1
Fair Work Act 2009
s.424—Industrial action
Minister for Industrial Relations for the State of Victoria
v
AGL Loy Yang Pty Ltd T/A AGL Loy Yang; Communications, Electrical,
Electronic, Energy, Information, Postal, Plumbing and Allied Services
Union of Australia; Construction, Forestry, Mining and Energy Union
(B2017/374)
DEPUTY PRESIDENT CLANCY MELBOURNE, 9 MAY 2017
Application for an order to terminate protected industrial action pursuant to s.424 – whether
protected industrial action threatened, impending or probable – whether industrial action
threatens to endanger the welfare of the population or of part of it – whether industrial action
will cause significant damage to an important part of the Australian economy – whether
termination or suspension is appropriate.
[1] On Friday 5 May 2017, the Minister for Industrial Relations for the State of Victoria
(the Minister) made application that an order be made terminating protected industrial action
(the Application) that is threatened, impending or probable.
[2] The Application was made under s.424 of the Fair Work Act 2009 (the Act). The
Minister has standing to bring the Application under s.424(2)(b)(iia) of the Act.
[3] The protected industrial action that is threatened, impending or probable1 is said to
comprise:
That notified by the Communications, Electrical, Electronic, Energy, Information,
Postal, Plumbing and Allied Services Union of Australia (Electrical Trades Union of
Victoria branch) (ETU) against AGL Loy Yang Pty Ltd (AGL Loy Yang) on 4 May
2017 (the ETU Notice); and
That notified by AGL Loy Yang in a Notice of Employer Response Action served in
accordance with s.414(5) of the Act on the ETU, other bargaining representatives
and employees on 4 May 2017 (the AGL Notice).
[4] The industrial action notified in the ETU Notice relates to employees who would be
covered by a proposed enterprise agreement to replace the terminated Loy Yang Power
Enterprise Agreement 20122 (the Proposed Agreement) who are members of the ETU and for
whom the ETU is a bargaining representative. The Proposed Agreement would cover
approximately 578 employees at the Loy Yang A Power Station (Long Yang A) and adjacent
[2017] FWC 2533
DECISION
E AUSTRALIA FairWork Commission
[2017] FWC 2533
2
open cut brown coal Loy Yang Mine (Mine) at Traralgon in Victoria operated by AGL Loy
Yang. It would exclude some employees on executive employment agreements.
[5] The ETU Notice served on AGL Loy Yang declared an intention to take protected
industrial action in the form of an indefinite number of consecutive one (1) hour stoppages on
the performance of all work, commencing at 12.00am on Monday 15 May 2017.
[6] The AGL Notice served on the ETU, other bargaining representatives and employees
declared an intention by AGL Loy Yang to take employer response action in the following
form:
“If the industrial action foreshadowed in the ETU Notice is engaged in by any employee
of AGL LY, the lockout [of all employees who will be covered by the Proposed
Agreement] will commence at 12.01am on 15 May 2017, and will continue indefinitely
until AGL LY gives notice that the lockout will cease.”
[7] The Application was brought on the basis that the industrial action notified in the ETU
Notice and the AGL Notice is protected action that is threatened, impending or probable and
is threatening or would threaten:
To endanger the life, personal safety or health, or the welfare, of the population or of
part of it; or
To cause significant economic damage to the Australian economy or an important
part of it.
[8] The Application was listed for hearing on Monday 8 May 2017. Mr M Harding of
counsel was granted permission to represent the Minister with Mr D Catanese. Ms L Weber
appeared for the ETU. Mr A Walkaden appeared for the Construction, Forestry, Mining and
Energy Union (CFMEU). Mr M Rizzo appeared for the Australian Municipal, Administrative,
Clerical and Services Union (ASU). Ms M Jenner appeared for The Association of
Professional Engineers, Scientists and Managers, Australia (Professionals Australia). Mr F
Parry QC and Mr B Avallone of counsel were granted permission to represent AGL Loy
Yang with Ms K Lehane.
[9] Additionally, Ms K Smith was granted permission to represent the State of South
Australia, which had been granted leave to appear in support of the Minister, with Mr V
Duffy.
[10] AGL Loy Yang supported the Application and submitted the Fair Work Commission
should terminate the industrial action.
[11] The Application is not opposed by the ETU or the ASU. Professionals Australia
indicated its support for the action proposed by the ETU and any steps that would resolve the
bargaining dispute.
[12] The CFMEU did not consent to the Application. While it indicated respect for the
mandate of the Minister, it was critical of AGL Loy Yang for taking what it said was a
“disproportionate and irresponsible response to protected industrial action by the workforce.”
It submitted that in the event the Commission determines the jurisdictional pre-requisites of
[2017] FWC 2533
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s.424(1) of the Act are satisfied, the appropriate order for the Commission to make is an order
terminating protected industrial action for the proposed enterprise agreement.
