Australian Workers' Union, New South Wales v Bluescope Steel

Australian Workers' Union, New South Wales v Bluescope Steel - [2006] NSWIRComm 71 - NSWIRComm 2006 case summary — Zoe

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3 Boland J made findings pursuant to s 139 of the Act that the AWU had breached certain of the dispute orders, and the matter was listed for hearing to determine what action should be taken in relation to those contraventions. That hearing was the subject of the second judgment from which the AWU now seeks to appeal, in which Boland J imposed a total penalty of $15,000 on the AWU in respect of the contraventions. 4 On 21 July 2005, the AWU sought and was granted a stay of the penalties imposed in Bluescope (No 2) on condition that the AWU pay a third of the total penalty into its solicitors' trust account, and that the AWU give a written undertaking to the Court that it would diligently prosecute the appeal and promptly pay the balance of the fine, if any, at the conclusion of the appeal proceedings. background 5 The background to this matter, which is set out in detail in Bluescope (No 1), related to a dispute over the outsourcing of part of the Coil Handling and Packaging Operations within the Packaging Products Department at Bluescope's Port Kembla steelworks. The dispute has its origins in mid-2002, when Bluescope began discussions regarding the need to upgrade its operations, which ultimately led, in mid-2003, to Bluescope entering into a service agreement with Brambles Industries Limited for the provision of certain coil handling services. There was no doubt that the Brambles service agreement would directly affect the employment of between 56 and 65 Bluescope employees. Negotiations took place between Bluescope and the AWU regarding the implementation of the Brambles service agreement, however those discussions were punctuated with threats of industrial action (and actual industrial action) and on two occasions - in October 2003 and January 2004 - Bluescope notified the Commission of the existence of an industrial dispute, which matters are not directly relevant to the present appeal. 6 The relevant industrial action, the consequent dispute orders, and the subsequent contraventions occurred during February 2004. 7 On 11 February 2004, Bluescope notified the Commission of a dispute as a result of threatened and then actual strike action by Packaging Products employees. The central protagonists included Mr Andrew Gillespie, the Branch Secretary of the AWU's Port Kembla, South Coast and Southern Highlands Branch and Mr David Hancock, an AWU Organiser. The matter came before Commissioner Connor at 10am on 12 February 2004, recommendations were made, and the industrial action consequently ceased shortly after 3pm that afternoon. Further recommendations were issued on the morning of 13 February 2004. However, at 7am on 16 February 2004, industrial action recommenced and the dispute was re-listed before Connor C at 12 noon, this time for hearing of Bluescope's application for dispute orders. 8 At about 12.45pm on 16 February 2004, Commissioner Connor made the following dispute orders:

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The AWU, the AFMEPKIU and the ETU, their respective officers and employees and their respective members employed by either: (a) Bluescope Steel (AIS) Pty Limited at its Port Kembla steelworks; or (b) Bluescope Steel Limited at its Springhill works, must immediately cease and refrain from taking any form of industrial action, including any strike, stop work meeting, ban, limitation or restriction on the performance of work; 2. The AWU, the AFMEPKIU and the ETU and their respective officers and employees must immediately cease and refrain from organising, encouraging or inciting any industrial action (including any strike, stop work meeting, ban, limitation or restriction on the performance of work) contrary to the order in para 1 above. 3. The AWU, the AFMEPKIU and the ETU and their respective officers and employees must take all reasonable and necessary steps to ensure that order in para 1 is complied with, including, but not limited to: (i) advising their members of these orders by no later than 3.20pm on Tuesday, 17 February 2004; and (ii) convening a meeting by 3.20pm on Tuesday, 17 February, 2004 of all members who are engaging in industrial action and directing them to comply with the order in para. 1. 4. This order shall come into effect on and from 3.20pm on Monday (sic - Tuesday), 17 February, 2004 and shall remain in force until Tuesday, 30 March, 2004 unless, on formal application, it is varied or rescinded in the meantime 12 Notwithstanding paragraph 3(ii) of the amended dispute orders, the AWU did not convene a meeting of its members by 3.20pm on 17 February 2004. A number of employees reported for work that afternoon and were told by Mr Hancock words to the effect "I can't tell you to go home, but I want to tell you all that you are all on strike". 13 A meeting of delegates took place late on the afternoon of 17 February 2004, at which time Mr Gillespie again attempted to secure a return to work, however the delegates were opposed to a return to work by striking members. A meeting was held at about 7am on 18 February 2004 for all steelwork employees engaged by Bluescope or Bluescope Steel Limited at the Port Kembla or Springhill steelworks, a vote was taken to return to work, and by approximately 9am that day the striking employees returned to work. 14 On 27 February 2004, a stop work meeting was held, attended by Coil Preparation Line employees. 15 On 3 June 2004, Bluescope filed a summons under s 139 of the Act alleging that, on 16, 17, 18 and 27 February 2004, the AWU had contravened the dispute orders made by Commissioner Connor on 16 and 17 February 2004. For convenience and clarity, in this judgment, we shall refer to the dispute orders made on 16 February 2004 as "the original dispute orders" and the dispute orders made on 17 February 2004 as "the amended dispute orders". The decision below - contravention of dispute orders 16 Boland J held that the AWU had contravened both the original and the amended dispute orders. 17 As to the original dispute orders, his Honour considered the attempts made by Mr Gillespie to secure compliance with those orders at the meeting of striking employees held at 3pm on 16 February 2004. Boland J held that, notwithstanding Mr Gillespie's attempts, he did not take all reasonable steps to ensure compliance, and through his failure, as a senior officer of the AWU, the AWU had contravened the dispute order. In arriving at that conclusion Boland J held:(at [106]):

