Introduction

In January 2018 rail workers employed by Sydney Trains and NSW Trains threatened a 24-hour stoppage and overtime bans. The industrial action would have brought all New South Wales (NSW) trains to a standstill for 24 hours and caused major disruptions due to the overtime bans. The NSW government estimated that the industrial action would cost the state A$90 million and would prevent more than 1 million customer journeys.

In a noteworthy decision for all employers, the Fair Work Commission (FWC) ordered that all industrial action be suspended for six weeks, finding that the stoppage threatened to cause significant damage to the economy and endanger the welfare of the community and the people who rely on the network to get to work and school.

Facts

On January 15 2018 the Australian Rail, Tram and Bus Industry Union (RTBU) (NSW Branch) notified Sydney Trains and NSW Trains pursuant to Section 414 of the Fair Work Act 2009 that its members would be engaging in indefinite bans on overtime from January 25 2018. The same day, the Association of Professional Engineers, Scientists and Managers Australia (APESMA) notified Sydney Trains that its members would also be engaging in indefinite bans on overtime from January 25 2018.

On January 16 2018 the RTBU notified Sydney Trains and NSW Trains that its members would undertake a stoppage of work for a 24-hour period commencing on January 29 2018.

On January 17 2018 APESMA notified NSW Trains that its members would be engaging in indefinite bans on overtime from January 30 2018.

On January 24 2018 Sydney Trains and NSW Trains applied to the FWC for an order suspending or terminating the protected action under either Section 424 or Section 425 of the Fair Work Act. On the same day, the minister for industrial relations in New South Wales applied to the FWC for an order suspending or terminating the protected industrial action pursuant to Section 424 of the act.(1)

Potential effect of industrial action

In support of the applications, Sydney Trains, NSW Trains and the minister filed evidence demonstrating the effect of the threatened industrial action, including as follows:

  • The overtime ban would reduce the number of rail services by 40%-50%.
  • No trains could run during the 24-hour stoppage.
  • The stoppage would prevent over 1 million customer journeys, affecting the 420,000 commuters who usually travel by train in the morning peak period and 440,000 commuters in the afternoon peak.
  • Buses could not mitigate the effects of the industrial action due to capacity constraints.
  • If everyone who typically travels by train attempted to drive, it would have a detrimental effect on the roads, which in turn could impede essential service workers (eg, police officers, nurses, doctors, ambulance officers and fire fighters) who usually travel to work by train.
  • The second largest use of rail services (after work-related travel) is education-related travel. The stoppage would affect travel by school children, with independent schools returning to school on the day of the proposed stoppage.
  • The stoppage would affect the movement of freight including:
    • coal;
    • perishable food;
    • grain;
    • cement; and
    • waste.
  • Travel to and from Sydney airport would be disrupted.
  • The NSW Treasury gave evidence which showed the modelling of the immediate economic effect of the proposed industrial action, which revealed that the proposed 24-hour stoppage would result in an economic loss of A$51.7 million. An additional loss of A$39.1 million was estimated to arise from the overtime ban, making a total loss of A$90.8 million.
  • The NSW Ministry of Health gave evidence of the effect of the industrial action on the health system, including service interruptions to elective surgery, outpatient services and community health services at numerous major hospitals. There could also be delays at emergency departments.

Section 424 of the Fair Work Act

Under Section 424 of the Fair Work Act, the FWC must make an order suspending or terminating protected industrial action for a proposed enterprise agreement that is being engaged in, or is threatened, impending or probable, if it is satisfied that the action has threatened, is threatening, or would threaten:

  • to endanger the life, the personal safety or health, or the welfare of the population or part of it; or
  • to cause significant damage to the Australian economy or a significant part of it.

The FWC concluded that the evidence established that the 24-hour stoppage and the overtime bans, taken together or separately, threatened to endanger the welfare of part of the population, including the large number of people in Sydney and surrounding areas who rely on the services provided by Sydney Trains and NSW Trains to get to work, attend school or otherwise go about their business, as well as those who would have suffered from the increased congestion on the roads that would have been an inevitable consequence of the industrial action.

The evidence also established that the industrial action would have threatened to cause significant damage to the economy of Sydney, accepted to be Australia's largest and most economically important city.

Comment

The decision is one of only a handful of decisions in which the FWC has ordered the suspension of protected industrial action under Section 424 of the Fair Work Act.

The decision highlights that employers can obtain orders under Section 424 by establishing that the protected industrial action threatens the welfare of part of the population (rather than the entire population).

It also demonstrates the evidentiary standard that must be met by an employer to obtain such an order. Sydney Trains, NSW Trains and the minister filed extensive evidence establishing the likely effect of the industrial action.

After the industrial action was suspended, the negotiations for Sydney Trains and NSW Trains enterprise agreements continued. Both have now been voted up by employees, providing certainty for employees, Sydney Trains, NSW Trains and the travelling public in New South Wales.

For further information on this topic please contact Tony Woods or Sally Moten at Lander & Rogers by telephone (+61 2 8020 7700) or email (twoods@landers.com.au or smoten@landers.com.au). The Lander & Rogers website can be accessed at www.landers.com.au.

Endnotes

(1) Sydney Trains; NSW Trains; The Hon Dominic Perrottet, Minister for Industrial Relations (New South Wales) [2018] FWC 632.

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