30 Jun 2011

Recent Federal Court decision has implications for employer response to stop work meetings

by Robert French, Dr Graham Smith

Employers should respond carefully when employees engage in unprotected industrial action

The recent decision of the Federal Court in Qantas Airways Ltd v Transport Workers' Union of Australia [2011] FCA 470 provides valuable guidance for employers in formulating strategies to respond to unprotected industrial action by employees.

In particular the decision has important implications for the manner in which employers:

  • authorise meetings of employees that could potentially become disruptive;
  • communicate their intention to observe their statutory obligation to dock the pay of striking employees.

Strike action on 30 March 2009

The industrial action the subject of the Qantas Decision arose as a result of meetings that were held by officials of the Transport Workers' Union (TWU) with Qantas baggage handlers at Sydney, Brisbane, Perth and Adelaide Airports on 30March 2009. The Court found that the meetings led to unlawful strike action. Some of the meetings were initially authorised by Qantas based on assurances given by TWU officials that they would be "non-disruptive" meetings.

Authorisation of worker meetings

The TWU argued that it had not engaged in unlawful industrial action (with the exception of Sydney) as the meetings were authorised by Qantas. Qantas countered that when certain sensitive issues were raised with employees the meetings became disruptive and went beyond the scope of the authorisation.

The Court ultimately found that while the workers were authorised to have non-disruptive meetings they were not authorised to engage in industrial action. Notwithstanding the Court's finding, the lesson for employers is that they should specifically prescribe, and record, the terms upon which any stop-work meetings can be conducted. These terms might include the duration of any meeting and who may attend.

Can employers retrospectively authorise industrial action?

Additionally, the Court suggested that employers can authorise industrial action that has already occurred which would otherwise have been illegal (ie. retrospective authorisation). It remains to be seen, however, whether these comments will be endorsed in subsequent cases. Employers should be cautious in authorising industrial action that has already occurred and should seek advice as whether they are still legally obliged to deduct employees' pay.

Docking of pay under statute and suspension of work for wages bargain

Employers have a statutory obligation to deduct a minimum of four hours' pay of employees who engage in unlawful industrial action. In the Qantas case, the workers who attended the meetings asked whether they would have their pay deducted. When the relevant Qantas manager indicated that their pay would be docked, the employees refused to return to work.

The issue before the Court was whether the employees were obliged to return to work, if requested by their employer, even though they were told they would not to be paid. This question arose because, at common law, workers are not required to work unless they are to be paid. This is commonly referred to as the "work-for-wages bargain".

If under statute, employers must not pay employees for a period, how can they still lawfully require employees to return to work? The Court found that, once an employer communicated its intention to deduct four hours' pay, the employees were not required to return work for the remainder of the four hour period. This finding has important implications for employers as they could inadvertently impair their legal right to request workers return to work if they tell them that they will be docking their wages.

Implications for employers

Employers should devise a carefully thought‑out strategy that enables them to comply with their obligations while not restricting their right to require employees to return to work. Employers might consider refusing to answer the questions regarding the docking of pay until they obtain legal advice. Alternatively they could simply inform employees that they will comply with their legal obligations – in any event employers should seek advice as to whether they are obliged to dock the pay of employees who engage in industrial action.

Importantly, the Court found that the suspension of the work for wages bargain did not prevent employers from successfully obtaining an order from Fair Work Australia requiring striking employees to return to work. So if industrial action by employees is happening, threatened, impending or probable, or being organised then employers can still seek an order from Fair Work Australia that the industrial action stop, not occur, and not be organised.


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Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication. Persons listed may not be admitted in all States and Territories.