Fair Work Act 2009

s.437 - Application for a protected action ballot order

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

CSF Proteins Proprietary Limited T/A CSF Proteins Pty Ltd

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

CSF Proteins Proprietary Limited T/A CSF Proteins Pty Ltd

Proposed protected action ballot of employees of CSF Proteins Proprietary Limited

• [1] CSF Proteins Pty Ltd (CSF) processes leftover raw byproducts from abattoirs and poultry factories, including offal, bone and feathers. CSF's Laverton processing site is the largest rendering facility in Victoria and processes approximately 6000 tonnes per week of animal proteins and oils.

• [2] In addition to production employees, CSF employs 4 electricians and 14 maintenance workers to ensure the maintenance and running of its processing machinery at the Laverton site. The electricians and maintenance workers, and their respective unions - the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (ETU) and the Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union known as the Australian Manufacturing Workers' Union (AMWU) - have been bargaining with CSF for a proposed enterprise agreement.

• [3] On 21 August 2024, the ETU and the AMWU on behalf of their members, made applications (the Applications) for Protected Action Ballot Orders (PABOs), pursuant to s.437 of the Fair Work Act 2009 (the Act). In the Applications the ETU and the AMWU sought orders that their respective members at CSF Laverton who will be covered by a proposed agreement are balloted to see if they support taking protected industrial action.

• [4] CSF did not oppose the making of protected action ballot orders. However, CSF sought an extended notice period of intended industrial action from 3 working days to 7 working days, in relation to questions 1, 2, 3 and 5 of the ballots. Those questions relevantly state:

"In support of reaching an enterprise agreement with your employer (CSF Proteins Pty Ltd), do you authorise protected industrial action against your employer... in the form of:

1. An unlimited number of indefinite and/or periodic stoppages on the performance of all work? [ ] Yes [ ] No

1. An unlimited number of indefinite and/or periodic bans on overtime?

1. An unlimited number of indefinite and/or periodic bans on call backs?

1. An unlimited number of indefinite and/or periodic bans on working at premises other than 1-9 Merino Street, Laverton North 3026? [ ] Yes [ ] No"

• [5] Under s.443(5) of the Act the Fair Work Commission may extend the statutory notice period from 3 days up to 7 days, if satisfied "there are exceptional circumstances justifying" the extension.

• [6] Following a hearing of this matter on the 23 August 2024, I determined that I was not satisfied that there were exceptional circumstances justifying extending the notice period and that I would issue the orders sought in the Applications. These are my reasons for that decision.

Section 443(5) and Legal Principles

• [7] Section 443(5) of the Act provides as follows:

"If the FWC is satisfied, in relation to the proposed industrial action that is 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."

• [8] The Full Bench in National Tertiary Education Union v Charles Darwin University[1] set out a three-step process to be applied by the Commission when considering whether to extend a notice period in accordance with s.443(5). This process involves:

• [9] First, the Commission must identify whether exceptional circumstances exist in relation to the proposed industrial action. The determination of whether the circumstances in a particular case are exceptional involves an evaluative judgement.[2] To be exceptional circumstances (which may include an individual factor or a combination of factors) "circumstances must be out of the ordinary course, or unusual, or special, or uncommon but need not be unique, or unprecedented, or very rare."[3]

• [10] The requirement for there to be "exceptional circumstances" imposes a high bar on the exercise of the Commission's discretion in s.443(5) to extend the notice period and indicates that ordinarily there should be no extension.[4] The Commission has recognised that that the statutory requirement that employees give 3 working days' written notice of industrial action "should not lightly be curtailed" by the imposition of a longer period of notice.[5]

• [11] Second, even in the event exceptional circumstances exist, the Commission must consider whether the exceptional circumstances justify a longer notice period. This also requires an evaluative judgement based on the evidence.[6]

• [12] The notion of justification must be understood in relation to the purpose of the notice required by s.441. In considering the notion of justification under s.443(5), Lawler VP in CEPU v Australian Postal Corporation[7] held:

"Essentially, what is required in determining whether exceptional circumstances justify an extension of the required notices period is a weighing of the interests of the employer and third parties in the employer having a greater opportunity to take appropriate defensive action as against the diminution in the effectiveness of the employees' bargaining power that results from such an extension. The fact that the legislature has seen fit to condition the ordering of an extension of the required notice period on the presence of exceptional circumstances justifying it, as distinct from merely conferring a simple discretion to extend the required notice period, indicates that ordinarily there should be no extension."

