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[2003] FCA 570
Federal Court of Australia
2003-06-06
Ryan J
Original judgment source is linked above.
REASONS FOR JUDGMENT 1 The applicants seek the following interlocutory relief; '1. An order that until the hearing or determination of this application or further order the First Respondent employ the Second Applicant in the position of boiler maker at the HDS project at the Shell Refinery at Corio in the State of Victoria. 2. An order prohibiting the Second Respondent from hindering or preventing or relying on or invoking any right, power or entitlement to prohibit the employment by the First Respondent of the Second Applicant as required by Order 1.' 2 By their substantive application which was filed on 27 May 2003, the applicants seek declarations that the first respondent ("MRE") has contravened s 298K of the Workplace Relations Act 1996 ("the Act") by refusing to employ the second and third applicants, Mr Cook and Mr Marshall, for a prohibited reason namely that each has been a delegate of the first applicant ("the AMWU"). The application also seeks the imposition of penalties under s 298U of the Act and an injunction restraining the respondents from contravening or being involved in the contravention of s 298K. As well, the applicants seek damages for breach of contract and conspiracy, and a mandatory injunction effectively requiring MRE to perform its obligations under a contract allegedly made between it and the AMWU in December 2002. Under that contract, it was said, the parties agreed to conclude a certified agreement in respect of work to be performed in the construction of a new hydrogen desulphurisation ("HDS") plant at the oil refinery operated at Geelong by Shell Refining (Australia) Pty Ltd ("Shell"). In consideration of the AMWU's entering into that certified agreement, as I understand the allegation, MRE, which had been engaged as a labour hire company to employ workers on the HDS plant, agreed to employ Mr Cook and Mr Marshall as boilermakers on the site where they would be AMWU job delegates. 3 The evidence discloses that MRE was being pressed by Shell to conclude a certified agreement with the AMWU before work began on the HDS plant. In the face of insistence by the AMWU that two of its nominees, Mr Marshall and Mr Cook, should be employed at the site in order to become union delegates or shop stewards, Mr Lockyer, the Manager of MRE, agreed, or to use his word "undertook", that MRE would employ Mr Cook and Mr Marshall. Arrangements were then made with the Australian Industrial Relations Commission ("the Commission") for certification of an agreement which occurred on 24 January 2003. The undertaking given by Mr Lockyer had been confirmed by facsimile from Mr Douglas, a consultant to MRE, to Mr Robb of the AMWU on 23 December 2002. That message recited that "the persons nominated by the union …. will submit to the selection process and these persons will be offered employment under the proposed agreement." 4 Work on the HDS site commenced in mid-April 2003 after a formal agreement had been concluded on 27 February 2003 between MRE and the second respondent ("CBI") which had been appointed by Shell to be the Contractor for the engineering, procurement and construction of the HDS plant. A relevant provision of the agreement between Shell and CBI stipulated; 'CONTRACTOR is to enter into a subcontract to source all labour from [Shell's] nominated labour supplier, Maintenance Resource Engineering Pty Ltd. This labour will be provided to the CONTRACTOR at the same cost as would have applied to the CONTRACTOR if the CONTRACTOR hired the labour directly under the terms of the labour agreement applying to the Shell-Geelong HDS 2 project.' 5 The agreement between CBI and MRE conferred on CBI the power itself to select, from among groups of workers whom MRE proposed as suitable for employment on the site, those whom CBI wished to be employed. That entitlement has been explained in these terms by Mr Mann, CBI's project manager; 'In its dealings and negotiations with MRE, CBI always made it clear that it would conduct a screening process in relation to workers which MRE proposed to engage on the HDS project. From around August 2001 until the Labour Supply Agreement was executed on 27 February 2003, I attended a number of meetings with representatives of MRE including Ted Lockyer and John Douglas at which I made it clear that CBI would retain a power of veto over workers proposed by MRE. The day to day management of the recruitment process is the responsibility of Peter Crook, an Employee Relations Officer employed by CBI and based in Sydney. Mr Crook has authority to make decisions as to whether workers nominated by MRE are acceptable.' 