Should interim injunctions be made?
46 I am satisfied that the Court has jurisdiction to make interlocutory orders including reinstatement, if not under s 545 of the FW Act, then under s 23 of the Federal Court of Australia Act 1976 (Cth), which gives the Court power to make such orders (including interlocutory orders) as it thinks appropriate. Save for the question of competency, Capcoal did not submit otherwise. Like the equivalent provision under the Workplace Relations Act 1996 (Cth) (WR Act) (s 298U) s 545 is not exhaustive of the remedies that may be afforded to a successful party, on a final or interim basis. On the position under the WR Act, see, for example, Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia (1998) 195 CLR 1 and Davids Distribution Pty Ltd v National Union of Workers (1999) 91 FCR 463 at [27]-[29], [35]-[40]. As Greenwood J explained in Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Bluestar Pacific Pty Ltd [2009] FCA 726; 184 IR 333 (Bluestar), in order to warrant the exercise of the Court's discretion to grant interim reinstatement, the applicant must show "a sufficient likelihood of success in the principal proceeding at trial to justify, in the circumstances, the preservation of the status quo [strictly, the status quo ante] pending the trial".
47 Before going any further, it is necessary to refer to the relevant provisions of the FW Act upon which the applicants' case is based.
48 A person must not take adverse action against another person because that person has a workplace right, or has exercised or proposes to exercise that right (s 340) or because, amongst other things, the other person is or was a member of an industrial association or has "engaged in industrial activity" as that phrase is defined in s 347(a) or (b): (s 346). "Adverse action" includes dismissing an employee or altering the position of the employee to the employee's prejudice: s 342(1). Both Mr Herdman and Mr Scotton have been engaged in industrial activity within the meaning of s 347(a) or (b). Such engagement extends to membership of or office-holding in an industrial association, encouraging or participating in lawful activity organised or promoted by an industrial association, and representing or advancing the views, claims or interests of the industrial association.
49 These provisions appear in Pt 3-1 of the Act. The objects of Pt 3-1 include the protection of workplace rights and freedom of association: s 336(1). The means by which freedom of association is protected is by ensuring, amongst other things, that people are free to participate (or not) in lawful industrial activities: s 336(1)(b)(iii).
50 In this case, as in Bluestar, the applicants claim that the employees have been deprived of their employment for a prohibited reason "in circumstances where the legislation enacting the prohibition and conferring [remedies for] contraventions of the prohibition, is directed to the protection and preservation of the freedom of association": Bluestar at [21]. This is an important matter of context against which the claim for interlocutory relief must be assessed.
51 Sections 340 and 347 will be contravened even if the prohibited reason was not the sole reason the action was taken; it is sufficient if the reasons for the action taken include a prohibited reason (s 360) in the sense that the prohibited reason was "a substantial and operative reason" for the action: Board of Bendigo Regional Institute of Technical and Further Education v Barclay (No 1) (2012) 248 CLR 500 at [104] (Gummow and Hayne JJ).
52 If, in an application of this kind, it is alleged that a person took action for a particular reason and taking that action for that reason would constitute a contravention of Pt 3-1 of the Act (which includes ss 340-378), then it is presumed that the action was taken for that reason unless the person who took the action proves otherwise: s 361(1). In Barclay at [45] French CJ and Crennan J observed that "[g]enerally, it will be extremely difficult to displace the statutory presumption in s 361 if no direct testimony is given by the decision-maker acting on behalf of the employer". Section 361(2), however, states that the presumption does not apply in relation to orders for an interim injunction.
53 There is no dispute that at all relevant times Mr Herdman and Mr Scotton were members and officials of the CFMEU and that the CFMEU is an industrial association with standing to bring the proceeding: FW Act, s 539 item 11. Nor is there a dispute that during their employment with Capcoal the two men engaged in lawful industrial activities, the details of which appear in their affidavits. Furthermore, it is not in dispute that those activities included "protected industrial action" within the meaning of that term in Pt 3-3 Div 2 of the Act.
