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[169]
[2022] FWC 493
General information, not legal advice.
Fair Work Commission
2022-03-04
Original judgment source is linked above.
s.424 - Industrial action
Application to suspend or terminate protected industrial action - endangering life etc.
A 48 hour stoppage of work commencing at 6.00am on 17 February 2022 in Brisbane.
A 48 hour stoppage of work commencing at 6.00am on 22 February 2022 in Brisbane.
A 24 hour stoppage of work commencing at 6.00am on 24 February 2022 in Brisbane.
A ban on the performance of work during a period of leave (including recalls and relief work) for an unlimited period commencing at 6.00am on 17 February 2022 in Cairns.
A 48 hour stoppage of work commencing at 12.01am on 17 February 2022 in Port Botany and Port Jackson.
A 48 hour stoppage of work commencing at 12.01am on 22 February 2022 in Port Botany and Port Jackson.
A 48 hour stoppage of work commencing at 6.00am on 17 February 2022 in Newcastle.
A 48 hour stoppage of work commencing at 6.00am on 22 February 2022 in Newcastle.
A ban on the performance of work during a period of leave (including recalls and relief work) for an unlimited period commencing at 6.00am on 16 February 2022 in Newcastle.
Kwinana, Fremantle, Albany, Geraldton and Mourilyan
A 48 hour stoppage of work commencing at 7.00am on 19 February 2022 in Kwinana.
A 48 hour stoppage of work commencing at 7.00am on 23 February 2022 in Kwinana.
A 48 hour stoppage of work commencing at 7.00am on 24 February 2022 in Fremantle.
A 48 hour stoppage of work commencing at 7.00am on 3 March 2022 in Fremantle.
A 4 hour stoppage of work commencing at 7.00am on 24 February 2022 in Albany.
A 4 hour stoppage of work commencing at 7.00am on 25 February 2022 in Albany.
A 4 hour stoppage of work commencing at 7.00am on 3 March 2022 in Albany.
A 4 hour stoppage of work commencing at 7.00am on 4 March 2022 in Albany.
A ban on the performance of work during a period of leave (including recalls and relief work) for an unlimited period commencing at 7.00am on 18 February 2022 in Kwinana, Fremantle and Geraldton.
A ban on the performance of work during a period of leave (including recalls and relief work) for an unlimited period commencing at 6.00am on 18 February 2022 in Mourilyan
a) Between 17 February 2022 and 4 March 2022 there was to be five whole days of stoppages in Brisbane, and four whole days of stoppages in Newcastle, Sydney, Fremantle and Kwinana (being together five of the six highest staffed ports); and
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> b) From 18 February 2022 indefinite relief bans were to be in place in six ports, and were to apply to up to 41 masters in Newcastle, 12 in Fremantle, 8 in Kwinana and Geraldton, and up to 6 masters in Cairns/Mourilyan.
The impact of the industrial action on port operations
"Due to the amount of leave typically taken and Svitzer's reliance of relief work, it is highly likely that there will be disruption in the ports from the indefinite ban on recalling crew from their leave to cover absences. This is exacerbated due to the low number of casuals engaged in those ports and the number of permanent part time employees (PPT) who have fulfilled or are forecasted to fulfil their guaranteed period. I understand the numbers are as follows:
(a) Newcastle has one casual master, and it is hard to identify the impact of availability of PPT masters currently early in the year;
(b) Cairns has no casual masters and one 50% PPT masters available until only March 2022;
(c) Fremantle & Kwinana has 3 casual masters; it is hard to identify the impact of availability of PPT masters currently; and
(d) Geraldton has no casual masters and one 75% PPT master who is expected to be unavailable after September 2022.
The impact of both types of action notified will invariably mean that most vessel movement will come to a halt in the various ports impacted by the industrial action..."
"Taking a conservative approach and assuming that shipping lines employ the mitigation responses ... I estimate that after a 48 hour stoppage it would take approximately 5 days for Svitzer's operations to return to normal. However, normal levels of operation at Svitzer are not necessarily indicative of recovery by our customers and their customers.