Legislation
[13] Section 424 of the Act provides:
“424 FWC must suspend or terminate protected industrial action—endangering
life etc.
Suspension or termination of protected industrial action
(1) The FWC must make an order suspending or terminating protected industrial
action for a proposed enterprise agreement that:
(a) is being engaged in; or
(b) is threatened, impending or probable;
if the FWC is satisfied that the protected industrial action has threatened, is
threatening, or would threaten:
(c) to endanger the life, the personal safety or health, or the welfare, of the
population or of part of it; or
(d) to cause significant damage to the Australian economy or an important part
of it.
(2) The FWC may make the order:
(a) on its own initiative; or
(b) on application by any of the following:
(i) a bargaining representative for the agreement;
(ii) the Minister;
(iia) if the industrial action is being engaged in, or is threatened,
impending or probable, in a State that is a referring State as defined in
section 30B or 30L—the Minister of the State who has responsibility
for workplace relations matters in the State;
(iib) if the industrial action is being engaged in, or is threatened,
impending or probable, in a Territory—the Minister of the Territory
who has responsibility for workplace relations matters in the Territory;
(iii) a person prescribed by the regulations.
Application must be determined within 5 days
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(3) If an application for an order under this section is made, the FWC must, as far as
practicable, determine the application within 5 days after it is made.
Interim orders
(4) If the FWC is unable to determine the application within that period, the FWC
must, within that period, make an interim order suspending the protected industrial
action to which the application relates until the application is determined.
(5) An interim order continues in operation until the application is determined.”
Evidence
[14] Evidence in the form of witness statements was given by the following persons:
Mr Mike Cleary – COO of the Australian Energy Market Operator Limited
(AEMO);
Dr Finn Romanes – Acting Deputy Chief Health Officer (Environment) in the
Department of Health & Human Services;
Mr David Catanese, Managing Principal Solicitor, Victorian Government Solicitor’s
Office;
Mr Steve Rieniets, General Manager of Loy Yang A and the Mine;
Mr Richard Wrightson, General Manager Wholesale Markets, AGL Energy Ltd; and
Mr Richard Robinson of R2A Due Diligence Engineers Australia.
[15] The Minister also filed a supplementary witness statement of Mr Cleary and made
application for this to be subject to a confidentiality order. This was consented to by the other
parties and granted by me on 8 May 2017.
[16] None of the witnesses were required for cross examination.
[17] In the context of assessing the evidence in Australian and International Pilots
Association v FWA (AIPA v FWA), Buchanan J usefully stated:
“Before I refer to that evidence, it is important to appreciate that FWA is not bound by
any technical rules of evidence (s 591); it may inform itself in relation to any matter
before it as it thinks fit (s 590); it must perform its functions quickly, informally and
without unnecessary technicalities (s 577); and, in the present case, was under strict
time constraints (s 424(3)). In those circumstances, there is only limited scope for a
debate about the evidence FWA might receive and take into account.”3
[18] I have had regard to this when assessing the evidence before me and I have considered
the evidence as it relates to each of the issues I need to determine in order to decide whether
to grant the Application.
Section 424(1)(b) - Is Protected Industrial Action Threatened, Impending or Probable?
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[19] The Loy Yang Power Enterprise Agreement 2012 passed its nominal expiry date on 31
December 2015. AGL Loy Yang and the various Unions have been negotiating for a
replacement agreement since July 2015.
[20] On 31 October 2016, the ETU made application for a protected action ballot order
(PABO) under s.437 of the Act.4 This application was heard, determined and granted by
Senior Deputy President Hamberger on 31 October 2016. The Senior Deputy President made
an order for the conduct of a protected action ballot of employees of AGL Loy Yang Pty Ltd
who are members of the ETU and who will be covered by the Proposed Agreement.5
[21] On 29 November 2016, the Australian Electoral Commission declared that more than
50% of relevant employees voted and more than 50% of the valid votes approved the
proposed forms of industrial action:
An unlimited number of periodic stoppages on the performance of all work; and
An unlimited number of indefinite and/or periodic bans on:
o Overtime;
o Issuing and/or receiving electrical/mechanical permits;
o Responding to break downs; and
o Performing higher duties.
[22] As outlined above:
On 4 May 2017, the ETU served on AGL Loy Yang a Notice of Protected Industrial
Action in accordance with s.414 of the Act in the form of an indefinite number of
consecutive one (1) hour stoppages on the performance of all work, commencing at
12.00am on Monday 15 May 2017. This action falls within the action authorised by
the PABO granted by Senior Deputy President Hamberger; and
Also on 4 May 2017, AGL Loy Yang served on the ETU, all other bargaining
representatives and all employees a Notice of Protected Industrial Action in
accordance with s.414(5) of the Act, outlining its intention to take employer
response action in the form of a lockout of all employees who will be covered by the
Proposed Agreement to commence at 12.01am on 15 May 2017, if the industrial
action foreshadowed in the ETU Notice is engaged in by any employee of AGL Loy
Yang. The AGL Notice advises that the lockout will continue indefinitely until it
gives notice that it will cease.
