[2011] FWA 6810

[2011] FWA 6810

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FAIR WORK AUSTRALIA

DECISION

Fair Work Act 2009
s.526 - Application to deal with a dispute involving stand down

"Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union" known as the Australian Manufacturing Workers' Union (AMWU)
v
McCain Foods (Aust) Pty Ltd
(C2011/740)

VICE PRESIDENT WATSON

SYDNEY, 7 OCTOBER 2011

Application to deal with a dispute involving stand down - stand down in relation to protected industrial action - whether employees could have been usefully employed - Fair Work Act 2009 ss 524,526.

Introduction

[1] This decision is in relation to an application by "Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union" known as the Australian Manufacturing Workers' Union (AMWU) under s526 of the Fair Work Act 2009 (the Act) for an Order that McCain Foods (Aust) Pty Ltd (McCain) unlawfully stood down employees on 14 September 2011 arising from protected industrial action engaged in by maintenance employees of the company represented by the AMWU and the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU).

[2] The matter was subject to a conference of the parties on the day following the stand-down, 15 September 2011. As the matter was unable to be resolved by agreement, I made directions for filing evidence and outlines of submissions for a hearing of the matter on 4 October 2011. At the hearing Mr I Thomas, Ms A McCarthy and Mr. T Hale represented the AMWU. Mr N Ogilvie of counsel was granted permission to appear for McCain.

Background

[3] The dispute concerns two processing facilities conducted by the McCain at Ballarat, Victoria. Approximately 450 production and 50 maintenance employees are engaged at the site. The plants produce potato products and prepared foods for both the retail and foodservice markets.

[4] Production and maintenance employees are currently engaged under the terms of the McCain Foods (Aust) Pty Ltd Ballarat Enterprise Agreement 2009 (2009 Agreement) which nominally expired on 30 June 2011. Negotiations have been proceeding for the renegotiation of the 2009 Agreement since approximately May 2011. Protected action ballots have approved the taking of protected action under the Act.

[5] On 8 September 2011, the AMWU notified McCain that maintenance employees intended to engage in a 24 hour strike on 14 September 2011. The action was authorised by a protected action ballot and is accepted to be protected action under the Act.

[6] On receiving the advice from the AMWU the Ballarat site management group met on 8, 12 and 14 September to discuss what meaningful work could be undertaken should the maintenance employees not attend work on 14 September 2011.

[7] On 13 September 2011, Mr Gavin Lett, the Plant manager, advised employees at the Ballarat site that the strike by maintenance employees could lead to the standing down of production employees, but as McCain was unaware how many maintenance employees would be on strike, production employees should attend for duty on 14 September as normal. Employees were told that in the event of a stand down, employees could elect to take any available annual leave.

[8] At 7am on 14 September all maintenance employees commenced a 24 hour stoppage. Some areas of the operations such as the distribution centre, the waste treatment centre and clerical and administrative functions were not impacted significantly and continued to work normally.

[9] Mr Lett met with two management colleagues and assessed the extent of meaningful work that could be undertaken. Sauce production was scheduled for the night shift commencing at 11pm, as is the normal procedure for production the following day. The repackaging machine in the dinner line was operated for approximately six hours. Cleaning work was performed at the prepared foods plant. Employees who could not be deployed on these activities were stood down. Some were stood down from 7.30am (potato products plant), some at 8am (prepared foods) and others when the required cleaning functions were completed.

[10] Of those stood down, 102 applied for and were granted annual leave or long service leave. All maintenance and production employees returned to work at 7am on 15 September.

The Relevant Legislation and Case Law

[11] Stand down provisions were a feature of many awards for many years. Now the right to stand down employees is contained in the Act. Section 524 of the Act provides:

“Division 2—Circumstances allowing stand down

524 Employer may stand down employees in certain circumstances

(1) An employer may, under this subsection, stand down an employee during a period in which the employee cannot usefully be employed because of one of the following circumstances:

(a) industrial action (other than industrial action organised or engaged in by the employer);

(b) a breakdown of machinery or equipment, if the employer cannot reasonably be held responsible for the breakdown;

(2) However, an employer may not stand down an employee under subsection (1) during a period in which the employee cannot usefully be employed because of a circumstance referred to in that subsection if:

(a) an enterprise agreement, or a contract of employment, applies to the employer and the employee; and

(b) the agreement or contract provides for the employer to stand down the employee during that period if the employee cannot usefully be employed during that period because of that circumstance.