Further, I note that all of the action notified involves a short return to work between stoppages (for example in Brisbane where there is a 72 hour gap between stoppages). Based on the Historical Data I do not consider that the period of time between stoppages will be sufficient for Svitzer to address the lost work and prevent flow on effects to the supply chain and I would anticipate that the next stoppage would compound the impacts of the one before it."
"Shipping schedules for container vessels are planned well in advance, they are often negotiated for at least a period of one year, and sometimes two years. Berth windows (also known as proforma/planned windows) can be slightly changed within that period of time by mutual agreement. Windows are also adjusted on a weekly basis due to tide restrictions and other minor issues.
Shipping schedules are negotiated between shipping lines and the relevant port authority
In order to make changes to the schedule, the shipping line needs to renegotiate with the terminal operator to see if the changes can be accommodated. However, this is difficult to achieve in busy ports or periods of congestion.
While there is some leeway if berthing windows are not met, this leeway is more likely to be a matter of hours. In the event that a vessel is delayed (by protected industrial action (PIA) or any other reason) for any longer than that, it results in a compounding effect on other vessels and the port generally. Idle time of a fully crewed and operating vessel causes increases costs to shipping lines which are then passed on the end user, being the importer/exporter. There are also demurrage fees (derived from additional costs such as fuel costs and usually expressed as a percentage of a contract) which are payable by the end customer in these circumstances."
"When containers do not make it on a vessel, it can mean that perishable goods are ruined. Even if goods are not perishable, shipping customers often have timeline commitments which mean that orders cannot be fulfilled on time, and goods may no longer be needs and/or penalties charged. These circumstances can also result in damages claims."
"This is consistent with my knowledge of recent events in Brisbane. I am aware that last week on 12 and 13 February 2022 there was a weather event, being strong winds which resulted in schedule slide and delays to most operators in the port. Further, it has been my experience that due to ongoing COVID-19 situation globally, there has been "off-window" pressure at Brisbane port and across the wider industry in general, which occurs when vessels are unable to enter port at their usual times due to a backlog or delay to previous services."
"Based on my knowledge and experience in the port of Brisbane, and knowledge of the current congestion, I anticipate that the impact of the Action on the port of Brisbane will result in downstream consequences for all port users. Depending on the type of cargo being carried, this impact will continue through to other parts of the Australian community, including supermarkets and building supplies.
There will be further congestion to that described above, which I anticipate will compound with the existing difficulties faced by the ports, as vessels will have nowhere to go and will be unable to be moved during the stoppage periods.
The resulting delays will be difficult to recover from in circumstances where the port and all the infinite resources within it (including tug boats, crews, cranes, berths and time as most parts of the supply chain already operate 24/7) are already at full capacity. "Recovery" in this context does not necessarily mean that all work that was scheduled for during the stoppage is carried out immediately after the stoppage, as scheduled as shipping lines my choose to take alternative approaches (such as those I outline above) to address the delays."
While I do not have the same direct knowledge of the other ports, I anticipate that the impacts will be similar within the context of the usual operations of those ports."
"If the protected action is suspended, then our members will lose the main tool they have available to them under the legislation to try and shift the Applicant's bargaining position. This is the first time they have taken protected industrial action in the negotiations. It will mean that the parties are less likely to reach agreement for at least that reason."
Significant Damage to the National Economy - Principles and case history
"[40] ... Damage to the sugar industry cannot simply be measured in terms of the lost time related to the particular hours of the stoppage in the mills. Halting the crush has a domino effect that threatened to cause further unrecoverable losses. The sugar industry is seasonal and as such is dependent on perishable cane to be harvested and crushed in a specific time period for its optimal return. The flow-on effects from the sugar industry, being the major agricultural industry and employer in the area has considerable impact on that part of the economy and communities as was provided in the economic analysis presented. The proposed industrial action threatened to cause 'significant damage' to the seasonal employment, the completion of the crushing season and the associated contractual implications.