54 The applicants submit, consistently with what the Full Court said in Kenefick v Australian Submarine Corporation Pty Ltd (No 2) [1996] IRCA 159; 65 IR 366 at 370-371, that the adverse action taken by Capcoal was a two-step process. The first step was the decision to reduce the workforce. The second was the selection of the employees as persons whose positions would be made redundant. Declarations 1, 2, 5 and 6 are concerned with the first step, declarations 3, 4, 7, and 8 with the second. The evidence indicates that multiple decision-makers were involved in each step.
55 As I have already indicated, Capcoal ultimately accepted that there was a prima facie case in relation to the first step and that, without more, if the evidence remained the same at the trial the applicants would be entitled to relief, including the right to seek reinstatement. Capcoal's argument turned on the balance of convenience.
56 The determination of this question involves the exercise of the Court's discretion. As the Full Court said in Samsung Electronics Co Ltd v Apple Inc (2011) 217 FCR 238 (Samsung) at [61], "[i]n exercising that discretion, the Court is required to assess and compare the prejudice and hardship likely to be suffered by the defendant, third persons and the public generally if an injunction is granted, with that which is likely to be suffered by the plaintiff if no injunction is granted. In determining this question, the Court must make an assessment of the likelihood that the final relief (if granted) will adequately compensate the plaintiff for the continuing breaches which will have occurred between the date of the interlocutory hearing and the date when final relief might be expected to be granted".
57 Neither party raised an issue about the interests of the public or third persons: cf. Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia (1998) 195 CLR 1 at [65] and [68].
58 In its written outline of submissions Capcoal contended that interlocutory injunctions should not be granted for three reasons: first, that there is little, if any, detriment to the applicants and "limited discernible utility" to any interim order at this time; secondly, that interim reinstatement is likely to have undesirable safety consequences; and thirdly, that the applicants would have an adequate remedy at the final hearing. During oral argument its senior counsel, Mr Neil submitted "there are no factors of convenience or inconvenience on either side", and that there was therefore "nothing to be gained" by the applicants in obtaining the interim relief sought.
59 He also argued that relief should be refused because of unexplained delay in bringing the application.
60 The submission that interim reinstatement is likely to have undesirable safety consequences fails for want of evidence to support it.
61 Nevertheless, putting to one side for the moment the question of delay, to which I will return, and if one were to ignore the merits of the applicants' case, there is much to commend Capcoal's argument.
62 First, both Mr Herdman and Mr Scotton deposed that, if reinstated, and protected industrial action were still taking place, then they, too, would take protected industrial action.
63 Secondly, both Mr Herdman and Mr Scotton deposed that they were receiving weekly payments from the CFMEU of over $1,000 (whether gross or net they do not say). While they said that they have been made to understand that the CFMEU is shortly to reconsider the continuation of those payments, the CFMEU has offered no evidence to indicate that the payments are likely to cease.
64 Thirdly, although the employees deposed to suffering financial stress, Capcoal submits that since they were not working for weeks before they were informed that their positions would be made redundant, that stress could not be attributed to the termination of their employment but to their engagement in protected action during which they were either not paid wages or paid a reduced wage (see FW Act, s 471).
65 Fourthly, although before the termination of their employment, both employees lived in heavily subsidised housing owned by Capcoal, as Mr Herdman's wife is independently entitled to free housing, Capcoal has approved Mr Herdman and his wife to continue to live in the same house rent-free. Capcoal has indicated (through Ms Oppermann) its preparedness to allow Mr Scotton to continue to occupy the house in which he resides until the final determination of the substantive proceeding.
66 Fifthly, during the course of the hearing Capcoal indicated that it would restore the applicants' annual and personal/carer's leave entitlements in the event that the employees prevailed at the hearing of the substantive application. Furthermore, on termination, Mr Herdman was paid $52,259.90 and Mr Scotton some $89,457.99 by way of redundancy payments, payment in lieu of notice, and accrued but untaken leave entitlements.