Note 1: If an employer may not stand down an employee under subsection (1), the employer may be able to stand down the employee in accordance with the enterprise agreement or the contract of employment.

Note 2: An enterprise agreement or a contract of employment may also include terms that impose additional requirements that an employer must meet before standing down an employee (for example requirements relating to consultation or notice).

(3) If an employer stands down an employee during a period under subsection (1), the employer is not required to make payments to the employee for that period.”

[12] Section 525 of the Act provides for certain exceptions to stand downs which may have application in this case.

“525 Employee not stood down during a period of authorised leave or absence

An employee is not taken to be stood down under subsection 524(1) during a period when the employee:

(a) is taking paid or unpaid leave that is authorised by the employer; or

(b) is otherwise authorised to be absent from his or her employment.

Note: An employee may take paid or unpaid leave (for example, annual leave) during all or part of a period during which the employee would otherwise be stood down under subsection 524(1).”

[13] The remedy sought to be accessed by the AMWU in this case arises from s526 of the Act which provides:

“Division 3—Dealing with disputes

526 FWA may deal with a dispute about the operation of this Part

(1) FWA may deal with a dispute about the operation of this Part.

(2) FWA may deal with the dispute by arbitration.

Note: FWA may also deal with a dispute by mediation or conciliation, or by making a recommendation or expressing an opinion (see subsection 595(2)).

(3) FWA may deal with the dispute only on application by any of the following:

(a) an employee who has been, or is going to be, stood down under subsection 524(1) (or purportedly under subsection 524(1));

(b) an employee in relation to whom the following requirements are satisfied:

(i) the employee has made a request to take leave to avoid being stood down under subsection 524(1) (or purportedly under subsection 524(1));

(ii) the employee’s employer has authorised the leave;

(c) an employee organisation that is entitled to represent the industrial interests of an employee referred to in paragraph (a) or (b);

(d) an inspector.

(4) In dealing with the dispute, FWA must take into account fairness between the parties concerned.”

[14] In applications under s526 of the Act reliance has been placed on the explanatory memorandum leading to the enactment of sections 524-6. Paragraph 2077 of the explanatory memorandum provides:

“An employer can only stand down an employee if they cannot be usefully employed. If the employer is able to obtain some benefit or value for the work that could be performed by an employee then the employer would not be able to stand down the employee.”

[15] I agree that this statement should be used as an aid in interpreting the effect of s524. As the concepts involved in s524 and the approach contained in the explanatory memorandum reflect previous case law dealing with stand down provisions in awards it is also appropriate to obtain some guidance from that case law on the proper interpretation of relevant concepts.

[16] A frequently applied statement on the meaning of “useful work” is contained in the 1971 judgement of Spicer CJ and Smithers J of the Commonwealth Industrial Court in Re Carpenters and Joiners Award. 1 As has been noted in subsequent cases, that statement was made in the context that deploying some employees and not others could lead to industrial unrest. I prefer to apply the approach of Morling J in Townsend v General Motors Holden’s Ltd2 who, after reviewing the various authorities said3:

“In my opinion the question whether an employee cannot be usefully employed because of a strike is largely a question of fact. No doubt, as a matter of law, some considerations will be irrelevant in determining the question of fact. But I reject the argument that the economic consequences to the employer are to be ignored in deciding the whether employees can be usefully employed. I accept that it is a material matter that work has been scheduled to be done by an employee on a day when, in fact, he is stood down. In many cases that will be a powerful indication that the work which was scheduled to be done was work which would have been useful to the employer. If the employee is stood down in those circumstances the employer will necessarily have to establish that because of circumstances that arose after the work was first scheduled to be done, the employee could not be usefully employed.

What I have so far said does not mean that cl. 6(g)(i) of the award gives GMH the right to unilaterally stand down its employees whenever there is a strike and it is convenient for it to do so. An employee may be able to be usefully employed although, as a matter of convenience, GMH would prefer him not to be at work. Questions of fact and degree will always be involved in determining whether, on the one hand, an employee cannot be usefully employed or whether, on the other hand, he can be usefully employed but it is not convenient to GHM to employ him. Whether a particular set of facts falls on one side of the line or the other will itself be a question of fact. In deciding that question I think it is proper to take the approach which Shepperd J. thought appropriate in a somewhat similar context - see In re Dispute - Australian Iron & Steel Pty Ltd; re Stand down of Bricklayers (No. 1) (1972) A. R. (N.S.W.) 285 at p. 296. That is to say, if it is shown that an employer has acted upon proper principles and in good faith, “the evidence... will not... be gone through with a tooth-comb in order to apply to its actions a standard of perfection which in cases such as this will always be impossible to achieve”.”

