Bluescope Steel Limited (Formerly BHP Steel Limited) v The Australian Workers' Union, New South Wales

Industrial Relations Commission (NSW)|2000-02-24|Before: Wright J, Walton J, Marks J, Haylen J

Industrial Relations Commission of New South Wales in Court Session

CITATION : Bluescope Steel Limited (Formerly BHP Steel Limited) v The Australian Workers' Union, New South Wales [2004] NSWIRComm 222 APPELLANT Bluescope Steel Limited PARTIES : RESPONDENT The Australian Workers' Union, New South Wales FILE NUMBER: IRC 7335 of 2003 CORAM: Wright J President; Walton J Vice-President; Marks J CATCHWORDS : Appeal - dispute orders made under s137 - alleged contravention of dispute orders - kinds of dispute orders available under s137 - jurisdiction - cease and refrain order - power to make dispute orders against a union - order ancillary or in aid of primary dispute order - obligation to take "reasonable steps" to ensure compliance with dispute order - words not too vague and imprecise - failure to exercise authority under union rules not a failure to take reasonable steps in the circumstances - requirement to hold discussions facilitative and ancillary to primary order - meaning of industrial action - despatch of urgent product required in accordance with enterprise agreement during periods of industrial action - work lawfully required - failure to hold immediate discussions - leave to appeal granted - appeal upheld in part - declaration made LEGISLATION CITED : Industrial Relations Act 1996 Abboud v The State of New South Wales (Department of School Education) (No. 2) (1999) 92 IR 32 BHP Steel v The Australian Workers' Union, New South Wales [2003] NSWIRComm 423 BHP Steel (AIS) Pty Ltd v Australian Workers' Union, New South Wales and Ors (2003) 125 IR 207 BHP Steel (AIS) Pty Ltd v Australian Workers' Union New South Wales and Ors (2003) 125 IR 216 City of Botany Bay v Federated Municipal and Shire Council Employees' Union of Aust., NSW Division (unreported, 24 February 2000, IRC 638 of 2000) Coal and Allied Operations Pty Ltd v Australian Industrial Relations Commission (2000) 203 CLR 194 Hawkins v Pender Bros Pty Ltd [1990] 1 Qd R 135 Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41 CASES CITED : House v The King (1936) 55 CLR 499 Mounsey v Lafayette (2002) VSC 342 National Union of Workers, New South Wales Branch & Ors v TNT Australia Pty Limited and Franklins Limited [1997] NSWIRComm 104 Parland Pty Ltd & Ors v Mariposa Pty Ltd (1995) 5 TASR 121 Public Employment Office v NSW Fire Brigades (unreported, 1 December 1999, IRC 6599 of 1999) R v The Commonwealth Conciliation and Arbitration Commission and Ors, ex parte The Transport Workers Union of Australia (1969) 119 CLR 529 Sheffield District Railway Co v Great Central Railway Co (1911) 27 The Times LR 451 Terrell v Mabie Todd and Co., Ltd [1952] 2 The Times LR 29 August 1952 Transport Workers' Union of Australia, New South Wales Branch v Chubb Security Services Ltd [2001] NSWIRComm 248 Wade v Burn (1966) 115 CLR 537 HEARING DATES: 07/27/2004 DATE OF JUDGMENT: 08/27/2004

APPELLANT: Mr RJ Buchanan QC Mr R Warren of counsel SOLICITOR: Mr David Lloyd Blake Dawson Waldron LEGAL REPRESENTATIVES: RESPONDENT: Mr A Hatcher of counsel SOLICITOR: Mr John Howard Maurice May & Co

JUDGMENT: - 56 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES IN COURT SESSION

CORAM: WRIGHT J, President WALTON J, Vice-President MARKS J

BLUESCOPE STEEL LIMITED (FORMERLY BHP STEEL LIMITED) v THE AUSTRALIAN WORKERS' UNION, NEW SOUTH WALES

Application for leave to appeal and appeal against a decision of Justice Haylen given on 1 December 2003 in Matter No IRC 4899 of 2002 JUDGMENT [2004] NSWIRComm 222

1 This matter concerns an application by Bluescope Steel Limited (formerly BHP Steel Limited) ("Bluescope") for leave to appeal pursuant to s188 of the Industrial Relations Act 1996 ("the Act"), and if granted, an appeal from a decision of Haylen J of 1 December 2003. In those proceedings, Bluescope made an application for a summons pursuant to s139 of the Act alleging that the Australian Workers' Union, New South Wales ("the AWU") had contravened dispute orders made by Commissioner Connor on 5 August 2002. Haylen J determined that application in favour of the AWU: BHP Steel v The Australian Workers' Union, New South Wales [2003] NSWIRComm 423. It is that decision that is the subject of the appeal presently before us.

2 The factual background to this matter is set out in considerable detail in Haylen J's decision, and can be relevantly summarised as follows:

a Bluescope employs members of the AWU at its Springhill Works at Port Kembla, including in the Finishing section of its Painting and Finishing department. The Finishing section operates 24 hours a day, 7 days a week.

b In July 2002, those employees engaged in industrial action by way of a strike. The employees' concerns, triggered by the dismissal of a fellow employee, Mr Danny O'Driscoll, related to the operation and application of Bluescope's rehabilitation programme.

c Following conciliation by Deputy President Grayson on 16 July 2002, the employees returned to work, however the strike resumed on Friday, 2 August 2002.

d On Friday, 2 August 2002, Bluescope sought an urgent re-listing of the matter, seeking a resumption of work generally, as well as compliance with clause 9 of the BHP Steel Port Kembla Operations Enterprise Agreement 2002 ("the Agreement"), which related to the despatch of urgent product during periods of industrial dispute. Specifically, Bluescope required the despatch of urgent product to its customer, Electrolux. The matter was listed before Commissioner Connor, who recommended a resumption of work, effective Monday, 5 August 2002. The employees did not return to work on 5 August 2002.

e On Monday, 5 August 2002, Commissioner Connor made dispute orders against the AWU and its members, effective 6 August 2002. The dispute orders were in the following terms:

Members of the AWU employed by BHP Steel (JLA) Pty Limited in its finishing section at the Springhill CRM works at Port Kembla shall cease and refrain from taking any further industrial action and shall work in accordance with normal work requirements and their contracts of employment.

The AWU, their respective officers and employees shall take all reasonable steps to ensure compliance with that order in paras 1 above and should hold immediate discussions with BHP with respect to the despatch of stock (coils) for Electrolux.

Upon resumption of work by the employees, the AWU and BHP shall hold further discussions concerning the question of the processes for rehabilitation in general and shall report to me the outcome of those discussions when the matter resumes before me on Tuesday, 17 September, 2002. At that time I will entertain any application for the variation or recission of the orders.

This order shall come into effect on Tuesday, 6 August, 2002 and shall remain in force until Tuesday, 17 September, 2002 unless varied or rescinded in the meantime.

f A variety of meetings were held on 6 August 2002, which ultimately resulted in urgent product being despatched at about 7pm on 6 August 2002, and a return to work at about 8am on 7 August 2002. Specifically:

i. at about 7am, employees conducted a "gate meeting" and resolved to continue with the strike. Present at that meeting were, amongst others, Mr Darryl Anderson, the Assistant Secretary of the Port Kembla and Southern Highlands Branch of the AWU and acting organiser at Bluescope's Springhill site, and Mr Branko Gorgievski, a Bluescope employee in the Finishing section and AWU delegate within that section.

ii. at about 9.00am, Mr Anderson and Mr Gorgievski held discussions with representatives of Bluescope, including Mr Gabriel Meena, President of the Springhill Works; Mr Sam Gerovasilis, Painting and Finishing Manager at the Springhill Works; and Mr Trent Sebbens, Human Resources Advisor. Much of the discussion at that meeting was focussed on the circumstances surrounding Mr O'Driscoll's dismissal.

iii. at about 10.20am, Mr Anderson and Mr Gorgievski (and other representatives of the AWU) conducted a further meeting with AWU members in the carpark.

iv. at about 10.30am, further discussions were held between representatives of the AWU and Bluescope, including a discussion about the despatch of urgent product to Electrolux, whether the customer's need was urgent, and the interpretation of clause 9 of the Agreement.

v. at about 11.00am, a further brief discussion was held between representatives of the AWU and Bluescope regarding the interpretation of clause 9 of the Agreement.

vi. at about 2pm, Bluescope attended the Commission seeking a widening of the dispute orders to cover both the Electrical Trades Union of Australia, New South Wales Branch ("the ETU") and the Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union, New South Wales Branch ("the AMWU"), who had become involved in the dispute. The dispute orders were so widened.

vii. at about 4.15pm, further discussions were held between representatives of the AWU and Bluescope. Mr Wayne Phillips (the AMWU organiser) and Mr John Thornton (the ETU organiser) also attended.

viii. at about 6.30pm, a six-point "peace plan" was agreed, save for one point relating to having the dispute orders set aside.

g At about 7pm, two AWU delegates completed the despatch of urgent product to Electrolux.

h At about 8am on Tuesday, 7 August 2002, the employees returned to work.

i On 26 August 2002, Bluescope filed its application for a summons under s139 of the Act alleging breaches by the AWU, setting out the following particulars:

Members of the respondent employed by the applicant at the Finishing Section of the applicant's Springhill Works at Springhill Road, Pt Kembla NSW engaged in a strike from at or about 7.00 am on 2 August 2002 to at or about 8.00 am on 7 August 2002 and were not available to perform work in accordance with their normal work requirements and their contracts of employment.

