Construction, Forestry, Mining and Energy Union v Laing O'Rourke Australia... [2013] FCA 246 | Case summary

Leave to appeal is granted to the first, second, fourth, fifth, sixth, seventh, and eighth applicants against the orders made of 25 February 2013 on the ground that the learned Judge made an order which prohibits those applicants from dealing with notifications by and undertaking consultations with such sub-contractors to the respondents' sub-contractors as are parties to enterprise agreements binding those as sub-contractors, and which require them to notify and consult with those union applicants (by their officers, servants and agents) about changes of hours.
The application for leave to appeal made by the third and ninth applicants is dismissed.
Until the hearing and determination of the appeal or further earlier order, the operation of so much of the orders of 25 February 2013 as would prohibit the CFMEU, Mr Ravbar, Mr Sutherland, Mr Griffin, Mr Vink and Mr Jarvis, or any other officer, servant or agent of the union, from exercising rights to be notified by and consulted by a sub-contractor in accordance with a consultation clause found in an industrial agreement applicable to work undertaken in respect of the M&A project is stayed.
In this order, "M&A project" carries the same meaning as the order made on 25 February 2013.
There be liberty to apply. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011

REASONS FOR JUDGMENT 1 A very large construction project is presently underway at premises at the corner of McLaughlan and Ann Streets in Fortitude Valley in Brisbane. It involves the construction of both residential and commercial towers. The project is known as the M&A Project. The head contractor and project manager in respect of the M&A Project is Laing O'Rourke Australia Construction Pty Ltd (LORAC). It employs some employees at the M&A Project site directly. Materially, though, for present purposes, LORAC engages a number of subcontractors to supply particular services to it in the construction project. 2 On 15 February 2013, LORAC and other applicants concerned with the M&A Project secured, on an ex parte basis interim injunctions against a number of unions and officers thereof from this Court (Greenwood J). Those interim injunctions were then returned on 22 February 2013 before another judge (Collier J) for consideration of whether there should be any continuance thereof by way of interlocutory injunctive relief pending the hearing and determination of the substantive proceeding. To say the least, a degree of urgency attended both the application for ex parte interim injunctive relief and, for that matter, the need for a decision in respect of whether to grant interlocutory injunctive relief. 3 On 25 February 2013, for reasons her Honour published that day, her Honour decided to grant interlocutory injunctive relief in the following terms and upon the giving on behalf of the applicants of the usual undertaking as to damages: On the provision of the usual undertakings as to damages by the applicants, until further order: THE COURT ORDERS THAT: 1. In this Order: "M&A Project" means the construction project located at the corner of McLachlan and Ann Streets, Fortitude Valley, Brisbane. "M&A Project Employee" means an employee of the second applicant or any M&A Subcontractor employed to carry out work on the M&A Project. "M&A Subcontractor" means any company or organisation carrying out work on the M&A Project as a subcontractor to the second applicant and includes: (a) Lindores Construction Logistics Pty Ltd; (b) QPI Pty Ltd; (c) Freshmore (QLD) Pty Ltd trading as Advanced Precast (Aust); (d) North West Commercial Industries (QLD) Pty Ltd; (e) Saba Bros Tiling (QLD) Pty Ltd; (f) Blue Star Pacific Pty Ltd; (g) G James Glass & Aluminium Pty Limited; (h) Active Platforms Pty Ltd; (i) Dig It Landscapes Pty Ltd. 2. Until the final determination of these proceedings or earlier order the first and second respondents (whether by their officers, delegates or employees, or howsoever otherwise) and the fourth and fifth respondents be restrained from: (a) taking any action or initiating or being involved in any communication (whether oral or in writing) likely to or intended to have the effect that any M&A Project Employee places a ban, limitation or restriction on the performance of work on the M&A Project; (b) advising, encouraging or inducing or attempting to advise, encourage or induce any M&A Project Employee not to carry out work on the M&A Project at any time when required or requested to do so by the second applicant or by his or her employer. 