CONCLUSION
91 It appears to me that there are two broad questions to be resolved in this proceeding. These are:
· whether, by introducing the WRP, the respondents, or either of them, took or threatened to take "other action" within s 170NC(1)(a)?
· whether, assuming that they did, that "other action" was taken or threatened to be taken "with intent to coerce" another person within s 170NC(1)(b)?
92 The answer to the first question depends upon the meaning to be accorded to "other action". Are these words to be read in their broadest sense, in which case the introduction of a government funding programme might well fall within their terms? Or are they to be read more narrowly, in conjunction with the words "industrial action" which immediately precede them?
93 In my opinion, the introduction of a government funding policy which rewards those institutions which meet policy objectives is not "other action" of the type contemplated by the section. The conjunction of the words "other action" with the words "industrial action" is strongly suggestive of an intent on the part of the legislature to limit the scope of what might otherwise be an extraordinarily wide definition of the conduct caught by the section.
94 The words "or other action" in the composite expression "industrial action or other action" should be read in accordance with the maxim noscitur a sociis. A word or phrase in an enactment must always be construed in the light of the surrounding text. In Attorney-General v Prince Ernest Augustus of Hanover [1957] AC 436, Viscount Simonds said, at 461:
"…Words, and particularly general words, cannot be read in isolation; their colour and their content are derived from their context."
95 The expression "industrial action" is defined in s 4 of the Act. It describes conduct of various types on the part of employers and employees, and organisations registered under the Act, and is limited to matters relating to the performance of work. Significantly, there is no mention of conduct by third parties within that definition. Section 4 also describes action which is not "industrial action", but it too only relates to employers and employees. The expression "other action" in s 170NC(1)(a) can be given a sensible interpretation if one reads it as including conduct of a kind taken by an employer, or employee, or an organisation registered under the Act, which related to the performance of work but is not included within the definition of "industrial action". Picketing is one example of such conduct.
96 Given that s 170NC is penal in character (albeit a contravention does not create an offence: s 170NF) the expression "other action" should not be accorded any undue width. Penal provisions are construed strictly, although this is now a canon of construction of less significance than was formerly the case: Beckwith v The Queen (1976) 135 CLR 569 at 576.
97 With regard to the second issue to be determined, in my view the expression "intent to coerce" should be construed as requiring something more than a mere inducement to comply. The term "coercion" connotes something akin to the use of force, or at least the threat of harm to the interests of another.
98 In Hanley v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (2000) 100 FCR 530 the Full Court considered the purpose underlying the introduction of s 170NC. The Court observed, at 541:
"… [Section 170NC] is found in Pt VIB of the Act which establishes a detailed regime for the creation of certified agreements including procedures for their negotiation, execution and certification. That regime contemplates free bargaining between employers and their employees or organisations of employees and allows the parties to undertake industrial action within a framework created by that Part. It is consistent with the purposes of Pt VIB to treat s 170NC as proscribing conduct which might result in an agreement which is not the product of free bargaining. That result could as well be achieved by conduct which had as only one of a number of objectives the coercion of a person as by conduct which had that as its sole objective.
Section 170NC is contravened if a person engages in conduct intending to coerce a person to agree to make an EBA even if the conduct has one or several other purposes or objectives. It is, to adopt the language of General Motors Holden Pty Ltd v Bowling (1976) 51 ALJR 235, sufficient that the proscribed reason is a substantial or operative reason."
99 In Finance Sector Union v Commonwealth Bank of Australia (2000) 106 FCR 16 Gyles J, gave careful consideration to the meaning of "intent to coerce" in the context of s 170NC. His Honour observed, at 23-27:
"18. The critical question is the meaning of the word "coerce" in s 170NC. There is an inconclusive discussion of that question by the Supreme Court of Victoria Court of Appeal in National Workforce Pty Ltd v Australian Manufacturing Workers' Union (No 2) (1997) 76 IR 200 at 221. The only other general statement in the cases which have dealt with the section to which I have been referred is that by Finkelstein J in his interlocutory judgment in Finance Sector Union v Commonwealth Bank of Australia [2000] FCA 1372, where his Honour said (at [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)."
That was said in a context in which his Honour was considering s 298M as well as s 170NC.
