Australian and International Pilots Association v Qantas Airways Limited

LEGISLATION - PRIOR TO 27 MARCH 2006 4 When the proceeding was commenced, s 298K(1) of the Act relevantly provided that: 'An employer must not, for a prohibited reason, or for reasons that include a prohibited reason, do or threaten to do any of the following: (a) … (b) injure an employee in his or her employment; (c) alter the position of an employee to the employee's prejudice; (d) … (e) …' 5 The prohibited reasons for the purposes of s 298K(1) of the Act were identified in s 298L(1) of the Act which provided, insofar as it is relevant, that: 'Conduct referred to in subs 298K(1) … is for a prohibited reason if it is carried out because the employee, independent contractor or other person concerned: …. (h) is entitled to the benefit of an industrial instrument or an order of an industrial body; ….' 6 By s 298V of the Act, the onus of proof in applications made under Division 7 of Part XA of the Act was dealt with as follows: 'If: (a) in an application under this Division relating to a person's or an industrial association's conduct, it is alleged that the conduct was, or is being, carried out for a particular reason or a particular intent; (b) for the person or industrial association to carry out the conduct for that reason or with that intent would constitute a contravention of this part; it is presumed, in proceedings under this Division arising from the application, that the conduct was, or is being, carried out for that reason or with that intent, unless the person or industrial association proves otherwise.' Section 298U provided for various remedies in the event of a contravention of s 298K(1). These included the imposition of monetary penalties, payment of compensation and the granting of injunctions.

LEGISLATION - SINCE 27 MARCH 2006 7 The Workplace Relations Amendment (Work Choices) Act 2005 came into force on 27 March 2006. It effected some amendments to the provisions which had previously applied. The relevant sections were moved to a new Part 16. Section 298K(1) of the Act became s 792(1) of the amended Act. Section 298L(1)(h), with an immaterial addition, became s 793(1)(i). More significantly, however, was the addition of a new s 792(4) which reads: 'An employer does not contravene subs (1) because of paragraph 793(1)(i) unless the entitlement described in that paragraph is the sole or dominant reason for the employer doing any of the things described in paragraphs (1) (a), (b), (c), (d) and (e) of this section.' Section 298V was modified and became s 809. Specific reference to industrial associations was removed because 'person' was defined to include industrial associations: see s 806. Remedies are provided for in s 807. They continue to include monetary penalties, compensation orders and injunctions. 8 The changes to the original Statement of Claim which were incorporated in the Amended Statement of Claim took account of these statutory changes. So too did the Further Amended Statement of Claim which it is now sought to strike out. It will be convenient to refer hereafter to the Further Amended Statement of Claim as 'the Statement of Claim'.

THE PLEADED CASE 9 The critical parts of the applicant's Statement of Claim are as follows: · The decision of the respondent about which complaint is made is identified at para 19A. It has a number of related elements. They are that Jetstar would commence international operations by early 2007, and that the respondent would provide Jetstar with the four airbuses but would not permit those aircraft to be crewed by its employees. The decision was said to be made in or about December 2005. · Paragraph 20 alleges that, on or about 14 December 2005, the respondent made a public announcement that it intended that Jetstar would commence international operations by early 2007 and that those operations would commence with an interim fleet comprising the four airbuses. · In para 20B it is alleged that, on 16 December 2005, a meeting took place between representatives of the applicant and representatives of Jetstar. It is alleged that, at that meeting, the applicant advised Jetstar that it wished the four aircraft to be flown by pilots employed by the respondent and that Jetstar replied that all the flying would be done by employees of Jetstar. · In para 25A it is alleged that, on or about 10 February 2006, representatives of the applicant met with representatives of the respondent. It is alleged that, at that meeting, the applicant restated its desire for the four airbuses to be flown by employees of the respondent after the airbuses were transferred to Jetstar and that the respondent refused saying, in substance, that the aircraft would be flown by employees of Jetstar pursuant to industrial arrangements agreed between Jetstar and the Jetstar Pilots Council. · In para 25F it is alleged that, in February 2006, the applicant advised the airbus fleet pilots employed by the respondent of the respondent's refusal to permit pilots employed by the respondent to fly the aircraft once they were transferred to Jetstar. · In para 25G it is alleged that, in or about February 2006, the respondent advised its airbus crews that it was seeking to address those pilots' concerns about becoming surplus to requirements when the four airbuses were transferred to Jetstar. In para 25H the number of potentially surplus pilots is said to be 24. The precise terms of the announcement of the decision, as particularised by the applicant, appear in a publication called "Airbus Fleet News". The author was the respondent's General Manager of Airbus Operations, Captain Peter Wilson. The passage reads: 'I am aware there is considerable concern amongst some A330 pilots about the surplus that will be created when the four aircraft leave for Jetstar. In an attempt to allay some of these concerns I will give you my perspective on this issue. There are several facts that need to be considered: 1) The surplus is approximately 24 crew. This is based on approximately six crew per aircraft and four aircraft leaving. 