[2012] FWA 1377

Download Word Document



Fair Work Act 2009
s.472 - Application for an order relating to certain partial work bans

Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union
ASC Pty Ltd



Application for an order relating to certain partial work bans

[1] This decision concerns an application by the Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union known as the Australian Manufacturing Workers’ Union (AMWU) pursuant to s.472 of the Fair Work Act 2009 (the Act). The relevant factual background is that AMWU members engaged as Supervisors by ASC Pty Ltd (the employer or ASC) have implemented protected industrial action in the form of bans on a range of work activities from 22 December 2011. A ban on overtime and call outs was also implemented on or before 22 December 2011.

[2] ASC is responsible for the maintenance of the six Collins Class submarines. On 21 December 2011, it issued a Notice of Reduction in Payment (“the Notice”) in accordance with s.471 of the Act, indicating that reductions in daily rates of pay would be implemented “... based on the amount of time Supervisors would usually spend during a day performing the work subject to a work ban.” The overtime and call out bans did not form part of the notice, but assume some relevance to the matters in issue between the parties for reasons discussed later.

[3] Peter Bauer, Regional Secretary of the Technical, Supervisory and Administration Division of the AMWU, appeared for the AMWU. Andrew Short, of counsel, appeared for ASC with leave of the Tribunal in accordance with s.596 of the Act. Leave was opposed by Mr Bauer, however I formed the view that representation by Mr Short would assist in the effective presentation of the employer’s case having regard to the absence on annual leave of the key witness for ASC in the period leading up to the date of the hearing. In addition there have been only limited cases in relation to applications under s.472 of the Act and representation of the employer would assist the Tribunal. 1

[4] The AMWU contends that the reductions in payment are excessive and do not reflect the amount of time the Supervisors would otherwise be engaged in the banned work in ordinary hours. The s.472 application seeks that Fair Work Australia (FWA) substitute lower proportionate reductions in the daily rates of pay.

[5] The relevant sections of the Act are as follows:

[6] Regulation 3.21 of the Fair Work Regulations 2009 deals with the method by which an employer should determine the reduction in employees’ payments as a result of partial work bans, and relevantly provides:

[7] There is no issue as to the form and distribution of the Notice sent by the employer to the Supervisors. The sole issue relating to the Notice is the proportionate reduction in the payments calculated by the employer.

[8] There are eight (8) different Supervisor classifications and ten (10) different work bans in place. Not all bans impact on all classifications of Supervisor and the impact of the bans is not uniform across those Supervisor classifications affected by them.

[9] The relevant classifications of Supervisor, the proportionate reduction calculated by the employer and the alternative reductions sought by the AMWU are as follows:

[10] The bans that have been implemented and which form the basis of the reductions in payment are as follows:

[11] The AMWU led evidence from three Supervisors. Lee Pike is a Mechanical Supervisor. He developed a document, referred to as Annexure A, 3 identifying the impact of each ban on each classification of Supervisor, expressed as a proportion of the time in ordinary hours that would otherwise be spent performing the banned work. The information in Annexure A formed the basis of the AMWU’s position on the appropriate reduction in payment. It was prepared using information provided to Mr Pike from other Supervisors as well as his own knowledge. Mr Pike also prepared, by the same means, a document identifying the daily tasks undertaken by Supervisors and an allocation of those tasks to different groupings.4

[12] Mark Francis is employed as an Electrical Supervisor and Daniel Burton is employed as a Mechanical Supervisor. Both Mr Francis and Mr Burton had input into Annexure A and AMWU 2. All three witnesses gave evidence on the impact of particular work bans on their own classification and other Supervisor classifications.

[13] The employer led evidence from Colin Loudon, Production Manager. Mr Loudon manages the Production Department for the maintenance of the Collins Class submarines. Based on information from the Managers to whom the Supervisors report and the Supervisor job descriptions, he prepared a document which identifies the impact of each ban on each classification of Supervisor (Ex ASC 2). Mr Loudon’s evidence addressed the direct impact of the bans as well the financial and other consequences for the employer’s operations arising from the bans.

The extent of the bans

[14] As the table in paragraph [9] above indicates, there is a significant difference between the parties on the impact of the work bans, except in relation to the classifications of FLS - Commissioning and Facilities Supervisor. In relation to these two classifications, the difference between the estimates is minimal, although the means by which the parties arrived at their respective positions is different. No purpose is served by delving into the impact of each of the ten bans on these two classifications and the employer’s calculations are accepted. From this point onwards the discussion concerning the impact of the bans will be dealt with in the context of the remaining six Supervisor classifications.