Members of the respondent employed in the Finishing Section attended a gate or report back meeting from at or about 7.00 am to at or about 11.00 am on 6 August 2002.

The gate or report back meeting was attended by Darryl Anderson, an official of the respondent.

Despite the gate or report back meeting, the strike by members of the respondent employed in the Finishing Section continued until at or about 8.00 am on 7 August 2002.

The respondent did not take all reasonable steps to ensure compliance with the dispute orders and did not hold immediate discussions with the applicant about the despatch of stock for Electrolux.

The respondent has acted in contravention of the dispute orders.

3 We note that the evidence before Haylen J indicated that the meetings which were held on 6 August 2003 were, for the most part, "back-to-back".

4 Bluescope's application alleged breaches of the dispute orders by the AWU on 6 and 7 August 2003. It was limited to breaches of the second dispute order.

5 Before considering the alleged breaches, it is appropriate to turn to the findings Haylen J made regarding the scope of orders available under s137. In effect, Haylen J found that the second order was not within power under s137 of the Act, adopting a narrow interpretation of that section.

6 Section 137(1) of the Act is in the following terms:

The Commission may make the following kinds of dispute orders when dealing with an industrial dispute in arbitration proceedings:

(a) the Commission may order a person to cease or refrain from taking industrial action; (b) the Commission may order an employer to reinstate or re-employ any one or more employees who were dismissed in the course of their industrial dispute or whose dismissal resulted in the industrial dispute. (c) the Commission may order an employer not to dismiss employees in the course of the industrial dispute if the employer has threatened to do so. (d) the Commission may order a person to cease a secondary boycott imposed in connection with the industrial dispute.

7 His Honour determined firstly that the words "kinds of dispute orders" in s137 do not operate to expand the four orders specified in s137(1)(a)-(d):

[105] The question then arises whether the words "kind of" in s 137 are mere surplusage or are meant to have a real role to play by expanding the dispute orders which may be made by the Commission. It seems an unlikely way to expand the orders which may be made to use this type of ambiguous language in a scheme of some particularity where serious consequences may flow from a breach of such orders. It is upon this basis that I am inclined to the view that the words "kinds of" are mere surplusage and do not expand the four categories of dispute orders which may be made by the Commission. Each order available under s 137(1) is a "kind" or "type" of dispute order, but each order addresses a different matter although they are all of a class of conduct occurring in times of industrial disputation. It may well be that the words have a role where an order does not, for example, use the words "cease" or "refrain" from taking industrial action but where the order is of that type and has that effect.

8 In light of that finding, Haylen J then determined that the second order was not within the kind or type of orders available under s137:

[107] The AWU has attacked the second order as one not capable of being made under s 137 as a dispute order. That submission was clarified as not being a challenge to the jurisdiction of the Commission to make such an order: it was conceded that an order of this type, in both its aspects, could validly be made under s 136 of the Act. The important point was that such an order could not be made under s 137 and proceedings for a contravention of that order could not be maintained under s 139 of the Act. Support for that proposition seems to be obtained from the decision of the Full Bench in the Transport Workers' Union case. In that case the following order was found to be beyond power when purportedly made under s 137(1)(a): The TWU and its officers, employees or agents shall take all necessary steps to ensure the continuation of work by their members employed at or in relation to the premises of Chubb in accordance with their contracts of employment and the lawful instructions of Chubb.

The Full Bench said that the order could also not be supported as an order ancillary or in aid of an order that the TWU, its officers, employees, members and agents refrain from imposing any bans, limitations or restrictions on the performance of work in relation to nominated premises of Chubb Security Services Ltd. This order was also said to offend against the requirement that such orders be in clear terms readily understood and capable of being obeyed by those against whom they were made.

[108] It appears from these ex tempore reasons that the Full Bench regarded the first order as coming within the terms of s 137(1)(a) and that, although that kind of order could be made, there was no room to make an order requiring all necessary steps to be taken to ensure the continuation of work. That was not an order contemplated by s 137(1)(a) or by the other three types of orders contemplated by sub-section (1)(b)(c) and (d). There seems very little difference between the order in the TWU case (which was made in the context of a refraining order under s 137(1)(a)) and the cease and refrain order made in this BHP case, with the second order requiring all reasonable steps to be taken to ensure compliance with the cease and refrain order. Further, the direction to hold immediate discussions with BHP with respect to the despatch of stock could not be an order made under s 137 based on the approach in the TWU case.

[109] Further support for this approach to s 137 is given by orders made by Hungerford J in Public Employment Office v NSW Fire Brigades Employees Union (unreported, 1 December 1999, IRC 6599 of 1999). In that case, his Honour made two orders under s 137 of the Act directing the union to cease all industrial action "by no later than 8.00 am on Thursday, 2 December 1999" and further directing that the union and its members refrain from taking industrial action "during the period from 8.00 am on Thursday, 2 December 1999 to 8.00 am on Friday, 31 March 2000". His Honour then issued directions under s 136(1) of the Act in the following terms:

Pursuant to s 136(1) of the Industrial Relations Act 1996 I make the following directions: The New South Wales Fire Brigade Employees Union (the "FBEU") and its officers are hereby directed to take all reasonable steps to ensure that the employees and the members of the FBEU comply with orders 1 and 2.

A similar approach was adopted by Schmidt J in City of Botany Bay v Federated Municipal and Shire Council Employees' Union of Aust., NSW Division (24 February 2000, IRC 638 of 2000).

[110] The approach in each of these cases recognises the limitations of s 137. The orders support the dispute orders by specific directions made under s 136. It is also important to note that the orders of Hungerford J in the Fire Brigade's case specified a time on a particular day when the order was to become effective and specified a time on another particular day when the order was to cease being effective. That precision is lacking in the present orders, but having regard to the Commissioner's knowledge of the logistics as described in conference by Mr Anderson, this may have been a deliberate choice allowing some flexibility in obtaining compliance with the orders .

[111] It is clear by reference to the proceedings before the Commissioner that the only orders sought were dispute orders under s 137 of the Act. In view of the approach I adopt to the operation of s 137, order 2 made by the Commissioner was not one available to be made as a dispute order under s 137 of the Act. I accept the concession made by the AWU that order 2 could have been made under s 136 of the Act in a similar way to the orders made by Hungerford J in the Fire Brigade Employees' case, but that step was not requested by BHP nor taken by the Commissioner. Importantly, proceedings cannot be commenced under s 139, treating order 2 as a dispute order which had been breached.

9 Having made these findings, his Honour then stated that "having heard full argument on the issues, it is appropriate that I also deal with [Bluescope's] contention that there were breaches of the dispute order by the AWU if all the orders were supportable under s 137 of the Act and in particular order 2."

10 Bluescope alleged that the AWU had breached the second dispute order made by Connor C in three ways: (1) Mr Anderson failed to exercise his authority under the AWU's rules to direct members to return to work, being a "reasonable step" which could have been taken to ensure that the AWU's members complied with the first dispute order; (2) the AWU made no effort to ensure the despatch of urgent product, thereby failing to ensure compliance with the first dispute order that members "cease and refrain from taking any further industrial action" and work "in accordance with normal work requirements"; and (3) the AWU failed to hold immediate discussions with Bluescope with respect to the despatch of urgent product to Electrolux.

11 We turn then to the findings made in respect of each of these alleged breaches.

12 First, his Honour found that there was no breach of the second dispute order as a result of Mr Anderson's failure to "take all reasonable steps" to ensure compliance with the dispute orders. In that respect, Haylen J made the following finding regarding the use of the words "reasonable steps" in the second dispute order (at [114]):

...Further, the term "reasonable steps" is too vague and imprecise - if particular steps were required to be taken by the AWU they should have been specified in the order, especially having regard to the consequences which may flow from a breach of such an order. and, more generally, held (at [113]-[116]):

The first breach alleged by BHP was that Mr Anderson, as acting branch secretary, did not take all reasonable steps to ensure compliance with order 1 requiring employees at the Finishing section to cease and refrain from taking further industrial action. There is not challenge to the validity of order 1. A disturbing feature of this alleged breach is that it became obvious during the address of senior counsel for BHP that breach action was commenced although the applicant had no evidence of what AWU officials, including Mr Anderson, had done or had omitted doing in obtaining compliance with the cease and refrain order. It was frankly conceded on several occasions by senior counsel for BHP that it could not, and was in no position to, call into question the evidence given by those attending the meeting and what was said by Mr Anderson himself about his encouragement to employees to obey Commissioner Connor's orders. Once the AWU went into evidence on this issue, the best case that could be mounted by BHP was to challenge the adequacy of the steps taken by the union to obtain compliance with the orders. It is not surprising that senior counsel effectively conceded that there were stronger arguments in relation to other aspects of the conduct of the AWU but that concession simply highlighted that BHP was in no position to allege this particular breach and had commenced this part of the proceedings apparently in the hope that some useful evidence might be forthcoming from the AWU. That approach is not justified by the terms of s 137: if BHP was not in possession of evidence which justified commencing proceedings for an alleged breach of the orders on this basis, then it should not have commenced the action.

