Costs of the proceedings to this day be reserved until 5 October 1989.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

This action arises from a long-running dispute in the building industry in Victoria as to whether the operations of the applicant (which uses the business name Troubleshooters Available and which I shall refer to as "Troubleshooters") are in breach of relevant industrial awards and, more particularly, the Victorian Building Industry Agreement ("VBIA"), which came into operation in October 1987.

2. The applicant operates a business of supplying workers on a casual basis to builders, construction managers and contractors in the building industry (whom I shall refer to comprehensively as "builders").

3. It maintains that these workers (supervisors, tradesmen and labourers) are all subcontractors and so the VBIA and awards do not apply to them.

4. The respondents, who are all unions or union officials (apart from the sixth respondents against whom the action was dismissed in interlocutory proceedings), maintain that the men who obtain work through the applicant are essentially employees - either of the applicant itself or of the builders to whom they are sent - and that they and their employers are bound by the VBIA. If they are correct in this, then it is clear that the applicant's operations give rise to breaches of that agreement in various ways. The applicant seeks a declaration that the men concerned work as subcontractors.

5. In addition, the applicant alleges that the respondents, in their efforts to maintain and enforce their view of the true legal position, have harassed the applicant's operations and, in effect, tried to put it out of business. By taking industrial action on building sites where men have been engaged through the applicant, the respondents have allegedly been guilty of contraventions of ss. 45D and 45E of the Trade Practices Act 1974 and also of the common law wrong of inducement to breach of contract. Injunctions and damages are sought, although it has been agreed that damages should not be assessed at this stage of proceedings.

6. Before considering the facts of this case, it is neecessary to say something about the nature of the building industry in Victoria and the organizations of employers and employees which operate in it.

7. Putting to one side major civil construction works, such as bridges and dams, the industry can generally be divided into three parts - domestic building (which includes both houses and small blocks of flats), commercial building (shops, offices, large residential developments) and industrial building (factories, warehouses). The dividing line in residential buildings between domestic and commercial construction is hazy; and it is not important for present purposes to distinguish between industrial and commercial developments or to allocate schools or public buildings to either sector. The important point is that,with the exception of some country areas, unions have very little control over the domestic sector of the building industry. Most workers in that field are self-employed or work as part of a small team employed by a builder. As Mr Henderson, the State Secretary of the first respondent, said in evidence,

"....most of the housing industry is subcontract,

people working nearly always in that way. In

fact some people have worked that way for many,

many years for the same builder".

8. The fourth respondent's position is a little different because so many of its members work as subcontractors in the housing industry. The union has to service their requirements, and regularly negotiates rates with employer organisations, which can then be used by members as a guide when they enter into contracts.

9. However it remains true that, in the domestic area, unions play little part in day-to-day activities. Troubleshooters supplies a number of workers to this part of the industry and faces no problems in doing so.

10. But the larger part of Troubleshooters' business is concerned with the industrial and commercial sectors, where unions are well-organised and exercise considerable power and influence. So when these reasons for judgment refer to builders, or the building industry, it is those sectors which are meant - unless domestic building is specifically mentioned.

11. Even in the industrial and commercial sectors there are many small businesses - individuals, partnerships and small companies. The work to be done includes demolition, renovation and construction, and the values of contracts range from tens or hundreds of thousands to many millions of dollars.

12. Some builders employ a number of tradesmen and labourers. They are particularly likely to employ their own carpenters, but most will subcontract such specialist tasks as air-conditioning, plumbing and electrical work. Bricklaying, concreting, plastering and painting are also likely to be subcontracted. Other builders operate largely or entirely as construction managers and, for a fee, they engage the contractors needed for the work and arrange for them to be paid directly by the client, while they generally organise and supervise the work.

13. In addition to work for the recognised trades, the building industry provides a number of jobs which are classed as labouring but require special experience and, in some cases, certificates of competence. These include concreting, steel-fixing and scaffolding.

