Fair Work Act 2009

s.437 - Application for a protected action ballot order

Construction, Forestry, Maritime, Mining and Energy Union

DP World Brisbane Pty Ltd T/A DP World and Others

Proposed protected action ballot of employees of DP World (Brisbane) Pty Ltd and others; application to extend minimum period of notice, "exceptional circumstances"

[1] Applications pursuant to s.437 of the Fair Work Act 2009 (the Act) have been filed by the Maritime Union of Australia Division of the Construction, Forestry, Maritime, Mining and Energy Union (CFMMEU) for protected action ballot orders in relation to certain employees of the following four employers:

• DP World Brisbane Pty Ltd

• DP World (Fremantle) Ltd

• DP World Melbourne Ltd

• DP World Sydney Ltd

[2] The applications were dealt with together as provided for under s.442 of the Act. The draft orders provided by the CFMMEU propose that various questions relating to proposed industrial action be asked of CFMMEU's members at each port. The DP World Brisbane draft order, for example, includes proposed industrial action of unlimited one hour stoppages and unlimited number of stoppages of 24 hours duration which may be arranged in consecutive periods.

[3] Both parties sought permission to be legally represented at the hearing of the matters, which was granted by the Commission pursuant to s.596(2)(a) of the Act.

[4] The employees to be balloted are employees of DP World who are members of the CFMMEU and are currently covered by the following enterprise agreements:

• DP Word Brisbane Enterprise Agreement 2016

• DP Word Fremantle Enterprise Agreement 2015

• DP Sydney Enterprise Agreement 2015

• DP Word Melbourne Enterprise Agreement 2016

[5] The nominal and common expiry date of the Agreements is 28 February 2019 being within the period of 30 days prior to the nominal expiry date as per s.438 of the Act.

[6] DP World does not oppose the protected action ballot orders being granted subject to requesting an extension to the notice period of 3 working days, as required under s.414(2) of the Act, to 5 working days before taking protected industrial action pursuant to s.443(5) of the Act.

[7] Attached to the CFMMEU's applications were statutory declarations made by Mr Warren Smith, the Divisional Assistant National Secretary of the Maritime Union of Australia Division of the CFMMEU in support of each application. Mr Smith outlined the history of enterprise negotiations between the parties commencing in early September 2018 when CFMMEU officials and DP World management met in Sydney.

[8] Mr Smith outlined in his statutory declaration the claims raised by the CFMMEU and DP World's initial response, which was that the claims had to be cost neutral due to the financial position of DP World.

[9] Mr Smith attested to numerous further meetings on subsequent occasions being held in Sydney, Melbourne and Brisbane. Meetings occurred in February 2019, and on 5 February 2019, the CFMMEU reviewed its log of claims and put forward a streamlined version of claims resulting in the withdrawal of many of its claims. In Mr Smith's declaration he states that a major issue for the CFMMEU was the continuation of Income Protection in the Agreements.

[10] Mr Smith stated that the CFMMEU had been and is genuinely trying to reach an agreement with DP World.

[11] For the purposes of s.443(1)(b) of the Act, and having regard to the statutory declaration of Mr Smith, I am satisfied on the basis of the unchallenged position of the CFMMEU that it has been, and is, genuinely trying to reach an agreement with DP World.

[12] Section 414(2) of the Act requires that written notice of any protected industrial action to be taken must be provided at least 3 working days prior to the action occurring. Section 443(5) allows the Commission to specify a longer period of up to 7 working days where the Commission is satisfied that there are exceptional circumstances justifying the minimum period of notice being longer than 3 working days.

[13] DP World seeks a notice period of 5 working days on the basis that there exist exceptional circumstances in accordance with s.443(5) of the Act in the nature of their business which justify orders extending the 3 working days by 2 days.

[14] The CFMMEU opposes the extension of the notice period.

[15] DP World in supporting its application for an extension of time relied upon the evidence of the Mr Hulme - General Manager Operations for its container stevedoring terminal at Port Botany, New South Wales.

[16] Mr Hulme in his witness statement[1] explained that at each of DP World's four container terminals export containers are brought to the terminal by road or rail, received, stored and ultimately loaded onto ships which then sail from the port. Import containers are discharged from ships, processed, stored and ultimately leave the terminal to the destination by road or rail.

[17] DP World employ stevedores who perform the work associated with terminal operations. This work includes driving the cranes used to load and discharge ships, lashing and unlashing containers held in the hold of a ship, driving vehicles which transport containers around terminals, staging yards and the receivable and delivery points, maintenance, clerical work and specific duties relating to refrigerated containers, safety and first aid.