Having regard to the state of knowledge of BHP when it commenced these proceedings, it is not surprising that the evidentiary basis for the attack calling into question Mr Anderson's conduct was flimsy at best. Senior counsel was left in the position of arguing that a particular set of words reflecting Mr Anderson's authority under the registered rules of the AWU to make a direction to its members engaged in a dispute, were required in order to discharge his obligation to take all reasonable steps to ensure compliance with the order. There was an air of unreality about this submission which failed to take into account Mr Anderson's relative inexperience as an organiser, his acting role in the absence of the branch secretary, the fact that he had not previously been involved in a dispute where dispute orders were issued by the Commission, his unfamiliarity with the background to and the terms of the recently made Enterprise Agreement and the feeling surrounding the treatment of Mr O'Driscoll which appears to have become something of a cause celebre amongst the members. ...

The evidence concerning what was said at the meeting by Mr Anderson has already been set out and does not need to be repeated. It is significant that Mr Phillips, who appears to be treated by BHP as something of a honest broker in this dispute, stated in his affidavit that in his view Mr Anderson used his best endeavours to have the Finishing section employees return to work. He was not cross-examined on this matter. Indeed, he was not cross-examined at all. Mr Phillips' affidavit confirmed: Mr Anderson had sought his help in dealing with the mass meeting, especially because of his knowledge of the Enterprise Agreement; the strident tone of the meeting held on 6 August 2002; the fact that Mr Anderson urged a return to work and compliance with the orders of Commissioner Connor ; that Mr Anderson had read the orders twice to the 7.00 am meeting; that the members were not permitted to go home at the end of the meeting but were kept waiting for a report back as the unions tried to resolve all the issues in further discussions with representatives of BHP. He recalled Mr Anderson saying that not only disobedience of the orders could land the members and the union if a lot of trouble but that the orders had to be obeyed and that meant the members had to return to work.

It may well have been that Mr Anderson was somewhat tentative in dealing with these employees who were not part of his normal organising area and he may not have felt comfortable in using the words of Rule 64 in seeking to persuade the men, in their difficult mood, to return to work. It was accepted on behalf of BHP that there was no suggestion that Mr Anderson paid mere lip service to the order, yet encouraged a continuation of the industrial action. The underlying issue was clearly the treatment of Mr O'Driscoll and the members appeared to have formed the view that a bad precedent had been created by BHP and an issue of general industrial importance had arisen. In addressing this group of employees, the tone of his address and the words he used had to be left to the good judgment of Mr Anderson, accepting, as does BHP, that he was encouraging a return to work. To require a formulistic approach to the terms to be used at a volatile stop work meeting in order to secure a return to work is not only naïve but very well may not achieve the type of response to the orders that BHP desired in this dispute. This aspect of BHP's case is rejected.

13 Second, his Honour found that there was no breach of the second dispute order as a result of the AWU's failure to ensure the despatch of urgent product. In that respect, Haylen J held (at [118]-[120]):

It was also accepted by BHP that Commissioner Connor declined to make a direction that delivery of urgent product take place and instead inserted a requirement that there should be immediate discussions with respect to the despatch of stock to Electrolux. There is no doubt that the Commissioner was attempting to progress that part of the dispute but he was doing so in circumstances where there was a significant issue about the way in which the "stock out" clause operated. While he was, undoubtedly, trying to achieve an urgent despatch of stock to Electrolux his order, in terms, did not impose that obligation upon the AWU - the focus was on a return to work. The despatch of product might also have been achieved by the members returning to work after their gate meeting at 7.00 am on 6 August 2002. There is force in the union's submission that BHP nominated 9.00 am on 6 August 2002 as the time at which the parties were to meet and this appears, at least in part, to be a time chosen by BHP in realisation that the gate meeting may have already achieved a return to work.

It is also to be remembered that representatives of BHP left the Commission after the orders were made knowing that nothing would happen in relation to the strike or the urgent despatch of product until the men had met at 7.00 am the following morning. If BHP wanted a return to work at an earlier time and/or the despatch of product at a time earlier than 7.00 am or 9.00 am the following morning, then it should either have asked for a specific time for compliance with the order or returned to the Commission on learning that the next step would be a 7.00 am meeting on 6 August 2002 and seek to amend the orders requiring, at least, urgent despatch that night. In industrial disputes, it is well understood that parties may not necessarily press the full extent of their rights because of a desire not to further inflame a difficult position. Whether this influenced BHP's thinking on the afternoon of 5 August 2002 is unknown but it is an experienced industrial player and it had available to it a wide range of options on the afternoon of 5 August 2002: if it wanted a return to work at a specific time and/or despatch of urgently required product by a specific time it could have sought such an order.

Further, I am unable to construe order 2 requiring the parties to hold immediate discussions with respect to despatch of stock to Electrolux to mean that there was an obligation for the urgent despatch of stock to Electrolux to actually take place. The order is further complicated by the fact that it was not to come into effect until Tuesday, 6 August 2002 and remained in force until Tuesday, 17 September 2002 unless varied or rescinded. In fact, the despatch of stock for Electrolux did take place on 6 August 2002 because of the action of the AWU delegates. No one contemplated that the despatch would take place at 12 midnight, 6 August 2002 and the form of the orders allowed substantial compliance, if not strict compliance, by the fact of despatch taking place on the day the order took effect.

14 Third, his Honour found that there was no breach of the second dispute order as a result of the AWU's failure to hold immediate discussions with Bluescope with respect to the despatch of urgent product to Electrolux. In that respect, Haylen J held (at [121]):

In relation to the requirement that there should be immediate discussions with respect to the despatch of stock for Electrolux, in terms that was not an order that could be complied with by the AWU acting alone: it required the co-operation of BHP. There is no doubt that BHP wanted the stock moved. It wished to talk about that subject matter immediately after the hearing in which the dispute orders were made. Mr Anderson concentrated upon resolving the whole issue by having a return to work utilising the meeting which had already been set down for 7.00 am on 6 August 2002. This position was disclosed to Commissioner Connor. BHP acknowledged the realities of the situation by then arranging for a meeting to take place at 9.00 am on 6 August 2002. The evidence of BHP representatives on this matter was frank - if the meeting had taken place and despatch occurred then or a full return to work had occurred then - that was sufficient compliance to satisfy BHP. It is likely that the only discussion of any substance on the question of despatch took place at about 10.30 am and was resolved later in the day at the meeting which began at 4.30 pm. The best that BHP might hope to establish from this evidence is a failure to meet concerning despatch of stock at 9.00 am on 6 August 2002. Bearing in mind what actually happened on that day and the nature of the orders made, if this conduct constituted a breach of order 2, then pursuant to s 139(3)(a) I would dismiss the matter on the basis that the circumstances were such that the Commission should take no action on the contravention.

15 Bluescope appealed the decision on the following five grounds: (1) Haylen J erred in finding that:

(a) orders available under s137 of the Act do not extend to include an order that a union and its officials take reasonable steps to ensure compliance with an order that industrial action cease;

(b) an order requiring a union and its officials to "take all reasonable steps to ensure compliance" was "too vague and imprecise";

(c) a union official who had presented s137 orders to a stop work meeting of members of the union but without exerting personal authority or that of the union had taken reasonable steps to ensure the orders were obeyed;

(d) orders available under s137 of the Act do not extend to include an order that the union and its officials engage in immediate discussions with the employer for the urgent despatch of product; and

(e) failing to arrange for the immediate despatch of urgent product was not a breach of the dispute orders made by Commissioner Conner on 5 August 2002. (2) Haylen J erred in having regard to the "relative inexperience" of the relevant union official in determining whether the union had contravened the dispute orders. (3) Haylen J erred in failing to find that conduct which amounted to a refusal to carry out particular work, being industrial action within the meaning of the Act, did not amount to a contravention of the dispute orders made by Commissioner Connor on 5 August 2003. (4) The interpretation of s139 adopted by Haylen J is contrary to the scheme and intent of the Act. (5) If the approach taken by Haylen J to the construction of s139 is correct, the Commission in Court Session will remain powerless to direct enforceable orders against unions requiring them to ensure compliance with s137 orders that industrial action cease.

16 In our view, the questions raised by this appeal are effectively threefold, namely:

a was the second dispute order made by Connor C an order available to him under s137 of the Act (and therefore enforceable under s139), having regard to both the first limb of that order (that the AWU take all reasonable steps to ensure compliance with the first dispute order) and the second limb (that the AWU hold immediate discussions with Bluescope)?

b if the second dispute order was within power, was the use of the words "reasonable steps" in the second dispute order "too vague and imprecise"?

c if the second dispute order was within power, was it breached by virtue of:

i. Mr Anderson's failure to exercise his authority under the Rules of the AWU;

ii. the failure to ensure the despatch of urgent product to Electrolux before 7pm on 6 August 2003; and/or

iii. a failure to hold "immediate" discussions regarding the despatch of stock to Electrolux.

17 Bluescope contended that the appeal raises important issues about the proper construction of s137 of the Act; that a number of those issues have not received attention in earlier cases; and that it would be desirable for a Full Bench of the Commission to provide some clarification about the way in which s137 operates and the nature of orders which may be made thereunder.

18 It was further submitted by Bluescope that the dispute orders that were made in the present matter are of a type regularly made by members of the Commission, and that Haylen J's decision would "work a fundamental alteration in the content of dispute orders".

