[2015] FWCFB 5530
FAIR WORK COMMISSION

DECISION


Fair Work Act 2009
s.604 - Appeal of decisions

Thiess Pty Ltd
v
Construction, Forestry, Mining and Energy Union
(C2015/3720)
Construction, Forestry, Mining and Energy Union
v
Thiess Pty Ltd
(C2015/3780)
Construction, Forestry, Mining and Energy Union
v
Mt Owen Pty Ltd
(C2015/3781)
Mt Owen Pty Ltd
v
Construction, Forestry, Mining and Energy Union
(C2015/3849)

VICE PRESIDENT HATCHER
VICE PRESIDENT CATANZARITI
COMMISSIONER JOHNS

SYDNEY, 2 OCTOBER 2015

Appeal against decision [2015] FWC 2055 of Senior Deputy President Harrison at Sydney on 7 April 2015 in matter numbers C2013/578 and C2013/579.

Introduction

[1] On 7 April 2015, Senior Deputy President Harrison issued a decision 1 (Decision) determining two applications made by the Construction, Forestry, Mining and Energy Union (CFMEU) pursuant to s.739 of the Fair Work Act 2009 (FW Act) for the Commission to deal with a dispute under the dispute resolution procedure in the Mt Owen Mine Enterprise Agreement 2010 (Agreement). The disputes the subject of the applications concerned entitlements of employees to payment in respect of certain periods in which protected industrial action (in the form of strike action) was taken in the period October-December 2012.

[2] The first dispute concerned employees of Thiess Pty Ltd (Thiess), which operates the Mt Owen coal mine (Mine) under a contract with Mt Owen Pty Ltd (Mt Owen), a subsidiary of Glencore Coal Australia Pty Limited. Thiess was covered by the Agreement at the relevant times. The second dispute concerned employees of Mt Owen, which operates the coal handling and preparation plant for the Mine. Mt Owen was also covered by the Agreement. The disputes could not be settled by conciliation, and accordingly they were arbitrated by the Senior Deputy President in accordance with the dispute resolution procedure in the Agreement.

[3] Two issues arose for consideration in each dispute. The first was whether Thiess and Mt Owen were required to pay employees the “Safety & Production Allowance” (Allowance) provided for in the Agreement to employees for pay weeks during which they had engaged in protected industrial action. This was referred to in the Decision as the “Allowance dispute”. It involved two questions:

[4] The second issue was whether Thiess and Mt Owen were required to pay salary to certain employees who had attended for work at their normal starting times but had not been provided with work during periods in relation to which notices issued by the CFMEU pursuant to s.414 of the FW Act indicated that employees generally would be undertaking protected strike action. This issue primarily involved a consideration of whether the employees were ready, willing and able to perform their duties or, alternatively, whether the consequence of the issue of the notices was that the relevant employees were to be treated as undertaking protected industrial action such that payment to them would be prohibited by s.470. This was referred to in the Decision as the “Wages dispute”.

[5] The parties formulated agreed questions in respect of the two disputes for determination. Although the issues in each dispute were essentially the same, the questions were formulated differently for reasons which are not apparent. In the Thiess dispute, the questions were as follows:

[6] In the Mt Owen dispute, the questions were:

[7] The Senior Deputy President determined the Allowance dispute in favour of the CFMEU, finding that Thiess and Mt Owen were required by the terms of the Agreement to pay the Allowance even during periods of protected industrial action and that s.470 did not prohibit the payment of the Allowance. This meant that the Senior Deputy President’s answer to question 1 in the Thiess dispute was “No”, and the answer to question 2 in the Mt Owen dispute was “Yes”. 4

[8] In relation to the Wages dispute, the Senior Deputy President found that the relevant employees were not at liberty to act contrary to the s.414 notices and consequently were to be regarded as undertaking protected industrial action, with the result that payment of salary to them was prohibited by s.470. The answer to question 2 in the Thiess dispute was therefore “Yes”, and the answer to question 1 in the Mt Owen dispute was “Other than the Allowance, no”. 5

[9] A number of notices of appeal have been lodged in relation to the Decision. Thiess and Mt Owen have separately (in matters C2015/3720 and C2015/3849 respectively) applied for permission to appeal and appealed the Decision insofar as it determined the Allowance dispute. The CFMEU (in matter C2015/3780 in relation to Thiess and in matter C2015/3781 in relation to Mt Owen) seeks permission to appeal and appeals the Decision insofar as it determined the Wages dispute. We will deal with these two aspects of the appeals in turn.

Thiess and Mt Owen appeals – the Allowance dispute

Relevant provisions of the Agreement and relevant statutory provisions

[10] In relation to the Allowance dispute, the first issue as earlier stated was whether under the terms of the Agreement the employer was required to pay employees the Allowance during protected strike action. It is necessary in that connection to set out the relevant provisions of the Agreement. The provisions directly concerning the Allowance are set out in Annexure 6 of the Agreement as follows:

[11] Annexure 6 also separately provides for an “Equipment Care Allowance” constituted by a monthly sharing of 100% of the employer’s budget savings where the actual estimated cost of equipment damage for the month is less than the budget allocation, subject to identified conditions. This allowance is payable to “permanent employees who are employed, or who are on approved paid leave, during the period and are employed at time of payment”.

