1
Fair Work Act 2009
s.526—Stand down
Construction, Forestry, Maritime, Mining and Energy Union
v
DP World Melbourne Ltd
(C2020/2381)
DEPUTY PRESIDENT COLMAN MELBOURNE, 6 AUGUST 2020
Alleged stand down dispute – employees refused to unload vessel on safety grounds related to
COVID-19 – employees not paid – whether employees stood down – distinction between stand
down and stand aside – relief sought requires judicial power – application dismissed
[1] This decision concerns an application brought under s 526 of the Fair Work Act 2009
(Act) by the Construction, Forestry, Maritime, Mining and Energy Union (CFMMEU) in
relation to an alleged stand down of employees employed as stevedores by DP World
Melbourne Ltd (DP World) at its container terminal at West Swanston in Melbourne.
[2] The union contends that DP World stood down employees who from 31 March to
2 April 2020 refused to unload the Xin Da Lian on safety grounds connected with the
COVID-19 pandemic. It says that the company did not comply with the requirements of s
524, because none of the circumstances identified in that section were engaged. In particular,
it says that employees were not engaged in industrial action for the purpose of s 524(1)(a), the
first of the trilogy of bases upon which a stand down is permissible under s 524(1). The union
asks the Commission to determine that the company invoked s 524 of the Act but that this
section was not validly engaged. It also asks the Commission to determine that there was no
basis for the company to withhold payment from employees during the relevant period.
[3] DP World contends that it did not stand down employees at all, but instead refused to
pay them for a period of unprotected industrial action, as it is required to do by s 474 of the
Act. It says that in any event, the Commission has no power to grant the relief sought by the
union, which in substance seeks a declaration of right and would require the exercise of
judicial power. In the alternative, the company submits that if it did stand down employees, it
did so in accordance with s 524.
[4] The application was listed for hearing before me on 27 July 2020. Three witnesses
gave evidence for the union: Mr Mick O’Brien, a foreman employed by DP World who is
also a workplace health and safety representative; Mr Craig Smith, a stevedore employed by
DP World; and Mr Shane Stevens, secretary of the Victorian branch of the Maritime Union of
Australia division of the CFMMEU. Mr Sean Jeffries, general manager operations, and Mr
Luke Gravell, operations manager, gave evidence for the company.
[2020] FWC 4147
DECISION
E AUSTRALIA FairWork Commission
[2020] FWC 4147
2
Background
[5] DP World operates a container terminal at West Swanson in Melbourne. Shipping
containers are brought to and from the quayside by employees operating straddle carriers.
Trucks and trains enter the terminal to load and unload containers. The terminal operates
continuously.
[6] In the course of March 2020, DP World implemented certain measures to mitigate the
risk of its employees contracting COVID-19 from working on vessels. In late March 2020, the
CFMMEU published a document called ‘COVID-19 Maritime Industry Framework’. The
document stated that vessels ‘must meet the government’s 14-day quarantine guidelines’, and
that ‘vessels do not start until 14 days have elapsed since last port.’ Mr Jeffries gave evidence
that he became aware of this document and considered that it did not align with the relevant
government requirements. There were no negotiations between the company and the union in
relation to the document.
[7] On 31 March 2020, the Xin Da Lian berthed at the West Swanson terminal. It had left
Taiwan 11 days earlier and had previously stopped in mainland China. Before it was allowed
to dock at the terminal, the vessel was required to obtain a range of clearances, including from
the Australian Border Force (ABF) and the Department of Agriculture. From 17 March 2020
all vessels arriving in Australia had been required to submit additional notifications in
connection with COVID-19. The Xin Da Lian had obtained all relevant clearances and was
granted ‘pratique’ to enter port. It was piloted to the terminal with authorisation from the Port
of Melbourne.
[8] Mr Jeffries gave evidence that on the afternoon of 31 March 2020, he telephoned
Mr Stevens and said that he understood that there would be an issue with the vessel being
worked that evening. Mr Stevens said that this was the case, because fewer than 14 days had
passed since the vessel had left its last port. Mr Jeffries said that ’14 days from last port’ was
not consistent with ABF advice. Mr Stevens said that ‘our position’ was that there must be
‘14 days from the last port’, and that the Xin Da Lian had not passed the ‘14 day quarantine
period’.