19 Finally, Bluescope submitted that the appeal raised important questions about the importance of obedience to dispute orders and the error of taking an overly technical approach to the enforcement of those orders.

20 The AWU submitted that there was no basis for granting leave to appeal. Firstly, Bluescope's assertion that the decision "will work a fundamental alteration in the content of dispute orders available under the Act" does not provide a proper basis for the grant of leave. Second, contrary to Bluescope's submission, the decision does not raise a question about either the importance of obedience to dispute orders or the error of taking an overly technical approach to the enforcement of dispute orders. Haylen J clearly stated that his findings "are not to be taken as condonation of a breach of dispute orders..." Further, in describing Haylen J's approach as "technical," Bluescope has mischaracterised his approach to the interpretation of s137 and exaggerated the implications of that approach. Thirdly, there is no public interest in the grant of leave. The decision relates to the particular circumstances surrounding the conduct of the AWU in the context of particular dispute orders, and is therefore of little public importance.

21 We accept each of the contentions of Bluescope in this respect. It is essential to the proper administration of the Commission's dispute resolution powers under the Act that the issues raised by this matter be resolved by the Full Bench of the Court Session. This factor is compounded by the particular elements of the matter which affect the proper operation of industrial instruments regulating industrial disputes in the Port Kembla steelworks. Each of these considerations raises powerful public interest issues requiring the grant of leave under s188 of the Act.

consideration Was the second dispute order within power?

22 The second dispute order comprised two distinct limbs: first, an order that the AWU "take all reasonable steps to ensure compliance" with the first dispute order; and secondly, an order that the AWU "hold immediate discussions with BHP" with respect to the despatch of urgent product. It is appropriate to deal with the validity of each limb of the dispute order separately.

Jurisdictional issue - the first limb of order 2 - take all reasonable steps to ensure compliance

23 Bluescope submitted that the approach adopted by Haylen J contained a "strictly limited catalogue of orders" which may be made under s137(1), and that consequently, "the allied proposition is that secondary forms of orders, such as ordering a union to take reasonable steps to obtain compliance with the primary order, are not permitted under this section". It was Bluescope's submission that such an approach was inconsistent with the approach not infrequently taken by other members of the Commission when issuing dispute orders, and was wrong in law.

24 Bluescope further submitted that a strict approach to interpreting s137 would defy the overall scheme of Part 2 Chapter 3. That submission was developed as follows: (1) given the definition of industrial action as "a strike by employees or a lock-out by an employer", a union can never be said to engage in industrial action; (2) in those circumstances and, on the approach adopted by Haylen J, there can be no basis for ever making a dispute order against a union to refrain from engaging in industrial action; (3) the Commission is therefore confined to making a direction against a union pursuant to s136 "with no remedy for non-compliance or outright defiance"; (4) it follows then that s138(1)(a), which states that a dispute order may be made against "a party ... to an industrial dispute" has no work to do with respect to an industrial organisation, which is entitled by virtue of s130(1)(a) to be a party to an industrial dispute; (5) such an interpretation would be curious given s139(4), which clearly contemplates a dispute order being made against an industrial organisation by stipulating the maximum penalty that may be imposed on an industrial organisation for a contravention of a dispute order.

25 The AWU submitted in written submissions that the approach adopted by Haylen J to the interpretation of s137 was correct and consistent with the decision of the Full Bench of the Commission in Transport Workers' Union of Australia, New South Wales Branch v Chubb Security Services Ltd [2001] NSWIRComm 248. However, Mr A Hatcher of counsel, who appeared for the AWU, acknowledged that it was not part of the AWU's submissions to Haylen J that the Commission lacked any jurisdiction under s137(1)(a) to make the orders in the first limb of order 2 against a union and its officers and employees. In that respect, he pointed to his submission in the matter below that "we accept that under section 137(1) it is safe for the Commission to make ancillary orders, so that an order ancillary or in aid of the purpose of achieving the cessation of industrial action would be within power". The AWU did, however, contend that the second limb of the second order was not within power. We will return to that contention later.

26 Further, the AWU contended that by asserting that, on Haylen J's approach, a dispute order cannot be validly made against a union, Bluescope was erecting and knocking down a "straw man" to demonstrate error where none exists.

27 Mr Hatcher contended in his oral submissions that Connor C did not identify the particular section of the Act under which the orders were made, and that it should not be assumed that all of the orders were made under s137. In particular, the second order may, in fact, have been made as a direction under s136. There is no support for such an argument, and we note that Mr Hatcher conceded that Bluescope's application for dispute orders was clearly an application for orders under s137. In our view, there is no doubt the second dispute order was made under s137.

28 His Honour drew support for a limited interpretation of s137 from the Full Bench decision in TWU v Chubb Security; the decision of Hungerford J in Public Employment Office v NSW Fire Brigades Union (unreported, 1 December 1999, IRC 6599 of 1999); and the decision of Schmidt J in City of Botany Bay v Federated Municipal and Shire Council Employees' Union of Aust., NSW Division (unreported, 24 February 2000, IRC 638 of 2000). In our view, for reasons which are set out below, those cases do not provide such support.

29 In TWU v Chubb Security, the Full Bench of the Commission held, in an ex tempore decision, that the following dispute order was not sustainable under s137:

The TWU and its officers, employees and agents, shall take all necessary steps to ensure the continuation of work by their members employed at or in relation to the Premises of Chubb in accordance in [sic] their contracts of employment and the lawful instructions of Chubb.

We do not consider there was power to make order number 2, nor could it be justified as being an order of the kind specified in the grant of power provided by paragraph (a). Further, the order when construed, could not be said to be an order ancillary to or in aid of order 1, particularly having regard to the fact that order 1 was an order to refrain from taking industrial action. Accordingly, there was no power to make the order and it should be set aside.

31 Bluescope contended that "to the extent necessary, Chubb should be reconsidered and/or overruled".

32 Mr Hatcher suggested in submissions that the orders in the present matter suffered from the same defect as those in TWU v Chubb Security, that is, the second dispute order made by Connor C was defective because it required compliance with order 1 in circumstances where order 1 imposed positive obligations on employees and as such was not within the kinds of orders available under s137(1). In that respect Mr Hatcher contended that the order 2 goes further than requiring "ordinary reasonable steps" be taken to ensure the cessation of industrial action and imposed a positive obligation to ensure that members worked in accordance with their normal work requirements and contracts of employment, an obligation which was on-going and would not be spent upon the employees returning to work. When pressed, Mr Hatcher conceded, that having regard to the fact that the AWU did not challenge the jurisdiction to make the first limb of order 2, "the most we can say with these reasons [is] that his Honour was on strong grounds in identifying the similarity and the nature of the obligations imposed in the first limb of order 2 in this case with order 2 in the Chubb case because both orders required this on-going obligation with respect to continuation of work which ... on His Honour's reasoning could not be said to be in aid or ancillary to an order to cease industrial action".

33 There is no support for the AWU's contention in this regard. Firstly, there was no challenge to order 1. Secondly, despite Mr Hatcher's submissions to the contrary, we consider that the second limb of order 1, that employees "work in accordance with normal work requirements and their contracts of employment", is sound. Unlike the second order in TWU v Chubb Security which imposed a positive obligation on employees to adhere to their contractual obligations without any direct connection with an order to cease industrial action, the second limb of order 1 in the present matter was merely an adjunct to the first limb that employees cease and refrain from taking any further industrial action.

34 In our view, it is not necessary to reconsider the decision in TWU v Chubb Security. We do not agree with Haylen J's finding that "there seems very little difference between the order in the TWU case (which was made in the context of a refraining order under s 137(1)(a)) and the cease and refrain order made in this case, with the second order requiring all reasonable steps to be taken to ensure compliance with the cease and refrain order". The first dispute order in TWU v Chubb Security required the TWU to refrain from imposing bans, limitations or restrictions on the performance of work. The second dispute order required the union to take "all necessary steps to ensure the continuance of work" "in accordance [with] their contracts of employment and the lawful instructions of [the employer]". That order did not purport to directly restrain any form of industrial action or require its cessation. Nor was it ancillary to the refraining order in that it imposed new and additional obligations. It imposed a positive obligation simpliciter to adhere to contracts of employment and to lawful instructions. The direction was both uncertain in the context of an order made under s137(1)(a) and otherwise in the sense that it required compliance with 'lawful orders', such orders being made to have effect in futuro.

35 In contrast, order 2 made by Connor C expressly required the AWU to take "all reasonable steps to ensure compliance with [the first] order". It was, on its face, expressly referrable to the first order and was plainly made in aid of the first dispute order.

36 In our view, the first limb of the second dispute order made by Connor C was plainly sustainable under s137 as an ancillary order, or an order in aid of the first dispute order requiring members of the AWU to cease and refrain from taking any further industrial action. We do not agree that it was not within the type of orders contemplated by s137(1). We consider that the approach adopted by Haylen J with respect to the interpretation of s137 was not correct.

