[2014] FWC 1185

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.472—Protected action

United Voice - Northern Territory Branch
v
Commissioner for Public Employment for the Northern Territory
(B2014/502)

VICE PRESIDENT CATANZARITI

SYDNEY, 17 FEBRUARY 2014

Application in relation to the non-entry of data recorded at incident into AirsNT for Automatic Fire Alarms occurring during the industrial action period.

[1] This matter arises from an application for orders relating to a partial work ban, pursuant to s. 472 of the Fair Work Act 2009 (“the Act”), filed in the Fair Work Commission (“FWC”) on 6 February 2014 by the Northern Territory branch of United Voice (“the applicant”) in relation to protected industrial action being organised by United Voice members engaged by the Commissioner for Public Employment for the Northern Territory (“the respondent”) in the Northern Territory Fire and Rescue Service.

BACKGROUND

[2] On 24 January 2014 the applicant gave notice to the respondent that it intended to take industrial action in the form of “no entry of data recorded at incident into AirsNT for Automatic Fire Alarms occurring during the industrial action period.” AirsNT stands for the “Australian Incident Reporting System Northern Territory.” Standard Operating Procedure 65 of the Northern Territory Fire and Rescue Service requires the Officer in Charge to enter incidents into AirsNT upon returning to the station. In the case of Automatic Fire Alarm incidents, the data entered into AirsNT forms the basis for issuing invoices to property owners on a cost recovery basis for unwanted false alarms, among other uses that are set out below.

[3] On 4 February 2014, the Commissioner for Public Employment for the Northern Territory issued a notice to United Voice members affected by the industrial action of his intention to deduct $124 for each shift in which the industrial action was taken.

[4] On 5 February 2014, United Voice notified the respondent that it intended to apply to the Fair Work Commission for an order under s. 472 of the Act. United Voice also notified the respondent that it had advised its members not to participate in that particular industrial action until the application had been heard and determined.

[5] On 6 February 2014, United Voice made an application under s. 472 of the Act for an order varying the amount by which payments made to the officers taking part in the industrial action would be reduced to $11 for each shift in which the industrial action was taken.

LEGISLATION

[6] Sections 471 and 472 of the Act relevantly state:

471 Payments relating to partial work bans

Employer gives notice of reduction in payments

(1) If:

(a) an employee engaged, or engages, in protected industrial action against an employer on a day; and

(b) the industrial action is a partial work ban; and

(c) the employer gives to the employee a written notice stating that, because of the ban, the employee’s payments will be reduced by a proportion specified in the notice;

then the employee’s payments are reduced in accordance with subsection (2) in relation to the period (the industrial action period) referred to in subsection (5).

(2) The employee’s payments in relation to the industrial action period are reduced:

(a) by the proportion specified in the notice; or

(b) if the FWC has ordered a different proportion under section 472—by the proportion specified in the order;

and the modern award, enterprise agreement or contract of employment that applies to the employee’s employment has effect accordingly.

(3) The regulations may prescribe how the proportion referred to in paragraph (2)(a) is to be worked out.

Employer gives notice of non-payment

(4) If:

(a) an employee engaged, or engages, in protected industrial action against an employer on a day; and

(b) the industrial action is a partial work ban; and

(c) the employer gives to the employee a written notice stating that, because of the ban:

(i)  the employee will not be entitled to any payments; and

(ii)  the employer refuses to accept the performance of any work by the employee until the employee is prepared to perform all of his or her normal duties;

then the employee is not entitled to any payments in relation to the period (the industrial action period) referred to in subsection (5).

(4A) If:

(a) an employer has given an employee a notice under paragraph (4)(c); and

(b) the employee fails or refuses to attend for work, or fails or refuses to perform any work at all if he or she attends for work, during the industrial action period;

then:

(c) the failure or refusal is employee claim action, even if it does not satisfy subsections 409(2) and 413(4), if the related industrial action referred to in paragraph (4)(a) is employee claim action; or

(d) the failure or refusal is employee response action, even if it does not satisfy subsection 413(4), if the related industrial action referred to in paragraph (4)(a) is employee response action.

The industrial action period

(5) The industrial action period is the period:

(a) starting at the later of:

(i) the start of the first day on which the employee implemented the partial work ban; or

(ii) the start of the next day, after the day on which the notice was given, on which the employee performs work; and

(b) ending at the end of the day on which the ban ceases.

Form and content of notice

(6) The regulations may prescribe requirements relating to one or both of the following:

(a)  the form of a notice given under paragraph (1)(c) or (4)(c);

(b)  the content of such a notice.

