Construction Forestry Mining & Energy Union v Mammoet Australia Pty Ltd [2013] HCATrans 79 (12 April 2013)

Last Updated: 15 April 2013

[2013] HCATrans 079

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
Perth No P27 of 2012

B e t w e e n -

CONSTRUCTION FORESTRY MINING & ENERGY UNION

Applicant

and

MAMMOET AUSTRALIA PTY LTD ACN 075 483 644

Respondent

Application for special leave to appeal

GAGELER J
KEANE J

TRANSCRIPT OF PROCEEDINGS

FROM CANBERRA BY VIDEO LINK TO PERTH

ON FRIDAY, 12 APRIL 2013, AT 11.51 AM

Copyright in the High Court of Australia

MR J.K. KIRK, SC: May it please the Court, I appear with my learned friend, MR T.J. DIXON, for the applicant. (instructed by CFMEU – East Perth)

MR S.J. WOOD, SC: I appear with my learned friend, MR C.O.H. PARKINSON, for the respondent, your Honours. (instructed by Lander & Rogers Lawyers)

GAGELER J: Yes, Mr Kirk.

MR KIRK: Thank you, your Honours. Might I first briefly outline the facts - I know your Honours will be familiar with them - and then go straight to the statute and address the competing constructions and finally address reasons why we submit special leave should be granted. The facts can be very easily stated. The case was brought by my client on behalf of four employees who are employed in far north-western Western Australia on the Burrup Peninsula. They were employed on a fly-in/fly-out basis where their usual place of residence was elsewhere, but they were flown in to work intense shifts and then flown back on a four week on, one week off basis.

The employment relationship was governed by an enterprise agreement and under the terms of that enterprise agreement these employees were defined as “distant workers”. Now, the defining characteristic of distant workers is that they are workers who cannot return to their usual place of residence at night. Your Honours will note that that in turn implies that they have a residence elsewhere and that has significance I will come back to.

For such distant workers, under the agreement the company was required to provide them with either suitable board and lodging or pay a fixed living away from home allowance. The relevant employees here were provided with accommodation, not the allowance. Now, that distinguished them from local workers, that is to say, people who are not distant workers. Local workers were paid a rental subsidy, but that subsidy was less than the living away from home allowance which was, in a sense, the equivalent of the accommodation that was provided to the four workers here.

The employer had an option whether it paid the living away from home allowance to the distant workers or it provided the accommodation. So there was a monetary value given to the allowance, albeit here actual board and lodging was provided. The workers also got travel expenses to and from the peninsula.

Now, in April 2010, the employees, amongst others, resolved to commence a 28-day strike. That followed a ballot and it was protected industrial action under the Act and the respondent was notified one week in advance. One day before the strike was to begin the respondent notified the relevant employees that they were required to vacate their accommodation by 6.30 am the next morning, that being the usual start of the work day. The respondent also declined to pay their travel expenses home.

At first instance, the applicant argued that that action was a breach of the agreement, the Greenfields Agreement, being the enterprise agreement, and also a contravention of the Fair Work Act by taking adverse action because of the exercise of a workplace right. The application was dismissed both in the Federal Magistrates Court and by Justice Gilmour in the Federal Court on appeal on the basis the provision of board and lodging was part of the workers’ payment within the meaning of section 470 of the Act and thus the employer was forbidden to pay it and the employee was forbidden from asking for it.

That is the issue before the Court and to be clear, it would obviously be a large issue to suggest that the four relevant workers might stay in the accommodation for the whole of the 28 days. That is not the issue before this Court. It was not the issue determined below. That issue would fall to be resolved by the terms of the Greenfields Agreement, the enterprise agreement.

The issue that this was determined on is whether section 470 of the Act had the effect that from immediately upon the commencement of the industrial action all board and lodging, all food, all transport home had to cease, leaving these workers in the remote location in the Burrup Peninsula in far north Western Australia.

Can I take your Honours to section 470 of the Act? Your Honours, I hope, have a bundle of joint authorities and if your Honours could turn to page 113. The number is down the bottom right-hand side.

KEANE J: One of your points is that the board and lodging arrangements do not involve a payment to a worker and, in any event, I take it you say that 470(1) is concerned with remuneration for services rendered?

MR KIRK: Yes, we do say that. Can I acknowledge a possible danger in that, of course, which is that one must be careful not to substitute different words - and here the word is “payment”? That said – and we have not found any cases dealing directly with the word “payment”, but that said, there is a core notion here of remuneration and - - -

KEANE J: It is “payment to”.

MR KIRK: That is right and I will take your Honours to a dictionary definition which includes remuneration and so it is very much about, as we put it in the end, the quid pro quo for the services to be provided. Can I come back to that and just deal a little with the statutory provision?

GAGELER J: We might be assisted by hearing from Mr Wood at this stage.

MR KIRK: May it please the Court.

MR WOOD: The decision below concerned the proper meaning of the word “payment” in section 470(1) of the Fair Work Act. The judge below found that the meaning of “payment” in the context of section 470(1) would extend where relevant to a payment in kind. His Honour below examined the relevant legislative context and the relevant purpose revealed by that context in an orthodox manner stating that the proper construction is revealed by the text, context and the purpose underlying section 470.

KEANE J: In terms of the text, it is:

payment to an employee in relation to the total duration of the industrial action –

So “payment to an employee” - looked at literally - that does not catch payments to others.