[44] On the evidence I was satisfied that the protected industrial action was threatening or would threaten significant damage on an important part of the Australian economy by compromising the crushing season at these mills. The impact of the industrial action would reduce the ability to harvest all of the season's cane at the required time at the optimum CCS, prior to the very real threat of rain shortening the available harvesting and crushing period. I have taken into account the very real possibility that the industrial action in combination with the impending weather conditions may result in cane being left in the fields unharvested, the crushing season being cut short and the implications of such for growers not being able to meet their contractual obligations and the potential for further losses to all parties being substantial."
"[7] Qantas produced material indicating that the protected action taken by the unions prior to 29 October had affected 70,000 passengers, led to the cancellation of 600 flights, the grounding of 7 aircraft, $70 million in damage. That protected action was associated with significant reductions in forward bookings and decline in market share."
"[9] We heard unchallenged evidence from Mr Mrdak, Secretary, Department of Infrastructure and Transport and Mr Clarke, Secretary, Department of Resources, Energy and Tourism as to the importance of airline passenger and cargo transport to the economy and the effect of the grounding of the Qantas fleet on the aviation and tourism industries. The tourism industry, including aviation, was estimated as contributing 2.6 per cent to GDP and as having 500,000 employees. The value of inbound tourism is estimated at $24 billion per year."
"Although there has been limited analysis of the economic impact of the industrial action, the impact is quite clear. Ms Lourey estimates that each day's loss of gas production would cost the Victorian economy alone at the upper end of the range of $5-15m. If the industrial action continues for the period of the Notices, the loss to the Victorian economy is estimated to be in excess of $1.2b. These estimates are based on an estimated loss to Esso of $4.7m per day and a loss to gas consumers involved in manufacturing basic chemicals, glass and glass products, ceramic products, plaster and cement products of a further $9m."
"[41] The evidence establishes the fundamental importance and significance of AGL Loy Yang's Loy Yang A Power Station and Mine to Victoria's power supply. The combined generation of Loy Yang A and Loy Yang B, which is also supplied by the Mine, regularly meets over 50% of Victoria's power needs in Winter. The industrial action in the ETU Notice and the AGL Notice would almost immediately impact the power supply to Victoria and have implications for South Australia. Additionally, the reliability and resilience of the Victorian system would be compromised. The fundamental importance of the power supply to the operation of Victoria's economy is self-evident. Businesses rely on a secure energy supply, and the transportation system depends on reliable power. The supply of power is vital to the operation of the hospital and broader healthcare system, as was highlighted in the evidence of Dr Romanes and Mr Robinson."
"[46] This finding was supported by the NSW Treasury modelling that estimated that the cost to the NSW economy would have been in the order of $90 million. I note that this figure assumed no impact at all on the output of public sector workers, nor on the output of private sector workers who do not usually travel to work by train, even though many of them would have been affected by increased congestion on the roads. It also assumed that the output of the majority of private sector workers who do normally travel by train would have been unaffected. Moreover, the modelling only estimated the cost of the threatened overtime bans until 31 January 2018, even though they were of an indefinite nature. It is quite likely, in my opinion, that the cost to the economy, if the industrial action had gone ahead, would have been significantly more than $90 million modelled by Treasury. Such a loss of output would represent - in absolute terms - significant economic damage."
"Section 424 provides that Fair Work Australia (FWA) must make an order suspending or terminating protected industrial action if it is satisfied that the action threatens to endanger the life, the personal safety, health or welfare of the population or part of the population or to cause significant damage to the Australian economy. The effect of making an order suspending or terminating protected industrial action is to bring to an end the right to take protected industrial action. This is achieved by the removal of the protection or immunity which would otherwise attach to the action. The termination of protected industrial action may also lead to FWA making a workplace determination under Part 2-5 of the Act (see ss.266 and 267).
Within the scheme of the Act, the powers in relation to the suspension or termination of protected industrial action are intended to be used in exceptional circumstances and where significant harm is being caused by the action. This is clear from the Explanatory Memorandum to the Fair Work Bill 2008:
"The Bill recognises that employees have a right to take protected industrial action during bargaining. These measures recognise that, while protected industrial action is legitimate during bargaining for an enterprise agreement, there may be cases where the impact of that action on the parties or on third parties is so severe that it is in the public interest, or even potentially the interests of those engaging in the action, that the industrial action cease - at least temporarily.