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1 Dispute orders are rarely made by members of the Commission. Long experience has demonstrated that most matters can be resolved by conciliation and/or arbitration without resorting to the prospect of sanctions. The making of a dispute order is a serious step given the consequences for contravention. Persons against whom a dispute order is made are bound to take it seriously, especially members, officials and employees of organisations who may be putting in jeopardy the very existence of their organisation. 2 Mr Gillespie is a person of very considerable standing and authority at the steel works. He has a strong personality. He has been associated with industrial relations at the steel works for many years. He was in an environment that was not new to him. Indeed, it was very familiar territory. In my opinion, Mr Gillespie was well capable of taking, and should have taken, a stronger and more effective stand in encouraging members to cease and refrain from industrial action on 16 February 2004 if he had been of a mind to; he did not use his best endeavours to achieve compliance. 3 Unlike the position in BHP v AWU , Mr Gillespie's words to his members on 16 February were not "in the nature of a direction" but only a recommendation; the evidence does not suggest the recommendation was forcefully put by a person with the authority and character to do so. By comparison, Mr Gillespie's attempts at the delegate's meeting on the afternoon of 17 February to secure a return to work were much more forceful (see [131]-[132]). 4 From the outset (when Bluescope signed the agreement with Brambles in July 2003) Mr Gillespie manifested strong feelings about the prosecutor's role in the dispute and threatened stridently throughout, that the prosecutor would not achieve its objectives and that it would result in a serious industrial dispute involving industrial action. This is apparent from the evidence of the prosecutor's witnesses and the transcript of various proceedings in the Industrial Relations Commission. Mr Gillespie said in proceedings before Connor C on 16 February 2004 that he was prepared to "cop" fines in defence of his Union's position. The unmistakeable inference is that Mr Gillespie was pre-disposed to a course of action that could lead to a contravention of dispute orders. In his submissions to Connor C on 16 February Mr Gillespie stated: Whatever's going to happen …we are prepared as a union to say, "we are not prepared to tolerate what these people want to introduce". If we think it's going to get bigger, then yes, Commissioner, it is going to get bigger, because there is a, quite a significant issue at stake in this particular matter which doesn't only affect the tin mill. It affects all of BHP. 5 That pre-disposition extended to widening the dispute to include the Hot Strip Mill, Plate Mill, Slab Yard and Springhill. As early as Friday 13 February 2004, before any resolution was passed at the meeting on 16 February for delegates in these other areas to be advised of the dispute, Mr Gillespie advised Mr Meena, the President of the Springhill operation, the dispute would escalate to include those areas. Mr Gillespie said in his evidence that he only indicated to Mr Meena that there was the "potential" for the dispute to spread to those other areas. Whatever words Mr Gillespie used, widening the dispute was clearly in his mind on 13 February. Whilst Mr Gillespie said he was only carrying out the directions of the meeting on 16 February in advising delegates in the Hot Strip Mill, Plate Mill and Slab Yard of the dispute in the Packaging Products Department, which had the effect of widening the industrial action, I consider it is more probable than not that Mr Gillespie knew that his advice to the delegates would mean a widening of the dispute and he took no reasonable steps to prevent that occurring. 18 Similarly, his Honour considered whether the conduct of union officials, including Mr Gillespie, at the meeting at 7am on 17 February 2004 contravened the original dispute orders. He had regard to the circumstances existing at the time, including the angry mood of the employees, and found:

