Australian Collieries' Staff Association v BHP Coal Pty Ltd

REASONS FOR JUDGMENT 1 By an amended application filed on 22 July 1998, the Australian Collieries' Staff Association ("the ACSA") sought declarations and orders against BHP Coal Pty Ltd ("BHPC"), in respect of contraventions of s 298K of the Workplace Relations Act 1966 ("the Act") which the ACSA alleges the respondent has committed. 2 In the amended application, the applicant claimed: "1. A declaration that the respondent has contravened section 298K of the Workplace Relations Act ("the Act") in that the respondent has threatened to dismiss employees of the respondent who are members of the applicant who are listed in Annexure "A" ("the said employees") and/or to injure the said employees in their employment and/or to alter the position of the said employees to their prejudice for the reason, or for reasons that include the reasons, that the said employees have refused and/or failed to agree and/or consent to and/or vote in favour of the making of an agreement to which the applicant, being an industrial association of which the said employees are members, would be a party. 2. A declaration that the respondent has contravened section 298K of the Act in that the respondent has threatened to dismiss the said employees and/or to injure the said employees in their employment and/or to alter the position of the said employees to their prejudice for the reason, or for reasons that include the reason that the said employees are entitled to the benefit of an industrial instrument. 3. Orders that penalties be imposed on the respondent pursuant to section 298U of the Act as a result of the contraventions of section 298K of the Act by the respondent. 4. An order that the respondent by itself, its servants or agents, refrain from contravening or continuing to contravene section 298K of the Act by: (i) Compulsorily retrenching the said employees, or (ii) Having persons other than the said employees perform duties normally performed by the said employees or by taking any steps to have persons other than the said employees to perform duties normally performed by the said employees, or (iii) Reducing the salaries of the said employees, or (iv) Requiring the said employees to exhaust all annual leave and long service leave entitlements." 3 The first claim for a declaration is based on ss 298K(1)(a), (b), (c), and s 298L(1)(e); the second declaration sought is based on the combination of ss 298K(a), (b), (c), and s 298L(1)(h); both depend, it is submitted, on s 298L(2). The application for penalties is based on s 298U(a) and the order seeking injunctions is based on s 298U(d) and (e). 4 Section 412 of the Act confers jurisdiction on a Federal Court in respect of the amended application. Part XA of the Act is headed "FREEDOM OF ASSOCIATION". Section 298A provides: "As well as the objects set out in section 3, this Part has these objects: (a) to ensure that employers, employees and independent contractors are free to join industrial associations of their choice or not to join industrial associations; and (b) to ensure that employers, employees and independent contractors are not discriminated against or victimised because they are, or are not, members or officers of industrial associations." 5 Section 298K(1) provides: "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) dismiss an employee; (b) injure an employee in his or her employment; (c) alter the position of an employee to the employee's prejudice; …" 6 Section 298L(1) relevantly provides: "Conduct referred to in subsection 298K(1) or (2) is for a prohibited reasonif it is carried out because the employee, independent contractor or other persons concerned: … (e) in the case of an employee - has refused or failed to agree or consent to, or vote in favour of, the making of an agreement to which an industrial association of which the employee is a member would be a party; or … (h) is entitled to the benefit of an industrial instrument or an order of an industrial body." 7 Section 298L(2) provides: "If: (a) a threat is made to engage in conduct referred to in subsection 298K(1) or (2); and (b) one of the prohibited reasons in subsection (1) of this section refers to a person doing or proposing to do a particular act, or not doing or proposing not to do a particular act; and (c) the threat is made with the intent of dissuading or preventing the person from doing the act, or coercing the person to do the act, as the case requires; the threat is taken to have been made for that prohibited reason." 8 The proper interpretation of this subsection has a very real bearing on this case. In the view I take of the subsection, the middle, and one of the essential, elements of the subsection is prospective. That is, the threat has to be made with an intention to dissuade or prevent or coerce, with the consequence that it can only apply where the relevant act in (b) and (c) (which I take to be the same act) is one to be done in the future. The act to which s 298L(2) refers is one that a person is proposing to do or proposing not to do. It does not relate to a refusal or failure which, of their essence, constitute past conduct. 