37 First, there is no doubt that a dispute order may be made directly against a union pursuant to s137(1)(a). It was not submitted by either party in this matter that the Commission did not have the power to make an order under that section against an industrial organisation. Section 222 of the Act establishes that a union that is registered under the Act is a "body corporate" and has perpetual succession. A body thus described would therefore come within any definition of "person" and particularly that in the Interpretation Act 1987 (see s21). The reference in s137(1)(a) to "a person" is a reference, in our view, to a legal person, and is not confined to a natural person. The word "person" in s137(1)(a) is broader than the word "employee", a difference which is clearly established by the distinguishing use of those words in ss137(1)(a) and (c) respectively. Whereas s137(1)(a) allows the Commission to make broad orders that a "person" cease or refrain from taking industrial action, s137(1)(c) specifies that the Commission may order an employer not to dismiss an "employee". Whilst "employee" falls within the broader category of "person", its use in the context of s137(1)(c) is narrower.

38 Further, the power to make dispute orders under s137 falls within Chapter 3 of the Act regarding "Industrial Disputes", a core element of which is disputation involving employers and industrial organisations, the usual parties in arbitration proceedings. The power to make dispute orders springs from the arbitration of disputes, and is identified in s136(1)(c) as being one of the powers available to the Commission in arbitration proceedings. Thirdly, s138(1) identifies those against whom dispute orders may be made, and includes a party to an industrial dispute. Section 130(1)(a) of the Act specifically provides that a union may be a party to an industrial dispute. Finally, a significant element of s139 regarding contravention of dispute orders focuses on the implications of such a contravention by an industrial organisation (see, for example, s139(3)(d)).

39 Once that conclusion is reached, and given that the nature of a corporate entity is such that it may only act through its officers and members, it is plain that the Commission has power to order a union to take steps to ensure the cessation of industrial action, as this is the only means for which the union (being a corporate entity) may ensure compliance with an order.

40 The corollary to this conclusion is equally clear: that where an order is made against the members of a union, there must be power to make an ancillary order such as in this matter requiring the officers of the union to take reasonable steps to ensure compliance by those members with the primary order. We consider that conclusion to be correct as a matter of general principle for two reasons. The power to make such ancillary orders against the officers of a union is consistent with the scheme of the Act, which contemplates a union being a party to an industrial dispute, and as such, places that union at the centre of the dispute resolution process. By enabling such orders to be made, the Act recognises that a union, as a corporate entity, is the instrument through which the industrial conduct of its members may be regulated.

41 Secondly, the practical operation of the principle is apparent in the present matter where the union was either responsible for the industrial action in question (by its direction and control) or the coordinating entity for its fulfilment (in the sense of convening meetings and being the centrepiece of the transmission of information and consideration of any action to be taken by the union's members). As earlier explained, given its corporate status, the AWU only has capacity to participate in industrial action through the actions of its officials, employees and members. Without jurisdiction under s137(1) to make an ancillary order against those officials and employees (such as order 2), the Commission could well be rendered powerless to intervene in and assist in the resolution of an industrial dispute, in circumstances where the union was a major protagonist in the dispute. Such a conclusion would be plainly contrary to general principle and the scheme of the Act.

42 This conclusion, and our interpretation of TWU v Chubb Security, is consistent with the earlier decision of a Full Bench of the Commission in National Union of Workers, New South Wales Branch & Ors v TNT Australia Pty Limited and Franklins Limited [1997] NSWIRComm 104. In that matter, the NUW sought leave to appeal from a decision of Schmidt J in which dispute orders were made against the NUW. The NUW sought to challenge the dispute orders for reasons which included that they went beyond the powers conferred by s137(1) of the Act. The dispute orders included an order against the NUW "requiring it to cease all industrial action against TNT... and to take all steps available at that time to ensure its members employed by Franklins ceased all industrial action and resumed work in accordance with the lawful directions of Franklins". Leave to appeal was refused on the basis that the circumstances and the matters involved were not of sufficient importance that the public interest required leave to be granted. However, the Full Bench relevantly went on to find:

In any event, we are satisfied that the dispute orders made by Schmidt J were regularly made having in mind the practice and procedure adopted by the Commission in such matters and were consistent with, as s137(1)(a) of the Act makes clear, the kinds of dispute orders which may be made by the Commission to "order a person to cease or refrain from taking industrial action". Section 138 specified the persons against whom a dispute order may be made and, it is clear to us, the persons against whom the present dispute orders were made are comprehended within pars (a) and (b) of sub-s(1) thereof. One need only add the width of industrial action in connection with an industrial dispute which may be caught by a dispute order as that term is defined in the Dictionary to the Act as including "a practice relating to the performance of work ... that restricts, limits or delays the performance of work, or ... a ban, limitation or restriction affecting the performance of work, or the offering or acceptance of work ... or any failure or refusal ... to attend for work or to perform work".

43 It was the AWU's submission that the decision in NUW v TNT is "not of any real assistance", because "the Full Bench only briefly gave its views in the context of a refusal of the grant of leave, and dealt with the impugned orders globally rather than giving specific consideration to the 'all reasonable steps' aspect of the orders". We do not agree.

44 We do not consider that the decision in Public Employment Office v NSW Fire Brigades Union lends support to a narrow interpretation of s137. In that matter, Hungerford J made dispute orders pursuant to s137, as well as issuing a direction to the union under s136 to "take all reasonable steps to ensure that the employees and the members of the [union] comply with [the dispute orders]". There is no doubt that his Honour was entitled to make the orders and direction under ss137 and 136 respectively. However, there is no foundation for interpreting his decision to make a direction under s136 to be a result of any finding by his Honour that there was a lack of power to make the orders and directions under s137. The same can be said for the decision of Schmidt J in City of Botany Bay v Federated Municipal and Shire Council Employees' Union, in which a similar direction was made under s136.

45 There are two further matters about which we consider it necessary to make some observations. We do not agree with Bluescope as to the implications of Haylen J's decision. In our view, Haylen J did not suggest that the second dispute order was unsustainable by virtue of the fact that it was made against an industrial organisation. In any event, as earlier stated, such a conclusion is incorrect. Leaving aside the issue of ordering a party to hold immediate discussions, his Honour's decision with respect to the power to make the second dispute order hinged on the fact that an order to "take all reasonable steps" to ensure compliance with a cease and refrain order was not within the types of orders contemplated by s137(1). We agree with the AWU that, in this regard, Bluescope's submission mischaracterises the approach taken by Haylen J.

46 However, it does not follow that we accept his Honour's consideration of the analysis of the words "kinds of dispute orders" appearing in the preamble to s137(1). We consider that those words are not mere surplusage (a conclusion which is inconsistent with the ordinary tenets of statutory interpretation) and do expand the scope of the powers conferred upon the Commission pursuant to the paragraphs (a) to (d) of s131(1). However, having regard to the conclusions in the earlier discussion of the scope of the Commission's powers under s137(1)(a) it is not necessary to deal with the issue further.

47 Bluescope has thus been successful in this aspect of the appeal.

Jurisdictional issue - the second limb of order 2 - hold immediate discussions

48 The grounds of appeal advanced by Bluescope included that "Haylen J erred in finding that orders available under s137 of the Act do not extend to include [the order in the second limb of order 2] that the union and its officials engage in immediate discussions with the employer for the urgent dispatch of product".

49 It was the AWU's submission that the inclusion in the second dispute order of the requirement to hold discussions was clearly outside the scope of s137, and as a result, the entire order must fail. Further, the holding of discussions falls within the ambit of "reasonable steps" in limb 1 of order 2. Therefore, according to the AWU, as a matter of construction, the second limb cannot be said to facilitate order 1 as such a construction renders the first limb of order 2 redundant.

50 The third dispute order also contained a requirement that the parties hold further discussions regarding the "processes for rehabilitation in general", albeit that those discussions were to be held upon the resumption of work. Mr Hatcher submitted that, as with the second limb of the second dispute order, the third dispute order was not an order available under s137, and further suggested that orders 2 and 3 were made under s136. As earlier discussed, we have no doubt that orders 2 and 3 were made under s137: the application for dispute orders was made by Bluescope under s137; the form of the orders suggested they were made as a coherent set of orders under s137; and there was nothing to suggest that the orders were made other than under that section.

51 For reasons which we discuss later, we are satisfied that order 1 required the despatch of urgent product. In those circumstances, an order requiring the parties to discuss how that despatch may be achieved must be considered facilitative of that primary order, particularly given the reasonably complicated process contemplated by clause 9 of the Agreement which required the performance of certain work during periods of industrial action, and given also that the AWU had been contesting the precise operation of that clause. Accordingly, in our view, the second limb of the order 2 was ancillary to the primary order and, as such, was validly made pursuant to s137(1)(a).

52 We do not agree with Mr Hatcher's contention that, if the second limb of the second dispute order was interpreted as being facilitative or ancillary, it would render the first limb of that dispute order redundant. As earlier stated, the second limb was appropriate in the circumstances and recognised the complexities associated with the requirement in the Agreement for the despatch of urgent product.

53 In any event, we consider that the second limb of the second dispute order is plainly severable and if we considered it to be invalid (which we do not), any such invalidity does not invalidate the order otherwise.

54 We consider that this aspect of the appeal must succeed.

Was the second dispute order "too vague and imprecise"?

55 Bluescope submitted that there was no reason to conclude that orders requiring "reasonable steps" to be taken lack any legal clarity.