6 On 15 February 2003, each of Mr Marshall and Mr Cook underwent some form of screening or test conducted by or on behalf of Chandler McLeod as a consultant to MRE. The results were "entered" on 18 February and Mr Marshall was among sixteen applicants "not recommended on basis of ability." Mr Cook was among seven applicants "not recommended on basis of temperament." On the same date, a further ten applicants were entered as "recommended." No evidence has so far been adduced from the maker of those recommendations as to the grounds on which they were made. 7 Despite the commencement of work at the HDS site, neither Mr Cook nor Mr Marshall has been employed by MRE at that site. That seems to have been due, in part, to a view taken by Shell expressed through its industrial relations manager, Mr Skinner, at a meeting with Mr Robb of the AMWU early in March 2003 that neither Marshall nor Cook was wanted on the project. The dispute arising from MRE's failure to employ Mr Cook was referred to the mediation of Mr Merriman, a former Commissioner of the Commission. His recommendation dated 15 April 2003 was in the following terms: '1. There was a clear understanding that a Mr Cook would be hired for the project. 2. That consistent with the practice and policy at the project the person nominated by the union would be required to submit to the selection process. (This was detailed at point two of page one of the 23rd December, 2002 facsimile message earlier referred to) 3. It is fully anticipated that these persons (nominated by the union) will be successful and will be offered employment under the agreement (this proposition is contained in Mr Douglas' email to Mr Oliver of the 20th December, 2002 as the 7th point) In considering all of the material I recommend that: 1. Mr Cook be offered employment and be required to submit to the selection process 2. If he is unsuccessful the parties must confer and give proper and due consideration to their agreement that such persons would be successful and offered employment 3. Given the undertakings that Mr Cook would be employed I would expect that at such a conference a range of understandings would be reached as to what would be expected of Mr Cook in employment. Should any reason then be advanced as to why Mr Cook still should not be employed then those reasons and the body making such claims should pursue the reason not only with the union but in a conference chaired by myself.' Despite the effect of the last paragraph of Mr Merriman's recommendation, it does not appear that any party sought to revive his mediation. 8 On 30 April 2003, a meeting occurred between Mr Oliver, the State Secretary of the AMWU, Mr Addison, its Senior Industrial/Research Officer, Mr Lockyer and Mr Douglas, a solicitor representing MRE, and Mr Mathieson on behalf of Shell. According to Mr Addison, the representatives of MRE and Shell indicated that Mr Cook would not be employed on the HDS site because he was "working in cahoots" with another union, the Construction Forestry, Mining and Energy Union ("the CFMEU") and Craig Johnston, a former State Secretary of the AMWU, to disrupt the job. Mr Addison went on to depose that he and the other AMWU representatives had been informed at that meeting that CBI had vetoed the employment of Mr Cook to which the AMWU representatives responded that "a deal was a deal and that he was to be placed on the job in accordance with the agreement." 9 At a further meeting on or about 2 May 2003 between Mr Oliver, Mr Addison, Mr Lockyer and Mr Douglas, the AMWU maintained its insistence that Mr Cook be employed on the HDS site. According to Mr Addison, the representatives of MRE repeated their assertion that CBI had vetoed Cook's employment, reiterating, as the reason, that he (Cook) was working "in cahoots" with the CFMEU. In response to a request by the AMWU for evidence of this activity by Cook, Mr Addison claims that the MRE representatives referred only to a "side comment" attributed to Mr Brendan Murphy, a CFMEU organiser. 10 In a letter dated 6 May 2003 to Mr Oliver, Mr Douglas set out as follows what were claimed to be MRE's perceptions of events since the "undertaking" had been given on 20 December 2002; 'At the time of the meeting on 20 December 2002 and the subsequent communications in relation to the matters therein discussed, our client had the authority to select the labour which would be employed on the Project. A formal selection process that includes aptitude and work-related testing, interview and reference checking determined the selection of labour. When our client formed the opinion that the most efficient labour from this process can be identified, it employed these persons having regard to the vacancies at that time on the Project. This was subject only to general oversight by the client of Maintenance Resource Engineering Proprietary Limited, being Shell. The details of the selection process had previously been advised to the union. In the early part of 2003 and subsequent to the meeting on 20 December 2002, this situation was changed. Our client entered into formal and separate contractual arrangements with Shell and CBI, the construction