[2011] FWA 9329

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The attached document replaces the document previously issued with the above code on 29 December 2011.

The numerals 243 in paragraphs [28], [48] and [59] have in each instance been replaced with the numerals 423.

Leanne Weeding

Relief Associate to Senior Deputy President Kaufman

Dated 30 December 2011

[2011] FWA 9329


FAIR WORK AUSTRALIA

REASONS FOR DECISION

Fair Work Act 2009
s.423—Suspend or terminate industrial action

Schweppes Australia Pty Ltd
v
United Voice - Victorian Branch
(B2011/4097)

SENIOR DEPUTY PRESIDENT KAUFMAN

MELBOURNE, 29 DECEMBER 2011

Section 423 application to suspend or terminate protected industrial action - significant economic harm to employees - nature of discretion.

[1] On 19 December 2011, Schweppes Australia Pty Ltd (Schweppes) filed an application pursuant to section 423 of the Fair Work Act 2009 (the Act), seeking an order from Fair Work Australia terminating protected industrial action for a proposed enterprise agreement that is being engaged in.

[2] I heard the application on 23 December 2011 at which time Schweppes was represented by Mr S Wood, S C with Mr M Follett of Counsel. United Voice, a bargaining representative for the proposed agreement, was represented by Mr E White of Counsel to oppose the application.

Background

[3] The background facts leading to the application were largely uncontested and I draw much of what follows from the witness statement of Peter Todd, Human Resources Partner - Supply Chain, for Schweppes.

[4] Schweppes develops, manufactures, sells, distributes and markets a range of non-alcoholic beverages and cordials. Schweppes also manufactures certain alcoholic beverages under third-party arrangements.

[5] Schweppes operates manufacturing, distribution, warehousing and sales sites throughout Australia. It employs approximately 1,500 people.

[6] Schweppes has a facility at Tullamarine at which both alcoholic and non-alcoholic products are manufactured. It is the largest manufacturer of Schweppes’ products in Australia. Tullamarine is also the site of Schweppes’ Victorian distribution centre, and is home to Schweppes’ science and technology, business services and sales groups.

[7] The terms and conditions of employment of approximately 153 production and warehouse employees employed at the Tullamarine site are regulated by the Schweppes (Tullamarine) Production and Warehouse Employees Enterprise Agreement 2010 (the 2010 Agreement).

[8] The 2010 Agreement is an enterprise agreement made under the Act and has an unusually short life with a nominal expiry date of 23 September 2011. The 2010 Agreement covers United Voice.

[9] The employees covered by the 2010 Agreement work exclusively in the Supply Chain business unit at the Tullamarine site which produces, packages and distributes product.

Overview of enterprise bargaining negotiations

[10] On Monday 7 June 2011, Schweppes issued a Notice of Employee Representational Rights in relation to a proposed enterprise agreement to replace the 2010 Agreement (to be called the Schweppes (Tullamarine) Production and Warehouse Employees Enterprise Agreement 2011) (the proposed Agreement)

[11] United Voice is the only employee bargaining representative that Schweppes is aware of for the proposed Agreement.

[12] Bargaining meetings for the proposed Agreement have been held on a weekly to fortnightly basis between Schweppes and United Voice. The first meeting took place on Wednesday 29 June 2011. As at 19 December 2011, 17 formal bargaining meetings have been held between 29 June 2011 and 30 November 2011.

[13] There had also been two conciliation conferences held in Fair work Australia prior to the filing of the application. A further conciliation conference took place in Fair Work Australia on 22 December 2011 and another is scheduled for 29 December 2011.

Industrial action engaged in by employees

[14] On or about 22 September 2011 (after the tenth bargaining meeting), United Voice applied for a protected action ballot order. Schweppes did not oppose this application and on 23 September 2011 Fair Work Australia made an order for a protected action ballot to be held of United Voice members to be covered by the proposed Agreement.

[15] The protected action ballot of United Voice members was held on 13 October 2011. The results of the ballot were declared on 14 October 2011. The ballot authorised 18 different forms of industrial action that might be taken by United Voice members. On or about 10 November 2011, United Voice requested an extension of the 30 day period in which to commence industrial action authorised by the ballot. Schweppes did not object and an order extending the 30 day period was made on 10 November 2011.

