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The court found that Queensland rail’s failure to consult was in breach of its industrial agreements and denied workers the benefit of active involvement in decisions fundamentally affecting their employment. On appeal, a Full Court of the Federal Court upheld the finding but significantly reduced the penalty imposed upon Queensland rail to $249,600. Appeal by Queensland rail Queensland rail lodged an appeal arguing that the Federal Court had placed undue emphasis on the concern of Queensland rail employees about working for a publicly owned enterprise as opposed to a privatised business. Queensland rail successfully argued that the decision to privatise its business was a decision made by its owner, the State government. It was not a matter that it was obliged to consult with its employees about under the terms of its industrial agreements, as it did not impact on the “terms and conditions of the employees’ employment”. Chief Justice Keane and Justice Marshall accepted the argument that any change in the identity of Queensland rail’s shareholders was “a matter external to the relationship regulated by agreements” and was “not a matter for consultation between employer and employee”. industrial relations Federal court drastically reduces penalty for Queensland rail An article in our Spring 2010 Bulletin, Maximum fines for failure to consult – Queensland Rail hit with $660,000 fine, detailed the Federal Court’s decision to impose a hefty penalty on Queensland rail for failing to consult with the union and workers about its plans to privatise its rail services. However, Chief Justice Keane and Justice Marshall found that implementing the decision to privatise Queensland rail gave rise to various decisions that fell within the scope of the consultation obligations contained in Queensland rail’s industrial agreements. It was held that the letter sent to Queensland rail employees on 22 January 2010 requesting the transfer of their employment to Qr Passenger did not constitute proper consultation. They said that this communication could not accurately be described as “provisional or as a mere speculation about a possibility of change” and said that “it is manifest from the letter itself that decisions had been made … to pursue a change to the terms and conditions of employees’ employment”. It was made clear by the Full Court that the purpose of the consultation provision contained within Queensland rail’s industrial agreements was to provide employees with “a real opportunity to make suggestions on the subject matter raised for their consideration so that the suggestions might be considered by the employer before the process of bargaining and offer and acceptance begin”. The Full Court found that none of the communications offered employees the opportunity to make suggestions or to put forward ideas and contributions regarding the selection of employees who could potentially be offered a position at Qr Passenger. In other words, decisions about the allocation of the workforce to Qr Passenger, the redundancy of existing positions and the increase in the size of Qr Passenger’s workforce had already been made by management without consultation with its workforce. penalty reduced The Full Court reduced the penalty originally imposed on Queensland rail from $660,000 to $249,600, decreasing the penalty for each breach from $33,000 to $20,000 and applying a further 25 per cent reduction of the total penalty. Although it was accepted that Queensland rail had failed to discharge its consultation obligations, the court found that this was not a deliberate breach, nor did it involve dishonesty. This meant that it should not be categorised as one of the “worst imaginable cases”, as had occurred at first instance. However, the need for the imposition of a significant penalty was recognised due to the fact that the breach was “heedless of the rights of employees” and contravened 20 agreements affecting the industrial rights of 10,300 employees. Autumn 2011 l Workplace Relations & Safety l Page 5
industrial relations economic harm must be exceptional to suspend or terminate industrial action In a recent decision, 1 Fair Work Australia (FWA) ruled that “considerable” economic harm suffered by a company is not enough to support an application to suspend or terminate protected industrial action under the Fair Work Act 2009 (Cth) (FW Act). This decision confirms an earlier Full Bench decision that protected industrial action should only be suspended or terminated in exceptional circumstances, where the harm threatened is above and beyond the sort of loss, inconvenience or delay that might ordinarily be expected to flow from industrial action in a similar context. 2 the facts Prysmain Power Cables and Systems Australia Pty Ltd (company) made an application to FWA under the FW Act to terminate or suspend, for 12 weeks, the indefinite strike by its employees on the grounds it was causing considerable economic harm. The Company’s existing agreement reached its nominal expiry date in July 2010. The Company met with the unions on 15 occasions between July and November to negotiate a new deal. The issues that remained unresolved concerned redundancy payments and employee wages. After the parties failed to reach agreement on these issues, the unions commenced industrial action, including an indefinite strike. After the strike had been in place for six weeks, the Company made its application, submitting that the protected industrial Page 6 l Workplace Relations & Safety l Autumn 2011 action was causing considerable economic harm to both the Company and its employees, and that the parties were unlikely to reach a resolution. The Company identified key areas of disruption to its business caused by the strike, including that it had suffered: • a significant reduction in invoiced amounts; • order cancellations; • loss from orders not being delivered; • loss from backorders needing to be filled; and • loss from spoilt goods and container demurrage costs. the decision Commissioner Cargill found that the evidence before her did not support a finding that the economic loss, although considerable, was “significant” in terms of it being exceptional in either its character or magnitude. Commissioner Cargill noted that the harm suffered was the very sort of harm that could be expected as a direct result of an indefinite strike. In addition to considering whether the economic harm was significant, Commissioner Cargill was also required by the FW Act to consider the likelihood of the harm continuing, the capacity of the Company to bear the economic harm, and whether there was a reasonable prospect that an agreement would be reached. Despite acknowledging that the Company did not have an unlimited capacity to continue to bear the economic loss identified, Commissioner Cargill did not agree that the dispute would not be resolved in the reasonable foreseeable future. Accordingly, the application was dismissed. Bottom line for employers This case confirms that the threshold in the FW Act for suspending or terminating protected industrial action on the basis that it is causing a company “economic harm” has been set very high. In preparing strategies to combat industrial action, employers should bear in mind that FWA is only likely to intervene on this basis in the most extreme cases. 1 Prysmian Power Cables and Systems Australia Pty Ltd v National Union of Workers; Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia; “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) [2010] FWA 9402. 2 Construction, Forestry, Mining and Energy Union v Woodside Burrup Pty Ltd and Kentz E & C Pty Ltd [2010] FWAFB 6021.
Page 1 and 2: In this issue: FWA warns employers
Page 3 and 4: Contents click below to go to each
Page 5 and 6: employment FWA warns employers abou
Page 7: employment MAkinG AMenDS FOr A $1M
Page 11 and 12: anti-discrimination no discriminati
Page 13 and 14: occupational health & safety Danger
Page 15 and 16: occupational health & safety Model
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