[12] Salaries for employees covered by the Agreement are separately provided for in clause 13, which is entitled “Salaries & Payment”. Clause 13.4 sets out the “classification rate” for each level of employee, being the “hourly rate excluding shift allowance, public holiday allowance and rostered overtime”. The expression “Classification Rate” is defined in clause 3 to mean “the rate of pay in respect of 35 ordinary hours as prescribed in clause 13.4 of this Agreement”. Clauses 13.6 and 13.7 provide for annualised and weekly salary rates respectively. Clause 13.5 explains the nature and purpose of the salary rates as follows:

[13] Clause 14 provides for payment of superannuation contributions of a percentage amount of “Ordinary Time Earnings”. That expression is defined in the clause as follows:

[14] Clause 7.3, which was relied upon by Thiess and Mt Owen, provides for loss of payment for employees in certain circumstances as follows:

[15] The second question arising in the Allowance dispute concerned whether the prohibition in s.470 of the FW Act applied to payment of the Allowance to employees. Section 470(1) provides:

The Decision

[16] In the Decision the Senior Deputy President initially addressed the question of whether having regard to clause 7.3 of the Agreement, the Allowance was payable for the relevant periods in which employees were engaged in protected industrial action. The reasoning of the Senior Deputy President in concluding that the Allowance was payable may be summarised as follows:

[17] The Senior Deputy President, by reference to the High Court decision in Construction, Forestry, Mining and Energy Union v Mammoet Australia Pty Ltd 13, then determined that s.470 did not prohibit the payment of the Allowance to employees when engaged in protected industrial action. The Senior Deputy President reasoned that:

Submissions

[18] Thiess submitted that the Agreement was to be interpreted in the context of the common law principle of “no work, no wages/pay”. Clause 7.3 operated consistently with this principle by requiring that an employee not attending or not performing work lose payment. There was no reason, Thiess submitted, that “payment” in the context of clause 7.3 was to be read as confined to salary; the Allowance was a “payment” according to the ordinary meaning of the word, was expressly referred to in clause 13 which was entitled “Salaries & Payment”, and if the parties had intended that the exclusion in clause 7.3 only apply to salary they could easily have used the term “salary” instead of “payment” in clause 13. The express application in item (4) of Annexure 6 of the Allowance to identified categories of paid leave (as opposed to unpaid leave) demonstrated that it was not the intention of the parties that the Allowance be payable simply while the contract of employment subsisted. Further, Thiess submitted, item (4) would be otiose if clause 7.3 applied only to salary, since otherwise the Allowance would be payable while ever the contract of employment remained on foot. The fact that the quantum of the Allowance was fixed in the Agreement (unlike the predecessor agreement) did not demonstrate that it was not paid for the performance of work any more than the fact that the amounts of salary were fixed by clause 13.6 meant that payment of salary was not related to performance of work. It was submitted that the Senior Deputy President’s construction of the Agreement was to be rejected as industrially incongruous, divorced from industrial realities and not contributing to a sensible industrial outcome, since it meant that significant payment to employees would be required even where industrial action occurred for extended periods. Accordingly, Thiess submitted, clause 7.3 was to be construed as not requiring payment of the Allowance when protected industrial action occurred, and in any event s.470 prohibited payment of the Allowance.

[19] Mt Owen’s submissions in its appeal not surprisingly substantially reflected the submissions made by Thiess, and it is unnecessary therefore to recite much of its submissions for that reason. Mt Owen did also submit that the exclusion of the Allowance from the concept of “salary” in clause 13.5 did not support the conclusion that it was not related to the performance of work, and the requirement in Annexure 6 that the Allowance be paid to employees “with their salary” was to be interpreted as linking the salary and the Allowance as concurrent entitlements so that if no salary was paid, then there could be no payment of the Allowance. Item (4) of Annexure 6, which required the Allowance to be paid in respect of certain categories of paid leave, was significant because, Mt Owen submitted, it operated as a specific exception to the application of clause 7.3; the non-inclusion of unpaid absences from work in item (4) demonstrated that the parties intended that clause 7.3 was to apply to such absences. The payment of the Allowance as a fixed weekly amount made it indistinguishable from salary, and was therefore encompassed by the prohibition in s.470.

[20] Both Thiess and Mt Owen submitted that their appeals should attract permission to appeal because the Decision involved a question of law about which an erroneous conclusion had been reached and raised issues of novelty and general application. In the case of Mt Owen, to which the Agreement continued to apply, it was submitted that its appeal raised an issue of ongoing application.

[21] The CFMEU submitted that the conclusion reached by the Senior Deputy President was correct. The plain and ordinary language of Annexure 6 demonstrated that the Allowance was payable weekly at a prescribed amount and identified no occasion or circumstance in which it was not payable. The three components of the Allowance did not relate to the taking of protected industrial action or even the attendance at work, and the adjustments to the Allowance occurred by reference to the satisfaction of prescribed targets over the previous 12 months. Once the targets were achieved, the CFMEU submitted, Annexure 6 made no provision for any regression in the payment of the Allowance. Item (4) merely confirmed that the Allowance was payable in relation to paid leave; it did not disentitle employees to payment in circumstances not encompassed by the clause. Annexure 6 operated as an exception to clause 7.3. The Senior Deputy President was correct in concluding that the prohibition in s.470 did not apply because, on the proper construction of the Agreement, the Allowance was not contingent upon performing work in a particular period of time because its components could not be ascribed to any particular period of time since the prescribed targets related to performance over a period of 12 months. The CFMEU submitted that there was no error justifying the grant of permission to appeal, and any general issues concerning the interpretation and application of s.470 were resolved by Mammoet.