[16] Between 14 October 2011 and 12 December 2011 (inclusive), Schweppes received 12 Notices of Intention to Engage in Industrial Action from United Voice:

[17] All employees to be covered by the proposed Agreement have engaged in the industrial action. As far as Schweppes is concerned, the twelfth notice represented a very significant escalation.

[18] Some of these bans were of an indefinite nature and were continuing at the time Schweppes gave notice of its intention to lock out employees on 15 December 2011.

Industrial action engaged in by Schweppes

[19] On Thursday 15 December 2011, commencing from 9.58am, Schweppes gave notice of its intention to lock out all employees covered by the proposed Agreement. The notice was given to United Voice and all employees to be covered by the proposed Agreement.

[20] The lock out is for an indefinite period and is continuing.

Outstanding claims for the proposed Agreement

[21] There are six key claims outstanding in bargaining. It is Schweppes’ view that no substantive progress on these claims has been made since bargaining commenced.

[22] The six claims are:

[23] It is in these circumstances that Schweppes applied, on 19 December 2011, for an order that the industrial action being engaged in by it be terminated pursuant to section 423 of the Act.

[24] Section 423 is in the following terms.

[25] Section 423 is the first in a suite of provisions empowering Fair Work Australia to suspend or terminate protected industrial action. Section 424 requires Fair Work Australia to suspend or terminate protected industrial action if it is satisfied that the action has threatened, is threatening or would threaten to endanger the life, the personal safety or health, or the welfare, of the population or a part of it or to cause significant damage to the Australian economy or an important part of it. Section 425 requires Fair Work Australia to suspend protected industrial action if it is satisfied that the suspension is appropriate having regard to whether the suspension would be beneficial to the bargaining representatives, as well as other matters. Section 426 requires Fair Work Australia to suspend protected industrial action if it is satisfied that the action is adversely affecting the employer or any of the employer's that would be covered by the agreement or any of the employees who would be covered by the agreement.

[26] It is notable that it is only pursuant to section 423 that Fair Work Australia has a discretion as to whether or not to suspend or terminate protected industrial action once it has reached the requisite degree of satisfaction in relation to the matters specified in the section. Under section 423 Fair Work Australia may suspend or terminate the protected industrial action. Under section 424 Fair Work Australia must suspend or terminate the protected industrial action. Under sections 425 and 426 Fair Work Australia must suspend the protected industrial action.

The Evidence

[27] In support of its application Schweppes called three witnesses. Ms Barbara MacDonald, the Financial Controller – Supply Chain for Schweppes, gave evidence of the projected loss in remuneration suffered by each relevant employee from October 2011 to the end of the year. It should be noted that the loss from October 2011 until 15 December 2011 is attributable to the employee protected action whereas the projected loss from 15 December to 31 December 2011 is attributable to the lockout that commenced on 15 December. She estimated that the average loss for each employee for the period 20 October 2011 to 31 December 2011 will be $10,414. From the statistics for 2010 Ms MacDonald projected the average weekly earnings for each employee at $1,622. By dividing the projected loss for each employee by the projected 2011 weekly earnings, she estimated that the loss to 31 December 2011 would be the equivalent of 6.42 weeks’ earnings. Mr White did not seek to challenge Ms MacDonald's calculations, although he did elicit from her that the figures were average figures which included overtime earnings. Ms MacDonald conceded that the amount of overtime worked varies as between employees.

[28] In order to demonstrate that the employer response action is causing, or is threatening to cause, significant economic harm to any of the employees who will be covered by the agreement [a requirement of section 423(3)(b)] Mr Wood called an expert witness, Professor Ian Harper. Professor Harper was retained by Schweppes "to evaluate the likely economic impact of a lockout which commenced on 15 December 2011 following certain other industrial action on approximately 155 employees at" Schweppes Tullamarine site.

