Liquor Hospitality and Miscellaneous Union v Arnotts Biscuits Limited

REASONS FOR JUDGMENT 1 The respondent, Arnott's Biscuits Limited (Arnott's), is very well known in Australia as a manufacturer of biscuits. One of its biscuit manufacturing plants is located in the Brisbane suburb of Virginia. 2 On 28 September 2009, during the course of a shift changeover at the Virginia plant, three long serving, full time employees of Arnott's, Mr Clive Popko, Mr Antonio Taito and Mr Phil Passmore were engaged in performing cleaning work on a machine on one of the production lines. The machine concerned is known as the line 5 cutting machine. Arnott's did then and does now regard each of the men as a good worker. Unfortunately, on 28 September 2009, each of them neglected to perform a procedure known as "lock out/tag out" prior to performing the cleaning work. They had each recently expressly been given training in support of a requirement by Arnott's that, for occupational health and safety reasons, they perform this procedure. A supervisor, Mr Catlow, noticed their neglect to perform this procedure. 3 An investigation by Arnott's of the incident followed. Arnott's scrupulously observed procedural fairness in respect of each of the men in conducting this investigation. At their request, it readily involved their union, the Liquor Hospitality and Miscellaneous Union (the Union), the applicant in these proceedings. The Union, in turn and likewise scrupulously, discharged its role of representing and advising the men. On 30 September 2009, at the conclusion of the investigation, the responsible manager at Arnott's concluded that the men's conduct was such that it warranted the summary dismissal of each of them. Instead of so doing, Arnott's, by a letter in like form given to each of them that day, asked each man whether he was prepared to take leave without pay for one month. It allowed time for each of them separately to consider this and to take advice from the Union or other sources. Each took advice from his Union. Having so done, each, via the Union, agreed to take leave without pay although reserved a right to challenge the course put to them by Arnott's. In light of this response from each man, Arnott's did not dismiss him from its employment. Instead, each man went without pay for one month and did not attend work during that period. Each man continues to work for Arnott's. 4 The governing industrial instrument, an agreement entitled Arnott's Biscuits Enterprise Bargaining Certified Agreement 2006-2009 (the certified agreement), was originally made pursuant to the Industrial Relations Act 1999 (Qld) but progressively continued in application first by the Workplace Relations Act 1996 (Cth) (Workplace Relations Act) and later by the Fair Work Act 2009 (Cth) (Fair Work Act). It made no provision for the suspension without pay for disciplinary reasons of workers covered by that agreement. Nor, materially, did the certified agreement provide for any right on the part of Arnott's to stand down an employee without pay. There was no separate provision in the contract of employment of each of the men which would have permitted either of these courses of action. 5 Because of the reference made to it in the Union's submission, mention should also be made to the further, limited provision made by s 524 of the Fair Work Act as to an employer's power to stand down an employee without pay. That section provides: 524 Employer may stand down employees in certain circumstances (1) An employer may, under this subsection, stand down an employee during a period in which the employee cannot usefully be employed because of one of the following circumstances: (a) industrial action (other than industrial action organised or engaged in by the employer); (b) a breakdown of machinery or equipment, if the employer cannot reasonably be held responsible for the breakdown; (c) a stoppage of work for any cause for which the employer cannot reasonably be held responsible. (2) However, an employer may not stand down an employee under subsection (1) during a period in which the employee cannot usefully be employed because of a circumstance referred to in that subsection if: (a) an enterprise agreement, or a contract of employment, applies to the employer and the employee; and (b) the agreement or contract provides for the employer to stand down the employee during that period if the employee cannot usefully be employed during that period because of that circumstance. Note 1:If an employer may not stand down an employee under subsection (1), the employer may be able to stand down the employee in accordance with the enterprise agreement or the contract of employment. Note 2:An enterprise agreement or a contract of employment may also include terms that impose additional requirements that an employer must meet before standing down an employee (for example requirements relating to consultation or notice). (3) If an employer stands down an employee during a period under subsection (1), the employer is not required to make payments to the employee for that period. None of the circumstances for which s 524 provides is applicable in the circumstances of this case. 6 All other things being equal, the effect of the certified agreement (by cl 6.1(4)) is that a full time employee will work at least 152 hours in any 4 week period. 7 Section 340 of the Fair Work Act prohibits an employer from taking "adverse action" against an employee because the employee has a workplace right or proposes to exercise such a right or to prevent an employee from exercising such a right. Section 341 of that Act specifies what constitutes a "workplace right". One such thing it specifies is an entitlement to the benefit of, or a role or responsibility under, a "workplace instrument": s 341(1)(a). The certified agreement is a workplace instrument (definition, s 12). 8 Section 342 of the Fair Work Act specifies what constitutes "adverse action". One such action in the case of action by an employer is dismissal of the employee: item 1 in the table under s 342(1). Adverse action also includes threatening to take any of the adverse actions set out in that table: s 342(2). 