[23] I am satisfied and it was not disputed by any party that protected industrial action as
described in both the ETU Notice and the AGL Notice is threatened, impending or probable.6
Section 424(1)(c) - Has the Protected Industrial Action threatened, is it threatening, or
would it threaten, to endanger the life, the personal safety or health, or the welfare of
the population or of part of it?
or
Section 424(1)(d) - Will the Protected Industrial Action cause significant damage to the
Australian economy or an important part of it?
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[24] The evidence of Mr Cleary was that the shutdown of all six generating Units at both
Loy Yang A and Loy Yang B will take a total of 3300 Megawatts per day of generation
capacity out of Victoria’s power system and this represents about a third of Victoria’s
installed maximum generation capacity. In Winter, the combined generation of Loy Yang A
and B regularly meets over 50% of Victoria’s power needs. He said there are at least five
foreseeable effects that range in likelihood from probable to certain if the industrial action is
engaged in and all the Loy Yang A and B units cease generating electricity:
1) The loss of power generation from Loy Yang A and B will result in a failure to meet
projected demand that will cause load shedding: Consequences could be severe for
businesses reliant on a continuous supply of power or power to be supplied at
particular voltage, healthcare facilities could be impacted by particularly widespread
or prolonged outages, as could the operation of public services such as traffic lights,
trains, trams, level crossings, lifts, public lighting and sewage pumps;
2) The loss of power generation from Loy Yang A and B may cause further
unpredictable losses of power supply in Victoria and South Australia or part thereof
due to power system control issues: this will manifest itself in unstable voltages
leading to a less secure transmission network;
3) The loss of power generation from Loy Yang A and B will cause a loss of resilience in
the Victorian power system in the event of a fault: the network will operate with
unprecedented low fault levels which can affect the operation of network protection
systems;
4) The loss of power generation from Loy Yang A and B decreases the resilience of the
system to unplanned events, increasing the probability of them resulting in a ‘black
system’, with a significantly greater recovery time: decreased stability of the system
increases the probability the system cannot stabilise after a significant unplanned
event, which can in turn lead to a ‘black system’. This is a situation where there is a
complete absence of voltage. The shutdown of both power stations increases the
probability of such an event and if a black system occurs across large parts of Victoria,
there is a material risk that most of South Australia will also go black; and
5) The loss of power generation from Loy Yang A and B will deplete Victoria’s gas
reserves from mid-June 2017, which will result in gas shortages in Victoria: this is
because a shutdown will result in gas fired power stations running more frequently
than they otherwise would, depleting gas storage facilities.
[25] The Minister also submitted that apart from the foreseeable impacts, there is material
risk of harm arising from effects that cannot be reliably predicted in advance due to the
absence of relevant historical experience arising from a total shutdown of Loy Yang A and B.
It was submitted this necessarily prejudices Australian Energy Market Operator’s (AEMO)
ability to plan for and mitigate the effects of what might occur should the shutdown proceed
and the element of unpredictability the protected industrial action will induce intensifies the
threat of the danger or damage.
[26] I also had regard to the supplementary confidential witness statement of Mr Cleary.
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[27] Mr Richard Wrightson, General Manager Wholesale Markets at AGL Energy Limited,
said that AGL Loy Yang is Victoria’s largest energy producer and on average, historically,
over the course of a year, Loy Yang A produces approximately 30-33% of Victoria’s power
requirements, and approximately 11% of total generation for the south-eastern seaboard states
of New South Wales (including the ACT), Queensland, South Australia and Tasmania. Mr
Wrightson said Loy Yang B has historically provided approximately 15-17% of Victoria’s
energy needs.
[28] With the closure of the Hazelwood Power Station in April 2017, Mr Wrightson said he
would expect the percentage of Victoria’s energy produced by AGL to increase, with Loy
Yang A to produce approximately 40-43% of Victoria’s power requirements and Loy Yang B
approximately 20-21%. Mr Wrightson concluded that approximately 60-65% of Victoria’s
energy needs are dependent on the brown coal supplied to the Loy Yang A and Loy Yang B
Power Stations by the AGL open cut brown coal mine, with the remaining electricity needs
met by the Yallourn Power Station and wind generation, amongst other sources.
[29] Mr Wrightson also gave evidence about the supply and demand of electricity,
including the occurrence of supply variations in the other sources of electricity besides Loy
Yang A and Loy Yang B.
