"Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union" known as the Australian Manufacturing Workers' Union (AMWU) v Pacific Marine Batteries Pty Ltd T/A PMB Defence - Batteries [2022] FWC 49 (14 January 2022)

[2022] FWC 49

Fair Work Act 2009

s.437 - Application for a protected action ballot order

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

Pacific Marine Batteries Pty Ltd T/A PMB Defence - Batteries

Proposed protected action ballot of employees of Pacific Marine Batteries Pty Ltd - extension of notice period

• [1] On 24 December 2021 the Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (AMWU) applied under s 437(1) of the Fair Work Act 2009 (Act) for a protected action ballot order. The order was sought in relation to bargaining for a proposed enterprise agreement with Pacific Marine Batteries Pty Ltd (PMB).

• [2] The requirements for making a protected action ballot order are set out in Part 3-3, Division 8 of the Act. Section 441 of the Act requires the Commission to, as far as practicable, determine an application within 2 working days after the application is made.

• [3] In this case, in light of the relevant persons at PMB being on leave and the company's Christmas shutdown until 10 January 2022, the AMWU did not press its application. The Respondent advised on 10 January 2022 that it contested the making of the order in two respects: that the draft order provided by the AMWU incorrectly named the parties; and that it sought an extension of the notice period to 7 days.

• [4] On 12 January 2022, the AMWU provided an amended draft order addressing the issues raised by PMB and advised that it opposed any extension of the notice period. The application was dealt with at a hearing on 12 January 2022. At the conclusion of the hearing the Commission held informal discussions with the parties, following which PMB undertook to respond to a proposal by the AMWU by noon on 13 January 2022. The proposal was not accepted, and the Commission has proceeded to determine the application.

• [5] A protected action ballot order may only be made in limited circumstances and the Commission does not have the discretion, other than to make an order, if it is satisfied that there has been a valid application made under s 437 and that the applicant has been and is genuinely trying to reach an agreement with the employer of the employees who are to be balloted.

• [6] The Respondent did not dispute either that the application is valid or that the AMWU has been and is genuinely trying to reach agreement. On the basis of the material filed by the AMWU, I am satisfied as to each of these matters.

• [7] It follows that the application for a protected bargaining order must be granted.

• [8] PMB contended that in the event that a protected action ballot order is made, there are exceptional circumstances justifying the period of written notice referred to in s 414(2)(a) of the Act being longer than three working days, and that 7 days should be specified.

• [9] Mr Stephen Faulkner, CEO of the Respondent gave evidence, including:

• The Respondent is the manufacturer of batteries for submarines and the only submarine battery manufacturer in Australia.

• The Respondent has agreements with the Commonwealth and other countries in respect of the delivery of batteries for defence operations.

• PMB's contract with the Commonwealth to provide batteries for its fleet of Collins Class submarines includes an obligation to deliver twin cells every month (a whole battery is several hundred twin cells). The consequences of not delivering that are not severe because PMB delivers two fully commissioned batteries every 12 months, and this is not imminent. But at times it is required to deliver twin cells at short notice.

• The Respondent incurs financial penalties if they are unable to meet the deadlines for delivery of batteries.

• PMB also has a contract with the Canadian Navy. This involves delivery of the whole battery system in one shipment, so any delay in the manufacture of cells is a problem, as the entire system needs to make it on to the ship. As a result of COVID-19, PMB is already currently running late on delivery by about a month and has booked in shipping to deliver by a certain date which will limit the extent of the lateness. If the ship is missed, shipping needs to be renegotiated. That is why the company is worried about the prospect of protected action - each day matters, and any extra notice the company has to try to make arrangements to mitigate the effect of protected action is important.

• The shipping of batteries is time sensitive and can impact on the navy's ability to deploy vessels when needed.

• In the current global environment any further delay has the capacity to significantly impact the ultimate delivery date as finding alternate shipping is very problematic. Delays of weeks and months are currently not unusual. For example, a shipment from the United Kingdom to Australia via Hamburg and Singapore that would usually take approximately 2 months, took 7 months, having missed the connecting ship in Hamburg.

• PMB also has an extended process for onboarding of workers, which includes obtaining police checks, which can take anywhere from a day to six weeks to obtain, defence clearances for some workers and site inductions and specific training for new employees due to the specialised nature of the work undertaken by PMB. Approximately 3 or 4 employees require defence clearances, necessary to commission batteries.

