Analysis of the CFMEU vs. Mammoet Case - Research Paper Example

Impact of the Case CFMEU v. Mammoet Name Professor Course Date Question No. 1 In the context of the general protection provisions of the FWA Act 2009 critically assess the decision of the High Court in CFMEU v. Mammoet Australia Pty Ltd (2013) HCA 36. To what extent does the decision provide a workable solution as opposed to a particular decision which is applicable only to the particular facts of Mammoet? Introduction Towards the end of the first decade of the new millennium, Parliament enacted a law that was meant to raise the standard of labour laws in the country. Known as the Fair Work Act 2009 (Cth), the new law promised general protections that were not fulfilled by its predecessor – the WorkChoices legislation. The new law offered general protections in the areas of workplace rights, the right to engage in industrial activities, the right to be free from unlawful discrimination, and the right to be free from undue influence or pressure in negotiating individual arrangements.1 The impact of the new law is diminished, however, by ambiguity in some of its provisions. The case of Construction Forestry Mining & Energy Union V. Mammoet Australia Pty Ltd2 highlighted this ambiguity in the strike pay prohibition provision of the law. Notwithstanding this, the case brought a degree of clarity to the relevant provision that can surely guide employers and employees faced with similar circumstances. The Strike Pay Prohibition in the Fair Work Act 2009 (Cth) The right of employees to hold a strike has been recognised in Australian jurisdiction since the passage of the Industrial Relations Reform Act 1993 (Cth). The right is deemed an important component of the right of employees to negotiate employment terms with their employers. Prior to this, a strike was held, under common law, to be a breach of employment contract that gave employers the right to withhold wages, and even dismissed employees. Development in international labour laws and the Australian commitment to them spurred changes in labour laws.3 Subsequently, Parliament passed the Fair Work Act 2009 (Cth), which offered general workplace protections including strengthening the right to engage in industrial action.4 The right to engage in industrial activities, together with other workplace rights, is protected from adverse action, amongst others.5 However, there are exceptions to this rule as illustrated by the strike pay prohibition under s 470(1) of the Act. The provision states: (1) If an employee engaged, or engages, in protected industrial action against an employer on a day, the employer must not make a payment to an employee in relation to the total duration of the industrial action on that day. Note: This subsection is a civil remedy provision (see Part 4‑1).6 The strike pay prohibition is a validation of the long held principle in common law of ‘no-work-no-pay.’ This provision, in effect, prohibited the payment of strike pay for the duration of the strike.7 If an industrial action is protected, the prohibition is absolute; if it is unprotected, the law prohibits payment for at least four hours.8 Nonetheless, the provision is not as clear as to preclude controversy in interpretation. This is especially true with respect to the term ‘payment,’ which does not enumerate its specific inclusions. This lack of clarity is the reason of the conflict in the case of Construction Forestry Mining & Energy Union V. Mammoet Australia Pty Ltd9 (CFMEU hereafter). The CFMEU Case and its Impact on Australian Labour Laws The case of CFMEU illustrated the characteristic ambiguity of the strike pay provisions in the FWA 2009 (Cth), particularly s 470(1) thereof. The prohibition on strike pay is not a new provision as it also existed in the Work Choices Act – the legislation that FWA 2009 (Cth) replaced. This ambiguity, however, became evident in the CFMEU case, which involved fly-in-fly-out employees. The lower and appellate courts’ interpretation of the provisions, specifically the word ‘payment’ vis-à-vis ‘accommodation’ significantly affected the right of fly-in-fly-out to engage in industrial action. In addition, the fact that the provision in issue is a civil remedy exposes employers who extend accommodation to workers to penalty. The Panel that reviewed the FWA 2009 (Cth), which was created in 201110 predicted the disruption that the decisions of the lower and appellate courts will generate. It was compelled to recommend that the legislature amend the provision in issue to specifically eliminate the term ‘accommodation’ from the concept of ‘payment.’ This was despite the fact that the Panel abided by the policy of restraining itself from making recommendations on matters “that are still evolving through decisions of the FWA and the court.”11 The conflict in the CFMEU case began when several employees of Mammoet Australia Pty Ltd – an industrial company with a construction project in a remote location – signified their intention to conduct an industrial action. The respondent company had assigned the involved employees in a remote project location in the Burrup Peninsula somewhere in Western Australia and provided for their accommodation. Upon learning of the employees’ plan, Mammoet decided to withdraw such accommodation. CFMEU, which represented the employees concerned, sued the Company citing adverse action. Mammoet contended that the accommodation it provided to the employees was within the scope of the term ‘payment’ and, therefore, should be withdrawn for the duration of the action. The ambiguity of the provision was illustrated in the divergence of opinions between the trial and the appellate courts, on one hand, and the High Court, on the other. Both the Federal Magistrates Court and the Federal Court, where the case was appealed to by CFMEU, sided with Mammoet. The Federal Magistrates Court cited the legislative intent of the strike pay prohibition, which is “'that employees are to bear the economic loss of their industrial action”12 and continuing to extend the same would defeat this intent. On the other hand, the Federal Court believed that ‘accommodation’ is embraced by term payment because the legislature failed to make a distinction. In addition, the Court also cited legislative intent of the provision as a means to encourage employers and employees to negotiate resolve issues as fast as possible since both bear the costs of the industrial action. The High Court was not persuaded by the rationale of both trial and appellate courts. It held that the deprivation of accommodation by Mammoet constituted adverse action because ‘accommodation’ cannot be considered payment within the meaning of s 470(1) of the FWA 2009 (Cth). This ruling rested on the following reasoning: the enterprise agreement included the extending of accommodation to the employees; a transfer of economic benefit to the employee by the employer does not necessarily mean that payment was made; the nature of s 470(1) of the FWA 2009 (Cth) is a civil liability, which requires certainty for the benefit of those who are subject to it, and; the phrase “a payment to an employee in relation to the total duration of the industrial action” necessitates an interpretation that points to remuneration. The decision of the High Court in the CFMEU case significantly impacts the relevant provisions of the FWA 2009 (Cth) and future cases that will involve strike payment prohibition. The decision gives clarity to the provision with respect to the term payment when used in relation to protected industrial action. It validates that payment under the provision refers only to monetary payment and does not include accommodation or any other economic benefit. The implication of this is that employees may still continue to enjoy accommodation extended to them by the employer even though they are engaged in protected industrial action. This, in effect, gives reality to the overall purpose of the FWA 2009 (Cth), which is to strengthen the right of employees to engage in industrial actions as a means of leveling the playing field between employers and employees as added to the former in negotiating terms in employment contracts. The right to strike serves to protect the economic and social interests of workers and is an important component of collective bargaining.13 In addition, the High Court may help ease up criticism foisted against the FWA, and its predecessor, as anti-strike and sweeping, rather than determining this issue on a case-to-case basis.14 The extent of clarity that the case brought to the provision is not the most ideal, however. The High Court did not render a final ruling and, in fact, remanded the case to the Federal Court for further hearing. In addition, the Court made a general opinion that economic benefits granted by the employer to employee will have to be assessed on a case-to-case basis and thus, refused to enumerate of what the term embraces. Nonetheless, what is clear at this point is that payment, when used in relation to s 470(1) does not include accommodation. Conclusion The CFMEU case highlighted the ambiguity in the strike pay prohibition contained in s 470(1) of The FWA 2009(1). Nonetheless, the case managed to thresh out some of these ambiguities and made the provision clearer. The case is, thus, significant in that it clarified that the term ‘payment’ when used within the context of industrial action does not include non-monetary benefits, such as accommodation. This is important because it diminishes the confusion in the relationship between employers and employees who are engaged to work on a fly-in-fly-out-basis. Nonetheless, the failure of the High Court to determine the exact scope of the term implies that conflicts in these areas still potentially loom in the future. References CCH, Understanding the Fair Work Act (CCH Australia Limited 2010). CFMEU v. Mammoet Australia Pty Ltd [2013] HCA 36 DEERWR, Towards More Productive and Equitable Workplaces (Department of Education, Employment and Workplace Relations, 2012). Fair Work Act 2009 (Cth) Fair Work Ombudsman, General Workplace Protections (Australian Government, 2013). Feltham, B. ‘Review of the Fair work Act released Yesterday,’ Hunt&Hunt Lawyers, http://www.hunthunt.com.au/news-and-publications/fairworkaustralianews Industrial Relations Reform Act 1993 (Cth) Romeyn, J. ‘The need for further reform of the law relating to industrial action,’ Research Paper Index (2008). Wheelwright, K, ‘Bearing the Economic Loss Of Industrial Action: The Payment of Striking Employees Under The Fair Work Act 2009 (Cth)’ (2013) Deakin Law Review, 2013, vol. 18, no. 2. White, C. Firewalling the Right To Strike In Australia? 2009, https://submissions.deewr.gov.au/sites/.../White_Chris_Attachment.doc. Read More