The Australian Workers' Union v Brockman Engineering Pty Ltd

[2015] FWC 2077

[2015] FWC 2077

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.739 - Application to deal with a dispute

The Australian Workers’ Union
v
Brockman Engineering Pty Ltd and Others
(C2014/6062, C2014/7691)

Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union" known as the Australian Manufacturing Workers' Union (AMWU)
v
USI Pty Ltd and Others
(C2014/6137, C2014/6140, C2014/6942)

Manufacturing and associated industries
DEPUTY PRESIDENT GOOLEY	MELBOURNE, 30 MARCH 2015

Application to deal with a dispute involving stand down.

[1] A dispute exists between The Australian Workers’ Union (the AWU) and the “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) and various contractors to Shell Refining (Australia) Pty Ltd 1 about the decision to stand down employees on 24 July 2014.

[2] The AWU is in dispute with:

• Brockman Engineering Pty Ltd (C2014/6062)



• Veolia Environmental Services (Australia) Pty Ltd (C2014/6062)



• UGL Operations & Maintenance Pty Ltd (C2014/7691)

[3] The AMWU is in dispute with :

• USI Pty Ltd (C2014/6137)



• Brockman Engineering Pty Ltd (C2014/6140)



• UGL Operations & Maintenance Pty Ltd (C2014/6942)

Background

[4] The direct employees of Shell had been negotiating an enterprise agreement. On 18 July 2014, the AWU gave notice that its members employed by Shell would take protected industrial action in support of a new enterprise agreement. The notice advised Shell that there would be an indefinite ban on the issuing of clearances commencing at 1700hrs on 24 July 2014. 2 It is not in contest that if such a ban had been put in place the employees of the contractors would not have been able to perform work.

[5] On 22 July 2014, Shell met with the contractors and advised them of the proposed industrial action and subsequently provided them with a letter that advised the contractors that Shell did not require maintenance work on the days protected industrial action was being taken by its Operators. The letter further advised that “It is expected that you will take action to minimise the costs of your overheads during this time. Shell will not be accepting claims for payment of direct labour employees during this time other than where it is in accordance with your industrial instruments’ ‘stand down’ or annual leave provisions. Shell will only accept invoices for staff we have agreed to retain on site during these days. During the course of the PIA we will be assessing our ability to effectively execute maintenance work and will advise you in the event conditions change.” 3

[6] During the meeting, Mr Scott Godfrey, the Operations Manager for Veolia, gave evidence that there was some discussion about what he described as the cut off point, that is the latest time employees of the contractors could be told that the industrial action had been called off and they could work as normal on Friday. 4

[7] Ms Kerrin Thompson, the Contract Manager for UGL, met with UGL EBA covered employees the same day and told them of the advice received from Shell. She told them that they would be stood down. She told them that they could apply for leave otherwise they would be unpaid. 5

[8] Later the same day, UGL emailed its employees and provided them with the same advice. The email further advised as there was no alternative work or training employees were stood down without pay until such time as the clearances were again able to be issued by Refinery Operators. UGL relied on clause 2.3 of the UGL Operations and Maintenance Pty Ltd Geelong Refinery Maintenance Services Enterprise Agreement 2014 6 (the UGL Agreement) to stand down employees. Employees were advised that they could apply for annual leave and it would be approved. Employees were advised that they would be notified if conditions changed.7

[9] Ms Thompson said that at the end of Thursday it was necessary for them to make safe the works because they were planning for an indefinite stoppage. 8

[10] On 22 July 2014, Mr Godfrey met with the Veolia employees on site at Shell to tell them of the proposed industrial action. He told them that Shell would not require them to perform work on Friday and he did not think that they would be able to be usefully employed and therefore it was likely they would be stood down. 9 He told them he would see if there was any work that might be required either at Shell or another Veolia site and that they could apply for leave. He did not tell them to remain contactable and on standby.10

[11] Veolia sent a letter 11 to its employees on the same day to that effect. Veolia relied on s.524 of the Fair Work Act 2009 to stand down employees as the Veolia Environmental Services Shell Refinery AWU Agreement 2014-201712 did not provide for the stand down of employees.

