The Honourable Les Kaufman

Senior Deputy President, Fair Work Australia

EMPLOYMENT DISPUTES: ISSUES AND TRENDS

Lockouts to Break Strikes?

• Will employers lock out their employees as a tactic to bring to an end lawful employee/union industrial action?

• Have recent cases set a trend?

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© Commonwealth of Australia — Fair Work Australia 3

The Right to Strike

• 1973 – Australia ratified international conventions protecting the right to strike

• 1994 – Australia legislated to give effect to the conventions

• The making of certified agreements at an enterprise level was encouraged

• Industrial action could be protected from civil suit if taken in support of enterprise bargaining

© Commonwealth of Australia — Fair Work Australia 4

The Current Law

• Three types of protected industrial action:

– Employee claim action (s.409)

– Employee response action (s.410)

– Employer response action (s.411)

• Industrial action is only protected if authorized by a protected action ballot

• Notice is required for taking employee claim action, but no notice is required for employer response action.

© Commonwealth of Australia — Fair Work Australia 5

Employer Response Action

• Section 411 of the Fair Work Act:

Employer response action for a proposed enterprise agreement means industrial action that:

(a) is organised or engaged in as a response to industrial action by:

(i) a bargaining representative of an employee who will be covered by the agreement; or

(ii) an employee who will be covered by the agreement; and

(b) is organised or engaged in by an employer that will be covered by the agreement against one or more employees that will be covered by the agreement; and

(c) meets the common requirements set out in Subdivision B.

Suspension /Termination of Protected Industrial Action

• Fair Work Australia has the power to suspend or terminate protected industrial action in exceptional circumstances

• The grounds are:

– Causing, or threatening to cause, significant economic harm to the employer and employees (for employee claim action) (s423(2))

– Causing, or threatening to cause, significant economic harm to any of the affected employees (s.423(3))

– Threat to endanger the life, safety or welfare of the population or part of it (s.424(1)(c))

– Threat to cause significant damage to the Australian economy or an important part of it (s.424(1)(d)).

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Suspension of Protected Industrial Action

• Fair Work Australia has the power to suspend protected industrial action

• Grounds for suspension are:

– If Fair Work Australia is satisfied that the suspension is appropriate to provide a “cooling off period” (s.425)

– If Fair Work Australia is satisfied that the protected industrial action is adversely affecting the employer or the affected employees (s.426(2))

– If Fair Work Australia is satisfied that the protected industrial action is threatening to cause significant economic harm to a third party (s.426(3))

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Workplace Determination

• If Fair Work Australia terminates protected industrial action

– No bargaining representative can take protected industrial action

– Parties have 21 day negotiating period

– If no agreement is reached Fair Work Australia must make an arbitrated workplace determination (s.266)

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Case Studies

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The Qantas dispute

• Three protracted industrial disputes between Qantas and:

– Australian Licenced Aircraft Engineers Association;

– Transport Workers’ Union of Australia, and

– Australian and International Pilots Association

• All unions had concerns regarding the job security of their members.

• All unions took protected industrial action

• Qantas suffered financial and reputational damage

– Qantas was losing $15m per week as a result of the claim action

– 600 flights had been cancelled

– 70,000 passengers affected

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The Lock Out

• Qantas gave three days’ notice that it planned to lock-out its employees

• The entire fleet was grounded immediately

• Australian Government lodged an application under s.424 of the Act that Fair Work Australia terminate the protected industrial action

• Fair Work Australia held an urgent hearing over that weekend

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Full Bench Hearing

• The Full Bench found that the proposed lockout threatened to cause significant damage to the Australian economy, particularly to:

– Aviation industry, and

– Tourism industry

• The Bench opted to terminate rather than suspend the protected action

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The Aftermath

• The parties had 21 days to negotiate an agreement

• No agreement was reached

• ALAEA and Qantas later reached an agreement which became a consent Workplace Determination

• Workplace Determinations are being arbitrated by Fair work Australia for the pilots and TWU

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The Schweppes Dispute

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Schweppes and United Voice

• The company sought an agreement involving a significant change in the rostering of shifts

• The company wanted to introduce a 12 hour shift

• Employees had been accustomed to significant earnings as a result of overtime at penalty rates

• Employees engaged in protected industrial action

• Schweppes locked out its employees

• Schweppes managed to continue to meet productivity requirements through the use of management and contractors

• Workers set up a picket at the worksite

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Termination

• Soon after lockout (four days) Schweppes applied under s.423 to terminate the protected industrial action

• It argued that its lawful lockout was causing or threatening to cause significant economic harm to any of the employees who were to be covered by the agreement

• I declined to grant that application

• Six weeks after the lockout anonymous letters were mailed to my chambers

• I decided to call on the matter at Fair Work Australia’s initiative

• Both parties conceded that the protected action should be terminated

• No agreement was reached within 21 days. Matter listed for a workplace determination before a Full Bench.

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Do Two Swallows a Summer Make?

• Qantas was unique

• The Waterfront?

• A Repeat of Schweppes?

– A risky proposition

– A fairly high bar

– Difficult for an employer to prove

– Suspension a possibility

• Has a Trend Been Set?

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