Esso Australia Pty Ltd v The Australian Workers' Union; The Australian Workers' Union v Esso Australia Pty Ltd [2017] HCA 54

Factual Background. In 2015, the Australian Workers' Union ("AWU") took industrial action against Esso Australia Pty Ltd at Esso's Bass Strait oil and gas operations. The AWU claimed that this was "protected industrial action" under the Fair Work Act 2009 (Cth) ("Act"). 

Esso claimed that the AWU had contravened an order made by the Fair Work Commission in relation to a proposed Enterprise Agreement ("EA") to which the protected industrial action related. Esso argued that because the AWU had previously contravened an order of the Commission in relation to the proposed EA, the industrial action was not "protected" because of section 413(5) of the Act. 

Legal Background. Protected industrial action can be taken by employers and employees only when they are negotiating an EA. If industrial action is "protected", the employer or employee taking the action is generally immune from civil liability under the law. 

Section 413(5) of the Act provides that for industrial action to be "protected", persons organising or engaging in the action (including employees and/or the "bargaining representative") "must not have contravened any orders that apply to them and that relate to, or relate to industrial action relating to, the agreement or a matter that arose during bargaining for the agreement".

Decision. Esso appealed to the High Court of Australia. Among other things, the High Court found that section 413(5) was intended to apply to past contraventions of orders. The High Court said that because the Act is predicated on participants "abiding by the rules, it is much more likely that the purpose of a provision in that form would have been to deny the immunity of protected industrial action to persons who had not previously complied with a pertinent order or orders and who had thereby demonstrated that they were not prepared, or prepared to take sufficient care, to play by the rules".

Accordingly, the majority of the High Court (Kiefel CJ, Keane, Nettle and Edelman JJ) upheld Esso's appeal, essentially finding that the AWU's industrial action would not be protected for the duration of the EA as it had previously breached an order from the Commission that related to that EA. 

Lessons for Employers. Employers should be aware that industrial action will not be protected where the person seeking protection has previously contravened an order made by the Commission that relates to a proposed EA. Where an employer is affected by "protected industrial action", the employer should check to see whether the union has complied with all relevant orders of the Commission. If not, the union will be taking "unprotected industrial action", meaning the employer may be able to take action against the union and/or employees to bring such unprotected industrial action to an end.