3. Until the final determination of these proceedings or earlier order the first and second respondents (whether by their officers, delegates or employees, or howsoever otherwise) and the fourth and fifth respondents be restrained from: (a) advising any M&A Subcontractor, whether orally or in writing, that they should not carry out work on the M&A Project at any time when required or requested to do so by the second applicant; (b) advising any M&A Subcontractor, whether orally or in writing, that if they do carry out work on the M&A Project, there will or may be an adverse consequence of any kind for the M&A Subcontractor; (c) taking any action in respect of any M&A Subcontractor in any circumstances if that action has the purpose or the likely effect of inducing the M&A Subcontractor to refuse to carry out work for the M&A Project when required or requested by the second applicant; or (d) taking any action with the purpose or likely effect of causing detriment to the commercial interests of any M&A Subcontractor in any circumstances because the M&A Subcontractor has carried out or proposes to carry out work on the M&A Project. 4. Until the final determination of these proceedings or earlier the first and second respondents (whether by their officers, delegates or employees or howsoever otherwise) and the fourth and fifth respondents be restrained from engaging or attempting to engage in conduct in concert with any other person which has the purpose or the likely effect of hindering or preventing an M&A Subcontractor from carrying out construction work on the M&A Project including: (a) advising any M&A Subcontractor, whether orally or in writing, that they should not carry out work on the M&A Project at any time when required or requested to do so by the second applicant; (b) advising any M&A Subcontractor, whether orally or in writing, that if they do carry out work on the M&A Project, there will or may be an adverse consequence of any kind for the M&A Subcontractor; (c) taking any action in respect of any M&A Subcontractor in any circumstances if that action has the purpose or the likely effect of inducing the M&A Subcontractor to refuse to carry out work for the M&A Project when required or requested by the second applicant; or (d) taking any action with the purpose or likely effect of causing detriment to the commercial interests of any M&A Subcontractor in any circumstances because the M&A Subcontractor has carried out or proposes to carry out work on the M&A Project. 5. Until the final determination of these proceedings or earlier order the first and second respondents (whether by their officers, delegates or employees or howsoever otherwise) and the fourth and fifth respondents be restrained from reaching an agreement or arriving at an understanding or attempting to reach an agreement or understanding with any M&A Subcontractor which is entered into or reached or attempted to be entered into or reached for the purpose of preventing or hindering the M&A Subcontractor from carrying out work on the M&A Project as required or requested from time to time by the second applicant. 6. Until the final determination of these proceedings or earlier order the first, second and third respondents (whether by their officers, delegates or employees, or howsoever otherwise) and the fourth to the ninth respondents be restrained from: (a) advising, encouraging, inciting, aiding, abetting, counselling or procuring any industrial action by any M&A Project Employee; (b) advising, encouraging, inciting, aiding, abetting, counselling or procuring any M&A Project Employee not to attend for work as required by his or her employer; (c) Impeding, hindering, preventing or discouraging the entry or exit of persons or vehicles to and from the M&A Project; (d) organising, encouraging, assisting or participating in a picket line at the entry or exit point of any M&A Project which has the effect of impeding, hindering, preventing or discouraging the entry or exit of persons or vehicles to and from the M&A Project; (e) placing or leaving any vehicle, trailer or other thing within 100 metres of any entrance or exit to the M&A Project. 7. The orders in paragraph 2, 3 and 6 do not apply to the organising or taking by any person of protected industrial action in accordance with s 408 of the Fair Work Act 2009 (Cth) or activity which is not industrial action because of the operation of s 19(2) of the Fair Work Act 2009 (Cth). 8. Subject to further Order, the affidavit of Murray Middleton, filed in these proceedings, be provided only to lawyers acting for any respondent (other than any persons employed by respondents) and that the affidavit or its contents not be otherwise disclosed. 9. The matter be listed for further hearing on a date to be fixed. Those orders, as one might expect, were expressed to operate until further order. 4 The unions and the officers thereof have applied for leave to appeal from the orders made on 25 February 2013. A grant of leave is a necessary precondition in respect of any appeal against those orders because they are, in character, interlocutory. 