It is not intended that these mechanisms be capable of being triggered where the industrial action is merely causing an inconvenience. Nor is it intended that these mechanisms be used generally to prevent legitimate protected industrial action in the course of bargaining." [paras. 1708-1709]"
"[44] When regard is had to context of the FW Act as a whole and to the explanatory memorandum, the expression "significant harm" in s 426(3) should be construed as having a meaning that refers to harm that has an importance or is of such consequence that it is harm above and beyond the sort of loss, inconvenience or delay that is commonly a consequence of industrial action. In this context, the word "significant" indicates harm that is exceptional in its character or magnitude when viewed against the sort of harm that might ordinarily be expected to flow from industrial action in a similar context. In this way, an order will only be available under s 426 in very rare cases, as contemplated by the Explanatory Memorandum. It follows that it will not, of itself, be sufficient that the harm, viewed in isolation, can be characterised as "substantial". Substantial harm to third parties is a common consequence of effective industrial action. Unless the harm is out of the ordinary then suspension would contrary to the legislative intention that suspension should not be able to used generally to prevent legitimate protected industrial action in the course of bargaining. In assessing whether there is "significant harm" context is also important. A particular quantum of financial loss may constitute "significant harm" in one context but not in another."
Damage to the Australian economy or an important part of it - expert evidence
a) The importance to the Australian economy of seaborne trade and towages services in the Affected Ports noting in particular that containerised and liquid and/or dry bulk trade makes an important contribution to each state economy and to the overall Australian economy. Towage services are an essential component of the economic infrastructure that underpins a range of export and import activity.
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> b) That the economic impact of the notified protected industrial action at the Affected Ports on the Australian economy, and/or an important part(s) of the Australian economy was likely to be significant. An indicative quantification of the total (including multiplier) effects associated with the Notified protected industrial action is up to in the order of $458-589 million.
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> c) That there are a number of sectors of the Australian or State economies whose business activities can reasonably be expected to lose a significant amount of value as a result of delays arising from the Notified protected industrial action. In particular, the export coal industry, meat export industry, retail industry, grain industry and liquid fuel import industry are such sectors who could be expected to be disproportionately affected by the industrial action.
(i) Each stoppage that was the subject of the AMOU's notifications proceeded as scheduled (including the stoppages scheduled to occur prior to the hearing of Svitzer's application);
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> (ii) The stoppages prevented all loading and unloading of vessels on the days in which they occurred, although for the two Sydney ports an alternative towage service provider could provide 60 per cent of the total towage service requirements for the Sydney ports, leaving 40 per cent of total service requirement unmet (meaning that in the Sydney ports the stoppages prevent 40% of ships from being loaded or unloaded);
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> (iii) Port activities and movements would be affected for a further 5 days after each 48 hour stoppage (based on an assumption he was asked to make that on average each port would take 5 days to return to normal after a 48 hour stoppage);
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> (iv) All of the trade activities that would otherwise take place in an affected port on a day of stoppage would be delayed and therefore "disrupted";
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> (v) On the days of a stoppage 5-10% of disrupted trade would be lost - meaning lost output never to be recovered;
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> (vi) On each of the subsequent 5 days after a 48-hour stoppage 5% of disrupted trade would also be lost;
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> (vii) If a stoppage took place shortly after another stoppage the loss would be worse because of cascading delays, and the lost trade arising from the second stoppage would increase by a 1.5X multiplier;
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> (viii) A further economic multiplier (1.9X) must be applied to the calculated loss to take account of the interdependence between industries that make up an economy;
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> (ix) The amount of trade activity on any given day in each affected port can be estimated by reference to historical data from a comparable season/period (in this case the period from 1 January 2020 to 31 March 2020 for containerised freight and 1 September 2020 to 30 November 2020 for bulk freight);
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> (x) the average daily level of Gross State Product over the financial year ended 30 June 2020 is a reasonable estimate for the average daily rate over the relevant three-month period to 31 March 2020.
