Secretary for NUW (cc: Mark Whenan & Hannah Miflin, Industrial Officer for NUW), requesting that:

i. the unprotected industrial action being organised at the Applicant’s Dry Creek site immediately cease; &
ii. NUW confirm that the Applicant’s employees (members of NUW) have been advised by NUW to return to work and perform their duties as required and in the usual manner.

I. No response has been received by the Applicant to its email (above) to NUW.
J. On Monday evening (31 October 2016) a meeting took place between Rick Skewes (Logistics Manager for the Applicant) and Mark Whenan (NUW Organiser) at Adelaide Airport. During that meeting the Applicant was requested to respond to NUW by midday on Wednesday 2 November 2016 on whether the Applicant would re-instate a former employee (JK) - who had been terminated on 25 October 2016 on grounds of his excessive absences from work, failure to follow the Applicant’s leave procedures and process, and inability or refusal to meet his employment obligation of performing a 38 hour week’s work. In the meantime, Mark Whenan said he would ensure that work at the Applicant’s Dry Creek site would continue as normal until the Applicant had advised of the company’s decision re the former employee.
K. On Tuesday 1 November 2016, at or about 9AM, a further meeting took place between NUW Representatives (Mark Whenan & Tim Palmer) and the Applicant’s employees at the Applicant’s Dry Creek site. Following that meeting, the NUW Representatives met with Rick Skewes & David Kolbig of the Applicant. The inference from that discussion, and the surrounding circumstances, was that no further industrial action would occur until the Applicant responded to the NUW regarding re-instatement of the former employee (JK).
L. The Applicant rejects the unlawful demands made by the NUW and its Representatives regarding re-instatement of the former employee (JK), and seeks orders from the Fair Work Commission to stop the industrial action which has happened, is threatened, impending or probable, and/or is being organised.” 2

[7] The NUW opposed the application on a number of grounds including that:

● No industrial action was happening at the time of the application and the Commission could not be satisfied that any such action was threatened, impending or probable;
● There was no evidence to support the contention that the NUW had, or was continuing to, organise industrial action;
● The circumstances leading to earlier industrial action, the dismissal of an employee, had in effect, been moderated given that he had found some other employment; and
● Any orders that might be considered must relate to the relevant findings and be as narrow as was necessary to deal with those findings.

[8] I note that it was common ground that unprotected industrial action within the meaning of the FW Act had occurred but was not taking place at the time of the hearing of the application. Swire was entitled to make the application under s.418(2)(b).

2. The Evidence before the Commission

[9] Evidence in support of the application was given by the following Swire employees:

• Mr David Kolbig, Logistics Services Manager at the Dry Creek site; and



• Mr Rick Skewes, Logistics Services Manager on secondment to the Laverton Distribution Centre, Victoria – but brought in to assist with this matter.

[10] Both of these witnesses were extensively cross-examined by the NUW. I found that their evidence was given openly and honestly. This included making appropriate concessions and giving the recall of the events to the best of their recollection without appearing to add any gloss. I accept their evidence. To the extent that there is some difference between them as to the sequence of events on Tuesday 1 and Wednesday 2 November 2016, I prefer the recall of Mr Skewes.

[11] The NUW did not lead any evidence in the matter. Swire contended that I should draw an adverse inference from the failure to lead any evidence. The NUW contended, in effect, that none of its officials were available to give evidence and no inference should be drawn. It also sought to draw some comfort from the fact that Swire’s decision maker in relation to the fate of the dismissed employee (RK) (and the person who signed a letter to the NUW regarding the industrial action) was also not called. 3

[12] It is open for the Commission, but not necessary, to draw a negative inference where there is an unexplained failure to call evidence.⁴ In this case, the contentions about the unavailability of the relevant officials were made in closing submissions, in response to questions from the Commission. Even assuming that the priorities of the officials could be a proper explanation; there was no evidence to support the contention, no request that the matter be heard at a different time to enable the officials to be present, and no indication that the NUW would have led evidence if that could be facilitated. The absence of the employer’s “decision maker” is not relevant here given that the scope of the application concerns the nature and likelihood of industrial action, not the merit of the dismissal itself. Further, the management staff directly involved in the relevant events gave evidence.

