12 July, 2016
Australian Mines and Metals Association Inc v The Maritime Union of Australia
[2016] FCAFC 71
Esso Australia Pty Ltd v The Australian Workers' Union [2016] FCAFC 72
What you need to know
- After the expiry of the nominal term of an enterprise agreement, industrial action is not directly prohibited by the Fair Work Act 2009. However, if the industrial action fails to satisfy the common requirements under section 413 of the Act to be protected, it may be prohibited by order of the Fair Work Commission or a court.
- If industrial action is protected, the persons and organisations who organise or participate in that action are immune from many legal claims that could otherwise be brought against them. The immunity does not apply if the industrial action is unprotected. If the industrial action is unprotected, various legal remedies may be available.
- In two recent decisions the Full Federal Court has confirmed that, under section 413(5) of the FW Act, industrial action will not be protected if the bargaining representative or employee organising or participating in the industrial action is in breach of FWC orders applying to them at the time of organising or engaging in the proposed industrial action. However, past contraventions of orders during the same bargaining process do not prevent future industrial action from being protected.
The Full Federal Court's decisions adopt a narrower interpretation of when industrial action will be unprotected than the interpretation advanced by the relevant employers.
- The immunity given to protected industrial action is not absolute and can be lost by a contravention of an order during the currency of that industrial action. For example, if a bargaining order requires a certain step to be taken at a moment during the industrial action, a failure to take that step will render that industrial action (and any other protected industrial action in connection with the enterprise agreement) unprotected for so long as the contravention occurs.
What you need to do
representatives as protected industrial action is, in fact, protected.
- Consider whether any bargaining representatives or employees organising or participating in the industrial action have failed to comply with any orders applying at the time of the proposed industrial action and, if so, the legal status of such non-compliance.
- Obtain advice about the available legal options and strategies for preventing or stopping any unprotected industrial action having regard to potential legal claims that may be available in the circumstances.
What is a key consequence of a bargaining representative or an employee failing to comply with an FWC order that applies to them? Industrial action organised or engaged in by the person will not be protected under the FW Act for so long as the order applies to that person and non-compliance with the order continues.
Industrial action – what does the FW Act require?
Section 413 of the FW Act identifies the common requirements that must be complied with for industrial action to be protected. One of those requirements, under section 413(5), is that bargaining representatives and employees organising or engaging in the industrial action must not have contravened any orders "that apply to them" and that relate to, or relate to industrial action relating to, the agreement or a matter that arose during bargaining for the agreement.
An existing "stop order" under section 418 or 420, a court injunction to stop unprotected industrial action, an injunctive order against pattern bargaining under section 422, or a bargaining order imposing ongoing requirements about how bargaining should occur under section 230, are examples of orders which might engage section 413(5) if they are not complied with.
A Full Federal Court has now confirmed that industrial action will not meet the section 413(5) common requirement if the person organising or engaging in the industrial action is in breach of orders that apply to that person at the time of organising or taking the particular industrial action. In doing so, the Court rejected a broader interpretation of section 413(5), namely that a person's failure to comply with an order during the bargaining process would result in that person being unable to satisfy the common requirement for the duration of bargaining for the proposed enterprise agreement.
Full Court considers impact of "spent" bargaining orders in AMMA case
In Australian Mines and Metals Association Inc v The Maritime Union of Australia [2016] FCAFC 71, AMMA sought declarations that the MUA had contravened interim bargaining orders that applied to the MUA and accordingly any future industrial action organised by the MUA for the proposed enterprise agreements would not be protected industrial action.
One aspect of the interim bargaining orders required the MUA, on or before 21 July 2014, to set out and prioritise the claims it would pursue against each of the four offshore vessel operator employers and provide an undertaking not to pursue other claims. The orders also required the MUA to provide a written undertaking to the FWC that it would not pursue certain claims. Those things were not done until 25 July 2014 – ie, four days late.
Meanwhile, on 18 July 2014, the MUA gave notice to one of the employers of two consecutive work stoppages to take place on 25 and 26 July 2014.
As at 22 July 2014, the MUA had not complied with the interim bargaining orders. The employer applied to the FWC for a section 418 order to stop or prevent the notified stoppages on the ground that they would constitute unprotected industrial action.
In support of its application, the employer relied on section 413(5).
On the second day of the FWC hearing on 24 July 2014, the MUA withdrew its notice of intended industrial action. As the industrial action was no longer threatened, impending or probable, the FWC dismissed the employer's section 418 application.
AMMA subsequently sought declarations in the Federal Court to the effect that, due to the MUA's non-compliance with the interim bargaining orders, any future industrial action by the MUA or its members concerned with bargaining for any of the proposed enterprise agreements would not be protected industrial action.
