FWA 1144
REASONS FOR DECISION
Fair Work Act 2009
s.423 - Application to suspend or terminate protected industrial action - significant economic harm etc
SENIOR DEPUTY PRESIDENT O'CALLAGHAN
ADELAIDE, 17 NOVEMBER 2009
application to suspend protected industrial action – cooling off.
 On 13 November 2009 Nyrstar Port Pirie Pty Ltd (Nyrstar) lodged an application to suspend or terminate protected industrial action pursuant to sections 423, 424 and 425 of the Fair Work Act 2009 (the Act). Nyrstar sought an urgent hearing of this application on the basis that blast furnace operations at the Nyrstar Port Pirie plant were in imminent danger of ceasing. My decision relative to this application was handed down in transcript at the conclusion of proceedings on 13 November 2009. These reasons for decision have been provided consistent with an undertaking provided to the parties in the course of that hearing.
 The application was the subject of a hearing on 13 November 2009 in Adelaide, with a video link to Melbourne and a telephone link to Port Pirie. Nyrstar were represented by Ms Zeitz and Ms Mulcahy of counsel. The Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (AMWU) was represented by Mr Fenney. The Australian Workers’ Union (AWU) was represented by Mr Hopgood. The Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU) was represented by Mr Donnelly and the Construction, Forestry, Mining and Energy Union (CFMEU) by Mr Roberts. I have generally referred to the unions collectively as “the unions".
 At the outset I note that this application was made in essentially similar terms to an application made on 5 November 2009 1 through which Nyrstar relied on sections 423 and 424 of the Act. That first application was refused in a decision issued in transcript on 9 November 2009 and confirmed in a decision issued on 16 November 20092. I have taken the proceedings and evidence provided to me relative to this first application into account in considering the current application.
 The background to this application is set out in my decision of 16 November 2009. In simplistic terms Nyrstar has been unable to reach an agreement with the unions. Protected industrial action in the form of overtime and other bans commenced on 9 November 2009. This industrial action commenced at a time when, for a variety of mechanical reasons, the sinter stocks held by Nyrstar for the continued operation of the blast furnace had reduced to approximately 2500 tons against a normal stockpile of 7000 tons. The evidence given to me on 9 November 2009 was to the effect that any further significant reduction in sinter stocks may necessitate the programmed shut down of the blast furnace facility. This would involve lost production costs in the order of $600,000 per day over a minimum of six days with preparatory costs in the order of $400,000. Further, the evidence of Mr Howell, the General Manager for the Nyrstar Port Pirie facility, was to the effect that he was uncertain that approval to reopen the blast furnace would be obtained from the Nyrstar parent corporation.
 At the hearing on 13 November 2009 evidence was given by the Nyrstar acting General Manager Mr Jetson and by the Nyrstar acting Human Resources and Occupational Health and Safety Manager, Mr Milner.
 This evidence went to the effect and operation of the bans and the effect of a series of further mechanical breakdowns affecting the sinter plant which had reduced the sinter stocks to approximately 900 tons. The evidence of Mr Jetson went to the probable imminent closure of the blast furnace.
 To the extent that the application was made pursuant to section 424, Nyrstar advised that it was not seeking a suspension of the protected industrial action on this basis at the present time.
 However, Nyrstar initially pursued the second section 423 application and, in the alternative, sought a suspension of the protected industrial action for the purposes of "cooling off" pursuant to section 425.
 Section 423 states:
“Suspension or termination of protected industrial action
(1) FWA may make an order suspending or terminating protected industrial action for a proposed enterprise agreement that is being engaged in if the requirements set out in this section are met.
Requirement—significant economic harm
(2) If the protected industrial action is employee claim action, FWA must be satisfied that the action is causing, or is threatening to cause, significant economic harm to:
(a) the employer, or any of the employers, that will be covered by the agreement; and
(b) any of the employees who will be covered by the agreement.
(3) If the protected industrial action is:
(a) employee response action; or
(b) employer response action;
FWA must be satisfied that the action is causing, or is threatening to cause, significant economic harm to any of the employees who will be covered by the agreement.