9 Section 298U provides: "In respect of conduct in contravention of this Part, the Court may, if the Court considers it appropriate in all the circumstances of the case, make one or more of the following orders: (a) an order imposing on a person or industrial association whose conduct contravened or is contravening the provision in question a penalty of not more than: (i) in the case of a body corporate - $10,000; … (d) an order requiring the person or industrial association not to carry out a threat made by the person or association, or not to make any further threat; (e) injunctions (including interim injunctions), and any other orders, that the Court thinks necessary to stop the conduct or remedy its effects; …" 10 Section 298V provides: "If: (a) in an application under this Division relating to a person's…conduct, it is alleged that the conduct was, or is being, carried out for a particular reason or with a particular intent; … it is presumed, in proceedings under this Division arising from the application, that the conduct was, or is being, carried out for that reasons and with that intent, unless the person…proves otherwise." 11 In Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia [No 3] (1998) 72 ALJR 873, Brennan CJ, McHugh, Gummow, Kirby and Hayne JJ noted at para 4 of their Reasons: "A contravention of s 298K(1) is not an offence but the Federal Court of Australia is given a wide jurisdiction to make orders in respect of contravening conduct." 12 Their Honours said, at para 25: "…jurisdiction is conferred upon the Federal Court with respect to a matter which arises under the Act in relation to which an application for orders under s 298U may be made to it. The applications which may be made to the Court under s 298T and the orders, which may be made by the Court under s 298U, are defined in the same terms, namely, 'in respect of conduct in contravention of this Part'. … If the relief sought is an order of the kind prescribed in the lettered paragraphs of s 298U and if the basis of the relief is alleged conduct in contravention of Pt XA of the Act, the jurisdiction of the Court is effectively invoked." 13 Later their Honours said: "In so far as the power of the Court under s 298U(e) is to make an order necessary to remedy the effects of contravening conduct, counsel for the appellants may well be correct in submitting that the power conferred by s 298U(e) is exercisable only when those effects have been found to exist. That is the condition upon the power to make a final order." 14 And at para 30: "The orders which the Federal Court is authorised to make under s 298U(e) include an order to 'remedy' the effects of conduct in contravention of Pt XA." 15 As to the operation of s 298V regarding onus, North J noted in National Union of Workers v Davids Distribution Pty Ltd [1998] 1530 FCA: "Once the Union alleged that Davids acted for the prohibited reason, a presumption was raised by operation of s 298V that Davids did act for that reason unless Davids proved otherwise." 16 The standard of proof is the Briggenshaw Civil Standard. 17 In retrospect, I should have acceded to the request of BHPC that the ACSA provide particulars. 18 See also Heidt v Chrysler Australia Ltd (1975) 26 FLR 257 at 268, where North J said: "The provisions of s 5(4) of the Act [a provision analogous to s 298V of the Act] cast an onus of disproving facts, namely, that the reason for the defendant's action was not actuated by the reason alleged in the charge. It has been held that a defendant need not prove the reason why he dismissed an employee [citation omitted]. The mere proof of a reason for dismissal, other than the reason alleged in the charge, does not necessarily negate the reason alleged in the charge. A mere denial of the reason alleged in the charge may not be sufficient to satisfy the onus cast upon the defendant. All the facts and circumstances leading up to the dismissal must be considered, including any reason expressed at the time of the dismissal, as well as any denial of the reason alleged in the charge." 19 These proceedings arise out of an agreement, to which the applicant ACSA and BHPC are parties, known as the BHP Coal Pty Ltd Salary Staff Agreement 1966 ("the Agreement") and certified by the Australian Industrial Relations Commission ("the AIRC") on 13 December 1966. Both the ASCA and BHPC are parties to and bound by the Coal Mining Industry (Supervision and Administration) Interim Consent Award 1990 Queensland (the Federal Award) being an award made under the Industrial Relations Act 1988, which is applicable to all employees of BHPC who are members of ASCA. 20 The Agreement was to remain in force until 12 December 1999. Clause 13 is headed "Employment Security". "13.1 There shall be no forced retrenchments of salaried staff during the life of this Agreement. However, the parties understand that there will be changes to the Company's coal operations to which this Agreement applies, and changes to the way in which work is carried out during its term. 13.2 Where necessary the Company will consider intermine transfers to balance excess/shortages in salaried staff levels between mines. Such transfers shall be made in accordance with Company policy relating to transfers and relocations of staff. 13.3 Where is required to reduce salaried staff levels, this will be done by natural attrition, ie non replacement of terminations. 