The Case

A building contractor engaged approximately 130 employees to work on the WA Water Corporation’s new waste treatment plant.

On 20 February 2015, a group of workers attended a pre-work meeting with the Construction, Forestry, Mining and Energy Union (CFMEU) and the Australian Manufacturing Workers Union (AMWU) about completing a bullying survey. At the conclusion of the meeting, the workers voted by a show of hands to take industrial action by leaving the site and did not perform any work that day. As such, a concrete pour that was scheduled to take place was delayed. There was no authorisation provided by the building contractor for its employees to leave work.

The workers were covered by an in term enterprise agreement that was not due to expire until September 2017.

Under the Fair Work Act 2009 (Cth) (FW Act), it is unlawful to take part in industrial action before the nominal expiry date of a registered agreement has passed. In addition, an application needs to be made to the Fair Work Commission (FWC) to obtain a protected action ballot order prior to taking protected industrial action, and the employees need to have a secret ballot to approve the taking of such action. As such, the industrial action taken by the employees was unlawful.

The Australian Building and Construction Commissioner commenced proceedings in the Federal Court against 23 employees for contravening section 417(1)(a) of the FW Act by failing or refusing to attend work, or by failing or refusing to perform any work, and for engaging in unlawful industrial action.

Section 417 of the FW Act states:

(1) A person referred to in subsection (2) must not organise or engage in industrial action from the day on which:

(a) an enterprise agreement is approved by the FWC until its nominal expiry date has passed …

(2) The persons are:

(a) an employer, employee, or employee organisation, who is covered by the agreement or determination; …

Verdict

Prior to the hearing, the employees admitted they had engaged in unlawful industrial action. Justice Siopis of the Federal Court found that the industrial action did not cause any pecuniary loss to the building contractor. However, there was a 1-day delay caused to a minor concrete pour. The Federal Court found:

• the employees’ conduct was deliberate;
• the employees had all consciously made the decision to withdraw their labour on 20 February 2016; and
• the withdrawal of labour, without prior notice and within the nominal term of the enterprise agreement, was a contravention of the FW Act.

Considering the facts and circumstances of the case, the early admission of guilt, the employees’ cooperation with the Australian Building and Construction Commissioner and that labour had only been withdrawn for 1 day, Justice Siopis imposed a penalty of $1000 per employee. The maximum penalty he could have imposed was $10,200 per employee.

Justice Siopis indicated that despite the employees’ actions being at the lower end of the range of seriousness, a penalty had to be imposed for both specific and general deterrence.

Lessons for You

The FW Act regulates industrial action. Industrial action in relation to building and construction work is also subject to additional regulation under the Building and Construction Industry (Improving Productivity) Act 2016 (BCIIP Act). Under the BCIIP Act, industrial action that is not protected is unlawful.

Industrial action is protected if:

• a new enterprise agreement is being negotiated (that is not a greenfields or multi-enterprise agreement); and
• the nominal expiry date of any existing agreement has passed; and
• a protected action ballot order has been approved by the FWC and the industrial action has been authorised by a secret ballot of employees; and
• the bargaining representatives are genuinely trying to reach agreement, and are not taking action in relation to unlawful terms or as part of pattern bargaining; and
• all relevant notices and FWC orders relating to industrial action or bargaining for the enterprise agreement have been complied with.

Additional requirements apply to industrial action in relation to building and construction work. The industrial action will not be lawful if:

• it is engaged in in concert with any person who is not a protected person; or
• the organisers include one or more persons who are not protected persons for the action.

A ‘protected person’ is:

• an employee organisation that is a bargaining representative for the proposed agreement;
• a member of such an organisation employed by the employer who will be covered by the proposed agreement;
• an officer or employee of such an organisation acting in that capacity; and
• an employee who is a bargaining representative for the proposed agreement.

If these conditions are not met, the industrial action will be unlawful. This can result in injunctive proceedings, imposition of penalties and proceedings to pay compensation for damages suffered as a result of the unlawful industrial action.

Please note: Case law is reported as correct and current at time of publishing. Be aware that cases in lower courts may be appealed and decisions subsequently overturned.