[12] Mr Ivan Babic, the Managing Director of USI, advised its employees on site on 22 July 2014 that Shell had advised that they were not required to perform any work from 25 July 2014 until further notice. He told the employees that they would be stood down and could take an annual leave day or an RDO otherwise the day would be unpaid. 13

[13] Mr Babic gave evidence that he told his employees to be contactable and that he would keep them informed of what was happening. 14

[14] Mr Matthew McPhee 15 an organiser with the AMWU gave evidence that on or about 23 July 2014 representatives of Brockman advised its employees that they would be stood down without pay from 25 July 2014 until further notice because of the Shell Refinery Operator’s industrial action. The employees were told that if they applied for annual leave it would be approved.

[15] On the afternoon of 24 July 2014, Shell put an offer to the AWU delegates. As a result an announcement was made at 5pm that no protected industrial action was to commence at 7pm that night. A meeting of AWU members was held at 7pm. At the conclusion of the meeting at 7.40pm, the AWU advised Shell that the members had accepted the offer in principal and that the notice of industrial action was withdrawn and no industrial action would take place. 16 Shell confirmed that advice at 8.59pm that evening.17

[16] It is not disputed that no industrial action took place on 25 July 2014. The employees of the contractors were not recalled to work and either took approve leave or were unpaid for 25 July 2014.

[17] Ms Thompson gave evidence she arrived at work at 7.38am on 25 July 2014. She was not advised until 9.30-9.45am that the industrial action had ceased. Mr Richard Crocker advised that he wished to discuss when UGL could re-mobilise to work. 18 It was her view that they would not be able to re-mobilise until Monday as it would be necessary to first notify the supervisors so that the work and crews could be organised so that work could be performed safely.19 She recalled Mr John Armstrong to work to coordinate contact with EBA employees and planning crews. He returned to the site at 10.15am to commence the necessary planning.20 Mr Armstrong told her at 2.20pm that he had not been able to contact all EBA employees and he was still working on balancing matched crews for Monday.21

[18] Not all employees returned to work on Monday as 11 of the 50 employees advised that they wished to continue their absence on the Monday because they had made other plans. Accordingly the schedule required further adjustment. 22

[19] Ms Thompson said it takes more than one hour to mobilise 81 employees, including 51 EBA employees. It would take less time if they needed to call employees back to work overtime or cover a shift but that is because there would be less employees involved. She rejected Mr Gavin Penn’s evidence that employees had been mobilised on shorter notice. Mr Penn gave evidence that in late 2013 as a result of a major leakage employees were directed to wait outside the gate until further notice or go home but be available to be called back if required. 23 He said employees returned to work within an hour.24 It was her evidence that only 38 of the 81 employees returned to site either before or within an hour of being called back. 37 of the employees did not return at all.25

[20] Mr Godfrey advised that he left the Shell site at 3.30pm on Thursday. He said the EBA staff left between 3pm to 3.30pm. He said he did not receive any advice from Shell on 24 July 2014. 26 He found out at 10am on 25 July 2014 that the industrial action had stopped and he was told by Mr Jamie Collis from Shell that Shell required them to recommence work as normal on 28 July 2014. He then contacted the EBA employees and advised them that as of 28 July 2014 they were no longer stood down. 4 of the 17 employees who had annual leave approved for 28 July 2014 were permitted to continue with that leave.27 12 of the 17 employees attended work on 28 July 2014.28 It was his evidence that he could have got a pool of employees back at work within a couple of hours.29

[21] In cross examination Mr Godfrey gave evidence that he knew at about 8.30pm on the Thursday that the industrial action had been called off. 30 He did not contact Shell and advise them that he could get his employees back to work the next day. When on Friday Mr Collis told him to return them to work on Monday he did not suggest that they could work on Saturday. This was because the direction was that they were to return to work on Monday.31 But for the direction from Shell that they were not to return until Monday his employees could have worked on Friday.

[22] Mr Babic arrived at the Shell site on Friday at approximately 9.30-9.40am. He was shortly thereafter informed that the industrial action was off. Mr Collis informed him that the USI workers could return to work on Monday. He immediately contacted employees and told them that they could report to work on Monday and they did. 32 It was his evidence that he did not recall the workers that day because Shell did not require them to work and there would have been no work for them to perform.33 It was his evidence that if it was required he could have got some of the employees back on site.34 He accepted that had his employees been on site that day they could have performed work as normal.35

[23] Mr Damian Cieciura, an Operator employed by Shell, gave evidence that at the time the industrial action was called off most of the employees of UGL and USI would have left the site. 36 Mr Cieciura gave evidence that there were some Veolia employees on site at 5pm37 on 23 July 2014 but he accepted that those employees were doing safety and environment work and they were exempted from the industrial action.38

[24] Mr Penn accepted that he did not advise any representative of Brockman that the industrial action was over. 39

[25] The unions contend that the contractors were not entitled to stand down employees and notified dispute to the Fair Work Commission under ss. 526 and 739 of the Fair Work Act 2009.

