Hazelwood Power Corporation Ltd v CFMEU [2000] VSC 477

11. The resolution was recorded in writing and as I understand the situation copies of it were fairly widely distributed throughout the Latrobe Valley.

14. The resolution is on the letterhead of what is described as the Victorian Division Branch - C.F.M.E.U.

"Thursday, 2nd November 2000 Political Protest The meeting of CFMEU Latrobe Valley power industry members at the Morwell Bowling Club today carried the following resolution overwhelmingly: 'As a political protest against the use of Reith's laws to attack the Yallourn workers and Latrobe Valley community, all Latrobe Valley power stations and mines will cease generation and all mining and conveyor equipment shall cease to operate for a 24 hour period from 7 PM, 2nd November 2000. This meeting will reconvene on Thursday, 16th November 2000'."

21. At about 7.00 p.m. that night members of the C.F.M.E.U. employed at the power stations in the Latrobe Valley commenced a 24 hour strike.

24. Thereafter certain members of the Union employed by the various power stations as power unit controllers, commenced to shut down the units thereby drastically reducing the power stations' production and supply of electricity.

27. Later that evening urgent applications were made to me on behalf of the power stations for injunctive relief.

30. At 7.55 p.m. on 2 November and on the application of Yallourn Energy I granted interim injunctions against the C.F.M.E.U.

33. At 8.21 p.m. I granted similar injunctions in favour of Hazelwood Power Corporation Ltd. (Hazelwood) and Loy Yang Power Ltd. (Loy Yang).

"1. Until further order the Defendant be restrained, whether by themselves, their delegates, servants, agents, members or howsoever otherwise from: (a) interfering with the production of or generation of power supplies at the Loy Yang Ltd. Power Station; (b) inducing, persuading, advising or procuring any employee of Loy Yang Power Management Pty. Ltd. from performing work pursuant to their contract of employment or the Loy Yang Power Enterprise Agreement 1999; (c) interfering with the production of or generation of power supplies at the Yallourn Energy Pty. Ltd.; (d) inducing, persuading, advising or procuring any employee of Yallourn Energy Pty. Ltd. from performing work pursuant to their contract of employment or the Yallourn Energy Pty. Ltd. Enterprise Agreement 1997; (e) interfering with the production of or generation of power supplies at the Hazelwood Power Corporation Ltd.; and (f) inducing, persuading, advising or procuring any employee of Hazelwood Power Corporation Ltd. from performing work pursuant to their contract of employment or the Hazelwood Power Corporation Enterprise Agreement 1997."

40. I then adjourned the further hearing of the applications to 2.00 p.m. on 3 November.

43. At 11.30 p.m. on 2 November the Minister for Energy and Resources gave a direction pursuant to s.47C of the Electricity Industry Act 1993 that all persons who were employed or engaged at the Yallourn Power Station, the Loy Yang A Power Station, the Loy Yang B Power Station and the Hazelwood Power Station as at 2 November 2000 performing duties relating to the generation, supply, or distribution of electricity from these power stations and who have ceased to perform such duties, to perform those duties and to carry out any work required to ensure the generation, supply or distribution of electricity at those power stations.

46. The direction was stated to apply until 9 November.

49. At about the time the Minister's direction was given, the industrial action at the power stations in question ceased and the power units which had been shut down were re-started.

52. On 3 November I gave leave to two of the plaintiffs in the various proceedings which are now on foot in the Court, to join a number of members of the C.F.M.E.U. as defendants to the proceedings, then adjourned the matter to 8 November to give the defendants an opportunity to file answering affidavits.

55. On 3 November and effective from 7.00 a.m. on that day the Commission ordered that all industrial action not occur at Yallourn Energy's sites in Victoria for a period of six months.

58. I now have applications by Yallourn Energy, Loy Yang and Hazelwood to extend the injunctive relief granted by me on 2 November to the trial of the action or further order and to make certain ancillary orders in the various proceedings.

61. There was no dispute before me concerning the fact that the industrial action taken on the evening of 2 November against Hazelwood and Loy Yang was not protected action under s.170MT of the Workplace Relations Act, nor in my opinion could there be.

