1
Fair Work Act
2009
s.426 - Application to suspend protected industrial action
Linfox Australia Pty Ltd
v
Australian Federated Union of Locomotive Employees; Australian Rail,
Tram and Bus Industry Union
(B2019/422)
COMMISSIONER SPENCER BRISBANE, 28 JUNE 2019
Application to suspend protected industrial action – legislative test – significant harm to a
third party not made out – application dismissed.
Introduction
[1] This decision relates to an application pursuant to s.426 of the Fair Work Act 2009
(the Act), by Linfox Australia Pty Ltd (Linfox/the Applicant/Third Party) to suspend
protected industrial action being taken by train crew and freight operations employees of
Aurizon Operations Limited (Aurizon). The Australian Federated Union of Locomotive
Employees (AFULE) and the Australian Rail, Tram and Bus Industry Union (RTBU) (the
Respondents/the Unions Bargaining Representatives) opposed the application.
[2] This matter was brought on quickly for hearing at the Applicant’s request with
Directions for the filing of evidence and submissions set and complied with across the prior
weekend. The Application sought an Order for the suspension of protected industrial action
for 2 months.
[3] Each of the three parties was granted permission to be represented, pursuant to
s.596(2)(a) of the Act given the complexity of the matter. The Applicant was represented by
Mr Williams of Minter Ellison; the Respondents were represented by Mr Diamond of the
RTBU and Mr Sivaraman of Maurice Blackburn for AFULE.
[4] In terms of the background to the Application Linfox acquired Aurizon’s Intermodal
operations on 1 February 2019. Aurizon is currently engaged in negotiations for a new
Enterprise Agreement with its employees. Mr Williams stated the case was brought on behalf
of the Queensland operating division of Linfox. I note however, the Applicant entity is the
parent company.
[5] Linfox in the current matter argued that it is directly affected by the protected
industrial action taken by employees of Aurizon and that such is threatening to cause
[2019] FWC 3653 [Note: An appeal pursuant to s.604 (C2019/4377) was
lodged against this decision - refer to Full Bench decision dated 22 August
2018 [[2018] FWCFB 5861] for result of appeal.]
DECISION
E AUSTRALIA FairWork Commission
https://www.fwc.gov.au/documents/decisionssigned/html/2019fwcfb5861.htm
[2019] FWC 3653
2
significant harm to it’s newly acquired business and it’s customers. Further, it was submitted
that suspension would not be contrary to the public interest or inconsistent with the Objects of
the Act.
[6] Linfox operates services across Australia, which includes long distance transport
services utilising road, rail and coastal shipping. In Queensland, Linfox provides door-to-door
and depot-to-depot transport services for its customers, utilising rail and road transport.
Linfox manages 48 train services per week in Queensland, utilising its network of depots, rail
wagons and rail containers.
[7] In order to provide this service, Linfox has a number of contractual relationships with
Aurizon. The largest contract is a 'hook and pull and maintenance services agreement', via
which Aurizon locomotive and train crew, pull Linfox-owned wagons and rail containers on
the rail network between 13 different terminals located across Queensland. This agreement
also requires Aurizon to perform all maintenance on Linfox's rail wagons. Aurizon also
operates three terminals accessed by Linfox train services through a terminal services
agreement at Acacia Ridge in Brisbane, Stuart in Townsville and Mt Miller in Gladstone.
[8] Primarily the Applicant’s representative argued in support of its application for an
order (to suspend the protected industrial action for 2 months), that the s.426 Full Bench
decision in the matter of Construction, Forestry, Mining and Energy Union v Woodside
Burrup Pty Ltd & Anori was decided in error on the application of the test of ‘significant
harm’.
[9] Witness evidence for the Applicant was tendered in the form of a witness statement by
Mr Aaron Carter, Linfox General Manager – Train Services and for the RTBU by Mr Leslie
Moffitt, Branch Organiser. The evidence of both was unchallenged.
[10] Whilst not all of the submissions and evidence are referred to in this decision all of
such have been considered.
[11] A short time after the finalisation of the proceedings on the day of the hearing the
parties were advised in writing that I did not intend to grant an Order and reasons would be
provided
Relevant Legislation
[12] Section 426 of the Act provides as follows:
“426 FWC must suspend protected industrial action—significant harm to a
third party
Suspension of protected industrial action
(1) The FWC must make an order suspending protected industrial action for a
proposed enterprise agreement that is being engaged in if the requirements set out in
this section are met.
Requirement—adverse effect on employers or employees
[2019] FWC 3653
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(2) The FWC must be satisfied that the protected industrial action is adversely
affecting:
(a) the employer, or any of the employers, that will be covered by the
agreement; or
(b) any of the employees who will be covered by the agreement.
Requirement—significant harm to a third party
(3) The FWC must be satisfied that the protected industrial action is threatening to
cause significant harm to any person other than:
(a) a bargaining representative for the agreement; or
(b) an employee who will be covered by the agreement.
(4) For the purposes of subsection (3), the FWC may take into account any matters
it considers relevant including the extent to which the protected industrial action
threatens to:
(a) damage the ongoing viability of an enterprise carried on by the person;
or
(b) disrupt the supply of goods or services to an enterprise carried on by
the person; or
(c) reduce the person’s capacity to fulfil a contractual obligation; or
(d) cause other economic loss to the person.
Requirement—suspension is appropriate
(5) The FWC must be satisfied that the suspension is appropriate taking into
account the following:
(a) whether the suspension would be contrary to the public interest or
inconsistent with the objects of this Act;
(b) any other matters that the FWC considers relevant.
Order may only be made on application by certain persons
(6) The FWC may make the order only on application by:
(a) an organisation, person or body directly affected by the protected
industrial action other than:
(i) a bargaining representative for the agreement; or
[2019] FWC 3653
4
(ii) an employee who will be covered by the agreement; or
(b) the Minister; or
(ba) if the industrial action is being engaged in 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; or
(bb) if the industrial action is being engaged in in a Territory—the Minister
of the Territory who has responsibility for workplace relations matters in the
Territory; or
(c) a person prescribed by the regulations.”
[13] Section 3 of the Act sets out the Object of the Act as follows:
“Object of this Act
The object of this Act is to provide a balanced framework for cooperative and
productive workplace relations that promotes national economic prosperity and social
inclusion for all Australians by:
(a) providing workplace relations laws that are fair to working Australians, are
flexible for businesses, promote productivity and economic growth for Australia's
future economic prosperity and take into account Australia's international labour
obligations; and
…
(f) achieving productivity and fairness through an emphasis on enterprise-level
collective bargaining underpinned by simple good faith bargaining obligations
and clear rules governing industrial action; and
(g) acknowledging the special circumstances of small and medium-sized businesses.
Section 426 – Jurisdiction and Protected Industrial Action
[14] In the circumstances of this matter the Commission’s jurisdiction in relation to
s.426(1) of the Act was enlivened as protected industrial action was being engaged in, at the
time of the application and the hearing. Protected industrial action in the form of an overtime
ban was being undertaken.ii
[15] It is noted that the submissions, relying on the past industrial action do not provide a
basis for the jurisdiction in relation to the Section 426(1). Relevantly, whilst there have been
few prior decisions on this provision, a similar view has been held in the Queensland Cane
Growersiii decision, in which Commissioner Lewin set out the below.
“[16] In my view, the absence of the power to make an Order terminating industrial
action under s.426 of the Act and the absence of power to suspend threatened,
impending or probable industrial action commands a much narrower reading of the
[2019] FWC 3653
5
power conferred upon the Commission by s.426 of the Act than that conferred by s.424
of the Act. If I am correct in this the legislature intends that the powers conferred by
s.426 of the Act are directed to a more limited set of facts and circumstances and a
more limited remedy with which to affect such facts and circumstances.
[17] In this respect, it should be noted that the power conferred by the provisions of
s.424 of the Act is also temporally confined and directed to extant industrial action
“being engaged in” and industrial action “threatened, impending, or probable”, in the
future. No reference to protected industrial action which was or has been taken but is
no longer “being engaged in” appears in those provisions.
[18] Consequently, it seems to me that the submissions of the Applicant, which rely
exclusively on past industrial action to ground the power to make the Order sought by
the application are incompatible with the terms of s.426 of the Act, which should be
considered in the overall context of Division 6, Part 3-3, Industrial Action of Chapter 3
of the Act.
[19] I respectfully agree with my colleagues Senior Deputy President Watson and
Commissioner Spencer who have reached similar conclusions in the cases of Tas
Paper Pty Ltd v “Automotive, Food, Metals, Engineering, Printing and Kindred
Industries Union” known as the Australian Manufacturing Workers’ Union
(AMWU) (Tas Paper)iv and Sucrogen Australia Pty Ltd v The Australian Workers’
Union; “Automotive, Food, Metals, Engineering, Printing and Kindred Industries
Union” known as the Australian Manufacturing Workers’ Union (AMWU);
Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and
Allied Services Union of Australia (Sucrogen).v
[16] It is noted however that whilst prior and further notified protected industrial action
does not ground the jurisdiction of the provision, it is able to be relied on in terms of Section
426(3) in setting out whether the impact of the industrial action, is threatening to cause
significant harm to the Applicant.
[17] The Applicant has standing to bring the application pursuant to Section 426(3); not
being a bargaining representative for the Agreement or an employee who will be covered by
the Agreement but an organisation directly affected pursuant to Section 426(6)(a).
The Protected Industrial Action and Resulting Impact
[18] The Applicant argued that the contemporaneous overtime ban had the following effect
on its operations as set out below.
“The following impacts have been incurred by Linfox and its customers as a result of
this industrial action:
(a) Cancelled 2 Rockhampton – Gladstone shunt services due to insufficient
train crew (resulting in road transport costs borne by Linfox);
(b) Termination of a Central West service at Emerald (en route to Longreach)
due to insufficient train crew (resulting in road transport costs borne by
Linfox);
[2019] FWC 3653
6
(c) Left freight behind due to insufficient train crew (resulting in delays to
freight availability);
(d) 24 hour delay to a southbound train out of Mackay scheduled for Brisbane
due to insufficient train crew (resulting in delays to freight availability).”vi
The evidence relevant to Section 426(4)(a) to (d) in addition to the evidence of the extent of
the threat of the protected industrial action was taken into account.