…
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 Australian Manufacturing Workers' Union (No 2) 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, 128-129; Hodges v Webb [1920] 2 Ch 70 at 86-87; 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 Australian Manufacturing Workers' Union (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.
…
25. I am satisfied that the ordinary meaning of "coerce", the line of cases beginning with Allen v Flood 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. This conclusion is directly contrary to proposition (3) put by Mr Hodgkinson, and requires further consideration of his propositions (1) and (5).
26. The genesis of proposition (3) (see at [16]) is to be found in the interlocutory judgment of Merkel J in Australian Workers Union v Yallourn Energy Pty Ltd (2000) 95 IR 207. In that case (as here) the parties were engaged in bargaining during a bargaining period initiated pursuant to s 170MI of the Act. Industrial action caused the Yallourn Energy site to cease functioning, leading to financial losses by Yallourn Energy of many millions of dollars (and serious power shortages in Victoria). The unions claimed that the industrial action was protected action for the purposes of the immunity granted under s 170MT(2). Merkel J held that on a prima facie basis on the evidence before him it was likely that the action was protected.
27. Yallourn Energy gave notice to the Industrial Relations Commission (IRC) under s 166A of the Act of its intention to bring an action in tort against the unions and their officers, members and employees arising out of the industrial action. In the event, a certificate was only sought in relation to the conduct of the unions and not of its members. The IRC granted the certificate, with the consequence that Yallourn Energy was entitled to commence proceedings in tort in relation to the industrial action. Proceedings were brought by the unions to restrain the bringing of any such proceedings as to do so would be a breach, inter alia, of s 170NC(1) of the Act. Reliance is placed on behalf of the Bank upon the following passage from the judgment in relation to the finding that there was a serious issue to be tried under s 170NC )at 221 [73]):
"There is a degree of unreality about the submission of counsel for Yallourn Energy that the threatened proceeding is extraneous to and is unconnected with the employer's bargaining position in relation to the new enterprise agreement. Earlier in these reasons I outlined the steps taken by the various parties in the course of the present dispute. In my view each step and counter step by the parties in the current dispute appears to be intended to advance their respective bargaining positions in relation to the new enterprise agreement. Whilst there will be additional reasons for particular conduct to be engaged in during the escalation of the dispute, each step appears to be integrally related to each party's position in the bargaining process. Thus, whilst a reason for the proposed proceeding might be to recover loss,I would infer from the limited evidence before me that, on a prima facie basis, the proposed proceeding is another step to assist the position of Yallourn Energy in the bargaining process." (Emphasis added)
28. This concept appears to be directly reflected in the interlocutory judgment of Marshall J in Construction, Forestry, Mining & Energy Union v Multiplex Constructions at 299 [27]:
"27. A reason for the Supreme Court action, or further proposed Supreme Court action, may well be to recover financial loss but if it is also taken with intent to advance a position in a bargaining process or detract from the position of a party in the bargaining process s 170NC(1) of the Act will be contravened."
29. For the sake of completeness, I should say that I derive little assistance on the question of construction from the interlocutory decisions in Construction, Forestry, Mining & Energy Union v Master Builders Association of Victoria (No 1) [2000] FCA 168, Construction, Forestry, Mining & Energy Union v Mirvac Constructions Pty Ltd (2000) 96 IR 458 and Auspine Ltd v Construction, Forestry, Mining & Energy Union (2000) 97 IR 444.
30. It is clear that if the passages of Merkel J and Marshall J relied upon by the Bank are intended to state the test for breach of s 170NC, then they are far wider than, and inconsistent with, my construction of the section. Mr Kimber SC, for the Union, submits that they do not represent the considered view of either judge as the proper construction of intent to coerce in s 170NC, but are merely observations in the course of urgent interlocutory proceedings during a far reaching industrial campaign. He submits that they are to be understood in a context where it was held that there was a prima facie case that most of the industrial action had been protected action.
31. I agree with Mr Kimber's submissions. Neither of their Honours express themselves in a manner which suggests that he was resolving an issue as to the construction of the section, and neither refer to pertinent authority. This is not surprising in view of the nature of the proceedings. The fact that the result in these, as well as other, interlocutory decisions might have been different if what I regard as the proper test had been applied is not to the point.