Consideration

[22] We will first consider whether, under the terms of the Agreement, the Allowance was payable in respect of the instances in 2012 in which employees of Thiess and Mt Owen undertook protected industrial action. It is necessary to state at the outset that on no view can the provisions of the Agreement concerning the circumstances in which the Allowance is payable, and not payable, be regarded as pellucidly clear. However when the relevant provisions of the Agreement are considered in their entire context, including their historical industrial context, consistent with the principles of interpretation of enterprise agreements set out in the Full Bench decision in The Australasian Meat Industry Employees Union v Golden Cockerel Pty Limited 14, we consider that it becomes reasonably apparent that the conclusion reached by the Senior Deputy President was the correct one.

[23] It is first necessary to consider clause 7.3. Insofar as it concerns the situation of an employee “not attending or performing work”, it clearly applies to an employee who is engaged in protected strike action. However the words of the provision which describe the loss of payment to apply in that circumstance require close attention. The requirement is that the employee must “lose payment for the actual time of such non-attendance or non-performance”. That payment is to be lost for the period of time described carries with it, by necessary implication, that the payment is relatable to the relevant period of time. That is, it must be a payment which, of its nature, is one which represents remuneration for the work that should have been performed during the period of non-attendance or non-performance but was not.

[24] By way of illustration, clause 13.8 provides for the payment of a tool allowance which is required to be paid annually to engineering employees and apprentices “for the purchase, maintenance and upkeep of such tools by the employee”. There is no express provision in clause 13.8 to the effect that the clause operates “otherwise as provided” in clause 7.3. However, it is plain that clause 7.3 is not intended to operate upon the tool allowance in clause 13.8 because that tool allowance is not one which relates to the performance of work during any particular period of time. Rather, it is a reimbursement-type allowance which is payable annually to engineering employees who provide their own tools. For that reason, it is not a payment which clause 7.3 requires to be lost, in part or in whole, for not attending or not performing work for any particular period.

[25] Similarly the equipment care allowance provided for in Annexure 6 is not one that is payable referable to any particular period of the performance of work. The circumstance which gives rise to an entitlement to payment is where there are “budget savings made where the monthly, actual or estimated cost, of equipment damage is less than the budget allocation” (subject to identified conditions). Annexure 6 expressly states that the equipment care allowance is not payable “in those months where actual or estimated costs for equipment damage is equal to or in excess of the allocated monthly budget”. There is no express provision in Annexure 6 that the equipment care allowance is payable “otherwise as provided” in clause 7.3. However it is, again, plain that clause 7.3 does not operate to require any loss of the payment of the equipment care allowance where, for a particular period, an employee does not attend or perform work because the allowance is not referable to the performance of work during any particular period. The criterion for payment is the extent to which the cost of equipment damage is less than the budget allocation, and not the performance of work in a particular period.

[26] Clause 13 makes it apparent that the salaries for which it provides are payments of the type to which clause 7.3 applies - that is, payments which relate to the performance of work in a given period. The classification rates provided for in clause 13.4 are hourly rates payable for “ordinary hours of work”, and are thus directly relatable to the performance of work in given periods. That the annualised salaries set out in clause 13.6 are substantially a product of the hourly classification rates in clause 13.4 is confirmed by clause 13.5, which provides that those salaries “represent compensation for all time worked under the roster cycle prescribed in Annexure 3 of this Agreement … inclusive of all other payments (including holiday loading, shiftwork and all allowances)” (except for the Allowance, the equipment care allowance and the tool allowance), and by the definition of “Salary Rate” in clause 3, which states that the rates in clause 13.6 include “payment in respect of ordinary time, rostered overtime, penalty rates and aggregated allowances”. Annexure 3 sets out the various shift rosters in the roster cycle and identifies how many hours are worked per week in each roster, which presumably forms the mathematical basis for the calculation of the annual salaries. The weekly salaries in clause 13.7 are simply the annual salaries divided by the number of weeks in the year.

[27] The exclusion of the Allowance together with the equipment care allowance and the tool allowance in clause 13.5 we consider to be of critical importance. Clause 13.5 identifies that it is the salaries which constitute compensation for “all time worked” - with the result that the Allowance (together with the equipment care allowance and the tool allowance) does not form part of the compensation for “all time worked”. That supports the conclusion that the Allowance, like the equipment care allowance and the tool allowance, is not a payment relatable to time worked, and is therefore not a payment to which clause 7.3 has application. We therefore agree with the Senior Deputy President’s conclusion that the payment referred to in clause 7.3 only encompasses the salaries provided for in clause 13. The payment of the Allowance during a period of protected industrial action is therefore not excluded by clause 7.3.

[28] The provisions of Annexure 6 which concern the Allowance tend to confirm that it is not a payment linked to the performance of work at any given time. Its three components - Lost Time Injury, Restricted Work Injury and Productivity – are not relatable to the performance of work by any individual employee, but, as their adjustment criteria demonstrate, are concerned with past aggregate indicators of workforce performance in the identified areas. Productivity in particular is measured by reference to “the total volume of bank cubic metres (BCMs) of coal and overburden moved per year” (with each year commencing, for purposes of adjustments to the quantum of the Allowance, from the date of commencement of the Agreement). Thus, to the extent that strike action may affect productivity (by reducing what otherwise would have been the volume of BCMs for the year), it may have the result that a future increase to the Allowance does not occur, but there is nothing in Annexure 6 which provides for a pro-rata payment of the Allowance in the event that there is a non-performance of work due to strike action in any particular week.

[29] Thiess and Mt Owen relied upon the reference to the Allowance being payable to employees “with their salary” as tying the Allowance to the salary as payment for work performed in a particular week, and leading to the result that if salary is not payable in a given week because of strike action, then neither is the Allowance. We consider that this submission seeks to place excessive weight on these particular words. A less strained approach which is consistent with the ordinary meaning of the language used is that this is simply a requirement concerning timing of payment - that is, the Allowance is to be paid to employees each week at the same time as their weekly salary payment, noting that clause 13.1 provides for the timing (weekly) and method (electronic funds transfer) of the payment of salaries to employees.