13.4 In addition to natural attrition, the Company may offer a voluntary redundancy program on a Company or individual mine basis as a means of reducing total staff levels." 21 Clause 17 provided for the "Duration of the Agreement", as follows: "17.1 Agreement shall come into effect as from 13 December 1996 and shall remain in force for 3 years 17.2 The parties may agree to extend the term of this Agreement. 17.3 The parties to this Agreement shall meet to discuss whether or not a further agreement is appropriate. 17.4 Should this Agreement terminate on its expiry date, the parties shall continue to apply its terms and conditions until a new Agreement is negotiated and registered. 17.5 Notwithstanding the provisions of this clause the Parties shall by 30 June 1997 develop a single concise instrument which incorporates all conditions of employment covered by this Agreement and the Award. 17.6 The parties understand that whilst the process referred to in 17.5 takes place the Award as it may be varied from time to time and agreements that are in effect at the time of certification of this Agreement shall continue to apply. Should any circumstance arise which impacts on this commitment during the term of this agreement such as legislative change the parties shall immediately confer and decide upon the most appropriate lawful course of action to ensure that their intentions in this regard are maintained." 22 Pursuant to Clause 17.5 of the Agreement, the parties negotiated for a replacement Agreement during 1997. The negotiations continued, on and off, until a Final Draft Replacement Agreement was endorsed by the Negotiation Committee of the applicant on 16 September 1997. On 5 November 1997 BHPC advised ACSA that, due to a change in upper management personnel, the proposed Replacement Agreement had been put "on hold" and, in particular, BHPC advised that it had a concern with the security of employment guarantee contained in Clause 13.1 of the Agreement. There were meetings on 8 and 23 December 1997 regarding this and other matters. 23 Prior to the certification of the Agreement by the AIRC, the parties had tendered an explanatory Memorandum which included the following, in relation to the duration of the Agreement: "The parties have committed themselves to developing a single agreement that combines the Award and this Agreement. The intention is to review the award as it currently stands. BHP Coal Pty Ltd does not intend to rely on new legislation to simply remove conditions where they remain legal. BHP Coal Pty Ltd will seek to review and reach agreement with the ACSA as to the appropriateness of the existing Award to its operations. The parties do not expect the process to necessarily be the adoption of all existing clauses in their entirety. A proper review will occur of existing conditions and their applicability in light of the Agreement, the needs of the Parties and ACSA members." 24 By letter of 29 December 1997, Ms Julia Fellows, then General Manager in Human Resources for BHPC, forwarded to ACSA "a list of the items that we would like to negotiate further for incorporation into our proposed EBA". In relation to job security, it proposed, amongst other things: "13.3 Where it is necessary to reduce salaried staff levels, it will in the first instance be done by natural attrition or the Company may offer a voluntary redundancy program on a Company or individual mine basis as a means of reducing total staff levels. 13.4 Where the methods set out in 13.3 fail to reduce salaried staff levels within a reasonable period the Company may, following consultation with the parties to this agreement, institute a program of compulsory retrenchments." 25 The statements at the core of these proceedings fall into two categories: the first of which might be neutrally described as statements concerning breaching the of "Employment Security" guarantee (Cl 13.1) in the certified Agreement; and the second of which can be described as statements concerning the "padded cell" option. 26 The Statement of Claim by the ACSA claims, in essence, that BHPC had been seeking a Replacement Agreement which would permit forced retrenchments, while the ACSA has been seeking that the present provision of the Agreement prohibiting forced retrenchments be retained. 27 The Statement of Claim pleads, inter alia: "… 8. The Applicant has been negotiating on behalf of the said employees with the Respondent for a replacement agreement to which the Applicant would be a party since 20 June 1997. The Applicant and the Respondent have failed to reach agreement. … 10. The said employees have voted with other members of the Applicant employed by the Respondent at the mines against an agreement that does not retain the present provision of the Agreement prohibiting forced retrenchments. As a result the Applicant has refused to enter into an agreement on behalf of its members, including the said employees, that does not retain the present provision of the Agreement prohibiting forced retrenchments. 11. The Respondent through its servants and agents has threatened to: (i) compulsorily retrench the said employees; and/or (ii) have persons other than the said employees perform duties normally performed by the said employees; and/or (iii) reduce the salaries of the said employees; and/or (iv) require the said employees to exhaust all annual leave and long service leave entitlements. 