The relevant industrial instruments

[26] The UGL Agreement provides at clause 2.3 for the standing down of employees as follows:

“Notwithstanding anything elsewhere contained in this Clause, the Company will have the right to deduct payment for any day or part day an Employee cannot be usefully employed because of industrial action, or through any breakdown in machinery or any stoppage of work by any cause for which the Company cannot reasonably be held responsible.”

[27] The Brockman Engineering Pty Ltd Workshop & Site Collective Bargaining Agreement 2011 40, the USI Pty Ltd and AMWU Metal Engineering On-site Construction Agreement 201441 and the Veolia Environmental Services Shell Refinery AWU Agreement 2014-2017 do not contain stand down provisions.

[28] Brockman, USI and Veolia relied upon s.524 of the Fair Work Act 2009 to stand down employees.

[29] S.524 provides as follows:

524 Employer may stand down employees in certain circumstances

(1) An employer may, under this subsection, stand down an employee during a period in which the employee cannot usefully be employed because of one of the following circumstances:

(a) industrial action (other than industrial action organised or engaged in by the employer);

(b) a breakdown of machinery or equipment, if the employer cannot reasonably be held responsible for the breakdown;

(c) a stoppage of work for any cause for which the employer cannot reasonably be held responsible.

(2) However, an employer may not stand down an employee under subsection (1) during a period in which the employee cannot usefully be employed because of a circumstance referred to in that subsection if:

(a) an enterprise agreement, or a contract of employment, applies to the employer and the employee; and

(b) the agreement or contract provides for the employer to stand down the employee during that period if the employee cannot usefully be employed during that period because of that circumstance.

Note 1: If an employer may not stand down an employee under subsection (1), the employer may be able to stand down the employee in accordance with the enterprise agreement or the contract of employment.

Note 2: An enterprise agreement or a contract of employment may also include terms that impose additional requirements that an employer must meet before standing down an employee (for example requirements relating to consultation or notice).

(3) If an employer stands down an employee during a period under subsection (1), the employer is not required to make payments to the employee for that period.

[30] There is no dispute that the AMWU and AWU have standing to make the applications. There is no dispute that the dispute resolution procedure in the UGL Agreement has been complied with.

Consideration

[31] The contractors had the right to stand down employees if:

(1) the employees “cannot be usefully employed”

(2) because of a stoppage of work for any cause for which the employer cannot reasonably be held responsible

[32] The AMWU and AWU submitted that the employees could have usefully been employed at the Shell refinery because there was no ban on issuing clearances on 25 July 2015.

[33] I do not accept this submission. The employees could not have been employed at the Shell refinery on 25 July 2015 because Shell did not require work to be performed that day.

[34] The question then to be determined is whether the employees could have been usefully employed elsewhere.

[35] Ms Thompson gave evidence that she considered whether there was other work or training that the EBA employees could do. The only other site that UGL had employees working at, on 25 July 2014 was Long Island Point and Longford. She submitted that due to a reduced maintenance workload over the first six months of 2014 that there was no work available for them to do. 42 Mr Penn in reply said that Mr Ben Davis, the AWU State Secretary, told him that it was his understanding from communications with members that there had been no reduction in maintenance work at the site.43

[36] Mr Godfrey gave evidence that Veolia also performs work at the Incetic site at Geelong. He gave evidence that on 22 July 2014 he contacted the supervisor at that site and advised that he had additional employees and asked if he required any additional employees. He advised that there was no work on 25 July 2014 but it was agreed that they would assess this on a day by day basis. He gave evidence that he again contacted the supervisor on 24 July 2014, who confirmed there was no additional workers required on 25 July 2014. 44 He also said that Veolia runs employees out of the Brooklyn Site. He rang the Manager at that site on 22 July 2014 and advised that they may have employees available for 25 July 2014 and in the week beginning 28 July 2014. He told the Manager that given the discussions with employees about taking annual leave it would be unlikely that he would have any additional employees on 25 July 2014. Again it was agreed that this would be reviewed on a daily basis.45