Manner of giving notice

(7) Without limiting paragraph (1)(c) or (4)(c), the employer is taken to have given a notice in accordance with that paragraph to the employee if the employer:

(a)  has taken all reasonable steps to ensure that the employee, and the employee’s bargaining representative (if any), receives the notice; and

(b)  has complied with any requirements, relating to the giving of the notice, prescribed by the regulations.

Employer does not give notice

(8) If:

(a)  an employee engaged, or engages, in protected industrial action against an employer on a day; and

(b)  the industrial action is a partial work ban; and

(c)  the employer does not give the employee a notice in accordance with paragraph (1)(c) or (4)(c);

then the employee’s payments for the day are not to be reduced because of the ban.

472 Orders by the FWC relating to certain partial work bans

(1) The FWC may make an order varying the proportion by which an employee’s payments are reduced.

(2) The FWC may make the order only if a person has applied for it under subsection (4).

(3)  In considering making such an order, the FWC must take into account:

(a)  whether the proportion specified in the notice given under paragraph 471(1)(c) was reasonable having regard to the nature and extent of the partial work ban to which the notice relates; and

(b)  fairness between the parties taking into consideration all the circumstances of the case.

(4)  An employee, or the employee’s bargaining representative, may apply to the FWC for an order under subsection (2) if a notice has been given under paragraph 471(1)(c) stating that the employee’s payments will be reduced.

[7] Regulation 3.21 of the Fair Work Regulations 2009 also has application:

3.21 Payments relating to partial work bans—working out proportion of reduction of employee’s payments

For subsection 471(3) of the Act, the proportion mentioned in paragraph 471(2)(a) of the Act is worked out for an employee or a class of employees by carrying out the following steps.

Step 1	Identify the work that an employee or a class of employees is failing or refusing to perform, or is proposing to fail or refuse to perform.
Step 2	Estimate the usual time that the employee or the class of employees would spend performing the work during a day.
Step 3	Work out the time estimated in Step 2 as a percentage of an employee's usual hours of work for a day. The solution is the proportion by which the employee's payment will be reduced for a day.

SUBMISSIONS

The Applicant’s Submissions

[8] The applicant submitted that the nature of the partial work ban is as follows:

● “The nature and extend [sic] of the partial work ban is based on the non-completion of entry of data recorded at incident into AirsNT for Automatic Fire Alarms.
● Members are still entering the data but are not executing the final page which requires a signature.
● Completion of AirsNT report is not a regular occurrence.”

[9] United Voice relied on the evidence of Mr P Jelly, a Leading Fire Fighter within the Northern Territory Fire and Rescue Service to contend that executing an AirsNT report involved only a ‘mouse click,’ and that sometimes the AirsNT reports remained incomplete for some period. United Voice contended that reminders were sent to officers every three months reminding them to complete their outstanding AirsNT reports.

[10] United Voice submitted that there was no loss of revenue as a result of the partial work ban, and that the partial work ban resulted in “at least, no change to the normal practice of officers completing the reports at a later date or, at most, some inconvenience to the respondent.” Further, the applicant contended that Mr P Jelly’s evidence showed that on average, only three Automatic Fire Alarm reports are required to be completed over every eight shifts, and that it takes around five minutes to fully complete such reports. The reports, it was submitted, were being completed but not ‘executed’ which only involved a mouse click.

[11] United Voice further submitted that a reduction of $124 per shift was “so financially significant that the affected fire-fighters would be unlikely to participate in the partial work bans.” Further, United Voice submitted that its members are entitled to participate in protected industrial action as a “legitimate bargaining tactic” and that as the types of industrial action that can be taken in the emergency services sector are necessarily limited, it would be unfair not to reduce the proportion by which payments are reduced where members would otherwise be unable to participate in a legitimate bargaining tactic. 1

[12] United Voice also relied on the evidence of Mr P Jelly to submit that there were members who were not often required to execute AirsNT reports for Automatic Fire Alarms as they worked outside the Darwin Response Area, in which the majority of Automatic Fire Alarms were generated. Thus, it was submitted, it would be unfair to reduce payments to members who were not in fact participating in the industrial action.

[13] While United Voice’s initial application indicated that it sought a variation of the proportion by which payments are reduced to $11 per shift, its written submissions indicated that the reduction is more appropriately expressed as a percentage of the payment that would otherwise be due to an officer for the completion of a shift.

[14] United Voice submitted that the evidence showed that as it only took a mouse click to submit a report, and given a rounded approximation of one minute for a mouse click and the frequency of three reports for every eight shifts, “the proportionate reduction should be calculated on the basis of three minutes for every 5760 minutes which equates to a percentage reduction of 0.052%.”