32. I should also refer again to the decision of Finkelstein J in Finance Sector Union v Commonwealth Bank of Australia, a case between these parties arising out of the very negotiations which are the context for this case. I have already set out [44] (see [18]). His Honour later said (at [51]):
"The question for the bank then was how it could force the union to accept its July offer, remembering that it was of the view that a higher offer was not commercially justified. The bank needed to find a lever to compel the union to act. The union was reasonably aggressive in its negotiations, with the support of its members."
33. These passages are consistent with my view as to the necessity for compulsion if coercion is to be intended within the section. His Honour does not, however, refer to the necessity for the means of coercion to be unlawful, illegitimate or unconscionable. The Bank submits that his Honour must have taken the view that it was unnecessary to so find, because it is difficult to see how it could be concluded on any basis that offering Australian workplace agreements to workers could be so described without denuding that requirement of all content. Far from being unlawful, illegitimate or unconscionable, the Act encourages the offer of Australian workplace agreements by employers to employees (cf Ryan J in Maritime Union of Australia v Burnie Port Corporation at [61]-[72]). Indeed, it is submitted on behalf of the Bank that if the decision of Finkelstein J was correct, it follows that it should succeed on its cross-claims.
34. I do not agree. It would be rare (if ever) that a decision as to whether to grant an interlocutory injunction would be of later precedent value on a substantive issue of law, particularly an issue of law not directly addressed in the decision. I am not concerned with the correctness or otherwise of the decision. I appreciate that the result is that the Bank may have the worst of all worlds in relation to the current negotiations, but I cannot let that govern my construction of the statute. The interlocutory orders restraining the Bank will only be in operation until further order of the Court, and presumably there will be an urgent final hearing to alleviate the unfairness to the Bank which will ensue if it ultimately succeeds. In any event, as I have said, his Honour did apply an intent to compel test which is consistent with my view of the section."
100 In National Union of Workers v Qenos (2001) 108 FCR 90, I set out these same passages and said that, in my view, they correctly stated the reach of the relevant provision.
101 In Community and Public Sector Union v Telstra Corporation Ltd (2000) 108 FCR 52, Ryan J said that he agreed with Gyles J in Finance Sector Union, that the concept of coercion in s 170NC bore the same meaning as the concept of duress in s 170WG. He referred to Schanka v Employment National (Administration) Pty Ltd (2000) 97 FCR 186 in which a Full Court had construed the term "duress" in that section as requiring a different, and narrower interpretation than the same concept in the context of cases in which courts have been concerned to relieve a victim from the consequences of a contract or payment procured by duress. Crescendo Management Pty Ltd v Westpac Banking Corporation (supra) was distinguished on that basis. By analogy with s 170WG, his Honour considered that an intent to coerce in s 170NC required proof of an intention to overbear, by illegitimate or unconscionable pressure, the will of another.
102 In Seven Network (Operations) Ltd v Communications, Electrical, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (supra) Merkel J observed at 388:
"41. The above cases establish that there must be two elements to prove "intent to coerce" under s 170NC(1). First, it needs to be shown that it was intended that pressure be exerted which, in a practical sense, will negate choice. Secondly, the exertion of the pressure must involve conduct that is unlawful, illegitimate or unconscionable. The requirement that the pressure exerted be unlawful, illegitimate or unconscionable must be considered in the context of the scheme of the Act and of the fact that, subject to the immunity in respect of protected industrial action under s 170MT of the Act, many forms of industrial action are unlawful: see Ansett Transport Industries (Operations) Pty Ltd v Australian Federation of Air Pilots [1991] 1 VR 637.
42. The requirement of unlawfulness etc might, in a sense, be said to have been superimposed upon the ordinary meaning of "coercion": cf Hanley at 534 [11]. However, without such a requirement s 170NC(1) could have an anomalous operation in so far as it might prevent the legitimate exercise of rights by employees or employers. In Hanley the Full Court did not really consider this issue. In all the circumstances I consider that it is appropriate to apply the approach taken to s 170NC(1) in Cadbury Schweppes, Finance Sector Union and Qenos unless I am satisfied that that approach is clearly wrong, which I am not."
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.
