The recent overturning of a 35 day industrial action-free period for Patrick’s stevedores highlights why it is critically important to carefully consider your bargaining position, and preparedness to bargain, when industrial action is threatened. Written by AREEA’s director of legal and migration services, Amanda Mansini.

A FULL Bench of the Fair Work Commission yesterday (February 8) overturned a decision of Vice President Watson to order a 35 day industrial action-free period for Patrick’s stevedoring operations in the Ports of Fremantle, Botany, Brisbane and Melbourne, originally granted to allow the parties to focus on resolving the bargaining.

After more than 12 months of bargaining involving 52 formal bargaining meetings, the MUA organised 13 instances of industrial action. In response to the MUA’s industrial action and threats to escalate, Patrick applied to the Fair Work Commission (FWC) to suspend the industrial action under s.425 of the Fair Work Act, insisting that further negotiations would provide real prospects of resolving the outstanding matters.

To make a cooling off order, effectively prohibiting what would otherwise be protected industrial action, the FWC must be satisfied that this is appropriate after taking into account the following:

(a) whether the suspension would be beneficial to the bargaining representatives for the agreement because it would assist in resolving the matters at issue;

(b) the duration of the protected industrial action;

(c) whether the suspension would be contrary to the public interest or inconsistent with the objects of the Fair Work Act; and

(d) any other matters that the FWC considers relevant.

Single member decision

At first instance, Vice President Watson considered all elements of the test and made two key findings:

• The suspension would assist in resolving the matters at issue because the industrial action “made it difficult for Patrick managers to make the time available to attend bargaining meetings before, during and after industrial action” given it required them to go into “firefighting mode”. Watson VP concluded “it is clear that the elevation of hostilities between the parties has precluded the processes of discussion and negotiation”. The Vice President also held that there was some compromise likely, the assistance of Deputy President Booth in facilitating the negotiations would likely be of assistance, and the MUA’s bargaining position would not be compromised by a suspension.
• It would not be appropriate to suspend the protected industrial action for a lengthy period. Watson VP said: “Despite the disruptive nature of this industrial action there does not appear to have been any concessions by Patrick in response to the industrial action. Indeed the cancellation of meetings appears to represent some hardening of Patrick’s position. If only current industrial action is considered, the pending escalation would need to be disregarded.”

Consideration was also given to the impact of disruption on third parties. Vice President Watson found that a suspension order of all forms of otherwise protected industrial action for a period of 35 days (rather than the 60 days which Patrick originally sought) would be in the public interest and consistent with the objects of the Fair Work Act.

Full Bench overturns Watson VP

On Appeal, a Full Bench comprised of Hatcher, Catanzariti and Bull found error in the Vice President’s consideration of the evidence about whether a suspension order would assist in resolving the matters in issue.

In short, the Full Bench determined that the evidence did not in fact bear out a ‘hardening’ by Patrick or a difficulty in further negotiations while industrial action simultaneously took place.

Rather, the Full Bench determined the evidence proved that in response to the MUA’s threats to strike and escalate the strikes, there was no cancellation of bargaining meetings by Patrick nor did Patrick harden its position.

The Full Bench did uphold the principle that a cooling off order (if made) can only apply to all forms of industrial action otherwise authorised by a protected action ballot and not, as the MUA argued, a limited list of forms.

Implications for AREEA members – when can a cooling off period be obtained?

The main implication of this decision is a further raising of the bar for when an employer can access even a short period of relief from protected industrial action to facilitate the reaching of an agreement.

This decision does not preclude a cooling off period for an employer who could demonstrate (among other things) that its position hardened and negotiations could not occur in response to threatened or escalating industrial action. However, the overriding presumption appears to be that protected industrial action may well be necessary to assist parties with resolving a bargaining outcome.

In light of the Full Bench’s position, AREEA recommends employers with upcoming bargaining campaigns consider carefully the circumstances in which it will agree to negotiate with a ‘gun to its head’.

It is important to also consider whether there is any capacity to concede significant claims once industrial action happens or escalates, or whether capacity to agree in fact reduces in light of such damage to the business. These boundaries must then by clarified with other bargaining representatives.

For further advice on this case or any other EBA bargaining matters, contact an AREEA Legal Services or Workplace Consulting representative at your local AREEA office.