DECISION

Fair Work Act 2009
s.418 - Application for an order that industrial action by employees or employers stop etc.

AGL Loy Yang Pty Ltd T/A AGL Loy Yang
v
Construction, Forestry, Mining and Energy Union; Mr Gregory Hardy
(C2017/273)

Alleged industrial action at AGL Loy Yang, Loy Yang site.

[1] In my decision of 16 January 2017 1 I refused to grant an order under Section 418 of the Fair Work Act 2009 (Cth) (the Act), however, I indicated that the decision had been a fine balance and that should the problem continue or should further evidence emerge the decision might be quite different. The decision was made on transcript on Sunday 15 January 2017 and published on 16 January 2017.

[2] A further application was made by AGL on 17 January 2017. AGL requested an order for substituted service. I considered that service on Mr Hardy and Mr Dyke, the key local representatives of the CFMEU was sufficient to ensure that the CFMEU and its officials and delegates were aware of the proceedings. However, I rejected AGL’s application that this should be sufficient service in respect to employees who are members of the CFMEU at Loy Yang. I consider that Loy Yang is in a better position to communicate with its employees and that the employees should be properly informed if they are at risk of having orders imposed which directly affect them.

[3] The matter was listed for hearing on the evening of 17 January 2017 and the hearing was adjourned until early on the morning of 18 January 2017 to provide the CFMEU with the opportunity to consider the evidentiary material provided by AGL at short notice and to get instructions. At the conclusion of the hearing at about 1pm on 18 January 2017 I advised the parties of my decision and issued an Order. These are the reasons for my decision.

[4] The CFMEU, Mr Hardy and AGL were represented with permission. Mr Hardy was not in attendance.

[5] AGL sought to rely upon the material in the earlier proceeding and I considered that appropriate given that the allegations and orders sought are similar. I adopt the findings in my earlier decision.

[6] I decided that I could not issue an Order against the employees of AGL who are members of the CFMEU because I was not satisfied that the employees had been informed of the Section 418 application and the proceedings. The employees did not have a proper opportunity to appear and respond to the allegations. In these circumstances it would be unfair to impose an Order upon them.

[7] AGL significantly augmented the evidence concerning the alleged industrial action and also concerning Mr Hardy’s alleged role.

[8] AGL provided detailed evidence of the approaches made to individual employees. AGL continued to implement its earlier process consistent with Clause 73 of the Loy Yang Power Enterprise Agreement 2010 (the Agreement) whereby it asked employees in the specified order if they would attend for overtime and if the employee declined they moved to the next employee on the list. AGL then contacted employees and directed employees to perform overtime in accordance with Clause 15 of the Agreement. AGL recorded the outcomes of these calls.

[9] To operate the four units at the power station in accordance with the Agreement requires 17 employees on day shift and 16 employees on night shift. In the period since my earlier decision on Sunday afternoon AGL has generally continued to be unable to get sufficient workers to ensure that it can operate all 4 units of the power station.

● Mr James gave evidence that for Sunday night shift 13 calls were made to fill two vacancies but only one position was able to be filled. Units 1 and 2 remained shut down as a result of the lack of staffing.
● For Monday day shift six employees called in sick. AGL cancelled training and as a result filled four positions. 11 phone calls were made. 10 were unanswered and the other employee refused to work. A further 23 phone calls were then made pursuant to Clause 15. 11 failed to answer and did not call back, 11 refused to come in and one agreed to attend. As a consequence unit 1 was unable to be put back on line due to lack of staffing and unit 2 remained off line for mechanical reasons.
● For Monday night shift 9 employees called in sick and there were then 11 gaps in the roster. Three of the positions were filled with overtime arranged before 12 January 2017. 13 phone calls were made in accordance with the Clause 73 process and only four employees answered or returned the calls. Those four employees refused to work. 11 further phone calls were then made pursuant to Clause 15. None of these employees answered the phone or returned the call in a timely manner. Three employees eventually made themselves available one of whom was amongst the 11 called. As a consequence there were five vacancies for the shift and both Unit 1 and Unit 2 remained shut. AGL had intended to return both units to service if they had sufficient staffing.
● For Tuesday day shift five employees called in sick and there were a total of 6 vacancies. One position was filled by overtime which had been arranged prior to 12 January 2017. The other positions were filled by cancelling training and by utilising one employee who was rostered to work a make-up day on that day.
● For Tuesday night shift four employees called in sick before 11am and a further two employees called in sick after that time. There were a total of 9 vacancies. 15 phone calls were made using the Clause 73 process. 8 employees did not answer their phone and did not call back in a timely manner. Of the seven employees who answered the phone only one agreed to work overtime. A further 10 calls were made pursuant to Clause 15 and only 3 employees answered the phone or called back. Only one employee agreed to work overtime. Later in the day further calls were made and some employees agreed to make themselves available. Two positions remained unfilled, however, this was later reduced to one position. Unit 1 remained off line and Unit 2 returned to service at 11pm.
● For Wednesday day shift there were 4 people sick and a total of 6 vacancies. 8 calls were made and six did not answer and the two who did answer did not agree to work. Vacancies were filled by utilising three people rostered for make-up days on that day and redeploying trainers. Minimum staffing levels were achieved.
● At the time Mr James gave evidence five employees had called in sick for the night shift of 18 January 2017.

