Key Points: Suspension of protected industrial action affecting a third
party will only be ordered in exceptional circumstances where the
harm is out of the ordinary.
The Full Bench of Fair Work Australia in CFMEU v Woodside
Burrup Pty Ltd  FWAFB 6021 recently quashed a decision
suspending a period of protected industrial action.
The protected industrial action was being taken by 12 employees
of Mammoet Australia Pty Ltd, who contracted to Woodside to carry
out heavy moving operations at the construction of the on-shore
component of Woodside's $9 billion Pluto project in north-west
Western Australia. Bargaining for a new enterprise agreement was
commenced by the employees shortly after the nominal expiry date of
the Mammoet Australia Pty Ltd Pluto Project Greenfields Agreement
After bargaining was unsuccessful in not producing an agreement,
an order was made for a protected action ballot, which was declared
approving protected action. After the commencement of a second
28-day episode of protected industrial action in late June 2010,
Woodside and two contractors affected by the delay in Mammoet's
works made an application under section 426 of the Fair Work Act
2009 for an order suspending the protected industrial action as
affected third parties. At first instance, McCarthy DP suspended
the protected action for a period of three months.
FWA must suspend protected industrial action if satisfied
"that the protected industrial action is threatening to cause
significant harm to any person other than a bargaining
representative... or an employee who will be covered by the
agreement" (section 426(3) of the Act).
The decision identifies that the threshold for satisfying the
test of "significant harm" is extremely high. The ability
to suspend a period of such action will not be triggered where the
industrial action is merely causing the third party an
Employees have a right to take protected industrial action in
support of a proposed enterprise agreement and in order to suspend
a period of such action, the harm to the third party would need to
be significant and more than merely suffering of a loss,
inconvenience or delay.
Suspension only in "very rare
FWA observed that effective industrial action will almost always
cause harm to an employer that will frequently adversely affect a
third party and as such, "significant harm" must be
beyond the sort of loss, inconvenience or delay commonly caused by
Unless the harm is out of the ordinary, which
is likely to be in vary rare cases, FWA will not be inclined to
suspend the protected industrial action.
FWA expressed the view that even the substantial losses that
Woodside was exposed to as a result of losses caused by delay
(amounting to millions of dollars a day) were not
"significant" in the relevant sense when considered in
the context of the project as a whole (including its enormous size)
to warrant suspension of protected industrial action, unless the
delays on account of the action became "very
Reputation, mitigation and length of any
Further magnifying the high threshold required for a third party
to satisfy "significant harm," FWA did not think that
reputational loss suffered by the relevant third parties would be
great, and in any case, not enough to constitute "significant
Despite finding that there was no "significant harm,"
FWA said that even if it had found that such harm existed:
Woodside would have had to demonstrate that there were no
alternative measures that it could have taken to mitigate the
effect of the protected industrial action; and
the effect of any suspension can only be long enough to
provide temporary respite from the effects of the action, and not
have the effect of terminating it.
Conclusion and implications of decision
In the first real test of FWA's power to suspend protected
industrial action under the Act, it is clear that the bar has been
set very high.
Companies, particularly those which sub-contract components of
their works, should not be prepared to sit back while enterprise
agreements covering employees of its sub-contracting companies near
expiry, under a misapprehension that any protected industrial
action arising out of unsuccessful bargaining will be promptly
suspended by FWA.
This case highlights the importance of ensuring that
construction management companies focus their attention on ensuring
that bargaining exercises are conducted in a manner that promotes
an effective outcome, thus reducing the possibility of employees
taking protected industrial action that has the potential to impact
on the third party.
Unless the protected industrial action falls into the rarest of
cases, it is unlikely to cause harm significant enough to
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guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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