Fair Work Act 2009
s.418—Industrial action

OSM Australia Pty Ltd
v
Construction, Forestry, Maritime, Mining and Energy Union & Ors listed in the Schedules
(C2022/1007)

Order to stop industrial action – casual employees failing to board vessel – whether industrial action or the declining of work – role of the union – order issued

[1] On 8 February 2022, an application was made by OSM Australia Pty Ltd (company) under s 418 of the Fair Work Act 2009 (the Act) seeking orders from the Commission that unprotected industrial action cease and not occur. The orders sought were directed at eleven employees of the company who are currently at Geelong and scheduled for deployment at sea. The employment of the eleven employees is covered by the OSM Australia Pty Ltd and MUA Offshore Oil and Gas Enterprise Agreement 2021 (Agreement). The nominal expiry date of the Agreement is 10 October 2022. The employees are members, or eligible to be members, of the Construction, Forestry, Maritime, Mining and Energy Union (CFMMEU).

[2] Section 420(1) of the Act requires that as far as practicable, the Commission determine an application under s 418 within 2 days after it is made. I heard the application on 9 and 10 February 2022. Earlier today, I advised the parties that I had concluded that I was required to issue an order under s 418(1). I summarised my reasons and indicated that I would publish those reasons shortly. I do so below. I have added a summary of the background and argument.

Background

[3] OSM is a labour hire company specialising in the supply of marine personnel to the oil and gas sector. It is currently servicing the Otway Offshore Project in Victoria and is contracted to provide employees for the crewing of two vessels, the Siem Aquamarine and the Siem Amethyst. In order to comply with Covid-19 safety protocols that apply on the project, employees must complete seven days of isolation before joining their vessels. Under clause 26.6(b) of the Agreement, the company is required to pay employees for time spent in isolation only as ‘dead days’, rather than ‘duty days’. The latter attract superior benefits.

[4] Mr Paul Schneider, the company’s industrial relations manager, gave evidence that in late January and early February 2022, the CFMMEU demanded that the company afford certain conditions of employment to employees who would be deployed on the two vessels. One of these conditions was that time spent by employees in isolation be paid as ‘duty days’ rather than ‘dead days’. The company rejected the claim. Mr Schneider attached to his statement email correspondence between Mr George Gakis, CFMMEU assistant secretary, and various company representatives, concerning the union’s claims.

[5] Five casual employees of the company were rostered to commence work on the Siem Aquamarine on the morning of 8 February 2022, following their completion of seven days’ isolation in a hotel: Tully Culpin, Kane Armstrong, Joshua Toonen, Grant Brown and Mark Robinson. These employees were referred to in the proceeding as the ‘tranche 1 employees’. Mr Schneider said that on 7 February 2022, at 10.13am, Mr Gakis called him and said that he had met with the CFMMEU’s members working on the Siem vessels, and that they were not happy with the isolation arrangements. Mr Gakis said that the employees were demanding that time in isolation be treated as duty days, and that unless the demand was agreed, the tranche 1 employees would not join the Siem Aquamarine the following day.

[6] Shortly after this telephone conversation, between 10.34am and 10.50am on 7 February 2022, each of the five employees sent to the company an email stating that ‘the payment of dead days is not worth the time spent in here’. The messages went on to state: ‘Tomorrow I am meant to be joining the vessel but won’t be doing so unless OSM reaches an agreement with the union’. The employees’ messages were copied to Mr Gakis.

[7] At around the same time that morning, five of the six employees of the company rostered to work on board the Siem Amethyst from 15 February 2022 also sent messages to the company. This group was referred to in the proceeding as the ‘tranche 2 employees’. Four employees (Hamish Canvin, Josh Culpin, Richard Badger and William Zisis) stated, in very similar messages, that while they would commence their isolation period, they ‘doubted’ that they would join the vessel ‘with the current arrangements in place’. A fifth employee, Shane Szwedyc, stated that the arrangements were not favourable to him and that while he planned to go into isolation, he encouraged the company to speak to the union and reach an agreement. A sixth employee, Anthony Baker, stated in a message to the company on 8 February 2022 that ‘until the current issues’ were resolved, he ‘will not be checking in’ to hotel isolation.

[8] On the afternoon of 7 February 2022, Mr Schneider received a further telephone call from Mr Gakis, who told him that, as the company’s position had not changed, the tranche 1 employees would not be joining the Siem Aquamarine. On the evening of 7 February 2022, Mr Schneider sent an email to the OSM consultative committee, copying Mr Gakis and the tranche 1 employees, stating that the company had issued a direction for the tranche 1 employees to join the Siem Aquamarine as scheduled, and that if employees failed to join the vessel it would constitute serious misconduct and may warrant dismissal.

[9] On the morning of 8 February 2022, the tranche 1 employees failed to board the Siem Aquamarine. Mr Schneider’s evidence was that he believed that the employees, most of whom are not from Geelong, then booked themselves into their hotels for a further night.