[19] At the point in time of the hearing, employees of Aurizon had engaged in the
following protected industrial action which the Applicant argued had affected the Linfox
intermodal operations in the following ways:
“To date, employees of Aurizon have taken protected industrial action which has
affected Linfox's operations:
(a) Acacia Ridge / Maryborough Operations – 24 hour work stoppage from
12.00pm Tuesday 23rd April;
(b) Rockhampton Operations – 24 hour work stoppage from 12.00pm
Wednesday 24th April;
(c) Mackay / Townsville Operations – 24 hour work stoppage from 12.00pm
Thursday 25th April; and
(d) 7 day overtime ban commencing from the midpoint of the work
stoppages.”vii
[20] As a result of this protected industrial action it was also argued by the Applicant that
this had caused the following impacts on the Applicant’s operations and its customers:
“ …
(a) 14 train service cancellations (4 Seafreighter, 6 Superfreighter, 4
Rockhampton to Gladstone shunts) along with a number of rescheduled
train services.
(b) Many Superfreighter customers experienced a 1-2 day delay in standard
transit times.
(c) Seafreighter customers experienced delays in transit times resulting from
cancelled services, and the largest customer of this service also incurred
road transport expenses with another transport operator.
(d) Linfox incurred additional expenses of approximately $43,000 in the form
of overtime costs and alternative rail operator linehaul charges relating to
this event.
(e) Revenue loss from customers who moved their freight with other transport
operators.”viii
[2019] FWC 3653
7
[21] At the time of the hearing protected industrial action had been notified to Aurizon by
the Unions, in the form of a 48 hour stoppage of work immediately following the overtime
ban. The Applicant set out the estimated impact of this notified industrial action in the
following terms:
“It is estimated that the impacts of this event will be significant:
(a) Seafreighter: Cancellation of 2 train services; 2 train services also need to
be rescheduled with a 24 hours delay for customers;
(b) Superfreighter: Cancellation of 10 train services with no train services
departing on Tuesday / Wednesday. Monday train services also need to be
rescheduled to less convenient departure times;
(c) Central West: 24 hour delay in 2 train services.”ix
[22] Furthermore, the Applicant argued that the impact of this future protected industrial
action would be heightened, due to the scheduled track closures by Queensland Rail in June,
which would cause the loss of four train services, four Seafreighter and 10 train services for
Superfreighter. In combination with the impact of the then current, past and future protected
industrial action, it was argued that the harm that the business was being subjected to was out
of the ordinary, given that the company and its customers had also been significantly affected
by the extraordinary flooding event in North Queensland in February 2019 and the associated
track closures that occurred. It was set out that the harm caused by the combination of all of
these events was over and above the sort of loss, inconvenience or delay that is commonly a
consequence of industrial action. The Applicant explained the joint impact, in the following
terms;
“Costs are being borne by Linfox and its customers considerably above the standard
costs for standard rail delivery. For Linfox, this involves additional labour costs as
well as loss of revenue. The costs being borne by Linfox's customers will invariably be
passed on to consumers.
The fledgling business has already been impacted by other events since it was
purchased by Linfox in February 2019 and that has diminished Linfox's ability to
grow its business. When those events are combined with the real impacts of the
industrial action which has already occurred and the potential for further industrial
action to take place, this creates the potential for customers to transfer their freight
movement from rail to road due [sic] which may damage the ongoing viability of the
enterprise.
Whilst all efforts are taken to ensure safety throughout Linfox's operations, the risk
profile may be increased where work is having to be performed outside of the standard
operating practices.”x
[23] The evidence of Mr Aaron Carter (General Manager - Train Services) for the
Applicant, was that Linfox conducts competitive supply chain solutions across Australia and
that Linfox acquired Aurizon’s Queensland intermodal operations (including its network of
depots, rail wagons and rail containers) on 1 February 2019. Mr Carter set out that Aurizon
[2019] FWC 3653
8
had been operating in uncertain circumstances and that the purchase of the Aurizon business
by Linfox had saved some 300 jobs across Queensland. He stated that via these new
operations the company now operates a range of transport services for its customers.
“Linfox's standard train services schedule is as follows:
(a) 10 Seafreighter train services per week between Central Queensland and
the Port of Brisbane;
(b) 34 Superfreighter train services per week between Acacia Ridge and North
Queensland; and
(c) 4 Central West train services per week between Rockhampton and
Longreach.”xi
[24] Mr Carter detailed the recent impact on the newly acquired business; from the
protected industrial action, the flooding event and the associated disruption to the transport
operations and its customers was as follows:
“Immediately following Linfox's acquisition of Queensland Intermodal from Aurizon,
Linfox was faced with a substantial flood event in North Queensland in February 2019
that closed sections of the rail line for 3 weeks as well as significant components of the
North Queensland road network. Linfox's customers experienced significant impacts
as a result of this event:
(a) Delays in freight travelling to or from any destination north of Mackay for
all customers (delays of approximately 2 weeks for Townsville and 3 weeks
for Cairns);
(b) Significant cost increases in freight transported by Linfox via road through
the weather event (approximately $1,000,000 premium to standard rail costs
was paid by customers);
(c) Other road transport costs borne by customers as a result of sourcing
alternative transport operators.
In total, Linfox lost 32 train services due to this flood event in February 2019.
There has also been an unusually high number of planned track possessions by
Queensland Rail since Linfox's acquisition of Queensland Intermodal as follows:
(a) 16 to 19 February 2019;
(b) 10 to 13 March 2019; and
(c) 6 to 9 April 2019.
Queensland Rail's planned track closures for maintenance works are necessary events
to ensure the condition of the track. However, the frequency of these track closures in
[2019] FWC 3653
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the first half of 2019 has been much higher than in previous years, resulting in greater
impacts to Linfox and its customer base.
Each planned track closure has seen the loss of 4 Linfox Seafreighter services, which
has created material disruption for key Central Queensland exporters that rely on this
service. This disruption is in the form of missing connecting vessels at the Port of
Brisbane, road transport costs and container demurrage and storage costs.
These events have also seen the loss of weekend Superfreighter train services which
has required the use of more costly road transport services by large retail customers.
Linfox also experiences revenue loss as a result of these events, for example, rail
freight volumes will often leak to other road transport operators.
In total, Linfox has lost 34 train services due to planned track closures in the months
of February, March and April 2019.
…
I am aware that Aurizon is currently engaged in enterprise bargaining with its
employees who are working in Aurizon’s Bulk Business Unit, for whom the Australian
Federated Union of Locomotive Employees (AFULE) and the Australian Rail, Tram
and Bus Industry Union (RTBU) act as Bargaining Representatives.
Those train crew and terminal operations employees are directly engaged in work for
Aurizon which impacts on Linfox's train services.
Stoppages by Aurizon staff impacts on Linfox's train services in the following ways:
(a) The train services cannot be run, which means that Linfox is unable to
transport customer freight on the train service at scheduled times, or is
required to transport that freight via road services; and
(b) There is a reduced operational capability at the terminals which are
operated by Aurizon.”xii
[25] Mr Carter stated the industrial action had resultant effects on their customers such as:
“(a)Major retail customers on Superfreighter services are required to
reschedule store ordering parameters and distribution centre operations to
enable freight to be 'brought forward' to meet earlier train services, in some
cases by up to 48 hours. This has a cost impact in the form of additional
labour and overtime.
(b) Further, these customers may choose to accept deferred deliveries of
product into their stores in North Queensland. This has a cost impact in the
form of additional labour and overtime and may also have revenue and
market share implications for the customer.
(c) Further, in order to meet store requirements, road transport will also be
arranged for the linehaul component of the transport task through the
[2019] FWC 3653
10
period of the stoppage. Given the short notice period, this road transport
service comes at a significant cost premium to standard rail services.
(d) Major Seafreighter customers experience a range of impacts, including
road transport costs, missed vessels at the Port of Brisbane, container
demurrage / storage costs and potentially a lower sale price for their
products in their export markets.”xiii
[26] He stated these were only some of the costs imposed due to delivery delays to
customers.
[27] Mr Carter’s evidence pointed to the possible effects of this disruption to the business
as follows:
“(a) Risk to the business in being unable to provide the transport service, which
may see customers leave to one of Linfox's competitors or Linfox not
reaching key performance indicators in contracts with certain customers;
(b) An inability to grow the business by attracting new volumes whilst the risk
of service interruption is prevalent;
(c) Revenue loss as a result of customers seeking alternative operators during
the period of the industrial action. For example, for fresh produce, for each
day a scheduled train service is not operated, this is a loss of
approximately $30,000 in revenue to Linfox;
(d) Linfox will incur additional costs, in the form of road transport costs and
labour / overtime as a result of having to roster work around the proposed
stoppages; and
(e) Elevated safety risk as a result of operations occurring in an environment
that is not regarded as business as usual operations.xiv
[28] He particularised the first round of protected industrial action (repeated here for
convenience) as follows and stated it had the following impacts:
“In or around mid-April 2019, Linfox received notice from Aurizon that it had received
notice of planned protected industrial action involving train drivers and terminal
operators for the following operations:
(a) Acacia Ridge / Maryborough Operations – 24 hour work stoppage from
12.00pm Tuesday 23 April 2019;
(b) Rockhampton Operations – 24 hour work stoppage from 12.00pm
Wednesday 24 April 2019;
(c) Mackay / Townsville Operations – 24 hour work stoppage from 12.00pm
Thursday 25 April 2019; and
(d) 7 day overtime ban commencing from the midpoint of the work stoppages.
[2019] FWC 3653
11
The following impacts were incurred by Linfox and its customers as a result of this
industrial action:
(a) 14 train service cancellations (4 Seafreighter, 6 Superfreighter, 4
Rockhampton to Gladstone shunts) along with a number of rescheduled
train services.
(b) Many Superfreighter customers experienced a 1-2 day delay in standard
transit times and additional costs to manage the pull forward or push back
of freight despatch.
(c) Seafreighter customers experienced delays in transit times resulting from
cancelled services, and the largest customer of this service also incurred
road transport expenses with another transport operator.
(d) Linfox incurred additional expenses of approximately $43,000 in the form
of overtime costs and alternative rail operator linehaul charges relating to
this event.
