Re Builders Workers' Industrial Union of Australia; William Oliver; Jo Mcpartlin; Victorian State Building Trades Union; Hugh Harkins and Martin Bingham v Odco Pty Ltd [1991] FCA 87

Re Builders Workers' Industrial Union of Australia; William Oliver; Jo Mcpartlin; Victorian State Building Trades Union; Hugh Harkins and Martin Bingham v Odco Pty Ltd [1991] FCA 87 - FCA 1991 case summary — Zoe

[35]

"AGREEMENT TO CONTRACT

CONDITIONS OF CONTRACT

Hereunder let Troubleshooters Available be read as:

TROUBLESHOOTERS AVAILABLE AND/OR ASSOCIATED CLIENTS.

1. I (the undersigned) acknowledge and agree that there is no

relationship of Employer-Employee with TROUBLESHOOTERS

AVAILABLE and that TROUBLESHOOTERS AVAILABLE does not guarantee

me any work. I (the undersigned) am self-employed and, as such,

I am not bound to accept any work through TROUBLESHOOTERS AVAILABLE.

2. I (the undersigned) hereby agree to work for ..... per hour for

actual on-site hours or job price to be agreed.

3. I (the undersigned) hereby acknowledge and agree that

TROUBLESHOOTERS AVAILABLE does not cover me in respect of

Workcare, the onus of responsibility and liability in respect

of insurance is mine only. Further, I have no claim on

TROUBLESHOOTERS AVAILABLE in respect of Workcare.

4. I (the undersigned) expressly forbid TROUBLESHOOTERS AVAILABLE

to make deductions in respect of P.A.Y.E. Taxation.

5. I (the undersigned) hereby agree that I have no claims on

TROUBLESHOOTERS AVAILABLE in respect of Holiday Pay, Long

Service Leave, Sick Pay or any similar payment.

6. I (the undersigned) hereby agree that TROUBLESHOOTERS AVAILABLE

has no responsibility or liability to me except that I am

guaranteed to be paid agreed hourly rate for actual on-site

hours or agreed job price for work done.

7. It is agreed that I (the undersigned) must carry out all work

that I agree to do through the Agency of TROUBLESHOOTERS

AVAILABLE in a workmanlike manner and TROUBLESHOOTERS AVAILABLE

is hereby guaranteed against faulty workmanship. All work must

be made good. Further, I agree to cover the work (where

necessary), for Public Liability, Accident Insurance, Long

Service Leave, Holiday Pay, Sick Pay and superannuation, and

have no claims on TROUBLESHOOTERS AVAILABLE in respect of the above.

the Trade Union covering my trade.

9. I (the undersigned) hereby agree to supply my own plant and

equipment, safety gear, boots, gloves or any necessary

ancillary equipment required and that I (the undersigned) have

no claim on TROUBLESHOOTERS AVAILABLE in respect of the above.

SIGNED.........................................................

WITNESSED......................................................

DATED........................................................."

[72]

"meant that a sum, arrived at by taking one shilling for every

dozen score of the total quantity put into the oven, was to be

given to these latter men, but that out of the sum so given to

them they were to pay the other men their daily wages. The

appellant and the other men who signed the first mentioned

agreement were no parties to this, but in fact they were paid

their wages by the hands of the two men named in the second

agreement. It was said this established the relation of master and

servant between the men in the second and those in the first

agreement, and destroyed it between the respondents and the

appellant. But this is not so. It is to suppose that the appellant

and the respondents entered into an agreement for no purpose but

at once to cast it aside. The matter is very intelligible. The

appellant desires to have, and the respondents desire to pay,

fixed daily wages for the appellant's labour. But the respondents

desire to have that benefit which is got from careful supervision

and the partial application of the principle of piece work. They

therefore hire the appellant at daily wages, and they agree with

the two men in the second agreement that the appellant shall work

under them as under a foreman, and that they the foremen shall be

paid thus:-An account shall be taken, at one shilling for every

dozen score, of all articles put in the oven; that so much of that

sum as exceeds the wages of the men employed, shall be paid to

them, the foremen, to keep for their own benefit; and that for the

convenience of all parties the residue of that sum shall be given

to them, for them to be the hands who pay the men. It is clear

that if the foremen had not paid the men, either because their

earnings would not allow them, or for any other reason, the

defendants would be liable. It was asked whose would the loss be

if one of the workmen did not work. But the question is not

intelligible. Nobody's but his own. If he did not work he would

not be paid. If the question means if he worked idly or ill, why

the loss would be the foremen's; but so it would be if the

respondents had agreed in terms with the foremen (as we say they

have in substance with this difference) that they themselves would

pay the men and deduct their wages from the sum arrived at by

taking one shilling for every dozen score. The very object of the

arrangement is to give the foremen an interest in getting the

greatest possible quantity of work out of the appellant and his

fellows."