12. The action or conduct of the Respondent set out in paragraph 11 constitutes threats to dismiss the said employees and/or to injure the said employees in their employment and/or to alter the position of the said employees to their prejudice. 13. The reason, or one of the reasons, for the action or conduct of the Respondent set out in paragraph 11 is that the said employees have refused and/or failed to agree and/or consent to and/or vote in favour of the making of a replacement agreement to which the Applicant, being an industrial association of which the said employees are members, would be a party. 14. The reason, or one of the reasons, for the action or conduct of the respondent set out in paragraph 11 is that the said employees are entitled to the benefit of the Award and the Agreement, particularly prohibiting compulsory retrenchments. …." 28 It is important to note that the complaint made by the ACSA in paragraph 13 is that BHPC engaged in the threats alleged in paragraph 11 because, or in part because, the employees have refused and/or failed to agree and/or consent to and/or vote in favour of the making of a replacement agreement. Paragraph 13 picks up and alleges the past tense of s 298L(1)(e) of the Act. 29 It is also important to note that paragraph 14 pleads that the threats alleged in paragraph 11 were made because, or partly because, the employees are entitled to the benefit of the "Employment Security" guarantee in the Agreement. 30 The case for ACSA is that the threats the subject of the proceedings were made at the meetings on 4 and 10 March 1998 and 3 April 1998 to officers of ACSA, and by officers of BHPC (including Mr Greg Gerard, the Manager Employee Relations of BHPC) at meetings of staff employees at the seven open cut mine sites covered by the Agreement, as follows: 19 May 1998 Peak Downs; 20 May 1998 Norwich Park; 21 May 1998 Blackwater and Gregory; 22 May 1998 Moura; 28 May 1998 Saraji and Goonyella Riverside. 31 These were also site meetings, at some of which managers on behalf of BHPC made presentations, in July 1998. I accept that at the site meetings, there was no statement made concerning breaching the Agreement, but that statements were made to employees (both members of ACSA and non-members) concerning the "padded cell" statements. I will need to refer to the content of the various statements in some detail later. 32 On 6 April 1998, Mr Gary Norris, the Branch Secretary of ACSA, wrote to Ms Fellows saying, in part: "I refer to our negotiations on the security of employment arrangements for staff pursuant to the certified agreement and issues related thereto and wish to advise that the ACSA, in current circumstances and, on the information which the company is willing to provide, is not prepared to agree to vary the agreement to provide for forced retrenchments. We also believe that the company is seeking to effect change in a non-consultative, panic-driven manner and, in so doing, is committing and threatening to commit breaches of terms of the certified agreement." 33 Also on 6 April 1998, ACSA notified the AIRC of the dispute, which then came by agreement before Commissioner Hodder as conciliation proceedings, which commenced on 21 April and continued on 1 May 1998. 34 After each of the May site meetings, once management and non-members of the ACSA had left the meeting, the members of the ACSA met and authorised the officers of ACSA to continue negotiations on a Replacement Agreement, including negotiations on the Security of Employment Guarantee, subject to certain conditions which included: "the company shall exhaust voluntary reductions of staff without threats or intimidation" and "any provision for forced retrenchments to be negotiated shall apply seniority in class of work for selection, unless otherwise agreed by the ACSA…". 35 After the conciliation conference before Commissioner Hodder on 1 May 1998, BHPC undertook as follows: "6. the Company will not, before 31 May 1998: (a) introduce compulsory redundancies; (b) require staff to take annual or long service leave; or (c) reduce staff salaries where such a reduction is not the result of normal management processes. 7. if by 31 May 1998, there still remains staff surplus to requirements, and there is no agreement to satisfactorily deal with the surplus, the Company will consider the following: (a) reducing staff salaries to the legal minimum to reflect the fact that surplus positions are no longer required; (b) requiring employees to take accrued annual leave and long service leave; (c) seeking to exercise its legal options to enable it to compulsorily retrench staff on the basis of merit through a target selection process. (Staff who, as at 31 May 1998, remain employed by the Company but who have agreed to be made voluntarily redundant at a time after 31 May 1998 will not be affected by any reduction of staff salaries and requirements to take leave.)" 36 These undertakings were later further extended to 12 June 1998. 37 On 16 June 1998, before Commissioner Hodder in the AIRC, BHPC produced a document relating to "surplus staff" which reiterated the company view that economic circumstances were such that there was a need to significantly reduce costs associated with the employment of what it claimed were surplus salaried staff, and that BHPC wished to compulsorily retrench surplus employees. After a conciliation conference on 24 June 1998, there was a proposal that BHPC wished to put to the members of the ACSA for a "one-off moratorium" on the Employment Security provisions in the Agreement, with specified retrenchment packages and one-off benefits. 