(e) Revenue loss from customers who moved their freight with other transport
operators.”xv
[29] Mr Carter also addressed the second round of protected industrial action being the
then current overtime ban and the third proposed or notified round of protected action in terms
of a 48 hour stoppage which together he stated had the following effect:
“(a) Cancelled 2 Rockhampton to Gladstone shunt services due to insufficient
train crew (resulting in road transport costs borne by Linfox);
(b) Termination of a Central West service at Emerald (en route to Longreach)
due to insufficient train crew (resulting in road transport costs borne by
Linfox);
(c) Left freight behind due to insufficient train crew (resulting in delays to
freight availability);
(d) 24 hour delay to a southbound train out of Mackay scheduled for Brisbane
due to insufficient train crew (resulting in delays to freight availability).
…
It is estimated that the impacts of this event will be significant:
(a) Seafreighter: Cancellation of 2 train services; 2 train services also need to
be rescheduled with a 24 hours delay for customers;
(b) Superfreighter: Cancellation of 10 train services with no train services
departing on Tuesday / Wednesday. Monday train services also need to be
rescheduled to less convenient departure times;
[2019] FWC 3653
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(c) Central West: 24 hour delay in 2 train services.
The compounding factor is that the proposed industrial action will occur just prior to
a pre-planned Queensland Rail track closure scheduled for 1 June 2019 to 4 June
2019, which by itself sees the following impact:
(a) Seafreighter: Loss of 4 train services;
(b) Superfreighter: Loss of 10 train services.
The cumulative impact is therefore:
(a) Seafreighter: Only 6 train services will operate in a period in which 12
services would normally operate (a 50% reduction in train capacity);
(b) Superfreighter: Reduction of 20 train services during a 7 day period.”xvi
[30] Mr Carter stated that the combined effects of the protected industrial action referred to,
resulted in a cost of approximately an extra $500,000 in road Transport costs to be borne by
Linfox and its customers and an increased cost of $25,000 for extra labour and overtime
during the period of the stoppage, associated road expenses of at least $100,000 and delays to
customer transit times based on train capacity constraints. This provided concerns for
customers to terminate their contracts or transfer their freight movement from road to rail and
resulted in pressure on a new ‘fledgling’ business, with the capacity to cause reputational
issues, relating to reliability and potential safety risks across the operation.
[31] The Respondent’s argued that the employees could not be held responsible for the
effects of the flooding or the financial position of the Aurizon business operations at the time
that Linfox acquired the business. They also strongly argued that the impacts complained of,
were nothing more than would be regularly experienced in response to protected industrial
action of this nature and such could not be considered to be of ‘significant harm’. Further, it
was emphasised that their members were entitled to take protected industrial action as set out
in the legislative scheme and that to issue the Order as sought would be in conflict with the
Section 3 Objects of the Act, that provided for the facilitation of enterprise agreements.
[32] The Unions also argued that they had been negotiating in good faith with Aurizon and
that whilst there had been 30 meetings, it was Aurizon that had not responded to the offers
arising from the last meetings. Whilst the Applicants characterised the negotiations as being
in a deadlock, the correspondence received from Aurizon to the Commission and parties, prior
to the commencement of the hearing (which stated as follows) was not indicative of
bargaining parties who were failing to continue negotiations:
“Aurizon Bulk bargaining
27 May 2019
Dear Owen / Mick
[2019] FWC 3653
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I refer to the Witness Statement of Les Moffitt filed in Matter No B2019/422 in which
he states that the RTBU and AFULE have received no response from Aurizon on a
union proposal to roll over the current Aurizon Train Crew and Transport Operations
Enterprise Agreement 2015.
I regret any inconvenience caused to the union parties through any misunderstanding
on Aurizon’s part of the expectations arising from the round of bargaining meetings
which concluded on 16 May 2019.
Aurizon is happy to meet with the unions at your earliest convenience to progress
discussions around a mutually acceptable rollover arrangement.
Yours sincerely
David Johnston
Principal Advisor Employee Relations”
The Application, Section 426 and ‘Significant harm’
[33] Mr Williams set out that his client Linfox was the quintessential innocent, third party
with limited rights under the Act and was suffering harm as a result of the significantly
disrupted services by the industrial action, being taken by the two Respondent Unions against
Aurizon. The application, he stated provided capacity for the Commission to provide respite
to such a third party, where it was appropriate and in the public interest to make an Order to
suspend the industrial action.
[34] As set out, the initial jurisdictional element of Section 426(1) was met, such that;
protected industrial action was being engaged in in terms of the then current overtime ban.
Further, the terms of Section 426(2) were met; the employer Aurizon is subject to the negative
impact of the industrial action. Aurizon and its employees will be covered by the Agreement
and the employees were adversely affected, losing wages as a result of the protected industrial
action.
[35] In terms of Section 426(3), satisfaction must be grounded on whether the protected
industrial action is threatening to cause ‘significant harm’ to ‘any person’, other than a
bargaining representative of an employee covered by the Agreement. Mr Williams stated that
the only jurisdictional threshold in terms of the quality of the harm in subparagraph three of
Section 426, is that it must threaten to cause ‘significant harm’ to the Applicant. On that basis,
Mr Williams was asked (as is relevant to examining Section 426 of the Act and the context of
the harm) about the specific corporate entity of his client. His submissions referred to the
significant harm on the ‘fledgling business’ he referred to as the recently purchased
Queensland intermodal service of Aurizon. This business, he confirmed, was an operating
division of the Parent Corporation. The Unions had similarly raised for consideration this
context of the harm, against the Applicant’s commercial entity.
[36] The central issue is the assessment of whether the industrial action is causing
‘significant harm’, to justify an Order pursuant to s.426. In referring to the Full Bench
authority in Woodside Burrupxvii, Mr Williams correctly confirmed that this decision has been
the leading Full Bench authority for some nine years and that a subsequent Order pursuant to
section 426 had never been granted. His argument was that this was so, as the bar set out in
this Full Bench decision, for the test of ‘significant harm’, was perceived to be very difficult
[2019] FWC 3653
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to meet. He conceded that such Section 426 applications are very rare, but stated that this may
be a product of the high bar, in relation to the circumstances of the test for ‘significant harm’
set in that Full Bench decision. In this regard, in referring to the case of Woodside Burrupxviii
he stated:
“… the Full Bench suggested a very high bar in a circumstance where millions of
dollars was being lost on an ongoing basis by Mammoet and that was found not to be
significant. We make two submissions about Woodside Burrup. The first is that if you
take it as an entirely correct statement of the law, significant damage is being caused
and is threatened to be caused to my client, even within the test as it was enunciated in
Woodside Burrup, having regard to the context, which the Full Bench decision accepts
is always important.
But our second submission is that the Full Bench decision represents an erroneous
interpretation of section 426 sub-section (3) …”xix
[37] In his submission on the benchmark adopted on the term ‘significant harm’, Mr
Williams submitted that the interpretation of this term is a matter of law and in that regard
referred to the Full Bench reasoning on the ‘significant harm’ test as follows:
“‘Resort maybe had to extrinsic material including the explanatory
memorandum to assist in ascertaining the purpose of an Act, the mischief it
was intended to overcome and its purpose or object, and in the particular
circumstances identified in section (a)(b) of the Acts Interpretation Act to
determine the meaning of the provision when the provision is ambiguous.’
We don't quibble with any of that. There is then reference to two of the primary
submissions in the area of statutory interpretation, the CIC Insurance matter, and…
Project Blue Sky. And in Project Blue Sky, as the High Court said:
‘The primary object of statutory construction is to construe the relevant
provisions so that it is consistent with the language and purpose of all of the
provisions of the statute.’
And I pause to emphasise that the Full Bench found ambiguity and for reasons I'll
explain, that was erroneous. But the Full Bench also referred to a context including
the context that protected industrial action under the Fair Work Act was a tool which
industrial parties were given and which they were designed to have the ability to
exercise, even if it caused harm. And reference was had to the situation as it applies
between the direct parties to the industrial action, and that was said to be part of the
context in explaining how section 426 should apply. In our submission that's
erroneous, as well, because section 426 is about the protection of the rights of
innocent third parties, who as I've said, have none of the influence or the counter
weapons or even the notification obligations which are given to the parties,
themselves.
It was erroneous for the Full Bench to find that there was a harmony, or there should
be an interpretation which provided for an harmonious interpretation of section 426
having regard to the way that the legislation treated the parties, themselves. To the
contrary, the context is that the legislation has accepted that there will be innocent
[2019] FWC 3653
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third parties who are affected, and section 426 was designed to give the Commission a
remedy not available as between the industrial parties, themselves, to provide for
some respite to a party who is being innocently damaged in the way my client is.
But going onto the other purpose which is to identify and resolve ambiguity, at
paragraph 24, … the Full Bench said this:
‘As to the ordinary English meaning of the word, "significant," as noted by the
Deputy President, the relevant ordinary English meaning as defined in the
Macquarie dictionary is, "importance of consequence."’
And that's correct. And that's as far as the Full Bench should have taken the matter of
ambiguity. Because "significant" has a perfectly plain English language definition. It
is not an ambiguous phrase or term. It does have to be applied in context and it
appears to me that that's the issue which led the Full Bench into error. It has to be
applied in context. But the term itself is plain and unambiguous. And as a term which
is plain and unambiguous it was unavailable to the Full Bench to have reference to
extrinsic material, including the memorandum which was the relevant extrinsic
material - - -…”xx
(emphasis added)
[38] In further referring to the Full Bench decision at paragraph [38] on page 372xxi, Mr
Williams stated:
“‘Due to the context of the Act as a whole and having regard to the legislative
purpose behind the regime in the Fair Work Act for the taking of protected
industrial action as a means of advancing claims for an enterprise agreement
as the vehicle through which employees are able to seek improvement in their
terms and conditions of employment, the precise meaning intended by the
parliament in using the expression, "significant harm," in section 426 sub-
paragraph (3) is unclear.’
I pause to note that the context in which the Full Bench made that finding which we
say is unavailable in any event, was the context of the rights and obligations which
apply as between the direct industrial parties, not the rights and protections available
to innocent third parties. So the context was not apposite to the finding that the Full
Bench made. The Full Bench went on:
‘The ordinary meaning provides insufficient guide to distinguish what harm is
significant for the purposes of section 426, since most industrial action
threatens harm which is "important," or "of consequence" to the bargaining
parties and also often to third parties.’
