• Australia: Recent Increase in Disputes Relating to Strike Action
  • October 28, 2015 | Author: Adam Salter
  • Law Firm: Jones Day - Sydney, New South Wales Office
  • In Australia, the concept of protected industrial action provides immunity from prosecution under state and federal laws. However, industrial action will be "protected" only if:
    • The nominal expiry date for the enterprise agreement has passed;
    • The industrial action is in association with negotiations for the renewal of an existing or proposed agreement (but not a greenfields or multi-enterprise agreement);
    • The industrial action is to support claims in relation to the agreement or in response to action on the part of the employer; and
    • The majority of eligible employees vote in support of the action through a secret ballot.
    • An application can be made to the Fair Work Commission ("FWC") for a protected action ballot order. The industrial action will be protected where the action relates to the questions included in the ballot, more than half of the eligible employees vote, and more than half of those votes are in the affirmative.
    Where industrial action does not comply with the requirements set out above, it will be unprotected or "unlawful" industrial action. The FWC can make an order to stop unprotected industrial action when it has already begun or can prevent industrial action that is threatened, probable, or being organized. Two recent instances of industrial action—the Gorgon strike and the Hutchison strike—reflect the recent increase in disputes relating to industrial activity in Australia.

    The Gorgon strike involved employees working on the Gorgon LNG Project in Western Australia. The project employed up to 10,000 people and was at risk of delays and cost blowouts. The previous enterprise agreement nominally expired in January 2015, and the employees were consistently rejecting proposed new enterprise agreements. The unions sought authorization for industrial action, and the FWC eventually granted a protected action ballot order.

    The strike action was called off after unions and the employees reached an in-principle agreement in relation to rosters and a 5 percent pay increase. The Gorgon Project now provides some of the best roster and wage conditions in the construction industry in Australia. For employers, however, the Gorgon Strike highlights the importance of avoiding enterprise agreements expiring during phases or work where delays could have significant impacts upon operations.

    The Hutchison strike arose when 40 percent of Hutchison Ports' workers were made redundant overnight. Hutchison sought an order preventing industrial action that was being organized on the basis that it was unprotected, which the FWC granted. The union sought an order from the Federal Court reinstating the employment of the redundant individuals, claiming that Hutchison was in breach of the enterprise agreement by failing to consult in relation to redundancies and failing to comply with dispute resolution processes.

    The Federal Court saw merit in the union's argument and granted an order restraining Hutchison from making the employees redundant. Hutchison and the union have recommenced negotiations to avoid further action. For employers, the Hutchison strike demonstrates that employers taking action against unions engaging in unprotected industrial action should ensure that they have "clean hands" in order to avoid an adverse outcome.