Construction, Forestry, Mining & Energy Union v Multiplex Constructions

Federal Court of Australia|2000-02-14|Before: Marshall J

REASONS FOR JUDGMENT 1 The applicant, Construction, Forestry, Mining and Energy Union ("CFMEU") has applied for an interlocutory injunction restraining the respondent companies from taking any further steps in a proceeding which the respondents have commenced in the Supreme Court of Victoria. It also seeks to restrain the respondents from taking any further proceeding which relates to industrial action taken by members of CFMEU which CFMEU contends is "protected action" within the meaning of s170ML of the Workplace Relations Act 1996 (Cth) ("the Act"). 2 The substantive application before the Court was made pursuant to s170NG of the Act, which, inter alia, permits the Court to grant an injunction requiring the respondents to cease contravening s170NC(1) of the Act. So far as is material s170NC(1) provides that: "A person must not: (a) take or threaten to take any industrial action or other action … with intent to coerce another person to agree, or not to agree, to: (c) making … an agreement under Division 2 or 3 … "

(Emphasis supplied). 3 Members of CFMEU have, since 11 January 2000, taken industrial action which CFMEU contends is "protected action". Such action is conferred legal immunity. See s170ML(1) of the Act. 4 The action of the respondents, said by CFMEU to constitute a breach of s170NC of the Act, was the commencement of an action in the Supreme Court of Victoria on 7 February 2000. In that action the respondents are the plaintiffs and CFMEU is the defendant. CFMEU submitted that the action in the Supreme Court is barred by s170MT(2) of the Act, which apart from certain immaterial circumstances, prohibits the taking of any action which may lie under State law in respect of action which is "protected action".

Factual background 5 CFMEU is an organisation of employees registered pursuant to the Act. Each respondent is a corporation which is engaged in the building and construction industry in the State of Victoria. Each respondent engages its own direct employees and in addition engages sub-contractors to assist in the performance of its work. Each sub-contractor also engages employees to carry out work on building and construction sites operated by the respondents. 6 On or about 7 December 1999, CFMEU served notices initiating a bargaining period pursuant to s170MI of the Act on the respondents' sub-contractors who employ persons eligible to be members of CFMEU. The notices contained a catalogue of demands concerning industrial matters. The overwhelming majority of such sub-contractors were party to certified agreements also binding CFMEU, the nominal expiry date of those agreements was 30 November 1999. 7 On or about 5 January 2000, CFMEU served on the sub-contractors notices of intention to take industrial action under s170MO of the Act. The industrial action that has ensued since 11 January 2000 is in support of the demands contained in the notices initiating the bargaining periods under s170MI of the Act. 8 On Sunday 6 February 2000, in an ex parte hearing, the Supreme Court made an order restraining the taking of certain industrial action by CFMEU. The first order of the orders made on that day provided that: "The CFMEU must not until 4.30 pm on 8 February 2000 (through its officials or agents) or until further order encourage or authorise members of the Union employed by the plaintiffs to strike or stop work or otherwise breach their contracts of employment with the plaintiffs." The further hearing of the application for interlocutory relief in the Supreme Court was adjourned to 8 February 2000. 9 On 7 February 2000 the respondents filed a Writ and an Indorsement of Claim in the Supreme Court in proceeding no 4237 of 2000. In par 1 of the Indorsement of Claim the respondents claim the following relief: "1. An injunction restraining the Defendant [CFMEU] … from directing, procuring, advising, authorising and/or encouraging its members (otherwise than in the exercise of the rights which the Defendant has pursuant to Division 8 of Part VIB of the Workplace Relations Act 1996) not to perform the work which their contracts of employment (with any of the plaintiffs or with any sub-contractor engaged on the Plaintiffs' sites) require them to perform. … " 10 On 8 February 2000, by consent, the Supreme Court ordered that: "The Plaintiffs' application for interlocutory relief by summons dated 7 February 2000 be discontinued." 11 A statement of claim is yet to be filed in the Supreme Court action and although no application for further interlocutory relief has been sought counsel for the respondents informed the Court that he was unable to say whether such relief would be sought again on an urgent basis or whether a statement of claim would be filed. On 9 February 2000 the respondents gave written notice to the Australian Industrial Relations Commission ("the Commission") of their intention to commence actions in tort against CFMEU. Such notice was given pursuant to s166A(3) of the Act. A further notice under s166A(3) was served by facsimile on CFMEU's solicitors at 2.42 am on 11 February 2000, the day this Court heard CFMEU's application for interlocutory relief.