56 It was submitted that an obligation to take reasonable steps can be seen in a number of statutes (including the Industrial Relations Act) which have received attention in the courts without any doubt being cast upon the certainty of the formulation. For instance, the term "take all steps within its power" was used in a bans clause which was considered by the High Court in R v The Commonwealth Conciliation and Arbitration Commission and Ors; ex parte The Transport Workers Union of Australia (1969) 119 CLR 529. Bluescope submitted that: although the challenge to the power to make a bans clause proceeded upon other grounds, there was no suggestion that the formulation of the clause involved vagueness or uncertainty. Indeed it was the fact that the clause imposed enforceable obligations punishable at law for breach that led to the jurisdictional challenge.

57 The AWU submitted that his Honour's finding that the words "all reasonable steps" were too vague and imprecise was made in the context of his consideration of the merits of the matter and not as a matter going to the power under s137 to make such an order. It was the AWU's submission that Bluescope incorrectly attacked Haylen J's findings as being not capable in law of having certainty.

58 We agree, in this respect, with the submission of Bluescope. The phrase employed by Connor C in the ancillary order was both conventional and well-known in industrial parlance. The AWU was not able to point to any authority which cast doubt as to the meaning of the expression (or that it was vague or imprecise). We note the conclusions of Barwick CJ in Commonwealth Conciliation and Arbitration Commission; ex parte TWU regarding the obligation imposed on the TWU by the bans clause to "take all steps within its power" to bring a ban to an end. His Honour held (at 549):

In the present case, the obligation to take all steps within the power of the organization to bring the ban to an end extends to the case of a ban etc. imposed by another organization and not directly involving the members of the prosecutor. But, in my opinion, this extension does not bring the clause or any part of it into invalidity. It may be that, in the case supposed, the prosecutor has no steps within its power which it can take; and it may be that situations may arise where difficult questions of fact have to be decided in determining whether or not the obligation has been breached. These, however, are not matters affecting the validity of the clause or of the particular aspect of it now under consideration.

59 Barwick CJ's observations regarding the validity of the obligation on an organisation to "take all steps with its power" are pertinent to our discussion regarding the obligation to take "all reasonable steps". The fact that there may be a factual dispute regarding the nature of the steps that may be considered "reasonable", or whether there has been a breach of the obligation as a result of a failure to take a particular step, does not render the order itself invalid.

If the second dispute order was within power, was it breached as alleged?

Failure to exercise authority under the Rules of the AWU

60 Bluescope contended that "merely drawing attention to the orders, or even referring to the Commission's authority, falls well short of complying with a direction to take reasonable steps to have them obeyed" and that "a reasonable step, not taken by Mr Anderson, was to use the authority of his union office, to direct the members to resume work". Bluescope's appeal in this regard hinges on whether Haylen J incorrectly found that the failure by Mr Anderson to take direct steps under Rule 64(2) of the Rules of the AWU to direct employees to return to work constituted a failure to take reasonable steps. Mr RJ Buchanan QC, with whom Mr R Warren of counsel appeared for Bluescope, submitted that "we are either wrong about this or not. His Honour thought we were wrong about it. With respect, our submission is that his Honour sets the bar too low".

61 We note that Mr Buchanan submitted that Haylen J did not, in fact, make a finding that Mr Anderson had taken all reasonable steps. However, he submitted that such a finding was a necessary consequence of Haylen J's rejection of Bluescope's argument that Mr Anderson should have taken the additional step of instructing members, using his authority under the Rules of the AWU, to comply with the dispute orders. We agree with this assessment.

62 It was contended for Bluescope that, whilst Mr Anderson was not complicit in the decision made by employees to continue to strike in the face of dispute orders requiring them to "cease and refrain" from such action, Mr Anderson was nevertheless tentative in his attempts to encourage employees to comply with the dispute orders. In effect, Bluescope's submission was that the alleged breach would have been avoided had Mr Anderson during his address to employees used words to the effect "you are required under Rule 64(2) of the Rules of the AWU to comply with all directions given by me as the officer of the AWU who is handling this dispute. I hereby direct you to return to work."

63 The AWU submitted that "Mr Anderson addressed the meeting in his capacity as an AWU official and did direct the members back to work". The AWU further submitted that "the fact that a return to work did not eventuate on 6 August does not mean that the AWU, through Mr Anderson, did not use its best endeavours to achieve such an outcome".

64 Mr Hatcher submitted that there was no evidence to suggest that, had Mr Anderson exercised his authority under Rule 64, it would have made a difference to the outcome of the dispute. Further, Mr Hatcher submitted that, in the absence of cross-examination, Bluescope has failed to meet the onus on it to establish a breach of the first limb of the second dispute order, that Mr Anderson failed to take all reasonable steps.

65 The evidence before Haylen J regarding the steps taken by Mr Anderson on 6 August 2002 can be summarised as follows: (1) Mr Andy Gillespie was the AWU Branch Secretary and organiser for the Springhill site. Mr Anderson was acting in that position while Mr Gillespie was on leave. Mr Anderson had no experience handling industrial disputes in which dispute orders had been issued. (2) It was Mr Anderson's evidence that at a meeting of employees at 7am on 6 August 2002, Mr Anderson read the dispute orders to the assembled employees, and stated words to the following effect:

The issuing of dispute orders is very serious, you should follow these orders. I have never been involved in a dispute where dispute orders have been issued and recommend that you comply with the orders. The employees continued to express their concerns about the issues surrounding the dismissal of Mr O'Driscoll. After further discussion, Mr Anderson said words to the following effect:

The dispute orders have to be complied with, you have to go back to work, these are very important orders, these are serious orders of the Commission and you should go back to work. (3) Mr Gorgievski's evidence corroborates the evidence given by Mr Anderson. He recalled Mr Anderson saying words to the following effect:

These dispute orders have to be complied with, you have to return to work, these orders should be complied with, they are orders from Commissioner Connor, they are orders of the Commission, you should go back to work. and

Before you take another vote, just hear me again, now you're all here, you have to know that we have dispute orders requiring us to return to work. The orders have to be complied with. Mr Gorgievski also deposed that, when asked if they could get into trouble for not complying with the orders, Mr Anderson said "yes, we can get into a lot of trouble". (4) Similarly, Mr Phillips gave the following evidence regarding the meeting at 7am on 6 August 2003:

Mr Anderson had showed me the dispute orders and he then, during his address recited the Dispute Orders to the members of the mass meeting.

Mr Anderson in addition to reading the Dispute Orders said words to the effect of:

"These are important Orders, they are Dispute Orders from the Commission. They have to be obeyed, this means you have to return to work."

During this address I took a telephone call from a fellow AMWU State Organiser from Orange. However, I was present when Mr Anderson repeated parts of the Dispute Orders a number of times reminding the members that they were to be complied with and that they could be in trouble if they were not abided by.

There were questions asked from the members of the mass meeting concerning Danny O'Driscoll and whether they could be in trouble if the Orders were not obeyed. In answer to this question, Mr Anderson replied words to the effect of:

"Yes you can get into a lot of trouble, the company can take further action against the Union, its Organisers and yourselves for not complying with the Dispute Orders."

I would describe the mood from the floor as very hot under the collar and hostile. We note that Mr Phillips was not cross-examined in relation to his evidence. (5) Mr Anderson gave evidence that, at about 8.15am, a general meeting was held, during which he again read the dispute orders, and said words to the following effect:

The orders have to be complied with, the people they're directed against have to return to work. (6) Whilst Mr Anderson was cross-examined briefly in relation to the steps that he took to ensure compliance with the first dispute order, he was not cross-examined in relation to his failure to give an express direction to members pursuant to Rule 64 of the Rules of the AWU. Specifically, he was not cross-examined as to Rule 64 and as to whether he knew of its existence.

66 Haylen J appeared to accept the evidence given by Mr Phillips (as an "honest broker" in the dispute) as confirming that: "Mr Anderson had sought his help in dealing with the mass meeting, especially because of his knowledge of the Enterprise Agreement; the strident tone of the meeting held on 6 August 2002; the fact that Mr Anderson urged a return to work and compliance with the orders of Commissioner Connor; that Mr Anderson had read the orders twice to the 7.00 am meeting; that the members were not permitted to go home at the end of the meeting but were kept waiting for a report back as the unions tried to resolve all the issues in further discussions with representatives of BHP. He recalled Mr Anderson saying that not only disobedience of the orders could land the members and the union if a lot of trouble but that the orders had to be obeyed and that meant the members had to return to work."

67 Bluescope relied on the decisions in Hawkins v Pender Bros Pty Ltd [1990] 1 Qd R 135 and Terrell v Mabie Todd and Co., Ltd [1952] 2 Times LR 29 August 1952 in support of its contention that the concept of "reasonable steps" is interchangeable with "best endeavours", and that the emphasis is on doing all that you can, not something less than that. The court in Terrell v Mabie Todd noted the finding in Sheffield District Railway Co v Great Central Railway Co (1911) 27 Times LR 451 at 452 that "best endeavours means what the words say; they do not mean second-best endeavours". The decisions in Terrell v Mabie Todd and Sheffield District Railway were cited in the High Court decision in Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41 in support of the conclusion that "an obligation to use 'best endeavours' does not require the person who undertakes the obligation to go beyond the bounds of reason; he is required to do all he reasonably can in the circumstances to achieve the contractual object but no more". The Queensland Supreme Court in Hawkins v Pender Bros held that the test, as stated by the High Court, properly recognised that a party, in doing all he "reasonably can", is not obliged to go beyond the bounds of reason, and that the extent of the obligation is governed by what is reasonable in the circumstances.

