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[2002] AIRC 1241
plaintiff. Order made under section 127: CFMEU and its officers ordered not to take or incite any action involving employees of subcontractors to Pentroth; finding that the Notice of 20 August 2002 lacked...
Pentroth applied to the Commission under s127 to stop industrial action affecting its construction site. The Commission found industrial action was threatened or probable, the CFMEU's notice lacked sufficient specificity to be protected, and that action by employees of subcontractors was not protected. The CFMEU and its officers were ordered not to take or incite action involving subcontractor employees. Leave was reserved for further proceedings if necessary (see [28], [35], [38]–[41]).
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1,785 words · generated 15/07/2026
Pentroth Contracts Pty Ltd, the head contractor on a hotel construction site in Adelaide, filed an urgent application under section 127 of the Workplace Relations Act 1996 to restrain industrial action which had occurred and which, it said, was likely to continue. The factual matrix was compact and specific. Pentroth employed only one employee on the site and used specialist subcontractors, including MacMahon Services Pty Ltd and MC Vadasz trading as Australasian Piling Company, whose employees were covered by certified agreements (see [18]–[20], [29]–[30]). The CFMEU served a Notice of Bargaining Period dated 20 August 2002 and, by letter dated 2 October 2002, advised of an intention to commence industrial action on 10 October 2002 (see [20], [22]). On 10 and 11 October 2002, a CFMEU organiser (Mr Feehan) directed the Pentroth employee and the subcontractor employees to stop work; work stopped on those days (see [23]).
1 cited instrument linked from this judgment.
Pentroth filed the section 127 application late on 11 October 2002 and sought an immediate hearing. The CFMEU's state secretary, Mr O'Malley, attended the hearing but left after unsuccessfully opposing the Commission's grant of conditional leave for counsel to appear for Pentroth (see [3]–[5]). The Commission (Senior Deputy President O'Callaghan) heard Pentroth's submissions and made findings about jurisdiction, notice specificity and the protected status of the action taken by subcontractor employees. The Commission ordered that the CFMEU and its officers not take or incite any action involving employees of subcontractors to Pentroth and indicated Pentroth could seek expedited listing of a section 166A application if necessary (see [40], [42]).
Three central strands of reasoning led to the orders.
Jurisdiction under s127 was established. The Commission concluded that industrial action was "threatened or probable" on the facts, given the recent history of site disruptions and the conduct displayed by union representatives (see [28]). The presence of certified agreements covering subcontractor employees and the award covering Pentroth's single employee satisfied the statutory prerequisites for the Commission to exercise the discretionary relief in s127 (see [29]–[31]).
Notice specificity requirement. The Commission applied established federal court principles about the information a notice of intended protected action must contain. The judgment quotes and adopts the approach in David's Distribution (Federal Court) that a notice must describe the intended action in 'ordinary industrial English', with sufficient detail to allow affected parties to take defensive or preparatory measures (see [33]). The Commission also referenced the endorsement of those principles in Adelaide Brighton Cement v AWU (cited at [34]). Applying those authorities, the Commission found the Notice given to Pentroth on 20 August 2002 failed to specify when and what particular bans or stoppages would occur and therefore was not sufficiently specific to attract protection (see [35]–[36]).
Protected action and third-party employees. The Commission addressed whether industrial action taken by employees of the subcontractors could be 'protected' in relation to Pentroth. It held that industrial action involving employees who were not employees of Pentroth could not be regarded as protected action for the purposes of the Act and that, because the action by those subcontractor employees fell within the operation of section 170MM (and related provisions), the entire industrial action was not protected. On that basis, the Commission found that it was appropriate to order that the CFMEU and its officers not take or incite action involving subcontractor employees (see [38]–[40]).
The Commission's remedial choice was targeted: it did not purport to prohibit any action by Pentroth's own employee, recognising that action by that individual might 'be regarded in an entirely different manner' (see [32]). The prohibition addressed inducement or incitement of subcontractor employees, because the Commission considered such action unlawful and outside the protective regime of the Act (see [38]–[40]).
Before this decision, the legal framework governing protected industrial action under the then Workplace Relations Act had already been clarified by Federal Court authority, notably David's Distribution, which emphasised the necessity of specificity in notices of intended action to allow affected parties to organise and protect legal rights (summarised at [33]). Adelaide Brighton further illustrated the adverse operational consequences of ambiguous notices (see [34]).