(4) For the purposes of subsections (2) and (3), the factors relevant to working out whether protected industrial action is causing, or is threatening to cause, significant economic harm to a person referred to in those subsections, include the following:
(a) the source, nature and degree of harm suffered or likely to be suffered;
(b) the likelihood that the harm will continue to be caused or will be caused;
(c) the capacity of the person to bear the harm;
(d) the views of the person and the bargaining representatives for the agreement;
(e) whether the bargaining representatives for the agreement have met the good faith bargaining requirements and have not contravened any bargaining orders in relation to the agreement;
(f) if FWA is considering terminating the protected industrial action:
(i) whether the bargaining representatives for the agreement are genuinely unable to reach agreement on the terms that should be included in the agreement; and
(ii) whether there is no reasonable prospect of agreement being reached;
(g) the objective of promoting and facilitating bargaining for the agreement.
Requirement—harm is imminent
(5) If the protected industrial action is threatening to cause significant economic harm as referred to in subsection (2) or (3), FWA must be satisfied that the harm is imminent.
Requirement—protracted action etc.
(6) FWA must be satisfied that:
(a) the protected industrial action has been engaged in for a protracted period of time; and
(b) the dispute will not be resolved in the reasonably foreseeable future.
Order may be made on own initiative or on application
(7) FWA 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;
(iii) a person prescribed by the regulations.”
 As I indicated in my decision of 9 November 2009 each of the requirements specified in this section must be met in order for Fair Work Australia to suspend or terminate protected industrial action.
 Subsection 423(2) requires that I consider and be satisfied that the protected industrial action is causing or is threatening to cause significant economic harm to either Nyrstar or its employees who will be covered by the proposed agreement.
 I have considered this issue in the context of the factors specified in subsection 423(3). In these respects I have noted that the unions seek the right to pursue their protected industrial action and that, since this action commenced, the unions have made various efforts at meeting their undertakings that the blast furnace operation, not be jeopardised. The protected industrial action, of itself, has not resulted in the continued diminution of the sinter stocks. However, the evidence before me indicates that there has been, and is likely to be, continued confusion over the application of various work bans and that this confusion, together with the bans, has and is limiting the capacity of Nyrstar management to remedy plant problems.
 I have noted that the Nyrstar facility is an old plant and that the sinter plant is particularly prone to mechanical problems and that, in these respects, Nyrstar is heavily dependent on overtime and call in arrangements to quickly remedy problems.
 I have noted the likelihood of a forced closure of the blast furnace and the significant costs associated with recommencement of blast furnace operations.
 I am not yet convinced that an agreement cannot be reached. I will be in Port Pirie on 18 November 2009 and will endeavour to meet with all of the parties to the dispute on that day.
 I have also noted that subsection 423(3)(g) requires consideration of the objective of promoting and facilitating bargaining for the agreement. In this respect, if the blast furnace is forced to close and Nyrstar do not immediately recommence blast furnace opening procedures, a significant drop in employment opportunities is highly likely and negotiations toward a new agreement is unlikely.
 In overall terms, I am satisfied that the protected industrial action has not yet caused significant economic harm to Nyrstar but that a combination of the mechanical breakdown problems and low sinter stocks means that continuing protected industrial action is threatening to cause significant economic harm to both Nyrstar and the employees to be covered by the proposed agreement. On the evidence before me, I am satisfied that these costs could easily exceed $6 million.
 In terms of subsection 423(5) I am satisfied that this threat of harm is imminent. The evidence indicates that the possibility of closure of the blast furnace is immediate.
 The requirements of subsection 423(6) were pivotal to the decision issued on 9 November 2009 and remain so. This subsection requires that I be satisfied that the protected industrial action has been for a protracted period of time and that the dispute will not be resolved in the reasonably foreseeable future.
 It may be the case that a protracted period of time has different connotations depending on the complexity of a plant or an operation. Notwithstanding this, I cannot conclude that the operation of the protected industrial action over the past four days represents a protracted period of time. Further, I am not able to conclude that the bans have in fact directly contributed to the circumstances now confronting Nyrstar. Finally, notwithstanding that it is clear to me that Nyrstar management are currently too preoccupied dealing with the major process issues confronting the plant to engage in immediate negotiations, the possibility of reaching an agreement over the next few days continues to exist.