2) The aircraft don't all leave at the same time. The departure dates are October 06, November 06, January 07 and March 07 ie over a six month period. 3) On 15 April 06 the training vacancies for July 06 to June 07 are advertised. 4) Presently A380 aircraft one and two are being crewed from the A330. Due to the delay in delivery of the A380, six aircraft now arrive in nine months. It is currently being considered whether aircraft three and four will also be crewed from the A330. 5) Over the next few years there are a considerable number of retirements from the B744. 6) The four aircraft return to mainline in early 09, with the possibility that an extra two may come with them. When allowing for the above factors, I believe the A330 will have minimal or no training in the next year and coupled with vacancies on other aircraft growth from the A380 and retirements, the surplus will be able to be managed.' · Paragraph 31B alleges that the making and communication of the respondent's decision constitutes an injury in the employment of each of the respondent's airbus fleet pilots or a threat so to injure and/or an alteration to the position of the pilots to his or her prejudice or a threat to do so. These allegations are particularised as follows: '(a) Particulars of injury and/or prejudicial alteration; (i) Loss or diminution of the expectation or opportunity to continue to earn remuneration at the same or similar level including remuneration in excess of the minimum guaranteed remuneration provided for by [the relevant Enterprise Bargaining Agreement between the applicant and the respondent which regulates the employment of airbus pilots]; (ii) Loss or diminution of the expectation or opportunity of continuing in their positions and continuing to receive the remuneration and status of an airbus fleet pilot; (iii) Loss or diminution of security of employment; (iv) Loss or diminution of the expectation or opportunity of access to promotion and career advancement. (b) Particulars of threat and injury and/or prejudicial alternation. (i) Loss of remuneration in the position of an airbus pilot; (ii) Redeployment to less remunerative employment of lower status flying aircraft other than Airbus A330 aircraft; (iii) Loss of employment; (iv) Loss or diminution of opportunities for promotion and career advancement.' · By para 32 it alleged that a reason for the respondent injuring, or threatening to injure, the airbus fleet pilots and for prejudicially altering their positions, or threatening to do so was that each of the pilots concerned was entitled to the benefit of enterprise bargaining agreements between the applicant and the respondent. · Paragraph 34 alleges that the proposed allocation of the four airbuses to Jetstar will cause loss and damage to the respondent's pilots who presently crew its 14 airbuses and pleads that 'the applicant will rely on, and seek compensation for, all such loss and damage whether suffered as at the date hereof or subsequently.' 10 It is alleged that, in these circumstances, the respondent has contravened s 298K of the Act: see para 32A.

THE RESPONDENT'S CASE 11 The respondent makes numerous complaints about the Statement of Claim. They may be summarised as follows: · The respondent complains that the applicant is seeking to rely on conduct of the respondent which occurred before 27 March 2006 so that it does not have to meet the 'sole or dominant reason' test now imposed by s 792(4) of the Act. In doing so, so the respondent contends, the applicant impermissibly separates conduct (constituted by the decision and the announcement of it) from the implementation of the proposed arrangements which was not to occur until after 27 March 2006. · The respondent complains that the Statement of Claim 'leaves out dates and details and seeks to operate at a high degree of generality' thereby contravening the requirements of O 11 of the Federal Court Rules. · The pleading of the communication of the decision to the pilots is said to lack precision and detail. · The announcement of an intention to do something in the future cannot, it is contended, constitute an 'injury' for the purposes of s 298K; nor could the pleaded communication constitute a 'threat' for the purposes of s 298K. · A loss of expectation cannot constitute an injury or an alteration to prejudice under s 298K. · A loss of opportunity cannot constitute an alteration to prejudice and, in any event, concern about the future actions of the respondent cannot constitute an alteration to prejudice. · The relief sought seeks to restrain or penalise future conduct which, if taken, would fall to be assessed for its efficacy under Part 16 of the Act rather than the old Part XA. · Specific objections are taken to paras 14-17, 19(b), 21-24, 25A and 25B-25E on the ground that they do not plead material facts. 12 The principal issues thus raised by the respondent are: · Whether on the facts as alleged the employees were injured in their employment or suffered a prejudicial alteration to their position as a result of the respondent's conduct. · Whether the announcement of an intention to do something in the future can constitute a prejudicial alteration for the purposes of s 298K. · Whether the employees whom it is alleged will be prejudiced by the respondent's conduct are able to be identified. · Whether, in order to establish injury or prejudicial alteration, the applicant is able to rely on conduct which has yet to occur and the effect of which (if any) on any particular employee is not and cannot be known. · Whether a breach of s 298K can be established when no conduct beyond the making of the relevant decision and its public announcement occurred before 27 March 2006. · Whether the announcement could amount to a 'threat'. There is a good deal of overlap between many of these issues.