[9] Later that afternoon, Mr Stevens sent Mr Jeffries an email, stating that the vessel was
still inside the ‘Department of Health’s 14 day quarantine period’, and asking him to confirm
that employees would not be required to work the vessel before the end of the 14 day period.
Shortly afterwards, Mr Jeffries replied to Mr Stevens, requesting that he provide details of the
advice from the Commonwealth Department of Health (DOH) to which he referred, and
asking Mr Stevens to explain how any such advice, if it existed, could override the ABF
conditions that apply to commercial vessels entering port. Mr Stevens did not reply. In his
evidence, Mr Stevens gave a similar account of his interaction with Mr Jeffries that afternoon.
He said that he told Mr Jeffries that everyone travelling to Australia should be quarantined for
14 days, and that, for the Xin Da Lian, this period would end only on 3 April 2020.
[10] It is convenient at this point to address the question of whether there were any
regulatory restrictions or requirements that prevented employees from working the Xin Da
Lian on the evening of 31 March 2020. Mr Jeffries and Mr Stevens both attached to their
witness statements a copy of an ABF maritime advice dated 20 March 2020 entitled
‘restrictions on entry to Australia by commercial vessels’, as well as a copy of advice from the
DOH dated 30 March 2020 and titled ‘COVID-19 information for the maritime industry’.
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Neither of these documents establishes a general 14 day quarantine rule for commercial
vessels. The ABF advice of 20 March 2020 states that vessels may berth in Australia at any
time, but that if a vessel arrives within 14 days from its last international port of call, certain
restrictions apply. Among these are that the vessel’s crew must use personal protective
equipment in public spaces on board the vessel while non-crew are on board. Clearly, this
recognises and anticipates that vessels may be worked by waterside workers during the 14 day
period since the vessel’s last international berth. Mr Stevens agreed in cross-examination that
these ABF and DOH documents did not prevent employees from working on the Xin Da Lian
on 31 March 2020.
[11] In his witness statement, Mr Stevens referred to a different ABF statement, dated 17
March 2020, concerning restrictions on entry to Australia for commercial vessels. This
document, which was appended to Mr Stevens’ statement, states that all persons entering
Australia after 16 March 2020 must undertake precautionary self-isolation for up to 14 days
upon entry. It also states that travel restrictions remained in place in respect of entry to
Australia for all travellers, including maritime crew, from mainland China, Iran, South Korea
and Italy. However, it does not say that vessels arriving in Australia are to be quarantined for
14 days, and it does not say that vessels cannot be unloaded.
[12] I find that there was no regulatory requirement or restriction that prevented employees
of DP World from unloading the Xin Da Lian on 31 March 2020 or on the following days. In
the course of the hearing, the focus of the union’s argument shifted from the question of
whether there were regulatory requirements that prevented work on the vessel to the question
of whether the company had in place adequate occupational health and safety arrangements in
light of the relevant COVID-19 risks.
[13] I now return to the night of 31 March 2020. The night shift was due to commence at
10.00 pm. Employees were to start work on the Xin Da Lian. They did not do so. Mr Jeffries
said that around 10.00 pm he and Mr Gravell attended the crib room, and that one of the
employees said to them that 14 days had not passed since the vessel had left China. Mr
Jeffries replied that the vessel had met biosecurity and ABF requirements and had been
granted access to port. He said that the vessel’s last port of call had been Taiwan, and that it
had stopped in mainland China over 14 days ago. Another employee said that the vessel had
to pass a 14 day quarantine period. Mr Gravell replied that the restrictions placed on vessels
were different from the restrictions placed on their crew. He read through the ABF advice,
confirming among other things that crew are required to wear PPE when stevedores are on
board. There was further discussion, in the course of which several employees said that there
was a safety issue associated with working on the vessel. Mr Jeffries replied that he did not
believe that there was a genuine safety issue. He then told employees:
‘If you refuse to work the vessel as directed, I will be treating this as unprotected
industrial action, you will be stood down and not paid for the shift for not following a
reasonable direction and you will be subject to disciplinary action.’