[10] Mr James gave evidence that from 1 January 2017 to 15 January 2017 the average number of employees on sick leave per shift was 1.7. In a similar period in 2016 the average was 1.6. As can be seen the rate of sick leave on 16, 17 and 18 January has been extraordinary. About one third of the required employees have called in sick.

[11] For 9 of the last 11 shifts AGL have been unable to achieve the minimum staffing levels specified in the Agreement to operate all four units of the power station. I am satisfied that this is unprecedented. New methods have been utilised by AGL since my decision on Sunday to direct employees to work reasonable overtime and those methods have not resolved the problem. AGL did manage to achieve minimum staffing levels for two shifts but this was not as a result of employees agreeing to work overtime but rather through the use of other strategies such as cancelling training. The abnormally high rate of sick leave has continued.

[12] I am satisfied by the new evidence considered in conjunction with the earlier evidence that industrial action is occurring. I am satisfied, on the balance of probabilities, that the failure of sufficient employees to agree to work overtime and the extraordinary level of sick leave is a result of collective action whereby employees are not making themselves available for overtime and attending for work consistent with custom and practice. I reach this conclusion because of:

● The hearsay evidence of Mr Thomas that when calls are made to employees about 50% answer but that those who do not answer generally ring back and respond quickly. For example, the documentary evidence provided by Mr Thomas shows that for night shift on 16 January 11 employees were contacted and none of these employees were contactable. The documentary evidence shows a much lower rate of response than normal from employees during the relevant period.
● The documentary evidence that employees during the period since my decision on Sunday have generally been contacted in accordance with Clause 73 and then contacted a second time in accordance with Clause 15 to be directed to work reasonable overtime. Employees have responded at a much lower rate than normal during the relevant period. That is, there has been a low rate of employees being contactable and then a low rate of positive response from those who have in fact responded. Of course some of the employees who have refused to work overtime have provided reasons which are reasonable or appear to be reasonable having regard to the criteria in Clause 15 of the Agreement. Some others such as the employee who said they were unable to attend due to a sick cow are unlikely to be reasonable. Others failed to provide reasons despite being asked to do so. It is not necessary to consider whether or not individual refusals are reasonable, it is sufficient to conclude that the rate of positive response is significantly less than normal and that the responses provided do not provide any obvious alternative explanation for the change.
● The evidence referred to earlier concerning the extraordinary incidence of sick leave.
● The direct evidence that although staffing is sometimes tight it has only been on two previous occasions during the life of the agreement that employees have failed to agree to work overtime in sufficient numbers such that operations have been affected. AGL provided evidence that those two previous occasions also coincided with industrial campaigning by the CFMEU. I accept that the two previous occasions coincided with the identified industrial issues but it is not necessary to determine that there was a direct causal relationship.
● Given that staffing is sometimes tight it is of course possible that there might be an occasion when it is so tight that sufficient numbers are unable to be obtained. That is, operations might be affected and it is not due to industrial action. However, given that the situation is most unusual and that it has now continued over a significant number of shifts (there have been inadequate employees making themselves available for 9 of the last 11 12 hour shifts) I am satisfied that, in the absence of reasonable alternative explanation, it is unlikely that this could occur in the absence of direct organised action by employees.
● There is no evidence of any other cause of the extraordinary number of shifts during the period when an inadequate number of employees made themselves available.
● The CFMEU is in a good position to provide evidence of alternative explanations for the abnormal behaviour in respect to overtime and sick leave should they wish. The level of unionisation is high, and the CFMEU have strong rights under the Agreement (at least until the date of termination of the Agreement) to information and access to the employees and information. The CFMEU did not seek to provide such evidence or explanation other than the suggestion that employees may be stressed and upset due to the termination of the Agreement decision. I accept that many employees are probably stressed and upset by the termination decision.

