National Fleet Network Pty Limited v Automotive, Food, Metals, Engineering,... [2005] FCA 917 | Case summary

REASONS FOR JUDGMENT 1 The applicant has applied to the Court for declaratory and injunctive relief in respect of industrial action taken by the respondents against the applicant at the aluminium smelter at Portland ("the Portland plant"). The applicant claims that the industrial action contravenes s 170MN of the Workplace Relations Act 1996 (Cth) ("the WR Act") which, relevantly, provides: "(1) From the time when: (a) a certified agreement; or (b) an award under subsection 170MX(3) (which deals with the exercise of arbitration powers on termination of a bargaining period); comes into operation until its nominal expiry date has passed, an employee, organisation or officer covered by subsection (2) must not, for the purpose of supporting or advancing claims against the employer in respect of the employment of employees whose employment is subject to the agreement or award, engage in industrial action. (2) For the purposes of subsection (1), the following are covered by this subsection: (a) any employee whose employment is subject to the agreement or award; (b) an organisation of employees that is bound by the agreement or award; (c) an officer or employee of such an organisation acting in that capacity. (3) If the employee, organisation or officer contravenes subsection (1), the action concerned is not protected action. …" 2 The consequence of s 170MN(3) is that industrial action that contravenes s 170MN(1) does not enjoy the immunity from legal action conferred by s 170MT of the WR Act. 3 The relevant facts are not in dispute. The applicant supplies and services certain equipment used at the Portland plant. The second, third, fourth, fifth, sixth and seventh respondents ("the employees") are employees of the applicant who perform services at the Portland plant and are members of the first respondent ("the union"). 4 On 26 September 2003 the Australian Industrial Relations Commission certified the National Fleet Network (Portland) Enterprise Agreement 2003 ("the certified agreement"), made pursuant to s 170LJ of the WR Act. The parties bound by the certified agreement include the applicant, the employees and the union. Clause 4 provides that the certified agreement shall operate from 1 July 2003 and shall have a nominal expiry date of 31 March 2006. The certified agreement provides for the terms and conditions of employment by the applicant of its employees at the Portland plant and for a number of other matters that are relevant to the employment of those employees. Clause 17 sets out a procedure "for the avoidance or resolution of disputes". Relevantly for present purposes cl 35, which appears to have been drawn with s 170MN in mind, provides: "No Extra Claims The parties agree that up to the nominal expiry date of this Agreement: 35.1 The employees, the Union or the Company will not pursue any extra claims relating to wages or changes in conditions of employment or any other matters related to the employment of the employees, whether dealt with in the Agreement or not; 35.2 This Agreement covers all matters or claims that could otherwise be subject to protected action under the Act and its successors." 5 A dispute has arisen between the applicant and the union concerning the rehabilitation and return to work of employees of the applicant who have suffered injuries or illnesses that are related to the work they carry out for the applicant. As a result of that dispute the union gave the applicant a notice of initiation of a bargaining period pursuant to ss 170MI and 170MJ of the WR Act. The matter proposed by the union to be dealt with in any agreement reached during the bargaining period was described in the notice as follows: "A comprehensive rehabilitation and return to work agreement for employees who have suffered injury or illness either at work or at some other place." 6 It was common ground that the notice was only concerned with work-related injuries and that the agreement sought would cover the employees. In the normal course the union and its members were entitled to take industrial action for the purpose of supporting or advancing claims made in respect of the agreement proposed by the union. Such action, if taken in accordance with the relevant provisions of the WR Act, would be protected action under s 170ML and would therefore enjoy the immunity from legal action conferred by s 170MT. 7 On 21 June 2005 the Union gave notice to the applicant that its officers and members intended to take industrial action which was described as follows: "Ban on paperwork be implemented on start of shift at 6.00 am on Monday, 27 June 2005 at the following National Fleet Network areas, Mount Waverley, Ballarat, Portland and Point Henry, Geelong." 8 The industrial action, which has commenced at the Portland plant, is intended to be continued for a period of three months or until agreement is reached, whichever first occurs. 9 On 28 June 2005 the applicant commenced its proceeding in the Court and sought urgent injunctive relief. During the course of the hearing of the application for that relief it became clear that the real issue between the parties was whether the industrial action at the Portland plant was protected action. 