5 As originally cast, the proposed grounds of appeal in the application were prolix. In the course of submissions and with a commendably keen appreciation of the principles entailed in a grant of leave and the principles, in turn, entailed in the grant of interlocutory injunctive relief, senior counsel for the applicants for leave came to narrow the basis upon which leave to appeal was sought to that which is set out in paragraph 4(f) of the application. It is there stated: … 4(f) the Learned Judge erred in making an order which (i) prohibits the applicants from consulting with the subcontractors to the respondents in accordance with the enterprise agreements binding the subcontractors to the respondents which require the respondents to consult with the applicants about changes of hours; and (ii) prohibits the applicants from advising subcontractors to the respondents that the applicants believe that the subcontractors are prevented from undertaking work outside ordinary hours without the consent of the applicants by reason of the operation of the subcontractors' enterprise agreements under the FW Act. 6 The applicants for leave also sought a stay in these terms of the operation of the orders made on 25 February 2013 in the event that there was a grant of leave to appeal: 1. The applicants seek a stay of the orders of Collier J made on 25 February 2013 insofar as they prohibit them from exercising rights to consult with sub-contractors to the first respondent about changes in working hours where such consultation is required under the terms of an applicable industrial instrument. 7 The first respondent is nominated in the application for leave to appeal as Laing O'Rourke Australia Pty Ltd. There is an apparent disjunct between that nomination and her Honour's conclusion at paragraph 5 of the reasons for judgment that it is LORAC which is the head contractor and project manager at the M&A Project. In any event, the intention in respect of the stay is clear enough, and that is that so much of the order made on 25 February 2013 as would operate to prohibit engaging in consultation with subcontractors to the head contractor be stayed. 8 I have already observed that the narrowing of the basis upon which leave to appeal was sought demonstrated a particularly keen appreciation of prospects. I make that observation because it is apparent from her Honour's reasons for judgment that her Honour approached the question of whether or not to grant interlocutory injunctive relief at all by reference to the well-settled test in respect of whether such relief should be granted: see para 22 of her Honour's reasons for judgment and the reference there to Australian Broadcasting Corporation v O'Neill (2006) 227 CLR 57. 9 Before turning to the question of whether or not leave should be granted, some further facts in relation to the M&A Project should be recited. That project presently has a scheduled completion date in October 2013. Included in the evidence read before her Honour was an email of 22 January 2013 which was copied to, amongst others, Mr McGibbon who gave evidence on behalf of the applicants for interlocutory injunctive relief and to Mr Peter Payten who is the project leader in respect of the M&A Project for LORAC. That email sets out under the subject M&A - Out of Hours Working, out of hours works that were either not able to take place as planned or are planned to take place over the coming weeks. In terms of what remain to this day future dates, it is stated in that email: Future Planned, from now till end April '13 - Mixed use Building, levels 3 to 4 to 5 Circa 80No panels left to complete Say 12 Night Shifts to complete the precast installations @ 14 men per shift = 112 Hours per shift + 2No Precast Vehicle Deliveries So, … = 1,344 Total Man Hour + 24No deliveries 10 Three of the subcontractors to LORAC are parties to particular industrial agreements. It is sufficient for present purposes to refer to but one of these, namely, the Lindores Construction Logistics Proprietary Limited Union Collective Agreement to which Lindores Construction Logistics Proprietary Limited and two of the applicants for leave would seem to be parties. I use the term "would seem" because the industrial agreement, understandably perhaps because it is not an agreement between lawyers, describes the union parties by reference to branches rather than the name of the union concerned. It is trite law, these days in any event, that a branch is not an entity separate from its parent registered union. I proceed though on the basis that either the Construction Forestry Mining and Energy Union or the Australian Building Construction Employees and Builders' Labourers' Federation (Queensland Branch) Union of Employees (as a traditionally registered organisation) is, on the true construction of the Lindores Construction Logistics Proprietary Limited Union Collective Agreement, the union party to that agreement. 11 Two clauses in that industrial agreement are of particular present relevance. They are: Clause 25 Hours of Work 25.1 Except as provided elsewhere in this agreement, the ordinary working hours will be 36 per week (7.2 hours per day) worked between 6.00 a.m. and 6.00 p.m. Monday to Friday. 25.2 The maximum number of hours worked on site by any employee will not be more than 58 hours per week, which shall be taken to mean no more than 10 hours per day Monday to Friday and 8 hours Saturday. In certain circumstances, hours may be extended to perform works which are critical to the ongoing productivity of other workers on the project or where a critical work task is delayed due to unforeseen circumstances. However, it is agreed that Sunday work and hours in excess of the aforementioned will not be worked unless written agreement is reached between the parties. Whilst such agreement will not be unreasonably withheld, an appropriate consultative process must be implemented prior to agreement being sought. 