9 Against this general background, the Union contended that Arnott's had contravened s 340 of the Fair Work Act. 10 The Union further contended that, in the circumstances, Arnott's had contravened s 343 of that Act. Materially, that section prohibits a person from taking or threatening to take action against another with intent to coerce that person from exercising a workplace right. It was alleged that Arnott's had threatened each of Messrs Popko, Taito and Passmore with dismissal so as to coerce him into agreeing not to exercise his right to attend and be paid for work under the certified agreement. 11 Arnott's denied that it had engaged in any conduct which contravened the Fair Work Act in the manner alleged. 12 Broadly therefore, the question which is raised is whether Arnott's, in effect, took the law into its own hands and thereby contravened the Fair Work Act as alleged such that it is liable to penalties or whether this a case where Arnott's has permissibly tempered justice with mercy in the workplace in relation to a breach of a safety requirement? If the former, the Union also seeks an order which would compensate each of the men for the wages which were foregone by them during their absence from work. It was uncontroversial as to the amount of those wages in each man's case. 13 Subject to the operation of s 360 and s 361 of the Fair Work Act, the Union carries the burden of proving the alleged contraventions. While the proceedings are civil in character, they are nonetheless penal. Thus, though the Union must prove the contraventions on the balance of probabilities, s 140(2) of the Evidence Act 1995 (Cth) (Evidence Act) requires that; due regard be given to the nature of the cause of action or defence; the nature of the subject matter of the proceeding; and the gravity of the matters alleged. That sub-section of the Evidence Act is a restatement of a well known passage in the judgment of Dixon J (as his Honour then was) in Briginshaw v Briginshaw (1938) 60 CLR 336 at 362 in relation to considerations which intrude in deciding whether the standard of proof in civil proceedings has been met, "the seriousness of an allegation made, the inherent unlikelihood of an occurrence of a given description, or the gravity of the consequences flowing from a particular finding are considerations which must affect the answer to the question whether the issue has been proved to the reasonable satisfaction of the tribunal. In such matters 'reasonable satisfaction' should not be produced by inexact proofs, indefinite testimony, or indirect inferences." 14 Sections 360 and 361 of the Fair Work Act provide as follows: 360 Multiple reasons for action For the purposes of this Part, a person takes action for a particular reason if the reasons for the action include that reason. 361 Reason for action to be presumed unless proved otherwise (1) If: (a) in an application in relation to a contravention of this Part, it is alleged that a person took, or is taking, action for a particular reason or with a particular intent; and (b) taking that action for that reason or with that intent would constitute a contravention of this Part; it is presumed, in proceedings arising from the application, that the action was, or is being, taken for that reason or with that intent, unless the person proves otherwise. (2) Subsection (1) does not apply in relation to orders for an interim injunction. 15 The allegations made by the Union against Arnott's, both in respect of its alleged contravention of s 340 and s 343, were such as to engage s 361 of the Fair Work Act. It is thus incumbent on Arnott's to prove, again on the balance of probabilities: (a) In the case of s 340, that it did not take adverse action against the men because each had a workplace right or proposed to exercise the same or so as to prevent the men from exercising such a right (s 340(1)(a)(i) and (iii) and s 340(1)(b)). In each instance, the workplace right is alleged to be the right under the certified agreement to attend and be paid for work. (b) In the case of s 343, that it did not have the intent to coerce the men not to exercise that same workplace right. 16 Further, by reason of s 360 of the Fair Work Act, if a reason of the kind just described is present there will be a contravention of s 340 or, as the case may be, s 343 and it would be nothing to the point, so far as liability is concerned, that other reasons may be present in the action taken by Arnott's. 17 It assists in giving context to the actions taken by Arnott's both before and after 28 September 2009 to recall the duty which it had at common law with respect to the provision, maintenance and enforcement of safety in the workplace. In McLean v Tedman (1984) 155 CLR 306 at 313 Mason, Wilson, Brennan and Dawson JJ stated: The employer's obligation is not merely to provide a safe system of work; it is an obligation to establish, maintain and enforce such a system. Accident prevention is unquestionably one of the modern responsibilities of an employer: see Fleming, Law of Torts, 6th ed. (1983), pp 480-481. And in deciding whether an employer has discharged his common law obligation to his employees the Court must take account of the power of the employer to prescribe, warn, command and enforce obedience to his commands. 18 In addition to this common law duty Arnott's was also subject to no less extensive statutory duties with respect to safety in the workplace. It is not necessary for the purposes of deciding this case to detail these. 19 A corollary of the duties at common law and by virtue of statute in respect of provision, maintenance and enforcement of safety in the workplace is that an employer is entitled to give reasonable directions to employees directed to its fulfilment of that duty. In particular circumstances, a failure by an employee to comply with such a direction can, at common law, provide a basis for the summary dismissal of that employee. Here again, statute can intrude. Whether such a failure constitutes "serious misconduct" as defined (s 12 of the Fair Work Act and reg 1.07 of the Fair Work Regulations 2009 (Cth)) is relevant to whether there is an entitlement on the part of the employee to termination and redundancy pay and to whether there ought to have been particular notification and consultation in relation to the dismissal: see ss 123, 534 and 789 of the Fair Work Act. It is also relevant to any consideration of whether, for the purposes of that Act, a dismissal of an employee is harsh, unjust or unreasonable. 