38 The ACSA later advised that it would not be recommending the resolution to its members at the July meetings, where officers of the ACSA addressed the members. Ms Judy Gray, the Assistant Branch Secretary, had written to BHPC on 1 July 1998 requiring the company's commitment "not to implement the padded cell" whilst the process of the July meeting was being undertaken. On 17 July 1998, after those meetings, Ms Gray advised: "Members overwhelmingly rejected the company's proposal and are not prepared to enter into an amending certified agreement to vary a Security of Agreement provision in the BHPC provision in the (Agreement)." 39 The Federal Court proceedings commenced on 22 July 1998. On 30 July, BHPC in the Commission foreshadowed its intention to make application to the AIRC to vary the agreement and the award, in respect of minimum conditions and, in addition, to remove bonus payments and stand down its "surplus staff". This application was made on 31 July 1998, the earlier applications having been withdrawn by leave on 30 July. 40 The applicants sought to have the applications removed to a Full Bench of the AIRC, and over many days in September there were proceedings for the purpose of a report in relation to that referral application. Eventually, on 23 December 1998, the Full Bench of the AIRC granted orders varying the award to enable the respondent BHPC to direct members whom BHPC identified as surplus to operation requirements to take accrued annual leave and long service leave upon certain terms. Some members directed by BHPC to take accrued leave have applied for an accepted redundancy package. 41 On 23 February 1999, Ms Gray wrote to ACSA delegates and members advising that on that day the company had withdrawn all of its applications, except for the taking of annual leave and long service leave. The letter continued: "This means that members no longer have a threat to having their salaries reduced, their production bonus removed or being stood down without pay for the life of the certified agreement." 42 I turn now to a consideration of the statements that were made concerning the two categories of claimed threats. 43 As is to be expected, there is no unanimity as to what was said and when it was said, but the factual differences are, in my opinion, not crucial. Ms Gray acknowledged that the sequence of her recollections as deposed to in her affidavits was in error, and it has to be said that the recollections of Mr Norris and Mr Frank Perry were less than comprehensive. Ms Fellows' recollection of what was said by her, in my assessment, tended to minimise what was said, while Ms Gray's recollection of what Ms Fellows said tended to put the statements of Ms Fellows at their most dire. No witness purported to remember the exact words, perhaps very sensibly. Mr Norris and Mr Perry agreed in cross-examination with much of the versions deposed to by Ms Fellows. As a consequence, in reality there is little difference between the various versions offered. 44 I accept that on 13 January 1998, Ms Fellows had indicated that the state of the coal industry had dramatically changed since the Certified Agreement was finalised, and that there was then a crisis in the market with current coal price reductions constituting the tip of the iceberg. She claimed that the company needed greater flexibility to be able to manage its way through the morass. In relation to the Security of Employment guarantee, she said words to the effect of: "I can no longer put my hand on my heart and guarantee that the company will be able to honour such an unqualified commitment. …It is clear to me already that the cost reductions that we will have to make will inevitably render some staff being excess to requirements." 45 The recollection of Ms Gray is that Ms Fellows said words to the effect of: "The company can no longer live with the Security of Employment guarantee for staff." "There will be excess staff and we will need to retrench, I can't be more open and honest than that." 46 Notwithstanding the claim in Ms Gray's first affidavit, I think the next reference to forced retrenchments in breach of the certified agreement occurred on 4 March 1998. The previous day Ms Fellows had tabled a proposed compulsory retrenchment programme at a meeting with Mr Perry and Mr David Otte of the ACSA, when she indicated that the programme was based on agreement reached between the colliery division of BHPC and the ACSA in New South Wales. 47 I accept that Ms Gray asked of Ms Fellows: "What will happen if we don't agree to the proposed compulsory redundancies?" I accept that Ms Fellows said that it was only in the event that sufficient volunteers were not received that BHPC would need to consider access to any form of a compulsory redundancy programme, but in my opinion Ms Fellows said words to the effect that BHPC would go to the Commission to seek to vary the agreement to provide for compulsory retrenchments, but that in the event that this was unsuccessful they would then breach the current provision in the Agreement, even if that exposed them to prosecution and the imposition of penalties. In my opinion, Ms Fellows' statement that she said words to the effect of: "We may well have to walk away from the current provision" is a benign formulation of the statement that she made, which was plainly to the effect that if BHPC could not successfully obtain from the Commission a relaxation in the Employment Security guarantee, they would have to break that obligation. 