[89]

"The conclusion to be drawn from this material is that the

tradesman enters into a contract with TSA by accepting the offer

of work made by telephone. The fact that the tradesman is

evidently free to withdraw from the site at any time because he

objects to work or to work further on the ground of safety or for

some other reason is by no means inconsistent with entry into a

contract with TSA on acceptance of the offer of work communicated

by telephone. It may well be that the tradesman has a right to

withdraw his services. The nature and scope of that right were not

explored in argument and it would therefore be unwise to speculate

upon the topic now, except to say that there was no suggestion

that it rendered the contract between TSA and the tradesman illusory.

When the tradesman accepts the offer of work, a contract comes

into existence on the terms set out in the document headed

`AGREEMENT TO CONTRACT' which the tradesman has previously signed.

That document contains the terms which are to govern the

contractual relationship which arises between him and TSA once he

accepts an offer of work communicated to him by TSA. It is

significant that, apart from cl 2, cl 7 of the document contains a

promise by the tradesman to TSA to: `carry out all work that I

agree to do through the agency of (Troubleshooters) in a

workmanlike manner.'

The clause also contains a `guarantee' against faulty workmanship.

In this context the words `work that I agree to do' contemplate

the reaching of an agreement between the tradesman and TSA with

respect to the work to be carried out. So far as the builder is

concerned, it enters into a contract with TSA whereby it agrees to

pay TSA an amount which will enable TSA to pay remuneration to the

tradesman. In the circumstances outlined by the affidavit, on the

oral acceptance by the tradesman of the communicated offer by TSA

of work, an agreement arises between TSA and the tradesman

constituted by that offer and acceptance and the terms set out in

the document entitled `AGREEMENT TO CONTRACT'. That agreement is

one whereby the tradesman agrees with TSA to perform work for the

benefit of TSA in the sense that the work is done for the purposes

of TSA's business and enables TSA to derive remuneration from the

relevant builder which will enable TSA to pay the tradesman for

his services."

[97]

The way in which the argument is put for the respondents is that

Troubleshooters men `exhibit decisively the features of employees'

and the combination of control and payment by Troubleshooters

point to that company as the employer. It is said that

Troubleshooters operates in a way analogous to building employers

who charge out labour to another builder, or to labour hire

companies which hire out their employees.

However it is clear that the arrangements which Troubleshooters

makes with its workers are very different from those made by other

labour hire agencies. It makes it clear that it does not intend

its workers to be its employees. They are not paid a weekly wage

nor do they receive any of the normal benefits of a wages

employee, particularly annual leave and sick leave. There is no

obligation upon any man registered with Troubleshooters to work at

any particular time. Equally there is no obligation on

Troubleshooters to find work for the man on any particular day.

So far as payment is concerned, what Troubleshooters does, in

practice, is to pay to the worker his share of the amount which

will in due course be received from the builder; Troubleshooters'

share represents its outgoings, including its superannuation and

public liability insurance payments on behalf of the worker, and

its profits. It is true that Troubleshooters normally pays the

worker before it has received anything from the builder and,

furthermore, it makes the payment even though it may never receive

payment from the particular builder. But Troubleshooters only pays

its men for work which they claim actually to have done for a

builder, and it does so in the confident expectation that it will

soon be reimbursed.

So far as control is concerned, the workers are free to work when

they please. The only requirement is that they keep

Troubleshooters informed of their availability if they want work,

or if they are ceasing to work at a site where Troubleshooters

labour is still required. The elements of stability and

continuity, which are such a central part of every contract of

service extending over a period of time, are not present.