20 So far as this case is concerned, Arnott's gave just such a direction in the middle of last year to each of Messrs Popko, Taito and Passmore as well as to their fellow employees at the Virginia plant. The direction took the form of a requirement to adhere to a "lock out/tag out" or "positive isolation" policy when working on machinery at the plant. The end to which the policy was directed was the positive isolation from electrical supply of industrial machinery at the plant prior to work being performed on it. The essence of the policy was that, if an employee was performing work on a machine, the electricity supply to the machine was first to be isolated not just by turning the relevant three phase power switch off but also but inserting either a lock or, as the case may be, a hasp and lock into the switch. As part of that system a tag stating "Danger Do Not Start" was to be affixed to the lock or hasp. 21 The locks concerned were colour coded such that each employee working on a machine was able and expected to use a differently coloured lock specifically allocated to that employee. In those situations where more than one employee was to work on a machine a hasp as well as a lock was used. A hasp is a metal device which has two, centrally hinged limbs. One end of each limb has a jaw on it; the other consists of a flat sheet of metal with multiple perforations. When the jaws are brought together these perforations become aligned. In this fashion, instead of passing the shank of a lock through aligned holes in an isolation switch so as to prevent it being turned on, the jaws of the hasp may be alternatively used. When closed it then becomes possible for each of a number of workers to insert their particular colour coded lock through a particular set of aligned holes at the other end of the hasp. By this means the hasp cannot be removed or the isolation switch turned on until the last of the locks has been removed thus in turn permitting the hasp to be removed from the switch. 22 In theory and, if the policy is adhered to, in practice, no worker can be placed in a situation where power is accidentally turned on to a particular machine while he or she is working on it, always assuming that the isolation switch itself is not defective. 23 The facility for "lock/out tag out" had existed at the plant before the middle of last year but before then a degree of tolerance had existed in the workplace about the adoption of this type of positive isolation. Insistence on adherence to the policy by Arnott's came as a result of some earlier workplace incidents. 24 One of the reasons, and the only one pertinent to this case, why a degree of tolerance had hitherto existed at the plant in relation to "lock out/tag out" can be illustrated by reference to the Line 5 cutting machine. 25 Line 5 at the plant consists of a number of linked machines for use in the production of biscuits. The production line starts with dough mixing and includes an oven, the cutting machine and a machine for packaging the finished product. 26 That cutting machine is fitted with numerous guards. As Mr Paul Gambley, an experienced maintenance electrician at the plant explained in his helpful evidence, some of these guards, the ones customarily used by operating staff in maintaining the machines, are fitted with isolation switches (also known as safety switches). Others, which can only be opened with a specialised tool (an Allen key), not issued to machine operators such as Messrs Popko, Taito and Passmore, do not have such switches fitted to them. A plant electrician such as Mr Gambley is issued with the specialised tool. That differentiation is typical of machinery throughout the plant. 27 As to those guards on the Line 5 cutting machine which are fitted with an isolation switch, the lifting of the guard will engage that switch. Thus, while the guard is raised that will prevent the cutting machine from being turned on. That obviously provides a level of protection providing care is taken when a guard is lowered to ensure that no-one else is undertaking work within the cutting machine or near cutting blades. For, once such guards are lowered the cutting machine can be switched on again. 28 There is no doubt that just relying on the isolation provided by the raising of this kind of guard had a convenience about it such that, prior to the middle of last year, it was preferentially used by machine operators such as Messrs Popko, Taito and Passmore when performing routine maintenance tasks on the cutting machine. Equally, until that time, Arnott's at least tolerated the adoption of that system. 29 As Mr Gambley conceded in his evidence, the "lock out/tag out" system, if adhered to, provides a higher level of protection in that, even if all isolation switch equipped guards have been lowered, the cutting machine cannot be switched back on until the lock or, as the case may be, hasp is removed. He added for completeness that there remains, even with this system, a remote (1%) possibility that an isolation switch itself might fail. 30 Arnott's conducted training for its operators in conjunction with the introduction of tis "lock out/tag out" (also termed "positive isolation") policy. Messrs Popko, Taito and Passmore each attended a training session about the policy although Mr Passmore had to leave the session which he attended early. 