[29] By reference to the income range of the relevant employees as detailed in Ms MacDonald's witness statement Professor Harper selected two arbitrary gross income levels to evaluate the impact of lack of income on two broadly representative cases – one lower paid worker (at $67,000 per annum) and one higher paid worker (at $80,000 per annum). The figures took into account the fact that the employees did not work overtime after 2 November 2011. By having regard to publicly available statistical information, particularly for the postcodes in which the employees live, Professor Harper estimated the number of weeks until each of the lower paid worker and the higher paid worker would have no ability to service his or her outgoings. To do this he estimated that there might be a range of accumulated savings ranging from $0-$34,310. He referred to the worker with accumulated savings of $5,000. In such a case he estimated that a lower paid worker who had completely eliminated his or her discretionary spending could survive for seven weeks before not being able to service his or her outgoings from accumulated savings. A higher paid worker would be able to survive for six weeks. Workers who had reduced their discretionary spending by 50% would be able to survive for six weeks, in the case of a lower paid worker and five weeks in respect of a higher paid worker. Workers who had not reduced their discretionary spending could survive for five weeks in each case.

[30] Professor Harper noted that, on average, individuals in the postcodes in which the Schweppes employees live have accumulated $34,310 in discretionary savings over their working lives. According to Professor Harper's Table 1 lower paid workers with zero discretionary spending could survive from zero weeks for a person with no accumulated savings to 47 weeks for a person with $34,310 accumulated savings before they are unable to meet their outgoings from those savings. The periods for higher paid workers were from 0 to 40 weeks. For those workers who were still spending 50% of their discretionary income the times were 0 to 41 weeks for lower paid workers and 0 to 35 weeks for higher paid workers. For those who had not reduced their discretionary spending the times were 0 to 36 weeks for lower paid workers and 0 to 31 weeks for higher paid workers.

[31] Given that Fair Work Australia need only be satisfied that the industrial action is causing or is threatening to cause, significant economic harm to any of the employees who will be covered by the agreement, it is appropriate to have regard to the likelihood that any affected worker might have accumulated savings of $5000 or less. As the average age of the employees is 43 years, it must be inferred that there are some employees who are considerably younger. The professor thought that there was at least one 28 year old. I am also prepared to infer that there are some employees with few years of service. I thus infer that it is relatively likely that at least some employees will have accumulated savings in the order of only $5,000, or less.

[32] Professor Harper noted that he had not taken into account the 6.42 weeks that Ms MacDonald had estimated each employee would have lost by 31 December 2011. In such a case, employees who had zero to $5,000 in accumulated savings could theoretically, at the time of the hearing, have had no ability to service their outgoings from accumulated savings.

[33] In cross-examination Professor Harper readily conceded that he was unaware of the specific circumstances of any individual employee. He also conceded that he had not taken into account any income that employees might receive in addition to their remuneration from Schweppes such as, for example, the household income earned by the second person in a dual person household, loans from friends or family or, indeed, any income other than that earned from employment at Schweppes. Nor had he had not taken into account any money that employees might have put aside in anticipation of the industrial action.

[34] Professor Harper also had regard to the long term financial impact of a significant loss of remuneration as a result of the lockout. He observed that for younger employees, the long term impact would be less over the term of their working lives than would be the impact on older employees who are closer to retirement. He had not taken into account the likely impact of future earnings if the 12 hour shift were to be introduced. Estimates varied from an annual reduction of $12,000 to $15,000 2 to around $5000 to $7000.3 Whatever the reduction, it would vary from person to person because the reduction in income would be due to the overtime that will not be required to be worked after the introduction of a 12 hour shift. Mr Todd made the point that even were a 12 hour shift to be introduced there would still be a necessity to work some overtime.

[35] As no evidence was led from United Voice to the effect that the union had arranged for the provision of some sort of monetary relief for its affected members, I draw the inference that it had not done so.

[36] In addition to setting out the background to the application, Mr Todd's evidence was directed at demonstrating that the protected industrial action has been engaged in for a protracted period of time 4 and that the parties are deadlocked with the consequence that the dispute will not be resolved in the reasonably foreseeable future.5

[37] As to the issue of the industrial action having been engaged in for a protracted period of time, in addition to the matters to which I have already referred, Mr Todd detailed the full extent of the negotiations between the parties as well as the several proceedings in Fair Work Australia and the Federal Court of Australia.

