Maritime Union of Australia v Sydney International Container Terminals Pty Ltd [2015] FCA 855 | Case summary

REASONS FOR JUDGMENT 1 Last night, on 13 August 2015, I granted injunctions on an urgent basis which: (a) require the respondents to rescind their decisions to terminate the employment of a number of their employees; and (b) restrain the respondents from terminating the employment of any of its employees on the ground of redundancy until the final hearing and determination of this proceeding or further order of the Court. 2 On 6 August 2015, the respondents sent text messages to approximately 56 stevedores employed in Sydney and 41 stevedores employed in Brisbane asking them to check their emails. Each of those employees had been emailed a letter indicating that "your position will not be retained." The letter did not, in terms, indicate that their employment had been terminated. However, it stated that "the intended last day of your employment will be Friday 14 August 2015." The email also stated that the employees "will not be required to attend work effective immediately." It was common ground between the parties that the employees remained employed by the respondents at the time of the hearing, but that their employment would end on 14 August 2015. 3 On 11 August 2015, the applicant filed an originating application seeking orders pursuant to s 545 of the Fair Work Act 2009 (Cth) (the Fair Work Act). The application seeks declarations that the respondents contravened s 50 of that Act by contravening an Enterprise Agreement between the applicant and the respondents, orders that the respondents reinstate the employees, and other orders. The application also asks for an interim injunction restraining the respondents from proceeding with the termination of the employment of the relevant employees. 4 The applicant alleges that the respondents contravened cll 13.5, 13.6 and 14.4 of the Enterprise Agreement. 5 Clause 13.3 requires the respondents to notify the applicant and employees of changes in the workplace that are likely to have significant effects on its employees. Such changes include redundancy. The respondents gave the applicant notice on 26 June 2015 that they anticipated making some positions redundant. 6 Clause 13.5 requires the respondents to discuss certain issues concerning relevant changes in good faith with both the applicant and the affected employees. Those issues include measures to avert or mitigate the effect of such changes. The applicant alleges that although there were some discussions, these were not adequate to meet the requirements of cl 13.5 and they were not in good faith. The applicant points to, for example, the respondents' memorandum to employees of 24 July 2015, which stated that before any position was made redundant, the respondents would meet with the employee and give the employee an opportunity to respond. However, it appears that the positions were made redundant without such meetings taking place. The applicant also contends that the respondents ought to have held a face to face meeting with its representatives after the respondents had formulated all the details concerning the redundancies and before making a final decision. The parties blame each other for such meeting not taking place. I consider that the applicant demonstrated a prima facie case that the respondents breached cl 13.5. 7 Clause 13.6 of the Enterprise Agreement requires the respondents to provide to the applicant and the employees concerned "appropriate relevant information about the changes". The applicant repeatedly requested "labour modelling" and "labour modelling information" from the respondents, but this was not provided. The evidence did not explain what the requested information is or why it is appropriate and relevant information. In addition, the evidence did not show that the respondents had the information sought. The applicant failed to establish a prima facie case of breach of cl 13.6. 8 Clause 14.1 provides a procedure for the resolution of disputes in the workplace. A series of steps is required, culminating in the ability of a party to refer a dispute to the Fair Work Commission for conciliation. The applicant referred a dispute concerning the redundancies to the Fair Work Commission on 4 August 2015. Clause 14.4 requires that "Pending the resolution of the matter, work shall continue in accordance with this Agreement and the employees' contracts of employment." The applicant alleges that cl 14.4 was breached because the respondents made the decision to terminate the employment before that dispute had been resolved. The respondents contend that the reference to the Fair Work Commission was not made in accordance with cl 14.1 because the applicant had not followed the series of steps required before such a reference could be made. I consider that the applicant demonstrated a prima facie case that the respondents contravened cl 14.4. 9 Beyond my assessment that the applicant demonstrated a prima facie case of contravention of cll 13.5 and 14.4 of the Enterprise Agreement, it is not possible to reach any firm view as to the strength or weakness of the parties' respective cases on the evidence available. 10 The applicant's complaints are about the respondents' alleged failure to comply with processes required under the Enterprise Agreement before termination of employment for redundancy. The applicant contends that interim injunctions are necessary and urgent because, once the employment is terminated, it will be too late for them to get the benefit of the required processes and damages will not be an adequate remedy. I note that the powers of the Court under s 545 of the Fair Work Act include reinstatement of employment. However, there is a risk that changes may take place in the workplace between the termination of the employment and the trial, which may make reinstatement impractical. While it might be possible to fashion an order restraining the respondents from making such changes, such an order would be complex and could be uncertain in its operation. The employees are presently employed and it is necessary and preferable to make orders that would maintain that status quo until the Court's final judgment. 