[10] The Siem Aquamarine remains at anchor off the Port of Geelong and is expected to sail on 11 February 2022. Mr Schneider said that the company’s expectation is that the tranche 1 employees board the Siem Aquamarine and complete their assignment on the vessel. Mr Schneider said that the head contractor, Beach Energy Limited, had advised the company that because tranche 1 employees had not boarded the vessel as scheduled, their isolation was compromised, and they would now need to serve a further period of seven days’ isolation before their deployment to the project. Mr Schneider said that the company would make arrangements for the Siem Aquamarine to return to the Port of Geelong to enable the tranche 1 employees to board after their further period of isolation.

[11] The CFMMEU did not lead any evidence.

Summary of the contentions

[12] The company submitted that the five employees who had failed to commence work as scheduled on the Siem Aquamarine had engaged in industrial action, which was constituted by a ban or limitation on the performance of work or by a failure or refusal to attend for work (s 19(1)(b) and (c)), and that the six employees scheduled to work on the Siem Amethyst had threatened to take such action. The company contended that the action was plainly unprotected, and that it was being organised by the CFMMEU. None of the action had been authorised by the company. On the contrary, the company had made clear to employees that it required them to work on the vessels as scheduled. Nor was there any question that the action was associated with a reasonable concern about an imminent risk to health and safety. The company contended that in these circumstances, s 418 required the Commission to issue an order that the employees’ industrial action cease or not occur.

[13] The company further contended that the CFMMEU was organising the industrial action. It pointed to the fact that from late January 2022, Mr Gakis had made demands of the company in respect of the arrangements that would apply to the isolation period, and that it was plain that the union had coordinated the employees’ messages to the company on 7 February 2022, most of which were also copied to Mr Gakis. The company also noted that a post had appeared on 8 February 2022 on the Facebook page of the ‘Maritime Union of Australia–WA Branch’, which stated, among other things, that members should not accept work from OSM on Siem vessels working on the ‘Beach Energy job’ in Geelong without first speaking to the union, and that questions could be directed to Mr Gakis. The company submitted that the post was evidence of the union’s organisation of the industrial action.

[14] The CFMMEU contended that all of the five tranche 1 employees were casuals, and that by not boarding the vessel on 8 February 2022, they had evidently declined to accept an engagement, which was their right. The union submitted that casual employment cuts both ways, and that, just as the employer gives a casual no advance commitment as to ongoing employment, the casual gives the employer no commitment to accept work. The union contended that, if the tranche 1 employees had declined work, or resigned from their employment, they could not be the subject of an order effectively requiring them to work.

[15] Concerning the six tranche 2 employees, the union contended that the evidence did not establish any threat to take industrial action. Five of the employees had indicated that they would commence their isolation, which is all that they were presently required by the company to do. The fact that four of these five employees had stated in their messages to the company that they doubted whether they would join the vessel merely foreshadowed a possibility that they would decline to work if an acceptable arrangement with the union could not be reached. In the case of three of the four casual employees (Mr Canvin, Mr Badger and Mr Zisis), they would be entitled to decline work in any event. Mr Szwedyc had said nothing that could be regarded as a threat to take industrial action. The sixth employee, Mr Baker, had evidently resigned because he had declined to commence isolation.

[16] The CFMMEU contended that no industrial action was happening or threatened, but that should the Commission conclude otherwise, the union was not organising such action. The CFMMEU submitted that although it had not led evidence, it made no concessions in respect of the orders that the company sought against it.

Consideration

[17] Section 418(1) of the Act provides as follows:

“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.”

[18] It appears to me that industrial action is happening and is being threatened. The industrial action that is happening is being taken by the five tranche 1 employees. The threat to take industrial action is being made by four of the tranche 2 employees. The industrial action is being organised by the union.

[19] I reject the union’s contention that the tranche 1 employees have declined a casual engagement. It is true, as the CFMMEU says, that casual employment cuts both ways. The parties give one another no advance commitment about future employment. Each engagement stands alone. A person is not required to accept a casual engagement. In the present case however, the casuals accepted an engagement for a five week period. It comprised seven days’ isolation followed by a four week period at sea. The casual employees in tranche 1 have completed the first week of their engagement. As they did not board the Siem Aquamarine, it appears that they will have to undergo a further isolation period. It is not clear what effect that will have on the length of their engagement. Nevertheless, the company wants the tranche 1 employees to complete their assignment. I consider that, for the moment at least, their casual engagement endures.

[20] I also reject the union’s submission that the five casual employees in tranche 1 have resigned. None of these employees has advised the company that they resign, nor have they by their conduct brought the employment to an end. Rather, the employees have said that they will not board their vessel unless an agreement is reached with the union. In my view, the conduct of these employees demonstrates that their employment continues. They want the company to reach an agreement with their union about the arrangements that apply to periods of isolation. The CFMMEU contended that the tranche 1 employees were not currently being paid, and that this was evidence that their employment had ended. I disagree. They are not being paid because they are engaged in industrial action, and the Act prohibits the employer from paying them.