MR WOOD: There were two payments that one could think about here. One is the payment constituted by the accommodation if a payment includes a payment in kind and that payment, the accommodation, was provided to the employees. There was a second payment, that is the actual provision of money - $90 per day per person - from the respondent to, on the evidence, Woodside, so there are two payments at issue and his Honour below and Federal Magistrate Lucev concerned themselves with the first payment, that is the payment constituted by the provision of accommodation to the individual employees.

GAGELER J: Would you say that section 470 would apply in exactly the same way to prevent the employer paying for the travel home of the striking workers?

MR WOOD: Depending upon the – that was not an issue that arose in the case below. The only reason that travel costs became an issue is they were pleaded as an element of the compensation sought, but it - - -

GAGELER J: In principle, would - - -

MR WOOD: - - - likely follow. That does not, of course, prevent the individuals paying for the accommodation themselves or paying for their own travel. There is no question on the facts of this case of access to the accommodation or access to travel, only the question of who would pay for it.

GAGELER J: Or who could pay for it.

MR WOOD: That is right. Well, who might be prevented from paying for it by the statute.

GAGELER J: Is your case that there is no implicit qualification to the word “payment”?

MR WOOD: In the context of this section?

GAGELER J: Section 470.

MR WOOD: No. You must read “payment” as including a payment in kind - - -

KEANE J: To a third party?

MR WOOD: Well, there are two payments here, your Honour. One is the payment of the money, that is the $90 on the evidence - and I will take your Honour to that if you need to. Federal Magistrate Lucev referred to it, that is, the money from the respondent to what I might loosely call Woodside. The second is the payment constituted by the provision of accommodation to the employees, and it is that payment to the employees which is prevented by section 470(1) because that provision of accommodation to the employees is a payment in kind.

GAGELER J: So it is the provision of a service by a third party at the cost of the employer?

MR WOOD: That would fall within the definition, yes. It must be the case otherwise the purpose of the section could be very easily avoided.

GAGELER J: What is the purpose?

MR WOOD: Well, the purpose is to ensure that neither side – and I do not think there is any contest between the applicant for special leave and us as to the relevant purpose which is set out between paragraphs 30 and 37 of Justice Gilmour’s decision, particularly at paragraphs 33 through to 37. There is a reference to a decision of Justice Lander where his Honour says at the bottom of paragraph [83]:

The policy of the Act is that if an employee engages in industrial action then it must be at the employee’s own expense . . .

[84] Industrial action is discouraged by putting the cost of that industrial action upon the employee rather than the employer.

Then reference to a decision of Justice Ryan that the relevant predecessor provisions evince:

a policy that collective bargaining should occur in an environment where employer and employee are to appreciate and accept the detrimental consequences for themselves of industrial action used as part of the negotiating armoury.

KEANE J: Justice Ryan goes on:

For the employee those consequences are normally loss of remuneration in respect of the period of the industrial action - - -

MR WOOD: Because this issue did not come up in that case.

KEANE J: Well, at the very least it does not support the view that in section 470(1) “payment to” goes beyond remuneration.

MR WOOD: The normal meaning of “payment” includes a payment in kind.

KEANE J: To the worker.

MR WOOD: To the worker.

GAGELER J: For services performed.

MR WOOD: Well, not for services performed, necessarily, your Honour, because if it was for services performed, it if was read that restrictively then it would be very easy to – or for – individuals to receive payments, both in money or in kind, in respect of industrial action that had previously been taken. For example, it would be very easy for a payment to be made at the end of a construction job to individuals that might be equivalent to the length of time for which they engaged in industrial action and it would not be in respect of services rendered. But it would be a payment, depending upon the evidence, to the employees in relation to the total duration of the industrial action. It would be a payment to compensate them for that.

KEANE J: Mr Wood, are there any cases that deal with this question in the context of fly-in/fly-out workers?

MR WOOD: I do not think so, your Honour, not this question of the operation of section 470. There are certainly cases that deal with different words used in different statutes with different objects, but in relation to this statute in this context, no.

GAGELER J: Is it part of your case to say that the policy of the Act is to discourage industrial action as defined?

MR WOOD: Yes, in this way - that is, by putting the cost of that industrial action upon the employee rather than the employer. If these employees had have been – the agreement allows for the employer to decide whether to provide board and lodging - suitable board and lodging - or whether to pay the living away from home allowance. The value of the living away from home allowance is about $450 per week. If these individuals had have been in a situation that some other employees – some of the distant workers were – that is, receiving the living away from home allowance, that would have been a payment to them of money in relation to their willingness to be ready, willing and able to work, not for services rendered but for being ready, willing and able to render services.

Now, there is no relevant distinction between that category of employee who would, by operation of section 470, lose the living away from home allowance and this category of employee whom the employer choses to pay – provide suitable board and lodging. The only difference is that the provision of the suitable board and lodging is a payment in kind to the employee, whereas the payment of the living away from home allowance is a payment in money to the individual employees.

GAGELER J: You may not be able to answer this, but is a living away from home allowance that is paid in money a payment that is governed by section 323, which governs the method and frequency of payment?

MR WOOD: I would have to look at the section but I think it is probably governed by 323(3), but I would need to turn up the section. I think it is either governed by 323(1)(b) or by 323(3). I do not think it could fall outside either of those categories. Apart from answering any of your Honours’ further questions, those were the submissions that we wish to make.

GAGELER J: Thank you, Mr Wood. We do not need to hear from you in reply, Mr Kirk. There will be a grant of special leave in this matter. Would the estimate of one day be more than sufficient?

MR KIRK: More than sufficient.

GAGELER J: There are some directions for the filing of submissions that counsel should obtain, as they leave the Court, from the Registry.

MR KIRK: May it please the Court.

AT 12.10 PM THE MATTER WAS CONCLUDED