[30] Mr Wrightson outlined what happens if there is insufficient electricity to supply the
market. He said that the AEMO, which manages the market that all electricity must be traded
through, publishes three levels of Lack of Reserve (LOR) notices to market. Relevantly, he
said an LOR3 is when AEMO considers that customer load would be, or is actually being,
shed automatically (or manually) in order to maintain or restore the security of the power
system. Where, in the event of a LOR3, there is insufficient electricity to supply the market, it
is necessary for load shedding (which involves reducing consumption by turning off the
electricity supply to groups of customers) to occur to avoid the entire electricity network
becoming unstable. Where possible, load shedding is done on a rotational basis and avoids
key infrastructure, but Mr Wrightson said sometimes this is not possible.
[31] Mr Wrightson said that AEMO has published a notice to the market that an LOR3
exists, starting from 11 May 2017 as a consequence of the anticipated shutdown of Loy Yang
A and Loy Yang B. He said forecasts as at 5 May 2017 indicate that from the evening peak on
11 May 2017, 142MW of load will be interrupted and this is equivalent to approximately
25,000 households being disconnected.
[32] Mr Wrightson also canvassed the impact of Loy Yang A and Loy Yang B shutting
down, saying that the reduced buffer between supply and demand is likely to lead to supply
being inadequate to meet the demand. He said that as a consequence of Loy Yang A and Loy
Yang B being shut down, approximately 3475MW will be removed from the system and there
will be a lack of reserve condition in Victoria and almost certainly rolling load shedding in
Victoria and South Australia, with AGL analysts estimating there would be supply
interruptions for Victoria over the period 15 May to 30 June 2017 based on the forecast
demands. Mr Wrightson concluded that any further constraints to the supply market,
including hydro constraints, low/no wind generation, gas availability, transmission like
outages or other unit outages, will increase significantly the duration, number and severity of
supply interruptions.
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[33] Mr Rieniets said the indefinite stoppage foreshadowed by the electricians could
compromise coal supply, which would lead to generation at Loy Yang A being curtailed and
ultimately cease. Mr Rieniets said that it is not viable to attempt to maintain coal production
and power generation without the essential support of electrical workers, who perform repairs,
issue electrical permits and isolate electrical supply, where required, to perform maintenance
and safety requirements. He said there would be risks to plant and potentially employees if
AGL Loy Yang attempted to maintain coal production and power generation without the
essential support of power workers.
[34] Mr Rieniets stated that AGL Loy Yang has exhausted all possible avenues of
negotiation for a new enterprise agreement and is of the view there is no reasonable prospect
of agreement being reached in the foreseeable future. He said that AGL Loy Yang will not
have the ability to continue running the Mine or the Station once the lockout commences.
[35] Mr Rieniets said that while Loy Yang A and Loy Yang B may have enough coal to
continue running for a short time after the lockout commences, the reality is that they will
both need to begin shutting down before then to ensure a safe and orderly shutdown. Mr
Rieniets said the shutdown of Loy Yang A would need to commence from 7.00am Tuesday 9
May 2017 and all generation would cease at 7.00am on Wednesday 10 May 2017. For Loy
Yang B, it would cease generating electricity for the network from on or around 16 May
2017.
[36] Dr Romanes, Acting Deputy Chief Health Officer (Environment), said that power
outages can impact health at many levels in a varied and far-reaching manner. He said
uncontrolled power outages affecting hospitals, particularly if prolonged;
could lead to a restriction in the ability of health services to deliver some services,
even whilst on back-up power generators, with the extent of the restriction of
services increasing as the length of the outage increases;
could threaten the life of ventilator-dependent patients;
could reduce access to community renal dialysis;
could adversely affect medication storage;
could lead to the cancellation of some or many primary care services, including
general practice and community pharmacy services;
could lead to closure of a significant number of general practices which could lead to
an influx of patients to emergency departments, which in turn could endanger
timeliness or capacity to provide care to high risk patients in the emergency
department; and
could provide challenges to accessing patient clinical records.
[37] Dr Romanes also stated that uncontrolled power outages could also:
result in delays in the emergency response to unwell Victorians with time-critical
health emergencies, caused by delays in the patients or their relatives being able to
call for assistance due to non-functioning mobile phones;
delay emergency services travelling to an emergency due to unsafe or congested
traffic conditions arising from widespread non-functioning traffic lights, level
crossings or street lights;
increase the risk of injury to road users or pedestrians from road traffic accidents or
road trauma resulting from traffic light failures;
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impact on the capacity of sewerage pump stations to ensure sewerage is safely
removed from the community, and outlined the negative consequences on the
environment and risk to humans if that does not occur;
reduce the capacity of drinking water treatment plants to deliver safe drinking water,
or cause a loss of pressure or loss of supply to communities on reticulated water
systems;
threaten communities that rely on private water if they are not able to treat or pump
water to supply points;
lead to a loss of domestic and retail capacity to maintain the refrigeration of food,
some of which must be chilled to avoid foodborne illness;
reduce the ability of patients and staff to access hospitals, employment and
education;
cause loss of heating, resulting in cold exposures, including for vulnerable members
of the community; and
cause a range of other effects on wellbeing, for example social isolation of
vulnerable elderly people who may be stranded in high rise flats, unable to use lifts,
as occurred in New York during Hurricane Sandy.