25.3 If any employer is found to have breached the previous sub clause on more than 2 instances in any 28 day period, each employee required to work in excess of the maximum hours shall be paid double time for all hours worked on that day. Clause 34 Consultation 34.1 Where the employer is seriously considering, and prior to the taking of any definite decision on, the introduction of major workplace changes that are likely to have a significant effect on employees, the employer must notify and consult with the employees and the union/s or other representative/s. 34.2 The employer must recognise the union (or other representative) and consult in good faith in relation to such proposed changes, including by allowing employees access to a relevant union official in the workplace to assist employees in the consultations relating to the proposed workplace changes. 34.3 The obligation to notify and consult includes providing all relevant details to the employees and the union/representative in writing about: a. the nature of the changes, any proposed timing of the changes and the expected likely effect on employees; and b. any measures the employer is proposing to take to avert or mitigate any adverse effects of such changes on employees; and c. any other matters related to the changes which may affect the employees. 34.4 In this clause major workplace changes that is likely to have a significant effect on employees includes: a. termination of employment b. changes to composition, operation or size of the workforce or the skills required of employees c. elimination or diminution of job opportunities (including promotion/tenure) d. alteration of hours of work e. retraining, relocation or restructuring f. changes to the legal or operational structure of the employer or business, including changes to business ownership or control. 12 Put shortly, but not in any way to diminish the point, the contention for the applicants for leave, as is apparent from paragraph 4(f), is that, in the granting of interlocutory injunctive relief, account was not taken of the operation or at least the possible operation of the consultation clause found in clause 34. The other industrial agreements are in like terms. There was in the written outline of submissions responding to the application for interlocutory injunctive relief, passing reference to the consultation clause (at [46]). That passing reference was greatly expanded in the oral submissions that were made to her Honour on behalf of the respondents to the application for interlocutory injunctive relief. Particular reference was made to clause 34. 13 It is a moot point and certainly not one either for decision today or, for that matter, for decision at the time interlocutory injunctive relief was granted, as to whether, on the true construction of clauses 25 and 34, there has arisen occasion for consultation. There was though, at least having regard to the prospect of a significant program of night work being undertaken until the end of April this year, a reasonable basis upon which, on one construction of those clauses, it might be said that an obligation to consult under clause 34 had arisen. 14 The program of works was one set by the head contractor, LORAC. It was not a party to and, therefore not bound by, the industrial agreements but three of its key subcontractors, apparently were bound. Those subcontractors are not parties to the present proceeding. Nonetheless, the injunctive relief seeks to restrain a union party and officers of that union party. There was, on the evidence before her Honour, at least the prospect that the subcontractors might in the face of the requirement made of them by the head contractor, have been obliged to say to that head contractor that they were obliged to consult. There is correspondingly at least a reasonable basis for apprehending that the union party was entitled to expect that it would be consulted. 15 Against that background, it is, with respect, not of trifling moment that there is no overt reference in her Honour's reasons for judgment to the consultation clause, notwithstanding attention being drawn to it in submissions. It is important to recall the following in respect of consultation clauses in industrial agreements. In QR Limited v Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (2010) 204 IR 142 at [14], Keane CJ and Marshall J observed of the consultation clause in that case: It may be said immediately that the process of consultation with which cl 36 is concerned is not to be confused with the ordinary and familiar processes of negotiation over industrial claims and counterclaims about "pay and conditions". Clause 36 of the agreement constitutes an intrusion upon the managerial prerogative of employers; but the legitimacy of such intrusion