When the Commission may suspend or terminate

Print this page

Significant economic harm

See Fair Work Act s.423

Where the action is employee claim action, the Commission may make an order suspending or terminating the protected industrial action that is being engaged in if satisfied that the action is causing, or threatening to cause, significant economic harm to:

the employer or any of the employers that will be covered by the proposed enterprise agreement, and
any of the employees who will be covered by the proposed enterprise agreement.

Where the action is employee response action or employer response action, the Commission may suspend or terminate the protected industrial action that is being engaged in if satisfied that the action is causing, or threatening to cause, significant economic harm to any of the employees who will be covered by the proposed enterprise agreement.

The Commission may only be 'satisfied' if its decision to that effect is based upon relevant considerations and the evidence.^[1]

In other words, if industrial action is being undertaken by the employer (whether protected or not), the Commission is only required to consider the harm to the employees. This reflects the fact that an employer that has locked out its employees should not then be able to have the employees' protected industrial action terminated based on the significant harm being caused to it.^[2]

Relevant factors – significant economic harm

Factors relevant to working out whether the protected industrial action is causing, or threatening to cause, significant economic harm include:

the source, nature and degree of harm suffered, or likely to be suffered
the likelihood that the harm will continue to be caused or will be caused
the capacity of the person to bear the harm
the views of the person and the bargaining representatives for the agreement
whether the bargaining representatives for the agreement have met the good faith bargaining requirements and have not contravened any bargaining orders in relation to the agreement, and
the objective of promoting and facilitating bargaining for the agreement.

If the Commission is considering terminating the protected industrial action, the following will also be relevant:

whether the bargaining representatives for the agreement are genuinely unable to reach agreement on the terms that should be included in the agreement, and
whether there is no reasonable prospect of agreement being reached.

If the protected industrial action is threatening to cause significant economic harm, the Commission must be satisfied that the harm is imminent.

The Commission must also be satisfied that:

the protected industrial action has been engaged in for a protracted period of time, and
the dispute will not be resolved in the reasonably foreseeable future.

Causing significant economic harm

"…the expression 'significant harm' in s.426(3) should be construed as having a meaning that refers to harm that has an importance or is of such consequence that it is harm above and beyond the sort of loss, inconvenience or delay that is commonly a consequence of industrial action.

In this context, the word 'significant' indicates harm that is exceptional in its character or magnitude when viewed against the sort of harm that might ordinarily be expected to flow from industrial action in a similar context." ^[3]

Link to application form

Form F37 – Application for an order to suspend or terminate of protected industrial action

All forms are available on the Forms page of the Commission's website

Case examples

Significant ecomonic harm imminent

Nyrstar Port Pirie Pty Ltd v Construction, Forestry, Mining and Energy Union and Others

Nyrstar Port Pirie Pty Ltd v Construction, Forestry, Mining and Energy Union and Others [2009] FWA 1148 (O'Callaghan SDP, 16 November 2009).

Facts

Nyrstar lodged an application seeking the suspension of protected industrial action, asserting that the planned protected industrial action would occur at a time which would cause it significant economic harm.

Nyrstar operate a substantial silver, lead and zinc smelter at Port Pirie. Continued operation was dependent on the continued functioning of the blast furnace. Consequently, the operation of the blast furnace would potentially be affected by protected industrial action, meaning there was an imminent risk that the blast furnace would need to be shut down.

A planned progressive shut down of the blast furnace was the least expensive option for Nyrstar but, in the event that an urgent shutdown was necessitated, the blast furnace would then need to be partially dismantled in order to recommence operations. The cost of ceasing production was estimated at $600,000 per day, together with an estimate of $400,000 to recommence operation of the blast furnace. Depending on the way in which the blast furnace was shut down, six to ten days would be required to recommence operations. In the event that the blast furnace was shut down, there was concern that Nyrstar Port Pirie management may not be given corporate approval to immediately restart the facility in the current economic environment.

Outcome

The Commission was satisfied that the threat of economic harm to Nyrstar was imminent; however s.423 of the Fair Work Act requires that the protected industrial action has been engaged in for a protracted period of time, and that it will not be resolved in the foreseeable future. The fundamental issue was that, at the time of the hearing of this matter, the protected industrial action had not commenced at all. As a result the Commission found that suspension or termination of the protected industrial action could not be considered.

Relevance

Section 423 requires that the Commission must be satisfied that protected industrial action is occurring and is either causing economic harm, or threatening to do so in a fashion which warrants intervention in the normal bargaining process.

Significant ecomonic harm NOT imminent

United Voice v MSS Security Pty Ltd

United Voice v MSS Security Pty Ltd [2013] FWC 4557 (Cloghan C, 17 July 2013).

Facts

United Voice and the employer were bargaining representatives for a replacement enterprise agreement. There had been a number of applications to the Commission during the bargaining process.

On the same day that protected industrial action was commenced by the employees, employer response action was taken by the employer, locking out employees indefinitely. The lockouts affected 25 employees. At the time the application was made the longest period of lockout was approximately one month and the shortest period was nine days.

United Voice made an application to terminate the employer's lockouts, claiming that due to the ongoing and indefinite period of the lockout, all employees locked out were either facing financial harm or would be if the industrial action was not terminated as a matter of urgency. United Voice had been providing limited financial assistance to its members who had been locked out.

Outcome

The Commission found that the lockout was not causing significant economic harm, however it was necessary to consider whether the potential of the lockout continuing would result in that harm being imminent.

The Commission held that while it was obvious that there would be a financial impact on employees who were not receiving an income, there was no evidence that employees would transfer from a state of financial hardship to one of experiencing significant economic harm. The application was dismissed.

Relevance

For the Commission to exercise the discretion to suspend or terminate industrial action it must be satisfied that the harm in question is of such consequence that it is harm above and beyond the sort of loss, inconvenience or delay that commonly occurs during industrial action.

Orders – significant economic harm

The Commission may make an order under s.423:

on its own initiative, or
on application by any of the following:
- a bargaining representative for the agreement
- the Minister
- if the industrial action is being engaged in a State that is a referring State as defined in section 30B or 30L – the Minister of the State who has responsibility for workplace relations matters in the State
- if the industrial action is being engaged in in a Territory – the Minister of the Territory who has responsibility for workplace relations matters in the Territory,
- a person prescribed by the Fair Work Regulations.

Note: The Fair Work Regulations do not currently prescribe any additional persons.

Related information

Orders to stop or prevent unprotected industrial action

References

^[1] Coal and Allied v AIRC [2000] HCA 47 (31 August 2000) at para.48; citing Coal & Allied Operations Pty Ltd v Construction, Forestry, Mining and Energy Union Print P8382 (AIRCFB, Giudice J, Munro J, Larkin C, 29 January 1998) at p. 17, [(1998) 80 IR 14].

^[2] Explanatory Memorandum to Fair Work Bill 2008 at para. 1713.

^[3] Construction, Forestry, Mining and Energy Union v Woodside Burrup Pty Ltd and Kentz E & C Pty Pty Ltd [2010] FWAFB 6021 (Lawler VP, Ives DP, Roe C, 6 August 2010) at para. 44, [(2010) 198 IR 360].

Updated time

Last updated

07 October 2019

Ribbon

Fair Work Commission

Search

Main menu

Industrial action benchbook