The Respondent’s Submissions

[15] The respondent relied on the evidence of Mr D Ellis, Deputy Chief Fire Officer Territory Operations, Northern Territory Fire and Rescue Services, to submit that there were a number of public interest implications arising from the industrial action, including:

(a) The impact that non-entry of the data has on the ability of the various organisations and individuals that rely on the data to effectively carry out their functions or business, including:

(i) The impact on the Australasian Fire and Emergency Service Authorities Council in monitoring trends, including product faults resulting in fires, which can lead to product recalls;

(ii) The impact on the ability of insurance companies to assess property insurance claims resulting from fires, which would have a flow on effect to insurance policy holders’ ability to access insurance money; and

(iii) The impact on Northern Territory Fire and Rescue Service’s (NTFRS) ability to identify and work with owner occupiers to rectify automatic alarm system faults, so as to free up NTFRS resources to respond to actual emergencies.

(b) The impact on the Northern Territory’s budget due to the inability to generate revenue on a cost recovery basis in relation to unwanted false alarms; and

(c) The fact that the funding of four fire safety positions within the NTFRS are directly linked to the revenue generated on a cost recovery basis by unwanted false alarms. This revenue amounted to approximately $1.5 million in the 2012/2013 financial year.

[16] The respondent further relied on the evidence of Mr D Ellis to explain the process by which the $124 reduction was calculated as follows:

“(a) 75 affected employees, comprising Station Officers and Leading Fire-fighters;

(b) 2360 automatic fire alarms were recorded in the 2012/2013 financial year. Of these, 2200 were UFAs [Unwanted False Alarms]. Of the 2200 UFAs, 2086 invoices were issued to owner occupiers.

(c) The current fee charged to owner occupiers in the case of UFAs is $823.90.

(d) There are on average 46 shift cycles per year, with shift workers rostered on duty of four shifts per cycle.

(e) Applying the above, the following formula was used to arrive at $124:

($823x2086 UFAs) divided by 75 affected employees, divided by 46 cycles per year, divided by 4 shifts per cycle = $124 per rostered shift)

(f) The time taken to enter data into the AirsNT program is approximately seven minutes per entry.

(7 mins x 2360 automatic fire alarms) divided by 365 days per year = 45 minutes per day spent collectively by OICs [Officers in Charge] in entering data into AirsNT).”

(Underline indicates emphasis in original)

[17] The respondent submitted that the calculation was a fair and reasonable deduction in all the circumstances as it was an accurate cost reflection of the actual cost impact on the Northern Territory Government. The respondent further submitted that the following factors were relevant in establishing that the calculation of $124 per shift reduction was fair and reasonable:

(a) According to the evidence of Mr D Ellis, the unwanted fire alarms are only attended to by shift-workers performing the role of OIC. However, the respondent submits that in the interest of fairness it included day work station officers in the calculation as these officers could also perform the OIC function on an overtime or short-term transfer basis. Excluding day work officers would have the effect of reducing the number of officers in part (a) of the above calculation to 58, resulting in a wage deduction of $161.

(b) The respondent submitted that the overall impact of the ban, including the public interest considerations outlined, was exactly the same regardless of whether the reports were not finalised or if they were not completed at all, as in any case they would not be available to be used for their various intended purposes.

(c) The respondent acknowledged that it may be possible to generate revenue relating to unwanted false alarms once the industrial action period came to an end, but submitted that:

(i) The ban appeared to be indefinite, rendering it unclear when the reports would be finalised;

(ii) Mr D Ellis’ evidence revealed that even when the reports were finalised, the Northern Territory Government anticipated difficulty generating revenue from the reports, as building owners could challenge invoices that were not received in a timely manner, and their capacity to pay multiple invoices received in close succession was in doubt. The respondent submitted that this consideration was particularly significant taking into account the number of small businesses in the Northern Territory.

(c) The respondent contended that while the wage deduction was arrived at having regard predominantly to the impact of the industrial action on the Northern Territory Government’s budgetary position, the broader public interest factors outlined above were also significant considerations for the purposes of s. 472 of the Act.

CONSIDERATION

[18] There are a limited number of authorities on the application of s. 472 of the Act. Despite this, however, it is clear that the application of s. 472 has been considered as requiring closer analysis than a perfunctory application of the “formula” set out in Regulation 3.21. The seminal decision with respect to the application of s. 472 is Transport Workers Union v Department of Territory and Municipal Services (ACTION), 2 in which Commissioner Deegan said:3

“[33] ... When determining an application for an order to vary the proportion by which an employee’s payments are to be reduced, FWA is required to take into account ‘whether the proportion specified in the notice was reasonable… having regard to the nature and extent of the partial work ban…’ and also to take account of ‘fairness between the parties taking into consideration all the circumstances of the case’. If all that were to be considered, as was argued by the TWU, was whether the employer had properly estimated the time involved in physically performing the banned task, the matters to be taken into account by FWA would have little relevance, particularly the ‘nature’ of the ban and ‘fairness between the parties’ in light of ‘all the circumstances of the case’.