[38] In Mr Todd's view, there is no likelihood that the dispute will be resolved in the foreseeable future principally because the parties are deadlocked on Schweppes’ shift pattern claim. At present six key claims remain outstanding, the most important of which for Schweppes is its shift pattern claim.

[39] According to Mr Todd, at the last formal bargaining meeting, which was held on 30 November 2011, the negotiating parties agreed that the negotiations were at an impasse. 6 Schweppes tabled its shift pattern claim at the first bargaining meeting and the issue was raised at almost every subsequent meeting. United Voice has refused to explore this claim because employees to not want to move to a six or seven day 12 hour shift pattern. Mr Matthew Kunkel, an industrial officer with United Voice and the lead negotiator for the proposed agreement, consistently maintained the position that the union would not agree to a 12 hour shift pattern.7 Despite the negotiating parties having participated in conciliation proceedings in Fair Work Australia, in Mr Todd's view, there is still no prospect that the impasse will be broken. In cross-examination Mr Todd was taken to the terms of a protocol that had been agreed between the parties in the conciliation conference of 19 December 2011:

[40] Mr Todd did not accept that the agreement in the protocol that negotiations for the new agreement shall include negotiations on the introduction of new shift rosters, including six day shift rosters, meant that the union had changed its stance and was now at least prepared to negotiate on the possibility that 12 hour shift rosters might be introduced.

[41] United Voice opposed the application and called two witnesses, Mr Kunkel and Mr Reginald Vesty, a storeman at the Schweppes Tullamarine site, who has worked there for ten and a half years. He is also a member of the bargaining team and thus represents union members in the negotiations.

[42] Mr Vesty said that union members have repeatedly been urged to prepare financially in case they were to take strike action, that he has spoken to members and told them to put their money away for a rainy day, to make sure that their finances are in order and that they may need to seek help from their families to support them in the event of a strike. 9 He named 23 people to whom he had spoken and said that there were others.10 As far as his own preparation is concerned, Mr Vesty said that he has no mortgage, that since the first report back meeting when Mr Kunkel advised members to prepare for a strike, he started to put money aside and now has at least $2000 in a strike savings account.11 He considers that his personal situation is such that he could be locked out for a long time and that his family would survive without any of its assets being put at risk.12 Mr Vesty detailed the situation of another storeman, Graeme Robinson, who has a large family with six children and whose wife does not normally work. He told Mr Robinson to prepare for a strike and has been informed by him that Mr Robinson has put in place financial arrangements, that he has spoken with his bank, Centrelink, his utility providers, family and friends and that he is in good shape to survive the lockout for a long time.13

[43] Mr Kunkel's evidence, like that of Mr Todd, detailed the background to, and the history of, the negotiations. Understandably, each witness placed a different emphasis on the status of the negotiations. Mr Kunkel emphasised that since 30 November 2011, the date at which Mr Todd said an impasse had been reached, four conferences have been held in Fair Work Australia. He suggested that he had been ‘verballed’ in acceding to Schweppes’ assessment that the parties were at an impasse on 30 November 2011. In his view, the parties have edged closer to resolving the matters that remain in dispute and significant progress was made in relation to the shift pattern claim at the 19 December 2011 conference when the protocol was agreed by the parties. In Mr Kunkel's view this means that the parties have agreed to continue negotiating all outstanding matters, including the shift pattern claim. 14

[44] In re-examination Mr Kunkel said that mass meetings of members had been conducted immediately after the conciliation conference on 19 December and then the following morning to catch day and night shift. The most recent mass meeting was said to have been held on the Thursday night, 22 December, being the night prior to the hearing. He was asked by Mr White: "at those mass meetings was there any discussion or decision in relation to the negotiation of 12 hour shifts in the conciliation sessions conducted by Commissioner Jones?" He replied that there had been some discussions about that. When asked whether any resolutions or agreements had been passed by the members he replied: "That the members were prepared to continue conciliation on the basis that 12 hour shifts might be an outcome of that conciliation process." 15 Mr Kunkel was vigorously cross-examined as to the veracity of this last-minute evidence and taken to some union “tweets”16 that suggested that, at the very least, the union media officer was unaware of the apparent change in heart.17 I place little weight on this late evidence, especially given the lack of detail as to the terms of any resolution of the members.