10 It is not in dispute that, if the industrial action is being engaged in in contravention of s 170MN(1), it would not be protected action entitled to the immunity conferred by s 170MT. It is also not in dispute that, if the action is protected action, it would be lawful and the applicant would not be entitled to injunctive relief restraining the continuance of the action. It was in that context that the parties agreed that it was appropriate that I resolve the issues raised by the proceeding on a final, rather than on an interlocutory, basis. At the conclusion of the hearing I reserved my decision but made directions that enabled the parties to put in further written submissions. 11 The competing contentions of the parties can be shortly stated. The applicant contends that the industrial action is being engaged in for the purpose of supporting or advancing claims against it in respect of a condition of employment of employees whose employment is subject to the certified agreement. Accordingly, so it is argued, the industrial action is in breach of s 170MN(1) because it is being engaged in prior to the nominal expiry date of the certified agreement. The riposte of the union and the employees is that s 170MN(1) is only concerned with a prohibition of industrial action that is for the purpose of supporting or advancing claims against the employer in respect of any matters that have been dealt with in the certified agreement and that, because the industrial action they are engaging in relates to a matter that was not dealt with in the certified agreement, no contravention of s 170MN(1) has occurred. 12 It is common ground that the matter of rehabilitation and return to work by employees who have work-related injuries was not expressly dealt with in the certified agreement. Thus, superficially at least, the union and the employees' contention that they have not contravened s 170MN(1) is supported by the decision of Kenny J in Emwest Products Pty Ltd v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (2002) 117 FCR 588 ("Emwest"), which was affirmed on appeal in Australian Industry Group v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (2003) 130 FCR 524 ("Emwest FC"). 13 In Emwest, industrial action was taken against the employer by a union in relation to certain redundancy claims prior to the nominal expiry date of a certified agreement to which the employer and the union were parties. Although the certified agreement dealt with a broad range of employment conditions it did not contain any provisions dealing with redundancy. That omission was not accidental as, although redundancy had been dealt with in previous certified agreements, the nominal expiry date of which had passed, the parties agreed to deal with that issue as a separate matter. The employer sought declaratory and injunctive relief against the union on the ground that the industrial action contravened s 170MN(1) of the WR Act because it was for the purpose of supporting or advancing claims against the employer in respect of the employment of employees whose employment was subject to the certified agreement. Kenny J described the issue arising for decision at [41]-[43]: "41. The issue is one of the proper construction of s 170MN. Section 170MN was introduced by the Workplace Relations and Other Legislation Amendment Act 1996 (Cth). That Act, it may be recalled, amended the statutory regime introduced by the Industrial Relations Reform Act 1993 (Cth) (the Reform Act). The Reform Act introduced the notion of certified agreements and enterprise flexibility agreements. 42. The effect of s 170MN is straightforward enough. Where there is on foot a certified agreement, the nominal expiry date of which has not yet passed, s 170MN(1) prohibits industrial action by an employee whose employment is subject to the agreement, or by a union bound by the agreement or officer of such a union, 'for the purpose of supporting or advancing claims against the employer in respect of the employment of employees whose employment is subject to the agreement'. The prohibition in s 170MN(1) against industrial action is, on any view, a limited one. The prohibition does not extend to industrial action taken for a non-prescribed purpose, even where there is a relevant certified agreement: cf Email at [12] per Madgwick J. This aspect of the provision's operation reflects the statutory assumption that when parties make an agreement with respect to employment, they do so on the basis that they will not resort to industrial action during the currency of the agreement in respect of the matters upon which they have reached agreement. 43. The issue in this case arises out of the ambiguity created by the use of the expression 'in respect of the employment of employees whose employment is subject to the agreement'. The reference to 'the agreement' is a reference to the certified agreement, the nominal expiry date of which has not yet passed. The whole expression is, however, capable of having more than one meaning. The expression may be read as referring to 'the employment of employees [where this] employment is [specifically] subject to the agreement'. That is, the expression may refer to only the matters actually agreed upon by the parties in the agreement. If so, the prohibition would relevantly extend only to industrial action taken for the purpose of advancing claims in respect of such agreed matters. The union contends that this is the correct construction of s 170MN(1)." [Emphasis added] 14 Her Honour, applying a purposive approach to the question of construction resolved that question at [48]: "The question of the proper construction of the expression 'in respect of the employment of employees whose employment is subject to the agreement' is not free from doubt. Although the construction that Emwest favours is perhaps the most obvious, and results in a relatively straightforward application of the provision, for the reasons set out below, I am not persuaded that it is to be accepted as the preferable construction." 