THE CASE LAW 13 Section 298K(1) of the Act is one of a number of measures adopted by the legislature in order to protect the principle of freedom of association. It does so by enjoining employers from taking action (directly or indirectly) against employees because, inter alia, they have asserted or obtained benefits in their employment as a result of their participation in collective bargaining processes. The conduct proscribed by s 298K(1) is the performance by an employer of one of the acts listed in the various paragraphs of the sub section or the issuing of a threat to do so. Relevantly, the proscribed acts are the injury of an employee in his or her employment or the altering of the employee's position to his or her prejudice: see s 298K(1)(b) and (c). In Patrick Stevedores (No. 2) (1998) 195 CLR 1 at 18 the High Court made the following observations about the relevant paragraphs: 'Paragraph (a) covers termination of employment; par (b) covers injury of any compensable kind; par (c) is a broad additional category which covers not only legal injury but any adverse affection of, or deterioration in, the advantages enjoyed by the employee before the conduct in question'. 14 In Maritime Union of Australia v Geraldton Port Authority (1999) 93 FCR 34 at 69-71 Nicholson J reviewed the authorities which had dealt with the predecessors of s 298K(1)(b) and (c). He noted with apparent approval decisions in which it was held that the precursors of para (b) were narrower in their reach than those of para (c). In particular he referred to the dictum of Smithers J in Childs v Metropolitan Transport Trust (1981) IAS Current Review 946 at 948 that: 'I cannot help thinking that "injury" refers to deprivation of one of the more immediate practical incidents of his employment, such as loss of pay or reduction in rank.' Reference was also made to the decision of Evatt J in Blair v Australian Motor Industries Ltd (1982) 61 FLR 283 at 290-292 in which His Honour agreed with Smithers J in Childs and added (at 290) that: 'It is clear in my view that the words ['or alter his position to his prejudice'] were added to the section to overcome a situation in which an employer did something short of dismissing an employee but which was something which could be said to be harmful to him in his employment.' More recently, in Community and Public Sector Union v Telstra Corporation Ltd (2000) 99 IR 238 at 244 Finkelstein J said that: 'Injury is concerned with actual adverse effect, usually by the loss or alteration of a legal right, in the position of a employee, in his capacity as an employee.' 15 The concept of prejudicial alteration is, as the High Court held in Patrick Stevedores, apt to comprehend prejudice extending beyond legal injury. Examples of the prejudicial alteration of employee's positions which extend beyond legal injury include reneging by an employer on an assurance (Childs; Kimpton v Minister for Education of Victoria (1996) 65 ALR 317 at 319), corporate restructuring which reduces the solvency of the employer (Patrick Stevedores) and discriminatory allocation of less congenial shifts or rosters (Independent Education Union of Australia v Canonical Administrators (1998) 87 FCR 49 at 68.) 16 An employer's conduct may directly alter an employee's position to his or her prejudice as where a promise of promotion is withdrawn. Section 298K(1)(c) of the Act can also apply to conduct which has an indirect impact on employees such as the corporate restructuring effected in Patrick Stevedores. Not all decisions by employers which have an indirect or consequential impact on the position of employees will constitute prejudicial alteration. In Community and Public Sector Union v Telstra Corporation Ltd (2001) 107 FCR 93 at 100 the Full Court said: 'The question is whether … Telstra had altered the position of any of its employees to the employees prejudice within the meaning of s 298K(1)(c). In Patrick Stevedores at 18 the majority of the High Court held that the subsection "not only legal injury but any adverse affection of, or deterioration in, the advantages enjoyed by the employee before the conduct in question." The majority also observed (at 20) that the reorganisation of companies within the Patrick Group had resulted in the security of employer companies businesses being "extremely tenuous" with the "security of the employee's employment [being] consequentially altered to their prejudice." The reorganisation did not directly affect or alter any legal rights or obligations of the employees but it had left their future employment less secure. Although this issue was not in dispute, the majority appears to have had no difficulty in accepting reduced security of future employment as falling within s 298K(1)(c) because it brought about an adverse affection of, or a deterioration in, the advantages enjoyed by the employees before the reorganisation.' 17 Where the alteration of position is alleged to be indirect or consequential, as in Patrick Stevedores and in the present case, it will often be more difficult to determine whether a prejudicial alteration of position has in fact occurred. Questions of degree will arise. It is sufficient for present purposes to say that if the prejudicial alteration is real and substantial, rather than merely possible or hypothetical, it will be covered by s 298K(1)(c). In Telstra the union had complained that the company had contravened s 298K(1)(c) when a senior executive had sent an e-mail which was construed as instructing managers that, in choosing employees who were involuntarily to be made redundant, preference should be given to those employees who were covered by awards or certified agreements, rather than those who had signed individual agreements. The Full Court found that the issuing of this instruction altered the position of employees in a real and substantial way. The Court said (at 100-101) that: 'Before the sending of the email Telstra's employees employed under awards and certified agreements enjoyed the benefit of being subject to redundancy only in accordance with the process which rated their eligibility for redundancy on the basis of merit, which was to be determined by application of the five principal criteria stipulated for the resource rebalancing process. There was an adverse affection of, or deterioration in, that benefit after the sending of the email as a result of the additional detrimental criterion applicable to employees employed under awards or certified agreements. The detrimental criterion was real and substantial for the employees whom it affected. Thus, while the refined or amended criterion had not been acted upon, and therefore may not have caused any injury to an employee, the employment of the employees on awards or certified agreements had become less secure in a real and substantial manner, than it had been previously. In those circumstances the position of the relevant employees had been altered to their prejudice within the meaning of s 298K(1)(c). It follows that while we consider that the primary judge was correct in concluding that, as the e-mail had not been acted upon, it did not injure any employee, we do not agree with His Honour's conclusion that the email had not altered the position of any of the employees to their prejudice.' 