64. The C.F.M.E.U. had given no notice to those employers of the initiation of a bargaining period as required by s.170MJ of the Act and no notice of intention to take industrial action as required by s.170MO.

67. The application for a continuation of the injunctive relief previously granted by me was opposed by the C.F.M.E.U.

70. The following are the basis upon which it was contended that no further injunctive relief should be granted:

(1) The C.F.M.E.U. did not authorise the strike and is not responsible for the actions of those of its members in the Latrobe Valley who did and who took part in the strike.

(2) There is no evidence that the C.F.M.E.U. is threatening to take further industrial action in the Latrobe Valley or that it will authorise the taking of such action. Indeed it has now sent or is sending a letter to each of the members of the Latrobe Valley Sub-Branch informing the member that the industrial action on the evening of 2 November was not authorised by the C.F.M.E.U., reminding the member that the taking of industrial action must be authorised in accordance with the rules of the C.F.M.E.U. and directing the member not to take any industrial action unless the industrial action has been authorised, in writing, by the National Secretary of the C.F.M.E.U. or the Secretary of the "FEDFA" Division which for practical purposes is the Victorian Division of the Union.

(3) By virtue of the provisions of s.166A of the Act this Court has no jurisdiction to entertain the plaintiffs' applications.

(4) In view of the undertaking the C.F.M.E.U. is now prepared to give to the Court there is no need to grant further injunctive relief in favour of the plaintiffs and against it; and

(5) The balance of convenience is now such as not to justify the grant of injunctive relief.

78. I turn then to the first of those contentions.

81. There would appear to be no doubt but that the C.F.M.E.U. and the FEDFA Division did not authorise the strike. Indeed the evidence is to the effect that as soon as the secretary of the FEDFA Division heard about the strike he immediately repudiated the actions of the members of the Latrobe Valley Sub-Branch and took all steps he could to have those members return to work.

84. Can it be said, however, that the actions of the members of the Sub-Branch on 2 November were the actions of the C.F.M.E.U.

87. In support of their contention that they were, counsel for the various plaintiffs relied upon the decision of Northrop, J. in Australian Postal Corporation v. Communications Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia[1] and the decision of Cooper, J. in Rowe v. Transport Workers Union of Australia and Others[2].

90. In the Postal Corporation case application was made to Northrop J. for an injunction restraining members of the defendant union from engaging in conduct which would constitute a contravention of an order made against the Union by a Commissioner of the Industrial Relations Commission. At p.107 his Honour said:

"The organisation, quite properly, has submitted that a branch is not the organisation; it has no separate legal identity. However on the material before the Court it is quite clear that here it is the branch and other officers of the organisation and of the branch who are supporting and encouraging the action being taken by the workers and which has been organised by the shop stewards of the organisation. The material supports a finding that it is the Union, through its relevant branch, which is taking the action."

94. It is to be noted that in that case as his Honour made clear that "the organisation" supported and encouraged the strike action.

97. In Rowe's case the Employment Advocate under the Workplace Relations Act applied to the Federal Court for relief against two industrial associations and three of their members on the basis that the members had breached the provisions of s.298S of the Act in that the members had been guilty of discriminatory action against eligible persons.

100. In dealing with the question as to the liability of the associations for the actions of their members Cooper, J. said at p.113:

"A body or group of persons which is not authorised by the constitution, rules or membership of an industrial association, cannot bind the industrial association and it is not liable for such conduct unless it ratifies the conduct or takes the benefit of it: Giblan v National Amalgamated Labourers' Union of Great Britain and Ireland [1903] 2 KB 600 at 617, 620, 625; Denaby & Cadeby Main Collieries Ltd v Yorkshire Miners' Association [1906] AC 384 at 390; Waterside Workers' Federation of Australia v Burgess Brothers Ltd [1916] HCA 2; (1916) 21 CLR 129 at 133, 136, 137-138; Commonwealth Steamship Owners' Association v Federated Seaman's Union of Australasia [1923] HCA 40; (1923) 33 CLR 297 at 303, 307, 311, 314-315. Nor does such a group constitute a committee of management as defined by s.4 of the Act and thus it is not a committee of management for the purposes of s.298B(2). Where, however, the body or group is authorised to manage the affairs of an industrial association it is a committee of management to which s.298B(2) applies. At common law, if the conduct found to have been engaged in collectively by the body or group, constituting a committee of management has been done, or purportedly done, as part of the management of the affairs of the industrial association and the conduct falls within that class of authorised conduct, the industrial association is bound by it and is liable for it if the conduct constitutes a wrong. As Farwell J said in Taff Vale Railway Company v Amalgamated Society of Railway Servants at 433: 'I have already held that the society are liable for the acts of their agents to the same extent that they would be if they were a corporation, and it is abundantly clear that a corporation under the circumstances of this case would be liable. See, for example Ranger v Great Western Ry Co [1854] EngR 73; (1854) 5 HLC 72; 10 ER 824, where Lord Cranworth points out that, although a corporation cannot in strictness be guilty of fraud, there can be no doubt that if its agents act fraudulently, so that if they had been acting for private employers the persons for whom they were acting would have been affected by their fraud, the same principles must prevail where the principal under whom the agent acts is a corporation. It is not a question of acting ultra vires, as in Chapleo v Brunswick Permanent Building Society (1881) 6 QBD 696, but of improper acts in the carrying out of the lawful purposes of the society. In such cases the principal, whether an individual or a corporation, or a body like turnpike trustees, is answerable for every such wrong of the servant or agent as is committed in the course of the service and for the master's benefit, though no express command or privity of the master be proved. Granted that the principal has not authorized the particular act, but he has put the agent in his place to do that class of acts, and he is answerable for the manner in which the agent has conducted himself in doing the business with which the principal has entrusted him: see Barwick v English Joint Stock Bank (1867) LR 2 Ex 259 in the Exchequer Chamber ...' The common law position as to when a servant or agent will bind the principal has been, at least since the decision in Barwick v English Joint Stock Bank at 265 per Willes J, that: 'the master is answerable for every wrong of the servant or agent as is committed in the course of the service and for the master's benefit, though no express command or privity is proved.' His Lordship further explained the principle in Bayley v Manchester, Sheffield and Lincolnshire Railway Co (1872) LR 7 CP 415 at 420: 'A person who puts another in his place to do a class of acts in his absence, necessarily leaves him to determine, according to the circumstances that arise, when an act of that class is to be done, and trusts him for the manner in which it is done; and consequently he is held answerable for the wrong of the person so intrusted either in the manner of doing such an act, or in doing such an act under circumstances in which it ought not to have been done; provided that what was done was done, not from any caprice of the servant, but in the course of the employment ...' The principle is not limited to the relationship of master and servant but applies to all relationships of principal and agent: Colonial Mutual Life Assurance Society Ltd v Producers and Citizens Co-Operative Assurance Co of Australia Ltd [1931] HCA 53; (1931) 46 CLR 41 at 46-47, 50. If the act is within the scope of the authority of the agent, it is immaterial that the principal directed the agent not to do it or was unaware that the act had been or was to be done: Colonial Mutual Life Assurance Society Ltd at 47, 50; Limpus v London General Omnibus Company [1862] EngR 839; [1862] 1 H & C 526, 539, 541, 543; [1862] EngR 839; (1862) 158 ER 993, 998, 999, 1000. Even where the agent acts fraudulently with a view to secure the benefit of the fraudulent conduct to the agent rather than the principal's benefit, the principal will be liable if the agent commits the fraud purporting to act in the course of business such as the agent was authorised or held out as authorised to transact on account of the principal: Lloyd v Grace Smith & Co [1912] UKHL 1; [1912] AC 716 at 725, 727, 738, 739, 742; Kooragang Investments Pty Ltd v Richardson & Wrench Ltd [1982] AC 462 at 472. These general agency principles apply to the conduct of the committee of management as well as any officer, servant or agent of the industrial association: Giblan v National Amalgamated Labourers' Union of Great Britain and Ireland at 620, 625; Atkinson v Lamont [1938] St R Qd 33 at 43, 58, 64-65. Further, as Murphy J observed in R v Bowen; Ex parte Amalgamated Metalworkers and Shipwrights' Union at 479, it can rationally be presumed that action, including industrial action of the type proscribed in Div 5 of Pt XA, taken by a committee of management, or a branch committee of management or an officer, employee or agent acting as such, is the action of the industrial association."