...

[35] Clearly, s.472 of the Act gives a wide discretion to FWA to deal with disputes concerning the amount of reduction an employer proposes to make and the section does not require, or allow, FWA to determine such a dispute merely by applying the ‘formula’ set out in Regulation 3.21.

[36] It is apparent from the terms of the Explanatory Memorandum that sections 470 and 471 were introduced to allow employers to make a judgment about the effect of a partial work ban and decide how to respond to the ban, that is whether to refuse to pay the employee at all for the period of the ban, refuse to accept the performance of any work by the employee or pay the employee proportionally for the work performed. Under the previous legislation the employer had no discretion in this regard and was required by the legislation to deduct at least four hours’ pay from any employee implementing protected action, no matter how minimal the effect of that action. According to the Explanatory Memorandum the new provisions might ‘assist in resolving disputes more efficiently and may prevent the escalation of some disputes’.

[37] Under the provisions of the Division, the employer has the discretion to decide that a task that an employee proposes to ban is not so critical that it is preferable that the employee perform no work at all and receive no payment. In such a circumstance the employer can determine what proportion of the employee’s wage should be paid for the performance of the work not banned and notify the employee of the proposed reduction in payment. The employee can then determine whether to accept that proportion of payment which will be made or take some other form of protected action, such as performing no work at all. It is also open to an employee, if it is considered that the proportion by which the payment has been reduced is too high, to make an application such as the present one under s.472 of the Act and have FWA determine the amount by which the payment should be reduced.”

[19] This decision has been followed with approval in Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union v ASC Pty Ltd [2012] FWA 1377; The Australian Institute of Marine and Power Engineers v Port of Brisbane Pty Ltd [2011] FWA 4653; and Bowers v Victoria Police [2011] FWA 6960.

[20] In addition, in Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union v ASC Pty Ltd, Deputy President Bartel noted that: 4

“[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 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.”

[21] It became evident during the course of the hearing that the approach taken by the respondent in calculating the relevant reduction was erroneous. Evidence from Mr D Ellis revealed that a not insignificant number of invoices for unwanted false alarms are waived, with a process in place that requires an established “Waiver Committee” to consider waiver applications. The number of invoices that were waived was not factored into the respondent’s calculations in attempting to determine its figure for reducing payments, resulting in a figure that did not, despite the respondent’s submissions, accurately reflect the cost impact of the industrial action on the Northern Territory Government.

[22] Notwithstanding this error, however, the approach of the respondent in calculating the reduction to payments was inherently flawed. The reduction in payments cannot simply be arrived at by estimating the potential cost impact of the industrial action and allocating this cost to the employees undertaking industrial action.

[23] The respondent placed significant emphasis on the public interest aspects of the Automatic Fire Alarm reports, including their impact on the Northern Territory Government’s budget revenue. Given the importance the respondent attributed to these reports, it was surprising to hear evidence that not only are these reports not routinely followed up in a timely fashion, but that there do not seem to be any disciplinary procedures in place to ensure the timely completion of the reports. Given the importance of these reports to the Northern Territory Government’s budgetary position as asserted by the respondent, it is to be expected that procedures will be implemented to ensure that these reports are completed in a timely fashion in the future.

[24] Having rejected the respondent’s approach, it must be said that I also do not accept that it is fair and reasonable in all of the circumstances of the case to accept the applicant’s submission that payments should be reduced by only $11 per shift.

[25] The reduction in payments was expressed in the respondent’s notice of reduction in payments as a dollar figure. The evidence of Mr D Ellis showed that the average wage per shift of an officer taking part in the ban would depend on the officer’s classification and how many shifts the officer worked in a particular fortnight. It was accepted during the course of the proceedings that a wage of approximately $470 per shift was a useful approximation for the purposes of determining the dispute. Given the difficulties in determining the wage of an officer for an individual shift, I am of the view that, consistent with the authorities, a proportionate reduction in the form of a percentage of total wages per shift is a more appropriate form for expressing the reduction in payments.

[26] While a great deal of emphasis was placed on the respondent’s calculations in relation to the unwanted false alarms during the course of the hearing, the correct approach is to look at all of the circumstances of the case. Having regard to the evidence and submissions of both of the parties, the correct amount by which payments should be reduced is 15% of the amount that would otherwise be paid for the completion of a shift.

[27] An order varying, to 15%, the proportion by which payments are to be reduced is issued with this decision.

VICE PRESIDENT

Appearances:

E Early and W Ash for United Voice.

C Winstanley and B Peacocke for the Commissioner for Public Employment for the Northern Territory.

Hearing details:

2014.

Sydney:

February 12.