[15] Both Annexure A and ASC 2 were based on the ordinary hours of work of 38 per week. There are a number of instances where there is agreement that a particular ban has no impact on a classification but otherwise the parties are in dispute. In the case of Annexure A, the percentage reduction also took into account that some of the banned work would usually be performed in overtime hours. Annexure A allocates between 0% and 2% to each supervisor classification as the proportion of ordinary hours that would otherwise be spent on the banned work, while ASC 2 allocates between 0% and 15%.

[16] I am satisfied that those involved in the preparation of Annexure A did so to the best of their ability on the information available. However, the proportion of Supervisors who contributed information to Annexure A is not clear. This document appears to reflect a ‘broad brush’ approach to the estimates of the time otherwise spent in the banned work and the relative impact of the bans is not consistent with the evidence in some cases. For example, the time spent on work affected by each of the bans on the signing of documents (ban no. 2 and no.4) is the same as the time spent attending non-safety related meetings (ban no.5). In the latter case, the evidence of the AMWU witnesses indicates that time assessed by the employer of 2.5 hours per week is closer than the estimate in Annexure A. In addition, the identification of classifications impacted by the bans is inaccurate in some respects and this adds to my concern in relation to the accuracy of Annexure A. 5

[17] The employer had the benefit of dealing with four Trades Managers and the Boat Manager, each of whom was in a position to provide an overview of the work of the Supervisors within their area. Other than in a respect to a couple of bans which are discussed below, I find that ASC 2 is based on more reliable information in terms of the hours spent by Supervisors on work that is the subject of the bans, and therefore the relative impact of different bans, and that ASC 2 reflects a more accurate picture of the particular classifications affected by the bans.

[18] I have found AMWU 2 to be of limited assistance. The proportion of time allocated to the major grouping of tasks associated with direct on-the-job supervision of 20% to 50%, no doubt to accommodate the variation in the time spent on this work across all supervisors, detracts from the veracity of the percentages attached to the other groupings of work.

[19] The areas where I consider that the employer has incorrectly assessed the impact of the bans is in relation to the signing of set to work documents (ban no.2) and the signing of critical evolution line up forms (ban no.4). The evidence and submissions of the AMWU is that the signing of these documents is just that - the physical act of put a signature on the form. The employer has adopted a broader interpretation of what this ban entails.

[20] In the case of both bans, the procedure before signing involves validating that the work that is required to be done has been completed in accordance with the requirements and that the relevant documentation and/or signatures relating to the work undertaken by the tradespersons has been completed and/or included. The employer has assumed that the ban on signing involves a ban on the validation of the relevant work and for this reason has not allocated set to work to the relevant Supervisor classifications.

[21] Mr Bauer submitted that both bans were in the nature of “nuisance bans” designed to inconvenience the employer only to the extent that someone else would have to sign the relevant documents based on information provided by the supervisors relating to the validation of the work. I consider that the employer should have interpreted these bans based on the ordinary meaning of the words used to describe them, or sought clarification of the bans. I am satisfied on the evidence that the employer has overestimated the extent of these two bans and the AMWU assessment is preferred.

[22] A significant feature of this case that bears on the assessment of the percentage reductions for time otherwise spent on the work that is banned, is that Supervisors work a significant amount of overtime on a regular basis and their average hours of work are approximately 110 hours per fortnight. The work performed by Supervisors in ordinary hours and in overtime hours is not clearly delineated and for the most part the Supervisors exercise their discretion as to when different work is performed. Mr Loudon confirmed that Supervisors were not directed as to when work was to be performed and he did not dispute that the banned work may be performed in overtime hours 6 prior to the ban on overtime.

Other matters

[23] Mr Loudon gave evidence that approximately 5000 hours per week would normally be scheduled for work on Sheehan but as a result of the bans only about 2000 per week are being performed. Certain critical set to work is being undertaken by management but he stated that the shortfall in hours will need to be made up in the future, involving the payment of overtime. If the time is not made up Mr Loudon said that ASC faces the prospect of being unable to deliver Sheehan on time and this would be damaging to its reputation in an environment where other work is likely to be up for tender. 7


[24] Mr Bauer, for the AMWU, submitted that:

[25] In addition Mr Bauer contended that the employer should have made no deduction from individual supervisors within a particular classification if the banned work was not part of the requirements of their position, and sought a determination from FWA to this effect.

[26] Mr Short on behalf of ASC stated that there was no distinction between ordinary hours and overtime in Regulation 3.21. He referred to the construction of the Act dealing with reductions in payments on account of partial work bans and referred to several authorities on the operation of the relevant sections of the Act. 8 It was contended that while the employer was bound to assess the extent of the ban in determining the proportionate reduction in employee payments, the Tribunal was not limited in this way in its consideration of the extent of the reduction in payments under s.472(3) of the Act.