[30] The submission made by Thiess and Mt Owen concerning item (4) of the provisions of Annexure 6 relating to the Allowance is a more substantial one. If the Allowance is simply payable each week at the same time as salary, as the opening words of Annexure 6 suggest, it is difficult to identify the necessity for it to be stated in item (4) that the Allowance is payable in respect of periods of paid leave. Further, the fact that paid leave is specifically dealt with, but any reference to unpaid leave or absence is omitted, makes it possible to draw the inference that the parties intended that the Allowance not be payable in the latter circumstances.

[31] However we do not consider that these matters are sufficient to displace the strong textual indicators we have already identified that the payment of the Allowance does not bear a relationship to the performance of work or otherwise in any particular period. Item (4) does not, in terms, deal with whether payment of the Allowance is required in respect of unpaid as distinct from paid absences from work, and given the overall context we do not think the inference should be drawn that it was intended that the Allowance not be payable in that circumstance. We are fortified in that conclusion by the fact that there is no mechanism in the Agreement by which a pro-rata payment of the Allowance could be calculated for any unpaid absence for a given number of hours. Nor can any such mechanism be inferred since, for the reasons stated, the quantum of the Allowance does not bear any relationship to hours of work. We therefore agree with the Senior Deputy President’s conclusion that item (4) is to be understood as serving the purposes of clarifying, in circumstances where it did not form part of the salary, that it was payable when any of the identified categories of leave was taken.

[32] The historical industrial context confirms, we consider, that the approach to the construction of the Agreement identified above is the correct approach. The predecessor to the Agreement, the Mt Owen Mine Complex Workplace Agreement 2006 (2006 Agreement), contained in clause 11 provisions for the payment of salaries that were in all relevant respects virtually identical (save for the quantum of the salaries) to clause 13 of the Agreement. Clause 11.5 of the 2006 Agreement in particular provided:

[33] Clause 7.3 of the 2006 Agreement was in the same terms as clause 7.3 of the Agreement.

[34] The “Mt Owen Mine Complex Performance Bonus”, which was dealt with in Annexure 7 of the 2006 Agreement, was structured in a different way. It consisted of similar components - a Safety Bonus, which had the subcomponents of Lost Time Injury and Restricted Work Injury, and a Productivity Bonus. The bonus was payable weekly with the salary, as in the Agreement. However, the payment amounts were variable from week to week dependent on whether weekly targets or criteria were met. In respect of productivity, the minimum amount of bonus was payable if 80% of the calculated weekly target for the movement of coal and overburden was achieved. The bonus increased for every 5% achieved of the target above 80%, with the maximum amount of the bonus being payable if 130% of the target was achieved. No bonus was payable if less than 80% of the target was achieved.

[35] We consider it beyond doubt that, under the 2006 Agreement, whether the Performance Bonus was payable in a given week, and the quantum of the amount that might be payable, was entirely dependent upon the extent to which the identified weekly targets were met. If there was protected strike action in a given week, then that potentially might (depending on the length of the strike) have a consequence for the amount (if any) of the Productivity Bonus component of the bonus that was payable, although it could not affect the Safety Bonus component because of the nature of the targets used in relation to Lost Time Injury and Restricted Work Injury. However the structure of the Performance Bonus as described was antithetical to any notion of there being a pro-rata deduction for any time spent on protected industrial action. The bonus was entirely relatable to the prescribed performance targets, and bore no relationship at all to the hours worked by individual employees.

[36] The evidence before the Senior Deputy President was that, in negotiations for the Agreement, it was agreed between the parties that in return for the employees not pressing 1% of their wage claim the amount of the performance payment would be a fixed amount each week instead of a variable amount. The fixed nature of the Allowance is confirmed by the terms of the Agreement. If in that context the parties had intended to change the basis of the payment by making it referable to the hours worked, or not worked, by employees, then it can be regarded as likely if not certain that the parties would have added express provisions to the Agreement identifying the changed basis of the payment. However, rather than doing this, the parties maintained the provisions of the 2006 Agreement which made it clear that only the salary constituted compensation for hours worked and that the Allowance was separate from the salary. The historical context therefore demonstrates that there was an intentional maintenance of the disconnect between the Allowance and hours of work.

[37] We therefore consider that the Senior Deputy President’s construction of the relevant provisions of the Agreement was correct, and that Thiess and Mt Owen were obliged under the terms of the Agreement to pay the fixed amount of the Allowance each week notwithstanding that protected industrial action occurred in that week.

[38] We now turn to the question of whether the prohibition in s.470(1) of the FW Act applied to the Allowance. There was no dispute before the Senior Deputy President or before us that the payment of the Allowance constituted a “payment” for the purposes of s.470. The issue in dispute was whether payment of the Allowance was one which met the description of being “in relation to the total duration of the industrial action on that day” for the purposes of s.470(1).

[39] In CFMEU v Mammoet 15 the High Court said (emphasis added):

[40] Applying the above reasoning to the circumstances of this case, the conclusion we have earlier stated that the obligation to pay the Allowance was not referable to the performance of work in any particular period compels the further conclusion that the Allowance was not payable in relation to the time during which employees of Thiess and Mt Owen engaged in industrial action had the employee worked during that period. Payment of the Allowance was not prohibited by s.470(1). The Senior Deputy President’s conclusion on this score was correct.

