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Journal of Australian Energy Producers
RESEARCH ARTICLE (Non peer reviewed)

Dealing with oil and gas unions*

A. Drake-Brockman A and D. White A
+ Author Affiliations
- Author Affiliations

DLA Phillips Fox.

The APPEA Journal 51(2) 736-736 https://doi.org/10.1071/AJ10116
Published: 2011

Abstract

Since the commencement of the Fair Work Act 2009 (Cth) (FW Act) on 1 July 2009, there has been a significant increase in union activity in Australia’s oil and gas industry. Recent case examples concerning the Pluto Project and various other disputes flag the importance of project managing industrial relations to ensure project delivery dates are met. Due to the contract interdependencies on large scale oil and gas projects, industrial action taken by a union in relation to a single sub-contractor can have ripple effects—causing budget blow-outs.

Emerging union influence is such a concern that some of Australia’s leading companies operating in the oil and gas industry now identify industrial activity as a key project risk. Furthermore, many Australian leading financial institutions now assess a company’s potential exposure to industrial action as part of their key lending criteria. New innovative industrial relations strategies are now part of the weaponry Australian unions use when representing their members—this includes global union strategies. Moreover, there is already evidence that the FW Act can promote the occurrence of demarcation disputes between unions. This type of industrial activity leads to poor outcomes for employers and can prove to be very costly—especially in a multi-million dollar a day industry. Providing insight into the recent union activities in the industry are the following cases:

  1. Heath v Gravity Crane Services Pty Ltd

  2. Boskalis Australia Pty Ltd v Maritime Union of Australia

  3. CFMEU v Woodside Burrup Pty Ltd

  4. Offshore Marine Services Pty Ltd v Maritime Union of Australia

There are a number of strategies oil and gas companies and sub-contractors can use to mitigate the effects of union influence in the workplace.

Allan has particular expertise and interest in enterprise bargaining and industrial litigation, with a focus on strategic industrial relations planning in the energy and resources sector.

This includes advising on major projects such as Gorgon, Pluto, Kippa Tuna Turrum, Bayu-Undan, Hope Downs 4 and major infrastructure and iron ore projects.

Allan combines his intimate knowledge of all Australian stakeholders in industrial relations including unions, employer associations and professional bodies together with his ability to find innovative solutions.

Allan has acted as counsel in major national industrial law cases in various full courts and tribunals across Australia.

Allan continues to be recognised in the Doyle’s Guide to the Australian legal profession as a pre-eminent workplace relations and employment lawyer in WA.

Daniel has particular interest in union management, especially in large-scale energy and resources projects across Australia. He has first class honours in industrial relations, focusing on new legislative good faith bargaining obligations imposed on parties when negotiating collective labour agreements and union conduct, behaviour and politics around those negotiations.

While working full-time, Daniel continues to engage in leading industrial relations research and publishes in conjunction with UWA.

Daniel has worked at DLA Phillips Fox since 2007 and has recently completed his legal qualifications.


References

This included the Workplace Relations (Work Choices) Amendment Act 2005 (Cth). See Richard Mitchell et al (2010) ‘Assessing the Impact of Employment Legislation: The Coalition Government’s Labour Law Program 1996–1997’ Australian Journal of Labour Law, vol 23, pp 274–301.

Note that the Office of the Australian Building and Construction Commissioner and the Fair Work Ombudsman also have a role in regulating industrial relations on particular projects.

Employers still have recourse to the Federal Court, Federal Magistrates Court and the State Supreme Courts for particular disputes if required.

See Andrew Stewart (2009) ‘A Question of Balance: Labor’s New Vision for Workplace Regulation’ Australian Journal of Labour Law, vol 22, pp 3–50.

Mammoet Pty Ltd v Construction, Forestry, Mining and Energy Union [2010] FWA 4389.

Douglas Heath v Gravity Crane Services Pty Ltd [2010] FWA 7751.

Maritime Union of Australia.

