| [2016] FWC 8826 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.424—Industrial action
Minister for Industrial Relations for the State of Victoria
v
Australian Workers' Union, The;
Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia;
"Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union" known as the Australian Manufacturing Workers' Union (AMWU);
Esso Australia Pty Ltd
(B2016/1264 and B2016/1267)
VICE PRESIDENT WATSON |
MELBOURNE, 7 DECEMBER 2016 |
Application for an order to terminate protected industrial action pursuant to s.424 – whether protected industrial action threatened, impending or probable – whether industrial action threatens to endanger the welfare of part of the population – whether the industrial action will cause significant damage to an important part of the Australian economy – whether termination or suspension is appropriate – Fair Work Act 2009, ss.424, 415, 266.
[1] This decision concerns two applications made by the Minister for Industrial Relations for the State of Victoria (the Minister) under s.424 of the Fair Work Act 2009 (the Act) that orders be made terminating protected industrial action notified by The Australian Workers’ Union, the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia and the "Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union" known as the Australian Manufacturing Workers' Union (AMWU) (the Unions) against Esso Australia Pty Ltd (Esso).
[2] The industrial action notified by the Unions relates to employees who would be covered by the proposed enterprise agreements to replace the Esso Gippsland (Longford and Long Island Point) Enterprise Agreement 2011 (the Gippsland Agreement) and the Esso Offshore Enterprise Agreement 2011 (the Offshore Agreement). The Notices of Protected Industrial Action served on Esso (Notices) declared an intention to take industrial action in the form of 24 consecutive one hour stoppages on the performance of all work by the employees commencing at 6:00am on 9 December 2016, and repeated from 6:00am on each day thereafter, until 6:00am on 1 March 2017.
[3] The applications by the Minister were brought on the basis that the industrial action has threatened, is threatening, or would threaten to endanger the welfare of the population or a part of it and cause significant damage to the Australian economy or an important part of it within the terms of s.424(1) of the Act. The Minister has standing to bring the application under s. 424(2)(b)(iia) of the Act. The Unions supported the Minister’s application for termination. Esso did not oppose nor support the application.
[4] The applications were listed for hearing on 7 December 2016 in Melbourne. In the hearing of these applications, Mr C Dowling of counsel appeared with Mr D Catanese on behalf of the Minister. Mr H Borenstein QC of counsel appeared with Ms J Vardi on behalf of the Unions. Mr F Parry QC and Mr L Howard of counsel appeared with Ms A Granger on behalf of Esso.
[5] Section 424 of the Act provides:
“424 FWC must suspend or terminate protected industrial action—endangering life etc.
Suspension or termination of protected industrial action
(1) The FWC must make an order suspending or terminating protected industrial action for a proposed enterprise agreement that:
(a) is being engaged in; or
(b) is threatened, impending or probable;
if the FWC is satisfied that the protected industrial action has threatened, is threatening, or would threaten:
(c) to endanger the life, the personal safety or health, or the welfare, of the population or of part of it; or
(d) to cause significant damage to the Australian economy or an important part of it.
(2) The FWC may make the order:
(a) on its own initiative; or
(b) on application by any of the following:
(i) a bargaining representative for the agreement;
(ii) the Minister;
(iia) if the industrial action is being engaged in, or is threatened, impending or probable, in a State that is a referring State as defined in section 30B or 30L—the Minister of the State who has responsibility for workplace relations matters in the State;
(iib) if the industrial action is being engaged in, or is threatened, impending or probable, in a Territory—the Minister of the Territory who has responsibility for workplace relations matters in the Territory;
(iii) a person prescribed by the regulations.
Application must be determined within 5 days
(3) If an application for an order under this section is made, the FWC must, as far as practicable, determine the application within 5 days after it is made.
Interim orders
(4) If the FWC is unable to determine the application within that period, the FWC must, within that period, make an interim order suspending the protected industrial action to which the application relates until the application is determined.
(5) An interim order continues in operation until the application is determined.”
[6] The provision requires the application of each element of the section to the circumstances of this case. Little is served by paraphrasing the elements of the section. The terms are to be given their ordinary and natural meanings.
[7] Evidence was given by the following persons:
● Stephen Bell, General Manager, Commercial of Qenos Pty Ltd,
● David Catanese, Managing Principal Solicitor, Victorian Government Solicitor’s Office,
● Matthew Clemow, Acting Group Manager, Gas Real Time Operations, Australian Energy Marketing Operator,
● Marianne Lourey, Executive Director, ACIL Allen Consulting,
● Damian Sanford, Group Manager, NEM Real Time Operations, Australian Energy Market Operator Limited, and
● Daniel Trindade, Partner, Clayton Utz, Solicitors for Esso Australia Pty Ltd.
[8] I propose to consider the evidence as it relates to each of the issues I need to determine in order to decide whether to grant the applications.
[9] Both the Gippsland Agreement and the Offshore Agreement passed their nominal expiry dates on 1 October 2014. Since that time, Esso and the Unions have been negotiating for replacement agreements. In November 2014 each of the Unions made applications for protected action ballot orders. On 10 December 2014 the Commission made orders for the conduct of ballots of relevant Esso employees. On 9 January 2015 the Australian Electoral Commission declared that more than 50% of relevant employees voted and more than 50% of the valid votes approved each of the proposed forms of industrial action.
[10] On 30 November 2016 the Unions gave notice of employee claim action in the form of 24 consecutive one hour stoppages commencing at 6:00am on 9 December 2016 and repeated from 6:00am each day thereafter until 6:00am on 1 March 2017. This action falls within the actions authorised by the protected action ballot.
[11] I am satisfied that protected industrial action as described in the Notices is threatened, impending and probable.
