The High Court’s decision in Esso Australia Pty Ltd v The Australian Workers’ Union [2017] HCA 54 has further narrowed the grounds for taking protected industrial action.

1 February 2018

On December 6, 2017, the High Court handed down a decision on protected industrial action in relation to section 413(5) of the Fair Work Act 2009 (FW Act). The High Court’s decision means that, if a bargaining representative contravenes a Fair Work Commission order relating to industrial action, any subsequent industrial action organised for the same enterprise agreement will not be protected industrial action.

Background 

In June 2014, the AWU and Esso commenced negotiations for new enterprise agreements.

In early 2015, the AWU provided a number of notices of intention to take protected industrial action to support negotiations for the planned new agreements.

On 2 March the AWU notified Esso of a ban on “de-isolation of equipment.” According to the AWU, the ban on “de-isolation of equipment” included a ban on “testing of equipment,” “air freeing” and “leak testing” and AWU members stopped performing these tasks.  

According to Esso, testing of equipment, air freeing and leak testing did not fall within the description of de-isolation of equipment and these bans were not protected industrial action.

On 6 March 2015, Esso obtained an order from the Fair Work Commission, under section 418(1) of the Fair Work Act 2009 (FW Act) to stop the organising of a ban on testing of equipment, air freeing and leak testing (FWC Order).

The FWC Order came into effect from 6.00pm on 6 March 2015 until 20 March 2015. 

The AWU’s ban on air freeing and leak testing, as well as a ban on the manipulation of bleeder valves to facilitate air freeing and leak testing, continued for a short time after the FWC Order had come into effect.  

Esso applied to the Federal Court seeking a declaration that the AWU’s contravention of the FWC Order meant that all subsequent industrial action organised by the AWU was not protected action because the AWU could not satisfy section 413(5) of the Fair Work Act 2009. 

Section 413(5) is one of the common requirements for industrial action to be protected industrial action.  The section states that a bargaining representative must not have contravened any orders that apply to them and that relate to, or relate to industrial action relating to, the agreement.

Esso was unsuccessful in seeking declaratory relief in an application to the Federal Court and a subsequent appellate hearing in the Full Court of the Federal Court.

A majority of the Full Court upheld the primary decision to not grant a declaration on the basis that section 413(5) must relate to an order that is current and operative at the time of protected industrial action.  The FWC order, made on 6 March 2015, was no longer in operation.

High Court decision

Esso was granted special leave to appeal to the High Court.

The majority of the High Court found that the AWU’s contravention of the FWC Order did fall within the scope of section 413(5) because this section applied to past contraventions of orders – not just orders that are current and operative – at the time of the industrial action.

According to the High Court, the AWU failed to meet the requirement in section 413(5) for the industrial action it organised after 6 March 2015, as part of Esso bargaining, to be protected industrial action.  All industrial action from that time was not protected.

Three take away lessons to avoid disputes about work bans during protected industrial action

  1. Use normal English to describe the proposed industrial action in protected action ballot order applications and in the notices of the action that you provide to the employer.
  2. If you must use a technical term use a definition that will be understood by the employer.
  3. Once the FWC makes a decision under section 418 of the FW Act about the industrial action specified, seek advice, or if in doubt, withdraw the notice.

 

 

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