[45] Mr Kunkel stated that it is not the union's view that the protected industrial action is currently causing significant economic harm to the members at the site, that the many members to whom he had spoken have indicated that they are coping with their financial commitments as they have made arrangements and that a petition signed by some 120 members supports his contention. 18 The petition states: "We the undersigned, oppose an order being made by Fair Work Australia terminating the protected industrial action. Furthermore, we are angry and disappointed that our employer has locked us out but we have made arrangements to be able to meet our current financial commitments."19 He was unable to speak with all employees, but all with whom he spoke signed the petition. Since the making of the petition a further 16 employees have signed it.

Consideration

[46] It is well accepted that in “construing a provision of an Act, the task is to ascertain the intention of the parliament. The starting point is always the ordinary English meaning of the words of the provision. However, a provision of an Act must always be construed in the context of the Act as a whole and account must always be taken of the purpose of the Act: a construction that would promote the purpose or object underlying the Act (whether that purpose or object is expressly stated in the Act or not) shall be preferred to a construction that would not promote that purpose or object. 20 Resort may be had to extrinsic materials, including the explanatory memorandum, to assist in ascertaining the purpose of an Act (the mischief it was intended to overcome and its purpose or objects21) and in the particular circumstances identified in s.15AB of the Acts Interpretation Act 1901 which, relevantly for present purposes, include to determine the meaning of a provision when the provision is ambiguous.22”23

[47] I approach my task bearing the above principles in mind.

[48] As I have already noted, a discretion whether or not to make an order suspending or terminating protected industrial action, provided that satisfaction is reached on the criteria set out in the various sections in Division 6, is only available in section 423. It therefore appears that even were I to be satisfied that the industrial action is causing, or is threatening to cause, significant economic harm to any of the employees who will be covered by the agreement, I still have a discretion whether or not to suspend or terminate the industrial action. Although I accept Mr Wood’s submission that the discretion will be largely informed by having regard to the factors set out in subsections 4, 5 and 6, nevertheless the use of the word "may" in the prefatory words of section 423 suggest to me that there is a discretion over and beyond that of the discretion involved in reaching satisfaction as to the matters identified in subsections 2, 5 and 6. The decision to terminate the protected industrial action involves, in effect, two discretionary decisions. The first is as to my satisfaction or otherwise that the protected industrial action being pursued is causing, or is threatening to cause, significant economic harm to any of the employees who will be covered by the agreement. That question must be determined by reference to the facts and circumstances attending the industrial action taken in support of the claims having regard to, in particular but not exclusively, the matters set out in section 423(4). If I am satisfied that the protected industrial action is causing, or is threatening to cause, significant economic harm to the affected employees I must make a further discretionary decision as to whether the industrial action should be suspended or terminated. 24

[49] For the purposes of this application I must be satisfied that the protected industrial action, being employer response action, that is the lockout, is causing, or is threatening to cause, significant economic harm to any of the employees who will be covered by the agreement. 25 In determining whether the lockout has the necessary consequence, I am not concerned with the effects of the employee claim action, that is, the protected industrial action taken by the employees prior to them being locked out on 15 December 2011. However, I accept Mr Wood’s submission that the effect of the lockout on the financial circumstances of the employees must be looked at having regard to all of the circumstances, in particular having regard to the loss of income experienced by them during the period that they were taking protected industrial action.

[50] Then, pursuant to section 423(5), if I am satisfied that the protected industrial action is threatening to cause significant economic harm to the employees, I must also be satisfied that the harm is imminent.

[51] Before turning to the relevant parts of section 423 it is desirable, having regard to the principles of construction to which I have earlier referred, to ascertain the context in which section 423 is found.

[52] The principal object of the Act is to provide a balanced framework for cooperative and productive workplace relations that promotes national economic prosperity and social inclusion for all Australians. One of the means by which that is to be achieved is set out in section 3(f): "achieving productivity and fairness through an emphasis on enterprise level collective bargaining underpinned by simple good faith bargaining obligations and clear rules governing industrial action".

[53] Chapter 2 – Part 2 - 4 deals with enterprise agreements. The objects of the Part are set out in section 171. They include the provision of a simple, flexible and fair framework that enables collective bargaining in good faith, particularly at the enterprise level, for enterprise agreements that deliver productivity benefits, as well as enabling Fair Work Australia to facilitate good faith bargaining and the making of enterprise agreements.