[21] In respect of the tranche 2 employees, I consider that the four employees who conveyed to the company their ‘doubt’ that they would join the vessel on 15 February 2022 ‘with the current arrangements in place’ were threatening to engage in industrial action. The clear implication is that if the company does not reach an agreement with the CFMMEU in relation to the conditions that will apply to isolation, these employees will refuse to join the Siem Amethyst, in the same manner that the tranche 1 employees refused to board the Siem Aquamarine. This action may not be impending or probable. But it is threatened.

[22] At the commencement of proceedings this morning, the company advised the Commission that it did not press for orders to be made against the two permanent employees in tranche 2, namely Mr Josh Culpin and Mr Szwedyc. Both of these employees had confirmed to the company their intention to work in accordance with their contracts of employment.

[23] As to Mr Baker, I consider that, by refusing to check into the hotel and commence his period of isolation, he engaged in industrial action, because having accepted his casual engagement, he was required to isolate. He has also threatened to take industrial action in the form of a refusal to attend for work on the Siem Amethyst on 15 February 2022. If he has not undergone isolation, he cannot expect to join the vessel.

[24] It is open to any of the employees to resign from their employment at any time. If they do so, they will cease to be bound by the order. I note that clause 14.1 of the Agreement requires seven days’ notice to be given of the termination of casual employment. I agree with the CFMMEU that this provision does not deem the employment to terminate only after the notice period has ended. The clause would not preclude casuals from ending their employment earlier. Whether employment subsists or has ended is a mixed question of fact and law. If a casual employee resigns without providing the required notice, the employee will contravene clause 14, and payments may be withheld on termination under clause 14(1)(d). But that would not alter the fact that the employment had ended.

[25] It is clear that the action or threatened action of the tranche 1 and four of the tranche 2 employees (Mr Canvin, Mr Zisis, Mr Badger and Mr Baker) falls within the definition of ‘industrial action’ in s 19(1) of the Act, and that it is not subject to the exclusion in s 19(2). There is also no doubt about the fact that the industrial action is unprotected. The employment of the employees is covered by the Agreement, the nominal expiry date of which has not passed (s 413(6)). Protected industrial action cannot occur until after that date. The other common requirements for protected industrial action in s 413 have also not been met.

[26] I consider that the CFMMEU is organising the industrial action that is happening and that is threatened. It has not merely relayed the views of its members to the company. From late January 2022, Mr Gakis made claims of the company in respect of the arrangements that would apply to employees’ period of isolation. He contacted Mr Schneider on 7 February 2022 to advise that tranche 1 employees would not board the vessel unless the claims were met. Shortly afterwards, in the same brief period of time, all of the tranche 1 employees sent very similar messages to the company advising that they would not join the vessel unless an agreement was reached with the union. In the same period, four of the six tranche 2 employees threatened not to join the Siem Amethyst on 15 February 2022, and a fifth encouraged the company to negotiate with the union. The coordinating hand of the union in the employees’ messages on 7 February 2022 is inferentially clear. This inference is more compelling than its alternatives, namely that the timing and similarity of the employee messages was coordinated by one or more employees, or that it was a coincidence.

[27] In my view, the industrial action of the relevant employees ‘is being organised’ by the union. The organisation is not confined to the past. It has resulted in a refusal by the tranche 1 employees to board the Siem Aquamarine, and a threat by four of the tranche 2 employees not to join the Siem Amethyst. I consider that the refusals and the threats are enduring and are sustained by the position of the union. In my view, the employees who are taking industrial action, and those who are threatening it, are likely to follow the union’s advice as to whether they should board their vessels in the coming days. The union’s organisation of industrial action that has occurred in the recent past therefore also resides in the present.

[28] In light of my conclusions, the Act requires that I issue an order that the industrial action that is happening stop, that the industrial action that is threatened not occur, and that the CFMMEU cease organising the industrial action. Unlike the position that obtained under previous legislation, there is no residual discretion conferred on the Commission to consider the broader setting of the industrial action and whether an order ought to be issued.

[29] Although s 418(3) provides that the Commission does not have to specify the particular industrial action, an order is made on a particular evidentiary foundation, and the Act requires that an order be issued against the industrial action. An order should go no further than is necessary. The scope and duration of the order should be appropriately tailored to the findings of the particular case. Accordingly, the industrial action that is subject to the order, and which must cease or not occur or be organised, is confined to industrial action constituted by a failure or refusal by the particular employees identified in the order to attend for work or to perform any work at all on or in relation to the Siem Aquamarine (for tranche 1 employees) or the Siem Amethyst (for the four relevant tranche 2 employees). In light of the fact that tranche 1 employees may have to undergo a further isolation period, I consider that the period of the order should be 14 days. This takes into account that it may not be realistic to commence a further period of isolation for some days. It is also appropriate that the order contain a provision allowing a person affected by it to have liberty to apply to the Commission to vary, extend or rescind the order.

[30] An order was issued separately in PR738240.

DEPUTY PRESIDENT

Appearances:

J. McLean of counsel for OSM Australia Pty Ltd
L. Edmonds for the CFMMEU

Hearing details:

2022
Melbourne, by video link to Perth
9 and 10 February 2022

Printed by authority of the Commonwealth Government Printer

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