Fair Work Act 2009

s.437 - Protected action

The Australian Institute of Marine and Power Engineers

Section 437 Application for protected action ballot order - Proposed protected action ballot of employees of Svitzer Australia Pty Ltd engaged in tug boat operations in the Ports of Cairns, Mourilyan, Brisbane, Newcastle, Sydney, Botany, Eden, Port Kembla, Westernport, Geelong, Melbourne, Adelaide, Spencer Gulf (incorporating Whyalla and Port Pirie), Albany, Kwinana, Fremantle and Geraldton - Whether there are exceptional circumstances justifying the period of written notice in s. 414(2)(a) being longer than three working days - Finding that there are exceptional circumstances justifying extension of the period of written notice to five working days.

• [1] An application was made pursuant to s.437 of the Fair Work Act 2009 (the Act) by the Australian Institute of Marine and Power Engineers (the AIMPE) on 9 July 2021. The AIMPE sought a protected action ballot order in relation to certain employees of Svitzer Australia Pty Limited (the Employer).

• [2] The Fair Work Commission (the Commission) sent correspondence to the Employer on 9 July 2021 seeking that the Employer urgently advise whether there was an objection to the application by 4.30pm on 12 July 2021. On 12 July 2021 correspondence was received from the Respondent indicating that it had not received the correspondence until late in the afternoon on 12 July 2021 and indicated it would respond by 10.00am on 13 July 2021.

• [3] Correspondence was received from the Employer's legal representative at 9.33am on 13 July 2021 indicating that the Employer wished to be heard in relation to the period of notice of protected industrial action being extended pursuant to s.443(5) of the Act and that parties were in negotiations in relation to the application more generally. It was also advised that the matter may benefit from a Mention.

• [4] On 13 July 2021, the AIMPE sent correspondence to the Commission indicating it was considering a revised draft order provided by the Employer and was also considering the Employer's request for the period of notice to be extended to five working days. The application was subsequently allocated to me.

• [5] I caused my Associate to send correspondence to the parties advising that the matter would be listed for Mention at 1.00pm on 14 July 2021. The Mention proceeded on that date. The Employer indicated that it pressed its objection to the order on the basis that it sought the Commission exercise its discretion pursuant to s.443(5) to extend the period of notice for industrial action to five working days. The parties also indicated there was a dispute over certain exemptions to industrial action and were attempting to reach agreement on this point noting the Commission could not determine that issue.

• [6] I issued directions requiring the Employer to file material stating the grounds on which it submits the Commission should exercise its discretion under s.443(5) of the Act to extend the period of notice, and the application was listed for hearing on 22 July 2021.

• [7] On 15 July 2021 correspondence was received from the AIMPE stating that the parties had reached an agreed position with respect to the order it sought from the Commission and provided an amended draft order.

• [8] On 15 July 2021 I caused my Associate to issue correspondence stating that the group of employees to be balloted described on the amended draft order was inconsistent with s. 437(5) of the Act and that the order issued would specify that employees to be balloted were those represented by the AIMPE rather than as described in the application - "Engineer employees of Svitzer Australia Pty Limited." The parties were also advised that while they had agreed to extend the period of notice in relation to specific stoppages of work, the Commission was still required to be satisfied there are exceptional circumstances justifying the period of notice being extended. Further, the parties were advised that consistent with advice from the Australian Electoral Commission about the time frame for conducting protected action ballots, the order would specify that the ballot would close within 30 working days of the date of the order rather than the period of 28 days sought in the Application.

• [9] The views of the parties in relation to the change to the description of employees to be balloted were sought by 10.00am on 16 July 2021, and the Respondent was required to file a brief outline of submissions addressing the matters in s. 443(5) of the Act.

• [10] On 16 July 2021 correspondence was received from the Employer indicating that it did not oppose the making of the order and providing submissions in relation to the basis upon which the Commission could be satisfied that there were exceptional circumstances justifying the period of written notice in s. 414(2)(a) being longer than three working days. Correspondence was also received from the AIMPE indicating it did not object to the making of the order and providing submissions in relation to the extension of the notice period that were supportive of the notice period being extended in relation to specific stoppages of work. The AIMPE also sought to add Port Kembla to the list of Ports in the Application and draft Order and the Respondent did not object to that amendment.

