[2016] FWC 3338
FAIR WORK COMMISSION

REASONS FOR DECISION


Fair Work Act 2009

s.424—Industrial action

Essential Energy
v
Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia
(B2016/559 and B2016/560)

SENIOR DEPUTY PRESIDENT HAMBERGER

SYDNEY, 31 MAY 2016

Termination of protected industrial action

[1] This decision provides my reasons for orders 1 I made on Monday 23 May 2016 under s.424 of the Fair Work Act 2009 (the FW Act). The orders followed an application by Essential Energy seeking the suspension of protected industrial action which had been notified by the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU), acting as a bargaining representative for its members. The orders terminated the protected industrial action with effect from 10pm 23 May 2016.

[2] Following receipt of the application, a hearing was held in Sydney on 23 May 2016. Essential Energy was represented by Mr H J Dixon SC and Mr S R Meehan of counsel. Mr I Taylor, appeared for the CEPU (as well as the Australian, Municipal, Administrative, Clerical & Services Union New South Wales United Services Branch (ASU) and Association of Professional, Engineers, Scientists & Managers, Australia New South Wales Branch (APESMA) who were granted leave to intervene) and Ms L Doust of counsel. Written statements were tendered on behalf of Essential Energy by Mr G Burgess (Manager System Control) and Mr P Smith (Industrial Relations Manager). Mr Smith was cross-examined. A written statement was given by Mr S Butler (NSW Branch Secretary) on behalf of the CEPU. Mr Butler was also cross examined.

The relevant provisions of the Fair Work Act 2009

[3] Section 424 of the FW Act is in Division 6 of Part 3-3 of the FW Act and is titled ‘Suspension or termination of protected industrial action by the FWC’. Part 3-3 of the Act, titled ‘Industrial Action’, contains provisions dealing with protected industrial action and the requirements for industrial action to attract that protected status, orders stopping industrial action (other than protected industrial action), the suspension or termination of protected industrial action, applications for protected action ballot orders and the conduct of such ballots and provisions relating to employee payments during periods of protected and unprotected industrial action. For present purposes, it is only necessary to reproduce s.424. That section provides as follows:

Background

[4] The Essential Energy electricity distribution network covers approximately 95% of the state of New South Wales and parts of Southern Queensland with the exception of a region on the east coast that covers the wider Sydney basin, Newcastle and the Hunter, Wollongong and Shoalhaven. It is Australia’s largest electricity network, delivering network services to more than 844,000 homes and businesses in 1500 regional, rural and remote communities. Essential Energy also provides water and sewerage services to approximately 20,000 customers in far west New South Wales.

[5] The CEPU has about 2000 members employed by Essential Energy throughout the network in roles as line workers, electricians, plant operators, engineering offices and the like. The union has members employed in most classifications under the Essential Energy Enterprise Agreement 2013 (the 2013 agreement). The ASU and APESMA also have members employed under the 2013 agreement.

[6] The 2013 agreement was approved by the Commission on 9 July 2014. It has a nominal expiry date of 30 June 2015. Clause 1.8 of the 2013 agreement provides as follows:

[7] Despite the terms of Clause 1.8 it appears that negotiations for a replacement to the 2013 agreement did not commence until July 2015. During that month the CEPU presented Essential Energy with a log of claims, and the latter provided a presentation to the unions outlining the areas it wished to discuss in the negotiations for a replacement agreement. On 17 July 2015, Essential Energy sent a broadcast to employees which identified changes it was seeking to the 2013 agreement.

[8] A number of bargaining meetings were held between late July and October 2015. In November 2015 the Commission facilitated a week of intensive ‘interest-based’ negotiations.

[9] Further bargaining meetings occurred between the parties on 25 November 2015, 9 December 2015 and 28 January 2016. On 4 February 2016, Essential Energy issued a draft enterprise agreement for consideration by the unions. The key proposed changes from the 2013 agreement were summarised in a broadcast to employees on that day. Those key changes were:

[10] Essential Energy sought a response to the proposed enterprise agreement by 19 February 2016.

[11] On 11 February 2016 a meeting of CEPU, ASU and APESMA delegates rejected Essential Energy’s proposed enterprise agreement. The unions indicated that they would consider proposals for involuntary redundancy subject to a number of conditions including a limit on the number of forced redundancies that may be implemented in any year, and a provision that any terms in relation to redundancy be for the life of the agreement until it is terminated by agreement or replaced by a new agreement. The unions also indicated that they did not agree to any of the other proposed changes, in particular those relating to the contracting out clause and the dispute settlement procedure.

[12] On 23 February the CEPU applied to the Commission for a protected action ballot order. The ballot order was made on 25 February 2016. The ballot was conducted and the results declared by the Australian Electoral Commission on 22 March 2016. The ballot authorised the following kinds of protected industrial action:

[13] On 7 March 2016 Essential Energy made an application under s.225 of the FW Act to terminate the 2013 agreement.

[14] On 4 April 2016, the CEPU wrote to Essential Energy indicating on a without prejudice basis the possible elements of a new agreement. On the same day the CEPU gave Essential Energy notices under the FW Act advising of the following protected action:

[15] The CEPU subsequently gave assurances that members would make themselves available for emergency response.

[16] The Acting CEO of Essential Energy, Mr Humphreys, responded to the unions’ latest proposals in a letter dated 14 April 2016. The letter included the following:

[17] The bans and stoppages which had been notified by the CEPU on 4 April 2016 proceeded on 14 April 2016 and 20 April 2016.