Now that is a plain statement of fact. But the definition which the Full Bench correctly
found was that a correct English definition of "significant" was "important or of
consequence." And it wasn't for the Full Bench with respect of them, of course, to find
that parliament intended something different to that which the plain English definition
required. All that's required under section 426 is that the threatened harm be
significant. And then over the page they went on to say that:
[2019] FWC 3653
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‘This ambiguity activates an entitlement to have regard to the explanatory
memorandum pursuant to section 15(a)(b).’
Commissioner, we say that was an error. There was no trigger for resort to the
explanatory memorandum. And by reference to another authority I'll explain why that
would not have been of any assistance, in any event.
…
‘Just as that Full Bench considered that the power in section 424 was intended
to be used only in "exceptional circumstances," we consider that the power
under section 424 is likewise, likewise intended only to be used in exceptional
circumstances.’
That was also in error. The Full Bench was considering two entirely different
protective regimes, one which applied between the parties who had the power to
control their own destiny, and one to protect innocent third parties. And the difference
is very clear.
‘That outcome is determined by a proper construction of the expression,
"significant harm," and also by a proper appreciation of when it will be
appropriate to make an order.’
And we agree with the second part of that. At paragraph 44:
‘When regard is had to the context of the Fair Work Act as a whole, and to the
explanatory memorandum, the expression of "significant harm" in section 426
sub-paragraph (3) should be construed as having a meaning that refers to
harm that has an importance or is of such consequence that it is harm over and
beyond the sort of loss, inconvenience or delay that is commonly a
consequence of industrial action.’
Commissioner, we say that is plainly wrong because it calls for the Commission to do
a comparison, relative comparison between the impact which is actually being
suffered or which is threatened to be suffered, and a concept which is impossible to
define of what the ordinary impact of industrial action would have. Now that's an
impossible task for the Commission to be given which may explain in part why there
are so few orders made under section 426.
Not only is it impossible but it is a comparison, a command to do a relative
comparison between an actual and a theoretical which is not to be found in section
426, or in any other part of the Fair Work Act. The only threshold in section 426 sub-
paragraph (3) is that that harm be significant. There is no warrant and certainly no
mechanism for the Commission to hypothesise a so-called status of normal impact,
and then to compare the two. There are no words, or no machinery of comparison in
section 426. The Full Bench went on:
[2019] FWC 3653
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‘In this context the word, "significant," indicates harm that is exceptional in its
character or magnitude when viewed against the sort of harm that might
ordinarily be expected to flow from industrial action in a similar context.’
One does not find the word, "exceptional" in section 426(3) and as I said, nor does
one find the mechanism for doing the kind of comparison that the Full Bench found
had to be done, if in fact there would be any way for the Commission to do that. Then
further down, Commissioner, at the end of paragraph 44 the Full Bench made a
statement which we do embrace, to this effect:
‘In assessing whether there is significant harm, context is also important. A
particular quantum of financial loss may constitute significant harm in one
context, but not in another.’xxii
[39] Further to this Mr Williams stated that in regard to the Full Bench’s suggested
erroneously decided basis for the term significant harm, he posited that in the assessment of
whether significant harm has occurred; context is important. His submission was that the
context was not only important it was decisive. In comparing the current circumstances to
those considered in the Full Bench decision, that is financial loss, he stated maybe considered
to be significant in one circumstance (such as the significant amounts of loss in the order of
$3.5 million plus per day in Woodside Burrup) but not so in another circumstance.
[40] He submitted, in this regard:
“… Woodside Burrup decision was determined in the context of a construction project
involving many, many, many billions of dollars' worth of infrastructure in
circumstances where the losses were in the six figures but the Full Bench found that in
the context of the project as a whole, it was not significant. It also found that what was,
in effect, happening was the kind of delays that as they found, at least, were commonly
the case in construction projects for all sorts of reasons, not just industrial relations,
that the parties, impliedly, at least, the parties must be take to have ordered their affairs
on the basis that might be likely. There was … a finding that no party was suggesting
its viability was being threatened. And they also found at paragraph 58 that Woodside
Burrup was essentially a player in the process because, as they said:
‘While technically a third party is not the usual position of a third party, the
evidence demonstrated unsurprisingly that pursuant to the relevant subcontract
that Woodside exercised very significant control over Mammoet in relation to
industrial relations. Woodside retained a right of veto over any industrial
agreement that Mammoet could enter into in relation to the project. Mammoet
was required to engage an industrial relations advisor acceptable to
Woodside.’
And so on. So in all of that relevant context, including the finding that Woodside
Burrup was perhaps playing a bit of a shadow game in the whole process, it was found
that the impact on Woodside was not significant, and in doing so, Commissioner, we
suggest they applied the wrong test. But even if they didn't, the issue of what's
significant in my client's situation is very different …”xxiii
[2019] FWC 3653
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[41] Mr Williams argued that in the case of Woodside the Full Bench had set the standard
for significant harm at an inappropriate benchmark. In that matter, in terms of background of
the proceedings, the Full Bench set out:
“[6] Woodside is undertaking a very large natural gas development on the Burrup
peninsular in Western Australia know as the Pluto project (Project). The Project has
on-shore and off-shore components. The construction of the on-shore components of
the Project is said to have a value of $9 billion. A major on-shore component is the
construction of what is known as an LNG processing train. It is consists of a series of
modules that have been constructed off site, transported to the site, lifted into position
and then connected together. Mammoet has the heavy lifting subcontract for the
Project and is responsible for lifting the modules into place. UGL Resources Pty Ltd
(United) is the major mechanical subcontractor on the Project and is responsible for
installing the necessary pipework and other physical connections between modules in
the LNG processing train. Kentz E& C Pty Ltd (Kentz) is the main electrical
subcontractor on the Project and is responsible for electrical installation in relation to
the LNG processing train.
[7] Speaking broadly, United cannot commence the major work it has to perform on a
module until the module has been lifted into place by Mammoet and Kentz cannot
commence the major work it has to perform on a module until United has finished its
major work on the module.”xxiv
(footnotes omitted)
[42] In the primary decision of Deputy President McCarthy it was set out:
“[18] The core of the decision commences at paragraph [69] under the heading
“Conclusion”:
“[69] In the context of s.426 of the FW Act I consider protected industrial
action to be "threatening" to cause harm if I consider that harm is likely to
occur. The meaning of threatening in the context of s.426 I take to mean that
the protected industrial action is likely to injure or be a source of danger to a
third party being harmed. The threatening harm also needs to be significant.
Indeed the primary argument of the CFMEU was not so much that harm was
not occurring, nor that it was not likely. Their main contention was that any
harm would not be significant.
[70] The Macquarie Dictionary defines significant as being of important or of
consequence. The Explanatory Memorandum to the Fair Work Bill 2008 states,
in respect of s.426, that:
“The purpose of this clause is to provide FWA with a means to address
significantly serious impacts that industrial action is having on the
welfare of third parties. It allows for a respite from industrial action
which is causing them significant harm. The harm to the third party
would need to be significant, that is a more serious nature than merely
suffering of a loss, inconvenience or delay. Therefore, it is anticipated
[2019] FWC 3653
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that FWA would suspend industrial action on this basis only in very rare
cases.”
[71] In this matter I consider the harm to be serious. The project is large, there
are interdependencies between contractors and the sequential nature of the
work deriving from those interdependencies are critical and complex. Those
interdependencies and the evidence relating to those interdependencies were
summarised by Mr Meehan as:
1. The relevant United work cannot commence until completion of the
relevant work by Mammoet;
2. Kentz work cannot commence until completion of the relevant work by
United;
3. Commissioning and start up work cannot commence until completion of the
relevant work by Mammoet, United and Kentz.
[72] The CFMEU endeavoured to portray any potential losses as not being
substantial or significant. The potential losses in my view are substantial and
appear to me to have a chain reaction effect. The more each aspect of delays
impacts on the interdependencies between the third parties.
[73] I am also satisfied from the evidence that the threatening harm is more
than an inconvenience. The incapacity to perform some works at all, the
rescheduling of works and the lack of efficient utilization of labor goes far
beyond being an inconvenience and goes to the capacity to perform important
and critical works. The delays likely to be caused are also not insignificant or
ordinary ones particularly because of the interdependencies between the
contractors.
[74] The extent of the harm to the supply of services and the capacity to fulfill
contractual obligations are substantial. It is difficult to make any assessment of
the extent of economic losses, particularly as it is unclear as to who would be
liable for any of those losses given the contractual relationships between the
third parties. Suffice for me to say that I consider the economic losses likely to
be incurred to be significant regardless by whom they would eventually be
borne by.
[75] I find that the supply of goods or services to the enterprises of Kentz and
United is threatening to be disrupted and that the extent of disruption
threatened is substantial. I also find that economic loss is threatened to be
caused to most likely all of the third parties and that the extent of the economic
loss is likely to be substantial. I also find that the protected industrial action is
threatening to cause Kentz and United to have a reduced capacity to fulfil their
contractual obligations and that the extent of that reduced capacity is
substantial.
[76] I therefore find that as a consequence of the protected industrial action
significant harm is threatening to be caused to Woodside, Kentz and United.
[2019] FWC 3653
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[77] I do not consider that the issuance of an order suspending the protected
industrial action would be contrary to the public interest. I have had regard to
the objects of the FW Act and the fact that there has been nothing unlawful or
improper in the actions of the employees or the CFMEU and its officials in
their conduct to date. However the extent of and significance of the harm that
is threatened to be caused to the third parties is significant and in my view
causes it to be appropriate to issue an order suspending protected industrial
action
[78] I therefore am of the view that the requirements of s.426 have been met.
[79] I considered the term of the suspension and, in particular, whether the
suspension should be confined to the period of the protected industrial action
currently being taken. In considering that I also had regard to the taking of the
employer response action by Mammoet. However having taken those matters in
the context of the history of the negotiations and the nature of the project with
the interdependencies and critical path timelines I decided that the term sought
by the applicants’ was appropriate, namely three months. I have however
provided a liberty for any party to seek to have the order varied.” xxv
(footnotes omitted)
[43] The Full Bench in considering the appeal from that decision stated:
“[19] Although s.426(1) is expressed in mandatory terms (that is, FWA “must” make an
order suspending the relevant protected industrial action if the requirements set out in
s.426 are met), the requirement in s.426(3) that FWA be “satisfied” that the protected
industrial action is “threatening to cause significant harm” to a relevant person and
the requirement in s.426(5) that FWA be “satisfied” that the suspension is
“appropriate” having regard to whether the suspension would be “contrary to the
public interest” and “any other matters that FWA considers relevant” mean that a
decision to make an order pursuant to s.426 suspending protected industrial action is
properly characterised as a discretionary decision”xxvi
[44] In the Full Bench decision it was affirmed that the focus of the arguments of appeal
was the proper meaning of the expression ‘significant harm’ in s.426(3) of the Act. Such also
became a focal point in the submissions of the Applicant in the current matter.
