Virtually all industrial action is unlawful as either or both of a breach of contract and a tort. This means that if workers are to have the capacity to take industrial action to protect and to promote their occupational interests, they need to be provided with some measure of protection against common law liability in respect of such action. The first formal recognition of this logic at federal level came in 1993 in the context of the shift away from centralised conciliation and arbitration in favour of enterprise bargaining.

The original protections have been extensively modified over the years, and are now to be found in Pt 3-3 of the Fair Work Act 2009 (FW Act).

The FW Act recognises three different forms of protected ‘industrial action’: employee claim action, employee response action and employer response action.

‘Industrial action’ for purposes of Pt 3-3 (and the rest of the FW Act) includes withdrawal of labour (‘strikes’), lock outs, and 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 in relation to work by an employee, the result of which is a restriction or limitation on, or delay in, the performance of work’.

This definition is subject to a number of exceptions, including for action that is agreed to by the employers or employees concerned, and action by an employee that is based on a reasonable concern about an imminent risk to the employee’s health or safety. In addition, in most circumstances, industrial action does not include picketing.

To be protected, employee claim action must:

• be organised or engaged in for the purpose of supporting or advancing claims in relation to a proposed agreement that ‘are only about, or are reasonably believed to only be about, permitted matters’;

• be organised or engaged in against an employer that will be covered by the agreement by a bargaining representative for an employee who will be covered by the agreement;

• meet the ‘common requirements’ (see below);

• have been authorised by a protected action ballot conducted in accordance with Pt 3-3 Div 9 of the FW Act;

• not be in support of, or to advance, claims to include unlawful terms in the agreement;

• not be part of ‘pattern bargaining’; and

• not relate to a ‘demarcation dispute’.

Employer response action can be engaged in only by employers in response to protected action by their employees, and must meet the ‘common requirements’. Employee response action can be taken only in response to industrial action by an employer, and again must meet the common requirements.

The ‘common requirements’ set out in s 413 of the FW Act are that:

• the industrial action must not relate to a greenfields or multi-enterprise agreement;

• bargaining representatives must be genuinely trying to reach an agreement;

• the bargaining representative for an employee that is proposing to take employee claim action must provide the employer with at least three working days’ written notice (or such longer period of up to seven days as may be specified in the relevant protected action ballot order) of the proposed industrial action. It is also necessary to provide written notice of both employee and employer response action, but there is no minimum notice period for such notice;

• bargaining representatives who are organising or engaging in industrial action must not have contravened any orders that apply to them and that relate to the proposed agreement or to industrial action relating to the agreement, or that relate to any matter that arose during bargaining for the agreement;

• protected industrial action cannot be taken before the nominal expiry date of any existing agreement; and

• the industrial action must not have been suspended or terminated under Pt 3-3 Div 6 or s 431(1) , and there must be no serious breach determination in force in relation to the agreement.

If industrial action is ‘protected’ in the relevant sense, then ‘no action lies under any law (whether written or unwritten) in force in a State or Territory’ in relation to that action.

This is subject to the qualification that protection does not extend to industrial action that involves:

• personal injury;

• wilful or reckless destruction of, or damage to, property;

• unlawful taking, keeping or use of property; or

• defamation.

See Protected action.

See Protected action: secret ballot process.

The FW Act provides that protected industrial action can be suspended or terminated on a number of grounds:

• that the industrial action is causing or threatening to cause significant economic harm to the employer(s) and/or the employees who will be covered by the proposed agreement;

• that the industrial action has threatened, is threatening or would threaten ‘to endanger the life, the personal safety or health, or the welfare of the population or of part of it’ or ‘to cause significant damage to the Australian economy or an important part of it’;

• that the Fair Work Commission (FWC) considers that it would be appropriate to suspend the industrial action because it would help the parties to reach an agreed outcome; or

• that the industrial action is ‘adversely affecting’ the employer, and is causing or threatening to cause ‘significant harm’ to a third party, and the suspension would be appropriate in the public interest.

In addition, the Minister for Employment and Workplace Relations can terminate industrial action where (s)he is of the opinion that the industrial action is threatening or would threaten ‘to endanger the life, the personal safety or health, or the welfare of the population or of part of it’ or ‘to cause significant damage to the Australian economy or an important part of it’. This power has never been used in practice.

Where industrial action has been terminated on any of these grounds, the FWC may, subject to certain preconditions, make an industrial action related workplace determination. This has the effect of imposing an arbitrated settlement upon the parties.

See Terminating or suspending protected action.

See Industrial action related workplace determinations.

From the earliest days of the federal system the legislation has included provisions that were intended to make all, or almost all, forms of industrial action unlawful as breach of statute.

These provisions were never rigorously enforced, and by the early 1970s they were discredited and almost entirely unused. This changed with the advent of enterprise bargaining from the late 1980s onwards — especially after the introduction in 1993 of statutory protection against common law liability for industrial action. This reflected a perception that if unions were to get the benefit of such protection, they had to pay a price in the form of acceptance that industrial action that was not protected could properly be subjected to legal sanction.

The principal sanctions that are available under the current legislation include the imposition of monetary penalties, the making of orders for compensation and the grant of injunctions for:

• engaging in unprotected industrial action;

• taking industrial action during the nominal life of an agreement;

• engaging in pattern bargaining; and

• coercion.

In addition, engaging in certain forms of unprotected industrial action can, in principle, lead to cancellation of the registration of an organisation under the Fair Work (Registered Organisations) Act 2009 , although this never happens in practice

See Remedies against unprotected action: stop orders and injunctions.

Participation in industrial action will, almost without exception, constitute a breach of contract on the part of the employee concerned. In most instances, this will enable the employer to refuse to pay wages to the employees concerned during any period when they are engaging in industrial action (protected or otherwise). In principle, these common law principles remain in place. However, in practical terms, they have now largely been superseded by the provisions set out in Pt 3-3 Div 9 of the FW Act.

These provisions make it unlawful for an employer to pay, or an employee to accept; or a union or employees to seek, payment of wages in respect of any period when employees are engaged in industrial action. They also make special provision for situations where employees are engaging in industrial action short of a strike, and where unprotected action lasts for less than 4 hours.

See Prohibition of payments during periods of industrial action.