[41] Because the Thiess and Mt Owen appeals raised questions of interpretation of the Agreement which were of some complexity and difficulty, we think it is appropriate to grant permission to appeal. However for the reasons we have stated we consider that the conclusions reached by the Senior Deputy President, and the answers to the questions posed for determination, were correct. Accordingly the appeals are dismissed.

CFMEU appeals - the Wages dispute

[42] The Wages dispute, insofar as it related to Thiess, involved a claim by the CFMEU that employees whose shift was due to commence at 6.45am on the dates 2 October 2012, 5 November 2012, 19 November 2012 and 18 December 2012 should have been paid for the period from 6.45am to 7.15am (the contested period) because they attended for work as normal and were ready, willing and able to work. In relation to Mt Owen, the same claim was made for payment to employees on the incoming shift for the contested period on the dates 26, 27 and 28 October 2012.

[43] By way of background, both Thiess and Mt Owen operate a shift system during the relevant period under which the night shift finished work at 7.15am each morning and the incoming day shift (incoming shift) started at 6.45am each morning. The half-hour overlapping period allows for a shift handover.

[44] In relation to Thiess, on 17 August 2012 the result of a protected action ballot of Thiess employees at the Mine was declared, with the result being that the employees voted in favour of taking industrial action, including strike action. The CFMEU sent a letter to Thiess dated 25 September 2012 in which it gave notice under s.414 of the FW Act that CFMEU members employed by Thiess at the Mine would take protected industrial action in the form of a stoppage of work (that is, strike action) for a period of “twenty four (24) hours and thirty (30) minutes in duration commencing at 6.45am on Monday, 1 October 2012”. That industrial action, if undertaken by all employees in accordance with the notice, would mean that the night shift would remain on strike until 7.15am on 2 October 2012 (that is, until the normal finishing time of the shift), and the incoming shift would be on strike for the first half hour of its shift (from 6.45am to 7.15am).

[45] Relevantly, notices were subsequently provided of further stoppages of the same nature (that is, of 24 hours and 30 minutes duration from 6.45am) to commence on 4 November, 18 November and 17 December 2012.

[46] As earlier stated, the CFMEU’s case before the Senior Deputy President was that on each of the relevant dates, although the night shift remained on strike until the time indicated in the notice (7.15am), the employees on the incoming shift attended for work as normal at 6.45am and were ready, willing and able to perform their normal duties. However Thiess treated the employees as if they were on strike until 7.15am, and did not pay them for the contested period.

[47] The Senior Deputy President made findings of fact in relation to this aspect of the CFMEU’s case. In relation to 2 October 2012, the Senior Deputy President’s findings were as follows:

[48] The CFMEU contended that these findings supported a conclusion that the employees on the incoming shift were ready, willing and able to work, and that Thiess was made aware of this.

[49] It is not necessary to set out the Senior Deputy President’s findings concerning the other dates because the CFMEU accepted at the hearing of the appeal that those findings did not sustain a conclusion that employees on the incoming shift were ready, willing and able to work and did not seek to impugn those findings. Accordingly 2 October 2012 was the only date in contest in respect of Thiess at the appeal hearing.

[50] Relevantly in relation to Mt Owen, notices of stoppages of two hours in duration commencing at 5.15am on the dates 26, 27 and 28 October 2012 were provided by the CFMEU pursuant to s.414 of the FW Act. On each of these dates the night shift undertook industrial action for the two hour period (from 5.15am to 7.15am). However the CFMEU’s case was that the employees on the incoming shift on each date attended for work as normal at 6.45am and were ready, willing and able to perform their normal duties. Like Thiess, Mt Owen treated them as if they were on strike until 7.15am, and did not pay them for the contested period.

[51] The Senior Deputy President’s findings of fact as to what occurred on those dates were as follows:

[52] At the appeal hearing, the CFMEU contended that these findings supported a conclusion that the employees on the incoming shift on each date were ready, willing and able to work, and that Mt Owen was made aware of this.

Submissions

[53] The CFMEU submitted that the Decision involved a significant error of law on an issue of general importance which justified the grant of permission to appeal. The Senior Deputy President erred, it was submitted, in concluding that the effect of the issue of a notice under s.414 of the FW Act was that employees encompassed by the notice were required to undertake the industrial action specified in the notice. There was no provision in the FW Act which expressly stated such a requirement, and no such requirement would be implied having regard to the purpose and objects of the FW Act. The CFMEU submitted that it was the individual employee, not the bargaining representative, who actually decides to take and who takes industrial action. The participation or non-participation of an employee in protected industrial action involved the exercise of a workplace right and engagement in industrial activity protected by the FW Act from adverse action, thus confirming that individual employees retained the choice as to whether to take part in protected industrial action identified in a s.414 notice issued by their bargaining representative. The Full Bench decision in Boral Resources (NSW) Pty Ltd 16, the CFMEU submitted, was authority for the proposition that not acting on a s.414 notice that has been issued did not amount to industrial action within the meaning of s.19(1) of the FW Act. The employees in question had not engaged in industrial action, were ready, willing and able to work, and were therefore entitled to be paid their normal salaries under the Agreement.

[54] In their respective submissions, Thiess and Mt Owen differed as to the ratio decidendi of the Decision in relation to the Wages dispute. Thiess submitted that the Senior Deputy President’s conclusion that the relevant employees were engaged in industrial action was essentially a factual one based on the finding that no work had been performed by them in the relevant period. Thiess pointed to the definition of the expression “industrial action” in s.19(1) of the FW Act, which in paragraph (c) referred to “… a failure or refusal to perform any work at all by employees who attend for work”, as justifying the conclusion that the mere fact that the employees did not perform work meant that they were engaging in industrial action, with the result that Thiess was prohibited under s.470(1) from paying them their salaries for the period. Thiess also submitted that the Senior Deputy President did not find that the relevant employees were ready, willing and able to work on the relevant dates, and the failure of employees to clearly communicate that they were willing to work contrary to the notices meant that they could not be found to be ready, willing and able to work. Thiess characterised the Senior Deputy President’s statements in the Decision to the effect that the employees were bound to take industrial action consistent with the terms of the notices as merely “observations”.