31 The evidence led in the case included copies of the PowerPoint slides which accompanied the instruction provided to operators about the policy at the training session. The slides use simple, direct language, supported by graphic illustration. The message which they convey may be summarised thus: (a) positive isolation is compulsory; (b) a failure to follow positive isolation procedures will be investigated and may lead to termination of employment; and (c) if in doubt, lock it out! 32 Even though Mr Passmore left the training session before it was fully completed, he was able to confirm in evidence having seen the PowerPoint slides at the session. Mr Taito and Mr Popko also acknowledged having seen these slides at the training session which they attended. 33 Apart from the slide assisted instruction, the training provided to operators involved a practical demonstration of the use of locks and hasps. 34 I detail below in a summary way what I regard as the material facts in respect of the events of 28, 29 and 30 September 2009. In so doing, I have drawn upon the evidence of each of Messrs Popko, Taito and Passmore, Mr Davie, Mr Irvin, Mr Catlow, Ms Scown, Ms Armistead and Ms Luxford. Insofar as not already identified the role which each of these persons played will be apparent from that summary. In respect of the summarised facts there was no particular conflict in such of the evidence touching upon them as these witnesses gave. Nor did I see any reason to doubt that evidence. For these reasons and save insofar as it is necessary to highlight particular individual aspects, I do not find it necessary to set out at length each individual's evidence. 35 On the morning of 28 September 2009, in the course of a shift changeover between the night and day shifts at the plant, Mr Catlow, who was then a Team Leader for Line 5, asked Mr Passmore, a member of the night shift, to re-clean some parts of the cutting machine. A Team Leader is an immediate supervisor of a team of operators allocated to a line. Messrs Taito and Popko assisted Mr Passmore with this task. As Mr Catlow went to leave the production line area he inspected the "LOTO Log Book". In accordance with the "lock out/tag out" policy entries should have been made in this log book recording the lock numbers of the locks drawn by operators for the purpose of locking out the isolation switch. The work then being undertaken was such that the cutting machine ought to have been isolated. There were no entries. He then asked the operators about this but could get no clear answer from them. 36 Later in the day Mr Catlow reported the incident to his superior, Ms Deborah Scown who then held of the position of Manufacturing Manager for the Line 5 Production Line. Ms Scown directed Mr Catlow to commence an investigation by interviewing the operators concerned. 37 Mr Catlow conducted individual interviews with each of Messrs Popko, Taito and Passmore on 29 September 2009. Each of them was offered the option of having a Union representative present at the interview. The upshot of those interviews was that each of them admitted not locking and tagging out prior to working on the cutting machine. Each said that he thought that the machine had already been locked out by someone else. 38 Later on 29 September 2009, Mr Catlow met with Ms Scown, her superior, Ms Rachel Armistead, the manager of Arnott's Virginia plant and Ms Kathryn Luxford, the Human Resources Manager. The group discussed whether termination was the appropriate sanction. Mesdames Armistead and Luxford considered that it was. Mr Catlow raised as an alternative suspension without pay. He had seen the use of this as an alternative in previous employment in the meat industry. External legal advice was taken by telephone by Ms Luxford about this alternative. The effect of that advice was that suspension without pay was only an alternative for Arnott's if the men agreed to this. Ms Luxford also put the options under consideration by telephone to a Mr Gary Beikoff in Arnott's Head Office. Mr Beikoff was a senior human resources manager there. His advice to her was that suspension as an alternative to termination or termination would be supported by him. The results of these telephone inquiries were reported by her to the meeting. 39 In the result, following further discussion between those present at the meeting, Ms Armistead, as Plant Manger, decided to offer each of the men the choice of termination or, should they wish, suspension without pay for one month. It was then arranged for each of the men to attend an individual meeting the following day. The Union was notified of the meetings proposed for that day. 40 On 30 September 2009, at a series of individual meetings with Messrs Popko, Taito and Passmore chaired by Ms Luxford, Arnott's decision in respect of the incident was put to each of the men. Present at each meeting were Mr Geoff Sharp and Mr Damien Davie, each of whom was an official of the Union, Mr Noel Irvin, a Union shop delegate at the plant, Ms Scown and Mr Catlow. Another shop delegate, Mr Robert Blair also attended the meetings with Messrs Popko and Taito respectively. 41 Ms Luxford had pre-prepared notes (a "script" as she termed it) of the points which she intended to cover with each man at each individual meeting. I am satisfied that she did indeed use these notes as an aide-memoir and spoke to them at each meeting. In summary, what she said to each of the men at each individual meeting was that: (a) Arnott's considered he had committed a serious safety breach; (b) Arnott's further considered that, as a result, it had the right to terminate his employment; (c) in order to show some leniency given the newness of the procedure and the time which it takes to effect behavioural change, Arnott's was prepared to offer him a suspension without pay for one month if he agreed; and (d) he had 24 hours to consider the proposal. 