Striking For Dummies


Although the incidence and duration of strikes under the Fair Work Act 2009 has remained roughly the same as under predecessor legislation, recent events, such as the current picket outside a Coles warehouse in Melbourne and last year’s Qantas dispute, have focused attention on the issue of industrial action. Are we in a class war? Do we have a "militancy problem", as Liberal governments nationwide claim?

Strike action and employer lockouts (collectively known as "industrial action") have always played a prominent role in Australia’s industrial relations history. Federal industrial relations legislation, which was enacted at the turn of the 20th century, expressly prohibited strike action by employees. Even without this prohibition, employees who took industrial action — that is, refused to perform work according to a binding contract of employment — risked committing a tortious act or being in breach of contract.

This situation changed with the industrial relations changes introduced in 1993, during Paul Keating’s term as prime minister. As well as legislating for a system of collective bargaining, Keating introduced a limited right to strike. However, employees were only entitled to take industrial action in support of their claims during the process of collective bargaining. An employee was took this limited form of strike action, which could be characterised as "protected industrial action", was provided with immunity from common law and statutory claims which could otherwise be brought.

Even after the election of the conservative Coalition government in 1996, this basic architecture was retained. Legal academics, such as Shae McCrystal, describe the "bipartisan consensus" which exists around industrial action. However, with the enactment of Work Choices in 2006, Howard introduced a number of further restrictions on employees taking protected industrial action, such as the requirement to hold a secret ballot.

Contrary to assertions often made by conservative commentators, Labor’s Fair Work Act 2009 has made few alterations to the regulation of industrial action. Perhaps the most significant change is that employers are no longer able to offensively lock employees out of a workplace; lockouts are only available to employers as a defensive tactic. However, the circumstances under which employees can take protected industrial action remain the same — that is, in pursuit of claims during enterprise bargaining.

So under the Fair Work Act, what counts as protected industrial action, and what are its benefits?

A party engaging in protected industrial action is granted immunity from common law claims, such as breach of contract or tort actions, and are no longer liable to be prosecuted for breach of federal or state statute. This immunity does not extend to conduct that results in personal injury or the wilful or reckless destruction of property.

For industrial action to be characterised as "protected", parties need to meet a number of requirements. The most important of these requirements is that the nominal expiry date of any agreement which applies to the enterprise has passed. This means that protected industrial action cannot be taken during the lifetime of an agreement.

Another important requirement is that the party is "genuinely trying to reach agreement." The precise meaning of this phrase has been the subject of much litigation. Recently, in some heavily contested litigation, the Transport Workers Union successfully established that it was genuinely trying to reach agreement even though bargaining had not actually commenced. In this case, the intransigent employer, JJ Richards & Sons, had refused to bargain. This decision now means that employees can take industrial action as a tactic to force an employer’s hand.

An employer can only take protected industrial action in response to action taken by employees.

Any industrial action taken by employees must be authorised by a protected action ballot. The purpose of this ballot is to establish that a majority of employees wish to take the action. The Fair work Act sets out a number of steps which must be satisfied to hold a valid ballot.

Once industrial action has been authorised by a ballot, employees must give three days’ notice to an employer before going out on strike or even taking a more limited form of action (e.g. a refusal to perform overtime).

The Fair Work Act expressly prohibits making payment to employees who engage in industrial action. However, employers have the discretion to provide partial payment to employees who take industrial action which falls short of a total stoppage of work.

The industrial relations tribunal, Fair Work Australia, can make orders suspending or terminating protected industrial action on the basis that the protected industrial action is causing significant economic harm to bargaining participants or third parties, or on "essential service" grounds (that is, the protected action is endangering the personal safety, health or welfare of the population, or causing significant damage to the Australian economy).

Quite sensibly, Fair Work Australia is generally reluctant to grant these orders, as this represents a curtailment of an important employee right. It took the threat of grounding the entire Qantas fleet in last year’s bargaining impasse for Fair Work Australia to grant the order sought by the Minister for Workplace Relations to terminate all protected industrial action at Qantas.

Fair Work Australia has the power to arbitrate claims in circumstances where it has terminated protected industrial action on essential service grounds or on the basis that it is causing significant harm to parties.

Although the Fair Work Act provides options for protected industrial action, workers and unions can obviously still go on strike outside the scheme — what are called "wildcat strikes". The Act makes it clear that any industrial action that is not protected is unlawful. Fair Work Australia can make orders terminating unprotected industrial action that is taking place, or even impending. Breach of such an order is punishable in the Federal Magistrates Court or Federal Court by the imposition of a penalty of up to $6600 for an individual or $33,000 for a corporation, or 12 months imprisonment.

Parties can also seek an injunction to enforce an order made by Fair Work Australia because this will usually be a more effective way of stopping or preventing the industrial action immediately.

Also, Fair Work Australia can make wide-ranging orders, including orders for compensation, in relation to unprotected industrial action taken during the lifetime of an agreement. In 2011, the Federal Court (upheld on appeal) awarded penalties totalling $750,000 against the Transport Workers Union to compensate Qantas for the damage it had suffered when workers walked off the job to attend a series of stop-work meetings.

In recent times, more militant employers have begun to bring tort actions which seek large amounts of monetary damages against employees and unions that organise unprotected industrial action.

The present regime is largely a continuation of the regulation that applied under Work Choices. Further, the limited right to strike which exists under Australian industrial regulation at the present moment is likely not in compliance with Australia’s international obligations in this regard. However, this has not stopped the Opposition claiming that there is a "militancy problem" with the Fair Work Act.

Launched in 2004, New Matilda is one of Australia's oldest online independent publications. It's focus is on investigative journalism and analysis, with occasional smart arsery thrown in for reasons of sanity. New Matilda is owned and edited by Walkley Award and Human Rights Award winning journalist Chris Graham.