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[113] Notwithstanding these circumstances, I am not satisfied the union officials took all steps that were reasonable to take to achieve compliance with the dispute orders. That is, the officials did not use their best efforts to get the members to return to work. It may have been the case that a direction by AWU officials would not have achieved compliance, although I am not entirely convinced that the issuing of a direction was not a reasonable step to take. Mr Gillespie was empowered, under the rules of his organisation, to make a direction under rule 64(2). Members of the Union are required to comply with such a direction. ... [117] However, I do not rely on the fact that no direction was given to sustain a finding that all reasonable steps were not taken on 17 February to comply with the dispute orders. I consider that, short of making a direction, reasonable steps were not taken. I do not consider recitation of the orders or a strong recommendation following "heated" debate constituted Mr Gillespie speaking emphatically to his members or that his words were in the nature of a direction, as was the case with Mr Anderson in Bluescope v AWU. [118] There are some additional considerations. These are referred to earlier in this decision regarding the meeting on 16 February, namely Mr Gillespie's personal threats of industrial action being widened, his stated disregard in proceedings before Connor C for dispute orders, his standing and authority to be more forceful in securing compliance with the dispute orders by dint of his strong character and his position as Secretary. There was nothing that occurred between the meeting on 16 February and the next meeting on 17 February that would have caused Mr Gillespie to have a different perspective on the direction of the dispute. In other words, if, as I have found, all reasonable steps were not taken at the meeting on 16 February to have the industrial action cease, nothing occurred before 7.00am on 17 February to cause Mr Gillespie to become more forceful or persuasive in his attempts to secure a cessation of the industrial action. I consider that Mr Gillespie was not inclined to, and did not, take all reasonable steps to have his members cease and refrain from taking industrial action. 19 As to the amended dispute orders, Boland J considered the conduct of Mr Hancock on the afternoon of 17 February 2004 and held (at [122]): I am prepared to infer that the group of employees who Mr Hancock was addressing on the afternoon of 17 February were members of the AWU. These members were previously on strike as a consequence of the meeting earlier that morning and were responding to calls from managers to return to work. In my opinion, Mr Hancock was present to ensure there was no return to work by his members and I am satisfied he used the words attributed to him by both Mr Bland and Mr Towers. Both of those witnesses were adamant Mr Hancock used words to the effect, "I can't tell you to go home, but I want to tell you all that you are all on strike". Mr Towers had an independent recollection and relied on notes he made about an hour later. The words can only sensibly be regarded as an encouragement of industrial action and thereby constitute a contravention of order 2 of the amended orders of 17 February. 20 Boland J considered that the holding of the meeting on 18 February 2004, whilst in contravention of the amended dispute orders, was arguably the only reasonable step available to the AWU to bring about a cessation of the industrial action, and therefore that the AWU had taken all reasonable and necessary steps on 18 February 2004 to ensure compliance with order 1 of the amended dispute orders. 21 However, although the holding of the mass meeting on 18 February 2004 was found not to be in contravention of the amended dispute orders, Boland J found that the organising of that meeting on the evening of 17 February 2004 did constitute a contravention of the amended dispute orders. His Honour held (at [134]-[136]): In the face of the delegates' rejection of a return to work of striking members Mr Gillespie opted for his fall back position, namely, a mass meeting the next day, 18 February, when he said he would have the numbers to outvote those who wanted to continue with industrial action. The AFMEPKIU supported this position. The organising of the mass meeting on 18 February 2004 was in contravention of order 2 of the amended orders by both the AWU and the AFMEPKIU. Mr Hatcher submitted that the Court was faced with something of a paradox in relation to the organising of the meeting on 18 February. He said that whilst it caused a stop work meeting of a wider group of employees, it was also the means by which a return to work was achieved. Mr Hatcher submitted the Court should dismiss the matter under s 139(3)(a) of the Act.