• [11] I allowed the amendment to the application sought by the AIMPE pursuant to s. 589 of the FW Act, to add Port Kembla to the list of Ports where employees subject of the ballot order are employed. The order was issued on 16 July 2021. I also decided that there were exceptional circumstances justifying the period of written notice in s. 414(2)(a) of the FW Act being extended from three to five working days and that period was specified in the order issued. These are my reasons for granting the longer notice period for protected industrial action.

Principles relevant to whether notice period should be extended

• [12] In Construction, Forestry, Maritime, Mining and Energy Union v DP World Brisbane Pty Ltd and Others (DP World),[1] a Full Bench of the Commission endorsed the principles to be applied in relation to considering whether an extension of the notice period for engagement in employee claim action should be granted, that were stated in the Full Bench decision in National Tertiary Education Industry Union v Charles Darwin University (NTEU).[2] In relation to s 443(5) generally, the Full Bench in NTEU observed:

"[20] The exercise of a discretion under s.443(5) results in an interference with the right of a bargaining representative to otherwise give three working days' written notice of industrial action that is to be organised and engaged in by employees in support of a proposed agreement. That this right should not lightly be curtailed by the imposition of a longer period of notice is evident in the grant of power itself. There must be 'exceptional circumstances' in relation to the proposed industrial action the subject of the order justifying a longer period."

• [13] In relation to the meaning of the expression "exceptional circumstances", the Full Bench in NTEU quoted and applied a decision of the Australian Industrial Relations Commission[3] relating to the equivalent provision in the Workplace Relations Act 1996 as follows:

"[10] ... 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."

• [14] The Full Bench in NTEU then set out a three-step decision-making process required in order to determine whether there should be an extension to the notice period pursuant to s.443(5) of the Act:

"[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)."

• [15] The Full Bench in DP World also considered the extent to which the adverse consequences of employee claim action on third parties, can constitute exceptional circumstances for the purposes of the Commission deciding whether to exercise the discretion in s.443(5) to require the provision of a further period of written notice of such action. In relation to this matter, the Full Bench in DP World said:

"[17] If the Decision [under appeal] was to be read as finding exceptional circumstances on that basis alone, we would accept that it would be in error. In our view, it is difficult to contemplate a situation where the taking of industrial action by employees in the form of a stoppage of work would not involve some impact, with cost implications, on third parties. Detrimental effects on suppliers, customers or subcontractors of the employer are an ordinary incident of the legitimate 'duress' or 'coercive influence' of protected industrial action. It has long been recognised that part of the purpose of the standard notice requirement for protected industrial action is to allow the employer to attempt to ameliorate the consequences for such third parties." (citations omitted)

• [16] To illustrate this point, the Full Bench in DP World gave as an example, a decision in relation to equivalent provisions in the former Workplace Relations Act 1996, where the Federal Court Full Court majority (Wilcox and Cooper JJ) in Davids Distribution Pty Ltd v National Union of Workers7 said (emphasis added):

"[87] We think s170MO(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 the 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."

• [17] The Full Bench in DP World went on to state that:

"[18] Consequently on no basis could it be said that the simple fact that protected industrial action has effects upon third parties requiring ameliorative steps to be taken is 'out of the ordinary course', 'special', 'rare' or 'uncommon' such as to constitute the requisite exceptional circumstances. Were it otherwise, extensions to the standard notice period under s 443(5) would be granted as a matter of course."

• [18] However the Full Bench in DP World also emphasised that the requirement for exceptional circumstances calls for particular facts and circumstances of a case to be considered, and an evaluative judgment to be made. Those facts and circumstances include the impact of industrial action on third parties. In this regard, the Full Bench said (at [20]):

"...There can be no doubt that one of the factors to be weighed by the Commission in determining whether exceptional circumstances justify an extension of the written notice period is the impact of the industrial action proposed to be put to a ballot upon the interests of third parties. Plainly, the magnitude of the impact and its ramifications will be a matter of degree in each case, depending on a range of factors, inter alia, the nature, extent of, and duration of the proposed industrial action. This is a matter which may be taken into account together with a range of other relevant factors including but not limited to the direct effect upon the employer, the effect of an extension upon the bargaining power of employees, the range of mitigative strategies which an employer may adopt within the standard notice period, and the capacity of the employer to take protected response action." (citations omitted).