manager for the Project. In relevant terms the contract between our client and the CBI provided that the latter takes a power of veto over the labour nominated to it by Maintenance Resource Engineering Proprietary Limited. There is no contractual obligation imposed upon CBI to state any reasons for the exercise of this veto. Since that time CBI has exercised this power on a number of occasions. We are instructed that one person who was nominated by the union for employment on the Project was Mr Shane Cook. In accordance with previous understandings between the parties, Mr Cook submitted an application for employment with out client on the Project. He undertook the test on 15 February 2003. We are instructed that Mr Cook was unsuccessful at this stage of the selection process, as there were other candidates who better met the inherent requirements of the position for which he applied. Notwithstanding this and in accordance with the above-mentioned understandings previously reached between Maintenance Resource Engineering Proprietary Limited and the union, our client submitted the name of Mr Cook to CBI for employment on the Project. CBI has informed our client that it will not consent to the employment of Mr Cook on the Project. As a result our client is unable to comply with the demand of the union that Mr Cook be so employed. Mr Cook will be informed of this outcome by letter from JPE Consult Proprietary Limited which conducts the selection process on behalf of our client. Our client understands that the union is disappointed that a previous undertaking given to it by it Maintenance Resource Engineering Proprietary Limited has not been complied with. However our client is unable to meet the demand as to do so would breach an existing contractual obligation. In any event it is relevant that Mr Cook was not successful in being a person who would be nominated by our client for work on the Project having regard to his results under the formal testing process. The union will be aware that the issue of employment of Mr Cook has previously been the subject of mediation between the parties by Mr Merriman. We understand this process has concluded without an outcome that is acceptable to the union.' 11 On 8 May 2003, Mr Addison responded to the letter just quoted seeking "advice ..…. as to the reason given to you by CBI for its veto of Mr Cook's employment. That letter elicited a response dated 12 May 2003 in these terms; 'We refer to our letter of 6 May 2003 and your subsequent response of 8 May 2003 in relation to the above-mentioned matter. We are instructed to inform you that our client confirms its refusal to engage the services of Mr Cook on the HDS 2 Project at the Shell Refinery at Corio. Whilst it is correct to say that our client has taken into account the views expressed to it by CBI, since our client is the employer it takes full responsibility for any decisions made to employ or not to employ any person on this project. Accordingly the decision not to employ Mr Cook has been taken by our client and not any other entity. As a matter of courtesy our client has instructed us to inform you of the reasons for the above-mentioned decision. These include reasons that our client has credible evidence that if it employs Mr Cook, it will be the subject of attempts by that person, in concert with other persons, including unions and individuals who are not party to any instrument of industrial regulation binding our client, to promote unlawful industrial activity, in breach of enterprise agreements which currently apply on the project. The AMWU is a party to one of these agreements. This evidence was not available to our client in December 2002 at which time the undertakings referred to in the above-mentioned letters were entered into between the parties. On the basis of this evidence our client has concluded that to employ Mr Cook is likely to lead to disruption to the project. We are also instructed that the other reason why our client declined to employ Mr Cook is set out in our letter of 6 May 2003, being that he was not successful when he submitted to the selection process.' 12 In an affidavit sworn 2 June 2003 Mr Mann, CBI's project manager, acknowledged that under the terms of its labour supply agreement with MRE, CBI has "a broad power to direct MRE in relation to the engagement of labour" under which "CBI can screen and veto any workers which MRE proposes to engage to work on the HDS project." In relation to Mr Cook, Mr Mann has deposed; '25. I recollect that an AMWU member called Shane Cook was discussed briefly at one or two of these meetings. From my experience in the construction industry, I am aware that some unions including the AMWU have a practice of putting industrial pressure on employers to employ certain member nominated by the union. Mr Mathieson informed the meeting that the AMWU was pushing to have Mr Cook engaged on the site. Mr Mathieson never asked for approval from CBI to