14. Since the Victorian de-registration in 1986 of the organisation generally known as the BLF (Builders' Labourers Federation) the more significant unions in the building field in Victoria have been -

the Building Workers' Industrial Union of Australia

("BWIU")which covers, in particular, carpenters and general

labourers, and claims a 'live' membership of about 35,000, of

whom 21,000 or more are financial members at any given time;

the Victorian State Building Trades Union ("VSBTU")

which covers bricklayers, plasterers, tilelayers and

labourers who assist those trades; it has about 12,000

members on its books, of whom some 7000 are financial;

the Plumbers and Gasfitters Employees Union of

Australia ("PGEU");

the Amalgamated Society of Carpenters and Joiners

of Australia ("ASC&J") which competes with the BWIU for

membership;

the Federated Engine Drivers and Firemen's

Association of Australia ("FEDFA"); and

the Operative Painters and Decorators' Union of

Australia ("OPDU").

15. On the employers' side, the major organisation is the Master Builders Association of Victoria ("MBAV"), but many smaller builders engaged in the domestic sector belong instead (or in addition) to the Housing Industry Association ("HIA"). At the other end of the scale, some major developers belong to no organisation, but associate with each other to protect their special interests. Others belong only to the Australian Federation of Construction Contractors or the Victorian Employers Federation.

16. The MBAV has some 3000 members, of whom about half are engaged in the commercial and industrial sectors of the industry. The membership includes both contractors and subcontractors.

17. In order to determine the true status of the workers who obtain their employment through Troubleshooters, it is necessary first to consider, in some detail, the way in which Troubleshooters operates; the contractual arrangements entered into between Troubleshooters and the workers and between Troubleshooters and its builder clients; the way in which these arrangements are applied in practice; and the types of workers who obtain their jobs through Troubleshooters.

18. Troubleshooters is a company with two working directors - Mr B P Groves, the managing director, and Mr Peter Bosa, who started the business - and some 14 office staff. It has about 2,000 workers on its books who have said they are available for work, either regularly or from time to time, and a client list of about 750 builders who have used its services. Some 30-40% of its business is in the domestic building sector, and the balance in the industrial or commercial sectors. On any one day, Troubleshooters will probably have found work for rather more tradesmen then labourers. In a typical week examined, approximately 40% of workers placed were labourers, 40% carpenters and the balance other trades.

19. Troubleshooters has, since February 1988, produced a public relations kit which is distributed to potential clients. This provides a convenient starting point for present purposes. The cover is headed "DO YOU HAVE LABOUR PROBLEMS?", and above the applicant's name and address appear the words "We have the solution] Troubleshooters Available".

20. Much of the contents of the kit consists of public relations material - extracts from other publications about the role Troubleshooters seeks to play in the building industry. In addition, there is a brochure called "Company Profile". In order to understand the workings of the applicant it is convenient to refer to a number of passages in that document.

21. The introductory paragraph refers to Troubleshooters as providing "an overload facility for clients with manpower problems."

22. The evidence satisfies me that, in many cases, workers are supplied as "an overload facility". However there can also be cases where a company operates as a building manager rather than a builder, employs few permanent staff on site, does most of its work through subcontracted firms of tradesmen, but hires all its labourers, and perhaps some tradesmen and even supervisors, from Troubleshooters or another agency.

23. In one sense this might be called an "overload facility", but it is an overload which is expected and planned for. In an extreme case, such as the Cordukes/Tilley job in Brunswick, which is dealt with later, the majority of workers on site could come from Troubleshooters.

24. The further claim in the opening paragraph of the Company Profile that the workers supplied by Troubleshooters are "bona-fide self-employed sub-contractors" is, of course, hotly contested by the respondents and lies at the heart of these proceedings.

25. It will be necessary, at a later stage, to consider the position of Troubleshooters men in more detail, but I note in passing the observation in the brochure that Troubleshooters has, over the years, been harassed by union officials on the grounds that it disadvantages its men. The comment is then made:

"If that is so, why has there been no

complaint lodged in the last twelve years by

these "disadvantaged" men?"

26. I am satisfied from the evidence - particularly that of the men themselves - that workers who seek jobs through Troubleshooters do so because it suits them to work in this way, rather than to obtain continuing employment with a builder or firm of subcontractors. They are in no sense being exploited by Troubleshooters, nor do they represent a source of cheap labour for employers. I shall return to these questions later.