"130. The direct value of goods disrupted by industrial action that I estimate above is not an estimate of the value lost completely, since many of the disrupted goods will likely be delivered to their destination eventually, albeit after a delay. At one end of the spectrum of possibilities, a delay may give rise to an inconvenience for an importer, without necessarily translating into a permanent loss in output and sales that, in turn, results in lost wages and profit. Businesses or consumers falling into this category are likely to be those for whom the import supply chain is a modest or occasional component of their enterprise.
131. At the other end of the spectrum are importers for whom containerised freight supports complex production and distribution supply chains and/or where international competitiveness demands cost efficiency, as arises from well-functioning, just in time product processing. For these industries, the economic harm occasioned by delays in the flow of inputs to the point of production carries a much greater risk of irrecoverable damage.
132. I adopt a range of conservative assumptions in respect of the proportion of disrupted containerised goods that are lost as a consequence of a two day strike in port, ranging from five to ten per cent of disrupted goods."
Damage to the Australian economy or an important part of it - Findings
1. 5-10% of a day's trade for each of the two days of stoppage; plus
2. 5% of a day's trade for each of the next five days after the stoppage.
Mr F Parry QC and Mr B Rauf of Counsel, for the Applicant
Mr E White of Counsel for The Australian Maritime Officers' Union
s.424 - Industrial action
Application to suspend or terminate protected industrial action - endangering life etc.
a) A 48-hour stoppage of work commencing at 7.00am on 19 February 2022 in Kwinana;
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> b) A 48-hour stoppage of work commencing at 12.01am on 22 February 2022 in Port Botany and Port Jackson;
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> c) A 48-hour stoppage of work commencing at 6.00am on 22 February 2022 in Brisbane;
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> d) A 48-hour stoppage of work commencing at 7.00am on 23 February 2022 in Kwinana.
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> e) A 24-hour stoppage of work commencing at 6.00am on 24 February 2022 in Brisbane;
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> f) A 48-hour stoppage of work commencing at 7.00am on 24 February 2022 in Fremantle; and
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> g) A 48-hour stoppage of work commencing at 7.00am on 3 March 2022 in Fremantle.
Printed by authority of the Commonwealth Government Printer
[3] See by analogy Tyco Australia Pty Ltd v Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (Electrical, Energy and Services Division) (Qld Divisional Branch) (2011) 208 IR 243 at 249-250; [2011] FWAFB 1598 at [28]- [31].
[4] Noting the evidence that in Sydney some towage work (60%) can be done by Svitzer's competitor.
[5] Being current, or threatened, impending or probable industrial action per s.424(1)(a) and 424(1)(b).
[6] On judicial review in Australian and International Pilots Association v Fair Work Australia (2012) 202 FCR 200, [2012] FCAFC 65 at [67]- [70], [129] and [176]-[180] the Full Court found that on the Full Bench's findings "no order could be made terminating or suspending the protected industrial action being engaged in by any of the unions." The Full Court ultimately did not disturb the Full Bench's order because they found that the order terminating Qantas' protected industrial action was properly made, and by reference to s.413(7) found that "the effect of the FWA order meant that neither side was able to engage in the industrial action which it had with the immunity offered by s 415" (at [90]).
[7] Esso Australia Pty Ltd v Australian Manufacturing Workers' Union (2018) 281 IR 147, [2018] FWCFB 4120.
[8] Re Sydney Trains (2018) 277 IR 389, [2018] FWC 632.
[9] Re Minister for Tertiary Education, Skills, Jobs and Workplace Relations (2011) 214 IR 367, [2011] FWAFB 7444.
[10] Minister for Industrial Relations for the State of Victoria v Australian Workers' Union & Ors [2016] FWC 8826, Minister for Industrial Relations for the State of Victoria v AGL Loy Yang Pty Ltd & Ors [2017] FWC 2533 and Application by BP Refinery (Kwinana) Pty Ltd [2019] FWC 68.
[11] Sucrogen Australia Pty Ltd v The Australian Workers' Union and others [2010] FWA 6192 and Re Sydney Trains (2018) 277 IR 389, [2018] FWC 632.