[18] DP World's customers include shipping lines whose services call at Australian ports to be discharged and loaded. The shipping lines operate on a regular rotation in which they call at a designated sequence of ports and at each port the vessel will be discharged and/or loaded (commonly both) where the shipping line will contract with a stevedoring operator. The regular shipping intervals are achieved by having an optimum speed at which vessels steam and having a certain number of vessels work the same service based on the time taken to complete the voyage.

[19] Mr Hulme's evidence was that vessels need to be stevedored and able to sail again within the planned shipping window wherever possible because delays in a particular port can have a cascading effect contributing to delays in the subsequent ports of call. In some cases it is possible to make up part of the delay by a vessel steaming faster but this comes at a cost to the vessel operator as a result of increased fuel consumption and cannot be guaranteed to make up the delay. A ship may also reduce its container exchange and spend less time in port where containers which were intended to be loaded at a port remain at that port and the vessel needs to depart before they can be loaded. Vessels may need to omit a port completely.

[20] The issue of delays in port becomes acute where delays in Australia flow on further and require that a service omit a port of call in another region. The cost of this will be borne by the vessel operator which may or may not be the shipping line. Depending on the relevant arrangements Mr Hulme estimated the cost of omitting a port can be in the range of AU$200,000 to $400,000.

[21] This cost is brought about by the need for:

• containers to be discharged at an alternative port and reloaded onto a different vessel or vessels;

• the vessel to increase speed to match a new schedule; and

• additional storage charges applicable to export containers which are unable to be loaded onto the original vessel due to the port omission.

[22] Mr Hulme provided evidence of two shipping services operated by ANL which DP World provides stevedoring at one or more Australian ports.

[23] The A3N service commences in Japan and steams to South Korea, China, and Taiwan and then to various ports in Australia and returns to Japan taking approximately 42 days and is operated weekly with a fleet of 6 ships.

[24] The A3S service commences in China and steams to Hong Kong and then to various ports in Australia, the voyage taking nominally 35 days and is operated weekly with a fleet of 5 ships.

[25] Mr Hulme stated that DP World also provides stevedoring services to approximately 10 other shipping routes which includes legs in Asia, the Americas, Europe and/or New Zealand. In each case delays in Australia can potentially result in significant consequences much further afield.

[26] Where protected industrial action has been notified resulting in DP World not being able to meet its obligations to discharge and/or load a vessel, and a significant delay is possible, the practice is to attempt to subcontract the work to another stevedoring provider in the relevant port so as not to interfere with the entire shipping schedule.

[27] Mr Hulme's evidence was that subcontracting is not an attractive option for DP World as invariably the cost paid to another stevedoring operator foregoes most of the revenue from the shipping service, and in some cases DP World would lose money. Subcontracting is particularly more difficult where ports have lesser capacity, for example in Fremantle where there are only two container stevedoring terminals as opposed to the three in Brisbane Melbourne and Sydney.

[28] Mr Hulmes' evidence was that to arrange a full subcontract that is both loading and discharging requires 6 to 7 days' notice, which is chiefly for two reasons.

[29] Firstly, DP World's container terminals begin receiving containers to be loaded onto a ship about six days before a vessel arrives. If there is a need to subcontract with less than six days' notice some of the relevant export containers will already be in the staging yards as opposed to having otherwise been directed to another terminal. The containers would then need to be moved to another terminal where the cost and difficulty involved would generally outweigh the delay until DP World can load the containers onto an appropriate service.[2] Mr Hulme could only recall one previous instance where export containers which had already been received at DP World staging yards were moved to another terminal.

[30] As a result, where a vessel's stevedoring is subcontracted with less than six days' notice the vessel operator will have a choice between calling at two terminals in the same port once the industrial action ceases or sailing light and leaving some of the containers at DP World until they can be removed on another service or voyage.

[31] Secondly, there are time constraints on the ability of other terminals to receive additional containers in an abbreviated period. A container exchange may exceed 2,000 containers in a 24 hour period but road or rail transport to another terminal could not accommodate this number of containers in the same period.

[32] In opposing the DP World application to extend the notification period, the CFMMEU relied upon the witness statement of Mr Warren Smith[3] and his oral evidence. Mr Smith was also subject to cross examination. The evidence of Mr Smith indicated that enterprise negotiations resulting in protected action occurring in respect to DP World had previously occurred in the enterprise agreement negotiations commencing in September 2011 and September 2014. During both these negotiations, Mr Smith's evidence was that the default three day notice period under the Act had applied.

[33] Mr Smith also provided details of the exemptions provided to the employer during previous periods of protected industrial action which are given in its application for the respective orders. Mr Smith explained that in respect to refrigerated (reefer) containers used to transport perishable goods, CFMMEU members would ensure that they were properly connected to an appropriate power source once they are discharged from a vessel or are loaded onto a ship so that the required temperature ranges are maintained so as not to accelerate spoilage, however they would not otherwise be moved.

