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Unions can organise strikes despite bad bargaining – Fed Court

IN an important test case for s413(5) of the Fair Work Act, a full Federal Court of Australia has ruled that unions do not have to comply with bargaining orders of the Fair Work Commission in order to organise protected industrial action (PIA).

The ruling on Australian Mines and Metals Association Inc v The Maritime Union of Australia, which was led by AREEA on behalf of several members in the offshore oil and gas maritime sector, is concerning for all employers given the implication is that unions should not be restricted from organising PIA even if they have failed to follow the law during bargaining.

However, the Federal Court ruled that any breach of orders related to industrial action, and which occurs at the time PIA is sought to be taken, would be unlawful.

The same application of s413(5) was further enforced in a separate case, Esso Australia Pty Ltd v The Australian Workers’ Union, handed down on the same day.


Section 413 of the Fair Work Act relates to “common requirements that apply for industrial action to be protected industrial action”, with subsection 5 ordering that those seeking PIA to “must not have contravened any orders that apply to them and that relate to, or relate to, industrial action…”

In 2014, the MUA breached interim bargaining orders issued by Commissioner Danny Cloghan related to ongoing bargaining between the union and AREEA involving agreements for multiple vessel operators in the offshore maritime sector.

Cloghan C’s interim bargaining orders included basic expectations of good faith bargaining behaviours, such as:

  • The MUA would desist with an ‘Australians first’ job clause that may have breached Australian anti-discrimination laws;
  • The MUA would commit to only including permitted matters in its claims and cease its efforts to restrict the use of contractors; and
  • That the MUA ‘clarify, identify and prioritise’ its claims by July 21, 2014 and specify which claims are sector-wide claims and which are related to individual employers.

Following the MUA’s failure to comply with these orders within the specified timeframe, which coincided with an attempt to organise PIA in relation to one vessel operator, AREEA sought declarations from the Federal Court that such failure should mean under s413(5) of the Act that the union could not take PIA against the employers concerned.

In 2015, Justice Michael Barker rejected AREEA’s application on the basis that s413(5) ‘only referred to the contravention of orders which applied at the time of proposed industrial action’, and that the bargaining orders related to AREEA’s application were ‘spent’ because the MUA had initially breached then later complied with those orders.

At around the same time, Esso Australia sought the same interpretation albeit in a slightly different context whereby the AWU had breached industrial action ‘stop’ orders (s418 orders), during industrial action at the oil and gas company’s Longford Plant in early 2015.

In his decision of 24 July 2015 on the Esso application, Justice Jessup cited the earlier AREEA decision, saying he saw ‘some force’ in AREEA’s arguments and that in his view Justice Barker’s interpretation of s413(5) as only being relevant to current orders could be ‘problematic’.

However, given Justice Jessop did not find Justice Barker’s view as ‘plainly wrong’, he was therefore required to follow the precedent in Justice Barker’s interpretation on s413(5).

Ruling – provision should be treated as ‘point in time’

In the recent full Federal Court ruling on AREEA’s case, Justices Siopos, Buchanan and Bromberg assessed AREEA’s argument and Justice Barker’s original ruling, and were not satisfied that a breach of bargaining orders should bar PIA taken forevermore, or even pre-emptively.

Leading the judgement, Justice Buchanan said s413(5) ‘is concerned with an assessment of the particular industrial action’ being sought; and is ‘concerned with a contemporary ‘point in time’ assessment’.

“In my view, therefore, the effect of s 413(5) is that the identified persons must not have contravened any such orders when organising or engaging in the particular industrial action which is being assessed to see whether it is, or will be, protected,” Justice Buchanan said.

“On the view which I take of s413(5) it is concerned with orders which might bear directly upon organising or engaging in the industrial action… It is not concerned with matters more remote from that industrial action or with matters of history.”

The Full Court therefore rejected AREEA’s application.

Esso Australia case also fails on s413(5)

The ruling on AREEA’s application came as the same panel of the Federal Court ruled on Esso Australia’s appeal of Justice Jessup’s decision of 24 July 2015, with mixed results for the employer.

In Esso Australia Pty Ltd v The Australian Workers’ Union, the employer succeeded in its argument that the AWU had breached certain stop orders made under s418 of the FW Act and, on the same interpretation of s413(5), the Full Court held that that all industrial action organised by the union in March 2015 was unprotected.

However, the Court applied the same view of the intention of s413(5) in that this provision only applies to ‘live’ orders related directly to PIA being sought and does not permanently bar PIA – only until such time as the breach has stopped or is rectified.

Implication for employers

AREEA’s director of workplace relations and legal, Amanda Mansini, says the approach to s413(5) taken by the full Federal Court demonstrates yet another failure in the Fair Work Act to ensure balance within the framework for enterprise bargaining and strike action.

“The important consequence of the Full Court’s decision is that a union can seemingly breach an order of the Fair Work Commission and, regardless of how serious the consequences, patch up the breach and continue on with taking PIA afterwards,” Ms Mansini explains.

“Of even further concern for employers is the implication that a regime which provides for otherwise unlawful conduct to occur lawfully, does not in exchange effectively incentivise adherence to the basic good faith bargaining rules.”

“While the direct link between union behaviour at the bargaining table and their ability to organise PIA should be clear and logical, this ruling has further distanced the two issues.

“This shows a great failure of the Fair Work Act to adequately protect employers from deliberate union intransigence and mischievous conduct during bargaining.”

For more information on this case or any other matter related to enterprise bargaining and strike action, email [email protected] or contact your local AREEA office.

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