AGL Loy Yang Pty Ltd v CFMEU and Hardy [2017] FWC 432

Articles Written by Amy Millar (Senior Associate)

The Fair Work Commission has ordered the CFMEU to stop organising covert unprotected industrial action at AGL’s Loy Yang site in Traralgon.  The order, made under section 418 of the Fair Work Act 2009, prohibits the CFMEU from organising unprotected action in the form of overtime bans and illegitimate sick leave absences.

AGL’s application

Section 418 requires the Commission to make an order stopping unprotected industrial action when it appears to the Commission that such action is happening, is threatened, impending or probable, or is being organised.

AGL alleged that the CFMEU was organising the unprotected action in response to the Commission’s recent decision to terminate the Loy Yang Power Enterprise Agreement 2012 (which has since been stayed).  The alleged action meant that AGL was unable to operate Loy Yang at full capacity, resulting in significant loss of income.

In support of its application, AGL presented detailed evidence of its attempts to contact employees during the relevant period to request or direct them to perform overtime.  The evidence showed that employees had responded to, or returned, telephone calls from their supervisors at a much lower rate than normal, and that most of the employees who were contacted refused to work overtime without a reasonable explanation (with a number of employees refusing to provide a reason for their absence and one citing a sick cow).  The evidence also showed an “extraordinary” rate of sick leave, with around one third of employees calling in sick during the relevant period. 


The Commission was satisfied that the evidence demonstrated abnormal behaviour by employees in respect of overtime and sick leave absences and that this behaviour was the result of collective action by employees, noting that the CFMEU had not provided a reasonable alternative explanation for what was occurring. 

The Commission also found that the CFMEU was responsible for organising the industrial action, largely due to evidence that its local representative, Mr Hardy, had been blind copied on two email updates from a shift manager to his superior regarding staffing levels in circumstances where there was no operational reason for Mr Hardy to be provided with that information (as he was on long service leave at the time).  The Commission stated that Mr Hardy’s failure to attend the hearing to give evidence, the high rate of unionisation and a long history of Mr Hardy’s leadership and influence at the site also supported that finding.

This decision followed an unsuccessful application by AGL, only a few days earlier, for orders under section 418 on the basis that its employees were engaging in unprotected industrial action in the form of overtime bans.  In rejecting the earlier application, the Commission found that there was at that time inadequate evidence to establish that any employee had unreasonably refused to work overtime. 

Lessons for employers

Obvious difficulties are faced by employers who are subject to covert unprotected industrial action.  Whilst such action has the potential to cause significant harm and disruption to a business, it is usually very difficult to prove. 

Section 418 applications are usually heard by the Commission within a very short timeframe of the application being made.  The AGL decision (coupled with the earlier unsuccessful application) confirms the importance of gathering detailed evidence, not only of what is occurring, but how that differs from “normal” employee behaviour.

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