[54] For over a century, prior to the WorkChoices amendments to the Workplace Relations Act 1996, the ‘rude and barbarous expedient of strike and lockout’ was replaced by the power of the Australian Industrial Relations Commission and its predecessors to settle industrial disputes by compulsory arbitration. The wheel has almost come full circle as Fair Work Australia no longer has that power, except in certain confined circumstances, one of which is the making of a workplace determination after protected industrial action has been terminated. 26 It is the making of such a determination that Schweppes ultimately seeks and that United Voice wishes to avoid.

[55] Enterprise bargaining is now the primary means whereby employers and employees secure terms and conditions of employment beyond, or different from, those contained in modern awards. Importantly, to advance their claims, employees are entitled to take protected industrial action, provided that certain procedural steps have been taken. Protected industrial action in support of claims for an enterprise agreement, as authorized by the Act, is the only lawful mechanism available to employees to achieve improvements in wages and conditions that an employer is not otherwise prepared to agree to. 27

[56] Unlike the ability of employees to take protected industrial action in support of their claims, employers may only take what is known as "employer response action". The only employer response action that may be taken is that of a lockout. On 15 December 2011 Schweppes locked out the relevant employees because it considered that the employee protected industrial action had escalated to such an extent that production was significantly compromised leaving it no alternative other than to lock out its employees. No criticism should be levelled at Schweppes for taking the action that it did. Nor should any criticism be levelled at the employees for taking the action that they did. The action taken by each party is lawful and is action that is contemplated by the Act whilst bargaining for an enterprise agreement is occurring.

[57] The protected industrial action that is sought to be terminated by Schweppes is its lockout. It is that industrial action that I must be satisfied is causing, or threatening to cause, significant economic harm to any of the Schweppes employees who will be covered by the proposed agreement. It is ironic that it is the action of Schweppes that Schweppes contends is causing, or is threatening to cause, serious economic harm to the Schweppes’ employees.

[58] Although Schweppes has standing to bring this application and I am not critical of it for having done so, in the normal course of events it would be expected that an application such as this would be made by, or on behalf of, the employee or employees in relation to whom it is said that the action is causing, or is threatening to cause, significant economic harm. In such a case there would almost inevitably be evidence led from employees as to the economic harm they were, or were expecting, to endure.

[59] As I indicated earlier, section 423(4) lists the factors relevant to working out whether protected industrial action is causing, or is threatening to cause, significant economic harm to any of the employees who will be covered by the agreement.

[60] Before I turn to those matters I should deal with a submission made by Mr Wood. He submitted that as there was no evidence from the employees (other than that of Mr Vesty), who are in the camp of the union, I should draw the inference that their evidence would not have assisted the United Voice case. Were I to accept that submission I could more readily draw the inferences that he submits I should draw from Professor Harper's evidence. I reject that submission. I agree with Mr White, that as the union had not received the professor’s witness statement until just prior to the commencement of the hearing, nor had it been notified that expert evidence was to be called, the failure to call any other employees is explicable and justifiable.

[61] The first matter to be considered is the source, nature and degree of harm suffered or likely to be suffered. The source of the harm, given that the application is to terminate the protected industrial action taken by Schweppes, must be the lockout. The nature of the harm is the inability of the affected employees to derive income from Schweppes during the lockout. The harm suffered or likely to be suffered is that described by Professor Harper. The degree of harm will inevitably vary as between individual employees according to their personal financial circumstances.

[62] The second matter to which I must have regard is the likelihood that the harm will continue to be caused or will be caused. The evidence of Professor Harper, Mr Vesty, Ms MacDonald, Mr Todd and Mr Kunkel all touch upon this aspect. The evidence adduced by Schweppes goes to the theoretical possibility (Mr Wood would say probability) that significant economic harm is being caused or is threatened to be caused by the Schweppes lockout. The evidence adduced by the union seeks to demonstrate that, at least at this stage and into the foreseeable future, employees who will be covered by the agreement are not, and will not be, suffering significant economic harm.