employ Mr Cook and I never asked Mr Mathieson not to put Mr Cook's name forward to CBI. Any request for approval in these circumstances would come to my attention as the Project Manager responsible for the site. The issue of Mr Cook's employment was not raised with me by anyone from MRE or the AMWU again until these proceedings were commenced. ………… 27. In response to Mr Addison's affidavit and the two letters from Mr Douglas, I say that: · from my discussions with Peter Crook, I understand that Mr Cook was never nominated to CBI as a proposed employee under the established labour procedures for the site. Accordingly, CBI never vetoed any proposal by MRE to employ him under these procedures; · MRE did not otherwise seek approval from me or Mr Crook to employ Mr Cook; · prior to these proceedings being issued, I was not aware that Mr Douglas had corresponded with the AMWU about Mr Cook's employment. Other than as set out in paragraph 25 above, I had no role in or knowledge of any discussions and correspondence between MRE and the AMWU about Mr Cook's employment. 28. I never had any discussions with the AMWU about any proposal that MRE employ Mr Cook. 29. I have never met Mr Cook or worked on a site or project on which Mr Cook worked.' 13 In the same affidavit, Mr Mann has indicated that MRE has at present about 123 employees at the HDS site and the workforce will grow by about 10 to 15 percent during the next month and will then remain at its peak until about mid-September 2003 when the workforce will "be wound down leading up to completion of the project." 14 In an affidavit also sworn 2 June 2003, Mr Lockyer of MRE described, as follows, his belief about the Mr Marshall and Mr Cook at the time when he gave his undertaking of 20 December 2002; 'At the time I was pressured by the AMWU to employ Cook and Marshall, given by experience in the industry, I was aware of both their reputations in the construction industry. In respect of Marshall, Marshall had a notorious reputation for engaging in unlawful industrial tactics, including taking unprotected industrial action during the life of certified agreements. I was aware of the reputation of Cook, who had been involved in organising unlawful industrial action at a construction project known as the "Saizeriya Food Processing Plant" in Melton, such industrial action being in contravention of Commission and/or Court orders.' 15 After disavowing any connection between his concern about Marshall and Cook and their having previously held appointments as Union delegates, Mr Lockyer went on to depose to information which he claimed to have received after it had become widely known that MRE had agreed to employ them on the HDS site. The effect of that information was that "Cook and Marshall were going to be used by the CFMEU to cause substantial damage to the progress of the project to punish MRE" for having entered into a certified agreement with the Australian Workers' Union (a rival of the CFMEU) rather than with the CFMEU itself. According to Mr Lockyer, his informants imputed that role to Mr Marshall and Mr Cook because they were supporters of Craig Johnston, the leader of the "Workers' First" faction within the AMWU which faction, in turn, had an alliance with the CFMEU. The only person identified by Mr Lockyer as a source of his specific information about Marshall and Cook has been one Rudi Schoonderbek who formerly had worked as a boilermaker on the HDS site and is said to have told Mr Lockyer that "Cook and Marshall were the link between the Craig Johnston and the Workers' First faction" and were coming on to the project to "fuck over the job".
Is there a serious question to be tried? 16 It is clear that MRE has refused to employ Mr Cook and that Mr Cook had been, and proposed, if employed, to become, a delegate of the AMWU. Accordingly, as Gray J pointed out in Australasian Meat Industry Employees Union v G & K O'Connor Pty Ltd (2000) 100 IR 383 at 391, the effect of s 298V of the Act is that it is to be presumed that MRE refused to employ him for that reason even if there were other reasons as well. "Only if the respondent could persuade the Court otherwise at the interlocutory stage would it avoid a finding that there is a serious question to be tried." 17 In the present case, MRE has attempted to discharge that difficult burden by suggesting that the sole reason for its refusal to employ Mr Cook has been its fear that he would, because of his imputed sympathy with the CFMEU, set out to disrupt work on the project. The difficulty to which I have just referred is compounded because Mr Cook's proposed appointment as an AMWU delegate is what is said to have given point to that fear. MRE must therefore overcome the obstacle erected by the introductory words of s 298K(2) of showing that its reason for refusing to employ Mr Cook did not include his prospective appointment as a delegate. 