[45] The Full Bench on this matter set out:
“[21] In construing a provision of an Act, the task is to ascertain the intention of the
parliament. The starting point is always the ordinary English meaning of the words of
the provision. However, a provision of an Act must always be construed in the context
of the Act as a whole and account must always be taken of the purpose of the Act: a
construction that would promote the purpose or object underlying the Act (whether
that purpose or object is expressly stated in the Act or not) shall be preferred to a
construction that would not promote that purpose or object. Resort may be had to
extrinsic materials, including the explanatory memorandum, to assist in ascertaining
the purpose of an Act (the mischief it was intended to overcome and its purpose or
objects) and in the particular circumstances identified in s.15AB of the Acts
[2019] FWC 3653
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Interpretation Act 1901 which, relevantly for present purposes, include to determine
the meaning of a provision when the provision is ambiguous.
[22] In CIC Insurance Ltd v Bankstown Football Club Ltd 12 Brennan CJ, Dawson J,
Toohey J and Gummow J observed:
“It is well settled that at common law, apart from any reliance upon s 15AB of
the Acts Interpretation Act 1901 (Cth), the court may have regard to reports of
law reform bodies to ascertain the mischief which a statute is intended to cure.
Moreover, the modern approach to statutory interpretation (a) insists that the
context be considered in the first instance, not merely at some later stage when
ambiguity might be thought to arise, and (b) uses "context" in its widest sense
to include such things as the existing state of the law and the mischief which,
by legitimate means such as those just mentioned, one may discern the statute
was intended to remedy. Instances of general words in a statute being so
constrained by their context are numerous. In particular, as McHugh JA
pointed out in Isherwood v Butler Pollnow Pty Ltd, if the apparently plain
words of a provision are read in the light of the mischief which the statute was
designed to overcome and of the objects of the legislation, they may wear a
very different appearance. Further, inconvenience or improbability of result
may assist the court in preferring to the literal meaning an alternative
construction which, by the steps identified above, is reasonably open and more
closely conforms to the legislative intent.”
(footnotes omitted)
[23] In Project Blue Sky v Australian Broadcasting Authority McHugh, Gummow,
Kirby and Hayne JJ said:
“The primary object of statutory construction is to construe the relevant
provision so that it is consistent with the language and purpose of all the
provisions of the statute. The meaning of the provision must be determined "by
reference to the language of the instrument viewed as a whole". In
Commissioner for Railways (NSW) v Agalianos, Dixon CJ pointed out that "the
context, the general purpose and policy of a provision and its consistency and
fairness are surer guides to its meaning than the logic with which it is
constructed". Thus, the process of construction must always begin by
examining the context of the provision that is being construed.”
(footnotes omitted)
[24] As to the ordinary English meaning of the word “significant”, as noted, by the
Deputy President, the relevant ordinary English meaning, as defined in the Macquarie
Dictionary, is “important; of consequence”.
[25] Turning to the context of the Act as a whole, we note first that for many decades
prior to the WorkChoices amendments to the Workplace Relations Act 1996 (WR Act),
the Australian Industrial Relations Commission and its predecessors had the power to
settle (interstate) industrial disputes through compulsory arbitration. Where a dispute
over terms and conditions of employment was resolved by arbitration this occurred
[2019] FWC 3653
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through the making of an award, binding the disputants, that had statutory effect. That
long standing power to settle disputes by compulsory arbitration was essentially
removed by the WorkChoices amendments to the WR Act and has not been restored by
the FW Act. Rather, enterprise bargaining may now be seen as a central component of
the industrial relations regime provided for in the FW Act by which employees may act
collectively to secure improvements in their terms and conditions of employment.
[26] Industrial action is defined broadly in s.19 of the FW Act. Section 408 defines
“protected industrial action”. Subject to various requirements, industrial action taken
for the purpose of advancing claims for a proposed enterprise agreement is “protected
industrial action”. FW Act which confers immunity from civil action in relation to
protected industrial action (s.415). The taking of industrial action that is not protected
industrial action is effectively proscribed. Once an enterprise agreement has been
made and approved, any industrial action taken by employees covered by the
agreement before the nominal expiry date of the agreement will be unprotected
(s.417). A person affected by unprotected industrial action that is happening,
threatened pending, probable or being organised can apply to FWA for an order that
the industrial action stop, not occur or not be organised. If FWA is satisfied that
industrial action, that is not, or would not be, protected industrial action, is that
happening, threatened pending, probable or being organised then FWA must make an
order that the industrial action stop, not occur or not be organised (s.418).
Contravention of such an order is prohibited and both civil remedies and injunctive
relief are available for such a contravention (s.421) and, in the case of injunctive
relief, with all the consequences that flow from breaching an injunction.
[27] Protected industrial action in support of claims for an enterprise agreement, as
authorised by the FW Act, is the only lawful mechanism available to employees to
achieve improvements to wages and conditions that an employer is not otherwise
prepared to agree to.
[28] The FW Act makes provision for the suspension or termination of protected
industrial action in certain circumstances. FWA has been given the power to suspend
or terminate protected industrial action where such action
(a) is causing or threaten to cause “significant economic harm” to any
employer or employees who will be covered by the proposed enterprise
agreement, provided such harm is imminent (s.423); or
(b) has threatened, is threatening or would threaten to endanger the life, the
personal safety or health, or the welfare, of the population or a part of it; or to
cause “significant damage” to the Australian economy or an important part of
it (s.424); or
(c) is threatening to cause significant harm to a third party (that is, a person
other than a bargaining representative for the proposed agreement or an
employee who will be covered by the proposed agreement) (s.426).
…
[2019] FWC 3653
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[32] The power conferred by s.426 of the FW Act is a power to suspend protected
industrial action on the basis of significant harm to a third party. There is no power
conferred on FWA to terminate protected industrial action the basis of significant
harm to a third party. Importantly, there is no provision for a workplace
determination where an order suspending protected industrial action is made under
s.426.
[33] The absence of a power in FWA to terminate protected industrial action on the
basis of significant harm to a third party (as distinct from suspend protected industrial
action on that basis) and the fact that only one suspension on that basis may be
ordered are matters of particular significance in the present context. It is to be
inferred that Parliament did not intend that protected industrial action should be
terminated on the basis of harm to third parties unless that harm, actual or threatened,
can be brought within the circumstances in identified in s.423 or s.424 or unless the
Minister can be persuaded to make a declaration pursuant to s.430. This suggests, as
is emphasised in the Explanatory Memorandum, that Parliament intended that a
suspension under s.426 to provide a single instance of temporary respite for third
parties from the adverse effects of protected industrial action.”xxvii
(footnotes omitted)
[46] The Full Bench referred to the relevance of Section 3(a)(f) and (g) of the Act which
are set out below.
“Object of this Act
The object of this Act is to provide a balanced framework for cooperative and
productive workplace relations that promotes national economic prosperity and social
inclusion for all Australians by:
(a) providing workplace relations laws that are fair to working Australians, are
flexible for businesses, promote productivity and economic growth for Australia's
future economic prosperity and take into account Australia's international labour
obligations; and
…
(f) achieving productivity and fairness through an emphasis on enterprise-level
collective bargaining underpinned by simple good faith bargaining obligations
and clear rules governing industrial action; and
(g) acknowledging the special circumstances of small and medium-sized businesses.
[47] The objects include the facilitation of good faith bargaining, the making of Enterprise
Agreements and the associated right to take protected industrial action in support of claims for
an Enterprise Agreement.
[48] The Full Bench noted in relation to interpreting significant harm that:
[2019] FWC 3653
24
“[38] Viewed in the context of the Act as a whole, and having regard to the legislative
purpose behind the regime in the FW Act for the taking of protected industrial action
as a means of advancing claims for an enterprise agreement as the vehicle through
which employees are able to seek to achieve improvement in their terms and
conditions of employment, the precise meaning intended by the Parliament in using the
expression “significant harm” in s.426(3) is unclear. The ordinary meaning provides
insufficient guide to distinguish what harm is significant for the purposes of Section
426 since most industrial action threatens harm which is “important” or “of
consequence” to the bargaining parties and also often to third parties. This ambiguity
activates an entitlement to have regard to the Explanatory Memorandum pursuant to
s.15AB(1)(b)(i) of the Acts Interpretation Act 1901.
[39] The Explanatory Memorandum for the FW Act includes the following in the
introductory remarks in relation to Part 3-3 which deals with “Industrial Action”:
“Division 6 – Suspension or termination of protected industrial action by FWA
1706. Division 6 sets out the grounds upon which FWA may suspend or
terminate protected industrial action organised, or engaged in, in relation to a
proposed enterprise agreement.
1707. Suspension or termination of protected industrial action brings to an end
the right to take protected industrial action. Protected industrial action may be
resumed after any period of suspension, but will be subject to any requirements
for the giving of notice before any action may be taken. A termination of
protected industrial action may lead to FWA making a workplace
determination under Part 2-5.
1708. The Bill recognises that employees have a right to take protected
industrial action during bargaining. These measures recognise that, while
protected industrial action is legitimate during bargaining for an enterprise
agreement, there may be cases where the impact of that action on the parties
or on third parties is so severe that it is in the public interest, or even
potentially the interests of those engaging in the action, that the industrial
action cease — at least temporarily.
1709. It is not intended that these mechanisms be capable of being triggered
where the industrial action is merely causing an inconvenience. Nor is it
intended that these mechanisms be used generally to prevent legitimate
protected industrial action in the course of bargaining.