Troubleshooters exercises absolutely no control over the way in

which work is carried out. It merely passes on to the worker the

time and place at which a builder wishes him to report. If the

worker does not like the sound of the particular job - perhaps

because of its location - he is under no obligation to accept that

engagement.

I have no doubt that, in acting as an agency finding work for

persons in the building trade, Troubleshooters creates a

relationship, between it and the men who use its services, of

principal contracting parties and not of employer and employee."

[145]

"I am satisfied, in the light of all the evidence, that the two

respondent unions, along with others in the building industry,

have adopted a policy of trying to prevent the applicant from

operating in the industry as it presently does. I think there are

several reasons behind this attitude of the unions.

First, unions are concerned that if too many people work in the

building industry on pay and conditions which are not the same as

those provided for in awards, those award provisions will be

eroded. In their eyes it is little to the point that the workers

(who are all union members) prefer to work that way and cannot, on

an objective view, be said to be exploited. `All-in payments' are

anathema to the unions and, they say, should not be offered by any

builder or accepted by any worker.

Secondly, the evil practice of `cash-in-hand' payments is seen to

have left a legacy in the form of the PPS system, which permits

deductions at the rather lower rate of 15% (soon to be 20%) than

normal PAYE payments. Of course, at the end of the financial year,

the appropriate level of tax is assessed and paid. But an

independent contractor may reduce his tax payments by entering

into a partnership with his wife or into a trust arrangement. He

may also be able to claim higher business expenses than an

employed worker. These facts are resented by the unions and their

officials, who tend to exaggerate both the extent and the alleged

moral fault of the practice.

Finally, and perhaps most importantly - though the precise motives

of the unions are not directly relevant to this decision, I think

it likely that the unions are concerned about a loss of support

for the closed shop, and thus for the numerical and financial

strength of the unions in the industry, if the applicant's method

of supplying (sic; sc. labour is) copied by others and more and

more workers come to regard themselves as contractors rather than

employees.

This attitude of stern opposition to the applicant, for what were

seen to be good reasons, was reflected in the Trades Hall Council

broadsheet and the minutes of the Building Industry Group, the

State Conference of the BWIU, and the special inter-union meeting

of 5 July 1988, which are set out above.

I do not believe that the advent of the VBIA changed union

attitudes in any way. Policy remained unaltered but, as the

minutes of the meeting of 5 July 1988 recorded, the VBIA could now

be used 'as a means of making life difficult' for the applicant.

However the VBIA did provide a channel for possible resolution of

any disputes which arose over the use by builders of labour

obtained through the applicant. This occurred in relation to the

John Street site.

So far as the management of the two unions is concerned, the BWIU

has as its supreme governing body its biennial national

conference. A national executive, of which Mr Henderson is a

member, meets six or seven times a year. At the state level, the

governing body is the state conference, which meets annually. Day

to day control is exercised by the state management committee,

which consists of the secretary, Mr Henderson, two assistant

secretaries, the president, 8 carpenter representatives, 6

labourer representatives and at least two representatives of

smaller trades. The union employs a total of about 26 elected

organisers and appointed field advisers.

Little oral evidence was given of the power structure of the

VSBTU, but its rules were tendered. It is clear that it is divided

into three divisions, replicating the three unions which merged to

form the new organization, and Mr Giles, as well as being general

secretary of the union, is secretary/treasurer of the bricklayers'

division.

I am satisfied that Mr Henderson and Mr Giles exercise

considerable authority in their respective union branch and

division, and in their unions as a whole, and for present purposes

they represent the relevant controlling minds and wills of their

unions. I am also satisfied that, over the period in question in

these proceedings, they instructed their respective organisers and

other officials to report to them before taking any action against

the applicant on behalf of the union. Generally speaking, those

instructions were carried out.

I was impressed by both witnesses. I think they are both trying to

do what they see as being in the best interests of their members,

while at the same time observing the interlocutory injunctions

granted by the Court. Mr Henderson, in particular, was at pains to

instruct his organisers and field officers to keep him informed

and not to take any action which might result in legal liability

for the union. Mr Giles was, I believe, more inclined to trust the

judgment of his officials.

The result was that, in each case, the field advisers and

organisers kept their senior officers informed but, of the four

cases where I have found breaches of the law to have occurred,

only at the John Street site did Mr Henderson's intervention help

to prevent unlawful conduct reaching its intended result in

breaches of contract between builders and the applicant, and

unlawful actions and understandings that would hinder builders in

engaging the applicant's workers in future.