[38] Mr Robinson conducted a historical review of circumstances of blackouts and outages
and the consequences of them. His conclusion was that it is clear that when the power goes
“off,” bad things happen:
Direct and indirect blackout impacts mean that persons who would otherwise be
unaffected can be injured or die;
Medically vulnerable members of the community are put at risk;
Critical infrastructure that supports the provision of many essential services will stop
and in some cases, even those with back-up power supplies fail.
[39] The overall conclusion reached by Mr Robinson was that the “quantum effect of
rolling blackouts in Victoria” would be expected to increase mortality by tens of persons per
day with injuries potentially increasing by the hundreds. This figure was said to be in addition
to the logistical disruptions associated with a loss of communications, traffic signalling and
electric traction services including lifts, trains and trams.
[40] This pre-requisite requires there only be a “threat” of the protected action endangering
the life, personal safety or welfare of the population or part of it, not that the threat be
“significant” or “exceptional”7. Nonetheless, the threat must be a credible one and I must be
satisfied the action will have the effect alleged8.
[41] The evidence establishes the fundamental importance and significance of AGL Loy
Yang’s Loy Yang A Power Station and Mine to Victoria’s power supply. The combined
generation of Loy Yang A and Loy Yang B, which is also supplied by the Mine, regularly
meets over 50% of Victoria’s power needs in Winter. The industrial action in the ETU Notice
and the AGL Notice would almost immediately impact the power supply to Victoria and have
implications for South Australia. Additionally, the reliability and resilience of the Victorian
system would be compromised. The fundamental importance of the power supply to the
operation of Victoria’s economy is self-evident. Businesses rely on a secure energy supply,
and the transportation system depends on reliable power. The supply of power is vital to the
operation of the hospital and broader healthcare system, as was highlighted in the evidence of
Dr Romanes and Mr Robinson.
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[42] Therefore, on the evidence before me, I am satisfied the industrial action in the ETU
Notice and the AGL Notice would, if taken, threaten to endanger the life, the personal safety
or health, or the welfare of the population or part of it or cause significant damage to the
Australian economy or an important part of it, being at least the State of Victoria.
Consequences of the Findings
[43] Section 424 of the Act requires me to suspend or terminate the protected industrial
action if I make either of the findings I have made above.
[44] If the protected action is suspended, bargaining can continue and the dispute is not
required to be resolved by arbitration while it remains unresolved.
[45] It is submitted on behalf of the Minister that I should terminate the protected action
because:
Extensive bargaining has failed to result in agreement and there is no basis to
conclude that a resolution can be reached;
Despite the time that has elapsed since the expiry of the Agreement and its
termination, bargaining has not resulted in a new agreement;
The current industrial action is for an indefinite duration; and
The nature and extent of the threat arising from the industrial action is so serious that
termination of the protected industrial action is warranted.
[46] In Essential Energy v CEPU9 (Essential Energy), Senior Deputy President Hamberger
outlined factors relevant to the exercise of the Commission’s discretion in deciding whether to
make an order either suspending or terminating protected industrial action, based on a review
of various Commission decisions. His Honour summarised them as follows:
the length of time negotiations had been going on;
the progress that had been made in negotiations;
whether there had been prior industrial action;
the views of the parties (especially where both parties agree on the appropriate
course of action); and
the potential for further industrial action that would endanger the general welfare
etc.10
[47] I have also had regard to Minister for Industrial Relations for the State of Victoria v
Australian Workers’ Union, The; Communications, Electrical, Electronic, Energy,
Information, Postal, Plumbing and Allied Services Union of Australia; “Automotive, Food,
Metals, Engineering, Printing and Kindred Industries Union” known as the Australian
Manufacturing Workers’ Union (AMWU); Esso Australia Pty Ltd11 (Esso). Vice President
Watson, in considering an application for the termination of notified protected industrial
action, stated:
“[19] In this case the parties have been negotiating for over two years. The initial claims
made by the Unions were made in July 2014. Conciliation first occurred before the
Commission in October 2014 before Commissioner Johns and continued well into
2015. The Commission has made good faith bargaining orders, protected action ballot
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orders, and orders that industrial action stop or not occur. Appeals and Federal Court
applications have been made following these orders. The Federal Court has issued
interlocutory injunctions. A previous application for suspension of industrial action led
to a temporary cessation of hostilities.
