AREEA chief executive Steve Knott explains why the resource industry employer group will call on the next federal government to fix legislation that risks rewarding workers for taking strike action on remote FIFO sites, while employers foot the bill for their accommodation.
AS explored in the feature article of today’s AREEA bulletin, a new Deloitte Access Economics’ report highlights that the business case for a number of potential projects in the investment pipeline is dissolving, and that further cost pressures could see major projects foregone in Australia.
In light of this and other evidence that Australia’s resource industry is rapidly becoming a high-cost, low-productivity environment, a High Court decision handed down yesterday (August 14) will surely have the international investment community scratching their heads.
The decision was the latest in a series of court proceedings involving the CFMEU and Mammoet Australia Pty Ltd in relation to industrial action taken by workers on Woodside’s Pluto Project in April 2010.
Originally, the Federal Magistrates Court found that providing accommodation to striking workers was prohibited under the Fair Work Act because it constituted ‘strike pay’ and the employer was right to withdraw it. In 2012, the Federal Court upheld this decision after the CFMEU appealed.
Yesterday, the High Court set aside the decisions of both the Federal Court and Federal Magistrates Court (now the Federal Circuit Court), remitting the matter back to the Federal Circuit Court to be heard and determined afresh.
The High Court’s key finding was that the greenfield enterprise agreement covering the parties meant the employer was required to provide accommodation for as long as the employment relationship continued, regardless of whether employees were performing work day-to-day.
However, even if the employees ceased to be legally entitled to accommodation because they were not ‘ready, willing and available to work’, the company’s denial of accommodation constituted an alteration of the position of those employees to their prejudice and therefore constituted ‘adverse action’ against them, the High Court said in its unanimous decision.
This is a significant development for resource industry employers, as the High Court decision risks rewarding workers for taking industrial action on remote sites while employers are left to foot the bill for high-quality accommodation and hospitality, all the while suffering the full commercial impacts and costs of the strike action.
Varying commercial complexities in the resource industry mean a ‘one-size-fits-all’ approach from policy makers to this issue is unworkable. For instance, if protected industrial action was temporary or for very short periods of time, the option of withdrawing accommodation an having to fly workers offsite would not be operationally expedient.
For longer term or protracted industrial action however, employer should have the right to mitigate the damage association with the action by withdrawing accommodation from workers for that period.
AREEA maintains it should be at the employer’s discretion to minimise the full costs and business impacts of any protected industrial action, which can run into millions of dollars a day in the resource industry.
If the current legislation is to operate even remotely fairly, employers would have the right to mitigate their costs by withdrawing accommodation from striking workers who were acting against their commercial interests.
We are adamant that our members should not face a situation where, under Labor’s Fair Work laws, union bosses can organise damaging long-term strikes and have their members enjoy ongoing high quality catering and accommodation provided at full cost by the employer.
Periods of extended strike action and the idle time this presents for employees on remote sites also create unacceptable risks to employers and add to their insurance and work health and safety liabilities.
The notion of employers being forced to provide employees with food and lodging when they are both not working and damaging the commercial interests of the employer is absurd.
Accordingly, AREEA will be making representations to the major political parties on the need for reform of the Fair Work Act in the wake of this decision.
For advice about what this High Court decision means for your operations, contact your local AREEA office or call director of legal services, Amanda Mansini at (03) 9614 4777.