[12] Sucrogen Australia Pty Ltd v The Australian Workers' Union and others [2010] FWA 6192 and Re Minister for Tertiary Education, Skills, Jobs and Workplace Relations (2011) 214 IR 367, [2011] FWAFB 7444.
[14] Australian and International Pilots Association v Fair Work Australia (2012) 202 FCR 200, [2012] FCAFC 65 at [93]- [94] and [173] and Schweppes Australia Pty Ltd v United Voice (2011) 214 IR 282 at 294, [2011] FWA 9329 at [57].
[15] [2010] FWAFB 6021; (2010) 198 IR 360 at 374, [2010] FWAFB 6021 at [41], citing FH Transport Pty Ltd v Transport Workers' Union of Australia (1997) 75 FCR 480; (1997) 74 IR 236.
[16] Coal and Allied Operations Pty Ltd v AIRC [2000] HCA 47; (2000) 203 CLR 194 at 208[2000] HCA 47; , (2000) 99 IR 309 at 317, [2000] HCA 47 at [28].
[17] See by analogy Construction, Forestry, Mining and Energy Union v Woodside Burrup Pty Ltd [2010] FWAFB 6021; (2010) 198 IR 360 at 376-377, [2010] FWAFB 6021 at [47].
[18] See by analogy Construction, Forestry, Mining and Energy Union v Woodside Burrup Pty Ltd [2010] FWAFB 6021; (2010) 198 IR 360 at 376-377, [2010] FWAFB 6021 at [47].
[19] The actual figure to be disregarded would not be as high as one third of the total estimates because Mr Houston applied a multiplier to the calculated losses for some of the remaining stoppages because they were scheduled to closely follow earlier stoppages.
[20] Total loss for containerised goods up to 0.98% and for bulk goods up to 0.21%, GSP measured over a 7-day period.
[21] Total loss for bulk goods up to 0.24%, GSP measured over a 7-day period.
[22] Total loss for containerised goods of 0.46%, bulk goods up to 0.06%, GSP measured over a 7-day period and assuming that 60% of towage work during a stoppage in Sydney could be outsourced to another operator.
[23] Total loss for containerised goods up to 0.72% and for bulk goods up to 0.19%, GSP measured over a 7-day period.
[24] Australian and International Pilots Association v Fair Work Australia (2012) 202 FCR 200, [2012] FCAFC 65 at [153].
[25] Construction, Forestry, Mining and Energy Union v Woodside Burrup Pty Ltd [2010] FWAFB 6021; (2010) 198 IR 360 at 374, [2010] FWAFB 6021 at [41], citing FH Transport Pty Ltd v Transport Workers' Union of Australia (1997) 75 FCR 480; (1997) 74 IR 236.
[26] Australian and International Pilots Association v Fair Work Australia [2012] FCAFC 65 at [92].
[27] National Tertiary Education Industry Union v Monash University [2013] FWCFB 5982 at [54] and also National Tertiary Education Industry Union v University of South Australia (2010) 194 IR 30, [2010] FWAFB 1014 at [13].
[28] Australian and International Pilots Association v Fair Work Australia (2012) 202 FCR 200, [2012] FCAFC 65 at [157] and [166].
[29] Australian and International Pilots Association v Fair Work Australia (2012) 202 FCR 200, [2012] FCAFC 65 at [93]- [94] and [173] and Schweppes Australia Pty Ltd v United Voice (2011) 214 IR 282 at 294, [2011] FWA 9329 at [57].
Printed by authority of the Commonwealth Government Printer
Svitzer Australia Pty Ltd
Australian Maritime Officers' Union, The [2022] FWC 493
(2011) 214 IR 367
(2010) 194 IR 30
(2011) 208 IR 243
(2012) 202 FCR 200
(2018) 281 IR 147
(2018) 277 IR 389
(2011) 214 IR 282
(2010) 198 IR 360
(1997) 75 FCR 480
(1997) 74 IR 236
(2000) 203 CLR 194
(2000) 99 IR 309