Burnie Port Corporation Pty Ltd v Maritime Union of Australia

THE COURT: 1 The main issue in the present appeal is whether it is a contravention of s 298K of the Workplace Relations Act 1996 (Cth) for an employer to refuse to employ a person, unless that person is prepared to accept employment under an Australian Workplace Agreement ("AWA") made under Pt VID of the Act . 2 Relevantly, s 298K provides: "(1) An employer must not, for a prohibited reason, or for reasons that include a prohibited reason, do or threaten to do any of the following: … (d) refuse to employ another person …" 3 Section 298L(1) provides: "Conduct referred to in subsection 298K(1)…is for a prohibited reason if it is carried out because the employee, independent contractor or other person concerned: … (h) is entitled to the benefit of an industrial instrument or an order of an industrial body; …" 4 An "industrial instrument" is defined in s 298B(1) as meaning: "…an award or agreement, however designated, that: (a) is made under or recognised by an industrial law; and (b) concerns the relationship between an employer and the employer's employees, or provides for the prevention or settlement of a dispute between an employer and the employer's employees." 5 The terms "industrial body" and "industrial law" are also defined in s 298B(1). An "industrial body" means the Australian Industrial Relations Commission or its State or Territory equivalent and an "industrial law" means the Act or any other law that regulates the relationship of employers and employees or provides for the prevention or settlement of disputes between employers and employees. 6 The antecedent of ss 298K(1) and 298L(1)(h) was s 334(2)(e) of the Industrial Relations Act 1988. That paragraph prohibited an employer from refusing to employ a person because the person "is entitled to the benefit of an award or an order of the [Australian Industrial Relations] Commission". Section 298L(1)(h) of the Act expanded the protection to "industrial instruments" and orders of an "industrial body" as defined in s 298B(1). 7 In August 1999 the appellant Burnie Port Corporation Pty Ltd, ("the Corporation") wished to engage two persons to fill vacancies in its workforce as port operatives/relief cold store operators. Members of the Corporation's workforce were either employed under individual AWAs, which was the Corporation's preferred mode of employment, or under one of two certified enterprise bargaining agreements (which are compendiously referred to as "the EBA"), to which the Corporation and the respondent, Maritime Union of Australia, ("the Union") were parties. The EBA, certified under Pt VIB of the Act, is an industrial instrument as defined in s 298B(1). 8 In pursuance of its preferred manner of regulating the employment of its employees, the Corporation stated during interviews with the prospective candidates for the two positions that it would require the successful candidates to agree to enter into an AWA before commencing employment with the Corporation. Stephen Gerard Rolls, one of three candidates being seriously considered for the positions, stated at his interview that he was not happy with an AWA. He stated in evidence that this was because he did not wish to be working on different terms and conditions from the rest of the employees of the Corporation. Mr Rolls was passed over for both positions in favour of the two other candidates , both of whom agreed to enter into an AWA before commencing employment with the Corporation. 9 It is common ground that the EBA would have applied in respect of Mr Rolls' employment had he been employed, but did not enter into an AWA. If Mr Rolls had entered into an AWA, under Div 6 of Pt VID of the Act, the AWA would, for practical purposes, have prevailed and operated to the exclusion of the EBA. We say "for practical purposes" as, although an AWA operates to the exclusion of an award (ss 170VQ(1) and 170VQ(4)), it does not operate in all circumstances to the exclusion of all of the provisions of a certified agreement (s 170VQ(6)). It appears that in the present case the AWA would have excluded the operation of the EBA: see s 170VQ(6)(c). Accordingly, the requirement imposed upon Mr Rolls that he agree to employment under an AWA was, in effect, a requirement that he agree to be employed on terms that would disentitle him to the benefit of the EBA. 10 The Union claimed before the primary Judge that the Corporation, by refusing to employ Mr Rolls because he had not agreed to accept employment under an AWA, and thereby to renounce the benefit of employment under the EBA, contravened s 298K(1)(d) of the Act. It applied for the imposition, pursuant to s 298U of the Act, of penalties on the Corporation in respect of the contravention. 11 The primary Judge concluded that the Union's claim of a contravention of s 298K(1)(d) had been made out and made orders that included a declaration that: "the Corporation in refusing in August 1999 to employ Stephen Gerard Rolls contravened s 298K(1) [of the Workplace Relations Act 1996 (Cth)] ." 12 His Honour adjourned the hearing on the question of penalty to a date to be fixed. 