• [19] The nature of the task the Commission undertakes in determining whether to exercise the discretion to grant a longer period of notice was explained by the Full Court of the Federal Court in a judgement dismissing an application by the CFMMEU to quash the orders extending the notification period, which were the subject of the Full Bench Decision in DP World. The Full Court of the Federal Court said:

"As a general matter it is apparent that the formation of the discretionary judgment called for by s. 445(3) is conditioned on the FWC forming a discretionary evaluative judgement about whether, having regard to all of the circumstances, there exists some characteristic of the foreshadowed proposed industrial action, in the whole of the context in which it is to occur, that justifies allowing a longer period of written notice."[4]

• [20] The Employer submitted that there is a tendency for exceptional circumstances to be found where interests beyond those of the immediate parties are impacted by the taking of industrial action. It was submitted that the circumstances of this case arise out of the ordinary course and are unusual, special or uncommon in the context of services provided by the Employer as a marine towage or tug boat operator which owns, and to a lesser degree charters, tug boats, in all types of ports across Australia including for: container terminals; liquid bulk terminals; dry bulk terminals; roll on/roll off (RoRo) cargo terminals; and cruise terminals.

• [21] Some types of vessels run to a strict schedule, and it is important that berthing windows are strictly followed where possible. Containers and RoRo vessels fall into this category. The employees subject of the Application are engineers. Without engineers, operations can be interrupted and the Respondent does not have back-up resources readily or likely available. The responsibilities of these employees include:

a) maintenance and repair of marine plant and equipment (including emergency maintenance work);

b) supervision of personnel undertaking and assisting in the engineering function;

e) ensuring all machinery (deck and engine) is maintained to operational standards at all times; and

• [22] Approximately 99 per cent of trade between Australia and the global economy is moved by sea. Ultimately, every supply chain that involves the vessels berthing at terminals of the nature described above depends on the availability and operation of marine towage services. Marine towage is therefore a vital link in innumerable supply chains, in a way that few other industries can match.

• [23] Accordingly, a significant impact would likely be felt by third-party shipping lines, container terminals and trucking companies and their customers, and ultimately the consumer both in Australia and internationally, were additional time not granted to enable the Respondent sufficient time to take steps to mitigate or ameliorate the impact of any industrial action on third parties. The impact on third parties includes:

a) Impact on container terminals: A terminal can take over 2 weeks to recover from a 1 day closure for whatever reason.

b) Impact on trucking companies: Disruption to trucking companies' schedules as a result of cancelled or rescheduled pick up / drop off times, potentially leading to idle trucks and labour.

c) Impact on shipping lines: Shipping schedules are planned well in advance, often for a period of one to two years. Delay therefore creates considerable and obvious disruption for shipping lines. Further, disruptions in one port typically lead to disruptions in subsequent ports - and hence, a disruption in Melbourne can have flow- on effects elsewhere. This can lead to the need to reduce container exchanges in various ports or skip a port altogether. For the shipping line, the late delivery of goods also creates a reputational risk; any perceived unreliability on their part potentially impedes their capacity to secure further business in future from their customers, being the importers and exporters.

d) Impact on importers or exporters: Delay naturally leads to imports and exports not being received on time or being stranded in foreign ports, potentially for a significant period of time. This has an obvious impact on:

i) Retailers who lose sales from their end customers;

ii) Customers who do not receive goods as promised; and

iii) Exporters who have promised goods to their customers, often international clients.

• [24] Further, the problem becomes all the more acute with particular types of orders or particular types of cargo. For example:

i) Perishable cargo: Delay impacts shelf life. The longer cargo sits at the Respondent's terminal, the less its shelf life is for the end consumer, or worse yet, an item might perish before it reaches its end destination.

ii) "Just in time" imports: Given the short lead time for orders made on a "just in time" basis, if there is delay then this typically leads to loss of revenue for the ultimate seller (for example, the supermarket) and unavailability of goods for the end customer.

iii) Exporters of bulk containerised cargo: If volume quotas are not met (for example, as a result of a vessel having to "cut and run" without some or all of their goods being loaded onto the vessel), then exporters of bulk containerized cargo face their order being cancelled because they have not fulfilled it.

• [25] Significantly, there are no other tug operators at (or nearby to) the ports of Brisbane, Melbourne, Adelaide or Fremantle that would be able to accept subcontracted services to mitigate the impact of the industrial action. If the Respondent has five working days' notice of the industrial action it will enable the Respondent to take steps to ameliorate (but will likely not entirely avoid) the impacts set out above. The benefits of this will accrue to third parties in the supply chain.