…
(emphasis added)
[40] The Explanatory Memorandum contains the following in relation to s.426:
“1726. FWA is required to suspend protected industrial action if action is
being engaged in and it is satisfied that (subclause 426(1)):
[2019] FWC 3653
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• the industrial action is adversely affecting any employer or any employee
who will be covered by the proposed enterprise agreement (subclause 426(2));
• the industrial action is threatening to cause significant harm to a person
other than a bargaining representative for the agreement or an employee who
will be covered by the agreement (subclause 426(3)); and
• it is appropriate to make the order, taking into account whether the
suspension would be contrary to the public interest as well as any other
relevant matters (subclause 426(5)).
1727. The factors that FWA may take into account when determining whether
protected industrial action is threatening to cause significant harm to a third
person are specified in subclause 426(4). They are:
• any potential damage to the ongoing viability of an enterprise carried on by
the third party;
• any threatened disruption to the supply of goods or services to an enterprise
carried on by the third party;
• any threatened reduction to the third party's capacity to fulfil a contractual
obligation; or
• any threatened economic loss to the third party.
1728. FWA may make the order on application by an organisation, person or
body directly affected by the industrial action, the Minister, or a person
prescribed by the regulations (subclause 426(6)). The Bill provides employees
with right to take protected industrial action in support of a proposed single
enterprise agreement. The purpose of this clause is to provide FWA with a
means to address significantly serious impacts that industrial action is having
on the welfare of third parties. It allows for a respite from industrial action
which is causing them significant harm. The harm to the third party would
need to be significant, that is a more serious nature than merely suffering of a
loss, inconvenience or delay. Therefore, it is anticipated that FWA would
suspend industrial action on this basis only in very rare cases.
1729. Protected industrial action cannot be terminated on this ground.” xxviii
(emphasis added)
[49] In terms of the impact of industrial action, the Full Bench further stated:
“[41] As members of a specialist industrial tribunal, we observe that effective
industrial action will almost always cause harm to the employer’s business which, in
turn, will frequently adversely affect third parties being the customers, clients or other
persons who depend upon the timely supply of goods or services by that employer. This
[2019] FWC 3653
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was recognised by Drummond J in FH Transport Pty Ltd v TWU where his Honour
observed:
“It is inevitable... that action engaged in directly by unions against very many
kinds of employer will, by disrupting the business operations of those
employers, also have a direct or indirect disruptive impact on the business and
other activities of third parties.”
[42] In National Tertiary Education Industry Union v University of South Australia a
Full Bench was concerned with an appeal against a decision suspending protected
industrial action pursuant to s.424 of the FW Act. The Full Bench observed:
“[8] Within the scheme of the Act, the powers in relation to the suspension or
termination of protected industrial action are intended to be used in
exceptional circumstances and where significant harm is being caused by the
action. This is clear from the Explanatory Memorandum to the Fair Work Bill
2008:
The Bill recognises that employees have a right to take protected industrial
action during bargaining. These measures recognise that, while protected
industrial action is legitimate during bargaining for an enterprise agreement,
there may be cases where the impact of that action on the parties or on third
parties is so severe that it is in the public interest, or even potentially the
interests of those engaging in the action, that the industrial action cease — at
least temporarily.
It is not intended that these mechanisms be capable of being triggered where
the industrial action is merely causing an inconvenience. Nor is it intended that
these mechanisms be used generally to prevent legitimate protected industrial
action in the course of bargaining.” [paras. 1708-1709]” xxix
(footnotes omitted)
[50] In characterising the relative use of the power in s.426, the Full Bench stated the
following:
“[43] Just as that Full Bench considered that the power in s.424 was intended to be
used only in “exceptional circumstances”, we consider that the power in s.426 is
likewise intended only to be used in exceptional circumstances. That outcome is
determined by a proper construction of the expression “significant harm’ and also by
a proper appreciation of when it will be “appropriate” to make an order within the
meaning of s.424(5). It is also consonant with the approach taken by the majority of
the Full Court of the Federal Court in relation to s.170MW of the Workplace Relations
Act 1996 in Re Polites; Ex parte Construction, Forestry, Mining and Energy Union
and paragraphs 1709 and 1728 of the Explanatory Memorandum in particular.
[44] When regard is had to context of the FW Act as a whole and to the explanatory
memorandum, the expression “significant harm” in s.426(3) should be construed as
having a meaning that refers to harm that has an importance or is of such
consequence that it is harm above and beyond the sort of loss, inconvenience or delay
[2019] FWC 3653
27
that is commonly a consequence of industrial action. In this context, the word
“significant” indicates harm that is exceptional in its character or magnitude when
viewed against the sort of harm that might ordinarily be expected to flow from
industrial action in a similar context. In this way, an order will only be available
under s.426 in very rare cases, as contemplated by the Explanatory Memorandum. It
follows that it will not, of itself, be sufficient that the harm, viewed in isolation, can be
characterised as “substantial”. Substantial harm to third parties is a common
consequence of effective industrial action. Unless the harm is out of the ordinary then
suspension would contrary to the legislative intention that suspension should not be
able to used generally to prevent legitimate protected industrial action in the course of
bargaining. In assessing whether there is “significant harm” context is also
important. A particular quantum of financial loss may constitute “significant harm” in
one context but not in another.”xxx
(footnotes omitted)
[51] As stated, the focus of the Applicant’s case is that the Full Bench’s interpretation of
significant harm was incorrect and that also they relied on an incorrect construction of
exceptional circumstances. In arguing this, Mr Williams set out:
“The Full Bench was considering two entirely different protective regimes, one which
applied between the parties who had the power to control their own destiny, and one to
protect innocent parties. And the difference is very clear.”xxxi
[52] In terms of the “relative assessment comparison bar set by Woodside”, Mr Williams
pointed to 3 particular circumstances relevant to the context (that should be considered in the
current matter); that being the Applicant conducts a new business on which the impact will be
greater. He referred to the evidence of the General Manager of Train Services of Linfox, who
had provided evidence, that he had concerns that customers will be lost to competitors and
that the viability of Linfox’s recently acquired Queensland intermodal operations business
will be threatened.
[53] In considering ‘significant harm’ in the relevant context; Mr Williams argued:
“… The test in Woodside Burrup is between a normal state of affairs, or the normal
state of impact, and a significantly greater impact. So it's really just a comparison
between the kind of impact that you'd expect if its business, however robust as a
fledgling business, and how it might have been if we were two or three years down the
track. But I don't put the submission higher than that. I simply put forward as context
which explains our submission …
…
Call it bad luck, perhaps, but almost immediately after the business was purchased
there was a catastrophic flood event and they can be forgiven for not being able to
predict that.
…
[2019] FWC 3653
28
… that they bought a business which was staggering, and it was staggering because its
previous owner who, coincidentally turns out to be Aurizon, had declared its intent to
close the business after a particular intervention by the Australian Competition and
Consumer Commission, and that was in the recent past, 19 July 2018.
There is not detailed evidence before you as to exactly what impact a decision of that
kind, or an intention expressed of that kind, would have on a business but one can
readily imagine that customers would have been destabilised by it, as Mr Carter
says. He says, "These circumstances created significant uncertainty for staff and
customers, resulting in a number of customers moving their business to alternative
transport operators, and many exploring and assessing their alternatives." So Linfox
did not take over a robust business, it took over a business in need of repair.
Mr Carter does make the point that the acquisition saved 300 jobs across Queensland,
and he makes the point perhaps with some irony that many of the train crew and
terminal operators whose jobs were saved are now participating in protected
industrial action. So that's the first part of the context which we say allows you to
find, even if the Woodside Burrup test be the right one, that this satisfies the test. It is
significantly greater impact than one might expect under normal operating
circumstances.
The second is the external events, Commissioner, and we've referred to
this. Immediately following the acquisition was a substantial flood even in North
Queensland in February 2019. It closed sections of the rail line for three weeks. Mr
Carter gives evidence about the impact of that. There were delays of approximately
two weeks for Townsville, three weeks for Cairns, significant cost increases in freight
transport of the number of a million dollars premium to standard rail costs paid by
customers.
And that plainly was an extraordinary event which would not form part of the context
of steady-as-she-goes industrial impact. We have a business which began in trouble
and its situation was immediately exacerbated by a very significant flood event.
Mr Carter also refers to what I call, track possessions, and track possessions in Mr
Carter's evidence are significantly higher, or … unusually high in February, March
and April of this year. Now taken alone, one might not put decisive weight on that but
in the context of the other impact, and unusual impact or unusual vulnerability it adds
to the equation, Commissioner. It adds to that context which would in our submission
allow you to find that Linfox is suffering significantly greater impact than would
normally be the case.”xxxii
[54] Mr Williams distinguished the current circumstances from the Full Bench decision in
Woodside Burrup, where he noted that Woodside Burrup had significant capacity to influence
the course of bargaining between the CFMEU and then Employer Mammoet. He argued in the
current circumstances Linfox has no capacity to influence either bargaining party or to attend
bargaining, make a concession or to take any form of response action against a union
bargaining representative or its members.
[55] Also in terms of the impact of the protected industrial action, he submitted Linfox
does not have the right to receive the Notices of proposed industrial action, although he
[2019] FWC 3653
29
recognised it was normal to receive rapid notice of such through its contracting party Aurizon.
The evidence was that in approving the protected action ballot the RTBU had consented to
provide a 7 day period of notice of the industrial action and the AFULE a minimum of 3
days.xxxiii The Unions argued this period allowed for Aurizon and Linfox to prepare for the
industrial action, which in the then current terms was a ban on overtime work.
[56] Mr Williams stated against the current circumstances:
“… the context in which we say that it would be available to you to find the high
standard which Woodside Burrup provides that the impact is significant, in the sense
of being significantly greater.
…
Yes. I think you can divine from the record before this Commission that negotiations
between these two parties are often protracted. But in any event, the evidence is that
this one's been protracted. It commenced in September 2018, industrial action first
occurred on 18 January 2019 and there has been industrial action since. So we're not
suggesting that Linfox didn't go into the purchase with its eyes wide open of the
possibility but that doesn't mean the impact hasn't occurred. And it doesn't mean that
after 30 meetings and an apparently intractable bargaining dispute, that my client
wouldn't be entitled to some respite. That's, of course, why we're here.
…
And in anticipation of a submission which will be made, has been made, it is true that
part of the impact which Mr Carter and Linfox relies upon is future potential. And
future potential specifically arising from the circumstance that there is a 48 hour
stoppage planned from tomorrow. The past is the past, but what we're dealing with
here is the impact which is threatened. And the submission I've already made is that
that necessarily involves an element of prediction.