[17] It was accepted in this case that the stand down applied in a circumstance described in s524(1)(a), namely that the stand down occurred during a period of industrial action. However the AMWU contested the employer’s view that the employees could not have been usefully employed at the times in question. The resolution of this dispute therefore requires a consideration of the circumstances to determine whether the employees could have been usefully employed at the time they were stood down, taking into account fairness between the parties concerned as required by s526(4).

Could the Employees be ‘Usefully Employed’?

[18] Mr Lett, the Plant manager at Ballarat, gave evidence that he met with his management team on three occasions to discuss and evaluate the prospects for meaningful work to be undertaken during the imminent strike by maintenance employees. The management group determined that there was little scope for useful work in the potato products plant because the boiler in that plant cannot operate without a maintenance presence. He said that the boiler is needed to produce steam for the production line and also to perform cleaning of the plant.

[19] Mr Lett said that there was no useful repackaging of French fries as there was no customer demand for repackaging, and temporary loading into large bins would unnecessarily damage product.

[20] Mr Lett said that there was no scope for normal production in the prepared foods plant because the production machinery requires a significant maintenance presence in order to operate. As there was scope for sauce production on the night shift, this work was scheduled to occur.

[21] Mr Lett said that there was scope for cleaning to be undertaken in the prepared foods plant, as the boiler is unmanned and can operate safely and reliably without a maintenance presence and repacking work to be undertaken on the dinner line without a maintenance presence. However as repacking machinery on the pizza line was only recently commissioned and required constant maintenance presence pizza repacking could not occur.

[22] Paul Lavery, a cleaner in the prepared foods section gave evidence that in his view there was more than enough work for all prepared food workers including pizza repacking, repacking in the chip plant and thorough cleaning work required to be undertaken regularly to comply with American Institute of Bakers cleaning standards.

[23] Leigh Aspland, a robot operator in the French fries section, gave evidence that in his view there was work other than production work that could have been undertaken during the period of the stand down. He mentioned cleaning work, both basic and deep cleaning and repacking of French fries. He estimated that there was at least four shifts of repacking work available where low quality product could have been repacked and stored in ‘totes’ for later assignment. It was also contended that deep cleaning work scheduled for the following day could have been brought forward thus enabling production employees to be redeployed on production work which had not been planned for the day following the stand down.

[24] Mr Lett dealt with each of these proposals directly and explained why such work would not have been useful to the company. He said that there was no advantage in bringing forward scheduled cleaning and additional running of production lines was not feasible on the following day because of the limited production time available that week.

[25] I have considered all of the evidence in this matter. I find that McCain adopted a rational and fair approach to finding useful work during the period of the maintenance strike. It discussed the prospects of work with relevant managers. Although acceptance of its decisions might have been enhanced if it sought input from employees, I do not think its conclusions would have altered as a result of any such consultation. I consider that its explanations of why work now proposed by the union as work that could have been performed would not have been useful to McCain to be sound.

[26] McCain determined that some useful work could be undertaken but other work was either of no benefit or a threat to safe and productive operations leading to potential raw material loss or product damage. I see no reason to question the conclusions reached by the company on the existence or otherwise of useful work on 14 September. I therefore find that the stand down was validly implemented in accordance with s524 of the Act.

[27] Further I do not consider that any alteration to the situation brought about by the stand downs is justified by general notions of fairness. McCain’s production was affected by the maintenance strike. It sought to minimise its losses by implementing savings on its wages bill for the day in accordance with its statutory rights which I have found to be validly exercised under the Act. If it had not stood down the employees at the time they would have been idle. Those employees who could have been usefully employed worked and were paid. Others were stood down or took paid leave. Although stand downs are generally unfortunate, in this case they were the natural consequence of the strike by maintenance employees.

Conclusion

[28] For the reasons above the application by the AMWU to quash the stand down and restore payments and leave entitlements for 14 September 2011 is dismissed.

VICE PRESIDENT WATSON

Appearances:

Mr I. Thomas, Ms A. McCarthy and Mr T. Hale for the AMWU.

Mr N. Ogilvie on behalf of McCain Foods (Aust) Pty Ltd.

Hearing details:

2011.
Melbourne
4 October.

1 [1971] 17 FLR 330 at 331-335.

2 [1983] 4 IR 358.

3 Id at 370.

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