[14] Mr Smith gave evidence that Mr Jeffries told the employees that they were stood
down, but that he did not recall either Mr Jeffries or Mr Gravell stating that they considered
employees’ actions to constitute illegal industrial action. I prefer the evidence of Mr Jeffries
on this point. His evidence was clear and detailed. It is consistent with the position of the
company set out in its disciplinary letters to employees in early April, and in the letter that the
[2020] FWC 4147
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company sent to the union on 2 April 2020. Mr Smith may simply not have heard Mr Jeffries
refer to unprotected industrial action.
[15] Mr Jeffries’ evidence was that, in using the words ‘stood down’, he did not intend to
convey the meaning suggested by the union. He said that he used these words to convey to
employees that they would be ‘off pay’ and that there would be financial consequences for
them if they refused to do the work that they had been allocated. I accept this evidence. It is
consistent with the context of the discussions Mr Jeffries had with employees.
[16] Mr Jeffries said that he and Mr Gravell later went through the labour sheets and
identified the employees who had refused to work the vessel. Mr Jeffries said that he and
Mr Gravell considered their conduct to be unlawful and that these employees were later
subjected to disciplinary action.
[17] Mr Jeffries gave evidence that early on the following morning, 1 April 2020, he
attended the start of day shift. Employees rostered to work the vessel failed to commence
work. The foreman, Mr Wayne Saunders, said that the vessel had not met its 14 day
quarantine and that employees did not think it was safe. Some of the other employees said
that there was a safety issue. Mr Jeffries told the employees that he did not believe that there
was a valid safety issue because the vessel had been approved by the ABF, that employees
were taking unprotected industrial action and that they would be stood down and disciplined
accordingly.
[18] On the afternoon shift of 1 April 2020, Mr Gravell attended the pre-shift toolbox
meeting. Employees rostered on shift did not commence work on the Xin Da Lian. Mr
Gravell’s evidence was that he told employees that, given they were refusing to work, the
company considered them to be taking unprotected industrial action and that they would be
‘stood down off pay’ and were not required to remain on site. Seventeen employees reported
sick for that shift. Mr O’Brien’s evidence of this meeting generally aligned with that of Mr
Gravell. He said that employees were told that the company believed that they were taking
industrial action, and that they were stood down without pay.
[19] On the night shift of the same day, 34 employees called in sick. The five remaining
employees were deployed to landside operations. Employees who reported sick on this and
other shifts were asked to provide medical certificates and those who did not do so were
considered by the company to have taken unprotected industrial action.
[20] At the commencement of day shift on 2 April 2020, 22 employees called in sick,
leaving ten employees available for work. They were deployed on a lashing gang to work on
the Xin Da Lian. The employees refused to perform work on the vessel. Mr Jeffries told
employees that they were refusing to follow a reasonable direction, that he would treat this as
unprotected industrial action, and that they were ‘stood down’ for the shift, and ‘off pay’.
[21] A similar series of events unfolded on the afternoon shift on 2 April 2020. Normal
work recommenced on the night shift of 2 April 2020. Employees rostered on that shift
worked on the Xin Da Lian as required by the company.
Findings
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[22] I make the following factual findings. First, from 31 March to 2 April 2020,
employees on the five shifts in question were required by the company to work the Xin Da
Lian but refused to do so and were not paid. Secondly, on each occasion, Mr Jeffries or Mr
Gravell told employees that they were ‘stood down’ and that the company considered their
refusal to work the vessel to be unprotected industrial action.
[23] Thirdly, I find that Mr Jeffries and Mr Gravell intended to convey from their use of the
words ‘stood down’ that employees would not be paid because they would not do the work
that the company required of them, which was to work the Xin Da Lian. I further find that this
was the objective meaning of the words ‘stood down’ in the context in which they were used.
[24] Fourthly, I find that, from 31 March to 2 April 2020, there was work for the
employees to perform, namely the unloading of the vessel Xin Da Lian.
[25] Fifthly, although it is not necessary for me to make a finding about whether there was
other work that employees could have been assigned to do during this period, I will record
that in my opinion, the evidence does not establish that other useful work, aside from working
the Xin Da Lian, was available on the shifts in question.