[37] He also looked at training opportunities for employees and booked eight employees who had not completed a training course into a course scheduled for 29 July 2014. It was his evidence that this was the first available training course that could have been completed. He also spoke to Mr Collis from Shell about some employees remaining on site to do approved safety and environmental work and it was agreed that three employees would do this work. He told the EBA employees that there would be a roster drawn up to distribute this work fairly amongst employees. On 25 July 2014, they had three employees who worked, four on approved annual leave and ten on leave without pay. 46

[38] Mr Babic gave evidence that USI have limited work outside of Shell. He said they were performing some work at Boral Cement Limited but the site requires induction training and none of the Shell workers had completed this training. He said the training only takes place at scheduled times and no training was scheduled before 25 July 2014. He considered whether there was any additional training the employees could do but he said all the employees’ training was up to date. 47

[39] He also gave evidence that there was no work to be performed in the workshop. 48

[40] In cross examination, Mr Babic accepted that he did not discuss this with Boral. He further said that USI only had one employee at Boral. 49

[41] Mr McPhee gave evidence that USI have their own workshop and he did not see why the employees could not have worked there. 50

[42] I am satisfied that the employees of UGL, Veolia and USI could not have been usefully employed at other sites. I accept the evidence of the contactors that they had no other work readily available or that training could have been organised for 25 July 2014. I prefer the evidence of Ms Thompson, Mr Godfrey and Mr Babic. They were in the best position to know about the available work and the training needs of employees.

[43] I am satisfied that UGL, Veolia and USI have satisfied the first limb.

[44] Brockman’s did not call any evidence about whether it could have redeployed employees to other sites.

[45] I accept that the employer bears the burden of proof to establish that employees could not be usefully employed. Brockman submitted that the facts in this matter “do not materially differ from those of the other contractors ... and accordingly Brockman Engineering chose not to provide separate evidence.” 51 Mr Michael Paynter said that “as to other opportunities to find alternative work, this is practically very difficult to achieve. That is, another client premises where site inductions and site familiarity is required or indeed those other clients may simply not required further employees to attend.”52

[46] The unions submitted that Brockman had the onus of proving that it was unable to redeploy and in circumstances where Brockman called no evidence it can’t possibly meet the onus. I accept these submissions. While Brockman was able to rely upon the evidence given by the other contractors about the events at Shell, the position of each contractor in relation to alternative work was unique to each contractor. As Brockman gave no evidence about what work was or was not available to be performed, it has not established that there was no work that the employees could reasonably have been required to perform.

[47] In those circumstances, I am satisfied that there is insufficient evidence before me on which I could conclude that Brockman was entitled to stand down its employees.

Was there a stoppage of work?

[48] The contractors submitted that because Shell directed them not to work on 25 July 2014 and did not revoke that direction until the morning of 25 July 2014, that this was a stoppage of work.

[49] The unions submitted that there was no stoppage of work because the work was available for the employees of the contractors to perform on 25 July 2014.

[50] The unions submitted that the direction not to provide labour only applied whilst there was protected industrial action occurring.

[51] The notice given to the contractors said as follows:

“As a consequence of the above and until further notice, Shell Geelong Refinery does not require maintenance work on those days PIA is undertaken by the Operators.”

[52] If it were not for the word “until further notice” I would have agreed with the submissions of the unions. However the notice makes it clear that prior to being required to provide labour that there must be further notice by Shell and this did not occur until the morning of 25 July 2014.

[53] In John Hay v Gardner Perrott the Western Australian Industrial Relations Commission held that a decision by the operator of a rig to order the contractor to vacate the rig to enable maintenance to occur meant there was a stoppage of the work the contractor was contracted to do. 53

[54] I accept that as Shell directed the contractors not to provide labour then that constitutes a stoppage of work.

What is the scope of the expression “for any cause”

[55] The unions submitted that the interpretation the words “for any cause” must be read ejusdem generis with the balance of the section and in the context of the provisions of the Act and the scope and purpose of the Act. A stoppage of work for any cause the unions say refers to causes of the same kind as those identified in subparagraphs (a) and (b) otherwise these provisions would have little work to do as they are merely a subset of (c). It is said that to be caught by (c) something has to happen which prevents work being performed. It was submitted that this does not include a direction from Shell for the workers not to attend the site.