27. The brochure next refers to "cash in hand" payments as a "major bone of contention" in the industry and to make the point that tax is deducted from all payments made by Troubleshooters to its men, under the Taxation Office's Prescribed Payments System (PPS). There can thus be no question of payments made not being declared.

28. On the other hand, although "cash-in-hand" is clearly a misnomer for the payments in question, I am satisfied that some union officials believe that the 15% deduction required by the PPS still leaves room for inadequate final payments of tax. Certainly a number of Troubleshooters men enter into business partnerships with their wives in order to reduce their overall tax liabilities - a course which is not open to employees receiving wages and paying PAYE tax.

29. The brochure also identifies the alleged receipt of "all-in-payments" as another source of trouble with unions. It correctly makes the point that the applicability of this tag depends upon whether the men concerned are employees or self-employed subcontractors. The significance of the expression "all-in payments" will become clear when the Victorian Building Industry Agreement ('VBIA') is considered in the next section.

"All subcontractors supplied through this

Agency are current financial union

members (Clear Card). They have Long

Service Leave Registration cards and are

current members of the Building Unions

Superannuation Scheme".

31. I am satisfied that this is an accurate statement. All persons working on industrial or commercial building sites have to belong to a union because the relevant employers have so agreed. Even subcontractors employing other tradesmen have to belong if they themselves want to work on such a site. Troubleshooters willingly conforms. Before accepting a worker on its books it requires the production of evidence of union membership, together with evidence of Construction Industry Long Service Leave Registration ("LSLR") and membership of the Building Unions Superannuation Scheme ("BUSS").

32. These requirements of Troubleshooters are not entirely altruistic. If its workers are not to draw attention to themselves when union officials exercise their right to inspect cards, they must be able to produce union, LSLR and BUSS cards. The general question of relations between Troubleshooters and the unions is dealt with in section 5 of these reasons.

33. In the final paragraph of the introduction to the Company Profile the applicant makes the following claim,

"Troubleshooters Available wishes to

maintain a harmonious relationship with both

builder and unions in the industry. To this

end, we have made ourselves available,

wherever and whenever possible, to discuss our

operation, so as to satisfy those who are

uncertain about the way in which we operate,

as to the bona-fides of our business. We are

happy to sit down at any time to discuss the

nature of our business so that the parties in

the industry can be satisfied that we operate

strictly within the principles operating in

the building industry, and in accordance with

all relevant laws applicable to the industry."

34. I am satisfied that the claims made in this paragraph about willingness to talk and explain are substantially true. I accept that the applicant has sought, through discussions with trade union leaders and with organisations of builders, to explain and justify its position in the industry. Whenever trouble has arisen at a site over the employment of Troubleshooters men, the applicant's directors have been prepared to go to the site and, in discussion with union representatives, explain their position and assert their rights.

35. The accuracy of the assertion by the applicant is of some importance, because it puts into perspective the fact that, in some ways, Troubleshooters men are coached to deceive union officials as to their status. In the first place, the holding of a BUSS ticket is primarily designed for that purpose. It is only open to employees in the industry and, when applying to BUS Pty Ltd for membership, Troubleshooters men are told to nominate as their employer a company which is controlled by the applicant's directors and which exists only to make payments to BUSS. The men are paid an "availability allowance" by Troubleshooters each week they work, which exactly equates the BUSS payment the workers are required to make. Apart from the fact that the men have to pay tax on the allowance as part of their income, the BUSS payment is in practice made directly by the applicant through its related company. However the respective credit of an availability allowance and debit of a BUSS payment are properly recorded in the records of the applicant and in the weekly statements sent to its workers.

36. In addition, potential Troubleshooters men are told to obtain a 'worker's' LSLR as well as any 'sub-contractor's' LSLR they might already have. Again, the sole purpose is to deceive union officials. To obtain this registration the worker simply states that he is presently unemployed - which on the day he makes the application may technically be an accurate statement, although usually the truth is that he has not recently worked as an employee and is not seeking such employment.

37. Finally, the worker is told, if asked on site who he is working for or employed by, to give the name of the builder to whom he has been assigned.

