A unanimous decision of the High Court in Construction
Forestry Mining and Energy Union (CFMEU) v Mammoet Australia Pty
Ltd  HCA 36 has shed light on the interpretation of
"payment to an employee" in the context of protected
Overturning findings of the lower courts, the High Court has
confirmed that the provision of accommodation is not a
"payment", and denial of accommodation would be an
alteration of the position of the employees to their prejudice so
as to constitute adverse action.
The CFMEU represented a number of Mammoet's employees who
worked at Woodside's Pluto natural gas project on a fly in/fly
out basis. Their employment was governed by a greenfields
agreement, under which Mammoet provided their accommodation while
In April 2010, the employees embarked on a 28-day strike. In
response to this protected industrial action, Mammoet ceased
providing accommodation to the employees, relying on section 470(1)
of the Fair Work Act 2009 (Cth) which prohibits an employer from
making a payment to an employee taking protected industrial action
in relation to the total duration of the action on that day.
In the Federal Magistrates Court, Lucev FM held that the
provision of accommodation was the making of a payment prohibited
by section 470(1). On appeal to the Federal Court of Australia,
Gilmour J upheld this finding stating that "payment" in
section 470(1) extends to payments in kind and includes the benefit
Issues on Appeal
Two critical issues arose on appeal.
Was the provision of accommodation by Mammoet a "payment
to an employee in relation to the total duration of the industrial
action" prohibited under section 470(1)?
Were the employees entitled to accommodation under the
agreement when they were not ready, willing and available to
Payment to an Employee in Relation to the Total Duration of the
The High Court relied on other provisions of the Act referring
to "payment" and "pay" to support a finding
that when the Act speaks of payment it is speaking of payment in
The High Court also construed "payment" in light of
section 470(1) as a civil remedy provision to support an
interpretation that it only applied to payments of money. It stated
that "the imposition of a civil penalty should be certain and
its reach ascertainable" and the penalty is "not
attracted by the transfer of just any economic benefit". It
was ultimately found that the purpose of section 470(1) is to
prohibit "strike pay" ie payments to make up wages not
earned by an employee during the period of industrial action.
As such, the High Court rejected Mammoet's argument and held
that the provision of accommodation was not a "payment to an
employee in relation to the total duration of the industrial
action" prohibited by section 470(1).
The High Court also rejected Mammoet's alternative argument
that the employees were not entitled to accommodation under the
agreement when they were not ready, willing and available to work.
This argument was not addressed by the lower courts.
The High Court found that while the employment relationship
existed, the employees' entitlement to accommodation arose from
them acting on Mammoet's instruction to travel to the location
of the project.
It was held that even if the employees ceased to be entitled to
accommodation because they were not ready, willing and available to
work, Mammoet's denial of accommodation would be an alteration
of the position of the employees to their prejudice so as to
constitute adverse action.
Significance for Employers
Whilst allowing the appeal from the CFMEU, the High Court has
sent the case back to the Federal Circuit Court to be heard and
determined according to the principles it has set down.
Despite no final ruling, this decision confirms that
"payment" in the context of protected industrial action
means a payment of money and does not include the provision of
accommodation or just any economic benefit. Significantly, this
means that employers will be required to continue providing
accommodation to employees during a strike or other protected
The High Court has indicated that whether the prohibition under
section 470(1) captures a payment will depend on the circumstances
of the case and it is not "necessary or desirable" to
provide an exhaustive list of those circumstances. It provided the
example of payment by way of a gift and said this might be captured
if the circumstances established that the gift was to compensate
for wages not earned.
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