The statutory context 12 Division 8 of Pt VIB of the Act is headed "Negotiations for certified agreements etc". Section s170MI of the Act permits an employer, an organisation of employees, or an individual employee who wants to negotiate an agreement under Div 2 or Div 3 of Pt VIB of the Act to initiate a bargaining period by the giving of notice accompanied by particulars referred to in s170MJ of the Act. Under s170MK of the Act the bargaining period commences seven days after the giving of notice under s170MI. 13 Section 170ML(2) of the Act permits an organisation of employees, or its members, to engage in industrial action against an employer for the purpose of supporting or advancing claims made which the organisation intends to be included in a proposed agreement as terms of such an agreement. A similar right to take lock out action is given to employers under s170ML(3) of the Act. 14 Industrial action taken in accordance with s170ML and the preceeding provisions of Div 8 of Part VIB of the Act has "legal immunity" from suit conferred upon it. So much is reinforced by s170MT of the Act which provides as follows: "(1) An order made by the Commission under section 127 does not apply to protected action. (2) Subject to subsection (3), no action lies under any law (whether written or unwritten) in force in a State or Territory in respect of any industrial action that is protected action unless the industrial action has involved or is likely to involve: (a) personal injury; or (b) wilful or reckless destruction of, or damage to, property; or (c) the unlawful taking, keeping or use of property. (3) Subsection (2) does not prevent an action for defamation being brought in respect of anything that occurred in the course of industrial action."

The competing contentions 15 Mr Borenstein of counsel appeared for CFMEU. He submitted that there was a serious issue to be tried concerning whether the Supreme Court action taken by the respondents combined with the prospect of further Supreme Court action in respect of the industrial action taken by members of CFMEU against the respondents' sub-contractors was action taken with intent to coerce CFMEU not to agree to a certified agreement in a form which contains provisions which CFMEU would otherwise be minded to seek to achieve. 16 It was also submitted by Mr Borenstein that there was a serious issue to be tried concerning whether the relevant industrial action against the sub-contractors was "protected action" under Div 8 of Pt VIB of the Act. In the course of his submissions Mr Borenstein observed that the respondents had not applied to the Commission under s127 of the Act to have the Commission make an order that the industrial action cease. 17 Although the Indorsement of Claim in the Supreme Court action excluded from the relief sought relief in respect of protected action, Mr Borenstein effectively contended that such exclusion was meaningless because the respondents did not identify any industrial action taken by CFMEU's members that they agreed was protected action. 18 Mr Borenstein also submitted that it was open to the respondents to seek the termination of the relevant bargaining periods under s170MW of the Act. He further submitted that such a course would have been followed if the respondents were only concerned about losses flowing from the industrial action and were not concerned to pressure CFMEU to modify its claims. 19 Mr Wood of counsel appeared for the respondents. Mr Wood's primary submission was that the application for interlocutory relief was premature given that no statement of claim had been delivered in the Supreme Court action. Mr Wood stated that it was possible that the "statement of claim may end up just being in relation to the direct employees" of the respondents. 20 Mr Wood submitted that the coercion point put forward by Mr Borenstein did not arise because the Supreme Court action excluded protected action in the relief claimed. However this submission must be considered in the context of Mr Wood's inability to identify any action taken relevant to this application which is "protected" in his clients' view. It must also be considered in the context of a notice issued by the respondents under s166A(3) of the Act which asserts that because all industrial action taken by employees of the sub-contractors was taken "in concert with" direct employees of the respondents, such action is "unlawful". 21 In support of his submission that there was no serious issue to be tried concerning whether the action taken by the employees of sub-contractors was protected action Mr Wood referred to evidence which disclosed that on one site CFMEU organised meetings of all its members on site, including employees of sub-contractors and employees of the respondents meeting together. Section 170MM of the Act provides that industrial action is not protected action if it is engaged in "in concert" with persons who are not protected persons.