18 It is undesirable at this interlocutory stage that I say more than is strictly necessary about matters going to credit or otherwise affecting the probability of MRE's discharging its reverse onus of proof. That is particularly so as I am likely to have the trial of the substantive application. However, it is obvious that, on MRE's case, the decision not to employ Mr Cook was at all times taken solely by Mr Lockyer. He has conceded that, on 20 December 2002, when he undertook to employ Mr Marshall and Mr Cook, he was aware of "their reputations in the construction industry" and of Mr Cook's activities in fomenting allegedly unlawful industrial action while previously working at the Saizeriya food processing plant. He has excluded as a reason for refusing to employ Mr Marshall and Mr Cook their failure to obtain a recommendation from Chandler McLeod saying; 'Cook and Marshall in February did undertake the selection process conducted by Chandler McLeod. They both failed that process. Given the rumours, however, I would not have employed Cook and Marshall even if they had passed the selection process. I did not interfere in that selection process.' 19 Given the way in which it has identified its reason, MRE must persuade the Court that it was solely the "rumours" and the warnings received from informants like Mr Schoonderbek that caused Mr Lockyer to change his mind about employing Mr Cook. It must do that in the face of Mr Lockyer's concession that the warnings were consistent "with my own knowledge within the industry that the Workers' First faction within the AMWU had an alliance with the CFMEU" and with "Cook and Marshall's reputation in that they were prepared to engage in unlawful industrial tactics if that served their ends." All of that knowledge of the industry and of the reputations of the two men was, it seems, possessed by Mr Lockyer on 20 December 2002. 20 As well, Mr Lockyer's credit can be seriously impugned because of his concession that the letter of 6 May 2003 quoted at [10] above which was written on his instructions contained the false assertion that CBI had vetoed the employment of Mr Cook. He deposed in his affidavit of 2 June 2003; '34. … It is true, as stated in the letter, that Cook had failed the selection process. In contrast to what was suggested in the letter, that was not why MRE did not employ him. It was because of the fear that he would engage in unlawful industrial tactics at the Refinery. 35. Also, to remove the pressure on MRE, I said that CBI had rejected Cook. This was not correct. I had, as stated above, never got to the stage of submitting Cook or Marshall for CBI's consideration.' 21 That later version has been confirmed by Mr Mann of CBI who has deposed; · 'from my discussions with Peter Crook, I understand that Mr Cook was never nominated to CBI as a proposed employee under the established labour procedures for the site. Accordingly CBI never vetoed any proposal by MRE to employ him under these procedures; · MRE did not otherwise seek approval from me or Mr Crook to employ Mr Cook.' 22 Mr Mann's evidence also gives rise to another inconsistency between his account and a version of the facts deposed to by Mr Lockyer. The latter has sworn; '32. I had at some time in February 2003, a discussion with Philip Mann (Mann), the Project Manager for CBI, who raised with me the fact that he had heard rumours that MRE had agreed to employ Cook and Marshall and asked whether this was correct. I said to him that it was correct but I was not going to comply with that commitment because Cook and Marshall had subsequently not passed the selection process test and that I had been told from too many sources that their intention on coming onto the Project was to damage the Project in retaliation for MRE entering into a certified agreement with the AWU and not the CFMEU. Although I told Philip Mann that one of the reasons was the failure of the selection process test, the critical reason was because of the information I had received that Cook and Marshall would engage in unlawful industrial tactics to damage the Project.' 23 Mr Mann in [25] of his affidavit recalled meetings in January and February 2003 attended by Mr Mathieson and Mr White, Shell's project manager, to discuss industrial relation issues relevant to the HDS project. At one or two of those meetings, Mr Cook was discussed briefly and it was intimated that the AMWU was pushing to have him employed on the site. No request was made of CBI for approval to employ Mr Cook and "the issue of Mr Cook's employment was not raised with me by anyone from MRE or the AMWU again until these proceedings had commenced." Later in paragraphs 27 to 29 of the same affidavit Mr Mann has deposed in the terms set out at [12] of these reasons. 24 These obstacles to the acceptance of any uncorroborated evidence by Mr Lockyer, in combination with the effect of s 298V, have led me to the clear view that there is a serious question to be tried as to whether MRE has contravened s 298K by refusing to employ Mr Cook.