[55] Mt Owen however accepted in its submissions that the Senior Deputy President had determined the Wages dispute on the basis of a conclusion that it was not possible under the FW Act for individual employees to withdraw from or amend the protected industrial action identified in a s.414 notice. Mt Owen defended this conclusion, and submitted that:

Consideration

[56] Contrary to Thiess’s submission, we consider that the Decision makes it plain that the Senior Deputy President determined the Wages dispute on the basis of the proposition stated in paragraph [89] of the Decision that “the [FW] Act does not envisage in the circumstances that employees for whom the CFMEU was a bargaining representative would have any right to decide for themselves that they would act contrary to the notice”. That proposition may fairly be characterised as one of general importance and application. We are not aware of any other decision which has stated any proposition to similar effect. We therefore consider that the public interest requires the grant of permission to appeal.

[57] The factual basis upon which the Senior Deputy President proceeded to determine the Wages dispute was not the subject of any real doubt. We consider, on a plain reading of them, that the relevant s.414 notices clearly communicated to Thiess and Mt Owen that on the relevant dates all employees for whom the CFMEU was a bargaining representative would be undertaking strike action until 7.15am. That necessarily included employees on the incoming shift on each of the relevant days. The CFMEU did not submit otherwise. It was also not in dispute that at no time did the CFMEU purport to withdraw or amend the notices, nor did it attempt to communicate to Thiess or Mt Owen that the incoming shifts would not participate in the strike action on the relevant days but would attend for work at the relevant time. The primary issue to be determined in respect of the Wages dispute therefore is whether the Senior Deputy President was correct in concluding that, in those circumstances, the employees on the incoming shifts were required by the FW Act to be treated as undertaking protected industrial action for the 30 minute period prior to 7.15am on each of the relevant days, and accordingly that s.470 prohibited the payment of wages to them for those periods.

[58] The FW Act does not expressly provide (in Pt.3-3 or elsewhere) that an employee may in any sense be required to take or be deemed to be undertaking protected industrial action, in circumstances where the employee chooses not to participate in it, on the basis that the employee’s bargaining representative has issued a notice under s.414 of the occurrence of that industrial action. Neither Thiess nor Mt Owen contended otherwise. The conclusion reached by the Senior Deputy President that the FW Act was to be construed as having that effect was essentially an inferential one based upon an analysis of the provisions of the FW Act concerning bargaining representatives and the taking of industrial action.

[59] There is nothing that can be discerned in the objects or general purpose or policy of the FW Act which provides contextual support for the inferred requirement for involuntary or deemed participation in industrial action. The object of the FW Act, which as stated in s.3 is “… to provide a balanced framework for cooperative and productive workplace relations that promotes national economic prosperity and social inclusion for all Australians…”, is difficult to reconcile with the putative inferred requirement. Elsewhere in the FW Act, there are significant protections for employees who do not wish to participate in protected industrial action.

[60] Firstly, s.340(1)(a) relevantly provides that a person must not take “adverse action” against another person because the other person “…has, or has not, exercised a workplace right…” or “…proposes or proposes not to, or has at any time proposed or proposed not to exercise a workplace right…”. “Adverse action” is defined in s.342, in respect of employees, to include a wide range of prejudicial actions in employment by employers and industrial associations. Under s.341(1)(b), a person has a “workplace right” if the employee “is able to initiate, or participate in, a process or proceedings under a workplace law or workplace instrument”. This last expression is defined in s.341(2)(c) to include “protected industrial action”. In short, an employer or a union must not take adverse action against an employee who refuses to exercise, or proposes to refuse to exercise, a workplace right to take protected industrial action.

[61] Secondly, s.346(c) provides that a person must not take adverse action against another person because the person “does not engage, or has at any time not engaged or proposed to not engage, in industrial activity within the meaning of paragraphs 347(c) to (g)”. Paragraph 347(f), to which among other things s.346(c) refers, provides that a person engages in “industrial activity” if the person “takes part in industrial action”.

[62] Thirdly, s.348 provides that “A person must not organise or take, or threaten to organise or take, any action against another person with intent to coerce the other person, or a third person, to engage in industrial activity”. “Industrial activity” in s.348 includes, by virtue of s.347(f), taking part in industrial action.

[63] Some critical observations can be made in respect of these provisions. They clearly evince a legislative intention to protect individual employees who choose not to participate in industrial action, including protected industrial action, from retribution or coercion from employers, unions and other persons. The existence of these protections appears to be premised on employees having a right to not take part in industrial action, including protected industrial action, if they do not wish to do so. In particular, s.340(1)(a), which relevantly protects against adverse action an employee who does not exercise or proposes not to exercise a workplace right to participate in protected industrial action, presupposes that an employee who is entitled to take part in protected industrial action has the legal capacity to choose not to do so. This is difficult if not impossible to reconcile with the putative inferred legislative requirement.

[64] The inference which the Senior Deputy President drew from the FW Act that there was a requirement for industrial action to be taken or deemed to be taken by an employee in accordance with a s.414 notice issued by the employee’s bargaining representative was based on an analysis of s.414 considered in the context of the status, rights and responsibilities of a bargaining representative under the FW Act as a whole. However we respectfully disagree with the Senior Deputy President’s conclusions concerning s.414.