[63] The third matter to be considered is the capacity of the person to bear the harm. Professor Harper's evidence demonstrates when it might be theoretically expected that various employees would reach the point at which they are unable to meet their monetary obligations from accumulated savings. The evidence of the union, except in the case of Mr Vesty, is hearsay designed to demonstrate that the affected employees have not reached, and are not likely in the near future to reach, the stage of suffering significant economic harm.

[64] The fourth matter to be considered is "the views of the person and the bargaining representatives for the agreement". It is notable that the noun "person" is in the singular. I take it that that is a reference to "any" employee in respect of whom I must be satisfied the action is causing, or is threatening to cause the harm. In a practical sense, it seems to me, that it must be the class of employee to whose views I should have regard. At least that seems to be the case where no particular individual employee has been identified. Mr Vesty is arguably not such an employee because his evidence demonstrates that the action is not causing, nor is it is threatening to cause, him economic harm. I do, however, have the views of some 136 of the approximately 155 employees who will be covered by the agreement. Albeit this evidence is only contained in the petition and is subject to the criticisms that were levelled at it by Mr Wood, the signatories to the petition have indicated that they oppose Schweppes’ application and have made arrangements to be able to meet their current financial commitments. I also note that there were some 30 to 40 people in the body of the courtroom during the hearing. I commented that they appeared to be some of the employees who will be covered by the agreement and there was no demur from Schweppes. I infer that those people were present to show their support for the position of the union. It is to any of that class that Schweppes contends its lockout is causing, or is threatening to cause, significant economic harm. United Voice, being a bargaining representative, is also one of the persons to whose views I must have regard, as I must to the views of the other bargaining representative, Schweppes.

[65] Although I must also have regard to 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, there is no evidence that either bargaining representative has transgressed.

[66] As I am considering terminating the protected industrial action I must also have regard to whether the bargaining representatives for the agreement are genuinely unable to reach agreement on the terms that should be included in the agreement and whether there is no reasonable prospect of agreement being reached. Mr Wood submits that given the substantial period of time that has been involved in these negotiations and the stage that they have reached I should conclude that the bargaining representatives are genuinely unable to reach agreement and that there is no reasonable or prospect of agreement being reached. Mr White submits that the evidence of Mr Kunkel demonstrates, particularly having regard to the ongoing conciliation process, that there is a reasonable prospect that an agreement will be reached.

[67] The final matter for consideration under section 423(4) is the objective of promoting and facilitating bargaining for the agreement. United Voice contends that that for which it advocates will best lead to the likely achievement of this objective. Clearly, Schweppes’ of having outstanding issues arbitrated by Fair Work Australia is antithetical to the achievement of that objective.

[68] Section 423 (5) provides that if the protected industrial action is threatening to cause significant economic harm I must be satisfied that the harm is imminent. The evidence of Professor Harper is to the effect that, theoretically, that is the case.

[69] Section 423(6) requires that I be satisfied that the protected industrial action has been engaged in for a protracted period of time and that the dispute will not be resolved in the reasonably foreseeable future. This involves a consideration of the evidence that is also relevant to the consideration of subsection (4)(f).

Conclusion

[70] As was the case in Woodside Burrup, albeit in relation to section 426 of the Act, I observe that a lockout will almost invariably adversely affect the financial position of the employees who are locked out. The issue that must be decided is, of course, whether or not the lockout is causing them, or is threatening to cause them, significant economic harm. Absent the subsection 4 factors relevant to working out whether significant economic harm is being caused or threatened one would have regard to the ordinary English meaning of the phrase. In my view that is still appropriate, albeit the factors referred to in subsection 4, some of which appear to confer a discretion on the finding, need to be considered.

[71] The New Shorter Oxford English Dictionary relevantly defines "significant" as: "important, notable; consequential" and economic as: "of or relating to household management. Relating to the management of private, domestic, etc., finances; relating to monetary considerations, financial." The Macquarie Dictionary relevantly defines "significant" as: "important; of consequence" and economic as: "relating to the production, distribution, and use of income and wealth. Relating to the means of living."

[72] Having regard to the normal English usage of the expression "significant economic harm" I am not satisfied that the employer response action, being the lockout imposed by Schweppes on 15 December 2011 is causing, or is threatening to cause, significant economic harm to any of the employees who will be covered by the agreement.