18 The decision in Telstra can usefully be contrasted with that of another Full Court in BHP Iron Ore Pty Ltd v Australian Workers' Union (2000) 102 FCR 97. In that case the employer had determined to give all award employees the option of entering into individual agreements. If they did not do so their future wages and conditions were to be determined by collective bargaining. The Court held that s 298K(1)(c) had not been contravened. It said (at 109) that: 'In the present case, the only undisputed intentional act of BHP IO has been to offer to each employee improved remuneration and conditions to be embodied in an individual Workplace Agreement. That, of itself, did not change, in either absolute or relative terms, the remuneration or any of the conditions of employment of the employee to whom the offer was made. A change in absolute terms only occurred upon acceptance of the offer and the consequent coming into existence of new contract of employment. It is true that, after some offers have been accepted by individual employees, a change can be discerned in the remuneration and conditions of employment of those employees, viewed in relation to the remuneration and conditions of employment of those employees who have not accepted the offer. However, the position of each of the latter employees has not been changed to his or her detriment by an intentional act of the employer. The relative change which we have just identified is brought about by the acceptance of some employees and the rejection by others, of an offer made indiscriminately to all employees.' The Court also emphasised the need for a comparison to be made between the position of employees before the impugned conduct and their position thereafter in order to determine whether their position had been altered to their detriment. In this regard it said (at 112) that: 'It is apprehended by the applicants that employees who elect not to sign individual workplace agreements will, in the future, be excluded from consideration for promotions or changes of shifts to which they are as well qualified by experience or training as employees who have accepted the offer. On the evidence, this has not happened and, until it does, it is not open to find that BHP IO had injured in their employment, or has altered to their prejudice the position of those employees who remain regulated by the award. It is also true that a continuing award employee who receives a promotion or some other beneficial change in his or employment may not achieve the same increase of remuneration as a similar employee on an individual workplace agreement. However, for the reasons outlined above, that will be a consequence of an election between different contractual regimes for the regulation of employment of the two groups of employees. It will not have been brought about by the active, intentional conduct of the employer which is struck att by s 298K." 19 One of the issues raised by the respondent in its strike out application is the extent to which it is necessary to identify the employee or employees whom it is alleged will suffer injury or have their position altered to their detriment by the employer's conduct. In dealing with this issue in BHP Iron Ore the Full Court observed (at 108) that: 'It has to be borne in mind in construing s 298K, that it proscribes conduct by "an employer" directed to "an employee" or "other person" …. That use of the singular suggests that the alleged injury or alteration of position has to be examined in the light of the circumstances of each individual employee. (It is not to the point that in the interpretation of statues, the singular ordinarily includes the plural; here we are concerned with the indications of legislative intention to be discerned from the actual language used.) It is also significant that the conduct struck out by each paragraph of s 298K is expressed by an active verb: "dismissed", "injure", "alter the position", "refuse to employ", and "discriminate". That implies that the proscription is essentially against an intentional act of the employer directed to an individual employee or prospective employee.' In Telstra, the company argued that it had not contravened s 298K(1)(c) of the Act because the e-mailed instruction was not directed against any particular employee or employees. The Full Court rejected this argument holding that it was sufficient that the relevant employees were ascertainable. The Court said (at 101) that: 'Telstra also relied on the observation by a Full Court of this Court in BHP Iron Ore … that the proscription in s 298K(1) "is essentially against an intentional act of the employer directed to an individual employee or prospective employee". Telstra contended that the email was not an intentional act directed at any individual employee. However, the observation of the Full Court also holds true where the act is intentionally directed at a number of identified employees. The email and its terms discriminated against each employee of Telstra who was employed under an award or a certified agreement. Accordingly, liability arises where the conduct is directed at a number of ascertainable employees as well as against a particular employee.' 