The High Court has upheld one appeal and dismissed another from a case (Esso Australia Pty Ltd v The AWU  HCA 54) arising from a Full Federal Court decision revolving around industrial action that was taken by the Australian Workers’ Union (“the AWU”) against Esso Australia Pty Ltd (“Esso”), who ran a number of offshore platforms, onshore processing plants and a marine terminal. The High Court split 4-1 in the decision, with Chief Justice Kiefel and Justices Keane, Nettle and Edelman issuing a joint judgment. Justice Gageler issued a dissenting opinion, and would have dismissed both appeals.
In 2015, Esso and the AWU were involved in a bargaining process for a new enterprise agreement or agreements. Many of the AWU’s members took part in various forms of industrial action against Esso. One of these forms of industrial action involved the AWU imposing a ban on the performance of equipment testing, air freeing and leak testing, from 2 March 2015. The AWU argued that this was protected industrial action, but Esso disputed this.
On 6 March 2015, Esso obtained an order from the Fair Work Commission which required the AWU to stop organising industrial action “including any constituting a ban, limitation or restriction on the performance of equipment testing, air freeing or leak testing” [at 16]. The order operated between 6:00 pm on 6 March 2015 and 6:00 pm on 20 March 2015.
The AWU contravened the order, and Esso instituted proceedings in the Federal Court. Esso sought a declaration that the AWU was a person who had contravened an order which applies to it under section 413(5) of the Fair Work Act 2017 and that:
“.. upon the proper construction of s 413(5), once the AWU had contravened the order made on 6 March 2015, the AWU was incapable of satisfying the common requirement specified in s 413(5) of not having contravened an order that applies to it and relates to industrial action relating to the agreement or a matter that arose during bargaining for the agreement. Consequently, it was contended, no further industrial action organised by the AWU in relation to the proposed agreement could qualify as protected industrial action” [at 18].
Section 413 of the Fair Work Act sets out “common requirements that apply for industrial action to be protected industrial action”:
(1) This section sets out the common requirements for industrial action to be protected industrial action for a proposed enterprise agreement.
Compliance with orders
(5) The following persons must not have contravened any orders that apply to them and that relate to, or relate to industrial action relating to, the agreement or a matter that arose during bargaining for the agreement:
(a) if the person organising or engaging in the industrial action is a bargaining representative for the agreement—the bargaining representative;
(b) if the person organising or engaging in the industrial action is an employee who will be covered by the agreement—the employee and the bargaining representative of the employee.
At first instance (Esso v AWU (2015) 253 IR 304), the primary judge, Jessup J, rejected’s Esso’s claim about the construction of s 413(5), pointing to a previous decision of Barker J in Australian Mines and Metals Association Inc v Maritime Union of Australia (2015) 251 IR 75, where his Honour had held:
“that the words "any orders that apply to them and that relate to ... the agreement or a matter that arose during bargaining for the agreement" include only such orders as continue to apply to the bargaining representative at the time of the commencement of the proposed protected industrial action; and, therefore, that, if before that time an order which has been contravened ceases to apply to the bargaining representative, the fact of the previous contravention of the order does not preclude the bargaining representative from satisfying the common requirement specified in s 413(5) in relation to the subsequent industrial action.” [at 19]
Esso then unsuccessfully appealed to the Full Federal Court (Esso v AWU (2016) 245 FCR 39).
On considering the legislation, High Court found the subsection in question to be “poorly drafted” [at 29], saying:
“The way it combines the present perfect tense "not have contravened" with the present tense "apply" is potentially ambiguous. Standing alone, the combination could be taken to mean either that a person must not have contravened an order which applied to the person at the time of contravention or, alternatively, that a person must not have contravened an order which continues to apply to the person.” [at 29].
However, after considering the history and context of the provision, their Honours concluded that s 413(5) applies to past contraventions of orders that applied to the relevant subject matter. The majority of the High Court upheld Esso’s appeal against the decision.
The AWU had also brought an appeal against the findings made by the Federal Court that they had contravened sections 343 and 348 of the Fair Work Act, questioning:
“whether it is sufficient to constitute organising or taking, or threatening to organise or take, action with intent to coerce another person contrary to s 343 or s 348 of the Fair Work Act for the person organising, taking or threatening the action to intend it to cause the other person to agree to terms with which the other person would not otherwise agree, or whether it is also necessary for the person organising, taking or threatening the action to know, and therefore intend, that the action is or will be unlawful, illegitimate or unconscionable.” [at 54]
The AWU argued that its officers did not know that the bans on equipment testing, air freeing and leak testing were not protected industrial action. The High Court dismissed this appeal, saying in any case, the AWU could not prove that the persons involved lacked subjective knowledge of the facts.
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Esso Australia Pty Ltd v The Australian Workers' Union  HCA 54 & judgment summary
Esso v AWU (2015) 253 IR 304
Esso v AWU (2016) 245 FCR 39
Fair Work Act 2009 (Cth) - available from TimeBase's LawOne service
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