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27 The AWU was represented in these proceedings by Mr A Hatcher of counsel. Mr R Buchanan, QC appeared for Bluescope with Mr P Coleman of counsel. the awu's submissions 28 As to Boland J's findings that the AWU had breached the original dispute orders on 16 February 2004, the AWU submitted that his Honour incorrectly concluded that Mr Gillespie's conduct constituted a breach of the original dispute order. In that respect, the AWU referred to the five matters which Boland J expressly took into account in arriving at that conclusion, being the matters identified by his Honour in Bluescope (No 1) at [106]. First, it was the AWU's submission that, whilst the making of dispute orders is a serious matter, that proposition does not by itself bear directly on the question of contravention. Secondly, the AWU relied on Parland Pty Limited & Ors v Mariposa Pty Limited (1995) 5 TASR 121 at 133 and Bluescope v AWU at [71] in submitting that a party does not fail to take a reasonable step where, even if that step had been taken, it would have made no difference to the outcome. In those circumstances, given Mr Gillespie's evidence that a "stronger and more effective stand" would have been counter-productive, it was not open to Boland J to conclude that the AWU had failed to take all reasonable steps to ensure compliance with the dispute orders. Thirdly, the AWU submitted that Boland J fell into serious error by drawing an inference from Mr Gillespie's conduct that he was "predisposed to a course of action that could lead to a contravention of a dispute order". According to the AWU, such an inference offends the principle in Briginshaw v Briginshaw (1938) 60 CLR 336 at 362 per Dixon J which applies to matters of this seriousness. In any event, Mr Gillespie's perceived predisposition did not manifest itself in his conduct on 16 February 2004, nor was it relevant. 29 As to Boland J's findings that the AWU had breached the original dispute orders and the amended dispute orders on 17 February 2004, it was submitted by the AWU that "in the face of this finding that the holding of the mass meeting on 18 February was the only reasonable step left to ensure compliance with the dispute order, and did not constitute a breach of the dispute order, it was, with respect, a complete contradiction to find that the organising of that same meeting at the delegates' meeting on 17 February constituted a contravention of the dispute order rather than also being a reasonable step to ensure compliance with it." 30 As to the maximum penalty applicable under s 139, the AWU submitted that Boland J incorrectly treated each part of the dispute orders as a separate order for the purpose of identifying maximum penalties. For instance, on 27 February 2004 the AWU was penalised for both failing to cease and refrain from organising, encouraging or inciting industrial action as well as for failing to take reasonable and necessary steps to ensure that the cease and refrain order was complied with.