20 A further issue which arises on the case as pleaded by the applicant is whether the announcement of the decision constituted a threat for the purposes of s 298K(1) of the Act. At first instance in Community and Public Sector Union v Telstra Corporation Ltd (2000) 99 IR 238 Finkelstein J dismissed the union's contention that the announcement of downsizing, with preference to be given, in the case of involuntary redundancies, to employees engaged under individual agreements, constituted a threat to those employees. His Honour was prepared to accept that the e-mail, about which complaint was made, could be construed as an announcement of proscribed action at some time in the future. Nonetheless he rejected the contention that it could constitute a threat. He said (at 243-4): 'To succeed it is necessary for the applicant to show that there has in fact been an injury to, or an alteration in the position of, employees engaged under awards or certified agreements or that there has been a threat to that effect. I can immediately dispose of the allegation that there has been a relevant threat. In the context of this legislation, there will not be a threat of proscribed conduct unless the employer communicates to his employee that proscribed action will be taken. One meaning of the word "threatened" is to menace or warn beforehand of an intention to inflict harm. That is the meaning that should be given to the word in s 298K. … It is the meaning that accords with one of the objects of s 298K which is to prevent employers bullying employees by reason of matters connected with their terms and conditions of employment or the performance of their work." Before His Honour's order dismissing the proceeding had been passed and entered, the applicant requested that he recall the order and hear further argument of the proper construction of the word 'threaten'. His Honour refused to recall the order. He said that: 'In my reasons for decision I said that one of the objects of s 298K was to prevent employers bullying employees by reason of matters connected with their terms and conditions of employment. I had in mind that the word "threaten" should be taken to mean a communicated intent to inflict harm. I accept that the communication need not be directly to the person threatened but could be just as effectively made if it is communicated to a person in circumstances where it is intended to or is likely to find its way to the person threatened. I was then and still am of the view that it is the essence of a threat that it is made for the purpose of intimidating a person ... I did not then, and I do not now, believe that there can be a relevant threat whenever an employer states an intention to contravene s 298K, regardless of the circumstances. Take but one example. Assume that a director of a "one man company" tells his secretary that he intends to take action against the company's employees for a prohibited reason, intending the communication to remain secret between them. Is that a threat? I do not believe that it is.' See Community and Public Sector Union v Telstra Corporation Ltd (2000) 101 FCR 45 at 48-49. Finkelstein J's decision was followed by Weinberg J in National Union of Workers v Quenos Pty Ltd (2001) 108 FCR 90. In that case an employer announced plant closures and advised the union that a 'spill and fill' process, under which employees would have to reapply for their positions, would be followed when selecting those employees who would be retrenched. Weinberg J rejected the submission that this announcement constituted a threat. His Honour said (at 118) that: 'There are other legal difficulties associated with this claim. I am not persuaded that the contravening conduct alleged is capable of being characterised as a "threat" of dismissal. All that had occurred when the applicant instituted this proceeding was that the respondent had communicated to its employees that there would be a spill and fill, and that [certain] employees would be included. To adopt the language of Finkelstein J in Community and Public Sector Union v Telstra Corporation Ltd such conduct is hardly a warning "of an intention to inflict harm". The mere indication that a selection process would be followed, without more, seems to me to fall well short of a threat, still less a threat which is directed to an individual employee.' When dismissing the applications before them both Finkelstein and Weinberg JJ relied, in part, on the fact that the direction to managers and the announcement of downsizing with redundancies respectively did not involve action directed by an employer to an individual employee or prospective employee. In doing so they regarded themselves as bound by what the Full Court in BHP Iron Ore had said in the passage quoted at [19] above. On appeal from Finkelstein J, another Full Court adopted the wider 'ascertainable employees' construction of s 298K of the Act. For this reason that Full Court upheld the union's contention that the position of relevant employees had been altered to their prejudice under s 298K(1)(c) of the Act. The union's second ground of appeal was that Finkelstein J had erred in his construction of the word 'threaten'. Apart from acknowledging that this ground had been raised, the Full Court said nothing more about it. Accordingly the construction placed upon this word by Finkelstein and Weinberg JJ remains undisturbed. 21 In Geraldton Port Authority the union alleged that the announcement of the prospect of redeployment of employees as a consequence of a business restructuring constituted a threat for the purposes of s 298K(1) of the Act. In dealing with this contention Nicholson J said (at 78): 'In my opinion it follows that the prospect of redeployment cannot in itself necessarily constitute a threat to injure or a threat to alter the position of employee to the prejudice of that employee. Until the facts of the redeployment fall out it is not known whether they will be injurious or prejudicial. It remains open …that redeployment could take place either without injury or prejudice or with enhancement. The second applicants cannot therefore now establish a threat to injure in employment or a threat to alter their position in this respect. … In the circumstances of this matter s298K(1)(b) cannot operate in respect of a threat to redeploy and would only operate where there was evidence arising from a particular proposed redeployment. Even then, the fact that provision for redeployment formed part of the conditions of employment would require close consideration.' (Emphasis added) 22 The respondent's application also raises the question of when a cause of action under s 298K crystallises. Contravention of s 298K(1) occurs 'once and for all' at the time at which the proscribed conduct occurs for a proscribed reason and the conduct injures or prejudicially changes the position of the employee: cf Roberts v General Motors Holden's Employees Canteen Society Inc (1975) 25 FLR 415 at 418.