67 Thus the injury to the two employees is substantially mitigated.
68 On the other hand, each of the employees said that if a decision is made to end the protected industrial action he would return to work. Protected industrial action has been on foot now for several months. While the evidence does not permit me to say when it will end, I have no doubt it will end. It may also involve shorter stoppages. The parties indicated that a trial is not feasible before March next year. An ex tempore decision is highly unlikely. Consequently, it is likely to be many months before the outcome is known. There is every chance that protected industrial action will cease before judgment is pronounced, if not before the hearing. It is true, as Capcoal submitted, that the applicants could always move the Court again for interlocutory relief once the protected industrial action comes to an end. But that would come at a cost and it would not be in the interests of justice to put the parties to the expense of fighting another interlocutory application at that time.
69 Furthermore, I am persuaded that the employees have suffered an injury for which damages would provide an inadequate remedy in that, by reason of Capcoal's actions, they have been deprived of their rights under the FW Act to engage in protected industrial action.
70 In Esso Australia Pty Ltd v Australian Workers' Union [2016] FCAFC 72; 258 IR 396 at [240] Bromberg J explained the place of protected industrial action in the scheme of the FW Act:
Broadly stated, and consistently with the objects set out at ss 3(f) and 171(a)[, ]the FW Act provides for enterprise-level collective bargaining for the making of enterprise agreements, as a means of enabling industrial parties to resolve their industrial disputes. Collective bargaining is a process in which employees bargain with their employer as a collective rather than individually. To be successful, bargaining usually involves the making of concessions. Sometimes concessions are freely made, but an inherent feature of a collective bargaining regime is the recognition that concessions may need to be extracted through the application of industrial pressure. Industrial action is an available form of pressure and the capacity to lawfully exert such pressure, including by inflicting loss or damage, is permitted but is subject to certain conditions. As to the last-mentioned characteristic of collective bargaining, the FW Act calls permitted industrial action "protected industrial action".
71 "Industrial action " is defined in s 19(1) of the Act to mean action of any of the following kinds:
the performance of work by an employee in a manner different from that in which it is customarily performed, or the adoption of a practice in relation to work by an employee, the result of which is a restriction or limitation on, or a delay in, the performance of the work;
a ban, limitation or restriction on the performance of work by an employee or on the acceptance of or offering for work by an employee;
a failure or refusal by employees to attend for work or a failure or refusal to perform any work at all by employees who attend for work;
the lockout of employees from their employment by the employer of the employees.
72 Furthermore, only employees covered by the proposed enterprise agreement may vote in a protected action ballot: FW Act, s 453.
73 It follows that Mr Herdman and Mr Scotton may only engage in industrial action as defined if they are employees. It is not to the point that the Act enables the employees to appoint them as their bargaining representatives: s 176. The CFMEU has been appointed and there is no evidence to suggest that there is any prospect either Mr Herdman or Mr Scotton would be appointed in lieu of, or (assuming it were possible) in addition to, the union. If their employment was wrongfully taken from them, subject to the terms of the Act they have also lost their right to withdraw their labour as a means of imposing pressure on the employer to agree to more favourable terms of employment. That is a valuable right for which damages would provide an inadequate remedy.
74 In any case, the merits cannot be ignored and in this case they are an important consideration. In Samsung the Full Court said at [67]:
As Sundberg J observed in Sigma Pharmaceuticals (Australia) Pty Ltd v Wyeth (2009) 81 IPR 339 at [15], when considering whether to grant an interlocutory injunction, the issue of whether the plaintiff has made out a prima facie case and whether the balance of convenience and justice favours the grant of an injunction are related inquiries. The question of whether there is a serious question or a prima facie case should not be considered in isolation from the balance of convenience. The apparent strength of the parties' substantive cases will often be an important consideration to be weighed in the balance: Tidy Tea Ltd v Unilever Australia Ltd (1995) 32 IPR 405 at [416] per Burchett J; Aktiebolaget Hassle v Biochemie Australia Pty Ltd (2003) 57 IPR 1 at [31] per Sackville J; Hexal Australia Pty Ltd v Roche Therapeutics Inc (2005) 66 IPR 325 at [18] per Stone J; and Castlemaine Tooheys [Ltd v South Australia (1986) 161 CLR 148] at 154 per Mason ACJ.