48 I am sure that after this, Ms Gray said that the company would be subject to prosecution if it so behaved and that it would also suffer bad publicity for breaching the Agreement, and I am further satisfied that Ms Fellows said words to the effect of: "Rio Tinto has been treated quite well in the media in relation to its industrial behaviour. A fine of $10,000 per retrenchment or possibly a total of $10,000 for a single action in retrenching all redundant staff is a cheap alternative to complying with the Security of Employment guarantee." 49 The possibility of breaching the agreement, if no relaxation on forcible retrenchments was able to be reached, was repeated by Ms Fellows on 10 March 1998. In my opinion this occurred in response to the proposal by Mr Perry, which BHPC regarded as "ridiculous" or "outrageous", to pay out the contracts of surplus staff in addition to their redundancy and other entitlements. 50 I am satisfied that the first reference to what is being termed the "padded cell" threat was made on 10 March 1998 by Ms Fellows. The phrase "padded cell" was Ms Fellows' and I accept that what she meant to convey by that reference was that surplus staff would not have meaningful work to do and that, further, the salaries of surplus staff would have their standard hours reduced to a 37.5 hours per week base and they would be required to exhaust all of their accrued annual leave and long service leave entitlements. The significance of this statement is that, under the Agreement, staff salaries are based on "standard hours", which are a combination of 37.5 hours per week with approximately ten hours overtime per week, and annual leave and long service leave are payable at the full salary rate. 51 I do not see the Agreement as providing power to the company to require or direct staff to take annual leave as it wishes and I do not think it was simply an abundance of caution which prompted BHPC's application to the Commission to enable this to be done. 52 The meeting on 10 March 1998 was heated, and after a break a number of proposals were written up by Mr Otte of ACSA on a white board, with various pros and cons listed in respect of each proposal. The first proposal was Mr Perry's buyout of salary, sick and annual leave entitlements, and under that proposal, there was noted on the white board "padded cell minimum conditions". The second proposal dealt with forced retrenchments and an enhanced package and selection process. The third proposal was for no forced redundancies as per the Agreement. The fourth proposal noted: "company cannot honour Security of Employment: 1. Continue to negotiate. 2. Apply to AIRC to vary. 3. Breach the Agreement." 53 The fifth proposal was for a mine site specific Agreement, and the sixth proposal said: "Tradeoff Security of Employment for those sites in need in return for other sites offering VR's to create vacancies for inter-mine transfers (then forced retrenchment)." 54 I accept that at the meetings in May 1997, while Mr Gerard may have referred to the term "padded cell" on the odd occasion, he in effect communicated the position from the company's viewpoint that if the company was unable to obtain the right to forcibly retrench surplus staff: "Staff hours would be reduced and staff would be required to take accrued annual leave and long service leave." 55 Mr Gerard said, and I accept, that in July the company had "given up on the objective of persuading the ACSA representatives and their members to agree to the escape hatch or qualification on the Security of Employment clause to allow compulsory retrenchment." Mr Gerard admitted, in giving evidence to the AIRC on 9 September 1998, that he recalled that he was asked whether he and Ms Fellows had threatened the ASCA and its delegates on several occasions with breaching the Certified Agreement, forcibly retrenching staff and simply paying the fine for the award breach, and he responded: "I can recall it being said once and it was said in the heat of negotiation." 56 I think that the comment about paying the fine was said on only the one occasion, but that the suggestion that if compulsory retrenchments were not able to be achieved by negotiation or by application to the Commission the company would breach or would consider breaching the Agreement, was made on more than one occasion. 57 Mr Gerard admitted that he stated at each meeting: "If the company could not forcibly retrench, it would implement the padded cell." I have earlier noted, however, that this in fact was an acceptance that, at the meeting, he had spoken of the company's intention to implement those aspects which had been referred to (mainly by others) as the "padded cell" option. 