SUMMARY DISMISSAL AND STRIKING OUT PLEADINGS 23 The respondent relies upon the provisions of s 31A of the Federal Court of Australia Act 1976 (Cth) and Order 20 of the Federal Court Rules. Section 31A of the Federal Court of Australia Act 1976 (Cth) relevantly provides that : '(2) The Court may give judgment for one party against another in relation to the whole or any part of a proceeding if: (a) the first party is defending the proceeding or that part of the proceeding; (b) the Court is satisfied that the other party has no reasonable prospect of successfully prosecuting the proceeding or that part of the proceeding. (3) For the purposes of this section, a defence or a proceeding or part of a proceeding need not be: (a) hopeless; (b) bound to fail; for it to have no reasonable prospect of success. (4) This section does not limit any powers that the Court has apart from this section.' Order 20 r 2(1)(a) provides for the staying of dismissal proceedings or claims made in a proceeding where no reasonable cause of action is disclosed. Order 11 r 16 provides for the striking out of a pleading or any part thereof on the same ground. In dealing with summary termination and strike out applications the Court must assume that the applicant will be able, at trial, to establish its pleaded case and must treat the allegations made in the best light for the applicant. As was pointed out by Heerey J in Duncan v Lipscombe Child Care Services (2006) 150 IR 471 at 473, s 31A was designed 'to establish a lower standard for strike outs …' than that imposed in cases such as Dey v Victorian Railways Commissioners (1949) 78 CLR 62 at 91-2 and General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 at 130, namely, that allegations had to be 'so clearly untenable that [they] cannot possibly succeed.' In Boston Commercial Services Pty Ltd v G E Capital Finance Australasia Pty Ltd [2006] FCA 1352 at [31] to [48] Rares J concluded that, even though the barrier had been somewhat lowered by the introduction of s 31A, it nonetheless constituted a difficult obstacle for a respondent to surmount. His Honour said (at [45]) that: 'I am of opinion that in assessing what reasonable prospects of success are for the purposes of s 31A, the Court must be very cautious not to do a party an injustice by dismissing the proceedings where, in accordance with the principles in Hocking v Bell (1947) 75 CLR 125 contested evidence might reasonably be believed one way or the other so as to enable one side or the other to succeed. As soon as the evidence may have such an ambivalent character prior to a final determination, I am of opinion that then, as a matter of law, at that point there are reasonable prospects of success within the meaning of s 31A. Unless only one conclusion can be said to be reasonable, the moving party will not have discharged its onus to enliven the discretion to authorise a summary termination of the proceeding which s 31A envisages.' I respectfully agree with His Honour and will act consistently with the principles which he enunciates in dealing with this application.

CONSIDERATION 24 The applicant's pleaded case is founded on s 298K(1) of the Act. It is alleged that the respondent engaged in conduct proscribed by paras (b) and/or (c). Alternatively it is alleged that the respondent threatened to perform the proscribed acts. The applicant bases its case on the 'a reason' standard which ceased to apply on 27 March 2006 and the only contravention alleged against the respondent is a contravention of s 298K(1). In order to make good its cause of action it must establish that the respondent, in February 2006, in announcing the decision referred to in para 19A of the Statement of Claim, injured or prejudicially changed the position of particular employees (or threatened to do either or both of these things), a reason for the decision being that those employees were entitled to the benefits conferred on them by the collective agreements to which the applicant was a party. 25 The respondent calls into question the ability of the applicant to establish precisely which pilots were prejudiced by the respondent's decision. The terms of the decision only permit the applicant to assert that, up to 24 of the domestic airbus pilots employed by the respondent in February 2006 might prejudicially be affected if and when the decision is implemented. It is not possible for them to identify any particular pilot whose employment will be or may be prejudiced by the implementation of the decision. It is, however, possible, having regard to the decision of the Full Court in Community and Public Sector Union v Telstra Corporation Ltd (2001) 107 FCR 93, that the applicant might be able to establish, at a trial, that the airbus pilots employed by the respondent in February 2006 and any prospective airbus pilots constituted an ascertainable group which had the potential to be affected (as to some or all of its members) should the respondent act in a proscribed manner in implementing the decision. Were this the only substantial objection to the applicant's pleaded case there would be no obstacle to the proceeding going to trial. There, are however, other difficulties. 