and the importance attached to such provisions has long been recognised. More than a quarter of a century has elapsed since Murphy J said in Federated Clerks' Union (Aust) v Victorian Employers' Federation (1984) 154 CLR 472 at 493 - 494: "In the history of industrial law, many matters which were within the exclusive managerial prerogative of employers have been brought within the scope of industrial regulation, by the legislature or industrial tribunals. Sometimes the former prerogative has been eliminated, for example by health and safety laws which prohibit certain practices. Sometimes it has been restricted, for example, by minimum wage provisions. Various privileges, which were once exclusive to the employer, are now shared with employees (or their organisations)". 16 Later, at paragraph 37 in the joint judgment, their Honours stated: The purpose of clause 36.2, evident from its text read in context with clauses 36.3 and 36.4, is to ensure that before the employer seeks to negotiate to alter the terms and conditions of employment, whether by inviting voluntary acceptance of an offer or engaging in compulsory processes of dispute resolution, employees will have a real opportunity to make suggestions on the subject matter raised for their consideration so that the suggestions might be considered by the employer before the processes of bargaining and offer and acceptance begin. In that same case, Gray J, at paragraphs 80 and 81, made similar observations to those which appear at paragraph 37 of the joint judgment. In particular at paragraph 80, his Honour observed: To comply with its obligations to consult, management needed to make it clear that there would be real opportunities for employees, individually or collectively, to suggest proposals for the implementation of the government's intention to privatise part of its railway operations, and to respond to the proposals of management about such implementation. 17 For the applicants for leave, it was submitted that paragraphs 2(b), 3, 4 and 5 of the orders of 25 February 2003, would in their generality, upon the assumption that there existed a right to be consulted, intrude upon the union party's ability and that of its officers to undertake consultation in response to the initiative of the employer in that regard. A consultation clause to which a union is a party, if applicable, would understandably carry with it a need, at least on some occasions, if not all, for the union to take soundings of its members prior to making a response to the employer. 18 Against that background, it does seem to me that an absence of reference to the prospect existing at the time of the engagement of consultation clauses carries with it a basis upon which leave to appeal, as sought, should be granted. In making that observation, I have had regard to the test for a grant of leave to appeal as found in the Full Court's judgment in Décor Corporation Pty Ltd v Dart Industries Incorporated (1991) 33 FCR 397. The relevant considerations are these: 1. whether in all the circumstances, the decision is attended by sufficient doubt to warrant its being reconsidered by the Full Court; and 2. whether substantial injustice would result if leave were refused, supposing the decision to be wrong. The introduction of sustained night work does, as I have observed, carry with it at least a reasonable basis upon which it might be contended that major change is being introduced, such that the subcontractors concerned are bound to consult. 19 It is important, in the context of a challenge to the granting of interlocutory injunctive relief in a construction site such as the M&A Project, to recall that, even though the head contractor is not bound by consultation obligations, certain of its subcontractors are. In that sense, the head contractor does not have, as a matter of law, an unfettered ability to dictate a work program. Those subcontractors who are bound by industrial agreements to consult are obliged to inform a head contractor intent on implementing a requirement for a particular work program that they are bound to consult. 20 Now is not the day to reach any concluded view on the consultation obligation. All that it is necessary to determine is whether there is a reasonable basis for apprehending that, in that latter regard, the width of the interlocutory injunctive relief may have been too great by reason of a failure to avert to a contingency that there were extant consultation obligations on the part of subcontractors. 