Fair Work Act 2009

s.240 - Bargaining dispute

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

• [1] On 31 March 2025, Wood Australia Pty Ltd (Wood) made an application under s.240 of the Fair Work Act 2009 (the Act) for the Fair Work Commission (the Commission) to deal with a dispute with respect to a proposed enterprise agreement to cover Wood and its electrical and instrumentation employees working at the Lytton Refinery.

• [2] The employees are currently employed pursuant to the Wood Electrical and Instrument Agreement Lytton Refinery 2022-2025, which passed its nominal expiry date on 30 March 2025. The Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (the CEPU) is a union bargaining representative.

• [3] In its s.240 application, Wood outlined that on 4 February 2025, it tabled a wage offer of a 12% wage increase over three years, comprised of 4% upon an agreement being made, with further annual increases of 4% on 1 April 2026 and 4% on 1 April 2027. This offer was made on the basis that all of the CEPU's other outstanding cost impact claims were withdrawn, including the claim for all overtime to be paid at double time. The offer was rejected by employees.

• [4] The CEPU applied for and was granted a protected action ballot order. Protected industrial action is being undertaken by members of the CEPU, including partial work bans and bans on overtime.

• [5] I convened a conference with the parties on 16 April 2025. At the conference, Wood advised that it contracts to Ampol at the Lytton Refinery, and any increases to entitlements Wood agrees to pay to its employees need to be fully underwritten by increases to the rates paid by Ampol to Wood.

• [6] The parties have engaged in further bargaining since 16 April 2025 and protected industrial action has been continuing. Wood has provided to relevant employees a written notice pursuant to s.471 of the Act, advising of reductions in payments on account of partial work bans taken by employees. The deductions to employees' payments took effect the week commencing 26 May 2025.

• [7] A further conference was convened with the parties on 4 June 2025.

• [8] The parties have made tremendous ground in almost reaching full agreement on all claims between them. Given that the parties are now close, I recommend as follows:

• 6% increase from the FFPP on or after the agreement is made (voted upon);
• A 4% increase from the FFPP on or after 1 April 2026; and
• A 4% increase from the FFPP on or after 1 April 2027;

• [9] Other conditions which are agreed in-principle include:

• I had indicated my recommendation would include back pay to the FFPP on or after 1 April 2025, however the parties have reached a position for a completion of bargaining payment of $400;

• A full complement of personal leave to be provided to new employees on commencement; and

• Superannuation and Contracting Industry Redundancy Trust payments to be made while employees are receiving income protection.

• [10] In being amenable to adopting the above wage increases at [8], there must be movement in the availability allowance which is paid to one person per week and has remained stagnant at $560 per week, for seven days' availability, for many years. It is not a high-cost item, given it is only paid to one employee per week, with a cost of around $30,000 per annum (before statutory burdens such as workers' compensation, superannuation and other payments are applied).

• [11] CEPU delegates involved in bargaining seek that the payment be increased to $840 per week.

• [12] I have recommended the availability allowance be increased as follows:

• $770 from the FFPP on or after the agreement is made (voted upon);
• $800 from the FFPP on or after 1 April 2026; and
• $830 from the FFPP on or after 1 April 2027.

• [13] In the last year of the agreement, where the availability allowance is paid to only one employee per week, the cost would be around $45,000 per annum (before statutory burdens), up from the current approximate $30,000 per annum.

• [14] As I understand it, there is firm reluctance from Ampol to underwrite the increase to the availability allowance as recommended by the Commission, and instead, Ampol is prepared to fund an increase to the effect of $650 per week, increasing to $660 and $670 over the life of the agreement. If this increase is adopted, in the last year of the agreement, the cost would be approximately $35,000 (before statutory burdens).

• [15] Wood has advised that it is not in a position to wear the cost differential of approximately $10,000 per annum between the recommendation made by me at [12] and the cost recovery from Ampol at [14]. It does wish to accept the Commission's recommendation.

• [16] Where Ampol has agreed to underwrite the wage increase by 6%, 4% and 4% (if voted up and agreed by employees to be covered by the agreement), it appears to me to be incomprehensible that Ampol presently does not agree to underwrite an increase to the availability allowance to $770 per week, increasing to $800 and $830 over the life of the agreement.

• [17] Ampol has had the benefit of the one (rotating) Wood employee receiving the availability allowance of $560 per week for many years without the allowance increasing. It is time the allowance was increased, and employees performing the work receive a minimum of $110 per day at the commencement of the agreement, up from $80 per day. In my view it is appropriate and deserving.

• [18] Ampol is encouraged by the Commission to adopt and fund the availability allowance increase at [12] so that the proposed agreement can be promptly put by Wood to employees to vote upon and increases in their wages commence upon a successful vote.

• [19] I am aware that another contractor on site at the Lytton Refinery, Enermech, has commenced bargaining with the CEPU in respect of similar work. The CEPU has indicated it may soon seek a protected action ballot order, and if granted, protected industrial action may commence as early as July 2025. It makes no sense to have two of Ampol's largest electrical contractors' employees engaging in protected industrial action, when the industrial disputation between Wood and the CEPU could be resolved by an additional and modest funding by Ampol of $10,000 or thereabouts per annum.

If Ampol is agreeable to fund the increases at [12] as recommended, I then urge Wood to promptly prepare to put the proposed agreement to vote to relevant employees in accordance with the Act. I would then strongly recommend relevant employees vote yes to make the agreement.

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