[73] Professor Harper's evidence was, and could only be, theoretical and predictive, as he candidly admitted. This is because, unsurprisingly, he had not been provided with the financial details of any employee. Absent the evidence adduced by the union I might have been able to infer that if the action was not in fact causing, it was threatening to cause, significant economic harm to any of the employees. This is because statistically, having regard to the methodology that he adopted, it is likely that at least one employee would be in imminent danger of being unable to service his or her outgoings thus placing that employee under financial stress. Although I do not, as Mr Wood suggested that I should, equate financial stress with significant economic harm I might have inferred that the lockout, which Schweppes threatens will last until the union agrees to its shift pattern claim, was threatening to cause such an employee significant economic harm. Financial stress could develop into significant economic harm.

[74] However, having regard to the evidence of Mr Vesty and Mr Kunkel, as well as to the petition, I am not prepared to draw the inference from Professor Harper's evidence. The evidence called by the union suggests that most employees, a significant majority, do not consider themselves under threat of significant economic harm. In light of that, I am not prepared to infer that any of them is.

[75] Regard to the factors referred to in section 423(4) further adds to my inability to be so satisfied. I have particular regard to the following:

[76] Of particular significance to the exercise of my discretion, in the circumstances of this case, is the attitude of the employees and their bargaining representative. It is these employees whom Schweppes submits are suffering as a result of its lockout. That the very employees who are losing income oppose the termination of the lockout is a powerful factor against exercising my discretion in favour of Schweppes.

[77] The sections 423(4) factor militating in favour of Schweppes is my view that the bargaining representatives are genuinely unable to reach agreement on the terms that should be included in the agreement and that there is no reasonable prospect of agreement being reached. However, that must be viewed in the context of my finding that leaving the parties to their own devices may lead to the impasse being broken. In saying this I am conscious of the fact that whilst the employees are locked out and earning no income from Schweppes the company is still achieving some 60 to 70% of its normal production. 28

[78] Given that I have failed to be satisfied that the protected industrial action is causing, or is threatening to cause, significant economic harm to any of the employees who will be covered by the agreement I need not have regard to section 423(5). Nor does the occasion for the exercise of my discretion under section 423(1) arise.

[79] The application for the termination of the employer response action must be dismissed.

SENIOR DEPUTY PRESIDENT

Appearances:

Mr S Wood, S C, with Mr M Follett of Counsel for Schweppes

Mr E White of Counsel for United Voice

Hearing details:

Melbourne
23 December
2011

 1   Exhibit A4

 2   Exhibit R1 at paragraph 29

 3   Transcript,PN381

 4   Section 423(6)(a)

 5   Section 423(6)(b)

 6   Exhibit A5, witness statement of Peter Todd, at paragraph 16

 7   Ibid at paragraph 31

 8   Exhibit R2, witness statement of Matthew Kunkel at paragraph 45

 9   Exhibit R1, witness statement of Reginald Vesty at paragraph 11

 10   Ibid at paragraph 18

 11   Ibid at paragraph 23

 12   Ibid at paragraph 28

 13   Ibid at paragraphs 13 – 15, 40

 14   exhibit are two at paragraphs 44 – 46

 15   Transcript, PN707 - 711, 720 - 721

 16   Exhibit A8

 17   Transcript, PN 725 ff.

 18   Exhibit R2 at paragraphs 49 – 51

 19   Attachment MK10 to Exhibit R2

 20   s.15AA of the Acts Interpretation Act 1901

 21   CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384 at 408 per Brennaqn CJ, Dawson, Toohey and Gummow JJ.

 22   s.15AB(1)(b)(i) of the Acts Interpretation Act 1901

 23   Construction, Forestry, Mining and Energy Union v Woodside Burrup Pty Ltd and another [2010] FWAFB 6021 at [21]

 24   See Coal and Allied Operations Pty Limited v Australian Industrial Relations Commission (2000) 203 CLR 194 at [20] per Gleeson CJ, Gaudron and Hayne JJ

 25   Section 423(3)(b)

 26   Section 266

 27   [2010] FWAFB 6021 at [27]

 28   Transcript PN548

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