Balance of convenience and other discretionary considerations 25 Despite my conclusion that there is a serious question to be tried, I have not been persuaded, on the balance of convenience and having regard to other discretionary considerations, to order MRE to employ Mr Cook on the HDS site until the hearing and determination of this action or further order. I acknowledge that the traditional refusal or reluctance of Courts to make orders, in effect, requiring specific performance of contracts of employment has been broken down where interlocutory relief has been sought in relation to claims under s 298K; see eg Australasian Meat Industries Union v G & K O'Connor Pty Ltd (supra) and Independent Education Union v Geelong Grammar School [2000] FCA 557. 26 However, they were both cases where the alleged contravention of s 298K involved the dismissal of an existing employee. In O'Connor, the employee was of almost eight years standing. In Geelong Grammar, the employee's engagement was for an indefinite period and entitled him to the provision of a residence for himself and his family. Moreover, as Finkelstein J pointed out at [35], "The stigma attached to a dismissal from employment by a school of the standing of Geelong Grammar cannot be underestimated." By contrast, Mr Cook has never commenced employment on the HDS project, and his employment, even if it were to commence now, would only be for about three months. There is no suggestion that inability to undertake employment in that period, even if it were total, would irreparably or significantly impair Mr Cook's skills as a boilermaker. Any stigma which he might attract as a result of MRE's refusal to employ him would be slight and largely, if not entirely, dispelled by the imposition of a penalty and an appropriate order for compensation against MRE. 27 I have not lost sight of the interests of the AMWU itself and its contention that to refuse an interlocutory injunction would "send a signal" that employers can, with impunity, "black list" former or prospective union delegates. However, as I have just indicated, considerations of that kind are counteracted by the reflection that, if it fails at trial, MRE will be liable to substantial penalties and, if it is not ordered to employ Mr Cook, to pay compensation without having had the benefit of his labour. Moreover, the evidence indicates that AMWU members presently working on the HDS site have elected job delegates and there is no suggestion that the industrial representation afforded to them has been impaired by Mr Cook's inability to undertake that role. On the other hand, the respondents have not suggested that there are no present vacancies for boilermakers or that any existing employees would have to be dismissed to permit Mr Cook to be employed without economic detriment to MRE. 28 I am also oppressed by the effect which an interlocutory order would have on CBI's contractual right to participate in the selection of employees for the HDS project. Mr Friend of Counsel for the AMWU sought to meet that concern by suggesting that CBI had been aware of the undertaking to employ Mr Cook and should be taken to have colluded with MRE in its alleged contravention of s 298K. However, I consider that the evidence as it stands, particularly that of Mr Mann which I am disposed to accept where it differs from that of Mr Lockyer, precludes the Court from fixing CBI with the knowledge imputed to it. 29 Factors which favour the view that damages or compensation under s 298U(c) are an appropriate remedy include the relatively short duration, already mentioned, of any employment which Mr Cook might obtain even if final orders could not be made until after September 2003. In addition, as I indicated during the course of argument, the Court can accord the parties a speedy trial leading to a final determination of this matter. That will minimise the financial hardship which Mr Cook has claimed that he and his family are suffering. I note parenthetically in that context that Mr Cook has been unemployed since February 2003 and was apparently content to remain so without seeking unemployment benefits until his expected employment on the HDS site should commence in mid-April 2003. 30 The obverse of the consideration that damages will afford an adequate remedy is the difficulty which would attend the making of an order to enforce the applicant's undertaking as to damages if it were ultimately held that an interlocutory injunction should not have been granted. The fact that MRE would have had the benefit of Mr Cook's labour during the intervening period may import into the calculation considerations which Mr Friend called "metaphysical". However, that is not sufficient to deprive this consideration, particularly as it affects CBI, of any significance at all.
Conclusion 31 For the reasons which I have endeavoured to explain, I have come to a clear conclusion that the preponderance of convenience and other discretionary factors militates against the making of the interlocutory orders sought. As one of those factors has been the facility for the Court to afford a speedy final trial, I shall give directions to ready the application for such a trial to occur on 30 June and 1 July and, if necessary, to continue from 8 July until concluded. There will be liberty to any party to apply on not less than forty-eight hours notice in writing to the other parties. I certify that the preceding thirty-one (31) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Ryan J.
Associate: Dated: 6 June 2003 Counsel for the Applicants: Mr W L Friend
Solicitor for the Applicants: Maurice Blackburn Cashman
Solicitor for the First Respondent: Legal & Employment Solutions
Solicitor for the Second Respondent: Mallesons Stephen Jaques
Automotive, Food, Metals, Engineering, Printing & Kindred Industries Union
Maintenance Resource Engineering Pty Ltd
(2000) 100 IR 383