This Commission decision applied and reinforced those principles within the s127 context. It confirms two points of practice and law:
After the decision, the practical effect for parties in similar bargaining disputes is to be careful about the content of notices and to avoid strategies that rely on inducing work stoppages by employees of other employers if they wish such action to remain protected.
Key passage (finding of probable action): "I am satisfied that industrial action ... is threatened or probable. The history of industrial disruption ... support this conclusion. The actions of the CFMEU secretary ... do not allow me to reach any other conclusion as to the position being adopted by the CFMEU." ([28])
Plain-English translation: Based on what's already happened at the site and how the union behaved in the hearing, the Commission is convinced that further industrial action is likely, so it can lawfully consider orders to stop it.
Key passage (notice specificity): "I do not consider the Notice of 20th October 2002 to Pentroth is sufficiently specific ... such that these actions are capable of being considered protected industrial action." ([35])
Plain-English translation: The notice the union gave Pentroth did not say, in adequate detail, what would happen and when, so it does not meet the legal standard to make that action 'protected'.
Key passage (third-party employees): "industrial action taken by employees of MacMahon Services and Vadasz cannot be regarded as protected action ... the involvement of employees who are not employees of Pentroth renders the entirety of the industrial action not protected." ([38])
Plain-English translation: When the union gets people who work for other employers (the subcontractors) to stop work, that conduct is not covered by the protections of the Act and therefore is unlawful in the way this dispute was being conducted.
Key passage (order): "I have decided that it is appropriate that the CFMEU and its officers be ordered not to take or incite any action involving employees of subcontractors to Pentroth." ([40])
Plain-English translation: The Commission made a binding order forbidding the union and its officers from directing or encouraging subcontractor employees to stop work on the job for Pentroth.
This decision is directly on point where the following factual features are present:
Where those elements exist, a tribunal or court will scrutinise whether the notice was sufficiently informative to attract statutory protection and whether inducement of third-party employees renders the action unprotected and unlawful, potentially justifying orders preventing further action.
The text of this decision itself cites and applies Federal Court jurisprudence (David's Distribution and Adelaide Brighton) as the controlling authorities on notice specificity ([33]–[34]). The Commission explicitly followed the principles espoused in those cases when assessing the Notice served on Pentroth ([35]).
This written decision does not include subsequent appellate treatment or later citations of this specific Commission decision. The judgment therefore must be read as an application and reinforcement of the Federal Court's approach within the exercise of the Commission's s127 discretion. For information about later judicial treatment, researchers should consult citators and later decisions; that information is not contained within the decision itself.
The decision resolves the specific dispute but leaves open several questions that practitioners will face in future cases:
Scope of permissible union conduct when multiple employers are involved. The Commission concluded that inducing subcontractor employees to stop work in this context rendered action unprotected (see [38]). However, the precise boundary between lawful solidarity tactics and unlawful inducement involving third-party employees could require further delineation in different factual matrices.
The sufficiency threshold for notices. The decision applies the general standard from Federal Court authorities, but what constitutes 'sufficient specificity' will always be fact-sensitive. Practical disputes will arise about how much timing detail is required, particularly for rolling stoppages and intermittent bans (compare the Commission's application at [35] with the concerns expressed in the Adelaide Brighton passage cited at [34]).
Remedies and enforcement modalities. The Commission made a prohibitory order against the CFMEU and officers (see [40]). The decision does not explore in detail what forms of contravention proceedings, enforcement or remedies (injunctions in the courts under s127(6), penalties, or other relief) are most appropriate in closely balanced cases.
Interaction with bargaining processes and s99 powers. The Commission noted that its s99 powers were significantly reduced once a Bargaining Period notice existed and that the parties had the option to engage in industrial action while bargaining continued (see [15]). How the Commission balances encouraging bargaining against restraining potentially unlawful action remains a practical tension in future matters.
Status of action by the single employee of the head contractor. The Commission recorded that action by Pentroth's one employee might be regarded differently (see [32]). The decision leaves open the circumstances in which such action would be protected where the union's campaign involves a single directly employed worker versus coordinated action by many non-employees.