[34] A further exemption is to be given to CFMMEU bus drivers that escort personnel through terminals or transfer ships crews; this exemption does not apply to the Fremantle operation of DP World as there is no dedicated bus driver. Those employees engaged in first-aid (other than Fremantle Port) would continue to provide this service despite any protected industrial action taking place.

[35] The Commission is required to be satisfied that there are exceptional circumstances justifying the period of written notice being longer than 3 working days, pursuant to s.443(5) of the Act.

[36] The proper interpretation and application of the words 'exceptional circumstances' has been considered in a number of decisions of the Commission. In Transport Workers' Union of Australia[4] it was noted that the uniform approach adopted by this Commission is that of Vice President Lawler in CEPU v Australia Post[5] dealt with under the Workplace Relations Act 1996 which cites with approval the decision of Rares J of the Federal Court of Australia in Ho v Professional Services Review Committee No 295[6]:

"[10] In this passage his Honour was concerned with the ordinary meaning of the expression "exceptional circumstances" and the approach identified is, in my view, equally applicable to the use of that expression in s.465(3). In summary, the expression "exceptional circumstances" requires consideration of all the circumstances. To be exceptional, circumstances must be out of the ordinary course, or unusual, or special, or uncommon but need not be unique, or unprecedented, or very rare. Circumstances will not be exceptional if they are regularly, or routinely, or normally encountered. Exceptional circumstances can include a single exceptional matter, a combination of exceptional factors or a combination of ordinary factors which, although individually of no particular significance, when taken together are seen as exceptional. It is not correct to construe "exceptional circumstances" as being only some unexpected occurrence, although frequently it will be. Nor is it correct to construe the plural "circumstances" as if it were only a singular occurrence, even though it can be a one off situation. The ordinary and natural meaning of "exceptional circumstances" includes a combination of factors which, when viewed together, may reasonably be seen as producing a situation which is out of the ordinary course, unusual, special or uncommon.

[11] However, it is important to note that when considering whether to make an order pursuant to s.463(5) the Commission is not simply concerned with determining whether there are exceptional circumstances. There must be exceptional circumstances "justifying" the specification of a longer notice period. The notion of justification is critical and calls for a consideration of the purpose of the notice required by s.441."

[37] The Vice President went on to state:

"[21] Essentially, what is required in determining whether exceptional circumstances justify an extension of the required notice 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 diminutions 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."

[38] More recently a Full Bench of the Commission in National Tertiary Education Industry Union v Charles Darwin University[7] (NTEIU) accepted that the words "exceptional circumstances" in s 463(5) of the Workplace Relations Act 1996 is in all material respects the same as the phrase "exceptional circumstances justifying" contained in s.443(5) of the Act. The Full Bench further concluded that the making of an order to extend the period of notice for the taking of protected industrial action involves:

"[23] The determination of whether the circumstances in a particular case are 'exceptional' involves an evaluative judgement. A proper approach to the exercise of the Commission's discretion under s.443(5) requires first that a member identify or make findings about the particular facts or circumstances in relation to the proposed industrial action which are said inform the evaluative judgement that such factors or circumstances are exceptional circumstances. The phrase "exceptional circumstances" carries its ordinary meaning.

[24] Secondly, there must be a consideration whether the identified exceptional circumstances are circumstances "justifying" a longer notice period. This also involves an evaluative judgement made on the basis of probative material. The use of the verb "justifying" in s.443(5) signifies that the identified exceptional circumstances must show or prove that it is reasonable or necessary or the circumstances warrant or provide good reason to require a longer period of written notice.

[25] Thirdly, if the member is satisfied there are exceptional circumstances justifying a longer period of notice, there must be a consideration of whether to exercise the discretion and, if so, the additional period of notice that should be given in the circumstances (noting the maximum period)."

[39] Attention was drawn to Commission matters where an extension of the notification period was dealt with in the stevedoring industry. In a recent decision involving Hutchinson's Ports Australia Pty Ltd and the CFMMEU,[8] the Commission declined to extend the 3-day notification period to 5 working days as requested stating:

"the potential for some unspecified community impact to be caused in the event that subcontracting for container movements may not be able to be arranged with three days' notice, irrespective of the particular type of industrial action which notice was given, did not establish exceptional circumstances".[9]

