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June 2020

3 million reasons not to take unprotected industrial action

3 million reasons not to take unprotected industrial action

The Case

Chevron Australia Pty Ltd v Construction, Forestry, Maritime, Mining and Energy Union (No 3) (2020)

In 2012, the Construction, Forestry, Maritime, Mining and Energy Union (CFMMEU) encouraged union members to take unprotected industrial action at a shipping port in Western Australia.

A ship, called the RockDoll Sun, was operated by a foreign crew. It transported critical freight as part of the Gorgon Project, to an island off Western Australia. The CFMMEU opposed Chevron Australia Pty Ltd (Chevron) using the foreign crew. So it alleged spurious safety concerns and had its members engage in unprotected industrial action. This industrial action extended over 2 days, delaying the commencement of work and holding up pre-start safety procedures. This resulted in the RockDoll Sun leaving port late with only half its freight. This caused Chevron to suffer financial loss and had a seriously detrimental effect on its contractual obligations.

Chevron commenced proceedings against the CFMMEU in the Federal Court.

The Verdict

The Federal Court held that:

  • There were no valid safety concerns, and the raising of spurious safety concerns had the potential to undermine confidence invalid safety issues;
  • The union’s actions were deliberate, with the aim of disrupting Chevron’s business;
  • The CFMMEU had breached the Fair Work Act 2009 (Cth) (FW Act) by encouraging its members to engage in unprotected industrial action;
  • The CFMMEU had received prior convictions for the same conduct;
  • The CFMMEU had access to resources and legal advice to be able to properly understand and comply with its legal obligations;
  • the CFMMEU had not apologised for its actions, and there was a need for specific and general deterrence; and
  • the CFMMEU should pay Chevron $3 million and a pecuniary penalty of $30,000 for the losses suffered.

By consent, the payment of the $3 million compensation was suspended on the proviso the CFMMEU would not be involved in any further contraventions of the FW Act relating to Chevron within the next 10 years.

The Lessons

The Federal Court has indicated that in circumstances where a union flagrantly breaches the FW Act, it will take decisive action in response.

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