Reducing payments for protected industrial action

In the event that employees take protected industrial action in the form of a partial work ban in support of enterprise bargaining, the Fair Work Act entitles an affected employer to give notice to the workforce (most commonly the principal union involved in the bargaining) that the employer intends, because of the ban, that the employees’ will be reduced by a proportion specified in the notice; sub-sec 471(1), Fair Work Act 2009.

Pursuant to sec 472 of the Act, the Fair Work Commission is empowered to vary the proportion by which an employee’s payments are reduced.

Here is the Fair Work Commission’s description in its latest quarterly summary of interesting cases of a case which did just that.

“The Transport Workers Union (the TWU) applied to the Commission for orders relating to certain partial work bans. The TWU gave notice to the respondent that it intended to impose a partial work ban on the collection of fares by drivers. In response the respondent informed employees that the payment of wages for the period of industrial action would be reduced by 51 per cent. The TWU made an application under s.472 of the Fair Work Act seeking an order to vary the amount deducted, applying to reduce it from 51 per cent to 16 per cent. The TWU submitted that the deduction proposed by the respondent was not consistent with the work time lost due to the partial work ban, and was not consistent with Regulation 3.21 of the Fair Work Regulations 2009. The TWU further submitted that the respondent was reducing wages by 51 per cent to recoup lost revenue and that the Commission must take into account the financial position of the ultimate holding company of the business, along with drivers low wages, as relevant factors in the consideration of ‘fairness’ under the Fair Work Act. The respondent submitted that the 51 per cent reduction was based upon the total operating expenses of the business.

The Commission held that when assessing the appropriate reduction it was necessary to consider the application of s.472(3), Regulation 3.21 and all of the circumstances of the case. The Commission held that it was apparent that the respondent’s methodology adopted in assessing its 51 per cent wage reduction provided an inflated result for the wage reduction, and that the TWU, in formulating its 16 per cent calculation, did not include any additional duties apart from fare collection. The Commission did not accept that the impact on the holding company was a relevant consideration. The Commission held that it was the proximate relationship of the parties engaged in bargaining, and those immediately impacted by protected industrial action that was relevant to setting the proportion of wage reduction. The formula in Regulation 3.2.1 must be considered. The Commission held that a figure of 20.1 per cent would account for apportioning time spent on associated fare collection duties rather than just fare collection, and that this was the appropriate reduction for the period of protected industrial action.”

Transport Workers’ Union v Transit Australia P/L t/a Marlin Coast Sunbus (2017) FWC 1531.