68 Mr Buchanan contended that the appropriate test was an objective one (that is, whether the AWU had taken all steps that were reasonably open) rather than a subjective one (that is, whether the AWU had taken all steps that were reasonable to take), but that the facts supported either situation: the exercise of authority under Rule 64 was both a step reasonably open to Mr Anderson, and was a reasonable step to take. It was sufficient to establish a breach, he submitted, to point to one step that was reasonably open to be taken but which was not taken.

69 Mr Hatcher cited Parland Pty Ltd & Ors v Mariposa Pty Ltd (1995) 5 TASR 121 in support of his contention that a failure to take a particular step does not mean that a party has failed to use its "best endeavours". The Tasmanian Supreme Court in that case considered the nature of the test as to what amounts to "best endeavours" and held (at 133):

Those passages and the way in which the decision of the primary judge was treated subsequently in the reasons for judgment make it clear that although the test which was being applied was objective in that it applied the standards of a reasonable man, it was also accepted that the covenantor's actions must be viewed in the light of the particular circumstances in which the covenantor was placed. In my view I should adopt the test applied in Hawkins v Pender Bros Pty Ltd (supra) subject to the proviso that a party should not be regarded as having failed to satisfy a condition requiring it to use its best endeavours if that failure was not material to the lack of success of the application in respect of which those endeavours were being used. Authority for that proposition can be found in Nina's Bar Bistro Pty Ltd v MBE Corporation (Sydney) Pty Ltd (1984) 3 NSWLR 613 and Egan v Geraghty (unreported) Court of Appeal Supreme Court of Queensland 16 February 1994. The reference in Hawkins' case at 155 to the fact that the primary judge was:

"... not prepared to find either that it acted in breach of the clause or that any other way of proceeding would have brought it to earlier success or indeed success at all."

suggests that the court in that case also regarded the materiality of the steps taken by a party to the success or failure of an application to be a relevant consideration. In any event quite apart from authority it would seem to me to be an untenable proposition that a party could be held to have failed to satisfy a condition requiring it to use its best endeavours in relation to an application because it failed to take some particular step if in fact the application would have been unsuccessful even had that step been taken. That is not to say however that the reasonableness of a party's endeavours should be judged with the benefit of hindsight.

70 In Mounsey v Lafayette [2002] VSC 342, the Supreme Court of Victoria considered the meaning of the words "take all reasonable steps" in the context of an obligation under the Transport Act 1983 (Vic) to purchase a ticket when travelling on a tram. The Court considered the meaning of "reasonable steps" at [28]-[30]:

In Rolfe v Willis , the High Court was concerned with a question of whether a landlord had taken "reasonable steps to prevent drunkenness" on licensed premises. It was held that:

"'Reasonable steps to prevent drunkenness' means such steps as ought reasonably to be taken by way of precaution against the occurrence of drunkenness on the premises under any circumstances that may reasonably be anticipated and to prevent its continuance when its existence is discovered."

In Young v Paddle Brothers Pty Ltd , Herring CJ was concerned with the question of whether a motorist had exercised "reasonable diligence" in attempting to identify the driver of a vehicle, and his Honour adopted the following test, which had been laid down in The Europe in discerning whether the owners of a damaged vessel had used reasonable diligence to discover her whereabouts:

"... the meaning of such expression (ie, `reasonable diligence') is not the doing of everything possible, but the doing of that which, under ordinary circumstances and with regard to expense and difficulty, could be reasonably required...".

Similar aphorisms have been employed to explain the meaning of "reasonable steps" and "all reasonable steps" in other statutory contexts: see, for example, Australian Meat Industries Employees Union v G & K O'Connor Pty Ltd ; Deputy Commissioner of Taxation v Pejkovic . The essential idea is that reasonable steps are what a reasonable man or woman would regard as being reasonable steps in the circumstances which apply.

71 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). We consider that that was not the intention of the Commissioner in the orders made on 5 August 2002.

72 The question of whether Mr Anderson took reasonable steps to ensure compliance with order 1 is a question of fact. As to appeals from findings of fact, the AWU relied on the decision in Abboud v The State of New South Wales (Department of School Education) (No. 2) (1999) 92 IR 32 which restated the well established principle that an appellate court will substitute its own judgment only if (leaving aside errors of law) the trial judge has made a finding of fact which is clearly wrong or not reasonably open on the evidence. Mr Hatcher submitted that no such error is evident in the present matter.

73 Bluescope submitted in its further written submissions that s191(3) of the Act requires us, in determining this appeal, to follow the principles applying to appeals from discretionary decisions. Accordingly, Bluescope submitted that the principles in House v The King (1936) 55 CLR 499 are relevant. In that matter, Dixon, Evatt and McTiernan JJ stated (at 504-505):

The manner in which an appeal against an exercise of discretion should be determined is governed by established principles. It is not enough that the judges composing the appellate court consider that, if they had been in the position of the primary judge, they would have taken a different course. It must appear that some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so. It may not appear how the primary judge has reached the result embodied in his order, but, if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance. In such a case, although the nature of the error may not be discoverable, the exercise of the discretion is reviewed on the ground that a substantial wrong has in fact occurred.

74 It was Bluescope's contention that an appeal against a discretionary decision depends upon showing "error in the decision making process" (see Coal and Allied Operations Pty Ltd v Australian Industrial Relations Commission (2000) 203 CLR 194 at 205) and that such an examination may involve an enquiry into whether the facts have been mistaken.

75 The AWU contended, in its further written submissions, that based on the majority decision in Warren v Coombs (1979) 142 CLR 531, "proper respect and weight has to be given to the conclusions of the trial judge" and that this means that "a trial judge's factual findings are not to be regarded as erroneous only because, in a case where different views of the facts are available on the evidence and where neither view clearly prevails over the other, the appeal court would prefer a view other than that taken by the trial judge". The AWU contended that the present matter is a case which readily gives rise to the potential for different views, so that in the absence of clear factual error by Haylen J, the appellate court should not reverse his decision.

76 In the present matter, irrespective of any argument regarding the relevant principles to be applied, we do not consider that any error is demonstrated in Haylen J's findings as to whether Mr Anderson took all reasonable steps. In that regard, Haylen J held (at [116]):

77 We concur with those findings. We are satisfied that Mr Anderson took all reasonable steps, having regard to the circumstances, to ensure compliance with the first dispute order: he used his best efforts to get the members to return to work and to comply with the first dispute order; he spoke emphatically to employees, and his words were in the nature of a direction (albeit not a formal direction under the Rules of the AWU); there was no challenge to his evidence that he could or should have said anything more to employees on the morning of 6 August 2002 to convince them to return to work; there was no evidence that issuing a formal direction under Rule 64 was the proper course of action in the circumstances, or that doing so would have made any difference to the eventual outcome; and his actions in seeking the assistance of Mr Phillips were appropriate.

78 We do not agree with the submission of Bluescope that "the bar has been set too low". Given that any assessment of whether an order to take reasonable steps has been complied with will depend on the particular circumstances operating at the time; the "bar" may well move. There can be no basis for suggesting that, by rejecting Bluescope's submission that Mr Anderson should have used a particular form of words, Haylen J was setting a minimum level of compliance with the second dispute order. Rather, in determining that matter Haylen J properly had regard to the circumstances in which Mr Anderson was acting.

79 We should not, therefore, be taken as suggesting that, in a given set of circumstances, a direction under the Rules of the AWU should not be given, or would be unnecessary. However, in the present circumstances, it is our view that Mr Anderson used his best endeavours, having regard to the issues and having also gauged the mood of the employees at the meeting, to ensure compliance with the first dispute order.

80 We note that Haylen J criticised Bluescope for commencing an action for breach of dispute orders without being in possession of any evidence justifying such proceedings, that is, evidence of Mr Anderson's activities on 6 August 2002 only became apparent to Bluescope during the proceedings themselves. Bluescope submitted that "this criticism - which was not advanced during argument - overlooks the fact that the evidence only emerged in the AWU case in response and that there was ample material from which an inference could be drawn that Mr Anderson was a collaborative party to a decision to continue the strike regardless of the orders". We reject that contention, and concur with Haylen J's finding that there was no suggestion that Mr Anderson pretended to seek compliance with the dispute order but gave "a wink and a nod" to the employees that they could continue their industrial action. We do not, however, concur with his Honour's criticism otherwise of the appellant.

81 We consider that this aspect of the appeal must fail.

Failure to despatch urgent product prior to 7pm on 6 August 2003

82 Bluescope contended that Haylen J erred in finding that "failing to arrange for the immediate despatch of urgent product was not a breach of the dispute orders", and further erred in finding that "failing to find that conduct which amounted to a refusal to carry out particular work, being industrial action within the meaning of the Act, did not amount to a contravention of the dispute orders". Two related issues arise for determination: firstly, whether by reference to "industrial action", order 1 compelled the despatch of urgent product to Electrolux; and secondly, whether order 2 operated so as to require the AWU to take reasonable steps to facilitate such despatch.

83 Bluescope's submission with respect to this alleged breach was developed as follows: (1) the refusal to despatch urgent product constituted industrial action by the employees; (2) the employees were ordered, by the first dispute order, to cease and refrain from taking any further industrial action, effective 6 August 2002; (3) the AWU was ordered, by the second dispute order, to take all reasonable steps to ensure compliance with the first dispute order; and (4) effecting despatch of urgent product at 7pm on 6 August 2002 "after consistent refusal until the intervention of the [ETU and AMWU]" does not constitute compliance with the second dispute order.