104. In considering that decision one must of course not overlook the provisions of s.298B(2) and (3) of the Act as clearly his Honour did not. The sub-sections read:

"298B (2) For the purposes of this Part, action done by one of the following bodies or persons is taken to have been done by an industrial association: (a) the committee of management of the industrial association; (b) an officer or agent of the industrial association acting in that capacity; (c) a member or group of members of the industrial association acting under the rules of the association; (d) a member of the industrial association, who performs the function of dealing with an employer on behalf of the member and other members of the association, acting in that capacity. (3) Paragraphs (2)(c) and (d) do not apply if: (a) a committee of management of the industrial association; or (b) a person authorised by the committee; or (c) an officer of the industrial association; has taken reasonable steps to prevent the action."

33 Williams and Others v. Hursey[3] was a case in which the High Court was required to examine the actions of members of the Hobart Branch of the Waterside Workers' Federation of Australia. At p.81 Fullagar, J. said:

"But, if the branch had been a separate body having an independent existence distinct from that of the federation, and capable of being made liable for the 'picketing' episodes, I should have doubted whether the federation also could have been held liable. It may be taken to have given sympathy and encouragement to the branch, but I should have felt doubt as to whether it could have been held to have made the acts of the branch its own acts in a sense which would have made it equally liable in damages with the branch. But in truth, as has been said, the branch has in law no existence separate from that of the federation. It is merely an aggregate of members which is an integral part or section of the whole federation, having that degree of autonomy which is permitted to it by or under the constitution of the federation. It represents the federation in the port of Hobart. In and for the port of Hobart it is, so to speak, the federation. It is forbidden by rr. 2 and 4 of Pt. II of the federal rules to strike or to take any step to 'enforce any wages, hours, or conditions of labour' without prior approval of the governing body of the federation. But, subject to those limitations, and perhaps one or two others, it is set up and organized in the port of Hobart to do in that port whatever the federation may do in any Australian port. Because it has that character and those functions, it seems to me that acts of the branch within its local limits are prima facie acts of the federation itself. The branch is in all respects subject to the control of the governing body of the federation, and that body could no doubt interfere and prohibit the branch from proceeding, or from proceeding further, with any particular course of action, and the federation would not be liable for anything done in breach of such a prohibition: cf. Waterside Workers' Federation v Burgess & Sons, Ltd [1916] HCA 2; (1916) 21 CLR 129. But in the present case there was no such prohibition and no such interference. Apart from the fact that Mr. Wallington, the federal organizer of the union, took an active part in the formation of the 'picket line' on 12th February 1958 - conduct of which Healy expressed disapproval - I do not think that any federal officer actually participated in the picketing. But the members of the governing body of the federation were well aware from the beginning of what was going on, and the federation made it known to the branch, and took steps to make it known to the public, that the branch had their full support and sympathy in 'the struggle'. Speaking of the 'picketing', Healy said: 'We gave our support by not directing any alteration to it'. That is, I think, the truth and, so far as appears, the whole truth, but I think that it is enough to make the federation liable. It makes it clear that acts which were prima facie acts of the federation were never repudiated or forbidden by it."

110. In Waterside Workers' Federation of Australia v. Burgess Brothers Ltd.[4] it was held by the High Court that in the absence of express authority and of any ratification the Federation was not liable for acts in the nature of a strike done by a branch without the knowledge of the governing body of the Federation. At p.133 Griffith, C.J. said:

"It is manifest that the appellants, being a corporation, can only act through agents. It was, therefore, necessary for the plaintiffs to establish that the acts complained of were done by their authorized agents. There is no question of express authority. The governing body of the appellant organization had in fact no knowledge of the acts complained of until after they had been done, and then, so far from approving or ratifying them, expressed its disapproval. The persons doing the acts did not even purport to act on behalf of the organization. I must not be supposed to suggest that under such circumstances any attempted ratification would have been effectual. The respondents were, therefore, compelled to rely upon the contention that the members of the Hobart Union were agents of the organization having a general authority to do on its behalf the acts complained of. The Supreme Court of Tasmania accepted that contention and dismissed a motion for judgment or nonsuit or for a new trial made by the appellants. Before this Court the respondents relied entirely upon the authority which, they contended, was established by the rules I have already quoted. It is impossible to construe rule 16, which is the one mainly relied on, as implying a general authority to a branch or to its individual members to act as agents for the organization collectively. Indeed, so far as any implication can be drawn from that rule, it tends to negative any such authority. It follows that, as the plaintiffs failed to show that the acts complained of were done by authority of the appellants, the verdict of the jury was without foundation, and that judgment should have been entered for them as against the appellants. The order appealed from should therefore be set aside, and judgment entered for them. It is, perhaps, not surprising that when a branch of a great organization like the appellants takes action in the nature of a strike some persons should impute the blame to the organization itself, but in a Court of Justice mere surmise or suspicion is not sufficient. A person or a corporation is not in a Court of Justice held liable for the actions of others unless his or its authority to do the actions on his or its behalf is established by evidence. In the present case, however, there is no foundation for even surmise or suspicion."

114. In the light of the decisions of the High Court to which I have referred I think it is strongly arguable in the present case that the C.F.M.E.U. is not responsible for the unauthorised actions of the members of the Latrobe Valley Branch of the Union in striking on 2 November.

117. As this is an interlocutory application and not the trial of the proceeding I make no concluded finding in relation to the matter. Indeed it would be improper for me to do so.

120. I turn then to the second contribution of counsel for the C.F.M.E.U. that is, that there is no threat that unless restrained the C.F.M.E.U. will take further industrial action in the Latrobe Valley.

126. The C.F.M.E.U. did not authorise the "wildcat" strike which occurred on 2 November, and immediately repudiated the actions of the members of the Latrobe Valley Branch who passed the resolution calling for the strike.

129. Whilst there are grounds for apprehending that the members of the Latrobe Valley Branch may take further strike action, and I refer in that regard to the fact that the mass meeting held on 2 November is scheduled to re-convene on 16 November, I am not satisfied on the evidence before me that the C.F.M.E.U. poses a similar threat. In that regard I point to the letter to which I earlier referred sent or being sent by the Secretary of the FEDFA Division of the Union to the members of the Latrobe Valley Branch.

132. Section 166A of the Act so far as is relevant reads:

"166A Restriction on certain actions in tort (1) Subject to this section, an action in tort under the law of a State or Territory may not be brought by a person against an organisation of employees, or an officer, member or employee of such an organisation, in relation to conduct by the organisation, or by the officer, member or employee acting in that capacity, in contemplation or furtherance of claims that are the subject of an industrial dispute unless the Commission: (a) has certified in writing as mentioned in paragraph (6)(a) or (c) in respect of the conduct; or (b) has certified in writing as mentioned in paragraph (6)(b) in relation to the person in respect of the conduct."

136. There are two points raised by counsel for the C.F.M.E.U. in relation to that sub-section.

139. In the first place he contends that the actions of the members of the Latrobe Valley Branch on 2 November were taken in contemplation or furtherance of claims that are the subject of an industrial dispute, namely the dispute between the C.F.M.E.U. and Yallourn Energy.

142. In the second place he contends that the present proceedings are actions in tort and in the absence of the certificate referred to in the section are prohibited.

145. Insofar as the second contention is concerned I adhere to what I said in Patrick Stevedore No. 1 Pty. Ltd. and Another v. Maritime Union of Australia and Others[5] namely that an application for injunctive relief is not an action in tort under the law of the State of Victoria. It is an application that the Court exercise its equitable jurisdiction. See also Patrick Stevedores Operations Pty. Ltd. v. Maritime Union of Australia and Others[6] and Patrick Stevedores Operations Pty. Ltd. and Another v. Maritime Union of Australia and Others[7].

148. Insofar as the first contention is concerned I think it is important to bear in mind the following matters.

151. The notice calling the mass meeting on 2 November was issued on 24 October. It is not correct to say therefore that the mass meeting was called as a reaction to the decision of Commissioner Lewin handed down on 2 November whereby Commissioner Lewin stated that he intended to terminate the bargaining period between Yallourn Energy and the C.F.M.E.U.