[20] Industrial action has been engaged in on various occasions over that two year
period. That industrial action has led to Federal Court litigation and contests as to
whether the action is protected from immunity. Further discussions have been
facilitated in 2016 by retired Commissioner Blair. None of those actions has resulted
in sufficient progress towards an agreed resolution of the dispute.
[21] As recently as 2 December 2016 Esso has made offers to resolve the disputes. On
6 December 2016 those offers were rejected. The parties remain apart on several
issues including significant issues of wages and rostering. No party submitted that
there was a likelihood of an agreement being reached if industrial action was
suspended for a period. The Minister and the Unions submit that the industrial action
should be terminated. Esso does not contend otherwise.
[22] Termination of the protected industrial action will move the negotiating parties
from the extended impasse in their negotiations to an alternative path of conciliation
and arbitration under the framework of s.266 of the Act. This will provide finality to
their dispute and will result in either agreements or Workplace Determinations that
deal with all disputed matters. Having regard to all of the circumstances I have
decided to terminate the protected industrial action scheduled to commence on 9
December 2016.”
[48] I have considered the factors outlined in Essential Energy and adopted the approach
taken in Esso in preferring termination over suspension. I have noted that it has not been
submitted by any party that there is a likelihood of an agreement being reached if industrial
action was suspended for a period. All parties submit the industrial action should be
terminated.
[49] In this case, the nominal expiry date of the terminated Loy Yang Power Enterprise
Agreement 2012 was 31 December 2015. AGL Loy Yang and each of the ETU, ASU and
Professionals Australia have been negotiating for a replacement agreement since July 2015.
The CFMEU did not commence at that time on the basis that its key bargaining
representatives were not available, but by 28 September 2015, it had provided written advice
to formally initiate bargaining.
[50] In late November 2015, AGL Loy Yang put a proposal that included a four-year-
agreement with 5% per annum salary increases, no forced redundancies and what it described
as “modest improvement changes to productivity and flexibility” to its employees for a vote.
This development came after 14 bargaining meetings had taken place. Opposed by the
CFMEU and other Unions, this AGL Loy Yang proposal was not approved by employees.
Following this, AGL Loy Yang commenced bargaining in December 2015 for what it
described as “broader reforms” while maintaining the pay offer of 5% per annum over four
years.
[51] Bargaining and other activity continued over the ensuing months but did not result in
agreement being reached. On 8 April 2016, AGL Loy Yang filed an application under s.240
[2017] FWC 2533
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of the Act requesting the assistance of the Commission. Also on 8 April 2016, the CFMEU
made application under s.229 of the Act for bargaining orders, alleging AGL Loy Yang had
not been bargaining in good faith.
[52] The CFMEU’s s.229 Application was heard and determined by Commissioner
Gregory. The Commissioner was not satisfied AGL Loy Yang was in breach of the good faith
bargaining requirements and in his decision dated 2 June 2016, declined to make the orders
the CFMEU sought.12
[53] Bargaining conferences under the s.240 Application were held before Commissioner
Gregory on 9, 26 and 31 May 2016.
[54] An initial application for a PABO under s.437 of the Act was made by the CFMEU on
26 May 2016. I heard, determined and subsequently dismissed that application because I was
not satisfied to that point in time that the CFMEU had been or was genuinely trying to reach
agreement.13 The CFMEU’s appeal against my decision was dismissed.14
[55] As part of the s.240 Application process, Commissioner Roe conducted a number of
conferences and made a Recommendation to the parties on 24 August 2016
(Recommendation) as a resolution to their bargaining dispute. The Recommendation retained
the Loy Yang Power Enterprise Agreement 2012 as the base and made, in the words of the
Commissioner, “a limited number of amendments to that document.” The Commissioner also
stated “I make this recommendation primarily on the basis of what, having considered the
submissions of the parties and the prevailing industrial circumstances, I believe has the best
prospect of resolving the dispute. I am not arbitrating on the merits of particular claims
although of course I have an eye to what is industrially sustainable and defensible having
regard to the business circumstances and the history of bargaining over many years at the
site.”
[56] AGL Loy Yang decided to endorse the Recommendation but the CFMEU did not and
when it was put to a vote of employees that closed on 21 September 2016, a majority of
employees rejected it.