38. In all these ways the applicant and its workers practise deception which, in its own brochure, it describes as a "web of falsehoods". But any significance of this fact is, in my view, counter-balanced by the willingness of the applicant's directors to argue the justice of their cause whenever an opportunity offers.

39. Under the heading "The Benefits of Our Agency", the applicant explains what it sees as the advantages which it offers to both its builder clients and its workers. There was nothing in the evidence before me to suggest that the basic claims made in the following two paragraphs are unwarranted, although allowance must be made for the use of language more suited to public relations than to coldly analytical description:

"Working through our agency can be exciting.

Our subcontractors are always meeting new

people, learning new things and working in

different locations. This overcomes the

boredom that sets in when you know the work in

a permanent job and it no longer represents a

challenge. Working through the agency of

Troubleshooters Available, you can enjoy a

changing and challenging environment. Our

work can be moulded to suit the needs of most

subcontractors. You may choose to work

full-time, have the odd day off or only work

the odd day, it's that flexible.

Our clients get better value for their money

using our personnel because they get someone

at short notice who is highly skilled and who

starts work straight-away. These clients can

place agency personnel for normal work, hard

to fill spots and jobs with high turnover.

If, for any reason, the subcontractor or the

client, is unhappy with the placement, a

simple phone call is all that is required to

end the engagement by either party for

whatever reason."

40. The next four pages of the brochure are taken up with the history of Troubleshooters, going back to 1973, and its constant problems with unions. The perceived need to resort to subterfuge to deceive union officials is described.

41. The following pages consist of copies of official correspondence, setting out the position of the applicant so far as PPS payments, payroll tax and long service leave payments are concerned.

42. Next comes a section headed "The Queensland Experience", describing the successful establishment in that state of the applicant's business. Following some litigation, agreement was apparently reached with Queensland unions. However it was brought out in evidence that, in the applicant's Queensland operations, labourers are treated differently from tradesmen and are hired out as casual employees of the builder.

43. 'Company Profile' concludes with more propaganda for the applicant's cause which need not be considered for present purposes.

44. There are two documents in the Troubleshooters kit which have direct contractual relevance. The first is a letter addressed to the recipient of the kit, urging that person to make use of Troubleshooters' services. The substantive paragraphs of the letter read as follows:

"The personnel we supply to you are yours

to direct and the onus of inspection and

satisfaction is yours. If, for any reason,

you are unhappy with our sub-contractor,

simply send the person off site and inform us

of your dissatisfaction. Our service MUST

supply good personnel to ensure your continued

usage. We therefore ask for feedback from you

as to the worker's performance.

We urge you to read the Conditions of Hire

enclosed and the Special Conditions of Hire

overleaf.

If you are interested in our service, now

or for the future, please complete the

removable section below and return it to us in

the prepaid envelope enclosed so that we can

initiate action to establish a credit account

ready for use at your convenience, thereby

avoiding any delay of supply when it is

required."

45. The removable section referred to provides for details of the prospective client to be given and for a signature to be provided beneath the words

"I have read and understood all Conditions of

Hire and wish to establish an account with

Troubleshooters Available."

Only if this section is signed and returned will workers be sent to the particular builder. Once it has been, a telephone call is all that is required to obtain the services of a supervisor, tradesman or labourer at a specified time and place - provided that Troubleshooters can find a qualified worker willing to take the particular job.

46. The Conditions of Hire referred to in this letter are set out in a separate brochure giving "Rates and Conditions".

47. Included in this brochure are the following sections

"PAYMENT TERMS AND CONDITIONS

You are invoiced per site per week for all the

personnel on that site.

We pay the personnel and your liability is to

pay us according to our terms and conditions,

(as per accompanying rates and conditions

sheets).

Our terms are strictly 14 days nett from the

date of invoice

We hope you will appreciate that it is our

policy to pay the sub-contractors weekly in

order to attract their services. It is

therefore vital to our service that our terms

and conditions are strictly abided by."

Next follows a schedule of rates for a wide range of supervisors, tradesmen and labourers which concludes,

"NOTE:

Payments received within seven (7) days from

date of invoice attract a 2.5% discount.

However, items that are a nett charge, such as

"site allowance", are not subject to any

discount."