75 It is therefore necessary to evaluate the strength of the parties' cases on the evidence as it stands.
76 The only substantive issue at trial will be whether the adverse action was taken for any one of the reasons identified by the applicants, which I shall call a prohibited reason.
77 At the trial the onus of proof on this question will be on Capcoal because the presumption in s 361(1) applies. Here, however, it is on the applicants, because of the operation of s 361(2). Capcoal argues that s 361(2) prevents the Court from taking into account the availability of the presumption at the trial (and therefore the reverse onus) in determining the applicants' likely success at trial. There is a good deal of authority to the contrary, which Capcoal submits is plainly wrong and should not be followed. Capcoal itself cited six decisions of this Court: See, eg, Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union v Visy Packaging Pty Ltd (No 2) [2011] FCA 953 at [19]; Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union known as the Australian Manufacturing Workers' Union (AMWU) v McCain Foods (Aust) Pty Ltd [2012] FCA 112 at [45]; Construction, Forestry, Mining and Energy Union v BHP Coal Pty Ltd [2012] FCA 563 at [62]; Construction, Forestry, Mining and Energy Union v Downer EDI Engineering Power Pty Limited [2012] FCA 661 at [12]; Construction, Forestry, Mining and Energy Union v Eco Recycler Pty Ltd [2013] FCA 24 at [44]; and Chenoskova v The University of Adelaide [2014] FCA 1436 at [24]. To this list may be added Police Federation of Australia v Nixon (2008) 168 FCR 340 at [69] (Ryan J); Construction, Forestry, Mining and Energy Union v BHP Coal Pty Ltd [2012] FCA 563 at [63] (Greenwood J); Construction, Forestry, Mining and Energy Union v Downer EDI Engineering Power Pty Ltd [2012] FCA 661 at [12] (Logan J), and Bluestar, decisions under the equivalent provision in the WR Act, s 809(2). I do not intend to suggest that the list is exhaustive. In Police Federation v Nixon Ryan J said of s 809(2)
If the effect of s 809(2) is to require an applicant to demonstrate, in the absence of any evidence at all from the respondent, a serious question to be tried as to each element of the cause of action, including the respondent's reason or reasons for the impugned conduct, the applicant may suffer irreparable damage before he or she can be accorded a final trial at which, ex hypothesi, the presumption would enable the cause of action to be made out. I consider that such a restrictive and apparently unjust interpretation should only be given to a provision which occurs in what seems to be a beneficial or facultative legislative scheme, if the language of the subsection intractably requires it. In my view, a construction more consonant with the statutory context and history and the preparatory material is that s 809(2) precludes the court from finding, on an application for an interim or interlocutory injunction, even provisionally, by recourse solely to the presumption, that the respondent's conduct was for a prescribed reason or for reasons that included a prescribed reason. However, I do not construe s 809(2) as preventing the court, in assessing whether there is a serious issue to be tried, from having regard to the availability of the presumption in the final determination of the application. Similarly, I consider that account can be taken of the ultimate availability of the presumption when assessing the respective strengths of the case for the applicant and that for the respondent as part of exercising the general discretion to grant or withhold interlocutory relief.
78 There is force in this reasoning. I am not satisfied that his Honour or the judges who have followed him are plainly wrong. Be that as it may, the evidence the applicants have adduced on this application is such that, even if the availability of the presumption at the trial is ignored, I am persuaded that they have demonstrated that they have a strong case.
79 I turn first to the decision to implement the proposal for forced redundancies - the first step in the decision-making process.
80 I accept the applicants' submission that the relevant decision-makers were Mr Heaton, Mr Gentle, and Rod Fury, the Commercial Manager. To determine why the adverse action was taken, the Court is concerned with their reasons. The only evidence of their reasons was adduced by the applicants. Capcoal merely relied on a passage in Ms Oppermann's affidavit in which she said:
To the best of my knowledge, information and belief, the reasons for the Proposal and the decision to implement it was as described by Deputy President Asbury of the Fair Work Commission in paragraphs 128 to 130 of her reasons for not making a bargaining order as sought by the CFMEU.