21 There is, in my opinion, sufficient doubt on that subject to warrant the matter being reconsidered by the Full Court but only on that narrow basis. Further, if there be a consultation obligation, it would be hollow if the project were completed and night works undertaken in the absence of consultation, such is the importance in contemporary industrial relations of consultation clauses where they are present in industrial agreements. The latter also has a resonance in relation to whether or not to grant a stay. As to that, the following observation made by Kenny J in Nolten v Groeneveld Australia Pty Ltd [2011] FCA 1494 is apt: 24 Rule 36.08 of the Rules confers a broad discretion to order a stay notwithstanding that an appeal shall not operate as a stay of execution or of proceedings under the judgment appealed from. In Powerflex Services Pty Ltd v Data Access Corporation (1996) 67 FCR 65, a Full Court of this Court held that the appropriate test for a stay under the equivalent of Rule 36.08 of the current Rules was that set down in Alexander v Cambridge Credit Corporation Ltd (1985) 2 NSWLR 685, namely, whether the applicant for a stay showed a reason or an appropriate case to warrant the exercise of discretion in his favour. More specifically, with respect to an application for a stay of a sequestration order, the question is whether there is an arguable point on the proposed appeal and whether the balance of convenience favours the granting of a stay: see Freeman at [3]-[4]; Coleman at 303; Beames v Rigby [2002] FCA 806 at [2]; Kellow v Dudzinski [2003] FCA 238 ("Dudzinski") at [8]; and Shirreff v Beck Legal Pty Ltd [2010] FCA 1407 at [67], (2010) 119 ALD 284 at 293-294 [67]. The test for a stay under s 52(3) of the Act is not materially different. 22 It was put, on behalf of the respondents to the application for leave, that a stay did not necessarily follow even if there were a disposition to grant leave to appeal on the narrow basis sought. That was put on the basis that, if there were occasion for a belief on the part of the unions or the union party to the industrial agreements that a need for consultation had arisen, then an application could be made for a variation of the existing interlocutory injunctive relief against those particular facts which had emerged. 23 The difficulty about that proposition, in my view, is that those particular facts have already emerged: see the email of 22 January 2013 to which I have referred. If there is, as the union parties to the industrial agreements contend, an obligation for consultation the fulfilment of that obligation will be rendered completely academic in the event that there is no stay. That is because it is highly unlikely, to say the least, that the case could be heard and determined by a Full Court of this Court before the end of April 2013. 24 The position therefore is that there is a basis upon which a grant of leave should occur and reason to think that if the appeal is successful and no stay is granted the fruit of that appeal would be lost completely. In those circumstances, it seems to me that there is a case for a stay. In reaching that conclusion, I have given very serious consideration indeed to the occasion for the granting of the interlocutory injunctive relief as revealed by the careful summaries of evidence found in her Honour's reasons for judgment. 25 There is understandably raised, on behalf of the respondents to the application for leave, a concern that the granting of any stay might provide something of a Trojan horse in terms of behaviours that led to the need to seek interlocutory injunctive relief. As against that, there are very particular restrictions which will remain, having regard to such of the terms of the order which will not be stayed. It would be a foolhardy union and a foolhardy union official who, under the guise of consultation, sought to engage in conduct which amounted to a breach of the interlocutory orders. There is a very narrow scope indeed offered in relation to consultation for union activity. It is to be remembered also that the obligation to consult falls on the employer, not the union. 26 I am also very conscious that the employers concerned are not parties to the present proceeding. 27 In the end, there is something of a balancing exercise and value judgment entailed. It is the prospect that the appeal would be rendered nugatory in respect of an important modern industrial provision that persuades me that there ought to be a stay. 28 I should add that I do not consider that there is a basis for sufficiency of doubt in relation to the interpretation of clause 25 that there is a mandated requirement for all night work to have union consent to warrant a grant of leave in that regard. So the grant of leave I propose to make is in respect of 4(f)(i) alone. The stay order I propose to make is it is not from exercising rights to consult. It is from exercising rights to be consulted by subcontractors. 29 It also emerged in the course of a consideration of the industrial agreements concerned that the CEPU was not a union party. That has the consequence that that union could have no expectation of being notified and consulted. Therefore, it is not a competent applicant for leave to appeal and neither necessarily is its official, Mr Bateman. 30 There will be orders accordingly. I certify that the preceding thirty (30) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Logan.

Construction, Forestry, Mining and Energy Union v Laing O'Rourke Australia Pty Ltd

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Judgment (19 paragraphs)

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Cases Cited (11)

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