Practitioners should carefully assess notice drafting, the identity of the employees targeted by any industrial action, and the means by which unions communicate and direct action when advising clients in the construction industry or in multi-employer site contexts. Where facts approach the thin line between protected industrial action and inducement of third-party employees, urgent applications under s127 (or associated injunctions) will remain a necessary and available remedy, as this decision demonstrates (see [26]–[31], [38]–[41]).
s.127(2) application to stop or prevent industrial action
NATIONAL BUILDING AND CONSTRUCTION INDUSTRY AWARD 2000
[1] This decision deals with an application for an Order pursuant to section 127 of the Workplace Relations Act 1996 (`the Act'). The application was made by Pentroth Contracts Pty Ltd (`Pentroth') and was accompanied by an application pursuant to section 166A of the Act. The section 166A application has been adjourned at the request of the applicant.
[2] In this matter Pentroth was represented by Mr Manuel of counsel by leave of the Commission pursuant to section 43(2)(b) of the Act. The CFMEU was represented by State Secretary Mr O'Malley.
[3] The section 127 application was filed late on Friday 11 October 2002 and was the subject of hearing before me on Monday 14 October 2002.
[4] At the commencement of this hearing Mr O'Malley opposed the granting of leave to Mr Manuel on the basis that this would disadvantage the CFMEU. When it became apparent to Mr O'Malley that I was prepared to granted leave to Mr Manuel on a conditional basis, Mr O'Malley abandoned the hearing and did not return.
[5] Before hearing Mr Manuel I provided an outline of my understanding of the issues involving Pentroth and the CFMEU.
[6] On 9th October 2002 I refused to certify a section 170LK agreement on the basis that the only employee to be covered by that agreement was not, at the time the agreement was negotiated and signed, actually an employee of the employer.
[7] The application for certification of this agreement was accompanied by a section 99 application which I listed for conference on 10 October 2002.
[8] At this conference the CFMEU advised that there was a possibility of a claim at common law for observance of what it considered to be an employment offer. The CFMEU indicated that it was now seeking a section 170LJ agreement with the employer.
[9] The CFMEU noted that no work had been undertaken on this construction site on 10 October 2002 but that this was due to the lack of electricity rather than due to industrial action. The CFMEU foreshadowed a claim for payment for the 10th October 2002.
[10] The CFMEU advised that it had now filed and served Notices for Bargaining Periods and an intention to take protected industrial action.
[11] The Master Builders Association of SA, (`MBA') then representing the employer, advised that it considered that there was indeed a common law contract in existence. Further, in the event of further proceedings in this matter the MBA noted that it was likely that the employer would be represented by a legal practitioner.
[12] The MBA advised that discussions with Mr O'Malley of the CFMEU had established that the union was prepared to discuss the issue and that no industrial action would occur whilst these discussions were underway.
[13] The employer expressed concern that he understood that the employee in question was prepared to sign and agree to a revised Certified Agreement but was being stopped from doing so by the CFMEU.
[14] I advised the parties at this conference that I was not prepared to discuss or consider issues relating to payment for time not worked. Further, in the event that the employee considered that the actions of the CFMEU in relation to its member were improper advice should be sought on the provisions and the requirements of the Act.
[15] I advised that as there was now a current Notice of intention to take industrial action and a Bargaining Period the Commission's powers pursuant to section 99 were significantly reduced and the option existed for both parties to engage in industrial action. Notwithstanding this, both parties asked me to keep the file open in the event that they sought the Commission's assistance to arrive at an agreed resolution to the matter.
[16] Having outlined my understanding of the issues based on my involvement in the matter to date, I indicated to Mr Manuel that I had intended to suggest to the parties that before this application proceeded to full hearing there might be scope for further discussions. Clearly the premature departure of Mr O'Malley prohibited this.
[17] Pentroth sought that the section 127 application proceed.
[18] Mr Manuel explained that Pentroth are the head contractor on a Hotel construction site in the Adelaide central business district. As such, Pentroth uses specialist subcontractors to undertake work and presently engage only one employee.
[19] Two specific subcontractors were identified. These were MacMahon Services Pty Ltd and MC Vadasz trading as Australasian Piling Company. Both these subcontractors employed construction staff under current certified agreements.
[20] A Notice of Bargaining Period was served on Pentroth by letter on 20th August 2002. This Notice of Bargaining Period (BP 2002/3257) is dated 20th August 2002.