At first instance, Justice Barker dismissed AMMA's application on the basis that section 413(5) only refers to contraventions of orders that apply at the time of the proposed industrial action. His Honour described the interim bargaining orders that had been contravened by the MUA, and subsequently complied with after the deadline for compliance, as "spent". His Honour held that section 413(5) does not apply without qualification to any contravention no matter when it occurred, whether the contravening conduct is continuing and whether it has been rectified.
Separately, Justice Barker rejected the MUA's submission that "substantial compliance" with the orders was sufficient to meet the requirements of section 413(5).
The reasoning and conclusion of the trial judge was upheld on appeal to the Full Federal Court. Justice Buchanan (with whom Justices Siopis and Bromberg agreed) had regard to the detailed legislative regime of common conditions that must be met for industrial action to be protected, and found that:
- such requirements must be satisfied at the point in time when the industrial action is being organised or engaged in; and
- the common conditions all relate to, or impose, a requirement for contemporary compliance, not historical compliance.
Justice Buchanan concluded that:
"Only such orders as are relevantly prohibitory and operative at the time of organising and engaging in the particular industrial action will require consideration under s 413(5)."
Accordingly, the Full Court declined to make the declarations sought by AMMA and dismissed the appeal.
Full Court adopts same construction of section 413(5) in Esso case
The same Full Federal Court adopted its preferred construction of section 413(5) in Esso Australia Pty Ltd v The Australian Workers' Union [2016] FCAFC 72, which was handed down at the same time as the AMMA decision.
The first instance decision of Justice Jessup in the Esso case is discussed in our Employment Alert Under Pressure: Organising unprotected industrial action gives rise to general protections liability published on 6 August 2015.
Esso and the AWU had been bargaining for new enterprise agreements to cover employees based at three onshore facilities in the Gippsland region of Victoria and a number of offshore oil platforms in the Bass Strait. One aspect of the Esso case concerned contraventions by the AWU of section 418 orders that industrial action at Esso's plant in Longford stop or not occur .
In the Federal Court, Esso argued that the AWU should, by virtue of section 413(5), be prevented from organising or taking any further industrial action in relation to bargaining for the replacement Esso agreements.
The trial judge, Justice Jessup, did not agree with the reasoning of Justice Barker in the AMMA case. His Honour was "provisionally attracted" to the view that section 413(5) referred to orders that applied to the person or organisation at the time when the contravention occurred. However, as Justice Jessup was unable to find that the AMMA judgment was "clearly, or plainly, wrong", his Honour felt compelled to follow it.
At first instance, Justice Jessup made a declaration that all industrial action organised by the AWU and taken by its members at the Longford plant during the period of operation of certain section 418 orders was unprotected industrial action. On appeal to the Full Federal Court, Esso challenged the confinement of the declaration to industrial action at Longford. Esso contended that the AWU and its members were pursuing a single, integrated campaign for one new enterprise agreement to replace all three existing agreements applying at relevant locations, or three replacement agreements.
It was not disputed that the AWU organised, and the AWU members took, industrial action in support of the totality of the claims across the three sites. Accordingly, Esso asserted that a breach of an order applying to the bargaining process as a whole was a breach that affected whether future industrial action at any of the facilities would be protected or not.
On appeal the Full Federal Court, in adopting its preferred construction of section 413(5), agreed that the declaration should be confined to the period of operation of the section 418 order. However, the Full Federal Court also found that the declaration should not be confined by reference to AWU members at Longford, but should refer to those members more generally in relation to all three existing enterprise agreements.
Implications for employers
These decisions settle the judicial debate over the proper construction of section 413(5). Protected industrial action by a union will only be ruled out in a bargaining process if the union has failed to comply with an FWC order relating to that process that applies to the union at the time of organising or engaging in the proposed industrial action. If the time for compliance has expired, or the order otherwise no longer applies to the union, section 413(5) will not operate to render future industrial action unprotected.
These decisions serve as a reminder for employers to:
- carefully consider whether any form of purportedly protected industrial action notified by employees or their union representatives is, in fact, protected;
- consider whether any bargaining representatives or employees organising or participating in the industrial action have failed to comply with any orders applying at the time of the proposed industrial action and, if so, the legal status of such non-compliance; and
- seek advice about options and strategy for preventing or stopping unprotected industrial action, having regard to potential legal claims that may be available in the circumstances.
MAKING THE CASE: Insights from Barbara Deegan
These decisions clarify the position that a failure to comply with a bargaining (or other) order will not remove the protected character of otherwise protected industrial action unless the failure is still occurring, or occurs, at the time the industrial action is being organised or taken.
It should be noted (as does Buchanan J at paragraph 95 of the AMMA decision) that it is also the case that industrial action, the organisation or taking of which is protected, may lose that protection if there is a subsequent failure to comply with a bargaining order that requires some act to be done, or action to be taken, during that industrial action. Such a failure will result in that industrial action, and any other industrial action taken in relation to the agreement, being unprotected for the duration of the contravention.
For further information, please contact:
Marie-Claire Foley, Partner, Ashurst
marie-claire.foley@ashurst.com
