Background
Chevron Australia employed rotational workers at remote oil and gas sites in Western Australia. Under its Rotational Benefits Policy, eligible employees received a Field Loading Allowance for aspects of remote-industry work and a monthly Transport Allowance to assist with travel costs between their homes and designated assembly points.
During enterprise bargaining, employees represented by the Australian Workers’ Union took protected industrial action, including work stoppages, from 8 to 21 September 2023. Chevron proportionately reduced both allowances according to the duration of each employee’s stoppage. The union alleged that withholding those amounts breached the requirement in s 323(1) of the Fair Work Act 2009 (Cth) to pay amounts owing in relation to work in full. The hearing determined liability only, leaving remedies, consequential orders and costs for later determination.
The Court’s Holding
Justice Lenehan held that Chevron lawfully withheld the Field Loading Allowance. The allowance formed part of annual salary, compensated employees for aspects of remote-industry work and depended on employees working, or being available to work, their allocated shifts. It therefore had the necessary connection with the duration of the industrial action for s 470(1) to prohibit payment. Because the affected amounts were not payable while that prohibition operated, withholding them did not contravene s 323(1).
The Court reached the opposite conclusion for the Transport Allowance. That allowance compensated employees for costs, time and inconvenience associated with arranging, paying for and completing travel to their point of engagement. The entitlement arose before the industrial action and was not connected to performing work during the stoppage. Section 470(1) therefore did not prohibit payment, and Chevron contravened s 323(1) by deducting the allowance. The parties agreed, and the Court accepted, that the transport-allowance deductions constituted a single contravention under s 557.
Key Takeaways
- Section 470(1) turns on whether an entitlement is connected to work performed, or availability for work, during the period of protected industrial action—not merely on whether it is labelled or paid as an allowance.
- An annually calculated allowance may still be withheld proportionately if entitlement to it depends on employees working their allocated shifts.
- An allowance earned through obligations completed before a stoppage is not withheld lawfully merely because it is paid monthly during a period that includes industrial action.
Why It Matters
The decision illustrates that employers must examine the substantive basis of each payment before making protected-industrial-action deductions. Different components of the same remuneration package may receive different treatment under s 470, depending on when and why the entitlement arises.
The ruling establishes liability for Chevron’s Transport Allowance deductions but does not determine compensation, penalties, costs or other consequential relief, which were reserved for a further hearing.