Serious issue to be tried 22 The Court is satisfied that there is a serious issue to be tried concerning whether the respondents have taken action with intent to coerce CFMEU to ameliorate its demands and consequently not make an agreement containing certain industrial demands which it would otherwise seek. The Court is not satisfied that the material before it discloses that the only intention of the respondents in taking Supreme Court action was to secure their positions concerning the financial losses suffered by them as a result of industrial action by CFMEU members. 23 In the view of the Court there is also a serious issue to be tried concerning whether the industrial action taken by members of CFMEU employed by the sub-contractors was protected action even if some of the meetings held to organise the industrial action were attended by direct employees of the respondents. As Wilcox and Cooper JJ said in Davids Distribution Pty Ltd v National Union of Workers (1999) 165 ALR 550, (at 579): "…there is a difference between taking action "in concert" and action in conjunction. Action "in concert"is action undertaken as a result of communication between the parties to the action. It is not enough that there be spontaneous actions by two or more persons, even if those actions occur at the same time; although, of course, such actions may "naturally … lead to the inference that these separate acts were the outcome of pre-concert, or some mutual contemporaneous engagement": R v Associated Northern Collieries (1911) 14 CLR 387 at 400, per Isaacs J. Nor is action "inconcert"simply because the action of one person or organisation is supported by others."

Further observations contained in the later portions of that paragraph of their Honours reasons reveal that questions such as whether direct employees of the respondents attended meetings in support of the employees of the sub-contractors and whether all action was taken following joint meetings would require thorough examination at the trial of the matter. The mere reference to joint meetings is insufficient to confidently assert that the protected status of the industrial action is lost due to the provisions of s170MM of the Act. 24 Mr Wood did not submit that the Court was without jurisdiction to grant the anti-suit injunction sought by CFMEU. That topic was thoroughly traversed by Merkel J in Australian Workers Union v Yallourn Energy Pty Ltd [2000] FCA 65 (at pars 51 to 58). I respectfully adopt his Honour's views contained in those paragraphs of his reasons for judgment. 25 The Court also agrees with Merkel J that in the context of s170NC of the Act, (at par 69): "… the commencement of a proceeding with the requisite intent is capable of constituting "action" for the purposes of the section." 26 In this matter the Court considers that there is a serious issue to be tried as to whether the respondents intended by issuing proceedings in the Supreme Court to coerce CFMEU to change its stance in the bargaining process with the sub-contractors in relation to the proposed new enterprise agreements. The Indorsement of Claim filed in the Supreme Court refers specifically to "any subcontractor engaged on the plaintiff's sites". There is also a serious issue to be tried concerning whether the respondents, by serving notices under s166A(3) of the Act foreshadowing additional Supreme Court action, further intend to so coerce CFMEU. As Merkel J said in Yallourn Energy (at par 73): "…each step and counter step by the parties in the current dispute appears to be intended to advance their respective bargaining positions in relation to the new enterprise agreement. Whilst there will be additional reasons for particular conduct to be engaged in during the escalation of the dispute, each step appears to be integrally related to each party's position in the bargaining process." 27 A reason for the Supreme Court action, or further proposed Supreme Court action, may well be to recover financial loss but if it is also taken with intent to advance a position in a bargaining process or detract from the position of a party in the bargaining process s170NC(1) of the Act will be contravened. 28 A proceeding in tort is likely to have "an intimidatory or coercive effect" on CFMEU and its members employed by the sub-contractors. See Yallourn Energy (at par 74). This is especially so when the Indorsement of Writ contains specific reference to them. 29 Like Merkel J, I also consider that "without evidence to the contrary I [should] infer that the litigation would be likely to be a significant issue arising in the negotiations for the new agreement". See Yallourn Energy (at par 74). By being the subject of Supreme Court action CFMEU is effectively being told by the respondents to "ease up on your demands or risk being the subject of Supreme Court orders". In the view of the Court there is a prima facie case that this constitutes coercive behaviour by the respondents. 30 It is significant here that the respondents have made no application for termination of the bargaining period or taken no step, on the evidence, to encourage their sub-contractors to do so pursuant to s170MW of the Act. That tends to suggest that the respondent's primary objective in bringing an action in tort was not only to avoid losses in respect of unprotected action. See Yallourn Energy (at par 74). Further no application under s127 of the Act has been made to seek to prohibit any unprotected action. 31 For all of the above reasons the Court is satisfied that there is a serious issue remaining to be tried under s170NC of the Act. Further if the evidence remains the same as it is now at the trial of the application the prospects of success of the application appear to be strong. That is a relevant matter in the context of the question of balance of convenience to which I now come.