15 Significantly, her Honour observed at [55]: "Emwest also submitted that the construction of s 170MN(1) for which the union contends 'would severely limit the scope of s 170MN, as unions and employees would be able to take industrial action in relation to claims about matters arguably not in the certified agreement' and 'would undermine the purpose and effect of parties reaching agreements and having them certified'. Assuming the policy behind s 170MN is to encourage parties to adhere to the bargain they have struck, then the policy would not, in my view, be defeated by permitting the parties to negotiate effectively in respect of matters that were not the subject of a relevant certified agreement. The policy is sufficiently protected if s 170MN(1) is construed as prohibiting parties to a certified agreement from resorting to industrial action to undo the matters they have agreed upon in the certified agreement, if its nominal expiry date has not passed. If the parties so desired, they could agree that a certified agreement made by them was intended to cover the whole field of relevant employment, thereby excluding the possibility of industrial action during the currency of the agreement." [Emphasis added] 16 The certified agreement in Emwest contained a "no extra claims clause" but it was not relied upon by the employer. Her Honour noted the clause and stated at [58]: "As already noted, although the bargaining notice for what was to become the 2000 agreement included reference to redundancy issues, Emwest and the union subsequently agreed to drop redundancy issues from the negotiations for the 2000 agreement and to consider the topic in the following year. The no extra claims clause was, presumably, negotiated with this agreement in mind. In any event, Emwest and the union entered into negotiations regarding redundancy in July 2001 in keeping with their earlier understanding. No attempt was made by Emwest at that time or at the hearing to rely on the no extra claims clause to preclude the union from advancing the redundancy claims. In the circumstances, no issue arises concerning the clause." 17 In Emwest FC the Full Court affirmed her Honour's decision. French and von Doussa JJ identified the construction issue at [31] and [32]: "31. The evident purpose of s 170MN(1), whatever the width of the prohibition it imposes, is to prohibit industrial action relating to matters capable of inclusion in a certified agreement or an award under s 170MX(3). This reinforces the proposition that 'employment' as used in the section refers generically to terms and conditions of employment. On this meaning of the word 'employment' the prohibition relates to industrial action engaged in for the purpose of supporting or advancing claims in respect of the terms and conditions of employees whose terms and conditions are subject to the relevant agreement or award. An alternative approach is to treat 'employment' as a reference to the 'employment relationship'. But in the setting of this statute the better view is that the employment relationship is defined by reference to its terms and conditions rather than some wider numinous reality. The construction which acknowledges that 'employment', in this setting, is a reference to terms and conditions of employment leaves open the constructional choice which faced her Honour, albeit the choice is differently framed. 32. On one reading of s 170MN(1) it prohibits industrial action for the purpose of supporting or advancing claims against the employer in respect of the terms and conditions of employment of employees whose terms and conditions of employment are subject to the relevant agreement or award. The alternative reading is that s 170MN(1) prohibits industrial action for the purpose of supporting or advancing claims against the employer in respect of the terms and conditions of employment of employees which terms and conditions of employment are subject to the relevant agreement or award. The word 'whose' is the word which is actually used in the subsection. If construction is to be based upon the ordinary English meaning of the words in their context then that construction which her Honour identified as 'perhaps the most obvious' best accords with the ordinary meaning of the words. The question is whether the other construction is open and, if so, whether it should be preferred." [Emphasis added] 18 Their Honours concluded at [37]-[38]: "37. Both views of the purposes of s 170MN have force. Each side of the argument can point to anomalous outcomes which could arise from the other's approach. In the end however, in our opinion, the preferable view is that which permits and encourages flexibility in the bargaining process. Comprehensive agreements may be desirable in some and perhaps most circumstances. But there may be cases when it will be in the interests of good workplace relations to conclude an agreement on some issues and leave less pressing issues for a subsequent agreement. If any certified agreement, however narrow its terms, has the effect that industrial action is prohibited generally in respect of the employment relationship to which it applies the result will be effectively to discourage resort to a possible option for the partial resolution of complex industrial negotiations. 