[2021] FWC 1875

Fair Work Act 2009

s.437 - Protected action

Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union known as the Australian Manufacturing Workers' Union

Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia

Proposed protected action ballot of employees of BAE Systems Australia Limited.

[1] The Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union known as the Australian Manufacturing Workers' Union (AMWU) and the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU) have applied to the Fair Work Commission (FWC) for a protected action ballot order (Application) pursuant to s 437 of the Fair Work Act 2009 (Cth) (FW Act).

[2] The Application was supported by statutory declarations from Mr Adam Woodage, Union Organiser for the CEPU (Mr Woodage), Ms Jade Cochrane, Union Organiser for the AMWU (Ms Cochrane) and Mr Michael M. Michael, Managing Director of Democratic Outcomes Pty Ltd (CiVS) (Mr Michael).

[3] The AMWU and CEPU seek an order for a ballot to be conducted of employees of BAE Systems Australia Limited (BAE) whose employment is covered by terms of the BAE Systems Australia Limited (Henderson) Collective Agreement 2017-2020 (Agreement) who are represented by the AMWU or the CEPU, or who are bargaining representatives for themselves but are members of the AMWU or the CEPU (Employees).

[4] The Application was the listed for a Conference, and if necessary a Hearing, on 8 April 2021 following email advice from BAE that the Application was opposed.

[5] The parties were issued directions on 7 April 2021 at approximately 3.30pm (AWST) (Directions). At approximately 5pm (AWST), 7 April 2021 Chambers received notice that the parties had reached a consent position.

[6] On 8 April 2021 BAE filed a witness statement of Matthew Kenneth Preedy, the Head of Production for BAE, and submissions in relation to section 443(5) of the FW Act.

[7] BAE provides defence and security services at a location called the Henderson Site.

[8] The Henderson Site is a 14.5 hectare waterfront, vessel berthing and docking, lay down and fabrication area located within the Australian Marine Complex, which provides infrastructure and support to Defence, local marine and offshore energy and resource industries.

[9] The docking arrangements for vessels on site are highly specialised. For example, the synchro lift at the Henderson Site, which is used to lift the vessels out of the water and put them in a cradle, requires specialised training. There is only other one lift of this kind in Western Australia. The Employees performing this work require a minimum of four years' experience in vessel docking.

[10] BAE's work on vessels can include testing which is required to be completed both on the hardstand and when the vessel is in the water, using the Common User Facility, which is leased by BAE from the state as needed. If BAE misses the time that has been booked to use the Common User Facility, there is no guarantee that BAE could rebook without delays, which could have potentially significant consequences for the owners of vessels that BAE is tasked to perform work on.

[11] BAE has entered into an agreement to provide maintenance, capability enhancement and sustainment services for a fleet of ANZAC Frigate Class Ships (Alliance Agreement). Under the Alliance Agreement, BAE provides support services to the other alliance partners. Those support services relevantly include providing craneage and scaffolding, implementing the system for issuing work permits and attending to mechanical and electrical isolations, and operating a warehouse which stores materials used by the other alliance partners.

[12] BAE has a standard process for on-boarding any workers on site. It includes:

1. Identifying suitable candidates then checking the CVs, reference checks, qualifications and experience of all candidates who apply;

2. A police check requirement for site, which typically takes one - two weeks to complete;

3. Pre-employment medical examinations;

4. BAE has a Verification of Competency process to confirm skill competency. Depending on the skills and competencies required, that could take up to a two day process to verify the competencies (noting that if BAE had to on-board a large number of workers simultaneously, this process could take substantially longer than two days);

5. Some workers are required to have a Defence clearance and that can take around four - six weeks to complete after the police check; and

6. A site induction and any additional BAE training may be required depending on where the person will be working and what they will be doing. The time involved varies.

[13] This process means there are significant delays before an alternative workforce could be on boarded in the event of industrial action.

[14] In addition to BAE and the other Alliance partners, there are multiple contractors that are based on the Henderson Site. There are also commercial parties who operate tugs and supply vessels for the offshore energy and resources sector.