In view of the policy they had adopted, the authority given to

organisers and field advisers, and the broad knowledge of the

union secretaries about the events that had occurred and were

occurring, particularly at the London Tavern and the 181 Chapel

Street sites, I am satisfied that the respondent unions were

directly and knowingly concerned in the unlawful conduct of their

officials at the London Tavern site, and the BWIU was so concerned

at 181 Chapel Street. In each case the unions acted in concert

with their officials. There was concurrence in the rightness of

the cause and in the desired result. Only the precise methods used

may have been criticised by the union secretaries because of their

vulnerability to legal action. But no direct steps were taken to

prevent the use of those methods on those occasions or to undo

their consequences.

In any event, I think it is clear that the two unions were both

vicariously liable for their officials' actions at the London

Tavern site and the BWIU was vicariously liable for the seventh

respondent's actions at 181 Chapel Street.

In each case the officials were designated and authorised to deal

with industrial matters at the sites to which they were sent or

which fell within their region of work. Instructions to be careful

in dealing with Troubleshooters, and to keep notes and report

their actions, were administrative requirements rather than formal

limitations on their authority to act in what they saw as being

the interest of their members.

In my view the unions are vicariously liable for the wrongdoing of

their officials at common law - so far as the actions for

inducement to breach of contract are concerned. And pursuant to

sub-s 84(2) of the Trade Practices Act they are liable, together

with their officials, for contraventions of the Act, since the

conduct of the officials was clearly within their apparent

authority and, in my view, within their actual authority, even

allowing for Mr Henderson's strictures about keeping within the

law. For the reasons I have given, the element of intent,

necessary to establish liability of the unions under s.45D, was

also present."

[170]

"HIRE A BODY -

GET A TAX BLUDGER

BODY HIRE UNDERMINES

BUILDING WORKERS'

WAGES AND CONDITIONS

They call them Labour Hire Agencies, but their business is to sell

bodies. They don't make anything. They just recirculate workers from

one boss to another and take a handsome fee for the workers' efforts.

Most of them are just body hire Agencies.

Some of these Agencies are alright, but many are not. They make

"all in" payments to building workers who in effect become

subcontractors.

These hired bodies are not paid proper award wages and conditions.

They do not get holiday or sick pay and they do not get

superannuation or long service leave pay.

BREAK AWARDS

This sort of subcontract body hire is clearly contrary to the

Victorian Building Industry Agreement 1987/89 and all other

relevant awards.

Body hire undermines the wages and conditions of all other

building workers. The hired bodies frequently ignore proper awards

and conditions and they are used to divide workers between themselves.

PAY MORE TAX

Subcontract body hire encourages tax bludgers. Those in the scheme

pay as little as 10% income tax, while most workers pay over 30%

income tax under the pay as you earn (PAYE) method.

THEY PAY LESS

Most of these hired bodies are tax bludgers. Genuine labour hire

has a limited role in industry and we are not criticising those

Agencies and workers who do the right thing.

`FREE MARKET?'

On the other hand this subcontracting body hire is in line with

the conservative political policies of the so-called New Right and

the Victorian Liberal Party who want to smash unions and undermine

hard won awards and conditions.

These people talk about `free market' deals between workers and

employers.

FREE FOR THE BOSS

What they really mean is that employers should be 'free' to decide

how long and when workers work and what sort of conditions they

should work under.

All this masquerades under the guise of 'flexible working coniditions'.

Some of the major employer organisations, including the

Confederation of Australian Industry, have often stated their

greedy desire to dismantle awards and encourage the making of

contracts between individual workers and employers.

Just imagine how much resistance one worker, on his or her own,

can put up to a boss who wants to change working hours, working

conditions and wages.

AT FIRST GLANCE

Many of these 'flexible' ideas seem alright at first glance, or

when the building industry is in 'boom'. But when the inevitable

'bust' comes along the deregulated 'free market' gives the boss

total control over workers.

* Make sure that the people you work with are not undermining your

wages and conditions.

* Demand, from your boss, that he/she only employs people working

on award/agreement conditions.

* Act now to protect your wages and conditions for now and the future.