[13] The CFMEU submitted that a number of other strategies are employed by AGL to fill vacancies. They are (a) use of make-up days; (b) use of extended shifts – i.e. extending one shift by six hours and calling in the other shift six hours earlier and; (c) altering an employee’s roster by bringing them in a day earlier.

[14] In respect to (a) AGL argue that the rules in the Agreement concerning make up days make it virtually impossible to use make up days to cover absences unless the employee is in fact rostered to work the make-up day on the relevant day. Generally AGL seek to use the days for training but where necessary the training will be cancelled so that the day can be utilised to make up the shortfall. This strategy was used during the period from 12 January 2017 just as it has been used in earlier periods.

[15] In respect to (b) AGL argue that this is just another form of overtime. This strategy was utilised by AGL very rarely prior to 12 January 2017 and it has been utilised by AGL during the period since 12 January 2017. In respect to (c) AGL argue that this is also just another form of overtime and the work is paid for at overtime rates. This strategy has also been utilised by AGL prior to 12 January 2017 and has been utilised by AGL during the period since 12 January 2017.

[16] I agree with the AGL submissions in respect to these other strategies. These three strategies have been utilised by AGL in the past and during the current difficulties. Despite the availability of these strategies there has been an unprecedented inability to achieve minimum staffing requirements and this has been due to higher rates of sick leave and to higher rates of employees failing and/or refusing to respond positively to requests to work overtime.

[17] I am not satisfied that there is adequate evidence to satisfy me that the problem will not continue. That is, I am satisfied that not only is there industrial action happening but it is also probable that it will continue.

[18] I am satisfied that industrial action is occurring and is probable. The industrial action is a ban or limitation on the performance of overtime contrary to Clause 15 or Clause 73 of the Agreement or contrary to custom and practice regarding availability for the performance of overtime. It is also the taking of personal/carers leave under Clause 18 of the Agreement or under the Fair Work Act in a manner that results in a restriction or limitation on the performance of work.

[19] There is no necessity for a ban or limitation to be a total prohibition. I accept that some employees have agreed to work overtime and some have not taken sick leave. I accept that some employees have simply exercised their right under the Agreement and the NES to refuse overtime on particular occasions or take sick leave when sick. However, I am satisfied that there has been a change to the custom and practice in respect to these matters and that the change has been organised in order to harm AGL.

[20] I now turn to the question of whether or not the CFMEU is organising the industrial action. I stand by the conclusions reached in my earlier decision concerning the lack of compelling evidence of Mr Hardy’s involvement on 12 January 2017. The CFMEU submitted, and I accept, that this is reinforced by the fact that Mr Hardy came on site at around 9am and the decision of DP Clancy terminating the Agreement was not handed down until 11.30am. The evidence concerning the time when Mr Hardy left the site is also not particularly clear.

[21] AGL sought to rely upon an email sent by Mr Hardy to CFMEU members on 21 March 2016 2. This email advised employees that: “if you are not up to scratch – you should consider taking sick leave” and then in the concluding paragraph of the email advised employees that “when we stand united, and box smart, we win.” The CFMEU objected to the admission of the email on the grounds that it had been discovered by the Fair Work Commission order issued in earlier proceedings related to the enterprise bargaining for the new Agreement involving AGL and the CFMEU. It is not necessary to determine this matter because given that the email is almost ten months old and there have been extensive twists and turns in the bargaining process since that time, I am not satisfied that it is relevant to establishing that Mr Hardy or the CFMEU are organising the current action.

[22] The CFMEU sought to rely upon an email sent by Mr Hardy to members on 16 January 2017 3. In that email Mr Hardy explains why he did not attend the hearing of the earlier Section 418 application on Sunday 15 January 2017. He says that he “was asked by Geoff Dyke, on the advice of our lawyers, not to attend”. He then says that the allegations made against him are “completely false and unsubstantiated” and that “I have not and am not organising the alleged ban or limitation on the working of overtime and do not support such a ban or limitation”. I do not consider that this evidence is of any probative value given that Mr Hardy had the opportunity to attend the hearing and give this evidence and that Mr Hardy was not available to be cross examined about this evidence.