[18] Mr Butler, in his written statement, said the following:

[19] On 22 April 2016, Mr Butler wrote to Essential Energy inviting it to consider the potential for a consent arbitration on the issues which were said to be outstanding by Essential Energy in the evidence it had filed in its application to terminate the 2013 agreement. Mr Humphreys responded on 26 April 2016. This included the following:

[20] Mr Butler met with Mr Humphreys on 27 April 2016 and canvassed areas where the two parties were apart.

[21] On 29 April 2016, the CEPU gave Essential Energy six notices advising of the taking of protected industrial action in the form of stoppages during the 24-hour period between 6 am on 11 May 2016 and 6 am on 12 May 2016. The notices were given in respect of the six sequential four hour periods over that 24-hour period. The notices included some exemptions intended to provide sufficient coverage for Essential Energy to operate without risk to safety. Further commitments were given by the CEPU about emergency coverage. The industrial action was duly taken on 11 May 2016.

[22] Mr Humphreys wrote to Mr Butler on 10 May 2016. His letter included the following:

[23] On 11 May 2016, the CEPU gave Essential Energy notices advising of the taking of protected industrial action over a period of 80 hours, constituted by 20 stoppages of four hours duration, between 10 pm 23 May 2016 and 6 am on 27 May 2016. Unlike with previous stoppages, the CEPU indicated it would not provide a skeleton staff to deal with emergencies.

[24] On 18 May, the CEPU gave Essential Energy notices advising of the taking of protected industrial action between 6 am 30 May 2016 and 6 am 1 July 2016 constituted by 192 successive stoppages of four hours duration.

[25] Also on 18 May 2016, Essential Energy sent a broadcast to the employees to be covered by the new enterprise agreement that it intends to request employees to vote for the enterprise agreement. The access period is intended to commence on Thursday 26 May 2016 with the ballot expected to conclude on Thursday 9 June 2016.

[26] The proposed agreement is in the same form as the draft enterprise agreement that Essential Energy had put to employees and bargaining representatives on 4 February 2016 except for three changes:

Consideration

[27] It is not contested that the CEPU has threatened to take protected action. Nor is it contested that the protected action threatens to endanger the life, the personal safety, the health and the welfare of a part of the population of NSW. I am satisfied, based on the uncontested evidence of Mr Burgess, that this is indeed so.

[28] The real issue in contention during the hearing was whether the Commission should suspend or terminate the industrial action. If the Commission terminates the industrial action this brings into operation the provisions of Division 3 of Part 2-5 of the FW Act. These relevantly provide, in summary, that if industrial action has been terminated under s.424, and the bargaining parties have failed to settle all the matters that were at issue during bargaining for the agreement during a post-industrial action negotiating period, then the Commission must make a workplace determination. In effect, the Commission would arbitrate the issues still in dispute.

[29] Mr Dixon submitted that the Commission should suspend the industrial action because:

[30] It is clear that once the Commission is satisfied that there is a threat of protected industrial action of the requisite kind, then the decision whether to suspend or alternatively to terminate that action is discretionary.

[31] I have examined the factors to which the Commission has had regard on previous occasions in deciding whether to make an order either suspending or terminating protected action.

[32] In Ambulance Victoria v LHMU Kaufman SDP said:

[33] In Victorian Hospitals’ Industrial Association a Full Bench said:

[34] In Monash University a Full Bench said:

[35] In Ausgrid Harrison SDP said:

[36] In Commonwealth, Wilson C indicated some preference for termination because if the protected action was only suspended it was probable that there would be further threats of industrial action that would again endanger the population. However he ultimately decided to suspend the action because none of the parties had sought termination. 6

[37] These decisions indicate that the following factors are relevant:

[38] These are the factors upon which I have based my decision. Taken together, they support a decision to terminate, rather than suspend, the protected industrial action. I have also had regard to the management initiated ballot. Whether the decision is to suspend or terminate the industrial action, this would not prevent the ballot going ahead.

[39] While both parties would, I am satisfied, prefer a negotiated outcome, it must also be recognised that negotiations have been going on for nearly a year, including a week of intensive conciliation by the Commission. Based on the evidence the parties are still far apart on some key issues – indeed Mr Humphreys expressed in his letter to Mr Butler on 10 May 2016 that the parties appeared to be moving further apart. There have already been several rounds of industrial action. There is no agreement between the parties on whether termination or suspension should be ordered. If industrial action were only to be suspended on a temporary basis it is likely that there would be further industrial action once the suspension was lifted, that could once again threaten the welfare of the broader population.

Conclusion

[40] The protected action threatened by the CEPU should be terminated.

Seal of the Fair Work Commission with Member's signature.

SENIOR DEPUTY PRESIDENT

Appearances:

Mr H J Dixon, Senior Counsel, appeared for the Applicant; and with him Mr S R Meehan of counsel

Mr I Taylor, Senior Counsel, appeared for the Respondent; and with him Ms L Doust of counsel and Mr A Neilson of Slater and Gordon Lawyers

Hearing details:

2016

Sydney

May 23

 1  PR580630, PR580631

 2   Ambulance Victoria v Liquor, Hospitality and Miscellaneous Union (2009) 187 IR 119

 3   Victorian Hospitals’ Industrial Association v Australian Nursing Federation [2011] FWAFB 8165 at [60]

 4   Monash v National Tertiary Education Industry Union [2013] FWCFB 5982 (26 August 2013) at [55]

 5   Ausgrid; Endeavour Energy; Minister for Industrial Relations (New South Wales) v CEPU, ASU and AMWU [2015] FWC 1600 at [59]

 6   Commonwealth of Australia (represented by the Department of Immigration and Border Protection) v CPSU, the Community and Public Sector Union [2016] FWC 2526

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