26 The first difficulty which confronts the applicant is that, in February 2006, the respondent did no more than announce an intention to provide four airbuses to Jetstar at times prior to March 2007 so that Jetstar could commence international operations and that those aircraft would not be crewed by the respondent's employees, who in February 2006, flew them on domestic routes. No contemporaneous action to implement the announced decision was taken. Counsel have not directed my attention to, nor have I found, any authority which supports the proposition that a mere announcement of an intention to act in a particular way at some time in the future can constitute conduct of the kind to which s 298K(1) is directed. Each of the cases to which my attention was directed, in which a contravention of the section was found, involved the making of a decision by an employer which was immediately operative even though the consequences of the decision may not have had an immediate effect on particular employees. In Patrick Stevedores the relevant conduct was the reorganisation of the corporate group which left the future employment of the employees less secure. In CFMEU v Coal and Allied Operations Pty Ltd (1999) 47 AILR 4‑200 the employer issued warnings to employees under its disciplinary code which were held to render continuing employment less secure. In Maritime Union of Australia v Geraldton Port Authority (1999) 93 FCR 34 the employer engaged in a business restructuring under which it ceased to provide stevedoring labour to port users. Employees were offered voluntary redundancies and some employees lost irregular shift work and the opportunity to earn overtime. In BHP Iron Ore Pty Ltd v Australian Workers' Union (2000) 102 FCR 97 the employer had determined to give award employees the option of entering into individual agreements. If they did not do so their future wages and conditions were to be determined by collective bargaining. The making of this offer was, in any event, held not to be conduct caught by s 298K(1) of the Act because any change to employment conditions would only occur after an employee had opted to enter into or refused to enter into an individual agreement. Even then, until the collective bargaining processes were concluded, it would not be possible to determine whether their employment would be prejudiced in any way. In CPSU v Telstra Corporation (2001) 107 FCR 93 the company's human resources manager had sent an e-mail instructing managers that, in choosing employees who were involuntarily to be made redundant, preference should be given to those employees who were covered by awards or certified agreements rather than those who had signed Australian Workplace Agreements. In Finance Sector Union of Australia v Commonwealth Bank of Australia (2005) 146 IR 37 the employer determined that, henceforth, all employees working in one of its business units should be employees of one of its subsidiary companies and that that subsidiary company would only engage employees on individual contracts which provided for a reduction in financial and legal benefits. In that case Merkel J (at 67) stressed that 'the prejudicial alteration came about because it was integral to the making and implementation of the decision.' (Emphasis added). In all of these cases (save BHP Iron Ore), the employer had not only announced proposed action but had acted in one or more of the proscribed ways. The approach to the construction of s 298K which is evident in these cases is explicable in part by reference to the language of the section. The various paragraphs in s 298K(1) which identify proscribed conduct speak in the active voice ('dismiss', 'injure', 'alter the position', etc). The employer must do something to prejudice an employee not merely foreshadow some future action which might or might not prove to be prejudicial. 27 Another reason why mere announcements of intended action are not comprehended by s 298K(1) is that there always exists the possibility that, for commercial, industrial or other reasons, a statement of intended action may never be acted on or might only be implemented in some modified form. Unless and until the decision is implemented no injury or alteration to prejudice to the position of employees will have occurred: cf BHP Iron Ore Pty Ltd v Australian Workers Union (2000) 102 FCR 97 at 108. The change may prove beneficial. Any detriment giving rise to injury will only become identifiable when it is possible to make a comparison between the position of ascertainable employees in February 2006 and the position they will be in following the implementation of the decision: cf BHP Iron Ore Pty Ltd v Australian Workers' Union (2000) 102 FCR 97 at 112; Financial Sector Union of australia v Commonwealth Bank of Australia (2005) 146 IR 37 at 56; Maritime Union of Australia v Geraldton Port Authority (1999) 93 FCR 45 at 78. The February newsletter makes it clear that no decisions had by then been made as to what, if any, changes to the employment arrangements of the pilots would occur when the decision to transfer the airbuses to Jetstar was implemented. The tenor of the article suggests that the respondent was confident that redundancies could be avoided as a result of redeployment opportunities, retirements and other developments. For present purposes it is notable that the respondent had not made any operative decision that had a detrimental or potentially detrimental effect on its airbus pilots. If and when the aircraft transfers commenced in October 2006 the possibility of adverse consequences for some pilots might materialise but that would be the result of decisions as yet unmade. 28 The applicant faces further difficulty. It can point to no injury suffered by any of the airbus pilots in February 2006. The decision which was announced at that time did not in any way deprive any of the airbus pilots of any of the immediate practical incidents of his or her employment. There was, to use the words of Finkelstein J in Telstra, 'no actual adverse effect'. In the absence of an operative decision and conduct to implement it there could be no injury within the meaning of s 298K(1)(b): Telstra at 101. 