84 The AWU submitted that there was no express requirement in the first dispute order to arrange the despatch of urgent product. In that respect, the AWU drew attention to the fact that Bluescope had unsuccessfully sought an order from Connor C that despatch of the urgent product take place. The fact that Connor C did not make such an order was evidence, according to the AWU, that the dispute orders that were made were not intended to include a requirement that despatch of urgent product occur. In any event, Mr Hatcher submitted that if that submission was wrong and the first dispute order did, in fact, include an obligation to despatch urgent product to Electrolux, then that obligation would have been met upon a resumption of work.

85 Mr Hatcher further submitted that the transcript of the proceedings before Connor C during which the dispute orders were made demonstrates that the despatch of product to Electrolux was addressed in a limited way in the second limb of the second dispute order, relating only to the holding of discussions regarding that despatch, and did not contain a requirement that such despatch actually occur.

86 The evidence in the proceedings disclosed that during the course of the day on 6 August 2002, there was some considerable discussion regarding the interpretation of clause 9.4 of the Agreement, and in particular, the terms "stock out" in clause 9.4.11. Clause 9.4 was in the following terms: 9.4 Meeting Urgent Customers Needs

9.4.1 To satisfy the requirements of the customers of the Companies, the parties are committed to ensuring that the urgent needs of customers are met throughout the period of any industrial dispute. 9.4.2. In recognising that the Companies' customers are a key foundation of the Companies' business, the parties commit to the principle that all disputes and issues will be resolved in accordance with the applicable dispute resolution procedures and without recourse to industrial action that would adversely impact on those customers. 9.4.3 In the unlikely event of industrial action occurring, the parties will, before such action commences, and on an ongoing basis as necessary during such action, hold discussions in relation to production or maintenance work that is necessary to enable genuinely urgent customer requirements to be met. So far as practicable, prior to the taking of industrial action and (on all occasions) progressively, as necessary, during such action the relevant union delegate(s) and the relevant Company representatives will meet and confer immediately and on an ongoing basis to manage the supply of product to avoid stocking out of customers. 9.4.4. The Company's customer service or logistics representative will identify product that is required to maintain a customer's business and is packed and waiting despatch. 9.4.5. Where, in accordance with sub clause 9.4.6. and 9.4.7, product is identified as requiring despatch to avoid a stock out or potential stock out and that product or part of that product is packed and awaiting despatch, it will be despatched as required by the Company. 9.4.6. The company will become aware, either through its despatch management systems or by way of other direct communication with a customer that the customer is in need of urgent delivery of product to avoid a stock out. This will occur each and every day during a period of industrial action. 9.4.7 Where the Company becomes aware of a stock out for a customer, then the company will provide to the relevant union delegate a written report containing the following particulars of the stock out or potential stock out:

· the name of the customer; · the product and quantity required; · where the product is required, and · when the product is required.

A copy of the written report will be faxed to the relevant union offices. 9.4.8 In the event that there is a residual amount of an order to be processed to enable despatch of it to occur and there are special or urgent considerations applying to the order, these circumstances will be raised and discussed between the relevant company representative and the relevant employee representative with a view to reaching agreement. In the absence of agreement either party may seek the assistance of the Commission by notification under s 130 of the Act. The parties agree that if the operation of this sub-clause creates substantially adverse consequences then any party may apply to the Commission after 13 November 2002 to recommend other arrangements in relation to residual amounts of orders and the parties will comply with the terms of such recommendation in lieu of the provisions of this sub-clause. …

9.4.11 In sub-clause 9.4: 'relevant union delegate' means the delegate of the employees whose industrial action is preventing or hindering the normal despatch of product. In the absence of that delegate the relevant union delegate shall be the employee who, in the ordinary course, would be regarded by the employees as acting in the place of the delegate. 'relevant company representative' means the customer service officer nominated by the company for the purpose of the arrangements in this sub-clause. 'stock out' and 'stocking out' mean a situation where the customer is unable, because of its lack of the Company product which the customer requires, to maintain its normal operations. …

87 Evidence was adduced regarding the manner in which the AWU were notified of the need for the despatch of urgent product. In summary:

(1) On 2 August 2002, Bluescope obtained a fax from Electrolux confirming that that customer required "urgent despatch" of a particular stock item.

(2) Mr Sebbens gave evidence that on 2 August 2002, he was in a car with Mr Gerovasilis while Mr Gerovasilis was speaking on the phone to Mr Anderson, during which conversation Mr Gerovasilis said words to following effect: We have a fax from Electrolux, but it contains confidential information. We are willing to show you the fax if you meet us at the Springhill Administration building, but we can't give you a copy. Mr Gerovasilis then told Mr Sebbens that Mr Anderson had said words to the following effect: He's not interested in coming in and seeing the fax. They aren't going to despatch the urgent orders. He just wanted to talk about Danny.

(3) Mr Anderson gave a slightly different version of that event. He deposed that he asked Mr Gerovasilis for a copy of the fax, but was told that it was confidential. He then said words to the following effect: Look Sam, its late can you place fax it so I can have a look at it here. I've been in the Commission all day and I've been with members since 7am this morning. Could you please fax it so we can have a look at it?

Mr Anderson further deposed that "had I received it I could have shown it to Mr Gorgievski and more constructive measures taken to assist in the Electrolux dispatch as recommended by Commission Connor could have occurred".

88 It was Mr Anderson's evidence that: "the issue of 'stock out' had yet to be resolved. That is, the issue of a definition concerning stock quantities that required work to be conducted during the withdrawal of labour or a strike... it was a very contentious issue"; and that "it was very difficult to concentrate on the Electrolux issue when I was having difficulty with the Finishing Products employees returning to work and the issue that was preventing that from occurring was Mr O'Driscoll and rehabilitation/welfare issues. My priority was this issue and getting the Finishing Products employees back to work therefore complying with the Dispute Orders and then resolving any misinterpretation of Electrolux issues separately".

89 The first dispute order required employees to cease and refrain from taking any further industrial action. The definition of "industrial action" in the Dictionary in the Act states that industrial action includes (at sub-section (a)) "a practice relating to the performance of work, adopted in connection with an industrial dispute, that restricts, limits or delays the performance of work" and (at sub-section (b)) "a ban, limitation or restriction affecting the performance of work ... that is adopted in connection with an industrial dispute". Mr Buchanan accepted, correctly in our view, that the definition of industrial action should be read as referring to actions which affected the performance of work that is lawfully required.

90 There was no issue that compliance with clause 9 of the Agreement required the performance of work, or that the industrial action in question prevented the performance of that work. Mr Hatcher conceded (as we shall discuss shortly) that such work was lawfully required by clause 9. Accordingly, we are satisfied that the despatch of urgent product to Electrolux required the performance of work by members of the AWU; that the performance of that work was lawfully required by clause 9 of the Agreement; and that the industrial action taken on 6 and 7 August 2002 restricted, delayed and impeded the performance of that work. It follows, then, that by ordering the cessation of industrial action (as that term is defined in the Act) the Commissioner was, therefore, ordering the cessation of any action which affected the performance of work, including in the present matter, the performance of the work contemplated in clause 9 of the Agreement.

91 The AWU urged us to construe the dispute orders made by Connor C by reference to the nature of the proceedings in which the application for those orders was made. Such an approach is wrong, particularly in circumstances where the orders are clear on their face; the reference to industrial action, in the context of dispute orders under s137, was consistent with the meaning given to that expression by the Act; and the orders did not indicate a contrary meaning, either expressly or implicitly.

92 Further, as earlier discussed, it was clearly the intention of the Commission to make an order under s137. Whilst we do not consider it appropriate to construe the orders that were made by reference to what was sought during proceedings before Connor C, we note that that transcript indicates that the issue of despatch of product to Electrolux was very much in the mind of the parties and the Commissioner at the time the dispute orders were made.

93 Accordingly, we are satisfied that it was not only open to Connor C to make an order for the cessation of industrial action (and therefore an order for the performance of work under clause 9 of the Agreement), but that that was the character of the first dispute order that was in fact made.

94 We reject, then, the AWU's contention that the issue of despatch of urgent product to Electrolux was limited to the second limb of the second dispute order, being the requirement to hold discussions. Such a contention incorrectly reads down the plain words of the first dispute order. We are unable to agree with Haylen J's conclusion that the orders made by Connor C did not, in terms, impose an obligation upon the AWU to achieve an urgent dispersal of stock to Electrolux.

95 Mr Buchanan acknowledged that Haylen J did not make a ruling as to whether clause 9 of the Agreement had been breached. Mr Hatcher stated in oral submissions that the question of whether there had been a breach of clause 9 of the Agreement had not specifically been raised, and that the AWU was not advancing a proposition that there was no such breach on 6 August 2002, if the orders were valid and effective. He further conceded that "at the end of the day compliance with clause 9 would have required the performance of some work by members, employees of [Bluescope]". That concession was properly made. The evidence is clear that clause 9 applied in the circumstances at the Springhill works on 6 August 2002. It follows that a dispute order which required the cessation of industrial action was sufficient to require compliance with clause 9 and thereby the urgent despatch of product in accordance with that clause.

At a glance

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Judgment (236 paragraphs)

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