[12] The evidence before me establishes that natural gas produced by Esso from its Bass Strait oil and gas fields and processed through its Gippsland production facilities is critical to the gas fired power generation peaking facilities and energy supply in Victoria, South Australia, Tasmania and New South Wales. Oil and gas produced by Esso is also used in a range of industries including power generation, transportation, gas retailing, plastics, petrochemicals, manufacturing and mineral processing. Gas supplied through the Gippsland facilities supplies the majority of domestic natural gas demand in South East Australia.
[13] The industrial action would immediately threaten gas supply to each of the regions and industries currently supplied with gas through the Esso production facilities.
[14] The critical nature of the gas supply for domestic and industrial use makes it inevitable that that the protected industrial action threatens to endanger the welfare of the population in various regions of South East Australia.
[15] Although there has been limited analysis of the economic impact of the industrial action, the impact is quite clear. Ms Lourey estimates that each day’s loss of gas production would cost the Victorian economy alone at the upper end of the range of $5-15m. If the industrial action continues for the period of the Notices, the loss to the Victorian economy is estimated to be in excess of $1.2b. These estimates are based on an estimated loss to Esso of $4.7m per day and a loss to gas consumers involved in manufacturing basic chemicals, glass and glass products, ceramic products, plaster and cement products of a further $9m.
[16] On the evidence before me there can be no doubt that the industrial action will cause significant damage to the Victorian economy and additional damage to other parts of South East Australia.
[17] Section 424 requires the Commission to suspend or terminate the industrial action if it makes either of the findings I have made in the preceding paragraphs. The consequences of termination are that the dispute is subject to compulsory conciliation and arbitration of the dispute under the terms of s.266 of the Act. The protection from immunity conferred by s.415 is removed. If the action is suspended, the dispute is not required to be resolved by arbitration if it remains unresolved.
[18] It is well established that the choice of termination or suspension depends on a consideration of all of the circumstances. In a decision concerning the 2011 Qantas dispute a Full Bench said 1:
“[12] It is apparent that a suspension of all action on an interim or short term basis is not appropriate and in the end no party supported that course. Some of the principal issues in the negotiations have so far proved very difficult to resolve. Other matters may be easier to resolve.
[13] On the evidence there is significant uncertainty arising from the protected action initially of the unions but in particular arising from the lockout and the grounding of the airline. We should do what we can to avoid significant damage to the tourism industry.
[14] There is a need to balance this issue against the fact that protected industrial action is permissible under our system and has been now for many years and has been taken relatively frequently in the airline industry with successive bargaining rounds. It is also important that encouragement of enterprise bargaining is also part of the system. In that respect, what we have heard indicates there are still prospects for a satisfactory negotiated outcome in all three cases. The prospect of a negotiated resolution in relation to the three proposed enterprise agreements still remains.
[15] In this case the primary consideration, however, as required by s.424(1), is the effect of the protected action on the wider aviation and tourism industries. We have decided that in the particular circumstances of this case, which on the evidence include the particular vulnerability of the tourism industry to uncertainty, suspension will not provide sufficient protection against the risk of significant damage to the tourism industry and aviation in particular. Suspension is necessarily temporary - it leaves open the possibility there may be a further lock out with its attendant risks for the relevant part of the economy. That is, a risk the situation we are now dealing with will recur.
[16] For these reasons we have decided to terminate protected industrial action in relation to each of the proposed enterprise agreements immediately.”
[19] In this case the parties have been negotiating for over two years. The initial claims made by the Unions were made in July 2014. Conciliation first occurred before the Commission in October 2014 before Commissioner Johns and continued well into 2015. The Commission has made good faith bargaining orders, protected action ballot orders, and orders that industrial action stop or not occur. Appeals and Federal Court applications have been made following these orders. The Federal Court has issued interlocutory injunctions. A previous application for suspension of industrial action led to a temporary cessation of hostilities.
[20] Industrial action has been engaged in on various occasions over that two year period. That industrial action has led to Federal Court litigation and contests as to whether the action is protected from immunity. Further discussions have been facilitated in 2016 by retired Commissioner Blair. None of those actions has resulted in sufficient progress towards an agreed resolution of the dispute.
[21] As recently as 2 December 2016 Esso has made offers to resolve the disputes. On 6 December 2016 those offers were rejected. The parties remain apart on several issues including significant issues of wages and rostering. No party submitted that there was a likelihood of an agreement being reached if industrial action was suspended for a period. The Minister and the Unions submit that the industrial action should be terminated. Esso does not contend otherwise.
[22] Termination of the protected industrial action will move the negotiating parties from the extended impasse in their negotiations to an alternative path of conciliation and arbitration under the framework of s.266 of the Act. This will provide finality to their dispute and will result in either agreements or Workplace Determinations that deal with all disputed matters. Having regard to all of the circumstances I have decided to terminate the protected industrial action scheduled to commence on 9 December 2016. An order [PR588348] giving effect to this decision accompanies this decision.
VICE PRESIDENT
Appearances:
Mr C Dowling of counsel with Mr D Catanese for the Minister for Industrial Relations for the State of Victoria.
Mr F Parry QC and Mr L Howard of counsel with Ms A Granger on behalf of Esso Australia Pty Ltd.
Mr H Borenstein QC of counsel with Ms J Vardi on behalf of the Unions.
Hearing details:
2016.
Melbourne.
7 December 2016.
Final written submissions:
Minister for Industrial Relations for the State of Victoria on 5 December 2016.
Esso Australia Pty Ltd on 6 December 2016.
1 Re Minister for Tertiary Education, Skills, Jobs and Workplace Relations [2011] FWAFB 7444.
Printed by authority of the Commonwealth Government Printer
<Price code C, PR588348>