[65] Section 414 is a critical part of the scheme established by Pt.3-3 Div.2 of the FW Act for the taking of protected industrial action - that is, industrial action which enjoys the degree of legal immunity conferred by s.415. Section 413 identifies a number of “common requirements” which must be satisfied in order for industrial action to be protected industrial action. Compliance with s.414 is established by s.413(4) as one of those common requirements, and is therefore a precondition for industrial action to be protected under the FW Act.

[66] Section 414 provides:

[67] Section 414(1) applies to “employee claim action”, a category of industrial action which is defined in s.409(1). It is a requirement under s.409(2) for industrial action to be employee claim action that it be authorised by a protected action ballot under Div.8 of Pt.3-3. There was no issue that the industrial action taken by members of the CFMEU against Thiess and Mt Owen was employee claim action. Section 414(4) applies to “employee response action”, which is defined in s.410 and is, broadly speaking, industrial action organised or engaged in as a response to an employer lock out. There is no requirement that such industrial action be authorised by a protected action ballot.

[68] Both s.414(1) and s.414(4) require the provision of written notice of the relevant type of industrial action by a bargaining representative “[b]efore a person engages in” that industrial action. That is, the provision of the required notice is a condition precedent for the taking of the industrial action. The practical effect of the provision is that an employee who intends to undertake or participate in industrial action must ensure, or be satisfied, that his or her bargaining representative has provided the requisite notice. Any failure to provide the requisite notice will mean that the industrial action, if taken, will not be protected and thus will not enjoy immunity under s.415.

[69] We do not consider that either s.414(1) or s.414(4) are capable of being read to mean that once the relevant notice is given, the industrial action must be taken. In the absence of express language to the contrary, a statutory prescription of a precondition to the taking of a particular action would not be read as meaning that satisfaction of the precondition required, as distinct from allowed, the particular action to be taken. No such express language is present in s.414.

[70] The Senior Deputy President, in reaching a contrary conclusion, placed emphasis on three matters. One was that s.414 made no provision for the amendment or withdrawal of a s.414 notice. From this it appears to have been inferred that once such a notice was issued, the industrial action was required to proceed in accordance with the s.414 notice given absent a communication to the contrary from the bargaining representative to the employer. However, we think a different conclusion may be drawn from the premise. Because s.414 does not impose any requirement on an individual employee to take the industrial action specified in a s.414 notice, it was not necessary for the FW Act to establish any machinery concerning the amendment or withdrawal of any such notice. They need not be amended or withdrawn because they do not have the binding effect suggested in the Decision.

[71] Another matter was that the Senior Deputy President concluded that the effect of a protected action ballot was to empower the bargaining representative to act on behalf of the represented to “initiate” the taking of industrial action. We respectfully disagree. The object of the scheme of provisions concerning protected action ballots contained in Div.8 of Pt.3-3 is, as stated by s.436, to “… establish a fair, simple and democratic process to allow a bargaining representative to determine whether employees wish to engage in particular protected industrial action for a proposed enterprise agreement”. It is only an employee bargaining representative who, as the Senior Deputy President observed, may apply for a protected action ballot under s.437(1). To that extent the role of the bargaining representative is significant in the protected action ballot process.

[72] However the effect of a protected action ballot, which is dealt with in subdiv.D (s.459), is of greater significance for present purposes. Section 459(1) (together with the accompanying statutory note) provides:

[73] The chapeau in the above provision makes it clear (and the statutory note tends to confirm) that it is industrial action by employees that is authorised by a protected action ballot, not any particular conduct by a bargaining representative. There is no indication that the legal consequence of a protected action ballot is that a bargaining representative may “initiate” industrial action in the sense that the representative may require it to be undertaken. It is correct, as the Senior Deputy President observed, that the FW Act does not require, once a protected action ballot has been conducted which approves the taking of protected industrial action, that individual employees be consulted about or approve in advance the issue of a notice by a bargaining representative under s.414. However, it cannot be inferred from this that a protected action ballot invests the bargaining representative with authority to unilaterally require engagement in industrial action. Rather, such provisions are unnecessary for the reason that a s.414 notice cannot bind employees in the manner suggested in the Decision.

[74] It may be added that in respect of employee response action, as earlier noted, no prior authorisation by way of a protected action ballot is required. There can be no basis therefore to suggest in that case that the bargaining agent has derived authority to “initiate” protected industrial action in the sense discussed.

[75] As has been stated in a number of authoritative decisions relating to s.414 of the FW Act or the equivalent provisions in the preceding Workplace Relations Act 1996, the policy purpose of the requirement to give written notice of protected employee industrial action is to provide the employer with an opportunity to take such steps as may be available in response to protect its interests. However it has never been suggested in such decisions that a requirement to give notice of protected industrial action is also to be understood as carrying with it an obligation for employees to engage in the conduct specified in the notice. Indeed the opposite conclusion was stated in the Full Bench decision in Boral Resources (NSW) Pty Ltd 17 (emphasis added):

[76] There are many reasons why employees may not choose to take industrial action that has been notified in accordance with s.414. For example, sometimes the mere provision of a s.414 notice gives a new impetus to negotiations which results in agreement being reached, or substantial progress being made, such that the industrial action becomes unnecessary. Sometimes a division about tactics amongst employees may lead to some employees deciding not to participate in industrial action. Employers may seek to persuade their employees by various means not to go ahead with industrial action, and to the extent that their efforts are successful employees will proceed with normal work. If the industrial action that is notified involves a lengthy strike, financial pressure may lead to some employees returning to work before the notified strike period comes to an end.

