The regulation of industrial action in Australia is complex. Whilst there is a need to acknowledge the rights of employees to engage in industrial action, the overall effect of industrial action on an employer’s business operations cannot be understated. Strikes or work stoppages and delays can have serious financial and reputational consequences for a business.
It is for this reason that the provisions of the Fair Work Act 2009 (Cth) (FW Act) impose a number of requirements on employees and unions who intend to take industrial action, and emphasise the importance of engaging in such action for a legitimate purpose.
In a recent decision, the Federal Court of Australia (the Court) has issued a strong warning to employees and unions who misuse the entitlement to engage in industrial action for improper purposes. The Court ordered the Construction, Forestry, Maritime, Mining and Energy Union (CFMMEU) to pay an employer over $3 million for engaging in industrial action in contravention of the FW Act.
In Chevron Australia Pty Ltd v Construction, Forestry, Maritime, Mining and Energy Union (No 3)  FCA 451, the Court was required to consider an appropriate penalty to be imposed on the CFMMEU in relation to unprotected industrial action taken by members of the (then) Maritime Union of Australia (MUA) at a shipping port in Western Australia in 2012.
The ship, known as the RockDoll Sun, was operated by a foreign crew and was tasked with transporting critical freight to an island off the coast of Western Australia for what was known as the Gorgon Project.
The MUA opposed the use of the foreign crew and, under the guise of safety concerns, arranged for its members to engage in industrial action by delaying the commencement of work, and conducting pre-start safety procedures slowly over the course of two days. The result was that the ship left the port late and with only half of the freight loaded.
The Court found that the alleged safety concerns were insubstantial and served as a pre-text. The CFMMEU was therefore found to have breached s 417 of the FW Act, which prevents employees engaging in industrial action while an enterprise agreement is in place.
The Court determined that the CFMMEU ought to pay the employer $3 million (plus a pecuniary penalty of $30,000) for the loss suffered as a result of the unlawful industrial action, noting that the delay and disruption to the delivery of the freight had a serious effect on the employer’s critical path and contractual obligations. The Court also considered the following factors:
With the consent of the parties, the payment of the compensation was suspended pending any further contravention of the FW Act by the MUA and the CFMMEU by way of organising or being involved in industrial action relating to any project of the employer within a period of ten years.
Lessons for employers
This decision should provide comfort to employers that courts are aware of the serious consequences that can result if employees engage in unlawful industrial action, and that the courts are prepared to penalise those involved.
Shane Koelmeyer is a leading workplace relations lawyer and Director at Workplace Law. Workplace Law is a specialist law firm providing employers with legal advice, training and representation in all aspects of workplace relations, employment-related matters and WH&S.
02 9256 7500 | email@example.com
Information provided in this blog is not legal advice and should not be relied upon as such. Workplace Law does not accept liability for any loss or damage arising from reliance on the content of this blog.
Comments are closed for this blog post