[27] He submitted that a consideration of fairness between the parties requires an assessment of the additional costs likely to be faced by the employer, which will be significant. In addition to overtime costs, Mr Short submitted that the Tribunal should take into account the potential for the employer to be required to pay a penalty if Sheehan is not delivered on time, and also the impact of the bans on the employer’s ability to successfully tender for further work.

[28] Mr Short referred to the draft order provided by the AMWU. He submitted that if the Tribunal was persuaded to alter the proportionate reductions in employee payments, any such order must be prospective in nature. It was argued that the terms of s.472(1) of the Act concern an order varying the proportion by which an employee’s payments are reduced and this connotes a prospective operation of any order.

[29] In reply, Mr Bauer stated that the authorities referred to by Mr Short are of limited assistance since they do not deal with the issue of overtime. He argued that Mr Short’s submission on the prospective nature of any order should not be accepted, since it would result in inherent unfairness to employees where a determination is made that the deductions in payments are excessive.

Consideration of the Act

[30] The operation of ss.471 and 472 of the Act and the relationship of these sections to Regulation 3.21 have been considered in the decisions referred to by Mr Short. These decisions reflect a consistent approach to the interpretation of the relevant sections of the Act, with which I respectfully agree. Regulation 3.21 prescribes the method by which an employer should approach the task of determining the proportionate reduction in payment as a result of the partial work bans. In some cases, such as the present, this calculation will be determined in advance of the bans commencing.

[31] Where the proportionate reduction implemented or to be implemented by the employer is sought to be varied, an application can be made pursuant to s.472(4) of the Act. The matters that must be taken into account by FWA in determining such an application are set out in s.472(3)(a) and (b) of the Act.

[32] Section 472(3)(a) of the Act requires FWA to examine the proportion specified in the notice given by the employer with a view to determining if it was reasonable having regard to the “nature and extent of the partial work ban to which the notice relates”. In my view s.472(3)(a) requires FWA to consider more than whether the employer’s estimate of the usual time spent performing the work that has been banned 9 was reasonable. It is apparent by the inclusion of s.472(3)(b) of the Act that, in considering an application for an order varying the proportionate reductions determined by the employer, FWA is to consider a range of matters that are broader than the calculation undertaken by the employer. As such there is no reason to read s.472(3)(a) narrowly or to interpret it other than in accordance with the ordinary meaning of the words contained within it. Part of the consideration of “fairness between the parties taking into account all of the circumstances of the case” as required by s.472(3)(b) of the Act will include a consideration of, but is not limited to the matters set out in s.472(3)(a) of the Act.

Calculating the extent of the reduction

[33] Regulation 3.21 requires the employer to identify the work that is or will be banned, estimate the usual time that the employee or the class of employees would spend performing the work “during a day” and then identify this amount as a percentage of an “employee’s usual hours of work for a day”. There is no requirement that the time spent performing the work is to be calculated solely on ordinary hours. This is reinforced by the terms of ss.471 and 472 of the Act which refers to employee “payments” and is not qualified in any way.

[34] In many cases ordinary hours may be the only hours worked or any overtime worked is of such limited incidence that it can be effectively discounted. In this case however the Supervisors regularly work around 110 hours per fortnight and there is no basis on which to discount overtime hours because there is an overtime ban in place.

[35] There is an acknowledgement by the employer that some or all of the banned work may usually be performed in overtime hours. However it has approached the determination of the percentage reductions by assuming that the bans relate to work otherwise performed in ordinary hours because this is what the employer would have directed had only the overtime bans been in place.

[36] I consider that this is a flawed approach. Any attempt to allocate duties to overtime or ordinary time in this case is doomed to fail in circumstances where employees have the discretion as to when the duties are undertaken and have implemented bans on certain work activities. Most importantly, the effect of the employer’s approach is to overstate the percentage deduction. Five to six hours as a percentage of 38 hours is significantly higher than five to six hours as a percentage of 55 hours.

[37] It should be apparent that I am not persuaded by the converse position put forward by the AMWU that only ordinary hours are taken into account for the purposes of assessing the appropriate reduction but that work which would otherwise have been performed in overtime hours is entirely discounted.

[38] As a starting point in the consideration of the matters in s.472(3) I determine that the appropriate approach to the assessment of the proportionate reduction in payment is to identify the time otherwise spent on the banned work calculated as a percentage of the average weekly hours of 55 per week.

[39] I have then taken into account my view that the employer has overestimated the time involved in “signing” set to work documents and critical evolution line up forms, by importing into this ban the additional task of validation.