[26] As will become apparent, it is not necessary for me to determine whether employees
were engaged in unprotected industrial action. I therefore do not propose to make findings
about the appropriateness of the company’s safety arrangements, or whether the employees’
concerns about the safety of working the Xin Da Lian were well-founded and within the
compass of s 19(2). I would however reiterate that there was no regulatory restriction or
requirement that prevented employees from working on the vessel from 31 March to 2 April
2020. I also note that I accept the evidence of Mr Smith that he was genuinely fearful of
contracting the virus, given his particular family circumstances.
The relevant provisions
[27] Section 524(1) provides:
‘An employer may, under this subsection, stand down an employee during a period in
which the employee cannot usefully be employed because of one of the following
circumstances:
(a) industrial action (other than industrial action organised or engaged in by
the employer);
(b) a breakdown of machinery or equipment, if the employer cannot
reasonably be held responsible for the breakdown;
(c) a stoppage of work for any cause for which the employer cannot
reasonably be held responsible.’
[28] Section 526(1) provides that the Commission may deal with a dispute about the
operation of Part 3-5. Section 526(2) states that it may do so by arbitration. Section 526(3)
sets out certain standing requirements, which are clearly met in this case.
Submissions of the parties
[2020] FWC 4147
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[29] The CFMMEU contended that the company invoked and purported to implement a
stand down under s 524 of the Act, but that there was no proper basis for it to do so. It said
that company managers clearly told employees on the relevant shifts that they were ‘stood
down’, and that the reason for this was because employees were engaging in unprotected
industrial action, which is the circumstance identified in s 524(1)(a).
[30] The CFMMEU contended that the employees were not in fact engaged in industrial
action at all, because their refusal to unload the vessel was based on their reasonable concern
about an imminent risk to their health or safety, namely the risk of contracting COVID-19
while working the vessel, and that their actions fall within the exception to the definition of
industrial action in s 19(2) of the Act.
[31] The union submitted that, either in terms or in substance, the company effectuated a
stand down of employees that did not conform to s 524, and that the Commission should
exercise its power under s 526 of the Act to arbitrate the dispute. In this regard, the union said
that s 526(3) requires the Commission to take into account fairness between the parties
concerned, and that in the present case this requires recognition of the safety risk posed to the
employees in question by the COVID-19 pandemic. The union said that employees were
stood down when they should not have been, as none of the circumstances identified in s 524
were present. It further submitted that, as no industrial action occurred, s 474 of the Act was
not applicable, and no deductions were required or authorised by that section.
[32] DP World submitted that the union’s application was misconceived, because the
company never purported to stand down employees. Although its managers told employees
that they were ‘stood down’, it was clear from the context that this meant employees would
not be paid because they would not work as directed. The company says that there was no
‘period in which the employees cannot usefully be employed’ for the purpose of s 524. The
employees were able to be usefully employed unloading the vessel, which is what the
company wanted the employees to do, but they refused to work.
[33] The company further submitted that there were no genuine safety concerns or risks
that would bring employees’ refusal to work within the exception in s 19(2), and that, because
the employees had engaged in unprotected industrial action, the company was right to
withhold pay, as s 474 of the Act requires.
[34] In the alternative, the company submitted that, if the Commission were to find that it
had stood down employees under s 524, there was in any event no other available work for
employees to do, aside from unloading the vessel, and that there was no obligation to pay the
employees for the shifts in question. I understand that in this respect, the company would seek
to rely on the circumstance in s 524(1)(c).
Consideration
[35] Section 526 states that the Commission may deal with a dispute about the operation of
Part 3-5. In the present case, there is a threshold dispute about whether the company in fact
stood down employees in purported compliance with s 524. This is a dispute about whether
Part 3-5 has any operation at all in the present circumstances. It is a dispute about jurisdiction.
If there was no stand down for the purpose of s 524, the Part has no operation, the
Commission has no power, and the application must be dismissed.
