[2010] FWA 6192

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Fair Work Act 2009
s.424 - Application to suspend or terminate protected industrial action - endangering life etc.

Sucrogen Australia Pty Ltd
The Australian Workers' Union; "Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union" known as the Australian Manufacturing Workers' Union (AMWU); Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia



Section 424(1)(d) application for an order to suspend or terminate protected industrial action - at Sucrogen Sugar Mills.


[1] These reasons relate to an Order issued in proceedings pursuant to s.424 of the Fair Work Act 2009 (Cth) (the Act) to suspend for four weeks the protected industrial action to be taken across Sucrogen (the Applicant) sugar mills by the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU), the Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (AMWU) and The Australian Workers’ Union (AWU) (collectively the Respondents/Unions).


[2] The remaining s.424(1)(d) application to Fair Work Australia (FWA) sought the termination of the notified industrial action on the basis that the industrial action was causing significant damage to the Australian economy or an important part of it. The proceedings covered the course of the day and into the evening. A short determination was provided on transcript at the end of proceedings.

[3] This s.424 application was one of four applications made by Sucrogen, the Canegrowers Association and Kalamia and Pioneer Canegrowers associations. The other applications made pursuant to s.423 and s.426 were found to be jurisdictionally barred and a determination to this effect was recorded on transcript during the proceedings. These other Applications were dismissed on the basis that the industrial action was not being ‘engaged in’, contrary to the statutory requirements in s.423 and s.426.

[4] These other matters are mentioned as the Applicant sought to rely on some of the evidence from the other applications. Pursuant to s.590 I allowed this evidence to be addressed in the current application. An adjournment was provided to allow the Respondents’ to consider the material. The material had already been filed with the Applicants’ initial material. After considering the material the Respondents sought to cross-examine three of the witnesses.

[5] The industrial action referred to in the application (from 8.00 am on Wednesday 28 July 2010 to 8.00 am on Thursday 29 July 2010) is protected industrial action which was authorised by the ballot order dated 24 February 2010 (PR994172).

[6] As background to Sucrogen’s application that the protected industrial action has threatened, was threatening or would threaten to cause significant damage to the Australian economy, or an important part of it, it was submitted that Sucrogen produces sugar at various facilities throughout Australia, including the Sugar Mills at Victoria, Macknade, Invicta, Pioneer, Kalamia, Inkerman and Plane Creek Mills (Sugar Mills) and that these operations were being compromised by the industrial action which in turn was impacting on the surrounding economy.

[7] It was submitted that the Regional communities and economies that surround the seven Sucrogen Sugar Mills are underpinned by the operations of these Mills. The seven mills and related regional areas which from north to south are:

Relevant legislation

[8] The relevant legislation is set out as follows, the Applicant relied upon s.424(1)(d):

[9] The Explanatory Memorandum with respect to s.424 does not provide additional guidance.

[10] The New Shorter Oxford English Dictionary relevantly defines the following terms in s.424(1)(d) as follows:

The determination

[11] A short determination was provided given the lengthy proceedings and the time available, that suspended the industrial action on the basis that further reasons would be provided at a later time. The determination provided Order PR999866 which suspended the industrial action from 7.00 pm on 27 July 2010 to 7.00 am on 27 August 2010. The determination was based, in summary on the following evidence.

[12] Primarily the impact of the threatened protected industrial action would be an immediate loss of $313,000 to the mills alone. The 24 hour stoppage included an additional period of approximately 18 hours of lost crushing as related harvesting is deferred (to avoid deterioration of uncrushed cane) as the mill is wound down in readiness for the stoppage and then time is required to prepare the boilers to recommence the crushing process, after the industrial action. Significant damage to the sugar industry cannot be determined on the basis of only a monetary measure associated with the time directly lost from the industrial action in a finite manner. A stoppage of the crushing process on the evidence threatened to have a compounding effect by reducing the optimum harvesting and crushing time.

[13] The evidence confirmed that there is particular pressure on the 2010 crushing season given that the forecast for this year promised an increased cane production and a recovery from the last three years, where the industry suffered economic and weather related impacts.

[14] The period of the crushing season and related timetable for the crushing of cane is specifically scheduled to provide for equity amongst growers in relation to commercially recoverable sugar content (CCS). This season also provided for an improvement in the forecast price of sugar. Many growers have entered into Forward Price Agreements with Sucrogen on this basis. Such agreements do not make provision for force majeure relief. Accordingly every disruption to “the crush” has the potential to significantly damage the ability for the parties to meet their contractual obligations.