38. It is of course possible that parties to an agreement may seek to abuse s 170MN by confecting some issue not explicitly covered by a certified agreement and using that as a basis for constructing an entitlement to protected action. It may be that in such a case the court would construe the agreement as intended to cover the field of terms and conditions defining the employment relationship in question. Indeed the parties may, as Kenny J pointed out, make that intention explicit by the inclusion of a provision that the agreement is intended to be exhaustive of the terms and conditions of the relevant employment relationship." [Emphasis added] 19 Marshall J stated at [76]: "A construction of s170MN which proscribes industrial action with respect to any matter, during the currency of a certified agreement which does not include the matter the subject of the industrial action, is a construction which is at odds with the object of Pt VIB and therefore is one which should not be preferred. The policy of Pt VIB and of the Act (as referred to in s 3(b) and (e)) is to encourage and facilitate agreement making by employers and employees. In the case of employment relationship at Emwest, the parties agreed that for them the most appropriate form of agreement dealing with redundancy was one which dealt with that topic alone, leaving to a separate agreement other general terms and conditions of employment. The expiry of the term of the redundancy agreement in advance of the 2000 agreement, on the argument advanced by AIG, would mean that the Union could not bargain with the usual assistance that would ordinarily be afforded by Div 8 of Pt VIB, and in particular the provisions of s170ML with respect to protected action. I do not consider that s 170MN, read in the context of the other provisions of Div 8, was intended to have that effect." 20 The observations of Kenny J in Emwest and of the members of the Full Court in Emwest FC make it clear that if the industrial action relates to a matter which, on a proper construction of the certified agreement, is dealt with or covered by that agreement and the action is engaged in prior to the nominal expiry date, it will contravene s 170MN(1). Of particular significance for present purposes were the observations, both in Emwest and Emwest FC, that the parties may avoid the difficulty that arose in Emwest by stating that their agreement was intended to "cover the whole field of relevant employment" (Kenny J) or that it is "exhaustive of the terms and conditions of the relevant employment relationship" (French and von Doussa JJ). 21 A similar issue arose before Goldberg J in Hawker de Havilland Aerospace Pty Ltd v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union [2004] FCA 1648 ("Hawker de Havilland") in which his Honour had to consider the question that arose in Emwest, save that the employer in Hawker de Havilland was relying on "no extra claims" clauses to distinguish Emwest. The "no extra claims" clauses relied upon by the employer were to the effect that the certified agreement was "comprehensive" and that the parties bound by the agreement agreed that they "will not pursue any extra claims, award or over award". His Honour dealt with the issue of the "no extra claims" clauses at [36]-[38]: "36. I consider there to be a serious question to be tried on this issue. It is significant to note - and senior counsel for the Company also relied upon - par [37] of the Emwest decision which contains this significant passage: 'Both views of the purposes of s 170MN have force. Each side of the argument can point to anomalous outcomes which could arise from the other's approach. In the end, however, in our opinion, the preferable view is that which permits and encourages flexibility in the bargaining process.' Then comes this statement which I consider to be significant: 'Comprehensive agreements may be desirable and in some and perhaps most circumstances. But there may be cases when it will be in the interests of good workplace relations to conclude an agreement on some issues and leave less pressing issues for subsequent agreement.' In my opinion, there is a serious question to be tried on this issue of whether cl 1.3.1 and cl 1.9.1 take the circumstances in this application out of the Emwest principle and within the exception to it to which I have referred. Ultimately this is a matter of interpretation of the industrial instrument. I invited the parties to consider having an expeditious final hearing on this issue alone. The respondents declined to do so, and in the circumstances, having regard to the speed in which the case has come on for hearing, I was not disposed to pressure the parties into doing so. 37. However, I am satisfied at this point of time that there is a serious question to be tried. The reason is that the words in cl 1.3.1 seem on their face to fall within what is contemplated by in par [38] of the joint judgment in Emwest. It is also significant, in my view, that the word 'comprehensive', which is identified in par [37] of the Emwest judgment, appears in cl 1.3.1. Even if it be thought that the comprehensiveness of the agreement relates only to matters which existed at the time the agreement was entered into, and does not cover future matters, it is necessary to give some meaning to the no extra claims clause (cl 1.9.1). 