A Full Federal Court has confirmed that to be protected under the Fair Work Act, employer lockout action must be causally connected to the employee industrial action. However, the Full Court also found that there is a low threshold for employer response action, and a casual link is all that is required: the employer’s action does not need to be a reasonable, proportionate or rational response to the employee action.


Implications for employers

Employers considering responding to employee claim action should keep in mind that there does need to be a casual connection between their response and the employee claim action. Provided that casual link exists, Fair Work Australia (FWA) will not inquire into whether the employer’s action is a reasonable, proportionate or rational response, or whether the sole reason for the response is to bring about a termination or suspension of the employee claim action.

Background

Qantas was engaged in separate negotiations with AIPA, the Australian Licenced Aircraft Engineers Association (ALAEA) and the Transport Workers’ Union (TWU) in relation to three different enterprise agreements.

Members of AIPA took industrial action, but it was limited to the pilots wearing red ties and making particular announcements at the end of long haul flights. The protected industrial action taken by ALAEA and TWU was significantly more damaging to Qantas.

Qantas simultaneously gave notice to AIPA, ALAEA, TWU and the relevant employees that they would be locked out indefinitely. As a consequence of the lockout, Qantas grounded its fleet of aircraft.

The Commonwealth Minister made an application under the Fair Work Act 2009 (FW Act) for an order to suspend or terminate the protected industrial action being engaged in by Qantas and the three unions, on the basis that it was “threatening to cause significant damage to the Australian economy or an important part of it”. FWA granted the orders sought, causing the immediate termination of all protected industrial action (employee claim action and the employer response action) in relation to all three enterprise agreements.

AIPA applied to the Federal Court to have FWA’s orders against it set aside.

Federal Court proceeding

The Full Court agreed with AIPA’s submission that an order should not have been made terminating AIPA’s industrial action, as AIPA’s action was not threatening significant damage to the Australian economy.

However, the Court held that this finding did not assist AIPA because under the FW Act, industrial action will not be protected where there is an order in operation terminating industrial action in relation to the relevant enterprise agreement. Therefore, FWA’s order terminating Qantas’ lockout action meant that AIPA’s industrial action could no longer be protected.

Secondly, AIPA submitted that Qantas’ lockout was not organised or engaged in as a response to the industrial action taken by AIPA, and was therefore not protected industrial action which could be terminated by FWA.

The Full Court acknowledged that the lockout might have been very “serious” and “opportunistic”, however it was “the only step available to [Qantas] to bring to a head its disagreement with AIPA” as part of a “wider strategy” to resolve all of its disputes with the three unions.

Perrum J clarified that an employer response:

does not have to be reasonable, proportionate or rational…taken solely in response to the industrial action of the party with whom the proposed enterprise agreement may be made nor that it be predominantly or even substantially in response to the employee claim action. All that is required is that it is a response. The threshold is low.

Ultimately, the Full Court dismissed the application on the basis that:

  • FWA was conscious of the “separate identity” of the industrial action taken by members of each of the three unions as the basis for Qantas’ response action, and properly found, based on “overwhelming” evidence, that Qantas’ action was a response to AIPA’s industrial action and therefore was protected industrial action; and
  • once FWA found that Qantas’ protected industrial action was threatening to cause significant damage to the Australian economy or an important part of it, FWA was entitled to make an order terminating or suspending that action; and
  • the termination of Qantas’ industrial action meant that AIPA’s industrial action in relation to the proposed enterprise agreement was no longer protected, so FWA’s orders terminating AIPA’s action were of no force or effect.  

The Full Court dismissed APIA’s application.

Australian and International Pilots Association v Fair Work Australia [2012] FCAFC 65