[13] In the circumstances, I considered that it was appropriate for the Commission to draw a negative inference from the absence of evidence from the NUW. That is, that the evidence would not have assisted its case. This did not, however, relieve Swire of the need to persuade the Commission that the necessary jurisdictional facts existed in this matter.

3. The statutory requirements for the making of an order under section 418 of the FW Act

[14] I have earlier set out the provisions of s.418 of the FW Act. Having regard to those provisions and the various authorities dealing with those provisions, I consider that the Commission’s present role is governed by the following approach as principally relevant to this application: 5

● Section 418(1) of the FW Act requires that if the Commission finds that industrial action that is not protected is happening, threatened, impending, probable or is being organised, the Commission must make an order that the industrial action stop, not occur or not be organised. These matters are jurisdictional facts, the existence of which the Commission must be satisfied of, before it has power to make an Order; 6

The history of past industrial action and evidence about the current state of industrial relations, is relevant in determining whether industrial action is threatened, pending or probable and the appropriate term of an Order directed to stopping or preventing industrial action; 7

If the Commission finds that unprotected industrial action is threatened, pending or probable, it has a duty to make an Order that it not occur. If the Commission finds that unprotected industrial action is being organised, then it has a duty to make an Order that it not be organised. Absent the relevant finding in relation to the specified matters, the Commission has no power to make an Order; 8 

The provisions of a particular s.418 Order - other than machinery or facilitative provisions - must be directed to the purpose of ensuring that the unprotected industrial action stop, not occur or not be organised as is relevant; and

● The period of operation of the Order (the stop period) must also be directed to the particular purpose and circumstances of the Order. 9

[15] I also note that the concept of a Union organising industrial action should have regard to all of the circumstances including whether there is evidence that it had encouraged, supported, was involved in, aided, abetted, counselled, induced or authorised the industrial action. 10

[16] Further, the making of a s.418 Order is a serious matter with consequences for the parties, including for breaches of any Order issued. 11 As such, I need to be satisfied to the requisite degree that the jurisdictional facts exist.

[17] It is not necessary to explore the nature of unprotected industrial action at any length for present purposes. The refusal to undertake work as directed is industrial action within the meaning of s.19 of the FW Act. There is no bargaining period in place and no basis for any industrial action that might have, or will take place, to be protected under the FW Act. 12

4. Factual findings based upon the evidence and submissions

[18] In general terms the evidence before the Commission supported the factual basis of the application set out in the grounds cited earlier in this decision. The additional elements of the factual matrix that flow from that evidence are set out below:

● The industrial action that was taken in this matter was motivated by, or directly relating to, the dismissal of an NUW member (JK) employed at the Dry Creek site. Without disclosing the personal circumstances of JK, or attempting to make findings about the merit of that dismissal, those circumstances are such that the other NUW members at the Dry Creek site are likely to have significant and strongly held concerns about the impact of the dismissal upon JK.
● JK was dismissed on 25 October 2016.
● The initial industrial action taken by members of the NUW in the early morning of Friday 28 October 2016 (sitting in the DC1 lunchroom without employer permission during what should have been working time) was probably taken by the relevant employees as an initial response to the dismissal of JK and without the involvement of NUW officials.
● After an initial discussion with Mr Kolbig, the relevant employees returned to work pending the attendance of an NUW official.
● A subsequent meeting of the relevant NUW members occurred with management consent and initially involved the members meeting with Mr Snelson (NUW official) and later hearing from Mr Kolbig. At around 9.30 am, the members returned to work.
● On Monday 31 October 2016 at 7.50 am, a meeting of the relevant NUW members was conducted at the Dry Creek site by two NUW officials, Mr Whenan and Mr Palmer. Mr Kolbig attended on the basis that he had earlier been requested to provide details of certain matters associated with the dismissal of JK. However, Mr Whenan informed Mr Kolbig that the Union had all the details, that they were holding a union meeting and would be addressing the group.
● By 8.55 am on 31 October 2016 management had not been informed of the outcome of the meeting and when Mr Kolbig rang Mr Whenan he was advised that Mr Whenan had left the meeting but did not give any indication of an outcome. This remained the case for some time with relevant NUW members remaining in the lunchroom and not attending work. Subsequently, Mr Whenan and Mr Palmer advised Mr Kolbig that the NUW members were “standing down”, or words to that effect. Whatever was said, it was evident that the members would not be performing work. Mr Kolbig entered the lunchroom, advised the employees that they had been given a reasonable and lawful instruction to return to work, that warnings might be issued and that the Company could or would deduct 4 hours pay. The DC1 and DC2 am shift employees involved returned to normal duties at around 1 pm, being 4 hours since ceasing work.
● That afternoon, five DC1 pm shift employees sat in the lunchroom at the time they were due to commence work. Mr Whenan and Mr Palmer were in the lunchroom when Mr Kolbig attended and he was informed that the DC1 pm shift was also “standing down”. Mr Kolbig made the same response as he did to the am shift employees and one or more of the employees advised Mr Kolbig that they were refusing to work. Mr Whenan and Mr Palmer remained in the lunchroom until later in the afternoon despite being requested by Mr Kolbig to leave the site and being advised that in future they would need to provide the required 24 hours’ notice of any right of entry.
● The DC1 pm employees remained in the lunchroom for a period of 4 hours before returning to work.
● Swire wrote to the NUW on 31 October 2016 outlining what it saw as unlawful conduct by the NUW and its members and requesting that the Union notify its relevant members that the industrial action was unprotected and that they would suffer a minimum loss of 4 hours pay. Further, Swire sought immediate confirmation that the relevant members had been advised by the NUW to return to work and to perform their work duties as required and in the usual manner. No response was provided by the NUW.
● On the evening of Monday 31 October 2016, Mr Skewes met with Mr Whenan to discuss the current circumstances. The two men discussed JK’s dismissal including the concerns of the NUW that the local management had not followed the correct procedures. Mr Skewes requested assurances about the industrial action and Mr Whenan gave his commitment that he would ensure that the night shift worked that evening and there would be no further action until Mr Skewes had had an opportunity to return to the site and review the current situation. 13 Mr Skewes agreed to conduct the review. Later that evening, at Mr Whenan’s request, Mr Skewes agreed to permit the NUW organisers to come to the Dry Creek site and have a meeting with members on the following morning. Mr Skewes was informed that the NUW meeting would not take any longer than 10 minutes and he confirmed that he was taking 24 hours to review JK’s case and would get back to the NUW.
● At around 8 am on Tuesday 1 November 2016, Mr Skewes walked around the shop floor at the Dry Creek site and gauged the attitude of employees. He ascertained that whilst there were some mixed emotions, some NUW members felt very strongly about the matter and were upset and disappointed about the treatment of JK. In terms of the potential for further industrial action, Mr Skewes understood that the NUW members were waiting on the response to his investigation of the matter. No direct threats of action were made to Mr Skewes. Following the discussion on Monday evening between Mr Whenan and Mr Skewes, Mr Whenan and Mr Palmer addressed the relevant members on Tuesday morning as agreed. Following the members’ meeting, Mr Whenan and Mr Palmer met with Mr Skewes and Mr Kolbig and advised management that the members wanted JK to be reinstated and that they had advised the members that management would be taking 24 hours to review his case and would be coming back to the NUW with an answer on the following day. In that meeting Mr Kolbig raised a concern about the impact of the industrial action upon customers and either Mr Whenan or Mr Palmer advised that “the guys are working at the moment and we’ll see what the company decision is at lunchtime tomorrow.” 14

On Wednesday 2 November 2016, Mr Skewes advised the NUW officials that the Company would not be reinstating JK. Mr Skewes also advised that he understood that JK had gained some new employment. Mr Whenan advised that that was not the decision the NUW was seeking. One of the NUW officials then stated to the effect that the Company would have to do what it had to do and the NUW would be doing what it had to do. Given the context, this would have been reasonably understood to be a reference to the earlier industrial action and the threat of its resumption.

Shortly thereafter most of the relevant NUW members were given a written warning about the earlier unprotected industrial action, a copy of this s.418 application and a copy of the letter sent to the NUW by Swire on 31 October 2016.

● There has been no subsequent industrial action. Despite more recent discussions between the NUW and Swire, the dispute about JK’s dismissal has not been resolved and the NUW is running a petition continuing to seek JK’s reinstatement.