[15] The industrial action taken in the current season from July 19 to 21 caused lost processing time of 72 hours that prevented the harvest of at least 100,000 tonnes of sugar cane in the Herbert. A further 70,000 tonnes was threatened by the current proposed industrial action arising from the effect of the reduced harvesting in preparation for the mill stoppage and then starting up the boilers after the stoppage. Whilst comparatively this period of industrial action may not be considered to be substantial in other industries, in the sugar industry which has an annual finite processing period and a perishable crop, the period is damaging to the prospect of crushing the crop in the time available, whilst the cane is at its peak and in fact completing the processing of the season’s crop.

[16] To date the sugarcane crop was only 28% harvested and long range weather forecasts currently predict La Nina conditions for later in the 2010 season for north east Australia.

[17] These issues were further explained in evidence as set out later.

[18] The evidence demonstrated that the sugar industry is a highly significant domestic and export industry and a significant part of the Australian economy. Mr Day’s (Executive General Manager Cane Products at Sucrogen) evidence is that the annual Australian sugar crop is 32 million tonnes, and that the yield of sugar per tonne of cane is about 13.9%. The average price per tonne of sugar is currently about $480 per tonne, valuing total domestic sales at $480 million and export sales at $1.7 billion. Sucrogen is responsible for between 40%-50% of all sugar produced in Australia.

[19] The statistics provided in evidence emphasised the importance of the industry and the importance it bears to that part of the Australian economy in that it provides a significant return to the parties to the industry and the related economy:

Industrial action taken and threatened

[20] The details of the industrial action taken to date at the Sucrogen sugar mills are:

[21] The industrial action which was threatened, according to the notice, was a 24 hour strike (with the same bans) from 8.00 am on Wednesday 28 July 2010 to 8.00 am on Thursday 29 July 2010. However the evidence was that 18 hours of downtime had to be added to this 24 hour stoppage, to allow for the growers to stop harvesting to ensure cane losing sugar content is not left in bins, whilst the mill is stopped and then to accommodate the restarting of the boilers after the stoppage.

Summary of Applicant’s Submissions

[22] It was submitted on behalf of the Applicant:

[23] The Applicant further submitted that:

[24] The Applicant confirmed that:

[25] The Applicant explained the effect of the industrial action was seen as protracted by industry standards as follows:

[26] The Applicant emphasised that by any standards, the sugar industry is an important part of the Australian economy, and industrial action at the seven Sucrogen sugar mills (approaching half of the industry) will inevitably cause significant damage to that part of the economy. The Applicant explained that the North Queensland economy was reliant on the sugar industry for its economic wellbeing.

[27] In these circumstances, the requirements of s.424 are plainly satisfied, and FWA must make an order suspending or terminating the protected industrial action (s.424(1)).

[28] In circumstances where the parties have negotiated to exhaustion, the industrial action is impacting the growers’ harvest and the crush at the mills and potentially jeopardising the completion of the crush, the Applicant submitted that the appropriate order is to terminate the protected industrial action.

Summary of Respondent’s Submissions

[29] The Respondents’ submissions did not refute the importance of the sugar industry or conclusively challenge the impact of the industrial action. However they emphasised the legislative entitlement of the employees to take the appropriately authorised and notified protected industrial action.

[30] The submissions centred on the wording of s.424(1)(d) and the requirement for the industrial action to “cause significant damage to the Australian economy or an important part of it.” Principally their collective submissions rejected that the proposed industrial action would cause significant damage and further they argued that whilst the sugar industry represented an important industry, it did not represent an important part of the Australian economy, on a comparative basis.

[31] In particular, in cross-examination, Ms Rogers of the CEPU challenged the sugar industry statistics raised by the Applicants, on the basis that these were not provided as a proportion of the Australian economy. Therefore, she argued the impact of the industrial action was demonstrated as damage to these sugar mills, but it was not representative of an important part of the Australian economy on the material presented. It was submitted that no comparative data or statistics were provided to meet the statutory test of an important part of the Australian economy.

[32] Further the decision of Bacon C in BHP Coal Pty Ltd, Hay Point Services Pty Ltd v CFMEU, CEPU and AMWU 6 was referred to. In this decision a similar provision of the legislation as it then appeared was considered - s.170MW(3)(b). That provision was in relatively similar terms to s.424 whereby “industrial action...is threatening... (b) to cause significant damage to the Australian economy or an important part of it”. The decision provided a lengthy summary of the circumstances of that matter. The decision concluded that the coal export industry was not an important part of the Australian economy as follows:


[33] Evidence was provided from a series of experts from the Sucrogen sugar milling operations and the Canegrowers’ Association.