48. The most important part of the brochure for present purposes is that headed "Conditions of Hire", which are set out in the following terms,

"(i)Minimum Hire: six hours per man per day.

(ii) Inclement weather minimum: four hours

per man per day.

(iii) Site Allowance: extra nett charge

according to each site.

(iv) Travelling Time: extra charge for sites

outside 40 kilometre radius from the GPO

as follows:

40-50 kilometres + 30 minutes per

day per man.

50-60 kilometres + 1 hour per day

per man.

Over 60 kilometres negotiable.

(v) Parking: car parking in Melbourne

Central Business District to be supplied by

client or charged at cost so that

sub-contract carpenters' tools are

accessible and secure.

(vi) Tools: basic tools of trade are included

in the above rates.

Special equipment such as large bench

drop saws, nail guns, heavy-duty hammer

drills attract an extra charge when

provided by the sub-contractor.

(vi) Overtime:

WEEKDAYS

First 8 hours - normal time.

Next 6 hours - Time and a half.

Thereafter to Midnight - Double time.

SATURDAYS

First 8 hours - Time and a half.

Thereafter to Midnight - Double time.

SUNDAYS

First 12 hours - Double time.

Thereafter - Double time plus negotiated

allowance.

PUBLIC HOLIDAYS * Negotiable

AFTERNOON AND NIGHTSHIFTS RATES

Time and a half or double time plus negotiated

shift allowance.

COUNTRY JOBS

All the above rates apply plus allowances

negotiated, ie: accommodation, living-away,

travel, etc."

The brochure concludes with the heading "DISSATISFACTION" and the relevant passage reads,

"If you are not satisfied with a

sub-contractor's performance, simply notify us

and send the sub-contractor off site immediately.

You will be charged for hours on site only.

Claims made after 14 days will not be

recognised (please ring us same day)."

49. I have dealt at some length with the arrangements between Troubleshooters and its potential clients. It is now necessary to deal with those aspects of the relationship between Troubleshooters and its workers not already covered.

50. Workers in the building industry who are interested in working for Troubleshooters usually contact the company, in the first instance, by telephone. They are then invited to give some personal details and their responses are written down on a document called PRELIMINARY INTERVIEW CHECK LIST. In addition to obvious personal details, the applicant is asked to state by whom he was referred to Troubleshooters, what work he is looking for, what qualifications he has, and what experience he has had in the building industry. He is also asked for the name of the last company for which he worked. He is then asked whether he has union membership, LSLR and membership of the BUSS. Other questions on the form are,

"WHY DO YOU WANT TO BE SELF-EMPLOYED?

WILL YOU BE RELYING SOLELY ON THE AGENCY FOR WORK?

HAVE YOU BEEN SELF-EMPLOYED PREVIOUSLY?

IF YES, WHAT PAYMENT SYSTEM DID YOU PAY YOURSELF?"

51. According to Mr Groves, who was the chief witness for the applicant, this form is then used to determine whether the person applying is appropriately qualified and experienced for the work which he is seeking and whether he has the necessary degree of commitment to working as a self-employed person. I accept that there is a filtering process at this point and that some applicants are not accepted, but I am not sure that all those who pass to the next stage have necessarily had experience in the building industry. I think it is probable that they all have appropriate qualifications for their respective trades and, in the case of labourers, some relevant experience.

52. If the response to these questions is acceptable, the worker is then invited to attend at the office of the applicant for a full interview. This interview can take anything from one to two hours and the person conducting it has in front of him a document headed 'JOB INTERVIEW CHECK LIST'. This is a reminder of all the points that must be raised with the worker. In addition to explaining the conditions under which Troubleshooters supplies workers to builders, and the arrangements necessary for the worker to obtain jobs by ringing Troubleshooters, other reminders to the person conducting the interview are -

"- Make aware of Union problem.

- Variety of clients. Good men create work for

themselves.

- We need your communication, keep us informed.

Running late ring us. Whether finishing a job or

unavailable let us know."