104 I am fortified to some degree in my view that this is the correct meaning to ascribe to the expression "intent to coerce" by the observations of Lord Romilly MR in Ellis v Barker (1871) 40 LJ Ch 603. His Lordship accepted that coercion may take an infinite number of forms. However, he noted that the moment that a person who influences another does so by threatening to take away something he then possesses, or by preventing him from obtaining an advantage he would otherwise have obtained, it then becomes coercion and ceases to be persuasion.
105 I also note the observations of Peterson J in Hodges v Webb [1920] 2 Ch 70 to which Gyles J referred in Finance Sector Union. Peterson J said at 86-87:
""Coercion" is a word of ambiguous import. In one sense anyone is coerced who under pressure does that which he would prefer not to do; but a reluctant debtor who pays under stress of proceedings is not coerced within the legal meaning of the word. … "Coercion" involves something in the nature of the negation of choice. … an employer cannot properly be said to be coerced if, having two alternative courses presented to him, he follows that course which he considers conducive to his own interests." (emphasis added)
106 It may be noted that the primary definition of the term "coercion" in the Oxford English Dictionary is:
"constraint, restraint, compulsion; the application of force to control the action of a voluntary agent".
The secondary meaning of that term is:
"Government by force, as opposed to that which rests upon the will of the community governed; the employment of force to suppress political disaffection and the disorder to which it gives rise".
107 It should also be noted that the term "coercion" derives from the Latin coercitio which, in Roman law, was the power of a magistrate to insist upon compliance with his orders or commands, including the power to punish for disobedience.
108 "Coercion" is sometimes used in the context of the exclusion of confessional evidence. At common law a confessional statement made out of court by an accused person is not admissible in evidence unless it is shown to have been made voluntarily.
109 In Cornelius v The King (1936) 55 CLR 235 Dixon, Evatt and McTiernan JJ said, in a joint judgment, at 246:
".. When it appears that, but for a particular promise or threat made by a person in authority, the prisoner's confession would be voluntary, it becomes necessary for the Judge at the trial to decide whether the promise or threat in question was really calculated, that is, really likely, to cause an untrue admission of guilt to be made. But a promise of advantage and a threat of harm are not the only matters which may deprive a statement of its voluntary character. For instance, a confession which is extracted by violence or force, or some other form of actual coercion is clearly involuntary, and, therefore, cannot be received in evidence." (emphasis added)
110 The distinction drawn between a promise or threat, on one hand, and actual coercion on the other, is instructive. It suggests that a high degree of pressure is required in order to amount to coercion. That interpretation is further strengthened by a line of authority which holds that answers made under compulsion of law are not, on that account, involuntary: R v Kempley (1944) 44 SR (NSW) 416; R v Owen [1951] VLR 393 and R v Zion [1986] VR 609.
111 In Smith v William Charlick Ltd (1924) 34 CLR 38 it was necessary to consider the meaning of the term "compulsion" in relation to a payment of which refund was sought. Isaacs J said that this term was analogous to "coercion", "exaction" or "force" and included every species of duress or conduct analogous to duress, actual or threatened.
112 If my view of the interpretation to be accorded to the expression "intent to coerce" in s 170NC is correct, it is clear that the NTEU has failed to establish that the respondents have contravened that section. The offer of an additional two per cent on top of existing operating grants, though subject to the need to satisfy the criteria contained in the Guidelines, can hardly be said to form the basis of an inference that the respondents intended to overbear the will of the institutions, and negate their choice. The evidence does not support any such conclusion. The additional funds may be "significant", as far as those institutions are concerned. However, there is nothing to indicate that they are so vital as to negate any realistic choice on the part of those institutions, compelling them to include in any certified agreements terms which meet the criteria set out in the Guidelines.
113 I accept that the evidence demonstrates that the institutions of higher education in this country, or many of them, are under significant financial pressure. I have no doubt that any additional funding would be keenly sought, and would be of substantial benefit to those institutions in their struggle to maintain reasonable standards in teaching and research.
114 The WRP clearly provides an incentive to include in any certified agreement terms which meet the criteria set out in the Guidelines. Some of those criteria may fairly be regarded as having little to do with the proper functioning of universities in this country, and rather more to do with the Government's industrial relations agenda. The preference for AWAs provides a good example of this.