[40] In this application, DP World submitted that they have done more than simply refer to an unspecified community impact caused by a need to subcontract container movements by demonstrating through the evidence of Mr Hulme how shipping schedules will be impacted where there is a delay in stevedoring. Further, it was also submitted that Hutchinson Ports Australia Pty Ltd is not comparable by virtue of the number of container lifts it performs in Australia. DP World referred to the Australian Competition & Consumer Commission Container stevedoring monitoring report 2017-18 October 2018, where it is stated that Hutchinson's national share of container stevedoring was 6.4% in 2017-18, whereas DP World's share was 44.4% making it one of Australia's largest container stevedores.[10]

[41] A copy of a protected ballot order issued by the Commission on 2 December 2015 in the matter of Maritime Union of Australia v Patrick Stevedores Holdings Pty Ltd[11] was referred to by DP World and in particular order (6) requiring the Maritime Union of Australia (MUA) to provide the employer with 5 working days' notice prior to taking any protected industrial action. It does not appear that any decision accompanied the order so the reasons for the exceptional circumstances justifying the written notice being longer than 3 working days are unknown. Other than it appears the order issued in the terms sought by the MUA, and it is evidence that the Commission has previously made a 5 working day notice order in the stevedoring industry, it is otherwise uninformative.

[42] It is noted that, for both parties, due to the shortage of notice requirements for a listing under s437 of the Act, the availability of fuller submissions and evidence is not always possible.

[43] As is often the case in matters before the Commission, when applying the provisions of the Act discretionary decisions largely turn on their own facts and circumstances. As much was stated by the Full Bench in the NTEIU case referred to above.

[44] There is no question that should the Commission exercise a discretion under s.443(5) of the Act to increase the notification period, the result is an interference with the right of the CFMMEU to otherwise provide three working days' written notice of industrial action that is to be organised and engaged in by employees in support of a proposed agreement. Such a right should not be lightly exercised. There must be "exceptional circumstances" justifying a longer period in relation to the proposed industrial action the subject of the order.

[45] The CFMMEU submit that the justification for the additional 2 working days' notice put forward by DP World is no more than mere inconvenience to DP World and do not provide exceptional circumstances. It was submitted that DP World simply wants more notice to prepare for the proposed protected industrial action. Attention was also drawn to occasions where in response to protected industrial action having been taken previously DP World has responded with a lock out. I accept that, as put by the CFMMEU, where inconvenience and delay is caused to DP World this is generally part of what protected industrial action is designed to cause and cannot be seen as creating an exceptional circumstance.

[46] I have had regard to the reasons put forward by DP World relating to the extension of the notice period and note as stated in the cross examination of Mr Hulme that delays in providing stevedore services can arise from a variety of events unconnected to the taking of protected industrial action by employees.

[47] I have not been persuaded by the potential spoilage arguments put by DP World of delays in transporting perishable goods, particularly as the additional 2 working days' notice would not appear to add greatly to the time already spent in such goods either departing or arriving from/at their destination.

[48] I am of the view however, that where the reasons for the extension application are beyond the immediate interests of DP World and the employees concerned and extend to the interests of third parties primarily the shipping lines, they are exceptional. While not being unique or unprecedented they are out of the ordinary course. In respect of whether the exceptional circumstances justify the specification of a longer notice period, I am satisfied on the evidence of Mr Hulme that three working days' notice is an insufficient period where DP World determines to subcontract out the stevedoring (assuming this is possible) in an attempt to mitigate the potential disruption to shipping schedules of third parties and the resultant costs to be borne by the shipping operator, transport companies and/or exporters and as such justifies the extension sought.

[49] In accordance with s.443(5) of the Act, I am therefore satisfied that there are exceptional circumstances justifying an extension to the period of written notice contained in paragraph 414(2)(a) of the Act from 3 working days to 5 days, noting this period is short of the maximum extent possible of 7 working days.

[50] Having regard to the evidence before me, I am satisfied that the requirements in s.443(1) of the Act (which relate to the applicant having been and is genuinely trying to reach an agreement) have been met and accordingly, the orders sought must be made.

[51] I am further satisfied on the application of DP World that there are in accordance with s.443(5) exceptional circumstances justifying the period of written notice referred to in paragraph 414(2)(a) of the Act being extended from 3 working days to 5 working days.

[52] Orders PR704775, PR704774, PR704773, and PR704771, based on the drafts provided by the CFMMEU, are issued in conjunction with this Decision.

Mr D Perry solicitor and Mr S Crilly solicitor for DP World Brisbane Pty Ltd and others

Ms J Doust of counsel and Mr A Jacka for the Maritime Union of Australia Division of the Construction, Forestry, Maritime, Mining and Energy Union

[4] [2012] FWA 133.

[5] [2007] AIRC 848.

[6] [2007] FCA 388.

[7] [2018] FWCFB 4011

[8] Sydney International Container Terminals Pty Ltd Limited v Construction, Forestry, Maritime, Mining and Energy Union [2019] FWC 208

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