81 In paragraphs 128 to 130 of her reasons the Deputy President said that she accepted certain evidence from Mr Heaton and drew certain conclusions from it.
82 I fail to see how this evidence is admissible, let alone probative of the fact in issue. First, Ms Oppermann's belief in the correctness of the conclusions reached by Deputy President Asbury is not relevant. It could not rationally affect either directly or indirectly the assessment of the probability of the existence of the reason in this proceeding. Secondly, to the extent that Ms Oppermann's evidence might be treated as an opinion about the reasons for the Proposal, she does not disclose how she derived the knowledge and information on which that opinion is based. Thirdly, to the extent her evidence conveys the Deputy President's account of Mr Heaton's evidence and the Deputy President's conclusions about that evidence, it is a mixture of second-hand hearsay and inadmissible opinion evidence. While second-hand hearsay may be adduced in an interlocutory proceeding if the source of the information is disclosed (see, for example, Bray v F Hoffman-La Roche Ltd (2002) 118 FCR 1 at [117] per Merkel J; Australian Competition and Consumer Commission v Prysmian Cavi E Sistemi Energia SRL (No 4) [2012] FCA 1323 at [116] per Lander J and the authorities referred to there), the Evidence Act 1995 (Cth) makes opinion evidence inadmissible for all purposes unless it falls within one of the exceptions in the Act and this evidence does not. What is more, s 91(1), which makes evidence of a finding of fact in an Australian proceeding inadmissible to prove the existence of a fact that was in issue in that proceeding). I therefore reject the evidence.
83 In any event, this evidence would not be admissible at the final hearing.
84 Capcoal repeatedly attributed the "organisational restructure" which supposedly necessitated the forced redundancies to "an unplanned delay". For example, in an "Employee Question and Answer" sheet the following appears:
Q. What is the decision that Capcoal is proposing to make?
A. Due to an unplanned delay, Capcoal has reviewed the current Mine Plan. From this review Capcoal is considering an organisational restructure that would see Capcoal's capacity reduced through the parking of the Shovel and ancillary equipment. No decision has been made, and consultation is commencing regarding this proposal.
...
Q. Are you doing this because of the protected industrial action that the CFMEU has taken?
A. No. Capcoal has reviewed the current Mine Plan because of an unplanned delay. From this review a proposal to park equipment is being considered. The reasons for the unplanned delay are not relevant to our considerations regarding the option that might be implemented in response to this delay.
...
Q. Is the proposal in response to an unplanned delay or market conditions?
A. Both. The unplanned delay triggered a requirement to review the mine plan which also needs to take into account the market conditions is coal prices etc. Despite the recent increases in coal prices Capcoal remains in a commercially challenging environment. However, no decision has been made to progress the proposal.
85 While in that document Capcoal denied the Proposal was due to the protected industrial action taken by the CFMEU, in cross-examination in the FWC, Mr Heaton admitted that the reference to "unplanned delay" was a reference to the protected industrial action, that there was no other unplanned delay unrelated to the industrial action, and that the proposal raised by Capcoal "was because of that unplanned protected industrial action".
86 In the conversation with Mr Scales on 28 September 2016 Ms Oppermann advised that the company was considering redundancies "as a result of parking up the Rope Shovel" as well as the "unplanned delay". Mr Heaton conceded in the FWC, and common sense supports the concession, that the rope shovel was parked because of the protected industrial action:
PN628 The reference to the unplanned delay is a reference to the protected industrial action which led to the shovel and the ancillary fleet only being able to be used as you described earlier on a few shifts? - Yes.
87 Mr Heaton also testified that much of the supporting ancillary fleet attached to the shovel was not in use because there were insufficient people at work to run the equipment, and those people were not at work because they were CFMEU members taking protected industrial action in support of their bargaining position.