29 The alleged decision of the respondent did not have any direct impact on any particular employee. At best for the applicant it could be said (as indeed it is in the Statement of Claim) that, by March 2007, there would be four less airbuses being flown by the respondent on domestic routes and that this would reduce available flying time and remuneration to some pilots employed by the respondent at the time at which the change occurred. It was not possible to identify specific pilots who might be affected by the change although it could be said that some or all of the airbus pilots employed by the respondent in February 2006, might, potentially, have been affected. Whether or not that would prove to be the case would be dependant on a range of contingencies which might arise in the period between February 2006 and the implementation of the decision, assuming that it were to be implemented. For example, in the intervening period, some pilots might retire or resign, or be retrained as A380 pilots. Even if it be assumed that the implementation of the decision would mean that 24 of the pilots employed in February 2006 would no longer be required, the impact on them and the other airbus pilots at that time would depend on a range of variables including whether redundancies were then offered, whether or not redeployment without loss of pay and conditions was available, whether some or all of the pilots were to be offered reduced flying hours, and so on. The position in February 2006 was, therefore, that the airbus pilots were aware of the decision but could only speculate about the impact (if any) which the decision might have on them. 30 As has already been noted, the Full Court in CPSU v Telstra Corporation (2000) 101 FCR 45 held that, in cases in which the conduct of employers is alleged to prejudice the position of employees in indirect or consequential ways as, for example, in the case of corporate restructuring, the employer will only contravene s 298K(1)(c) of the Act if the prejudicial alteration is real and substantial as distinct from merely possible or hypothetical. A fortiori, where an employer does no more than announce an intention to act in a particular way at sometime in the future and the consequences of that action are necessarily dependent on future decisions, it is hard, if not impossible to characterise the employer's conduct as having 'a real and substantial' affect on any particular employees or group of employees. The Statement of Claim contains no allegation of conduct by the respondent which could have constituted a contravention of s 298K(1)(c) in February 2006. 31 There remains the question of whether the respondent threatened action of the kind proscribed by s 298K(1)(b) or (c). The decision communicated to the airbus pilots in February 2006 was that the respondent would provide Jetstar with four airbuses at some time before the early months of 2007 and that those aircraft, when transferred to Jetstar, would not be crewed by the respondent's employees. Without more, this announcement, in my opinion, could not amount to a warning that the respondent was proposing to inflict harm on its airbus pilots. The announcement was equally consistent with an assertion by the respondent that the pilots were valued and needed to maintain domestic services. Even if it be assumed, in the applicant's favour, that in February 2006, the respondent had announced that it would not transfer domestic pilots to Jetstar to fly on international routes because the transferred pilots would enjoy terms and conditions of employment which were more beneficial when compared with those negotiated with Jetstar pilots, the announcement of that decision to its airbus pilots would not amount to a threat of the kind comprehended by s 298K(1) of the Act. It was in no sense a warning of future harm to them. It did no more than advise them that they would not be deployed on international flights on Jetstar aircraft. It said nothing about their continued employment with the respondent or about any reduction in the terms and conditions of employment enjoyed by them. For reasons already given any detriment to the pilots at the time at which the aircraft transfer occurred would be derivative in nature and dependent upon future decision-making. No conduct which is capable of constituting a threat within the meaning of s 298K(1) is alleged by the applicant. 32 It follows, in my opinion, that no conduct of the type proscribed by s 298K(1)(b) or (c) occurred prior to 27 March 2006. That being so no cause of action arose under that section before that critical date. 33 Having regard to the view which I have formed about the fundamental deficiencies in the applicant's pleaded case it is not necessary for me to deal with the additional objections raised by the respondent.

DISPOSITION 34 For these reasons I am satisfied that the applicant has no reasonable prospect of successfully prosecuting the proceeding as presently pleaded. Although this finding would justify the dismissal of the proceeding I am mindful that this is the first occasion on which these pleadings have been subjected to curial scrutiny and that I have not heard submissions from the applicant on whether it may wish to have the opportunity to replead. The preferable course, at this stage, is to order that the Statement of Claim be struck out. I doubt very much that the applicant can amend its Statement of Claim to advance a case under the former s 298K conformably with these reasons. However, I am prepared to grant leave to the applicant, should it be so advised, to file and serve a further amended Statement of Claim on or before 30 November 2006. I will list the proceeding for mention on 15 December 2006. 35 My decision does not, of course, preclude the bringing of a claim under s 792 of the Act when and if decisions are taken by the respondent which prejudicially affect any of its airbus pilots as the respondent proceeds (if it does) to implement its proposed transfer of aircraft to Jetstar. I certify that the preceding thirty-five (35) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice TRACEY.

Associate: Dated: 6 November 2006 Counsel for the Applicant: Mr M Bromberg SC and Mr C Dowling

Counsel for the Respondent: Mr F Parry SC and Mr R Dalton