[15] According to Mr Preedy the types of industrial action proposed in the ballot could prevent work proceeding as usual for all the businesses on site due to the critical functions performed by BAE (by the employees covered by the Agreement). If BAE's support services are disrupted, that would directly affect the capacity of those companies (and their employees and subcontractors) to continue to perform their own work on site.

[16] BAE issued a Notice of Employee Representational Rights (NERR) to the Employees on 7 July 2020.

[17] On 27 July 2020 the parties held their first bargaining meeting. Since negotiations commenced, there have been twenty-two (22) negotiation meetings. There have also been four meetings where the parties have met to review proposed wording, separate to the negotiation meetings.

[18] The AMWU and the CEPU provided a log of claims in August 2020. Two claims are yet to be resolved.

[19] The last bargaining meeting was held on 1 April 2021.

[20] The FWC is obliged to issue a protected ballot order in the following circumstances:

"443 When the FWC must make a protected action ballot order

(1) The FWC must make a protected action ballot order in relation to a proposed enterprise agreement if:

(a) an application has been made under section 437; and

(b) the FWC is satisfied that each applicant has been, and is, genuinely trying to reach an agreement with the employer of the employees who are to be balloted.

(2) The FWC must not make a protected action ballot order in relation to a proposed enterprise agreement except in the circumstances referred to in subsection (1).

(3) A protected action ballot order must specify the following:

(b) the group or groups of employees who are to be balloted;

(c) the date by which voting in the protected action ballot closes;

(d) the question or questions to be put to the employees who are to be balloted, including the nature of the proposed industrial action.

(3A) For the purposes of paragraph (3)(c), the FWC must specify a date that will enable the protected action ballot to be conducted as expeditiously as practicable.

(4) If the FWC decides that a person other than the Australian Electoral Commission is to be the protected action ballot agent for the protected action ballot, the protected action ballot order must also specify:

(a) the person that the FWC decides, under subsection 444(1), is to be the protected action ballot agent; and

(b) the person (if any) that the FWC decides, under subsection 444(3), is to be the independent advisor for the ballot.

(5) If the FWC is satisfied, in relation to the proposed industrial action that is the subject of the protected action ballot, that there are exceptional circumstances justifying the period of written notice referred to in paragraph 414(2)(a) being longer than 3 working days, the protected action ballot order may specify a longer period of up to 7 working days.

Note: Under subsection 414(1), before a person engages in employee claim action for a proposed enterprise agreement, a bargaining representative of an employee who will be covered by the agreement must give written notice of the action to the employer of the employee."

[21] Section 437 relevantly provides as follows:

"437 Application for a protected action ballot order

Who may apply for a protected action ballot order

(1) A bargaining representative of an employee who will be covered by a proposed enterprise agreement, or 2 or more such bargaining representatives (acting jointly), may apply to the FWC for an order (a protected action ballot order) requiring a protected action ballot to be conducted to determine whether employees wish to engage in particular protected industrial action for the agreement.

(2) Subsection (1) does not apply if the proposed enterprise agreement is:

(a) a greenfields agreement; or

(b) a multi-enterprise agreement.

(2A) Subsection (1) does not apply unless there has been a notification time in relation to the proposed enterprise agreement.

Note: For notification time, see subsection 173(2). Protected industrial action cannot be taken until after bargaining has commenced (including where the scope of the proposed enterprise agreement is the only matter in dispute).

(a) the group or groups of employees who are to be balloted; and

(b) the question or questions to be put to the employees who are to be balloted, including the nature of the proposed industrial action.

(4) If the applicant wishes a person other than the Australian Electoral Commission to be the protected action ballot agent for the protected action ballot, the application must specify the name of the person.

Note: The protected action ballot agent will be the Australian Electoral Commission unless the FWC specifies another person in the protected action ballot order as the protected action ballot agent (see subsection 443(4)).

(5) If A group of employees specified under paragraph (3)(a) is taken to include only employees who:

(a) will be covered by the proposed enterprise agreement; and

(i) are represented by a bargaining representative who is an applicant for the protected action ballot order; or

(ii) are bargaining representatives for themselves but are members of an employee organisation that is an applicant for the protected action ballot order.