88 In relation to the second step in the process culminating in the action taken against Mr Herdman, Capcoal identified the relevant decision-makers as Mining Superintendent Corkin, Mining Superintendent Neilson, and Operations Manager Keough. In relation to Mr Scotton, the decision-makers were said to be Coal Handling and Preparation Plant (CHPP) Production Superintendent Neroni, Acting CHPP Electrical Superintendent James; Acting CHPP Maintenance Superintendent Ryan, Acting CHPP Superintendent Bettens, and CHPP Manager Karooz. No evidence was adduced from any of these people. There is reason to believe that they, or at least some of them, had nothing to do with the decision to terminate the employment of the two employees and that the process of assessment that they purportedly undertook was not bona fide.
89 First and foremost, Messrs Corkin and Keough - two of the three decision-makers said to be involved in the decision affecting Mr Herdman - recorded in a pro forma assessment sheet that they had conducted their assessment after Mr Herdman had been informed that he would be made redundant: Mr Corkin on 30 November 2016 and Mr Keough on 31 (sic) November 2016. In Mr Scotton's case Mr Neroni's assessment purportedly occurred eight days afterwards on 6 December 2016 and Mr Bettens at an undisclosed time on 28 November 2016, three days after the date of the letter informing Mr Scotton of his redundancy.
90 Secondly, the evidence of both Mr Herdman and Mr Scotton (presently, at least, unchallenged) is that the decision-makers had little, if any, opportunity to assess their work.
91 Thirdly, there is no evidence to suggest that before the protected industrial action commenced there was ever an issue with the quality of their work or their value to Capcoal. Indeed, to the extent that there is any evidence on the subject it tells against Capcoal's decision to terminate their employment. Mr Scotton was one of only three people in his crew who was competent and trained to work in all 11 sections of the Washplant. Moreover, he had worked as "a Step-up" Washplant Supervisor on approximately 14 shifts. It is highly unlikely he would have been entrusted with this responsibility if his work and his attitude were not well-regarded. I have already referred to Mr Herdman's qualifications in mines rescue work and his position in the Mines Rescue Team.
92 Consequently, I accept the applicants' submission that there is an available inference from the evidence that the value of the employees to Capcoal only diminished after they became involved in union activities and, in particular, the protected industrial action.
93 Fourthly, Mr Scotton's evidence, which was not contested, is that nine coal operators working at the Washplant were made redundant and that seven of them were or had been CFMEU delegates. All nine have been replaced by labour hire employees or contractors, raising a serious question as to whether any of the redundancies in the Washplant, at least, were genuine.
94 I conclude that the strength of the applicants' case tips the balance of convenience in the applicant's favour. An interim injunction will restore the status quo ante and in the short term at least, as Capcoal itself acknowledged, that will occasion no inconvenience to the company. Furthermore, Mr Herdman and Mr Scotton gave undertakings to the Court to secure and not access their termination pay in the event that the injunctions were granted.
95 I am not persuaded that relief should be refused because of the delay in the institution of this proceeding.
96 The extent of the delay is insubstantial. The period between the notification to the two employees of the decisions to make them redundant and the institution of proceedings in this Court is two weeks or more precisely 16 days or 12 working days.
97 Capcoal does not claim that it is prejudiced by the delay. It does not suggest, for example, that the delay has resulted in the loss of evidence. Capcoal claims that delay alone can be enough. For that proposition it relies on the following passage from Meagher, Gummow, and Lehane's Equity: Doctrines and Remedies (Butterworths LexisNexis, 4th ed, 2002) at [21-375]:
[A]uthority is not wanting that on an interlocutory application ... mere delay of itself can (not must) be fatal. Why should a court grant urgent relief when the plaintiff's tardiness in applying for it casts doubt on the reality of his alleged injury?
98 It is trite to observe, however, that each case turns on its facts. While it is true that no witness gave evidence which explained why it took the applicants two weeks to make this application, there is evidence from which it may be inferred that the applicants were not tardy in applying for relief. Three affidavits were filed with the originating application. They were all affirmed on 14 December 2016. Mr Scales' affidavit is 366 pages long, Mr Herman's 58 pages, Mr Scotton's 99 pages. It is likely that it would have taken some time to take instructions, prepare the affidavits, and assemble the relevant documents. In addition, the CFMEU was preoccupied with preparing for, and presenting, its appeal before the Full Bench.