[2020] FWC 4147
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[36] In my view, it is clear that the company did not stand down employees under s 524. I
have earlier stated my finding that Mr Jeffries and Mr Gravell did not intend to convey by the
words ‘stood down’ that the company was standing down employees under s 524. Rather,
they intended to convey that employees would not be paid because they would not do the
work that the company required of them, which was to work the Xin Da Lian. Moreover, this
was the objective meaning of the words ‘stood down’ in the context in which they were used.
It follows from these findings that the union’s contention that the company purported to stand
down employees under s 524, in terms or in effect, must be rejected.
[37] Section 524 commences by stating that an employer may, ‘under this section’, stand
down an employee during a period in which the employee cannot usefully be employed
because of one of the three circumstances that are then identified. The significance of an
employer standing down an employee is that the employer is not required to make payments
to the employee for the period of the stand down (s 524(3)). The section confers a right on an
employer not to pay employees in particular circumstances. In my view, the exercise of the
right must be volitional. I find it difficult to see how an employer could be said to have stood
down an employee under s 524 if it did not exercise its right under that section.
[38] An employer may only stand down employees ‘during a period in which the employee
cannot usefully be employed’ because of one of the three circumstances. Although the section
does not explicitly say so, it is clear that the employer would have to at least believe that there
was no useful work for employees to perform. In a s 526 matter, the employer’s contention
that there is no useful work for employees to perform is typically at the centre of the dispute.
But in the present case, the company insisted that there was work to be done, namely the
unloading of the vessel. It did not tell employees that they were stood down due to the
unavailability of work. It told employees that they were ‘stood down’ because they would not
do the work they had been directed to perform. In fact what occurred, in ordinary industrial
parlance, is that employees were ‘stood aside’.
[39] A stand down does not occur simply because a manager uses the words ‘stand down’.
In Coal and Allied Mining Services Pty Ltd v MacPherson1, a Full Court of the Federal Court
held that, although the employer in that case had used the words ‘stand down’, it was clear
from the context that it had not stood down the employee in question due to the unavailability
of useful work. Rather, there had been work for the employee to do, but the employee had
chosen not to do it. Marshall and Cowdroy JJ said that the employee “was not ‘stood down’ as
that expression is usually understood in an industrial context, which connotes an absence of
work to be done, for whatever cause.”2 It is clear that in the present case, DP World did not
decide to withhold payment because of an unavailability of work. It was because employees
would not perform work as directed that payment was withheld. The union sought to
distinguish Coal and Allied on the facts, as the employee in that case refused to work only
part of a shift, but this is not a material difference. In any event, the decision is simply an
illustration that the non-industrial, vernacular, loose usage of the words ‘stood down’ will not
create a stand down situation when in substance none exists.
[40] The present matter is not a case where employees could not be usefully employed.
There was a vessel docked at the terminal. The company required employees to unload it.
Employees refused to do so because of their safety concerns. But even if those safety
1 (2010) 185 FCR 383
2 Ibid at 389
[2020] FWC 4147
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concerns were legitimate (I make no finding on that subject), this would not alter the fact that
there was work that the company wanted employees to perform. Section 524 is simply not
applicable to a case such as this.
[41] It is a curious feature of this application that the employees whom the union contends
were stood down are the same employees whom the employer considers to have taken
industrial action. Usually, where employees are stood down on the basis that they cannot be
usefully employed because of industrial action, it is the industrial action of other employees
that has caused the unavailability of work. The Explanatory Memorandum to the Act provides
an illustrative example of a stand down that involves just such a case.3 This is in keeping with
the context of a provision that is concerned with situations where there is no useful work for
employees to perform because of reasons beyond the employer’s control. Further, employees
who are taking industrial action cannot be paid for the period of the industrial action because
of the operation of ss 470 to 475, so there would be no need for a provision to relieve the
employer of its payment obligation in respect of those employees. It would not make sense for
s 524 to apply to employees who are themselves taking industrial action.
[42] Much of the CFMMEU’s case focused on its contention that employees’ refusal to
work the vessel was not industrial action because it was based on a legitimate concern for
their health and safety and therefore fell within the exclusion from the definition of industrial
action found in s 19(2). But even if that contention is accepted, and the employees did not
engage in industrial action, it does not follow that they were stood down for the purpose of s
524. Rather, the implication would be that the company could not rely on s 474 as a reason
not to have paid employees their wages on the days in question. If employees’ refusal to work
the vessel falls within s 19(2), the union and employees can bring proceedings in a court for
breach of the wages provision in the enterprise agreement.