• PMB has just under 40 production employees at present which is being supplemented by contract labour. The company has been growing very fast, and its approach to recruitment includes initially engaging people as contractors, obtaining a police check (but not defence clearance), and if they are suitable, subsequently offering employment on an ongoing basis. There are currently over 12 contractors engaged, and there are also a number of engineering staff.

• To mitigate the impact of protected action, PMB will try and accelerate production as much as it can, and its capacity to arrange overtime and shiftwork is increased if there is more notice of protected action. PMB will also accelerate production between the order being made and the conclusion of the ballot.

• Whilst the difference between 3 and 7 days might proportionally seem like a small ask, "it's still something extra which may help".

• COVID-19 has exacerbated the challenges in obtaining an alternative workforce. The company also faces a threat of losing staff if they have to isolate as close contacts, for example. This means that PMB's capacity to ramp up production may be more limited than a month ago.

• [10] PMB referred to four single Member decisions that are said to have similarities with this case.[1] Whilst each of these decisions granted a longer period of notice, in each case a period less than 7 days was ordered.

• [11] One of these decisions - The Maritime Union of Australia Division, Construction, Forestry, Maritime, Mining and Energy Union v Sydney International Container Terminals Pty Ltd T/A Hutchison Ports Australia Pty Limited; Brisbane Container Terminals Pty Ltd T/A Hutchison Ports Australia Pty Limited,[2] helpfully summarised the principles to be applied in considering whether an extension of the notice period should be granted. I have applied them in this case without repeating them.

• [12] Each case must be considered on its own facts and circumstances, and whilst the cases referred to by the Respondent share some similarities with the current matter, none are precisely the same. I accept Mr Faulkner's evidence and find the above summary to describe the factual context in which the request for an extended period is made.

• [13] Weighing up the considerations in this case is not straightforward - there are compelling considerations each way. The consequences of delays in not delivering under the contract with the Commonwealth are largely, not severe, and the obligation to deliver fully commissioned batteries is not imminent. I am not satisfied they constitute exceptional circumstances.

• [14] PMB has the capacity to take steps between now and the taking of any protected action, authorised by the ballot, to accelerate production and mitigate the impact of protected action. That is a mitigation step not always available, for example where the nature of the goods or services being produced are such that work cannot be brought forward. In addition, during any protected action PMB would continue to be able to draw on about 25% of its production workforce who are engaged as contractors.

• [15] However, the situation with the contract with the Canadian Navy is different, and the AMWU rightly acknowledged that this was a matter that should be taken into account. Further, I have taken into account the particular onboarding challenges faced by PMB, particularly in the context of the current (and emerging) challenges arising from the Omicron variant of COVID-19, which poses a threat to the availability of its existing workforce.

• [16] On balance, I am satisfied that there are exceptional circumstances in this case, and that they justify a longer notice period, and that it is appropriate to order accordingly.

• [17] That leaves the question as to what longer notice period should be ordered. The factual context that I have found exists does not lend itself to the application of a formula or ready answer, which might exist in a case where there are critical lead-times for contingency measures to be put in place. In this case, as Mr Faulkner explained, every bit of extra time is important. At the same time, beyond Mr Faulkner's evidence that every bit of time is important and is "something extra which may help", no compelling case or evidence was advanced as to why 7 days should be ordered, rather than a lesser period. Weighing up all the submissions and evidence, I consider that the exceptional circumstances justify a notice period of 4 working days.

• [18] I order that a period of 4 working days' written notice be given in relation to the industrial action proposed in questions 1 to 5 of the AMWU's draft ballot order.

An Order [PR737415] has been issued separately.

[1] Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union known as the Australian Manufacturing Workers' Union and Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v BAE Systems Australia Limited [2021] FWC 1875; Transport Workers' Union of Australia v Linfox Armaguard Pty Ltd [2016] FWC 1275; Community and Public Sector Union v G4S Custodial Services Pty Ltd [2020] FWC 1106; The Maritime Union of Australia Division, Construction, Forestry, Maritime, Mining and Energy Union v Sydney International Container Terminals Pty Ltd T/A Hutchison Ports Australia Pty Limited; Brisbane Container Terminals Pty Ltd T/A Hutchison Ports Australia Pty Limited [2020] FWC 3616; The Australian Institute of Marine and Power Engineers v Svitzer Australia Pty Limited [2021] FWC 4209.

[2] [2020] FWC 3616 at [14]- [21].

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