5. Conclusions reached on the jurisdictional basis

[19] In the circumstances, I was satisfied that unprotected industrial action was threatened and probable, and was being organised by the NUW.

[20] In terms of the finding that the action was threatened and probable, it was apparent to me that when considered in context, the earlier industrial action was, in effect, suspended pending the response from Swire to the demand that JK be reinstated. It was also a reasonable inference, given the manner in which that occurred, what was stated and how the developments arising from the union meetings were reported to Swire, the depth of feeling about the issue from the workforce, the absence of any contrary indication or undertaking, and the response to the confirmation that the dismissal would stand, that the threat and probability of further industrial action was real and remained at the time of the hearing of this application.

[21] In relation to whether the NUW was organising the industrial action, I have accepted that the initial action occurred prior to any evident involvement of the Union. However, officials of the NUW were involved in union meetings leading to the subsequent industrial action and Mr Whenan was in a position to give a guarantee that no industrial action would be undertaken pending the review of JK’s dismissal by Mr Skewes. Whilst it is conceivable that the NUW was simply acting as a mouthpiece for its members, the implications of the evidence before the Commission, when considered in context, is that the Union was involved with, and supported, the industrial action and the threat that it would resume.

[22] In reaching these findings, I have also considered two potentially contrary factors. Firstly, that there had not been further industrial action. However, this occurred in the shadow of this application and it is not reasonable to imply in the absence of relevant evidence that the threat has been withdrawn simply because there had been no further action at the point of hearing the application. Secondly, the change in circumstances of JK. It is possible that this could have taken the heat out of the issue, however, the only evidence before the Commission is that the claim to reinstate JK was not resolved, the workforce had very strong views that this should occur, and the NUW was continuing to campaign for that outcome. The industrial action remained probable and threatened.

6. The Order made

[23] Given my findings and the operation of s.418(1) of the FW Act, I was obliged to issue an Order in this matter. The Order made was directed at dealing with the findings that unprotected industrial action was threatened and being organised.

[24] Although Swire sought that the Order run until the end of 2016, the stop period was limited to three weeks. This was done in recognition of the circumstances in which the threat had been made and was in my view appropriate having regard to the purpose of the Order. The circumstances contemplated in s.418(4) of the FW Act did not arise as there is no “bargaining period” in place and there was no basis for protected industrial action to be taken after the end of the stop period.

[25] The Order also contained machinery provisions to ensure that the relevant NUW members and officials were aware of its terms.

[26] Liberty to apply to vary, extend or rescind the Order was also given to any person bound or affected by the Order.

COMMISSIONER

Appearances:

D Ey of Piper Alderman, with permission, for Swire Cold Storage Pty Ltd.

H Miflin, on behalf of the National Union of Workers.

Hearing details:

2016

Adelaide and Melbourne (video hearing)

November 3.

 1   PR587197.

 2 F14 Application.

 3   Transcript PN530.

4 Jones v Dunkel (1959) 101 CLR 298. See also The Herran Building Group Pty Ltd v Edward Anneveldt[2013] FWCFB 4744.

 5   These are drawn, for the most part, from the summary provided by Asbury DP in Watpac Construction Pty Ltd v Construction, Forestry, Mining and Energy Union[2014] FWC 7897.

 6   Transport Workers’ Union of New South Wales v Australian Industrial Relations Commission (2008) 171 IR 84 at [24] and “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) v UGL Resources Pty Ltd[2011] FWAFB 4777.

 7   Thiess Pty Ltd v Construction, Forestry, Mining and Energy Union AIRC PR938334.

 8   “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) v UGL Resources Pty Ltd[2011] FWAFB 4777 at [17] - [20].

 9   United Voice v Foster’s Australia Limited t/a Carlton and United Breweries Limited[2014] FWCFB 4104.

 10   Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) v UGL Resources Pty Ltd[2011] FWAFB 4777 at [22].

 11 A breach of a s.418 order is a civil remedy provision and may provide the basis for an injunction – see s.421 of the FW Act.

 12 Divisions 2 and 3 of Part 3-3 of the FW Act establishes the basis for protected industrial action. None of the circumstances apply in this matter.

 13   Transcript PN399.

 14   Transcript PN419.

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<Price code C, PR587211>