[43] For the above reasons, the company did not stand down employees under s 524. It did
not purport to do so, and it did not in fact do so, because there was available work, namely the
unloading of the vessel. Whether employees held reasonable concerns about an imminent risk
to their health and safety is not a matter I need to determine in these proceedings. However,
there was no regulatory impediment to the unloading of the vessel. It had been granted
‘pratique’. The company believed its safety arrangements were appropriate. Employees and
the union disagreed. But on any view, the company considered that employees could be
usefully employed and wanted them to work.
[44] Even if the company had purported to stand down employees under s 524 and had
done so in a manner that did not meet the requirements of s 524, there is a further impediment
to the union’s application, which is related to the determination that the union seeks the
Commission to make. The CFMMEU submitted that the Commission should determine that
the company invoked s 524 when it was not validly engaged, that there was no basis for the
company to withhold payments from the employees, and that the company must ‘rectify’ this.
[45] The union’s F13 application had stated that the relief it sought was an order that any
deductions from employees’ wages for the relevant period be reversed. In its submissions the
union withdrew this claim and asked in effect that the Commission confine any relief to
orders that are within the Commission’s power. In particular, the union said that it was not
3 Paragraph 2078
[2020] FWC 4147
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asking the Commission for declarative relief, and that to the extent its application was
inconsistent with this position, it amended its application accordingly.
[46] Despite the union’s submissions, what it seeks, in substance, is a decision that
determines that the company stood down employees in a manner that did not comply with
s 524. Such a decision would be declaratory in nature. It would purport authoritatively to
determine whether the company had a legal justification not to pay employees based on s 524
of the Act. Such a decision would require the exercise of judicial power.
[47] The union does not ask merely that the Commission form an opinion about the
employer’s compliance with s 524 as a step in the process of deciding whether to create a new
right or obligation by arbitration. The union’s application in essence asks the Commission to
determine that the employees were stood down unlawfully, and that the company should
make rectification, the implication of which is that it must pay employees wages for the shifts
in question.
[48] In Bristow Helicopters Australia Pty Ltd v AFAP,4 a Full Bench of the Commission
overturned a decision that had determined that an employer had contravened s 524. Pursuant
to the decision, orders had been issued requiring the employer to treat the stand downs as null
and void and to pay the affected employees their wages for the relevant period. The Full
Bench held that these orders were beyond power, and referred to the decision of Gibbs CJ in
R v Gough; Ex parte Key Meats Pty Ltd,5 where his Honour affirmed that the Commission’s
predecessor had no jurisdiction to determine the legal rights of employees who had been stood
down, or to enforce their award rights.6 The Full Bench upheld a different order made by the
Commissioner, which had required that the employer withdraw the stand downs and,
prospectively, allow employees to return to work. This order was permissible, as it created
new rights and obligations and involved the exercise of arbitral power. In my view, Bristow
Helicopters usefully illustrates the proper limits of the Commission’s power under s 526.
Conclusion
[49] The company did not purport to stand down employees under s 524. Although its
managers told employees that they were ‘stood down’, the intended meaning of these words,
and their objective meaning in the relevant context, was that employees would not be paid
because they had refused to work as directed. The application raises a dispute about the
operation of Part 3-5. I have determined that Part 3-5 has no operation in the present case.
Even if the company had purported to stand employees down, the union’s application asks the
Commission for a remedy that is in the nature of declarative relief, which requires the
exercise of judicial power and is therefore beyond the Commission’s jurisdiction.
[50] For these reasons, the application is dismissed.
4 [2017] FWCFB 487: see [53] to [57]
5 (1982) 148 CLR 582
6 At 587
THE SEAL OF THE F NOISSI
[2020] FWC 4147
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DEPUTY PRESIDENT
Appearances:
B. Baarini for the CFMMEU
S. Crilly for DP World Melbourne Limited
Hearing details:
2020
Melbourne
27 July
Printed by authority of the Commonwealth Government Printer
PR721632