At paragraph 20 Mr Carter predicts impact, or at least the categories of impact. He
does so in an informed way because he is acutely aware of the impact on Linfox
Australia from the stoppages which have already occurred, so it's not as if his evidence
doesn't have a foundation, his prediction.”xxxiv
[57] Whilst the jurisdiction of Section 426(1) requires protected industrial action to be
currently engaged in, in considering the context and impact, past, current and future industrial
action can be taken into account. All protected industrial action will fall within the scope of
any suspension Order.
[58] In terms of the context of the impact of the industrial action the evidence of Mr Carter
was set out in terms of the impact on the disruption to services and the related cost of such
against the Queensland operating division. The submissions did not address significant harm
in terms of the Applicant company Linfox Australia Pty Ltd. There was no evidence that the
industrial action was having a significant impact on this entity.
[2019] FWC 3653
30
Commercial mitigation
[59] The evidence regarding the commercial mitigation of any impact resulting from the
industrial action was contested in the circumstances. I asked the question on this of Mr
Williams as to whether Linfox had any commercial rights in terms of penalties under the
contract with Aurizon. Mr William’s response was that Mr Carter’s evidence was that any
impact causing adverse financial and commercial risk was not able to be mitigated on the
commercial arrangements. In contrast Mr Diamond on behalf of the RTBU referred to the
witness evidence of Mr Moffitt whereby he stated employees were regularly informed by
Aurizon about the contractual penalties if the company failed to meet their on time
performance, that is required by clients such as Linfox.
[60] The evidence of the impact of the industrial action did not distinguish between its
impact and that of the other events of the flood and track closures.xxxv The evidence was also
provided in relation to the Queensland intermodal operating division rather than the
Applicant; Linfox Australia Pty Ltd corporate entity. Mr Sivaraman provided that the
following was the best available evidence in relation to Linfox:
“In the financial year ending June 2017, it was reported that Linfox had a revenue of
$2.5 billion, with a net profit of $108.4 million and $100 million cash at year end
(Australian Financial Review 11 February 2019, annexed to these submissions). The
Australian government Corporate Tax Transparency report states that for the
Financial year 2016-17 the total income of Linfox Pty Ltd was $2,037,660,871.
The impacts set out in Mr Carter’s statement are not contextualised within the general
revenue and profit of Linfox. When done so it cannot in any way be seen as significant
harm to the Linfox business. It does not meet the bar of a, b and c in paragraph 9
above. If the Full Bench considered that a loss of $3.5million a day was not significant
harm to Woodside (above) then the impacts set out in Mr Carter’s statement simply do
not meet the requisite threshold for significant harm as required by s426 of the Act.
Furthermore, the impacts as described in Mr Carter’s statement paragraph 29 are
vague and speculative. The expenses in paragraph 25(a) are approximated. The loss
of a customer contract at paragraph 25(e) is described as only a potential. The impact
to reputation at paragraph 25(g) is vague and lacking any detail or support. Similar to
that of the respondents in the Woodside Full Bench decision the impact to reputation
is little more than an assertion. The applicant makes a grave assertion as to elevated
safety risks at paragraph 29(h). The AFULE is of course always concerned with the
safety of its members and those around them at work. Such a grave assertion cannot
simply be made without any substantive or thorough evidentiary basis as this assertion
has been made.
The Respondent’s submissions fail to demonstrate the criteria in s426(4) is met. At
paragraph 22(a) the Respondent highlights costs considerably above the standard
costs of delivery. That is a natural consequence of industrial action and not significant
harm. Paragraph 22(b) states that there is the ‘potential’ for customers to transfer
freight movement which is merely an assertion. Paragraph 22(c) sets out only an
assertion as to safety risk, without detail or substantiation.
[2019] FWC 3653
31
In summary, Linfox has not demonstrated it has met the threshold for being under
threat of significant harm as required by s426(c).”xxxvi
[61] However Mr Williams argued that this comparative assessment of the context was
misplaced:
“The Full Bench in Burrup might have set that side if they'd been – well, they did set
much larger losses aside but that was in the context of a multi billion dollar project,
not in the context of a fledgling and troubled business which has already been
impacted by extraordinary events. And of course - - -
THE COMMISSIONER: The positioning of this fledgling business, the intermodal, as
part of the overall Linfox entity - - -
MR WILLIAMS: It's not a large part of the overall business. So I'm not suggesting
that the viability of Linfox as a company is being threatened by this industrial action.
THE COMMISSIONER: All right, yes. Is your submission that simply the assessment
of significant harm be taken against your client in terms of the intermodal business?
MR WILLIAMS: Yes.
THE COMMISSIONER: Is that some separate entity within the corporate structure?
MR WILLIAMS: It's not a separate entity in the sense of a separate company, but it's
a separate operating division. It's one of Linfox's segmented business and - - -
THE COMMISSIONER: Known as?
MR WILLIAMS: The Queensland intermodal business, Linfox Intermodal
business. I'll just make sure I've said that correctly. Yes, Queensland Intermodal
Operation. And Commissioner, it can't be the case that a group which does segment
its businesses in a more precise way, for example, by different companies, which can
be done, would allow for a different assessment of whether or not the damage has
been significant.
So we accept that Linfox is a large and successful organisation, but a large successful
organisation can suffer significant financial and operational impact just as a smaller
operation can. It's not a disqualifier that the organisation has a large balance
sheet. And Mr Carter says, not challenged, in paragraph 33, "I have a genuine
concern that some of Linfox's customers will choose to leave the business completely
to go to a competitor, or reduce the volume of freight which Linfox will transport for
them." He says Linfox's customers have clear alternatives to do so. And he says in
paragraph 34, "A large wave of customer exits would have the potential to impact on
the viability of Queensland Intermodal Operations." And there's no reason not to
accept that to be a statement of – well, perhaps not a statement of fact, but at least a
statement of well informed opinion.”xxxvii
[2019] FWC 3653
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Significant harm test
[62] Mr Williams stated in relation to the test of significant harm; being of importance of
consequence; and that the dollar impact on this Linfox operating division (‘struggling for
viability’) is significant.
[63] In critiquing the Full Bench’sxxxviii approach to assessing significant harm, Mr
Williams tracked their approach in relying on extrinsic materials to discern the overall context
and purpose of the legislation.xxxix On this basis Mr Williams commented that the approach
taken by the Full Bench was incorrect:
“ ‘Second, the common law also recognised that "[i]t is a strong thing to read
into an Act of Parliament words which are not there, and in the absence of
clear necessity it is a wrong thing to do’
It does require words to be read into subparagraph 426(3) or 426 subparagraph (3),
words which require or allow the form of comparison which the Full Court found - the
Full Bench found. Those words are not there. What is there is a simple English term
'significant', and it goes on to say other things which are often said. That it's not
available to a court - a court's job is to construe an Act not rewrite it in light of what's
found to be its purposes. But, Commissioner, we've criticised the approach the Full
Bench took to the purpose of section 426(3) as well.
… we say that they misunderstood. The purpose is a protective one for commercial
entities in exactly the same situation as my client...”xl
[64] Further, in relation to taking into account the issue of public interest, Mr Williams
stated on the length of the negotiations, the flooding event and associated disruption:
“In terms of the public interest and whether its appropriate we do point to these other
matters and that is that – and I say it again, my client is an innocent victim of the
industrial action and the parties have negotiated extensively for 30 meetings only to
arrive at a deadlock. That’s their right but they’ve done so in circumstances where as I
understand it at least neither party has taken advantage of the processes of this
Commission including under section 240 or new approaches to assist in relieving the
deadlock.”xli
[65] The Respondent’s stated the public interest argument was not made out pursuant to
Section 426(5)(a) to support the making of the order and that to make the order would be
contrary to the relevant Objects of the Act that provided for protected industrial action in
support of agreement making. Contrary to the Applicant’s submission that the Unions had not
sought the assistance of the Commission; at an earlier stage this year a Good Faith Bargaining
Application had been filed by the Unions. As a result of a Conference before the Commission
the parties had set a series of meeting dates for negotiations and an agenda of issues. In
addition further correspondence received from Aurizon prior to the hearing refers to
continued negotiations between the parties.
[2019] FWC 3653
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Conclusion
[66] In this matter Aurizon employees at the time of the hearing were taking protected
industrial action in the form of a seven day overtime ban. Further consecutive industrial action
had been notified in the form of stoppages of work. Prior industrial action had also been
undertaken as set out earlier.
[67] It was argued on behalf of the Linfox business, or in particular the Queensland
operating division of the overall Linfox business, that the cumulative effect of the protected
industrial action, the regional flooding and the associated disruption to services and effects on
the track was causing ‘significant harm’ on this part of the business warranting suspending all
industrial action for a period of two months. On this matter, on the scope of the Order, the
Applicant’s representative drew a distinction that the suspension of the action should not only
relate to the current industrial action but to any industrial action. To do otherwise, Mr
Williams argued, would lead to a nonsensical situation. For example, where in the case of the
notification of hourly stoppages, the Applicant would be put in the case of re-visiting such
orders on a continual basis.
[68] The width of any resulting order arising from such an application, would suspend any
industrial action. This however is also my view given that Section 426 Orders are designed to
be issued once in exceptional circumstances where industrial action is causing significant
harm. The nature of the industrial action and the resulting impact is of such consequence to
require such a step. To provide orders in other circumstances would obviate the structure of
protected industrial action as a right for parties under the Act. To relax the required test for
significant harm, may allow for possible interference with the statutory entitlement of parties
to take industrial action. The Full Bench decision rightfully sets the benchmark at a high level
for the provision of an order pursuant to Section 426, that is not to say that circumstances
would not arise that would meet this threshold for significant harm. In any event the
circumstances described in this matter are not those that would cause a departure from
compliance with the Full Bench test of significant harm. In coming to this conclusion I do not
consider it is simply a comparison of the extant loss to the loss experienced in the Woodside
Burrup matter. It is not necessary that the loss in that case be met as a benchmark. The Full
Bench was at liberty to refer to extrinsic materials in particular the explanatory memorandum
to assess the purpose of the provision.
[69] In this matter in terms of the ‘harm’ to the Intermodal division of the business, a
conflation of events was referred to in causing the impact on the business. Whilst the flood in
question was an extreme weather event, tropical cyclones and floods are regular events at this
time of year in the north of Queensland that cause disruption to transport and freight services.