[57] On 26 September 2016, the CFMEU made further application for a PABO under s.437
of the Act. This application was heard, determined and granted by Commissioner Cirkovic on
28 October 2016.15
[58] On 29 November 2016, the Australian Electoral Commission declared that more than
50% of relevant employees voted and more than 50% of the valid votes approved the
CFMEU’s proposed forms of industrial action:
An unlimited number of stoppages of work for a period of between one (1) and
twenty four (24) hours duration; and
An unlimited number of bans of one or more hours duration on one of the units at
Loy Yang A Power Station.
[59] As outlined above, on 31 October 2016, the ETU made application for a PABO under
s.437 of the Act.16 This application was heard, determined and granted by Senior Deputy
President Hamberger on 31 October 2016.17
[2017] FWC 2533
13
[60] On 29 November 2016, the Australian Electoral Commission declared that more than
50% of relevant employees voted and more than 50% of the valid votes approved the ETU’s
proposed forms of industrial action:
An unlimited number of periodic stoppages on the performance of all work; and
An unlimited number of indefinite and/or periodic bans on:
o Overtime;
o Issuing and/or receiving electrical/mechanical permits;
o Responding to break downs; and
o Performing higher duties.
[61] On 14 December 2016, the CFMEU gave notice of proposed protected industrial
action pursuant to s.414 of the Act in the form of a 24 hour stoppage of work by Shift
Managers, Unit Controllers and Assistant Unit Controllers, commencing at 7pm on 28
December 2016. AGL Loy Yang responded with a Notice of Employer Response Action
served in accordance with s.414(5) of the Act on all bargaining representatives and employees
who would be covered by that proposed agreement outlining its intention to lock all
employees out if the industrial action foreshadowed by the CFMEU was engaged in. An
application by the Minister under s.424 of the Act was made on 15 December 201618 but it
was subsequently withdrawn following advice from the CFMEU that it had withdrawn the
notice that it would take protected industrial action on 28 December 2016.
[62] On 20 December 2016, the ETU gave notice of intention to engage in industrial action
in the form of:
A stoppage on the performance of all work for a period of one (1) hour commencing
at 7am on Sunday 25 December 2016;
A ban on overtime for a period of one (1) hour commencing at 7am on Sunday 25
December 2016;
A ban on issuing and/or receiving electrical/maintenance permits for a period of one
(1) hour commencing at 7am on Sunday 25 December 2016;
A ban on responding to break downs for a period of one (1) hour commencing at
7am on Sunday 25 December 2016; and
A ban on performing higher duties for a period of one (1) hour commencing at 7am
on Sunday 25 December 2016.
[63] Industrial action as outlined was engaged in on 25 December 2016.
[64] While these things had been occurring, AGL Loy Yang’s application under s.225 of
the Act to terminate the Loy Yang Power Enterprise Agreement 2012,19 opposed by the
Unions, was heard and determined by me. I terminated the Loy Yang Power Enterprise
Agreement 2012 with effect on and from 30 January 2017.20 The CFMEU’s appeal against my
decision was upheld to a limited extent, but with AGL Loy Yang having given an undertaking
dated 23 February 2017, the Full Bench saw no proper basis to disturb my decision or order.21
[65] On 18 January 2017, Commissioner Roe issued an Order that the CFMEU and Mr
Gregory Hardy, Secretary of the Loy Yang A Power Station Lodge of the Victorian District of
the CFMEU and Unit Controller at the Station, not organise any industrial action involving
any AGL Loy Yang employees who are members of the CFMEU and who work at the Loy
[2017] FWC 2533
14
Yang A Power Station. Commissioner Roe found industrial action was occurring and
probable and found the CFMEU and Mr Hardy were organising it.
[66] Termination of the protected industrial action is sought within the context of
protracted and hard bargaining extending since July 2015. When I terminated the Loy Yang
Power Enterprise Agreement 2012, I made the observation:
“[151] Progress has been made in some areas but a deadlock has been reached in respect
of the negotiations involving clauses that are key to both parties. AGL Loy Yang seek
changes to the Agreement it says will deliver flexibility and improve productivity
while the CFMEU, other Unions and employees wish to protect terms and conditions
they have historically enjoyed that they say protect employment (“no forced
redundancies”, “minimum staffing levels” and “restrictions on outsourcing to
contractors”). They say AGL Loy Yang is merely seeking to improve its already
healthy financial position by reducing its labour costs.
[152] On two occasions, a majority of employees have voted to reject a proposal for a
new Agreement that used the current Agreement as its basis, offered four pay
increases of 5% and fell short of AGL Loy Yang’s broader reform agenda. On both
occasions, the proposals were not endorsed by either the CFMEU or the other Unions.