42 Arnott's formal position was also put to each man in the form of an identically worded letter handed over at the meeting. That letter was in the following terms: Outcome of Investigation Arnott's has concluded its investigation into allegations that, along with two other employees, you failed to positively isolate an item of plant during a change over. The isolation of plant during a change over is a critical safety requirement. You were specifically trained in relation to this obligation on 7/7/09, and during that training, it was explained that breach of this critical procedure would ordinarily result in termination of employment. During the investigation, you admitted that you were aware of the requirement, however did not comply with it. Accordingly, Arnott's has concluded that the allegations are established. Breach of a critical safety procedure is serious misconduct, particularly in circumstances where you had recently been specifically trained in the requirement, and it appears to have been a failure to comply. Arnott's believes it has grounds to terminate your employment. However Arnott's is prepared to contemplate a suspension of your employment without pay for a period of one month as an alternative to termination of employment. However this is only available as an alternative if you specifically accept the penalty. Accordingly, if you are prepared to accept a penalty of one month's suspension without pay (during which you would not be entitled to access annual leave or sick leave) then please acknowledge your acceptance of this outcome by signing the duplicate of this letter and returning it to HR. Your period of suspension would begin on 1st October 2009 and end on 29th October 2009. Essentially, it would be an agreement that, for the period of suspension, you would be treated as being on unpaid leave. You would also receive a final written warning, which would be placed on your file, and any future breach would almost certainly result in termination. Arnott's is not prepared to consider any disciplinary action of a lesser nature, and wishes to emphasise the serious nature of the breach. If you are not prepared to accept this alternative to termination of employment, then Arnott's will proceed to terminate your employment. In that event, you would have the normal avenues for challenge of a decision to dismiss you from your employment. I encourage you to take advice from your union or from any other relevant advisor before making a final decision. … I, [name of employee] accept Arnott's decision to suspend my employment for a period of one month in accordance with the terms of this letter. I understand that during the suspension period I will not be required or permitted to attend at work, and I will not be entitled to be paid for the duration of the period. I accept that for the purposes of my employment arrangements, including the applicable industrial instruments, I will be treated as having taken leave without pay for the duration of the period. I also acknowledge that I accept this arrangement freely as an alternative to termination of my employment. 43 Having observed when they gave evidence each of the author of that letter, Ms Luxford, as well as Ms Armistead, who made the decision, I am satisfied that this letter accurately conveys the decision which Ms Armistead made. I am quite sure that, before the meetings of 30 September 2009, Ms Armistead had made a settled decision that there existed grounds to terminate, then and there, the employment of each man but that each man should be offered the alternative of agreeing to take one month's suspension without pay. I am further satisfied that, had this alternative not been accepted, each man's employment would have been terminated by Arnott's. Ms Armistead was taxed in cross-examination about her reasons for decision, with the suggestion being made that she considered a final warning too lenient and termination too harsh. She rejected this emphatically and credibly, I thought. Further, it does not strike me as inherently unlikely that an employer could, in the circumstances related above, reasonably form a view that there had been serious misconduct of a kind giving it a right summarily to dismiss each of the men. In other words, there is no stark incongruity between the avowed position as to the existence of grounds for termination put to each man and the circumstances disclosed by the investigation and recited in the letter given to each man. 44 At each of the meetings, Mr Davie said words to the effect, "so, to keep his job he must take the suspension". Ms Luxford's response to this was to confirm that the choice was either termination or, if the employee agreed, suspension. She also told each man he should get advice from the Union or others as to whether they should accept the proposed suspension without pay. Having done this and on each occasion Ms Luxford, Ms Scown and Mr Catlow left the meeting room, leaving the man concerned with his Union officials and representative(s). 45 Later and progressively on 30 September 2009 Ms Luxford received from Mr Davie, on behalf of each man, a copy of Arnott's letter with the suspension offer signed so as to signify his acceptance. Following this, each man absented himself from work for one month and was not paid by Arnott's during that period. Each has since returned to work. 46 As to the alleged contravention of s 340, the Union submits that it should be concluded that Messrs Popko, Taito and Passmore were each threatened with dismissal in the event that they did not agree to be stood down without pay. As to a workplace right, it points to their right to undertake at least the minimum hours of paid work for which the certified agreement provides. It further submits that another right which they had was not to be stood down except in accordance with s 524 of the Fair Work Act unless the certified agreement or their contract of employment otherwise provides. As noted, neither does so provide. 47 The Union invites me to conclude that Arnott's, materially its decision-maker, Ms Armistead, considered that a final warning was insufficient punishment but that termination was excessive in all of the circumstances. Being of this view, so the submission goes, and also being aware of the absence of any right to suspend the employees without pay, she threatened each of them with termination so as to secure their agreement to such a suspension. 