11 I am conscious that the grant of injunctions will force the respondents to maintain a relationship of employer and employee which they wish to sever, and this may be undesirable. However, the respondents are not obliged to provide the relevant employees with work if they are unwilling or unable to do so. The respondents will be required to continue to pay wages to those employees until the final judgment of the Court. Since the relevant employees have not been required by the respondents to perform any work since 6 August 2015 and they have been paid their wages by the respondents since then, an injunction does not create any significant practical change to the present relationship. The orders do not, contrary to the dramatic suggestion made by respondents, impose obligations on the respondents that may be likened to a form of reverse slavery. 12 The inconvenience and any hardship to the respondents can be ameliorated by two measures. 13 Firstly, there should be an expedited hearing. The Court is able to offer the parties trial dates in the week of 31 August 2015. 14 Secondly, the applicant can be required to provide, not only the usual undertaking as to damages, but a specific undertaking requiring it to repay the wages and other expenditure that the respondents incur, in the event that the originating application is dismissed. I also note that the respondents will not have to make redundancy payments to the employees in the meantime. 15 The respondents pointed to cl 13.7 of the Enterprise Agreement which provides that where the respondents make a "final decision" to implement changes, subject to there being no stoppage of work as a result of the decision, the applicant may refer the matter in dispute to the Fair Work Commission. The respondents argue that an injunction should not be granted where an alternative remedy was available but is no longer available because there has been a stoppage of work. They argue that an injunction will subvert the Enterprise Agreement. 16 The applicant's challenge in this proceeding is not to the "final decision" but to the procedures by which the respondents arrived at that final decision. The applicant alleges that the respondents, in contravention of s 50 of the Fair Work Act, breached the Enterprise Agreement. Clause 13.7 does not require a breach of the Enterprise Agreement and provides for a different resolution process on wider grounds. The applicant is not obliged to engage in the process contemplated by cl 13.7 instead of proceeding under s 50 of the Fair Work Act. I do not think that the mechanism for possible resolution in cl 13.7 is a factor that mitigates against the grant of an injunction in this proceeding. 17 The respondents argue that industrial action had been taken by its employees and that neither the employees nor the applicant should obtain an injunction when they do not have "clean hands". On 10 August 2015, the Fair Work Commission ordered that the applicant and employees of the respondents must stop, not engage in and/or not organise industrial action, as defined in s 418 of the Fair Work Act, in respect of the respondents' operations. However, the respondents declined to make any submission that the applicant are in breach of that order. Neither did the respondents submit that any of the redundant employees are in breach of that order. The respondents have not pointed to conduct which should, in my opinion, prevent appropriate injunctions issuing. 18 In the course of the hearing, I raised with counsel for each party the difficulty I had in understanding the precise effect of the email of 6 August 2015. On one view, it could be construed as communicating a decision made on that day to terminate the employment of the relevant employees, but that the termination would take effect from 14 August 2015. On another view, it could communicate that a decision would be made on 14 August 2015 that the employment was to be terminated. The significance was that if the former construction is correct, the decision to terminate the employment had already taken place, and a restraining order may not be of any assistance to the applicant. In that case, only a mandatory interim injunction would be of any utility. However, neither side argued that a restraining order would not be effective nor that a mandatory interlocutory injunction was necessary. 19 After hearing the parties' arguments, I indicated that I was prepared to make a restraining order. I stood the matter down so that the parties could formulate the relevant undertakings and provide a draft order. I indicated that I would provide reasons for my judgment when the hearing resumed. 20 When the hearing resumed, counsel for the respondents belatedly raised a new argument, namely that a restraining order would be ineffective because the letter of 6 August 2015 had already put in train the process leading to the termination of the employment on 14 August 2015 and that it was too late to grant a restraining order. Counsel submitted that the respondents could not undo that process, but was unable to cite any authority in support of that proposition. Counsel submitted that there was no form of order which could achieve the continuing employment of the relevant employees. 21 I considered that orders requiring the respondents to rescind their decisions to terminate the employment of the affected employees and temporarily restraining the respondents from terminating the employment of any of its employees on the ground of redundancy would achieve the result I thought was appropriate, namely that the affected employees' employment with the respondents continue until the final judgment or earlier order of the Court. 22 In the orders I made last night, I intended to include the word "forthwith" after the word "respondents" in Order 1, but omitted to do so. Pursuant to r 39.05 of the Federal Court Rules 2011 (Cth), I will vary Order 1 so as to correct that omission. I certify that the preceding twenty-two (22) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Rangiah.

Maritime Union of Australia v Sydney International Container Terminals Pty Ltd

At a glance

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Judgment (6 paragraphs)

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Legislation Cited (2)

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