115 However, there remains a clear distinction between offering a person an incentive to do something, and acting with intent to coerce. An incentive, no matter how powerful, can still, as a matter of practical reality, be refused. Coercion involves negation of choice.
116 Even if I were to construe the expression "intent to coerce" in the broader manner for which the NTEU contended, I would still conclude that it had failed to establish its case against the respondents. Coercion requires conduct which is relevantly unlawful, illegitimate or unconscionable. The implementation of policy by a democratically elected government, however contentious in political or moral terms that policy may be, is not easily translated into conduct which is in any relevant sense "illegitimate" or "unconscionable".
117 I have no doubt that within the academic community, and beyond, a substantial body would hold that the criteria contained in the Guidelines are, in a political sense, both illegitimate and unconscionable. It must be remembered, however, that some of those criteria reflect Government policy towards higher education not just since 1996, when the Howard Government was elected, but since the late 1980's and the era of the so-called "Dawkins reforms". Governments, both Labor and Liberal, have long acted in the belief that exposing the higher education sector to increased competitive pressures would enhance its efficiency and productivity. That approach may be misconceived. Many would say that it has led to a serious decline in the quality of higher education in this country, a view that has been the focus of attention in recent times. Many would also say that it has undermined academic freedom, and has had a profoundly negative effect upon staff morale. However, whatever view one takes with regard to these matters, that can have no relevance to the determination of the legal issues raised in this proceeding.
118 I am conscious of the fact that the terms "illegitimate" and "unconscionable" are not the words of a statute, but rather represent judicial exegesis upon a very different expression. Nonetheless, these terms capture one or more of the requirements which must be proved in order to establish the contravention of the penalty provision in question in this case. They are not to be understood as connoting mere disagreement, however strongly felt, with Government policy.
119 The suggestion that the introduction of the WRP was illegitimate or unconscionable because it was implemented for extraneous purposes requires some comment. The allegation of improper purpose is well-known to administrative lawyers and, where established, may vitiate an exercise of public power: R v Toohey; Ex parte Northern Land Council (1981) 151 CLR 170 and see the discussion in Aronson and Dyer, Judicial Review of Administrative Action 2nd ed, 246-251. However, the NTEU's difficulty with making good that proposition in the present case stems, in part, from the width of the power conferred by the HEFA upon the Minister to make operating grants,and to impose such conditions as meet the very broad requirements of s 18 of that Act.
120 An allegation of improper purpose must, of course, be proved to the requisite standard: Briginshaw v Briginshaw (1938) 60 CLR 336 at 362. The evidence relied upon by the NTEU does not meet that standard.
121 I should also indicate that I have some doubts as to whether the concept of unconscionability, as it has developed though the authorities, has any direct application to the operation of s 170NC. The notion of unconscionable conduct is one well known to equity. Duress and undue influence may amount to unconscionable conduct, as can exploitation of vulnerability or weakness: Blomley v Ryan (supra); and Commercial Bank of Australia Ltd v Amadio (supra). See also Legione v Hateley (1983) 152 CLR 406; Louth v Diprose (1992) 175 CLR 621 and Garcia v National Australia Bank Ltd (1998) 194 CLR 395. It is difficult to extrapolate from such cases any principle which can usefully be said to underlie the meaning to be accorded to the term unconscionable as a criterion for delimiting the scope of coercion in the context of industrial relations, and in particular, enterprise bargaining under the Act. I note that there is some precedent for the use of the term unconscionable in a statutory context separate from general principles of equity: see s 51AA of the Trade Practices Act 1974 (Cth) and C G Berbatis Holdings v ACCC (2001) 185 ALR 555.
122 Having regard to the findings set out above, it is unnecessary to come to any final conclusion as to whether the respondents are correct in their contention that the NTEU must also fail because it has not adduced evidence which relates specifically to each of the institutions potentially affected by the WRP, but has sought instead to present a global claim.
123 Nor is it necessary to come to any final conclusion as to whether s 170NC can be invoked against a third party, not involved in the enterprise bargaining process.
124 The application must be dismissed. In accordance with s 347 of the Act there should be no order as to costs.
I certify that the preceding one hundred and twenty four (124) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Weinberg.