[21] Mr Manuel explained that the CFMEU had, through a Mr Feehan, imposed various bans on the work to be undertaken by both Pentroth and subcontractors. Those instituted in late September 2002 had been lifted shortly before a Commission hearing was due to commence on to October 2002.
[22] By letter of 2 October 2002 the CFMEU advised of its intention to commence industrial action on thursday 10 October 2002 which action would consist of stop work meeting, bans, limitations and stoppages.
[23] Industrial action had been initiated on 10 and 11 October 2002. This action had taken the form of a direction from Mr Feehan of the CFMEU to the Pentroth employee, and MacMahon Services and Vadasz employees to stop work. Work subsequently stopped on those days.
[24] Mr Manuel informed me that Pentroth had been told by Mr Feehan that the industrial action related to issues that needed to be resolved with Mr O'Malley.
[25] Mr Manuel submitted that the CFMEU was engaging in a campaign of industrial action against Pentroth in pursuit of its industrial objectives, and that this campaign was being conducted through industrial action taken at the direction of the CFMEU by employees of other employers. Mr Manuel argued that this action could not be regarded as protected action and that it was causing financial hardship to Pentroth, its client, subcontractors and the employees.
[26] Section 127 provides that:
(1) If it appears to the Commission that industrial action is happening, or is threatened, impending or probable, in relation to:
(b) the negotiation or proposed negotiation of an agreement under Division 2 of Part VIB; or
(c) work that is regulated by an award or a certified agreement;
_the Commission may, by order, give directions that the industrial action stop or not occur.
(2) The Commission may make such an order of its own motion, or on the application of:_
(a) a party to the industrial dispute (if any); or
(b) a person who is directly affected, or who is likely to be directly affected, by the industrial action; or
(c) an organisation of which a person referred to in paragraph (b) is a member.
_(3) The Commission must hear and determine an application for an order under this section as quickly as practicable.
(4) The powers conferred on the Commission by subsection (1) are in addition to, and not in derogation of, the powers conferred on the Commission by the rest of this Act.
(5) A person or organisation to whom an order under subsection (1) is expressed to apply must comply with the order.
(6) The Court may, on the application of a person or organisation affected by an order under subsection (1), grant an injunction on such terms as the Court considers appropriate if it is satisfied that another person or organisation:_
(a) has engaged in conduct that constitutes a contravention of subsection (5); or
(b) is proposing to engage in conduct that would constitute such a contravention.
(7) If, in the opinion of the Court it is desirable to do so, the Court may grant an interim injunction pending determination of an application under subsection (6).
[27] It is necessary that I determine that the jurisdiction exists, pursuant to the section, before considering the application of the remedies that are at the Commission's discretion.
[28] I am satisfied that industrial action consistent with the definition contained in section 4 of the Act is threatened or probable. The history of industrial disruption of the site detailed by Mr Manuel support this conclusion. The actions of the CFMEU secretary Mr O'Malley in storming out of the courtroom do not allow me to reach any other conclusion as to the position being adopted by the CFMEU.
[29] I am satisfied that the employees of MacMahon Services and Vadasz are covered by the terms of Certified Agreements that have current application.
[30] I am also satisfied that the one employee of Pentroth is covered by the provisions of a Federal Award being the National Building and Construction Industry Award 2000.
[31] For these reasons I am satisfied that the jurisdictional prerequisites have been met so as to allow the exercise of the discretion provided for in section 127.
[32] I consider that future industrial action taken solely by the employee of Pentroth may be regarded in an entirely different manner to that which might be taken by persons who are not employees of Pentroth.
[33] In this respect the CFMEU have a member who is clearly covered by the Notice of Bargaining Period. Mr Manuel has raised concern over the extent to which the Notice of Intention to commence industrial action provided to Pentroth by the CFMEU lacks specificity in accordance with the principles enunciated by the Federal Court in David's Distribution Pty Ltd v NUW [1999] FCA 1108; (1999) 91 IR 198.In this Decision the Court indicated:
"We think as170MO(5) was designed to ensure that industrial disputants who are to become affected by protected action, in relation to which their usual legal rights are significantly diminished, are at least able to take appropriate defensive action. For example, an employer may operate a sophisticated item of equipment that will be damaged if precipitately shut down. If warned in advance of a ban that might affect the continued operation of that plant, the employer might choose a controlled shut down during the period of notice. More commonly, perhaps, an employer might use the notice time to communicate with suppliers and customers, and thereby reduce the consequences for them of the notified industrial action. Very often, the recipient of the notice will respond in a way that has a legal dimension. For example, a union might react to a notice by an employer of intent to lockout some employees by giving notice that all employees will strike indefinitely as from the commencement of the lockout. Similarly, an employer might respond to an employees' notice of bans by giving notice of a lockout of some or all employees.