The argument for no deduction where there is no impact

[40] I am unable to accept Mr Bauer’s argument that individual Supervisors that are part of a classification that has implemented a ban but who do not perform that work, should have no reduction in their payments. This submission is against the approach adopted by the AMWU in Annexure A and AMWU 2. I note that Regulation 3.21 concerns the calculation of the proportionate reduction for “an employee or a class of employee” and in my view this is a matter to be determined on the particular circumstances of the case. In the present case the approach of both parties was to estimate the average impact across each classification of Supervisor and there is no reasonable basis to impose a different approach.

Other considerations under s.472(3) of the Act

[41] It is a fact of this case that the employees are not receiving payment for a proportion of the weekly hours as a result of the overtime ban. A calculation of the proportionate reduction in payment which ignores this situation could legitimately be described as including an element of double counting. In my view there needs to be recognition of this situation in the final determination of the proportionate reductions.

[42] Also relevant to the issue of the nature of the bans and fairness between the parties is that the impact of some of the bans extends to a loss of work beyond that which is the subject of the bans because of consequences for the work of other employees. For example, the ban on the management of high risk evolutions - set to work, impacts on the work of the tradespersons who are supervised and on the FLS - On Boat who co-ordinates the work of the Supervisors.

[43] I also accept that the evidence and submissions concerning the future cost incurred by the employer arising from the requirement to pay for overtime to catch up on the work which is currently not being undertaken as a result of the bans, is a relevant matter in considering fairness between the parties. However while I accept the employer’s estimate of the loss of hours currently being experienced there are two matters that also need to be taken into account. The first is that the employer is not paying for the normal level of overtime at the moment as a result of the bans and the second is that some of the hours currently being lost is as a result of the misinterpretation of two of the bans implemented, and the consequent withholding of certain work that could be undertaken by the Supervisors. Neither of these matters have been quantified in dollars or hours but are relevant to the weight that attaches to the future cost.

[44] The submissions as to the damage to the reputation of the employer if Sheehan is not delivered on time and the potential negative impact on the employer’s ability to secure further contracts are somewhat speculative and based on the bans continuing to some point in the future. Mr Loudon’s evidence was that at this point in time the due delivery date could be met.  10


[44] My decision has taken into account that the employer has overestimated the extent of the bans generally by assessing the time otherwise spent on the ban as a percentage of the ordinary hours of work and that the employer has overestimated the extent of the bans involving the signing of the set to work documents and the critical evolution line up form. I have also taken into account the effect of the overtime bans in calculating the extent of the partial work bans. These matters weigh in favour of a reduction in the percentage attributed by the employer to the time otherwise spent on the banned work. I have also taken into account the additional impact on the employer caused by the disruption of the work of other employees as a result of the bans implemented by Supervisors and that there will be a future cost impact on the employer in meeting the delivery date for Sheehan.

[45] I have determined that the proportionate reductions implemented by the employer should be modified as set out in the following table: 11

Form of Order

[46] I am not persuaded by Mr Short’s argument that an order issued under s.472(3) must be prospective. Section 471 dealing with payments in relation to partial work bans is concerned with the industrial action period. This is defined in s.471(5) as the period commencing on the date on which the partial bans are implemented or the next day after the employer gives the notice of reduction in payments, whichever is the later, and ending at the end of the day on which the ban ceases.

[47] Section 471(2) states that the employee(s) payments in relation to the industrial action period are reduced by the proportion specified in the notice or, if FWA has ordered a different proportion under s.472, by the proportion specified in the order. As such the order is directed to the industrial action period. There is no legislative barrier to the making of a retrospective order, and in the interests of equity and fairness a retrospective order should be issued in this matter.

[48] An order varying the proportionate reductions to those set out in the table above, is issued with this decision.



Mr P Bauer for the Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union known as the Australian Manufacturing Workers’ Union

Mr A Short, counsel, for ASC Pty Ltd

Hearing details:

January 30, February 1 and 2, 2012.

 1   PN12

 2   Front Line Supervisor

 3   This document was attached to the AMWU’s application as Annexure A.

 4   AMWU 2

 5   Annexure A allocated a reduction for all classifications for work otherwise spent in the use of the bar-coding system (ban no. 7) but in evidence it was acknowledged that this was incorrect; PN246.

 6   PN1145

 7   PN744-PN761

 8   Bowers v Victoria Police, [2011] FWA 6960; The Australian Institute of Marine and Power Engineers v Port of Brisbane Pty Ltd, [2011] FWA 4653 and Transport Workers Union v Department of Territory and Municipal Services (ACTION), [2010] FWA 4558.

 9   In accordance with Step 2 of Regulation 3.21.

 10   Loudon, PN754 - PN761.

 11   There is no adjustment to the percentages for the classifications of FLS - Commissioning and Facilities Supervisor for the reasons outlined in paragraph [14].

Printed by authority of the Commonwealth Government Printer

<Price code C, PR520285>