 Consequently I am again unable to grant the Nyrstar section 423 application at this time. The application must be dismissed, in so far as it is made under section 423, as a consequence of the provisions of subsection 423(6).
 As a consequence of this finding I have considered the Nyrstar application for a suspension of the protected industrial action to allow a cooling off period pursuant to section 425.
 I have again noted that the current protected industrial action is compounded by the age of the nature of the plant, recent breakdowns and that what is of immediate concern is the imminent closure of the blast furnace as the result of dwindling sinter stocks.
 Section 425 states:
“(1) FWA must make an order suspending protected industrial action for a proposed enterprise agreement that is being engaged in if FWA is satisfied that the suspension is appropriate taking into account the following matters:
(a) whether the suspension would be beneficial to the bargaining representatives for the agreement because it would assist in resolving the matters at issue;
(b) the duration of the protected industrial action;
(c) whether the suspension would be contrary to the public interest or inconsistent with the objects of this Act;
(d) any other matters that FWA considers relevant.
(2) FWA may make the order only on application by:
(a) a bargaining representative for the agreement; or
(b) a person prescribed by the regulations.”
 In the event that I am satisfied that a suspension is appropriate having considered the factors set out in subsection 425(1), such a suspension of the protected industrial action is then required.
 In terms of subsection 425(1)(a) I am satisfied that a suspension of the protected industrial action would be beneficial in that it would allow the bargaining representatives to focus on agreement negotiations rather than what appears to be an emerging dispute over how the bans will be applied. Further, it will allow Nyrstar management to focus on reaching an agreement rather than keeping the plant operating or shutting it down.
 In terms of subsection 425(1)(b) I have noted that the protected industrial action has only been occurring for approximately 4 days. However, the Nyrstar facility is a continuous production function which is entirely dependent on ongoing integration of a series of smelting functions. The industrial action, at this stage, looks set to continue, and over the past four days the position of the parties, and particularly that of Nyrstar, appears to have become more entrenched.
 In terms of subsection 425(1)(c) I do not consider that the suspension of the protected industrial action for a short period of time would be contrary to the public interest or inconsistent with the objects of the Act. It would allow the parties time to negotiate. In contrary terms, if the blast furnace is allowed to close there is the real risk of substantial damage to the interests of employees and the Port Pirie regional economy.
 In terms of subsection 425(1)(d) I have noted the attempts made by the unions to honour the commitments not to shut down the blast furnace. As I have already observed, the events of the last four days lead to the real potential for confusion on the part of both Nyrstar and its employees over just what protected industrial action will occur.
 I have taken into account the real possibility that if the blast furnace is shut it may not be re-opened by the Nyrstar parent entity.
 Given these conclusions, section 425 requires that I suspend the protected industrial action for the purposes of cooling off.
 Nyrstar has urged that I grant a reasonable period of suspension for this purpose. I will be present in Port Pirie on the morning of 18 November 2009 in order to convene a conference pursuant to the Nyrstar section 240 application. Whether the parties choose to attend this conference is a matter for them. As the section 240 application was made by Nyrstar I would expect Nyrstar to attend with the most senior Australian manager available, and to ensure that every effort is made to enable access to the Nyrstar international decision makers.
 I recommend strongly that Nyrstar not proceed to pursue an employee vote for its own agreement proposals before 18 November 2009.
 The 18 November 2009 conference represents a watershed opportunity for the parties to reach an agreement in principle. At this stage, I am not inclined to provide for a cooling off period which substantially extends beyond 18 November 2009. In these circumstances I consider that a cooling off period of six days is appropriate. The Order issued on 13 November 2009 (PR990758) reflects this decision.
SENIOR DEPUTY PRESIDENT
S Zeitz and S Mulcahy counsel for Nyrstar Port Pirie Pty Ltd.
D Roberts on behalf of the Construction, Forestry, Mining and Energy Union.
C Fenney on behalf of the Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union.
M Hopgood on behalf of The Australian Workers’ Union.
B Donnelly on behalf of the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia.
Adelaide (and video-link to Melbourne and tele-link to Port Pirie):
2  FWA 1148
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