48 I have already set out my views in relation to Ms Armistead's evidence and in relation to the letter which was given to each man. Arnott's truly did mean what it said in each such letter. So, too, did Ms Luxford in putting the corporate position orally to each man when meeting with him on 30 September 2009. In her case also, I formed the view, having taken into account my assessment of her under cross-examination, that there was no element of contrivance about the communication that Arnott's considered that it had grounds to terminate each man. 49 I do accept that Arnott's was aware that it had no power, on its own initiative, to suspend any of the men without pay. So much is a necessary inference from the way in which each letter is drawn. I also accept that each of what the Union asserts to be a "workplace right" enjoyed by Messrs Popko, Taito and Passmore was indeed such a right for the purposes of s 340 of the Fair Work Act. Arnott's conceded as much. 50 Arnott's submitted that these particular workplace rights were not immutable. I agree. Both employer and employee are at liberty voluntarily to agree to a variation of the terms of the employment contract. What an employer cannot do is, materially, to take "adverse action", as defined, against an employee because of one of the reasons set out in s 340(1)(a) of the Fair Work Act or, as s 340(1)(b) of that Act provides, to prevent the exercise by the employee of a workplace right. 51 In s 340(1) both "because" and "to prevent" direct attention to whether there exists a causative relationship between particular alleged adverse action by a person and the exercise (or as the case may be as set out in s 340(1)(a)) or the prevention of the exercise of a workplace right by another person. For the reasons given by Tracey J in Barclay v Board of Bendigo Regional Institute of Technical and Further Education (2010) 193 IR 251 at [28], in an assessment of whether such a causal relationship exists it is relevant to consider evidence of an employer's subjective reasons for engaging in the conduct alleged to contravene s 340 of the Fair Work Act. In the case of action by a corporation, it is the subjective reasons of the person or persons who made the decision that the corporation engage in the impugned conduct which it is relevant to consider: General Motors Holden Pty Ltd v Bowling (1976) 12 ALR 605. 52 The table set out under s 342(1) of the Fair Work Act informs the reader that "adverse action" is taken by an employer against an employee if the employer dismisses the employee. To this s 342(2)(a) of that Act adds that "adverse action" as provided for in the that table includes threatening to take action covered by the table. Thus a threat of dismissal of an employee by an employer can constitute "adverse action". 53 Arnott's submitted that Messrs Popko, Taito and Passmore had not been "threatened" with dismissal. I disagree. A "threat" is "a declaration of an intention or determination to inflict punishment, pain or loss on someone in retaliation for, or conditionally upon, some action or course; menace" (Macquarie Dictionary, Online Edition).Both the letter in writing and Ms Luxford orally conveyed a threat, a declaration of an intention to dismiss. 54 Section 340 does not effect a blanket prohibition of the dismissal of an employee or a threat of the same. Rather, it prohibits such action if taken for one of the reasons set out in that section. In this case, the reason why the threat was made, and the only reason in the circumstances, was because Arnott's considered that it had grounds to dismiss each of the men by reason of his conduct on 28 September 2009. It is to be remembered, too, that the workplace right at least to perform, for the rates of pay there set out, the hours of work set out in the certified agreement was not an unqualified or absolute right. That right was always subject to such right as the employer had lawfully to terminate the contract of employment. 55 In the circumstances of this case there is no relevant causative relationship between the "adverse action" and the exercise or the prevention of the exercise of a workplace right. 56 Arnott's further submitted that, in circumstances where the alternative was dismissal, the making of the offer of suspension without pay was an offer of favourable treatment and not adverse treatment. Given the prescriptive quality of what s 342 takes to be "adverse action", I would prefer to state that this offer did not fall within any of the items in the table under s 342(1) of the Fair Work Act. The offer was not one which injured the employee in his employment, altered his position to his prejudice or discriminated between him and other employees. It could not have operative effect at all unless accepted. The reason why Arnott's made the threat of dismissal was not to procure that acceptance but for the quite different reason which I have mentioned. The position would be different if the threat were a mere contrivance, a façade, but that is not this case. 57 "Merciful" was a description which commended itself to Scott LJ in Bird v British Celanese Ltd [1945] KB 336 at 341, a case to which Arnott's referred, in relation to a clause in a contract which provided for temporary suspension of an employee for misconduct or breach of an order. Arnott's had no such right either by contract or otherwise unless its offer was accepted. However, Arnott's description in its submission of the offer alone as "merciful" is nonetheless apt and would remain so even if that offer had not been accepted. Save for noting the description, I make no other use of Bird v British Celanese Ltd for that case concerned the quite different question of whether the operation of the suspension clause concerned transgressed s 1 of the Truck Act 1896 (UK). 58 It follows that Arnott's has not contravened s 340 of the Fair Work Act. 59 That conclusion has the advantage of according with common sense. It would seem an odd result if an Act the object of which, inter alia, is to "provide a balanced framework forcooperative and productive workplace relations that promotesnational economic prosperity and social inclusion for allAustralians by providing workplace relations laws that are fair to workingAustralians" (s 3(a)), had, in the circumstances of this case, the effect of prohibiting, under pain of liability to penal sanction, an employer which had decided it had reasonable grounds to dismiss an employee for serious misconduct from making to that employee an offer such as Arnott's made to Messrs Popko, Taito and Passmore. Here, that Act has no such effect. 