(6) The application must be accompanied by any documents and other information prescribed by the regulations."

[22] It is not in dispute that the AMWU and the CEPU have standing to make the Application in their capacity as bargaining representatives.[1] The notification time in relation to the Proposed Agreement is 7 July 2020.[2] The Proposed Agreement is not a greenfields agreement or a multi-enterprise agreement.[3]

[23] The Application specifies the group of employees who are to be balloted.[4]

[24] The AWMU and the CEPU have proposed that CiVS conduct the ballot. The parties sought that the date by which the ballot should close would fifteen (15) working days from the Commencement date specified in paragraph 6.2.1 of the Order.[5]

[25] The Application also specifies the questions to be put to the employees who are to be balloted, including the nature of the proposed industrial action.[6]

[26] The Application was accompanied by documents and other information prescribed by the Fair Work Regulations 2009 (Cth).

[27] I am therefore satisfied that the Application has been made in accordance with s 437 of the FW Act.

[28] The FWC may only make the order sought if the FWC is satisfied that each applicant has been, and is, genuinely trying to reach an agreement with the employer of the employees who are to be balloted.

[29] The reference to the FWC being "satisfied" means that determining whether or not the requisite circumstance exists is a discretionary decision. The expression "has been, and is" imports temporal considerations, both of which are to be considered. An applicant for a protected action ballot order must satisfy both.

[30] In Esso Australia Pty Ltd v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union; Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia; The Australian Workers' Union [7] (Esso Case), the Full Bench stated:

"Whether an applicant 'has been, and is, genuinely trying to reach an agreement' is a question of fact to be decided having regard to all of the facts and circumstances of the particular case. Such a construction of s.443(1)(b) is consistent with the judgment of the Full Court in JJ Richards and with a number of Full Bench decisions of the Commission (see Total Marine; Pelican Point Power Limited v ASU; JJ Richards No.1; Alcoa; JJ Richards No.2; and Farstad" [8] (references omitted)

[31] In Total Marine Services Pty Ltd v Maritime Union of Australia, [9] a Full Bench of Fair Work Australia relevantly stated:

"[31] In our view the concept of genuinely trying to reach an agreement involves a finding of fact applied by reference to the circumstances of the particular negotiations. It is not useful to formulate any alternative test or criteria for applying the statutory test because it is the words of s 443 which must be applied. In the course of examining all of the circumstances it may be relevant to consider related matters but ultimately the test in s 443 must be applied.

[32] We agree that it is not appropriate or possible to establish rigid rules for the required point of negotiations that must be reached. All the relevant circumstances must be assessed to establish whether the applicant has met the test or not. This will frequently involve considering the extent of progress in negotiations and the steps taken in order to try and reach an agreement..."

[32] Both decisions stand for the proposition that a decision rule should not be adopted for the purposes of determining whether an applicant for a protected action ballot order has been, and is, genuinely trying to reach an agreement with the employer of the employees who are to be balloted. The entirety of the circumstances of the case must be taken into account.

[33] The AMWU and the CEPU provided evidence of the steps taken by them to bargain and of the progress of bargaining to date.

[34] In all of the circumstances, I am satisfied that the AMWU and the CEPU have been, and is, genuinely trying to reach an agreement with BAE.

[35] Pursuant to s 414 of the FW Act, where an employee is to engage in protected industrial action, their bargaining representative must give written notice of the action. Section 414(2) requires three working days' notice, or any longer period specified in the protected action ballot order.

[36] BAE submits that, if an order is to be made, the FWC should exercise its discretion to increase the subsection 414(2)(a) notice period of three working days.

[37] Section 443(5) of the FW Act provides that:

"If the FWC is satisfied, in relation to the proposed industrial action that is the subject of the protected action ballot, that there are exceptional circumstances justifying the period of written notice referred to in paragraph 414(2)(a) being longer than 3 working days, the protected action ballot order may specify a longer period of up to 7 working days."

[38] This requires consideration of:[10]

1. whether the circumstances are 'exceptional';

2. whether the 'exceptional circumstances' justify a requirement of notice longer than the statutory default; and

3. what the period of notice should be, up to a maximum of seven days.