53. The interviewer then takes the worker, clause by clause, through a form of 'contract' which he will be asked to sign. He is told of the rate presently being paid by Troubleshooters for his category of work, and that this rate is reviewed annually in the light of movements of wages in the industry. Only in special cases is there any room to negotiate a different rate from those generally applied by Troubleshooters. He is asked to sign a PPS tax form, an application for his BUSS membership, if that is not already held, and an application for LSLR. In a number of cases the worker will already have LSLR, but as a 'working subcontractor' not as an employee or 'worker'. It is explained to him that, in order to pass union inspection, it is also necessary for him to have worker membership of the long service leave scheme. He is told that, when applying for that membership, he should state that he is unemployed when asked to name his employer. As already indicated, since the worker will usually go straight from the Troubleshooters office to the Construction Industry Long Service Leave Board office, the statement will usually be literally true at the time that it is made; and so far as BUSS membership is concerned, the worker is given the name of an inactive company which has common directors with Troubleshooters, to nominate as the employer.

The 'contract' which the worker is then invited to sign is in the following form,

CONTRACT.............

CONTRACTORS NAME.............................................

ADDRESS......................................................

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.

8. I (the undersigned) agree that I must be a financial

member of 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........................................................

54. Several comments should be made on this document.

Introduction: It may be doubted if the reference to

"Associated Clients" has any effect. None was

contended for by counsel for the applicant.

Clauses 2 & 6: The reference to a job price is not reflected

in the actual practice of the applicant and its

workers.

Clause 7: The word 'guaranteed' in line 4 presumably means

'indemnified'. The applicant arranges public

liability insurance on behalf of its workers and

makes a deduction for premiums from each week's

payments to workers. Apart from this the last

sentence appears largely redundant.

55. Counsel for the respondents have made a number of criticisms of this document. Thus they point out that the so-called 'Agreement to Contract' does not amount in law to a contract because performance by each party is entirely discretionary. While this is true, I believe its terms are generally incorporated into the oral agreement arrived at when each offer of work is accepted by a Troubleshooters man.

56. The next point made is that, contrary to the wording of the document, Troubleshooters pays for both Workcare and BUSS. I do not see any significance in this. Workcare has been paid under protest at least until the recent decision of the Full Court of the Victorian Supreme Court in Odco Pty Ltd v Accident Compensation Commission (16 June 1989, unreported) dealt with in section 8, below. In the case of BUSS, an artificial 'availability' payment, equalling the required BUSS payment, is credited each week to each worker, and the BUSS payment is then deducted and paid on the worker's behalf. It is true that this looks like a direct payment of BUSS moneys by Troubleshooters, but the worker has to pay tax on the availability allowance and, to this extent, has a hand in the payments. The arrangement is explained to him when he signs with Troubleshooters, though not all workers who gave evidence seemed to understand the position fully.

57. The rates of pay are varied unilaterally by Troubleshooters each year. The workers are not consulted but are informed either just before or immediately after the event.

58. The document makes no reference to the wet weather allowance, the six hours minimum payment or overtime provisions. To this extent it is clearly deficient and does not include the whole of the contractual terms.

59. The conditions under which Troubleshooters men work have to be compared and contrasted with those of employees in the industry generally. It is necessary here to consider, first, the VBIA and then certain industrial awards.

60. The VBIA is obviously a very important agreement. I am satisfied by evidence from both union officials and employer representatives that, although it has not succeeded in ending all the unnecessary and undesirable practices which had grown up in the industry, and avoidable stoppages still occur all too often, it represents the high-water mark of good industrial relations in the Victorian building industry in recent years. It was made possible by the greater degree of trust in the industry after the BLF was de-registered. It is supported by the State Government. Its provisions for the settlement of disputes through the use of conciliators and a Disputes Board are important and have had some success, although the evidence does not allow me to say just what difference they have made to the industry. The relevant parts, for present purposes, of the publication known as "the Green Book", which contains the VBIA, are as follows.

THE VICTORIAN BUILDING INDUSTRY AGREEMENT 1987-1989

FOREWORD

In the March 1987 National Wage Case decision, the

Arbitration Commission introduced the two-tiered wages

system. The decision provided for a first tier increase of

$10.00 with provision for a further second tier increase of

up to four per cent. To secure the second tier increase

unions had to negotiate with employers around restructuring

and efficiency principles which were designed to make the

industry more productive.