Balance of convenience 32 The Court rejects Mr Wood's submission that the application for interlocutory relief is premature. The respondents were not prepared to give any undertaking to the Court concerning further action in the Supreme Court other than that they would give 48 hours written notice to CFMEU before filing a statement of claim. Neither would the respondents give an undertaking to the Court to refrain from progressing their Supreme Court action or commencing further Supreme Court action to enable the Court to carefully consider the submissions put to it and give fuller reasons for judgment towards the middle of this week. That led the Court to make interim orders late last Friday afternoon after a full day's argument to maintain the authority of the Court and to allow it to consider carefully on the weekend the submissions advanced to it on Friday. See Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia (1998) 153 ALR 641 per Hayne J (at 641). 33 Unless the Court grants interlocutory relief to CFMEU it has every reason to believe that the respondents will take action in the Supreme Court at any time they see fit to do so, even in the context of there being a very serious issue to be tried in this Court concerning their alleged contravention of s170NC of the Act in the circumstances described in the reasons. The respondents still have the option of pressing for the termination of the bargaining periods between the sub-contractors and CFMEU or, alternatively, seeking that the sub-contractors take such action. Further, unprotected industrial action can be the subject of an application under s127 of the Act in the Commission. Any detriment to the respondents caused by an interlocutory injunction can thereby be significantly ameliorated. 34 On the contrary CFMEU may suffer irreparable damage to its bargaining position should the respondents be at liberty to continue Supreme Court action and threaten further Supreme Court action. Consequently the balance of convenience strongly favours CFMEU. Such a significant difference in considerations relevant to the balance of convenience shows the strength of the case for the grant of injunctive relief given that "an apparently strong claim may lead a court more readily to grant an injunction when the balance of convenience is fairly even". See Woodward J (with whom Smithers and Sweeney JJ agreed) in Bullock v The Federated Furnishing Trades Society of Australasia (No 1) (1985) 5 FCR 464, 472. 35 Accordingly, in the opinion of the Court, as the balance of convenience strongly favours CFMEU and there is a serious issue to be tried which on the current state of the evidence may be considered to be a strong claim, an injunction to restrain further steps in the existing Supreme Court action with respect to CFMEU regarding their members who are employed by sub-contractors should be granted. Identical considerations apply to restraining steps which may otherwise be taken to commence fresh Supreme Court proceedings concerning industrial action taken by those employees of the sub-contractors.

Order 36 The Court considers that the interlocutory relief granted should be confined to proceedings in which action is taken by the respondents with respect to employees of sub-contractors engaged by the respondents because it is those employees in respect of whom there is a serious issue to be tried concerning the breach of s170NC(1) of the Act. 37 In the view of the Court it is appropriate to order as follows: Until the hearing and determination of the application, or further order, and upon the applicant giving the usual undertaking as to damages, the respondents by themselves, their servants or agents -

Refrain from taking any further step in the proceeding commenced by them in the Supreme Court of Victoria against the applicant, being proceeding number 4237 of 2000 ("the Supreme Court action"), insofar as the Supreme Court action deals with or concerns any issue concerning any industrial action taken by those employees of sub-contractors of the respondents who are members of CFMEU ("the employees").
Refrain from commencing any proceedings, other than in the Australian Industrial Relations Commission, in relation to matters referred to in paragraph 1 of the Indorsement of Claim in the Supreme Court action which deals with or concerns any industrial action taken by the employees. And it is further ordered that:

The directions hearing in the application be adjourned to 10.15 am on 6 March 2000.

There be liberty to apply on not less than 48 hours written notice to each other party. I certify that the preceding thirty-seven (37) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Marshall.

Solicitor for the Respondent: Deacon, Graham & James

Date of Hearing: 11 and 14 February 2000

Date of Judgment: 14 February 2000 (ex-tempore as revised from the transcript)

Workplace Relations Act 1996(Cth)ss 127, 166A, 170MJ, 170MK, 170MI

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