The Applicants have argued the cumulative effects of this flood, the nature of the fledgling
business after the recent purchase by Linfox taken together with the industrial action has
caused the impact on the business. The Respondent Union and its members have no control
over the impact of weather events, nor any influence over the nature of the business
transaction in terms of the operating status of the business at the time of purchase nor the
contractual terms of the acquisition nor do they set the track maintenance timetables; all of
which it was argued contributed to the significant harm.
[70] In this case the Applicants developed the argument that the construction by the Full
Bench in Woodside of the term ‘significant harm’ had been elevated to a level that was an
[2019] FWC 3653
34
improper interpretation arising from the statute.xlii The Applicant argued the purpose of the
test is for commercial protection of third parties and that the test is that the loss be out of the
ordinary, of importance or of consequence.
[71] The term ‘significant harm’ as set out by the Full Bench has been taken into account as
follows:
“[55] The sort of harm complained of by Woodside, Kentz and United is the sort of
harm that will be caused by industrial action by employees on any large construction
project where such action affects the critical path of the project. We reject any
proposition that an order under s.426(3) will be available and appropriate in all such
cases.
[57] It costs Woodside about $3.5 million per day to run the project team and site
based services, 24 that is, excluding payments to the contractors undertaking the
actual construction work on the Project. Woodside relies upon this and the consequent
delay in the commencement of the revenue stream from LNG sales (estimated to be in
the order of millions of dollars per day) as the quantum of the loss that it will suffer as
a result of the protected industrial action given that that action was affecting the
critical path of the Project and that there were, according to Woodside, only a few
days of buffer left in the project timeline before these losses begin to be incurred. It is
clear from the evidence that delays unrelated to the industrial action by the Employees
have also contributed to placing Woodside in this position.
[58] The position of Woodside requires particular comment. Woodside, while
technically a third party, is not the usual position of a third party. The evidence
demonstrated, unsurprisingly, that, pursuant to the relevant subcontracts, Woodside
exercised very significant control over Mammoet in relation to industrial relations.
Woodside retained a right of veto over any industrial agreement that Mammoet could
enter in relation to the Project. 25 Mammoet was required to engage an industrial
relations advisor acceptable to Woodside26 and was required to notify Woodside in
the event that they did not accept their advice and the reasons why the advice was not
accepted.27 In the event, Mr Colin Milne, acted as industrial relations adviser with
the approval of Woodside to all the contractors engaged on the Pluto project,
including Mammoet Australia Pty Ltd.
[59] The amount of potential daily loss identified by Woodside is a function of the
enormous size of the Project. In our view, those amounts are not significant in the
relevant sense when considered in the context of the project as a whole unless the
further delays on account of the protected industrial action become very protracted.
On the evidence it is more likely than not that the dispute will be resolved before that
point is reached. Indeed, in his earlier decision, the Deputy President expressed
support for a CFMEU contention that it was the existence of the capacity to take
industrial action and indeed the taking of it that had the effect of reducing the
differences between the parties and making an agreement more likely. We think that
there is a reasonable prospect that the dispute will be resolved relatively quickly if the
protected industrial action is permitted to continue.
[63] As an aside, we note that had we considered that the harm threatened in this case
was “significant harm” within the meaning of s.426 properly construed, we would, on
[2019] FWC 3653
35
the rehearing, have wanted to explore the measures available to Woodside to mitigate
the effects of the protected industrial action being taken by the Employees. We would
have been disinclined to accept, without more, the assertions in Woodside’s evidence
that there were no alternative measures that could have been taken to mitigate the
effect of that protected industrial action.”xliii
[72] Whilst the Applicant was arguing that the purpose of Section 426 was the commercial
protection of third parties, they have not provided any evidence of alternate measures to
mitigate the effect of the loss or disruption or to demonstrate that the impact of industrial
action is so severe to justify the intervention as sought.
[73] The Applicant argued that the industrial parties (Aurizon and the two Unions currently
before the Commission in this matter) are negotiating a new Enterprise Agreement and had
reached a stalemate after some 30 meetings. However the position as set out in the Aurizon
letter already referred to indicates a willingness to meet in contrast to the argued stalemate. In
any event the Objects of the Act as set out in Section 3 above, provide for the furtherance of
the making of Enterprise Agreements and the taking of industrial action in pursuit of such.
There is no debate that the industrial action notified was occurring (in the form of the seven
day overtime ban) or as pending (as set out) protected industrial action, compliant with the
relevant terms of the Act.
[74] The Respondent Unions argued that this was no more than exactly what the Act
contemplated and that Aurizon, and through its notifications to Linfox, were able to take
relevant preparations on notice of this protected industrial action. Furthermore, based on the
industrial action taken to date, such was not extreme on the continuum of possible industrial
action that was open to the Respondents.
[75] While there has been a series of meetings, these are not the circumstances of an
impasse particularly taking into account the correspondence of Aurizon electing to have
further discussions. Accordingly, the circumstances are also not those in which these
employees at this stage of the negotiations should have the right to take industrial action
suspended for a period of months.
[76] Furthermore, in terms of the context of the harm, the Unions argued that such has not
been particularised or quantified in real terms; that is the impact of this industrial action has
been provided on this operating division and not in the context of the Linfox business. No
argument of vulnerability of the Applicant’s business was made. This commentary is not
made from the point of view that large corporations should not be able to seek to utilise this
provision when being subject to significant harm. However the current circumstances required
further examination of the significant harm being borne by the actual Applicant entity. To do
otherwise would allow the test of significant harm to be demonstrated in exacerbated or
artificial terms in a context of only part of the Applicant’s business.
[77] The material as provided does not correlate with circumstances of significant harm as
set out by the Full Bench. It is understood the Applicants do not agree and argue that the Full
Bench decision as it is, is a substantially high bar for the grant of orders in terms of significant
harm. However in this case, the harm as argued (some of which is attributed to causes other
than the protected industrial action) does not meet the Full Bench test of significant harm nor
does it meet the lesser test (of consequence) as argued by the Applicant. Whilst I recognise
the current circumstances of the disruption and cost to this operating division; the third party,
[2019] FWC 3653
36
the harm cannot be attributed to the industrial action alone. The loss, inconvenience and delay
is commensurate with the industrial action.
[78] It must also be taken into account that no evidence was provided of any preparations
undertaken during the notification period of the action to reduce its impact nor was there any
evidence of any significant harm caused to the parent entity. The Respondent Unions clear
argument was that industrial action was not causing significant harm; given the nature of the
costs of the industrial action for this operating division could clearly be accommodated by the
overall profits of the parent company.
[79] These matters are relevant to the argument of context as made by the Applicant in the
assessment of significant harm. The Applicant has not provided relevant evidence in
accordance with their interpretation of determining significant harm on the test of the losses
being out of the ordinary, of importance or of consequence. A third party merely being
subjected to a loss or disruption from protected industrial action cannot satisfy the provision
of Orders being made pursuant to Section 426. The Full Bench correctly referred to the
Explanatory Memorandum which informs the particular purpose this provision serves.
[80] The circumstances of each matter must be considered separately. For example, it is
recognised, that distinct from the third party circumstances in the Full Bench decision, Linfox
does not have any influence over the negotiations, as is the normal position of a third party.
This could be a matter that is taken into strong consideration by the Applicant’s contractual
partner Aurizon; an entity that does have influence over the course of negotiations.
[81] The circumstances of this matter do not demonstrate that the protected industrial
action threatens to cause significant harm; to damage the ongoing viability of the Applicant’s
enterprise or its operating division nor are the other criteria in Section 426(4)(b),(c) or (d)
satisfied to a level that the harm caused is out of the ordinary or of consequence to the level of
the required purpose of this legislative provision. Further, on the evidence related to the
negotiations in this matter, the issuing of an Order to suspend the employee’s right to take
protected industrial action would be inconsistent with the Objects of the Act.
[82] Accordingly for the aforementioned reasons the Order pursuant to Section 426 for the
suspension of the protected industrial action is not granted. The Application is therefore
dismissed. I Order accordingly.
COMMISSIONER
Printed by authority of the Commonwealth Government Printer
PR708727
THE FAIR WORK NOISSI THE SEA
[2019] FWC 3653
37
i [2010] FWAFB 6021
ii Witness Statement of Aaron Carter at para [23]
iii Application by Queensland Cane Growers’ Association Union of Employers [2013] FWC 6987 at [16]-[20]
iv [2009] FWA 1872
v [2013] FWC 6987
vi Witness Statement of Aaron Carter at para [24]
vii Witness Statement of Aaron Carter at para [21]
viii Witness Statement of Aaron Carter at para [22]
ix Witness Statement of Aaron Carter at para [26]
x Applicant’s written submissions at para [22]
xi Witness Statement of Aaron Carter at para [5]
xii Witness Statement of Aaron Carter at paras [8] – [17]
xiii Witness Statement of Aaron Carter at para [18]
xiv Witness Statement of Aaron Carter at para [20]
xv Witness Statement of Aaron Carter at paras [21]-[22]
xvi Witness Statement of Aaron Carter at para [24], [26]-[28]
xvii [2010] FWAFB 6021
xviii Ibid.
xix PN163 to PN164
xx PN180 to PN187
xxi [2010] FWAFB 6021
xxii PN190 to PN206
xxiii PN212 to PN214
xxiv [2010] FWAFB 6021 at [6] – [7]
xxv [2010] FWAFB 6021 at [18]
xxvi [2010] FWAFB 6021 at [19]
xxvii [2010] FWAFB 6021 at [21]-[28], [32]-[33]
xxviii [2010] FWAFB 6021 at [38]-[40]
xxix [2010] FWAFB 6021 at [41]-[42]
xxx [2010] FWAFB 6021 at [43]-[44]
xxxi PN198
xxxii PN223, PN227 and PN230 to PN235
xxxiii PN722 to PN734
xxxiv PN261, PN267 & PN283 to PN284
xxxv PN320 to PN321
xxxvi AFULE’s written submissions paras [11]-[15]
xxxvii PN320 to PN329
xxxviii Construction, Forestry, Mining and Energy Union v Woodside Burrup Pty Ltd & Anor [2010] FWAFB 6021
xxxix PN403 to PN417
xl PN416 to PN418
xli PN456
xlii [2010] FWAFB 6021
xliii Ibid