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31 According to the AWU, s139(4)(a) must be construed within the context of Part 2 of Chapter 3 of the Act as a whole. The power to make an ancillary order (such as an order requiring an organisation to take reasonable steps to ensure members cease or refrain from taking industrial action) is part of the single exercise of the power to make a dispute order of the kind referred to in s 137(1)(a), and it is that single exercise of power to which the maxima specified in s 139(4) were intended to apply. It was submitted that the construction of s139(4) adopted by Boland J would "lead to absurd results", where the maximum penalty for a breach would vary depending upon the way a dispute order is drafted: orders may be contained within a single paragraph (and so treated as a single order subject to a single maximum penalty) or expressed in a number of paragraphs (and potentially attracting separate and additional maximum penalties). It was submitted that this was "plainly not what the legislature intended", and that the better approach, consistent with s 137, is to treat the exercise of power pursuant to s 137(1)(a), however expressed, as a single dispute order for the purpose of s139(4). 32 The AWU further submitted that Boland J incorrectly treated the original and amended dispute orders as separate orders. For instance, on 17 February 2004 the AWU was penalised twice: once for breach of the original dispute order for its conduct in the morning and again for breach of the amended dispute order for its conduct in the afternoon, with the latter breach attracting a higher maximum penalty pursuant to s139(4)(a). The correct approach, it was submitted, was that there was a single dispute order for the purposes of s 139(4)(a), attracting a maximum penalty of $10,000 for the breach on 16 February, and maxima of $5,000 for subsequent breaches on 17 and 27 February. 33 The AWU submitted that these errors resulted in double counting of the relevant penalties, or an incorrect assessment of the range in which the penalty ought to be assessed, on both 17 and 27 February 2004. 34 In the alternative, the AWU submitted that the penalties imposed by Boland J were manifestly excessive. 35 Mr Gillespie's conduct at the meeting of employees on 16 February 2004, which formed the primary basis for the first contravention, must be assessed at the low range of culpability: although Boland J found the AWU did not take all reasonable steps, it did take a number of reasonable steps including calling the meeting before the dispute order was due to take effect; explaining the effect of the order and recommending compliance. In BHP Steel (AIS) Pty Ltd v CFMEU [2000] FCA 1908 the CFMEU was found to have taken no steps at all to comply with the relevant order, and made no attempt to explain or justify its failure in this regard, yet the penalty imposed was $2,200 (with a potential maximum of $10,000). 36 For similar reasons, the contravention arising from the meeting on 17 February should be assessed as one of low-range culpability. The contravention was no more than a failure to take a more forceful or persuasive stand at the meeting. This by itself could not take the matter beyond the low range of culpability. Further, the penalty was assessed relative the wrong maximum: instead of $15,000 the maximum should have been $5,000. 37 In relation to the delegates meeting that evening, Boland J's found that the holding of the meeting was the only reasonable step remaining to the AWU to ensure compliance with the dispute order, notwithstanding that it constituted a technical breach. His Honour found that it would have been "perverse" not to impose a penalty and referred to his earlier finding that "if AWU officials had taken reasonable steps to comply with the Commission's orders relating to earlier episodes of industrial action" the mass meeting may not have been necessary. Since the AWU had already been penalised for the earlier contraventions it was erroneous to have taken them into account as a reason for the imposition of a further penalty. 38 In relation to the penalty for 27 February 2004, the principle of totality would not permit the AWU to be fined twice for what was essentially the same conduct, namely the holding of a stop work meeting. Further, in effectively assessing culpability as falling within the mid-range, Boland J failed to take into account or give sufficient weight to the insignificant nature of the stop-work meeting: it was brief and only involved employees of the Coil Preparation Line. 39 Although in assessment of penalties in civil cases the presence of contrition may be taken into account as a mitigating factor, Boland J erred in that his Honour appears to have taken the absence of contrition into account as an aggravating factor. bluescope's submissions 40 Bluescope made a number of written submissions which we summarise as follows:

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49 The AWU relied on the following passage in Bluescope Steel Ltd (formerly BHP Steel Ltd) v Australian Workers' Union, New South Wales (2004) 137 IR 176 (at [71]) in support of its contention that Boland J failed to find that a failure to take a particular step which, on the evidence, would not have achieved compliance constituted a failure to take all reasonable steps,: The case law clearly establishes that the extent of the obligation to take "reasonable steps" depends on the particular circumstances existing at the time the obligation arises. Further, we consider that, in the context of the orders made by Connor C, the obligation, as with the requirement to use "best endeavours", refers to all steps that are reasonable to take, and does not extend to all steps that are reasonably open in some narrow or theoretical sense (which could encompass, for example, matters not directly within the particular knowledge or experience of a relevant party). 50 Whether or not a particular step, if taken, would have made a difference to the outcome of a dispute is relevant to the determination of whether there has been a breach of a dispute order. However, a finding that a particular step would have made little or no difference to the resolution of a dispute does not necessarily lead to a finding that all reasonable steps were therefore taken, or that there has been no contravention of a dispute order. BHP v AWU is not authority for the proposition that such findings correlate in that way. There was no error of law or principle in his Honour's decision in that respect. 51 In any event, there is no suggestion in Bluescope (No 1) that Boland J accepted the AWU's contention that it would have made no difference to the outcome of the dispute had Mr Gillespie taken a stronger stand. His Honour considered that more could, and should, have been done by Mr Gillespie at the meeting on 16 February 2004. Implicit in Boland J's judgment is the conclusion that Mr Gillespie may well have effected compliance with the dispute orders had he done so. 52 As earlier stated, we are satisfied that his Honour's factual findings in relation to the contravention of dispute orders on 16 February 2004 were reasonably open on the evidence, and disclose no appealable error. Appeal against the finding that dispute orders were breached on 17 February 2004

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