38. The no extra claims clause in paragraph 1.9.1 was not a matter that was dealt with by Kenny J in her decision. Although there had been a no extra claims clause in the industrial instrument that was before Kenny J, having regard to the manner in which the parties conducted the case and what they had agreed to put aside for future consideration, her Honour gave no consideration to the no extra claims clause in that case, and it was not the subject of determination, consideration or submission by the parties." 22 As explained above, Emwest and Emwest FC provide some support for the argument of the union and the employees that a rehabilitation and return to work program was not intended to be dealt with by the certified agreement with the consequence that the industrial action in support of that claim is not, relevantly, distinguishable from the industrial action in support of the redundancy claims that were the subject of industrial action in Emwest. However, unlike the situation considered in Emwest, the certified agreement in the present case is intended to cover the whole field of employment and to be exhaustive of the terms and conditions of the employment relationship. In arriving at that conclusion I have relied upon two related aspects of the certified agreement that are relevant to the industrial context and purpose of the agreement. The first is the comprehensive range of matters covered by the agreement, which can be gleaned from the headings of each of its clauses: "1. Title 2. Arrangement 3. Parties Bound and Scope of Agreement 4. Date and Period of Operation 5. Relationship to Parent Award 6. Relationship to Previous Certified Agreements 7. Wages 8. Implementation of 36 Hour Week 9. Trade Union Training 10. Union Officials and Shop Stewards 11. Consultation 12. Redundancy 13. Training 14. Casual Labour 15. Contractors 16. Superannuation 17. Dispute Settlement Procedure 18. Consultative Committee 19. Union Dues 20. Facilities 21. Income Protection Insurance 22. Occupational Health and Safety 23. Long Service Leave 24. Sick Leave 25. Public Holidays 26. Portland Aluminium Picnic Day 27. Rest Period 28. Callouts 29. Quality 30. Company Service Vehicles 31. Payroll Accuracy 32. Purchase of Tools 33. Not to Form A. Precedence 34. Renegotiation 35. No Extra Claims." 23 The second aspect is the clarity and width of the "no extra claims" clause (cl 35), which provides that the parties are not to pursue any "extra claims" relating to: "changes in conditions of employment or any other matters related to the employment of the employees, whether dealt with in [this] Agreement or not;" The clause also provides that the agreement covers "all matters or claims" that could be subject to protected action. 24 The two aspects to which I have referred reveal that the industrial purpose of the certified agreement is that it is to be an agreement that, during the period of the agreement, defines the binding and enforceable terms and conditions of the employment relationship between the employer and the employees bound by the agreement. One aspect of that relationship is defined by cl 35, which is intended to prevent all of the parties bound by the agreement from departing from that defined relationship by seeking to change or add to those terms and conditions of employment. 25 It is clear that the union and the employees are taking industrial action to support or advance an extra claim, namely one that is additional to the claims resolved by the agreement, in respect of a change to the conditions of employment set out in the agreement. They are also taking action to support or advance a claim in respect of a matter "related to the employment" that was not expressly dealt with in the agreement, namely the obligations of the employer in respect of rehabilitation or return to work. Thus, the industrial action is being taken in support of a claim which was agreed, by cl 35.1, not to be made. Clause 35.2 places that matter beyond doubt by providing that the agreement, but in particular cl 35.1, is to cover all matters that could "otherwise be subject to protected action". Plainly, "otherwise" in the context of cl 35 means "but for this clause". In my view, cl 35 appears to have been intended to deal with the very kind of circumstance that has arisen in the present case. 26 After the hearing the union and the employers filed a written submission, which conceded that cl 35 "is wide and comprehensive in its operation" but added that on proper analysis "it is not a catch all". The submission then sought to break down each of the component parts of cl 35 to show, so it was said: "Where there is a crack light can enter." The "crack" was explained as follows: (a) notwithstanding the width of the present claim the union now only seeks an agreement that reflects the applicant's "Occupational Rehabilitation/Return to Work" policy; (b) the policy forms part of the conditions of employment of the employees; (c) the claim to make a prevailing condition of employment a binding and enforceable condition of agreement was not intended to be precluded by cl 35 because it is not seeking to change or add to any of the conditions of employment. 