[153] Given the strongly held views the parties have adopted on this fundamental
area of dispute, the length and history of the negotiations, the rejection of the two
proposals put to the employees including one reflecting the Recommendation made
after extensive assistance in the negotiations from the Commission, I am satisfied that
the dispute is intractable as things currently stand. I am persuaded that a change in the
status quo through the termination of the Agreement will better support good faith
bargaining for a new agreement that delivers productivity benefits.”22
[67] The parties have been negotiating for nearly two years. With Commissioner Roe
having conducted at least 26 conferences, an additional three conferences before
Commissioner Gregory and 23 bargaining meetings prior to that, there have been over 50
bargaining meetings. The Commission has dealt with applications for good faith bargaining
orders, protected action ballot orders, orders that industrial action stop or not occur, an
application to terminate the Loy Yang Power Enterprise Agreement 2012 and two appeals.
There have been two proposals made to resolve the dispute which have been rejected when
put to a vote. It would seem the parties remain apart on matters of significance.
[68] Agreement has still not been reached following the termination of the Loy Yang Power
Enterprise Agreement 2012. Despite Commissioner Roe having conducted 10 conferences
since then, the dispute appears to have remained intractable. As to the state of affairs, Mr
Rieniets gave the following evidence:
“In accordance with Commissioner Roe’s Statement of 27 April 2017, on 5 May 2017
the CFMEU (on behalf of all bargaining representatives, who have formed a single
bargaining unit (SBU)) sent AGL a list of matters which the SBU intends to pursue in
bargaining. This list includes 16 key items in relation to which the SBU still intends to
pursue claims. Such matters include minimum staffing, use of contractors and
provisions relating to vacancies and appointments amongst other things. These are
significant matters in relation to which the parties remain apart, and these matters have
[2017] FWC 2533
15
been subject to much of the extensive bargaining which has occurred prior to and
throughout the s240 process.”23
[69] Mr Walkaden for the CFMEU submitted that negotiations are deadlocked and will
remain deadlocked.
[70] In support of an order for termination, the Minister submitted the notified protected
industrial action is indefinite and the nature and extent of the threat arising from it is so
serious that its termination is warranted. Further, the Minister submitted a termination order is
the only order providing certainty. AGL Loy Yang submitted I can be satisfied that as things
currently stand there is no reasonable prospect of agreement being reached between the
parties if the industrial action is merely suspended. The CFMEU submitted that suspension
would simply result in the parties coming back before the Commission at some time in the
future because of AGL Loy Yang’s approach towards the taking of protected industrial action,
making termination the appropriate course for the Commission to adopt.
[71] Having regard to all the circumstances of this case, I consider that termination of the
protected industrial action by AGL Loy Yang and the Unions will see the parties move on
from the current, longstanding negotiating deadlock. Termination will give rise to conciliation
and arbitration pursuant to s.266 of the Act. This will result in either a new Agreement
reached through negotiations or a Workplace determination that deals with all disputed
matters. Either way, the current bargaining round will come to an end.
Conclusion
[72] In having regard to the requirements of s.424 of the Act, all of the circumstances of
this matter and the material before me, I have decided to terminate the protected industrial
action notified in the ETU Notice and the AGL Notice and scheduled to commence on 15
May 2017. An order to this effect will be issued together with this decision.
DEPUTY PRESIDENT
Appearances:
Mr M Harding of counsel with Mr D Catanese for the Minister for Industrial Relations for the
State of Victoria.
Mr F Parry QC and Mr B Avallone of counsel with Ms K Lehane for AGL Loy Yang Pty Ltd.
Ms L Weber for ETU.
THE FAIR WOR COMMISSION THE SEAL
[2017] FWC 2533
16
Mr A Walkaden for CFMEU.
Mr M Rizzo for ASU.
Ms M Jenner for Professionals Australia.
Ms K Smith and Mr V Duffy for the Minister for Mineral Resources & Energy for the State of
South Australia.
Hearing details:
2017.
Melbourne and Adelaide (video link):
May 8.
Printed by authority of the Commonwealth Government Printer
Price code C, PR592753
1 Fair Work Act 2009 (Cth) s.424(1)(b).
2 AE894678.
3 [2012] FCAFC 65 at [121].
4 B2016/1146.
5 PR 587089.
6 Fair Work Act 2009 (Cth) s.424(1)(b).
7 NTEIU v Monash University [2013] FWCFB 5982 at [19]-[20].
8 For example, see Tyco Australia Pty Ltd v CEPU (2011) 208 IR 243.
9 [2016] FWC 3338.
10 Ibid at [37].
11 [2016] FWC 8826.
12 [2016] FWC 3376.
13 [2016] FWC 4364.
14 [2016] FWCFB 6332.
15 [2016] FWC 7839 and PR 587023
16 B2016/1146.
17 PR 587089.
18 B2016/1316.
19 AE894678.
20 [2017] FWCA 226 and PR 589311.
21 [2017] FWCFB 1019.
22 [2017] FWCA 226.
23 Exhibit AGL 3 at [46].