[23] The only direct evidence of Mr Hardy’s involvement is in the evidence of Mr James. Mr James says that as the Manager of Station Operations the shift managers provide him with regular updates on staffing and this included during the present crisis. On 14 January 2017 a shift manager blind copied Mr Greg Hardy into two email updates the shift manager was providing to Mr James. Mr Hardy is on long service leave so there is no operational reason why Mr Hardy requires this information. The first email specifically advises of the current vacancies for the shift and of the efforts to fill vacancies and the likely operational consequences. It also includes Mr James’ instruction for the shift manager to go through the call list and to document responses. There is of course no evidence that Mr Hardy asked for the information. I infer that Mr Hardy received the information given that he had the opportunity to provide evidence in this matter and failed to do so. Considered in context I am satisfied that this is compelling evidence of the involvement of Mr Hardy in organising the industrial action.

[24] I agree with the submissions of AGL that the failure of the CFMEU to provide evidence supports the drawing of inferences that Mr Hardy and the CFMEU are organising the industrial action in circumstances where there is a high rate of unionisation and a long history of Mr Hardy’s leadership and influence on the station operations group of employees.

[25] The CFMEU argued that it is not liable for the actions of Mr Hardy. The CFMEU referred to the relevant union rules which provide that the delegates and Mr Hardy do not have the power to undertake industrial action and that strikes must have executive sanction and that it is the district executive, not Mr Hardy as lodge secretary, who manage and control industrial matters. I am satisfied that, depending upon the circumstances, Section 418 orders can be issued against unions even if the unprotected industrial action has not been properly authorised in accordance with the union rules. Given his consistent leadership role I am satisfied that in respect of industrial matters at the Loy Yang site Mr Hardy acts with the apparent authority of the CFMEU. I am also satisfied that the circumstances in this case are different to those which applied in the AMWU v UGL matter 4. I am not satisfied that the CFMEU have been acting in a firefighting capacity.

[26] I do not consider that the bulletin issued by Mr Dyke on behalf of the CFMEU District Executive is sufficient to alter this situation. Following my decision on Sunday 15 January 2017 AGL wrote to the CFMEU Mining and Energy Division National President, Mr Maher. AGL threatened legal action to recover its financial losses and requested the CFMEU to direct Mr Hardy not to engage in the campaign of unprotected industrial action and to act to stop the action. Mr Dyke issued a bulletin on behalf of the District Executive on 16 January 2017 which appears to be at least in part a response to this correspondence. In that bulletin Mr Dyke advises that the Fair Work Commission had the previous day handed down a decision “stating that there is insufficient evidence to be satisfied that industrial action was actually occurring at this time.” The bulletin then says that: “in respect to these unfounded allegations, the District Executive thought it timely to remind you of your legal obligations regarding overtime.” The bulletin then sets out the right to refuse overtime in accordance with Clause 73 but also that when required to work overtime in accordance with Clause 15 an employee can only refuse where that request is reasonable. The bulletin also advised that absenteeism can be a factor that may give rise to excessive overtime requirements and “asks that all employees seek to maximise their availability, regardless of the stress you may be under due to AGL terminating the Agreement and their threatened pay cuts.” Although there is nothing offensive or inaccurate in the bulletin, given I am satisfied that industrial action is occurring and without the ability to question Mr Dyke and Mr Hardy it does not provide evidence that Mr Hardy is not organising the action.

[27] On balance the bulletin does not alter my view that the evidence that Mr Hardy was blind copied into the emails from the shift manager concerning vacancies and the progress in filling them is sufficient to satisfy me that Mr Hardy is organising the industrial action. It also does not alter my finding that Mr Hardy was acting with the authority or apparent authority of the CFMEU.

[28] It is not disputed that if industrial action is occurring it is unprotected industrial action.

[29] Having found that unprotected industrial action is occurring and is also probable and having found that it is being organised by Mr Hardy and the CFMEU I must issue an order that it stop.

[30] After considering submissions from the parties on the content of the Order I issued an Order. I considered in all the circumstances that one month was an appropriate time period for the Order. It is reasonable to infer that the industrial action is a response to the decision to terminate the Agreement following application by AGL. It will be some time before the full implications of this decision and its impact on bargaining will be clear. It is not likely that the anger and upset that the CFMEU say their members feel will disappear. The CFMEU have appealed the decision to terminate the Agreement. In the circumstances it is appropriate that the Order remain in place for a reasonable time period. The CFMEU made no submission concerning the time period for the Order.

COMMISSIONER

Appearances:

Mr C O’Grady appeared for AGL.

Mr S Crawshaw appeared for the CFMEU and Mr Hardy.

Hearing details:

2017

Melbourne with video to Sydney

January 17 and 18

 1   [2017] FWC 306.

 2   Exhibit AGL3.

 3   Exhibit CFMEU2.

 4   [2011] FWAFB 4777.

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