13 The Corporation appealed against the decision of the primary Judge. On the appeal the Minister for Employment, Workplace Relations and Small Business ("the Minister") intervened, pursuant to s 471 of the Act, in support of the Corporation's appeal. The Corporation and the Minister contend that the primary Judge erred in law and fact in concluding that the Corporation contravened s 298K(1) by requiring that its prospective employees enter into an AWA as a condition of their engagement. 14 The Corporation relied on three main grounds. The first was that it had not refused to employ Mr Rolls. Rather, so it said, Mr Rolls declined to accept the terms and conditions of employment offered to him. The primary Judge found that the Corporation had refused to employ Mr Rolls when it decided to employ the two other applicants in preference to him. That finding was open on the evidence. We are not persuaded that his Honour erred in any respect in arriving at it. 15 The second ground relied upon by the Corporation was that his Honour erred in finding that the Corporation refused to employ Mr Rolls because he would have been entitled to the benefit of the EBA. The Corporation contended that his Honour failed to have proper regard to its evidence that it required new employees to be employed under an AWA, was imposed in response to competitive pressures in order to ensure that the Corporation was not at a disadvantage relative to its competitor ports. However, it seems to us his Honour did consider that evidence, but he concluded that the refusal of the Corporation to employ any candidate who would not agree to enter into an AWA if appointed "was actuated substantially, if not wholly, by a concern to exclude the appointees from the benefit of the EBA". At [57] the primary Judge said: "It is not necessary that one of the prohibited reasons identified in s 298L be the sole or dominant reason for the conduct struck at by s 298K(1). As the prefatory words to that sub-section make clear, if the conduct is engaged in for several reasons a contravention will be made out if those reasons 'include' a prohibited reason [Maritime Union of Australia v Geraldton Port Authority (1999) 165 ALR 67 at [224]]. The prohibited reason need only be one of a number of reasons actuating the proscribed conduct. Even in the absence of those prefatory words, it would be sufficient if the prohibited reason were a substantial or operative reason for the conduct imputed to the employer; see [Hanley v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union [2000] FCA 1188] at [45], citing General Motors Holden Pty Ltd v Bowling (1976) 51 ALJR 235." 16 His Honour considered that the substantial reason for the refusal to employ Mr Rolls was to exclude appointees from the benefit of the EBA, rather than the reason proffered by the Corporation for its conduct. cf: Klanjscek v Silver [1961] 4 FLR 182 at 187. That finding was open on the evidence and we are not persuaded that his Honour erred in any respect in arriving at it. 17 The third and, in our view, substantial ground argued by the Corporation was that s 298L(1)(h) required that the person who has been refused employment be, at the date of the refusal, entitled to the benefit of an industrial instrument or an order of an industrial body; it was said to be insufficient that the person might in the future be entitled to that benefit. It was common ground that at the date of the refusal, as Mr Rolls was not yet an employee of the Corporation, he had no existing legal entitlement to any benefit under the EBA or under any other industrial instrument or order of an industrial body that was of relevance to his prospective employment with the Corporation. Accordingly, so it was said by the Corporation and the Minister, the Union was not able to satisfy the statutory requirement that employment be refused by reason of an existing entitlement under an industrial instrument or order. The Corporation and the Minister contended that there can be no breach of s 298K(1)(d) where an employer refuses to employ a person because that person will not agree to the employer's preferred mode of industrial regulation under the Act which, in the case of the Corporation, was employment under an AWA rather than the EBA. 18 The Corporation and the Minister also contended that their interpretation of ss 298K(1)(d) and 298L(1)(h) does not render the operation of those provisions nugatory as there can be instances where an applicant for employment has an actual entitlement under an industrial instrument or order, which the applicant is required to forego as a precondition to his or her employment. One example given was a requirement that a former employee agree to refund termination entitlements as a condition of employment: see Construction, Forestry, Mining and Energy Union v BHP Steel (AIS) Pty Ltd [2000] FCA 1008 at [43]. A refusal to employ because of an existing award entitlement might also arise in a transmission of business case: see Moss v Fantil Pty Ltd (1994) 58 IR 118. It was also pointed out that certain industrial instruments confer entitlements on applicants for employment. 