In Construction, Forestry, Mining and Energy Union v Mammoet Australia Pty Ltd  HCA 36 (14 August 2013), the High Court of Australia held that the provision of on-site accommodation to employees during a period of protected industrial action was not a “payment” that was prohibited by the Fair Work Act 2009 (Cth) (FW Act). The decision highlights that employers need to carefully consider what benefits should be withheld from employees during periods of protected industrial action.
The central issue in the case was the meaning of section 470(1) of the FW Act, which provides that: ‘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.’
The CFMEU represented a number of Mammoet’s employees, who worked on construction at the Woodside Pluto LNG Project on the Burrup Peninsula in Western Australia. The employees worked on a fly in/fly out basis. Under the terms of the applicable enterprise agreement, employees were entitled to be provided with suitable accommodation by their employer, or to receive a living away from home allowance while they were on-site. Mammoet paid Woodside a fee for its employees to stay in the Woodside-owned accommodation on site.
Mammoet became aware that some of its employees were proposing to take protected industrial action in the form of a 28 day stoppage of work. In response, Mammoet informed employees that for the period of protected industrial action it would not be paying for their accommodation.
The CFMEU commenced proceedings against Mammoet in the Federal Magistrates Court, claiming that Mammoet’s refusal to provide accommodation was “adverse action” in breach of Part 3-1 of the FW Act. Mammoet argued that it was required to stop providing accommodation to the employees because of s 470(1) of the FW Act. Mammoet was successful before the Federal Magistrates Court and on appeal by the CFMEU to the Federal Court.
The three issues to be decided by the High Court were:
The High Court (Crennan, Kiefel, Bell, Gageler and Keane JJ) unanimously found in favour of the CFMEU, stating its position on each of the three key issues as follows:
This decision has particular significance for employers who provide accommodation to their employees, especially on regional and remote resources projects where employees cannot easily return home during industrial action.
When faced with protected industrial action, employers should only deduct monetary amounts connected to the period of work that is subject to industrial action. The withdrawal of other employment conditions, including accommodation, is likely to constitute adverse action in contravention of the general protections provisions in the FW Act. Careful consideration therefore needs to be given to what employment benefits are deducted, in addition to wages, during periods of industrial action.
The effect of the decision might be addressed to some extent by the inclusion of clauses in enterprise agreements and/or employment contracts that deal with the issue of payment for accommodation – and make express provision for accommodation to be withdrawn during periods of industrial action.
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