• [26] It was also submitted that in reaching a conclusion as to "exceptional circumstances" the Commission can take judicial notice of the impact of COVID-19. It is well understood that COVID-19 has had an impact on Victorian, Australian and indeed world economies. The importance of trade to economic wellbeing is also obvious. This course is open to the Commission and has been recently adopted.

• [27] The AIMPE communicated with the Commission indicating that a consent position had been reached on the terms of the order and the extension of the notice period to five days where stoppages would exceed 48 hours. The AIMPE indicated its acceptance that potential disruption to supply chains through lengthy stoppages during the pandemic period, is an exceptional circumstance and stated that the Union views this as a responsible position in the exceptional circumstances resulting from the pandemic.

• [28] I am satisfied, in relation to the proposed industrial action that is the subject of the protected action ballot pursuant to the order in these proceedings, that there are exceptional circumstances justifying the period of written notice referred to in 414(2)(a) being longer than three working days. Applying the approach set out by the Full Bench in NTEU v Charles Darwin University the particular facts or circumstances in relation to the proposed industrial action which I consider to be exceptional circumstances are as follows. As a marine towage or tug boat operator the Applicant deals with different vessels in all types of ports, running to schedules which are often strict and which are beyond its control. Impacts on those vessels caused by interruption of the Respondent's operations extend to container terminals, transport companies and shipping lines which are also running to schedules. It is also the case that disruptions in one port will likely lead to disruptions in subsequent ports.

• [29] The fact that 99% of trade between Australia and the global economy is moved by sea and that marine towage is a vital link in innumerable supply chains means that detrimental effects on third parties generally extend beyond the ordinary incidents of detriment to suppliers, customers or subcontractors of employers confronted with protected industrial action. This is because detrimental impacts are likely to extend to all parts of a supply chain including retailers, exporters and ultimately customers. The complexity is heightened by the variety of cargo involved. Compounding these factors is the impact of COVID-19 on the Australian and world economies.

• [30] It is a feature of the COVID-19 environment that many parties operating in it have reduced capacity to withstand loss or damage from the impact of protected industrial action. It is probable that any detrimental impacts on third parties because of delays in supplies of goods resulting from industrial action being taken by employees who are the subject of this application, will be compounded by the effects of the pandemic.

• [31] I consider that these exceptional circumstances justify a longer notice period. In this regard, I accept that a longer notice period will enable the Respondent to take steps to mitigate or ameliorate (although not entirely) the effects of industrial action on its operations. The longer notice period will also enable the Respondent to notify third parties to enable them to take steps to protect their interests. I also accept that there are no other tug operators at, or nearby to, the Ports of Brisbane, Melbourne, Adelaide and Fremantle, that would be able to accept sub-contracted services and that delays in these ports may have a knock-on effect at other ports. I also accept that the skills of the employees subject of the application are such that the Respondent does not have back-up resources readily or likely available.

• [32] Being satisfied that there are exceptional circumstances justifying a longer period of notice, I considered it appropriate to exercise the discretion to grant such period. I considered that the additional period should be 2 working days so that the total period of notice is 5 working days. In extending the notice period by two working days I have also had regard to the fact that the AIMPE has agreed to exempt emergency circumstances advised by a Harbour Master or representative of a Port Authority and any services impacting or potentially impacting the movement of an Australian Defence Force Vessel from industrial action. Further, the AIMPE has agreed that for a stoppage or stoppages longer than four hours, any services impacting or potentially impacting the shipment of a vessel loaded with livestock will also be exempt. The agreement of the AIMPE to these exemptions mitigates against a longer period of notice being granted.

• [33] For these reasons, I decided to issue the protected action ballot order in terms of the AIMPE application and to extend the notice requirements for employee claim action by 2 working days, to a total of 5 working days, and an order to that effect was issued on 16 July 2021.

[1] [2019] FWCFB 1150

[2] [2018] FWCFB 4011.

[3] Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Australian Postal Services Corporation [2017] AIRC 848.

[4] Construction, Forestry, Maritime, Mining and Energy Union v DP World Sydney Ltd [2019] FCAFC 99.

Printed by authority of the Commonwealth Government Printer