[39] The determination of whether the circumstances of a particular case are 'exceptional' involves an evaluative judgement of those circumstances. Circumstances may be "exceptional" if they are out of the ordinary course, unusual, special or uncommon. They need not be unique, unprecedented, rare or unexpected. For this purpose, "circumstances" may include a combination of factors which together produce a situation that is out of the ordinary course, unusual, special or uncommon, notwithstanding that none of them taken in isolation would be "exceptional".[11]

[40] Determining whether the "exceptional circumstances" justify a requirement of notice longer than the statutory default inevitably requires balancing the interests of the employer and third parties in having a greater opportunity to take defensive action, against those of the employees which may be adversely affected by a diminution in the effect of their industrial action, and hence their bargaining power.

[41] Having concluded that particular circumstances are exceptional, and that they justify a requirement of a notice period longer than the statutory default, a Member must decide whether to exercise their discretion to grant an additional period of notice and determine how long that period should be.[12]

[42] BAE provided evidence in support of its assertion that exceptional circumstances currently exist, which justify a requirement for a longer notice period. The evidence indicates that there is the potential for significant impacts to BAE, its clients, customers and the broader Western Australian and Australian community.

[43] Due to the very onerous obligations in sourcing workers for the Henderson Site, BAE submits five working days as a notice period would assist BAE to source alternative labour within its operations and/or implement subcontracting arrangements, including on-boarding suitably qualified personnel to the site.

[44] It is not practically, and logistically, viable for BAE, other businesses on site, vessel operators and Defence who use the Henderson Site to simply redirect their vessels at short notice to alternative sites in Western Australia.

[45] If the Defence operations are delayed, BAE incurs financial penalties under their arrangement with the Commonwealth. Not only this, but the delays could also affect the capacity of the Navy to deploy vessels when needed.

[46] Other businesses on site may also incur financial penalties as there may be flow on impacts for every business that has scheduled repairs or maintenance. If a vessel needs critical repairs, the business may have to meet the cost of sourcing a replacement vessel or subcontracting that work to someone else.

[47] COVID-19 has significantly exacerbated the challenges of obtaining an alternative workforce to ensure continuity of operations, given:

1. the rapid and on-going nature of changes to State border arrangements;

2. the potential for visitors to Western Australia to have to enter fourteen (14) days quarantine; and

1. the requirements associated with Western Australia's GTG PASS registration process.

[48] With additional notice of industrial action, BAE, the clients, vessel operators and Defence will have an opportunity to make logistical decisions that will not be as compromising financially or operationally.

[49] I am satisfied that the nature, and the potential impact, of the proposed industrial action is such that exceptional circumstances do exist justifying the extension of the notice period. In light of the evidence before me, I have determined to exercise my discretion to grant an extension of the notice period. I am satisfied that an extension of the notice period from three working days to five working days is appropriate in all the circumstances.

[50] Having been satisfied that the requirements of s 443(1)(a) and (b) of the FW Act have been complied with, the Application is granted and a protected action ballot order has been issued.[13]

[1] F34B - Declaration in support of an application for protected action ballot order dated 31 March 2021 - Jade Cochrane, 2.1 ('Cochrane Declaration'); F34B - Declaration in support of an application for protected action ballot order dated 31 March 2021 - Adam Woodage, 2.1 ('Woodage Declaration')

[4] Form F34 - Application for a protected action ballot order dated 1 April 2021, 2.1 ('F34').

[7] [2015] FWCFB 210.

[9] [2009] FWAFB 368.

[10] National Tertiary Education Industry Union v Charles Darwin University [2018] FWCFB 4011, [23] - [25].

[11] Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing, and Allied Services Union of Australia v Australian Postal Corporation (2007) 167 IR 4; [2007] AIRC 848, [10]; accepted as a correct statement of the law in Construction, Forestry, Maritime, Mining and Energy Union v DP World Sydney Ltd [2019] FCAFC 99, [7] - [8].

[12] National Tertiary Education Industry Union v Charles Darwin University [2018] FWCFB 4011, [25].

[13] PR728413.

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