Authorised by John Halfpenny, Secretary Victorian Trades Hall

Council, 54 Victoria Street, Carlton South

June 1988

Victorian TRADES HALL Council"

[188]

111. The learned trial judge made findings (which, in the light of what we have already said, must stand) of intentional and direct interference, by individual appellants acting on behalf of the appellant unions, with the contractual relations previously entered into between Troubleshooters and the respective builders at the sites referred to as the London Tavern site, the Chapel Street sites and the College of the Bible site. His Honour's reasons for judgment make it plain that each of the elements of the tort of interference with contractual relations, as elaborated by Lord Denning MR in Torquay Hotel Co Ltd v Cousins (1969) 2 Ch 106 at 138-139 (see also Emerald Construction Co Ltd v Lowthian (1966) 1 WLR 691 at 700-701, 703-704) was established against the appellants. For the purposes of the principle, as Lord Denning made clear in the first passage cited, there is a distinction to be made between direct and indirect interference in the execution of a contract. Indirect interference will only suffice for the establishing of the tort if the means used can be described as unlawful. But for this purpose the procuring of breaches of contract would constitute unlawful means (Torquay Hotel at 139; J.T. Stratford and Son Ltd v Lindley (1965) AC 269 at 325 per Lord Reid, 328 per Viscount Radcliffe, and 338 per Lord Upjohn; Merkur Island Shipping Corporation v Laughton (1983) 2 AC 570 at 607, 609-610; Davies v Nyland (1975) 10 SASR 76 at 100; Ansett Transport Industries (Operations) Pty Ltd v Australian Federation of Air Pilots (1989) 95 ALR 211 at 246; McKernan v Fraser [1931] HCA 54; (1931) 46 CLR 343 at 378, per Evatt J). As the builders were induced to break their contracts with Troubleshooters by threats of disruption of work at the building sites which would have constituted breaches of the contracts of employment of the members of the unions working there, it is really immaterial whether the interference with the contract between the respondent and the builder was direct or indirect. However, on his Honour's findings it was plainly direct.

[200]

117. A catalogue of instances where justification has actually been held to exist would be a short one. In Posluns (supra, at 270-271), reference was again made to the right of a father to induce his daughter to break a contract to marry a scoundrel (an example originally proposed by Stirling L.J. in Glamorgan Coal Company (supra, at 577)), and it was suggested a medical practitioner might properly advise a patient to withdraw from a contract in the interests of his health, though Gale J suggested heed should be paid to the distinction between mere advice and actual inducement. (But the language chosen by Lord Wright in Crofter Hand Woven Harris Tweed (at 465) does not encourage reliance on this distinction.) Gale J also referred to Stott v Gamble (1916) 2 KB 504, where a licensing body banned an objectionable film. However, the facts of that case suggest it involved nothing more than a proper exercise of lawful authority, and it may perhaps be compared with James v The Commonwealth (supra) where Dixon J (at 373) held that the executive government's "bona fide assertion as to the state of the law and an intention to resort to the courts made known to (a party contracting with the plaintiff)" could not be considered a wrongful inducement or procurement of any resulting breach. Two further examples were given by Gale J in Posluns. One was the case Brimelow v Casson (1924) 1 Ch 302, where a protective committee was held justified in procuring breaches of contracts of employment under which chorus girls had been so grossly underpaid that the court considered they had been forced into prostitution. That case was plainly an extreme one, and it has always been treated as exceptional - see the comments of Simonds J in Camden Nominees (supra, at 366). The final example given by Gale J is where "a person may be justified in encroaching upon another's civil rights because of some statutory or contractual privilege, in which case he can be said to be acting in accordance with a right conferred by contract or a duty imposed upon him by competent authority as distinct from the mere protection of his own interest." But in such a case, as Gale J also pointed out, it may be that there is no unlawful act, rather than that there is a defence of justification.

At a glance

Court

Decision date

Before

Source

Judgment (217 paragraphs)

Re Builders Workers' Industrial Union of Australia; William Oliver; Jo Mcpartlin; Victorian State Building Trades Union; Hugh Harkins and Martin Bingham v Odco Pty Ltd [1991] FCA 87 (21 March 1991)

Parties

Legislation Cited (6)

Cases Cited (17)