Fair Work Commission

What is employer response action?

See Fair Work Act s.411

Employer response action for a proposed enterprise agreement means industrial action that:

• is organised or engaged in as a response to industrial action by:
  • a bargaining representative of an employee who will be covered by the proposed enterprise agreement, or
  • an employee who will be covered by the proposed enterprise agreement; and

• is organised or engaged in by an employer that will be covered by the proposed enterprise agreement against one or more employees that will be covered by the proposed enterprise agreement.

Employer response action must be in response to industrial action, as defined, that is happening. Employer response action cannot, by definition, be in response to industrial action that is threatened, impending, probable or even imminent at the time that the employer's industrial action is implemented.^[1]

As defined, the only form of employer response action is a lockout.^[2]

An employer may also take other action, which is not 'employer response action', in response to employee claim action. This other action can include:

• standing-down employees in accordance with Part 3–5 of the Fair Work Act, or
• declining to pay employees for partial work bans in accordance with partial work bans under s.471(4).

In Australian and International Pilots Association v Fair Work Australia^[4] the Full Court of the Federal Court considered whether there needed to be a link between employer response action and industrial action taken by employees. The Court found that the terms of the Fair Work Act limit an employer to some form of causally connected response to employee industrial action.

The words 'as a response' require only that the lockout be seen as causally connected to employees' industrial action. It does not have to be reasonable, proportionate or rational.^[5]

Employer response action can be protected industrial action if it is engaged in in accordance with s.411 of the Fair Work Act in response to employee industrial action which is or is not protected action.^[7]

Employer may refuse to make payments to employees

If an employer engages in employer response action against employees, the employer may refuse to make payments to the employees in relation to the period of the action.^[8]

Employers have various statutory and common law rights to respond to industrial action by employees and such responses will not constitute industrial action unless the employer’s action is a lockout. For example, in particular circumstances an employer may have the right to respond to industrial action by:

• standing-down employees in accordance with Part 3–5 of the Fair Work Act, or
• declining to pay employees for partial work bans in accordance with partial work bans under s.471(4).

Continuity of employment not affected

Employer response action for a proposed enterprise agreement does not affect the continuity of employment of the employees who will be covered by the proposed enterprise agreement.^[9]

The Fair Work Regulations set out purposes for which continuity of employment is not affected by an employer taking industrial action. These are:

• superannuation
• remuneration and promotion which may be affected by seniority, and
• any entitlements under the National Employment Standards.^[10]

Accrual of annual leave

There is no entitlement to annual leave (a NES entitlement) for the lockout period when the industrial action is valid employer response action under the Fair Work Act. The entitlement to annual leave in s.87 is for ‘service’. A period of lockout does not count as employee ‘service’ by reason of s.22(2)(b).^[11]

"Meanings of service and continuous service

…

(2) [Exceptions to meaning of service]

The following periods do not count as service:

…

(b) any period of unpaid leave or unpaid authorised absence other than;

(i) a period of absence under Division 8 of Part 2-2 (which deals with community service leave); or

(ii) a period of stand down under Part 3-5, under an Enterprise Agreement that applies to the employee, or under the employee’s contract of employment; or

(iii) a period of leave or absence of a kind prescribed by the regulations;

…"^[12]

Case example

References