60 For reasons which follow, the findings of fact which I have made as to the reason why Arnott's made the threat of dismissal also dictate the fate of the allegation that the company contravened s 343 of the Fair Work Act. 61 Like counsel for each of the parties, I have not been able to locate any prior authority directly concerned with the construction of s 343 or, for that matter, its analogous predecessor, s 400 of the Workplace Relations Act. Counsel for Arnott's submitted that assistance was to be gained as to the meaning of "with intent to coerce" by reference to observations made by various judges of this Court concerning the import of that expression as it appeared in the former s 170NC of the Workplace Relations Act. I agree. 62 Section 170NC prohibited a person from engaging in particular specified conduct with intent to coerce another person to make, vary or terminate a certified agreement. The expression "with intent to coerce" is used in an analogous way to the way it is used in s 343 of the Fair Work Act. 63 As to the former s 170NC, in an interlocutory judgement delivered in Finance Sector Union v Commonwealth Bank of Australia (2000) 106 IR 139 at [44] Finkelstein J stated: 44 What constitutes coercion? Presumably it is no more than one form of inducement, but a particularly nasty form. A person will coerce another to act in a particular way if the first person brings about that act by force. It is for that reason that a threat will amount to coercion. Coercion will cause a person to act in a way that is, in a sense, non-voluntary (I do not mean involuntary in the legal sense). 64 Later, in Finance Sector Union v Commonwealth Bank of Australia (2000) 106 FCR 16 at [19] to [25], the occasion arose for Gyles J to consider the meaning of "coerce" in greater depth than the circumstances which customarily attend an interlocutory proceeding had permitted Finkelstein J. Having referred to the statement made by Finkelstein J in his interlocutory judgement, Gyles J made the following observations as to the meaning of "coerce" in s 170NC. The passage concerned (106 FCR at [19] to [25]) is lengthy but I set it out in full because I consider that it offers valuable guidance by analogy as to the meaning of that word as used in s 343 of the Fair Work Act: 19 The Macquarie Dictionary defines "coerce" in the following way: "1. To restrain or constrain by force, law, or authority; force or compel, as to do something. 2. To compel by forcible action." The New Shorter Oxford English Dictionary defines "coerce" as: "1. Forcibly constrain or impel (into obedience, compliance, etc); force or compel to do. (b) Enforce. 2. Enforce obedience; use coercive measures." "Coercion" is defined in the New Shorter Oxford English Dictionary as: "1. Constraint, restraint, compulsion; the controlling of a voluntary agent or action by force. 2. The faculty or power of coercing or punishing; the power to compel assent. 3. Government by force; the employment of force to suppress political disaffection and disorder. 4. Physical pressure; compression. Now rare." 20 The legal dictionaries refer to line of authority which was summarised in National Workforce v AMWU (No 2) (supra) at 221 as holding that the word "coerce" required wrongful, illegitimate or illegal action or, at any rate, the negation of choice (Allen v Flood [1898] AC 1 at 98, 128-9; Hodges v Webb [1920] 2 Ch 70 at 86-7; White v Riley [1921] 1 Ch 1; and Goddard v Osborne (1978) 35 FLR 122). I confess to having some difficulty in understanding the discussion of a legal as opposed to an ordinary meaning of "coercion" in National Workforce v AMWU (No 2) at 221. All of the dictionary meanings involve the negation of choice or compulsion. In my opinion, there is a significant difference in ordinary meaning between concepts such as influence, persuasion, inducement and the like, on the one hand, and coercion, on the other. 21 In my opinion, the decision of the Full Court in Schanka v Employment National (Administration) Pty Ltd [2000] FCA 202; (2000) 170 ALR 42 ("Schanka") provides authoritative guidance, although it related to the meaning of the word "duress" in s 170WG. The precise point of Schanka, namely, whether duress in s 170WG focused on the perpetrator or the victim, does not arise in this case as it is clearly upon the perpetrator here because of the requirement of intent in s 170NC. However, all that is said in pars 8 to 24 is relevant to the present issues. If there is a difference between duress and coercion, it is not, in my opinion, material here. The difference between certified agreements and Australian workplace agreements, whilst significant, does not affect this issue. Paragraph 18 is of particular significance: 18. The distinction between the pressure applied to an actor which constitutes duress both in its ordinary English meaning and its connotation in the general law, and the consequences as a matter of law which may attend the application of that pressure, was recognised, we consider, by Lord Scarman in Universe Tankships Inc of Monrovia v International Transport Workers Federation [1981] UKHL 9; [1983] 1 AC 366 at 400 where his Lordship said: It is, I think, already established law that economic pressure can in law amount to duress; and that duress, if proved, not only renders voidable a transaction into which a person has entered under its compulsion but is actionable as a tort, if it causes damage or loss: Barton v Armstrong [1976] AC 104 and Pao On v Lau Yiu Long [1980] AC 614. The authorities upon which these two cases were based reveal two elements in the wrong of duress: (1) pressure amounting to compulsion of the will of the victim; and (2) the illegitimacy of the pressure exerted. There must be pressure, the practical effect of which is compulsion or the absence of choice. Compulsion is variously described in the authorities as coercion or the vitiation of consent. The classic case of duress is, however, not the lack of will to submit but the victim's intentional submission arising from the realisation that there is no other practical choice open to him. This is the thread of principle which links the early law of duress (threat to life or limb) with later developments when the law came also to recognise as duress first the threat to property and now the threat to a man's business or trade." 