• [13] Third, if the Commission is satisfied that exceptional circumstances exist that justify a longer period of notice, the Commission must then consider whether to exercise the discretion to extend the notice period, and what the notice period should be in the circumstances (up to a maximum of seven days).[8]

• [14] I will now apply these principles to the circumstances in these matters.

Do Exceptional Circumstances Exist Justifying an Extension?

• [15] CSF argued that exceptional circumstances exist justifying an extension of time and relied on the evidence of Ms Donna Gray, Operations Manager. Ms Gray gave evidence on a range of potentially serious consequences that could occur if production at CSF Laverton was significantly impacted or ceased. These consequences included environmental and safety concerns, third party "food processing" implications, animal welfare implications, and commercial implications.

• [16] Firstly, in relation to environmental and safety concerns, CSF gave the following evidence. CSF holds an operating licence issued by the Environmental Protection Authority (EPA), which imposes specific requirements around CSF's processing of animal byproducts and to manage the environmental impact from an odour and waste management perspective. The EPA has deemed that particular odours produced by the work undertaken at the Laverton site, which is situated near a light industrial and residential area, are a "hazard to human health."

• [17] CSF generally aims to process its animal byproducts within 24 hours. Ms Gray gave evidence that if CSF fails to process the animal byproducts expeditiously, it will create a backlog of byproducts which will increase the odour from the Laverton facility and cause environmental and safety impacts to surrounding properties. Ms Gray contends that this would be inconsistent with CSF's obligations under its EPA licence.

• [18] Ms Gray gave further evidence on the viability of alternative processes for a backlog of unprocessed animal byproduct. Her evidence was that redirecting unprocessed byproduct to alternative rendering facilities was a logistically difficult process which would take 5-7 days to arrange. Other Victorian-based rendering facilities are also significantly smaller and not equipped to process all types of animal byproducts which are processed by CSF. Ms Gray stated that CSF would have to coordinate with interstate facilities to effectively redirect pork and poultry byproducts.

• [19] A second alternative is to redirect unprocessed animal byproducts to landfill. This is not permitted under CSF's licence with the EPA. Ms Gray stated that transporting raw materials to landfill is a lengthy process which requires permission from the EPA to be sought and granted, and a specific landfill facility to be approved, contacted and prepared. In summation, Ms Gray estimates this process would take up to 4 days before the byproducts can be picked up from the suppliers and taken to the approved landfill facility.

• [20] CSF contends that where it cannot process raw materials, its alternatives to continue operations are the two processes described above. It claims that these circumstances go beyond the ordinary inconvenience and commercial damage that might be suffered by an employer respondent in the face of employee industrial action.

• [21] Secondly, Ms Gray gave further evidence that rendering facilities are essential to the food production of meat for human consumption. She claimed that if CSF is unable to process animal byproducts on site, abattoirs and poultry processors will accrue a build-up of animal byproduct on their sites which will prevent them from processing their products. Ms Gray stated that this would impact the overall supply of animal products for public consumption.

• [22] Thirdly, a reduction in CSF's ability to produce meal, oil, and tallow would impact the ability of its customers to produce and supply animal stock feed and lead to significant animal welfare issues. Ms Gray outlined her concerns that customers would be unable to source stock feed from CSF and the corresponding commercial implications it would have on CSF.