It will be apparent we think it necessary, and sufficient, for parties to describe the intended action in ordinary industrial English; for example, `an indefinite strike of all employees', `a lockout of all employees employed in the AB fabrication plant', `a ban on overtime', `a ban of the use of MN equipment', `rolling stoppages throughout the mine', `a ban on the servicing of delivery vehicles'.
If we are correct in this approach, it follows that a notice that refers only to `bans and rolling stoppages', without any indication of the nature of the bans or the location of the rolling stoppages, does not adequately disclose `the nature of the intended action'."
[34] These principles were endorsed by von Doussa J in Adelaide Brighton Cement v AWU (2002) FCA 601 at page 110. Justice von Doussa states:
"In my opinion, notwithstanding the fact that the Notices are specific in the manner identified by counsel for the respondents, each Notice fails to meet the requirements of s170ML(5), substantially for the reasons given by counsel for ABCL. Each Notice fails to give any indication of when 24 hour rolling stoppages after the first one will take place, with the result that ABCL does not know from day-to-day whether it will have to make provisions for a stoppage of 24 hours duration. In this sense the Notices anticipate rolling stoppages at random times. From day to day ABCL will not know whether it must make provision for a possible stoppage of 24 hours duration or for a stoppage of 48 hours, 72 hours or some significantly longer period. The response of the fifth respondent to the effect that ABCL would not be forced to stand down roistered staff if a stoppage did not occur on a particular day as those staff could simply revert to normal duties fails to address the difficulties of rostering the staff in the first place to accommodate the possibility of back-to-back rolling stoppages each of 24 hours duration."
[35] I do not consider the Notice of 20th October 2002 to Pentroth is sufficiently specific in that it does not detail when specific actions are going to occur such that these actions are capable of being considered protected industrial action.
[36] Whilst I consider it appropriate that the CFMEU has the right to pursue legitimate protected industrial action through the one employee of Pentroth, I consider that this action must be such that it meets the requirements of section 170M0 of the Act in that the specifics of the action proposed should be detailed. The Order attaching to this Decision reflects this position.
[37] Secondly, given the absence of the CFMEU at the hearing of this matter it is appropriate that I draw that union's attention to the provisions of section 298R of the Act.
[38] On the information before me I consider that industrial action taken by employees of MacMahon Services and Vadasz cannot be regarded as protected action. It is also action covered by section 170MM of the Act such that the involvement of employees who are not employees of Pentroth renders the entirety of the industrial action not protected. Accordingly, I consider that it is appropriate that I make it clear that actions of this nature are illegal and should not be pursued.
[39] I consider that it would be beneficial and appropriate for employees of MacMahon Services and Vadasz to be made aware that any action taken by the CFMEU to force or encourage industrial action by these employees cannot be considered protected. The attached Order reflects this.
[40] I have decided that it is appropriate that the CFMEU and its officers be ordered not to take or incite any action involving employees of subcontractors to Pentroth.
[41] Finally, I have considered whether there would be merit in convening a compulsory conference in an endeavour to facilitate resolution of this matter. I have decided that the opportunity exists for either party to seek the involvement of the Commission to assist in the lawful resolution of the issues in dispute but that given the Order I have decided on, there is no pressing imperative for the Commission to seek to be involved in what should be a legitimate bargaining process.
[42] Leave is reserved to Pentroth to seek to have the section 166A application listed at short notice should this become necessary.
M O'Malley for the Construction, Forestry, Mining and Energy Union.
Printed by authority of the Commonwealth Government Printer
(1999) 91 IR 198
Order made under section 127: CFMEU and its officers ordered not to take or incite any action involving employees of subcontractors to Pentroth; finding that the Notice of 20 August 2002 lacked sufficient specificity and that industrial action by subcontractor employees was not protected (see [35], [38]–[41]). Leave reserved to Pentroth to seek section 166A listing at short notice (see [42]).