[34] The evidence on behalf of the Canegrowers’ Association was that the industrial action will:

[35] Mr David Lando, Chairman of the Canegrowers’ Burdekin Association, stated in evidence:

[36] Ms Tracey Garzotto, Sucrogen’s Senior Commercial Manager, who has been employed by Sucrogen for 30 years, estimated Sucrogen’s loss if a day of industrial action cannot be made up at the end of the season to be as follows:

[37] Further, Mr Mark Day, Executive General Manager Cane Products provided detailed evidence regarding the Applicant’s offers that had been made in negotiations with the Unions. He stated “My understanding is that none of these proposals were acceptable to the employee bargaining representatives, and therefore the Sucrogen negotiators have been unable to negotiate any productivity improvements of sufficient financial value to offset the labour cost increases to Sucrogen.” 10

[38] Mr Day stated in evidence, in response to questions as follows:

[39] Mr Peter Sheedy, Canegrowers’ Association provided evidence regarding the effect of the forward pricing contracts:


[40] In the current matter in measuring ‘significant damage’ a distinction must be drawn between the determination in relation to the nature of the coal industry (as referred to) and the sugar industry. Damage to the sugar industry cannot simply be measured in terms of the lost time related to the particular hours of the stoppage in the mills. Halting the crush has a domino effect that threatened to cause further unrecoverable losses. The sugar industry is seasonal and as such is dependent on perishable cane to be harvested and crushed in a specific time period for its optimal return. The flow-on effects from the sugar industry, being the major agricultural industry and employer in the area has considerable impact on that part of the economy and communities as was provided in the economic analysis presented. The proposed industrial action threatened to cause ‘significant damage’ to the seasonal employment, the completion of the crushing season and the associated contractual implications.

[41] The negotiations (between the parties Sucrogen and the current Unions) for the new enterprise agreement commenced in relation to a proposed Sucrogen Enterprise Agreement 2009 (Enterprise Agreement) on 17 July 2009.

[42] The decision to suspend the industrial action was based on an assessment of the evidence that the effect of the industrial action on that part of the Australian economy - North Queensland - threatened significant damage. This is due to the significant reliance of the North Queensland economy on sugar cane, and the need to maximise the return from the available crushing period.

[43] The forecast weather conditions predicted for North Queensland and this year’s crushing season also particularly constrain the opportunity for the sugar industry to ‘bounce back’ from the previous years of sub-standard production.

[44] On the evidence I was satisfied that the protected industrial action was threatening or would threaten significant damage on an important part of the Australian economy by compromising the crushing season at these mills. The impact of the industrial action would reduce the ability to harvest all of the season’s cane at the required time at the optimum CCS, prior to the very real threat of rain shortening the available harvesting and crushing period. I have taken into account the very real possibility that the industrial action in combination with the impending weather conditions may result in cane being left in the fields unharvested, the crushing season being cut short and the implications of such for growers not being able to meet their contractual obligations and the potential for further losses to all parties being substantial.

[45] The Applicant summarised the course of the bargaining as follows:

[46] The suspension of the industrial action on the basis of the legislative criteria in s.424(1)(d) provides a cooling off period in this now protracted dispute. The short period of the suspension allows for the parties to have what now must be termed final negotiations in this matter, but also relieves the pressure on the employees (many of whom are particularly dependant on this seasonal employment), the growers to harvest their cane and the millers to progress the crush at this important stage whilst the CCS content is still maintained at suitable levels and prior to the prospect of rainfall. The leverage of the employees to then continue to take protected industrial action is maintained and it is anticipated that in this four week period, urgent discussions without the threat of industrial action from both sides, will bring about an agreement on the very few remaining issues between the parties.



Mr Daniel Williams, Minter Ellison, for the Applicant

Mr Greg Trost, Queensland Cane Growers Association Union of Employers

Mr Martin Smith, Boulton Cleary and Kern Lawyers, on behalf of the Kalamia and Pioneer Canegrowers’ Association

Mr Derek Broanda, The Australian Workers’ Union

Ms Pat Rogers, Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia

Ms Lucy Weber, “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU)

Hearing details:

Tuesday 27 July 2010

 1   Exhibit 9, Statement of Mr Matthew Leslie.

 2   Submissions of the Applicant.

 3   Ibid.

 4   Ibid.

5 Ibid.

 6   PR903492.

 7   Exhibit 6 - Statement by Canegrowers Herbert River supporting an application by Canegrowers under section 426 of the Fair Work Act 2009.

 8   Exhibit 1, Statement of Mr D Lando.

 9   Exhibit 7, Statement of Ms T Garzotto.

 10   Exhibit 8, Statement of Mr M Day.

11 PN650-653 Transcript of Proceedings.

12 PN669 of Transcript of Proceedings.

13 PN673-675 Transcript of Proceedings.

14 PN571 Transcript of Proceedings.

 15   Applicant’s submissions.

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