• [23] The ETU and the AMWU argued exceptional circumstances did not exist. Both unions argued that CSF had painted a "nightmare" scenario wherein the industrial action led to all production stopping. However, CSF had not established that the proposed industrial action would lead to production stopping. The ETU and AMWU argued that in the event of industrial action, the relatively small number of electricians and maintenance workers would be replaced by contract labour. To this end the ETU and AMWU led evidence relating to CSF's frequent use of contractors at the Laverton site.

• [24] Mr Xavier McDonald, an AMWU member and fitter for CSF, provided evidence that it was "very common for contractors to be used." Mr McDonald gave uncontested evidence there were regularly between 10-20 maintenance contractors on site per week, and contractors could perform all maintenance roles. In his witness statement Mr McDonald stated:

"The plant is heavily reliant on contractors, the [industrial action] will have no impact on the wastage side of the business as CSF routinely uses contractors to cover any and all contingencies that come up on site."

• [25] Mr Mohamed Amin Bensiddiki, a member of the ETU and a shift electrician at CSF, provided the following relevant evidence:

• That CSF regularly calls on contractors when permanent staff are unable to cover absenteeism and that this can be arranged at short notice, within a day.
• While CSF currently engages 4 electricians to cover 24 hours, the site can be covered by 2 electricians working 12-hour shifts.
• Aus-Tech Electrical & Automation (Austech) is one of the larger contracting firms CSF uses in relation to electricians. Austech have significant experience at CSF.

Consideration - Are there exceptional circumstances?

• [26] I accept the Respondent's submissions that in the event production stopped and mitigating steps were not promptly taken, there are circumstances that are "out of the ordinary course," are "unusual," or "special". These circumstances relate particularly to the environmental and/or health consequences described in Ms Gray's evidence. For completeness, I note that there was not enough evidence before me to be satisfied that a stoppage of production would have a significant impact on human food production or animal welfare. I also did not consider the commercial implications raised in Ms Gray's witness statement gave rise to any unusual or uncommon circumstances.

• [27] However, the Respondent's submissions on "exceptional circumstances" are premised on the proposed industrial action leading to production stopping. Ms Gray conceded in cross examination that the consequences she had described were all based on a scenario where CSF was unable to process raw material into finished product.

• [28] I am not satisfied on the evidence before me that the proposed industrial action would lead to production stopping and consequently, I am not satisfied that there is a sufficient link between the proposed industrial action and the serious environmental and/or health consequences described by Ms Gray.

• [29] This is because on the evidence before me, CSF is readily able to engage contract labour to perform the work of electricians and maintenance workers. In coming to this conclusion, I have had regard to the following:

Small Number of Employees to be covered by Contractors

• [30] There is a relatively small number of employees - 4 electricians and 14 maintenance workers who are to be covered by the PABOs, and who may need to be replaced by contract labour. In fact, Mr Bensiddiki gave evidence that the work can be organised to decrease the number of electricians even further if required, by engaging contractors on 12-hour shifts.

• [31] I have found on the evidence before me that CSF regularly uses contract labour to perform electrical and maintenance work.

• [32] There was contested evidence between the parties on exactly how regularly contractors are used at CSF.

• [33] Ms Gray's evidence was that contractors were used occasionally. Ms Gray gave evidence that there is currently one contractor filling in a vacant position in the maintenance team and otherwise contractors were called in on an as required basis. When asked how often "as required" was - Ms Gray indicated she did not have that information and would need to look at the data.

• [34] In comparison, both Mr McDonald and Mr Bensiddiki gave uncontested evidence contractors were used regularly and were relied on by CSF. Mr McDonald gave evidence that within a week there are often 10 - 20 maintenance contractors.

• [35] CSF did not challenge Mr McDonald or Mr Bensiddiki's evidence in this regard, nor did they provide any records relating to hiring of contractors to contradict the Unions' evidence.