22 The Full Court in Schanka also cite, with apparent approval, a passage from the judgment of McHugh JA in Crescendo Management Pty Ltd v Westpac Banking Corporation (1988) 19 NSWLR 40 at 46 ("Crescendo") which included the following: "Pressure will be illegitimate if it consists of unlawful threats or amounts to unconscionable conduct. But the categories are not closed. Even overwhelming pressure, not amounting to unconscionable or unlawful conduct, however, will not necessarily constitute economic duress." 23 This passage from Crescendo also cited with approval a passage from the advice of Lord Wilberforce and Lord Simon of Glaisdale in Barton v Armstrong [1973] 2 NSWLR 598 at 633 which included: "...in life, including the life of commerce and finance, many acts are done under pressure, sometimes overwhelming pressure, so that one can say that the actor had no choice but to act. Absence of choice in this sense does not negate the consent in law: for this the pressure must be one of a kind which the law does not regard as legitimate. Thus, out of the various means by which consent may be obtained - advice, persuasion, influence, inducement, representation, commercial pressure - the law has come to select some which it will not accept as a reason for voluntary action: fraud, abuse of relation of confidence, undue influence, duress or coercion." 24 See also the caution as to too readily finding economic duress by Finn J in Australasian Meat Industry Employees Union v Peerless Holdings Pty Ltd [2000] FCA 1047 at par 54, in which the Crescendo test was applied on a final hearing in relation to s 170WG. Ryan J also recently referred, with approval, to the Crescendo test in relation to an alleged breach of s 170WG in his final decision in Maritime Union of Australia v Burnie Port Corporation Pty Ltd [2000] FCA 1189 - see pars 71 and 72. The decision of the Full Court in Hanley does not assist in resolving the present problem because, assuming, as I do, that economic sanctions might be action taken with intent to coerce, then it was a clear case - the Union organiser, inter alia, threatened to exclude the subcontractor from the site until a particular agreement was entered into. It was a take it or leave it proposition which negated the choice of the subcontractor. 25 I am satisfied that the ordinary meaning of "coerce", the line of cases beginning with Allen v Flood (supra) to which I have referred (particularly in an industrial setting) and the authorities in relation to s 170WG, particularly that of the Full Court in Schanka, all point in the same direction, and are to be applied. 65 In yet another case concerning the former s 170NC and having referred to the judgement of Gyles J in Finance Sector Union v Commonwealth Bank of Australia, with approval, as well as other authorities, Weinberg J in National Tertiary Education Industry Union v Commonwealth of Australia (2002) 117 FCR 114 at [103] observed: 103 The approach to the expression "intent to coerce" taken in each of the authorities set out above makes it clear that what is required is an intent to negate choice, and not merely an intent to influence or to persuade or induce. Coercion implies a high degree of compulsion, at least in a practical sense, and not some lesser form of pressure by which a person is left with a realistic choice as to whether or not to comply. [Emphasis in original] 66 I adopt just such an approach to the subject of whether an intent to coerce for the purposes of s 343 exists in this case. 67 In making its offer, Arnott's did not intend to negate choice but rather, for what is aptly described as merciful reasons, it did so for the purpose of offering a choice. Further, the threat of dismissal was not made with any intent to influence, persuade or induce Messrs Popko, Taito and Passmore in making their choice. It was made because Arnott's considered it had reasonable grounds to dismiss each of them for serious misconduct. 68 As I have already stated, Messrs Popko, Taito and Passmore did not have an unqualified right to engage in at least the hours of paid employment for which the certified agreement provided. That right was qualified by another right possessed by Arnott's, which was the right summarily to dismiss each of them for serious misconduct. It was just that right which Arnott's considered it had the right to exercise in the prevailing circumstances. Messrs Popko, Taito and Passmore could have declined to take up the offer made by Arnott's and to chance their hand at contesting whether, in those prevailing circumstances, Arnott's belief that occasion existed to dismiss each of them for serious misconduct was justified. They were each offered a reasonable opportunity to take independent advice on that subject. As a matter of deliberate corporate behaviour, Arnott's involved the Union when it communicated its decision to each man. I regard Arnott's conduct as the antithesis of coercion. Arnott's did not just offer a choice in circumstances where it had no obligation so to do; by its actions it proactively facilitated an ability for each man, with the benefit of advice, to make an informed choice. 69 I can well understand that it may have seemed to Messrs Popko, Taito and Passmore that the alternatives before them were such as to make acceptance of the offer of one month's unpaid suspension attractive, but it does not follow from this that Arnott's intended to coerce them in that choice. 70 For these reasons, the application must be dismissed. I certify that the preceding seventy (70) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Logan.