19 The Union submitted that the construction contended for by the Corporation and the Minister would effectively denude ss 298K(1)(d) and 298L(1)(h) of any operative effect. Employing what they called a purposive approach to construction, counsel for the Union contended that, in context, s 298L(1)(h) must be taken to refer to an existing entitlement or to an entitlement that would arise upon employment. Thus, the Union argued that s 298L(1)(h) operates where it can be established that the entitlement is contingent in the sense that, but for the contravening conduct (the refusal to employ), the person would have been entitled to the benefit of an industrial instrument or order cf: Moss v Fantil Pty Ltd at 124-126. The Union claimed that its interpretation gives effect to the statutory purpose of protecting present and prospective employees from discrimination in their employment for any of the proscribed reasons. 20 The primary Judge accepted that the reference in s 298L(1)(h) to an entitlement to the benefit of an industrial instrument or award meant an entitlement as "a matter of legal right": see Leontiades v F.T. Manfield Pty Ltd (1980) 43 FLR 193 at 196-197 per Keely J and Maritime Union of Australia v Geraldton Port Authority (1999) 165 ALR 67 at [189] per Nicholson J. However, the primary Judge stated that one of the fundamental purposes of ss 298K and 298L(1)(h) was that employees should be allowed to take advantage of all of the entitlements provided by, or under, the Act (including award benefits) without penalty. His Honour was not prepared to impute to Parliament an intention that those provisions only apply to actual, rather than prospective, employment. Thus, his Honour considered that the legislative purpose would be frustrated if a prospective employer were able to refuse to employ an employee because the employee wished to be able to enjoy the entitlements provided by, or under, the Act in respect of employment at the employer's workplace. That approach led his Honour to conclude at [54] that: "…for the purposes of Pt XA of the WR Act, Mr Rolls, as a serious applicant for a position in which he would have been entitled to the benefit of the provisions of the EBA, was 'entitled' to the benefit of that EBA. The fact that the Corporation expressed a clear intention that no successful applicants would have their wages and conditions regulated by the EBA (since they were to be employed on an AWA) does not entail a different conclusion. The Corporation's intention was to preclude any appointee from being able to compel observance of the EBA, and it thereby acknowledged that, as a matter of law, the provisions of the EBA would apply in the absence of an AWA." 21 The primary Judge found that Mr Rolls would have been entitled to the benefit of the EBA if there had not been a refusal to employ him because he would not agree to be employed under an AWA. 22 It will be seen that the appeal raises the important question of whether s 298L(1)(h) is only concerned with a present or existing, rather than a contingent or prospective, entitlement to the benefit of an industrial instrument or order. 23 The ordinary and natural meaning of ss 298K(1) and 298L(1)(h) is that, when the proscribed conduct occurs, the person concerned has, or enjoys, a present or existing legal entitlement to the benefit of an industrial instrument or order. The benefit might relate to the proposed employment or might have resulted from prior employment, but at the time of the proscribed conduct it must be a benefit to which the person concerned is entitled. The meaning contended for by the Union would require that s 298L(1)(h) be construed as relating to a benefit to which the person concerned is or would be entitled if the proscribed conduct had not occurred. 24 A major difficulty confronting the Union's proposed interpretation of s 298L(1)(h) is that in s 298L(1), when the legislature intended to distinguish between a past, present or future event or state of affairs, it did so. For example, s 298L(1)(a) refers to where the person the subject of the proscribed conduct "is, has been, proposes to become or has at any time proposed to become" a member etc of an industrial association. The careful use of terms in s 298L, suggests that when the legislature used the words "is entitled" in s 298L(1)(h), it intended to refer to a present or existing, rather than a future or prospective, entitlement. 25 The Union claimed that its interpretation gives effect to the legislature's intention that an employer may not discriminate between employees by imposing upon actual, or prospective, employees the employer's preferred mode of industrial regulation. It is plain that ss 298K(1)(d) and 298L(1)(h) intend to prohibit an employer from discriminating against an employee on the basis of the employee's existing entitlements under industrial instruments or orders. However, it is far from clear that the sub-sections were intended to prohibit an employer from offering to prospective employees employment on terms and conditions that give effect to the employer's preferred mode of industrial regulation under the Act. 26 Where an employer offers a prospective employee employment under an AWA as its preferred mode of industrial regulation under the Act, rather