27 In my view the "crack" sought to be constructed by the union and the employees does not exist. Their submission is premised on the contention that a claim to make the applicant's policy a term or condition of a certified agreement is not precluded by cl 35. However, as explained above, the effect of cl 35 is that all of the binding and enforceable terms and conditions of the employment relationship, which are to be the subject of a certified agreement during the period of the agreement, are set out in the agreement and that no claims will be pursued that seek to change that situation. A claim to add to the binding and enforceable terms and conditions of the employment relationship, as defined in the agreement, is a matter "related to the employment of the employees" that is not "dealt with in the Agreement". It is therefore an extra claim which is made in breach of cl 35.1. It is also covered by cl 35.2, because it is a "matter or claim" of the kind described in the sub-clause. Thus, the claim being pursued is precluded by cl 35. 28 I would add that, in any event, the union's submission that it is now only seeking to enforce the present policy is inconsistent with the situation it has created, which is to pursue industrial action for an agreement in terms wider than those set out in the policy. It is that action which led to the present proceeding and is the subject of the applicant's claim for relief. As I have determined that the applicant has made out its case in that regard, it is appropriate to grant relief that brings the present industrial action to an end. 29 Further, there is no evidence that the policy is a prevailing condition of employment, that the applicant is not complying with its policy or that there is some need for it to be the subject of a certified agreement. In those circumstances, the union's proposal may be "confecting some issue not explicitly covered by a certified agreement and using that as a basis for constructing an entitlement to protected action": see Emwest FC at [38]. As their Honours observed, that may lead the Court to construe the agreement as intended to "cover the field". That is the construction of cl 35 that I have adopted in the present case. 30 In summary, I am satisfied that the industrial action engaged in by the union and the employees is for the purpose of supporting or advancing a claim against the applicant in respect of a matter dealt with by cl 35 of the certified agreement. That matter is the making of an "extra claim" relating to the employment that the parties agreed was not to be made. The claim is to change, and thereby add to, the binding and enforceable terms and conditions of employment agreed upon in the certified agreement and is therefore a claim to change "the employment" agreed upon in that agreement, which is defined by the terms and conditions of the agreement, including cl 35.1 and 35.2. It is also a claim in respect of a matter related to the employment of the employees. Using the words of Kenny J in Emwest at [55] the resort to industrial action is seeking to "undo" two matters agreed upon in the certified agreement. The first is the agreement not to make such a claim and the second is that the agreement was to cover "all matters and claims that could otherwise be the subject of protected action". 31 The respondents argued that the injunctive relief sought by the applicant is too wide because it is not restricted to the present industrial action. Also, it was contended that an order restraining the union from "maintaining" the ban is uncertain because it was ambiguous as to whether the union was required to lift the ban or whether it was merely required to do nothing further in support of the ban: cf Concrete Constructions Pty Ltd v Plumbers and Gasfitters Employees' Union (No 2) (1987) 15 FCR 64 at 71-72. 32 In my view, the relief that is appropriate should prohibit the taking of industrial action at, or in relation to, the Portland plant in support of the rehabilitation and return to work claim, which I am satisfied has contravened s 170MN(1). It is appropriate, however, to modify the orders sought in the amended application to ensure there is no uncertainty or ambiguity about what is required of the union and of the employees. The main modification I propose to make is to require the union to notify the employees that the current industrial action has been terminated. That order will ensure that the union is aware that the orders require that a positive step be taken, rather than merely that no further step be taken. I would add that I regard an order prohibiting the maintenance of the current industrial action as requiring that positive step, but I propose to require notification in order to put that matter beyond doubt. Also, although I have acceded to the employer's request that the injunction operate until the nominal expiry date of the certified agreement, I have provided that it may be discharged by a further order, which might be made if circumstances arise that make the injunction inappropriate. Finally, I have limited the relief to industrial action at or in relation to the Portland plant. If industrial action is taken at or in relation to other sites, that action will have to be considered in the context of the industrial agreements that apply to those sites. I certify that the preceding thirty-two (32) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Merkel.

National Fleet Network Pty Limited v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union

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