[77] We are also aware of occasions in which bargaining representatives have issued s.414 notices without there being any intention by employees to take all or any of the industrial action identified in the notice. The use of this tactic is intended, as a result of the uncertainty engendered by the issue of the s.414 notice, to cause disruption to the employer without employees having to incur the loss of wages consequent upon taking industrial action. It was a situation of this nature that was considered in the Boral Resources decision. That did not alter the conclusion that the notification of industrial action under s.414 did not require the identified action to be taken. We add that the evidence in this matter did not suggest that the CFMEU was engaged in a tactic of this nature.

[78] Mt Owen submitted that the facts of this case were distinctive, and different to those in Boral Resources, because the notified industrial action was already underway (in the sense that the night shift had not worked) when the incoming shift had presented for work. We consider this to be a distinction without a difference since, for the reasons already explained, we do not consider that anything in s.414 or elsewhere in the FW Act creates any obligation for employees to take, or to be deemed to be taking, industrial action in accordance with a s.414 notice. On each of the relevant days, the employees on the incoming shift were entitled to decline to participate in the industrial action and to present for work at the normal starting time and in the normal manner. There was no basis for either Thiess or Mt Owen to treat them as if they were undertaking strike action until 7.15am.

[79] As earlier discussed, Thiess sought that the Decision insofar as it related to the Wages dispute be affirmed on grounds different to those stated in the Decision itself. Its submission that the mere non-performance of work by employees on the incoming shifts on each of the relevant days constituted “industrial action” for the purposes of the FW Act was based on the definition of that expression in s.19. In particular Thiess relied upon that part of the definition in s.19(1)(c), which provides that industrial action includes “a failure or refusal by employees to attend for work or a failure or refusal to perform any work at all by employees who attend for work” (underlining added). Thiess submitted that the non-performance of work constituted a failure to perform work for the purpose of the definition.

[80] That submission is rejected. We do not consider that, as a matter of ordinary English, the non-performance of work by employees as a result of the actions of the employer constitutes a failure by employees to perform work such as to fit within that part of the definition in s.19(1)(c). Those words in the definition connote responsibility or causation on the part of the employees for the non-performance of work. It could not sensibly be the case that an employee who is ready, willing and able to perform normal work but performs no work because none is allocated by the employer is thereby engaging in industrial action.

[81] The findings of fact made by the Senior Deputy President which we have earlier set out, and which were not challenged by any party, make it clear that on each of the relevant dates the employees on the incoming shift were ready, willing and able to perform their normal duties from the normal starting time of 6.45am, and that Thiess and Mt Owen were aware of this. We conclude therefore that, on the relevant days, the incoming shifts were not engaged in industrial action. In that circumstance, the prohibition on payment of the employees in s.470 was not applicable. Therefore the answer to question 2 in the Thiess dispute, in respect of 2 October 2012, should have been “No”. As earlier stated, the factual findings of the Senior Deputy President in respect of the other dates identified in the question did not permit the conclusion that the employees on the incoming shift had presented for work in the normal fashion, and an answer to question 2 different to that of the Senior Deputy President in respect of these dates was not sought by the CFMEU in respect of its appeal.

[82] Question 1 in the Mt Owen dispute, which concerned the Wages dispute, was formulated in different terms, namely whether the employees on the incoming shift had an entitlement to payment for the contested period on the identified dates of 26, 27 and 28 October 2012. Mt Owen submitted that because the employees did not perform work, clause 7.3 of the Agreement (which we have earlier set out) required that the employees lose payment for the contested period. It may be accepted that a strictly literal reading of clause 7.3 would support this submission. However such an interpretation would lead to absurd results. It would mean than employees would suffer a loss of payment for any period in which there was no work performed, even if it was for reasons entirely beyond the employees’ control such as there being temporarily no work for the employees to perform. Considered in the context of clause 7.3 as a whole, we consider that the more sensible and preferable interpretation of the provision is that the non-performance of work referred to is a non-performance for which the employee is responsible. Because, on the dates identified in question 1 in the Mt Owen dispute, the non-performance of work by employees on the incoming shift in the contested period was not their fault, but rather the fault of Mt Owen in treating them as if they were on strike, we consider that clause 7.3 was not applicable. Under clause 13 of the Agreement, employees are entitled to payment for the shifts for which they attend in accordance with the shift roster. Therefore the answer to question 1 in the Mt Owen dispute should be “Yes”.

Orders

[83] In the Thiess appeal (C2015/3720) we order as follows:

[84] In the Mt Owen appeal (C2015/3849) we order as follows:

[85] In the CFMEU appeals (C2015/3780 and C2015/3781) we order as follows:

scription: Seal of the Fair Work Commission with the memeber's signature.

VICE PRESIDENT

Appearances:

J. Darams of counsel for Thiess Pty Ltd

J. de Flamingh solicitor for Mt Owen Pty Ltd

A. Walkaden for the Construction, Forestry, Mining and Energy Union

Hearing details:

2015.

Sydney:

11 August.

 1   [2015] FWC 2055

 2   Decision at [17]

 3   Decision at [36]

 4   Decision at [94]

 5   Ibid

 6   Decision at [62]

 7   Decision at [63]

 8   Decision at [64]

 9   Decision at [65]-[66]

 10   Decision at [67]

 11   Decision at [68]-[71]

 12   Decision at [71]

 13   [2013] HCA 36, (2013) 248 CLR 619

 14   [2014] FWCFB 7447 at [41]

 15   [2013] HCA 36, (2013) 248 CLR 619

 16   [2010] FWAFB 1771, (2010) 193 IR 286

 17   [2010] FWAFB 1771, (2010) 193 IR 286

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