than under other forms of industrial regulation under the Act that are operative at the employer's workplace, it seems to us the employer is exercising a choice afforded to it under the Act. An AWA may be entered into by an employer with a prospective employee before the commencement of that employee's employment (see s 170VF(2)). That being so, it is difficult to discern a legislative intent that an employer should not be entitled to offer an AWA to a prospective employee rather than employment under an award or an EBA. 27 Each mode of industrial regulation under the Act, whether it be by an AWA, an EBA or an award, is operative and binding upon the parties only when the prescribed statutory criteria have been satisfied. Although the statutory criteria vary with each mode of regulation, the protective mechanisms provided under the Act in respect of each of them were intended to ensure that employees are not treated harshly or unreasonably. The legislature has not expressed any preference in the Act in favour of one form of industrial regulation over another. Rather, as is stated in s 3(c), one of the principal objects of the Act is to enable employers and employees to choose the most appropriate form of agreement for their particular circumstances. 28 In the circumstances we are unable to discern any legislative policy or intent that an employer be prevented from offering to a prospective employee one form of industrial regulation under the Act rather than another. Put another way, we do not discern a legislative policy or intent in respect of the anti-discrimination provisions in ss 298K(1)(d) and 298L(1)(h) that it is the prospective employee, rather than the employer, who is to be entitled to choose the mode of industrial regulation under the Act that is to apply to his or her employment, where more than one form of such regulation is available in the prospective employer's workplace. Yet that consequence flows from the Union's interpretation of those provisions. In our view the Union's interpretation is not supported by the ordinary and natural meaning of the provisions or by any discernible legislative policy or intention in respect of prospective employees. 29 While the relevant statutory provisions might not have extensive application, the examples proffered by the Corporation demonstrate that the interpretation which it supports will not denude those provisions of operative effect. Thus, there is no justification for straining the language of s 298L(1)(h) to ensure it has some operative effect. 30 The Union's reliance on Moss v Fantil to demonstrate that Mr Rolls had a contingent entitlement to the benefit of the award is not supported by the overtime example given in that case. The example shows that a person may be entitled to the benefit of an industrial instrument notwithstanding that the person has only a contingent entitlement to the payment of a particular benefit which is payable under the instrument on the occurrence of an event, such as the actual working of overtime hours (see Moss v Fontil at 124). In that example, the reason the person is entitled to payment for the overtime work in accordance with the industrial instrument is that, prior to the work being carried out, the person had a present and existing entitlement to be paid at the rate prescribed by that instrument in the event of working overtime hours. That entitlement crystallised into an entitlement to be paid the money required by the industrial instrument when the overtime hours were actually worked . That is different from the case of a person who is not entitled to any benefit under an industrial instrument until a particular event occurs, such as becoming employed. 31 The Corporation submitted, in the alternative, that s 298L(1)(h) requires that there be a refusal to employ a person for the reason that that person will be entitled to the benefit of any industrial instrument or order. The submission is to be rejected as the sub-section is concerned with a person's entitlement to the benefit of a particular industrial instrument (or instruments) or a particular order (or orders) applicable to that person. 32 Finally, we would emphasise two matters. The first is that our decision is confined to the construction of ss 298K(1)(d) and 298L(1)(h) and is not intended to reflect directly, or indirectly, on the operation of other subsections in either section. The second is that we have not decided that ss 298K(1)(d) and 298L(1)(h) cannot apply to a prospective employee. As explained earlier, the sub-sections can apply to a prospective employee who is discriminated against because of a present or existing entitlement under an industrial instrument or award. 33 For the above reasons we are of the view that the primary judge erred in his construction of s 298L(1)(h) with the consequence that the declaratory relief granted by his Honour ought not to have been granted. It follows that the appeal should be allowed, the orders of the primary judge aside and, in lieu thereof, it should be ordered that the application of the Union be dismissed. I certify that the preceding thirty-three (33) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Court.