58 Of the threat to breach the Certified Agreement, Mr Gerard said: "We still haven't done it and we don't intend to do it and never did." 59 And when asked what does "implement the padded cell" mean? He answered: "It's an unfortunate term that I think Ms Fellows regrets that she ever used in the heat of the moment and what it really was that we would simply put surplus staff aside, reduce their hours of work and that was essentially it. They really have very little to do." 60 The first question is to consider whether what was said amounted to threats. Whether something is a threat depends on the circumstances and the context. 61 Concerning the statement that if certain outcomes were not able to be achieved the company would breach the agreement in relation to Employment Security, I am satisfied that the statement to that effect was made on several occasions by Ms Fellows, in the context of the serious economic downturn facing the company, and in the context of a desire on the part of BHPC to achieve the flexibility of forced redundancies, similar to that which had been agreed between BHPC and the New South Wales collieries. I accept that the statement foreshadowed a possibility that in certain circumstances the company might consider dishonouring, or might in fact dishonour, its obligation under the Agreement. However, in the circumstances and context in which the statements were made, I do not accept that they were threats genuinely made by BHPC. The remark by an exasperated parent to a recalcitrant young child "stop doing that or I'll strangle you" would not, in my opinion, be regarded as a threat. I do not regard the statements concerning a possible breach of the Employment Security provision in the Agreement as a threat within s 298K. If I be wrong in that, for all reasons which follow I do not regard the statements as threats made for a prohibited reason. 62 On the other hand, I do regard the making of statements along the lines of the "padded cell" option as threats within the meaning of the section. I accept the evidence of Mr Norris that Ms Fellows said on 3 April 1998 words to the effect of: "We have sought and obtained legal advice on the Security of Employment provision and the padded cell. We believe that we can legally reduce salaries to a 37.5 hour base and require staff to take annual leave and long service leave at this rate." 63 That claimed belief is significantly at odds, in my opinion, with the written submissions made by Mr Murdoch, senior counsel on behalf of BHPC, who submitted: "Ms Fellows denies having threatened members…otherwise than as permitted by variations to the award and Salaries Staff Agreement, to reduce salaries and require accrued leave to be taken." (emphasis added) 64 I do not accept that there was a belief that, absent authorisation by the Commission by means of a variation (such as was subsequently later in fact achieved), BHPC had the power unilaterally to make either of those proposed changes. In my opinion, the statements were made seeking to induce the members to agree to a relaxation in the Employment Security guarantee in the Agreement. 65 However, I do not agree that the threats were made for a prohibited reason, and in particular for the prohibited reason alleged. This is not an application under Division 9 of Part VIB, which deals with the prohibition of coercion in relation to Agreements. Section 170NC relevantly provides: "a person must not take or threaten any action with intent to coerce another person to agree to making varying or terminating…an Agreement under Division 2 or 3…" 66 In my opinion, both sets of statements were made with the purpose of inducing or persuading the members of ACSA to accept a relaxation in the Employment Security guarantee in the Agreement. BHPC sought to induce the members as to their future conduct. In my opinion, the statements were not made: "Because the employee…has refused or failed to agree or consent to or vote in favour of the making of an Agreement to which an industrial organisation which the employee is a member would be a party" or because the employee "is entitled to the benefit of an industrial instrument or an order of an industrial body." 67 The claim that the threats were made by reason that persons were entitled to the benefit of an industrial agreement also fails, for the reason that the "threats" in relation to persons who were surplus applied equally to members of ACSA as to non-members. The evidence before me does not suggest that persons who had the benefit of an industrial instrument were singled out by the respondent for different or less favourable treatment than non-members of ACSA. The Award 1990 is applicable only to members of the applicant, and likewise the Agreement, being a certified Agreement, applies to all of the relevant employees of the respondent who are members of the applicant. In my opinion, whatever be the relevant conduct, it was not engaged in because the persons to whom that conduct was directed were entitled to the benefit of an industrial instrument. 68 In my opinion, on its proper interpretation, s 298L(2) has no application in respect of ss 298L(1)(e) or (h). Neither ss 298L(1)(e) or (h) refers to a person doing or proposing to do a particular act or not doing or proposing not to do a particular act. 69 For these reasons, the application will be refused. I certify that the preceding sixty nine (69) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Spender.