154. There is no industrial dispute between Hazelwood and Loy Yang and the C.F.M.E.U.

157. It was argued by counsel for the C.F.M.E.U. that the industrial action taken by the employees at Hazelwood and Loy Yang was taken in furtherance of C.F.M.E.U.'s claims that are the subject of the industrial dispute between it and Yallourn Energy.

160. There is no evidence to that effect, and in any event it is arguable that such action by the employees of Hazelwood and Loy Yang would be prohibited under the secondary boycott provisions of the Trade Practices Act 1974, in particular s.45D.

163. Finally such a contention flies in the face of the resolution passed at the mass meeting the opening words of which read:

"As a political protest against the use of Reith's laws to attack the Yallourn workers ..."

167. On the face of it, it is strongly arguable that this wildcat strike was no more than a political protest designed to cause as much damage and inconvenience to the power operators and the public at large in the shortest possible time. In that it succeeded. The financial loss the strike caused to Yallourn Energy was in the region of $14,000,000 and the financial loss to Loy Yang of the order of $10,800,000. One suspects that similar losses were experienced by Hazelwood. Large sections of Victoria were blacked out for some hours causing enormous inconvenience and confusion to members of the public. That the individuals concerned should take such action without warning, is to be deplored.

170. Having regard to the views I have formed as to the C.F.M.E.U.'s responsibility for the strike and the actions it has taken to ensure that further unauthorised strike action of a similar nature is not taken by members of the Latrobe Valley Branch, I propose to terminate the injunction insofar as the C.F.M.E.U. is concerned. In that situation it is unnecessary for me to consider the balance of convenience so far as that aspect of the application is concerned or for that matter the offer to give undertakings made by the C.F.M.E.U.

173. The individual members of the C.F.M.E.U. who are defendants in the Loy Yang proceeding and the Yallourn Energy proceeding were not represented at the hearing before me nor was anything advanced on their behalf. In that situation I consider it is appropriate that the injunctions granted against them remain on foot until further order of the Court.

(a) Proceeding No. 7501 of 2000 in which Hazelwood Power Corporation Ltd. is plaintiff and the C.F.M.E.U. is defendant (the Hazelwood proceeding) -

(1) I dissolve the injunction granted by me in paragraph 1 of my order of 3 November 2000.

(2) I order that this proceeding be consolidated with proceeding No. 7520 of 2000.

(5) I direct that this order be prepared by the solicitors for the plaintiff and within 48 hours be brought to me for authentication.

(b) Proceeding No. 7502 of 2000 in which Horizon Energy Holding and Others are plaintiffs and the C.F.M.E.U. and others are defendants (the Loy Yang proceeding) -

(1) I dissolve the injunction granted by me in paragraph 1 of my order of 3 November 2000 insofar as it relates to the C.F.M.E.U. The order is to remain in effect as against the other defendants until further order of the Court.

(4) I direct that this order be prepared by the solicitors for the plaintiffs and within 48 hours be brought to me for authentication.

(c) Proceeding No. 7525 of 2000 in which Yallourn Energy Pty. Ltd. is plaintiff and C.F.M.E.U. and another are defendants -

(1) I dissolve the injunction granted by me in paragraph 1 of my order of 3 November 2000.

(2) I order that until the hearing or determination of this proceeding or further order the second named defendant be restrained whether by himself his servants or agents or howsoever otherwise from:

(a) interfering with the production of or generation of power supplies at Yallourn Energy Pty. Ltd. sites;

(b) inducing, asking, persuading, advising or procuring any employee of the plaintiff not to perform his work in accordance with their contracts of employment or the Yallourn Energy Pty. Ltd. Enterprise Agreement 1997.

(5) I direct that this order be prepared by the solicitors for the plaintiff and within 48 hours be brought to me for authentication.

[1] (1998) 87 I.R. 105

[2] [1998] FCA 1646; (1998) 90 F.C.R. 95

[3] [1959] HCA 51; (1959) 103 C.L.R. 30

[4] [1916] HCA 2; (1916) 21 CLR 129

[5] (1998) 79 I.R. 268

[6] (1998) 82 I.R. 87

[7] (1998) 82 I.R. 237