• [36] Despite the discrepancies between the parties on exactly how frequently contractors are used, both sides appeared to agree that contractors were a common feature at CSF. Given CSF was not able to produce records relating to the engagement of contractors, I accept Mr McDonald and Mr Bensiddiki's personal experience of working with contractors on a regular basis.

• [37] CSF argued that contractors could not be relied on to replace employees taking industrial action because they were not always available. Ms Gray gave evidence that in her experience sometimes contractors were not available when CSF needed them. Ms Gray gave the example of when she had to contact three contractors before finding someone who was available, and as a result there was limited coverage for a number of hours until the contractor arrived.

• [38] On the evidence before me it appears that CSF has access to a sufficient pool of contractors to cover their electrician and maintenance workforce if required. Ms Gray provided evidence CSF uses 3 electrician contracting companies. Two of the companies engage between 10 - 20 contractors and the third is a sole trader. For maintenance contractors, CSF primarily engages sole traders as contractors. Mr McDonald gave evidence that it is not uncommon for there to be 10-20 maintenance contractors at CSF within a week. CSF did not contest Mr McDonald's evidence and Ms Gray was not able to provide evidence on how many maintenance contractors CSF have on their books.

• [39] In any event, CSF also has the ability to induct further contractors to increase their pool (although I note, it appears that some jobs may require contractors with previous experience with CSF).

• [40] In addition, Ms Gray's evidence was that availability issues have arisen in the past relating to very short notice periods, such as when a contractor is notified and required to attend on the same day. There was no evidence before me to suggest that adequate contractors could not be sourced with 3 working days notice.

• [41] Given the availability of contract labour to support ongoing production, I am not satisfied that the serious environmental and health issues described by CSF are likely to materialise. Accordingly, I am not satisfied that exceptional circumstances exist.

• [42] Given I have found exceptional circumstances do not exist I do not need to consider whether such circumstances justify an extension of the notice period. However, even if I had found there were exceptional circumstances, I would not have found that there was justification to extend the notice period. This is because on the evidence before me (and as discussed above), replacement labour is often sourced on the same day, and therefore 3 working days is adequate time for CSF to take mitigating steps to source replacement labour.

• [43] The requirement for "exceptional circumstances" imposes a high bar on the Commission's discretion under s. 443(5). For reasons given above, I am not satisfied that there are exceptional circumstances justifying the period of written notice being extended, and accordingly I will not exercise my discretion under s.443(5).

• [44] On the basis of the material before me, including the declarations from Chelsea Hill, ETU Legal and Industrial Admin Facilitator, and Chloe Simmons, AMWU Industrial Officer, I am satisfied that:

• Bargaining has commenced and a Notice of Employee Representational Rights has been issued in relation to the proposed enterprise agreement (s.437(2A)); and

• Both the ETU and the AMWU have been, and are, genuinely trying to reach an agreement with CSF.

• [45] I am satisfied that all the requirements in s.443(1) of the Act have been met and s.443(2) does not apply. On that basis, I must make the protected action ballot orders. Two protected action ballot orders have been separately issued in PR778575 and PR778592.

• [46] Both ballots are to be conducted by the AEC. For the purposes of s.443(3)(c) of the Act, the Commission has determined that the date by which voting is to close in both ballots is 7 October 2024. This also establishes the ballot period for both ballots for the purposes of s.448A(2) of the Act.

• [47] A compulsory s.448A conciliation conference will be listed at a date to be confirmed. An Order will be issued requiring the attendance of all bargaining representatives involved in the proposed enterprise agreement at this conference. Directions will be issued to ensure that the parties attend the conference ready to conduct meaningful negotiations.

[1] [2018] FWCFB 4011 ('Charles Darwin University').

[3] CEPU v Australian Postal Corporation [2007] AIRC 848, [10] ('Australian Postal Corporation').

[5] Charles Darwin University, [20].

[7] Australian Postal Corporation, [21]

[8] Charles Darwin University, [25].

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