[56] The contractors submitted that there is no reason to depart from the plain and ordinary meaning of the words “for any cause.” The contractors submitted that even if the expression for any cause in (c) was given a wide import, (a) and (b) would still have work to do because in those cases it is not necessary to “have the argument that that’s not something for which you are responsible.”

[57] I do not accept the respondents’ submission that the words “for any cause” should be read literally. If that were the case, then there would be no need for either (a) or (b). If the interpretation advanced by the respondents was accepted, only (c) would be necessary.

[58] I do not consider that every direction by Shell for the contractors not to provide labour would enable the contractors to stand down employees. Whether the stand down is permissible depends on all the surrounding circumstances.

[59] I accept that in certain limited circumstances, a direction by the operator to a contractor not to provide labour may be a cause within the scope of the expression “for any cause”.

[60] Here where a direction has been given that the contractors not provide labour because of proposed industrial action and the proposed industrial action is not cancelled in sufficient time for the contractors to mobilise their workforce with any certainty I consider that the reason for the stoppage of work is caught by the expression “for any cause.”

Was this stoppage one that the contractors could not have been reasonably held responsible?

[61] I accept that the contractors knew that the action may not proceed. On previous occasions, industrial action at Shell had been notified and then cancelled. It does appear however that this was the first time Shell had issued the direction that the contractors not provide labour.

[62] I accept that the contractors should have been more proactive in finding out on the Thursday if the industrial action was going ahead. In the end however Shell did not inform them of any change to the direction nor did it revoke its direction. The AWU did not inform the contractors that the notice had been withdrawn.

[63] Given the late notice of the cancellation of the industrial action I consider that the contractors cannot reasonably be held responsible for the stoppage of work.

[64] Except for Brockman, I have accepted the evidence of the contractors that there was no work on 25 July 2014 that the employees could have done. I have also accepted their evidence that training was either unnecessary because the employees’ training was up to date or training could not have been organised in such a short time. Therefore, except for Brockman, I am satisfied that the standowns were within the parameters set by the Act or the agreement.

[65] I therefore dismiss the applications in respect of UGL, Veolia and USI. I will make orders directed to Brockman.

DEPUTY PRESIDENT

Appearances:

C. Dowling for “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) and The Australian Workers’ Union.

M. Paynter for Brockman Engineering Pty Ltd.

C. Brown for Veolia, USI Pty Ltd and UGL.

Hearing details:

2014.

Melbourne:

18 December.

 1   Shell was sold and subsequently became Viva Energy Refining Pty Ltd in February 2014 but it will be referred to Shell in this decision.

 2   Exhibit A5 at GGP2.

 3   Ibid at GGP3.

 4   Transcript PN 592.

 5   Exhibit R3 at [19]-[21].

 6   AE408928.

 7   Ibid at KT2.

 8   Transcript PN 707.

 9   Exhibit R2 at [12]-[13].

 10   Transcript PN 607.

 11   Exhibit A5 at GGP5.

 12   AE407850.

 13 Exhibit R1 at [12].

 14   Transcript PN 451.

 15   Exhibit A3.

 16 Exhibit A5 at [33].

 17   Ibid at GGP6.

 18 Exhibit R3 at [37].

 19 Ibid at [38].

 20 Ibid at [41].

 21 Ibid at [42].

 22 Ibid at [43].

 23 Exhibit A5 at [42].

 24   Ibid.

 25   Exhibit R3 at [50]-[53].

 26   Exhibit R2 at [24]-[25].

 27   Ibid at [26]-[27].

 28   Ibid.

 29   Transcript PN 610.

 30   Ibid PN 672-674.

 31   Ibid PN 675-677.

 32 Exhibit R1 at [20].

 33 Ibid at [22].

 34   Transcript PN 501.

 35   Ibid PN 507-513.

 36   Ibid PN 94-96.

 37 Exhibit A2 at [4].

 38   Transcript PN 104.

 39   Ibid PN 329.

 40   AE891995

 41   AE412557

 42 Exhibit R3 at [31].

 43 Exhibit A6 at [17].

 44   Exhibit R2 at [17]-[18].

 45 Ibid at [19].

 46   Ibid at [20]-[23].

 47   Exhibit R1 at [14]-[15].

 48   Transcript PN 348.

 49   Transcript PN 431-432.

 50 Exhibit A4 at [8].

 51   Transcript PN 1202.

 52   Ibid PN 1203-1204.

 53   [1996] WAIRComm 7.

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