Section 19 of the FW Act provides ‘industrial action’ means action of any of the following kinds: the performance of work by an employee in a manner different from that in which it is customarily performed, or the adoption of a practice to work by an employee, the result of which is a restriction or limitation on, or a delay in, the performance of work; a ban, limitation or restriction on the performance of work by an employee or on the acceptance of or offering for work by an employee; a failure or refusal by employees to attend for work or a failure or refusal to perform any work at all by employees who attend for work; the lockout of employees form their employment by the employer of the employees.

Protected (lawful) industrial action can only occur where: there is no statutory industrial agreement covering the employees that is within its nominal term; it occurs in relation to a proposed Single Enterprise Agreement; persons organising or engaging in the industrial action are ‘genuinely trying to reach an agreement’; a secret ballot has approved the industrial action; notice requirements for the action have been met; and it occurs within 30 days of the declaration of the results of the successful ballot (subject to a further 30 day extension).

Boskalis Australia Pty Limited v The Maritime Union of Australia [2010] FWA 7508.

See also Offshore Marine Services Pty Ltd v The Maritime Union of Australia [2010] FWA 5196.

Construction, Forestry, Mining and Energy Union v Woodside Burrup Pty Ltd and Kentz E & C Pty Ltd [2010] FWAFB 6021.

Ibid, above n xii, at [44].

Ibid, above n xii, at [55].

See Anthony Forsyth (2010) ‘The Impact of “Good Faith” Obligations on Collective Bargaining Practices and Outcomes in Australia, Canada and the USA’ Monash University Workplace and Corporate Law Research Group, no. 17, pp 1–31; Hon Jennifer Action (2010) ‘Negotiating the Bargaining Highway’ Employment Law Bulletin, November/December, pp 94–98.

‘Good faith bargaining’ obligations are imposed on bargaining representatives negotiating a statutory industrial agreement (most often employers and unions) and include: attending and participating in meetings at reasonable times; disclosing relevant (but not confidential) information; responding to proposals from other representatives in a timely manner; recognising and bargaining with other representatives; giving genuine consideration to the proposals of the other bargaining representatives and giving reasons for responses to those proposals; and refraining from capricious or unfair conduct that undermines freedom of association or collective bargaining. Note: an employer is not obligated to enter into an agreement with a union or required to make concessions as part of the ‘good faith bargaining’ regime.

Note: ‘good faith bargaining’ rules do not apply in relation to Greenfields Agreements.

See JJ Richards & Sons Pty Ltd v Transport Workers’ Union of Australia [2010] FWAFB 9963.

David Vincent (Ed), ‘Maritime offshore oil and gas deals start to flow’, Workplace Express (Melbourne), 28 June 2010.

David Vincent (Ed), ‘Government open to talks on bargaining: Gillard’, Workplace Express (Melbourne), 13 October 2010.

A little known effect of the new FW Act is that where a union has entered a workplace to hold discussions with persons eligible to be members of the union, other persons not eligible to join the union can join in those discussions (see Supplementary Explanatory Memorandum to the Fair Work Bill 2008 paragraphs 214–16). This is a potent recipe for union demarcation disputes and the poaching of members.

Construction, Forestry, Mining and Energy Union v Foster Wheeler Worley Parsons (Pluto) Joint Venture [2010] FWA 2341.

Note also JJ Richards & Sons Pty Ltd v Transport Workers’ Union of Australia [2010] FWAFB 9963 in which the TWU submitted arguments based on the International Labour Organisation Convention 98 ‘Right to Organise and Collective Bargaining Convention 1949’ and Convention 87 ‘Freedom of Association and Protection of the Right to Organise Convention 1948’.

CFMEU Mining & Energy, ‘A specific instance under the OECD Guidelines for Multinational Enterprises’, Submission to the OECD in CFMEU Mining & Energy v Xstrata PLC, 11 October 2010, pg 1.

This function is performed by the executive member of the Australian Foreign Investment Review Board.

OECD Guidelines for Multinational Enterprises, Organisation for Economic Co-operation and Development, June 2000, OECD Guidelines, 27 June 2000, pp 33–35.

Note that the Fair Work (Registered Organisations) Act 2009 (Cth) provides for the settling of demarcation disputes through ‘Representation Orders’.