The VTHC, Building Unions, MBAV, Developers and the

Victorian Government have reached a two year agreement for

the Victorian building industry. It will operate from

14/8/1987 for two years.

The Agreement results from many hours of discussion

between the parties over new measures which should assist in

creating a more efficient building industry. This follows

the 4th May agreement reached between the MBA's, Developers,

Building Unions and the ACTU as to the terms of settlement to

the 1987 building industry claims.

Under the terms of settlement, working parties were

established at a National level and State/Territory level.

All bans and limitations were lifted and employers on their

part agreed not to initiate any new legal action against any

union and will seek settlement of all existing legal actions.

The State/Territory Working Parties undertook

discussions, with the objective of reaching agreement on new

measures designed to improve efficiency and productivity in

the building industry (reference National Wage Case Decision

March 87).

In Victoria, the parties reached agreement on new procedures

to apply to Christmas closedown, inclement weather, RDO's and

lost time.

These intensive and frank negotiations resulted in

the ratification by the Australian Conciliation and

Arbitration Commission of 4% increase in wage rates on 14th

August 1987.

An agreement for substantial reduction in lost time

will apply to those contractors and developers who contribute

to the Building Industry Redundancy Pay Agreement.

The parties have further agreed that a very

important part of making the new Agreement work is to ensure

all building workers and employers understand their rights

and obligations to the maximum extent possible. To achieve

this, the VTHC, Building Unions, MBAV and Victorian

Government, have jointly produced this booklet and other

explanatory material.

It is also agreed between the parties that the

unions and MBAV will jointly talk to combined meetings of job

stewards and foremen/supervisors wherever possible, to

minimise any misunderstandings about the Agreement which

might arise.

Acceptance of the 1987 Victorian Building Industry

Agreement is a condition of employment on new and existing

building sites.

This Agreement is one to which all of the parties

are totally committed.

On 4 August 1987 the Australilan Conciliation and

Arbitration Commission ratified a 4% second-tier wage rise

for building workers.

Late in August major building industry employers

and the building unions successfully concluded negotiations

aimed at establishing a Redundancy Pay Agreement as part of

the "Homers" Agreement to achieve a substantial reduction in

lost time.

These are the two elements of the Victorian

Building Industry Agreement 1987-1989.

ATTACHMENT E

AGREEMENT FOR SUBSTANTIAL REDUCTION IN LOST

TIME ("HOMERS" AGREEMENT)

It is agreed by all unions and employers who are

parties to this Agreement, that steps are to be taken to

achieve a substantial reduction in the incidence of lost time

in the building industry, and the application of this

Agreement is an important factor in regard to the successful

implementation of the 1987 Building Industry Awards package.

In order to achieve this objective the employers

shall take all reasonable steps to ensure all workers on-site

are financial union members, covered with WorkCare,

registered with the Long Service Leave Board and the approved

Superannuation Scheme as outlined in Clauses 1,2 & 3 below.

The parties agree that the Disputes Board decisions

shall be final and binding.

In particular, the parties agree that these

conditions shall now apply:

1. SUPERANNUATION

Employers and unions in the building industry

remain committed to the principles of superannuation, for

example BUS, coverage for all building industry workers.

Where there is an issue on a building site relating to

superannuation coverage, the immediate concern must be to

rectify the problem. The unions agree to a 48 hour (2

working days) period to allow an employer alleged to have

committed the breach, to comply with all requirements of the

approved scheme. While necessary steps are being taken to

establish this, the unions agree that all members are to

remain on site and perform normal work. The employee alleged

not to have superannuation coverage shall cease work.

To assist this process, employers agree to provide

all necessary information to both union and employer

representatives. Officers of the approved scheme may also

assist. If, however, there are instances of on-going

fundamental breaches of this arrangement, the parties may

review their commitment to the process and make any necessary

amendments. If a dispute is not resolved in accordance with

the above, the matter shall be determined by the Disputes

Board. Lost time should not be paid unless awarded by the

Disputes Board. (The attached Agreement entitled

"Superannuataion Procedure" shall be observed at all times.)

2. LONG SERVICE LEAVE

The employers and unions maintain the position that

every worker on site must be registered with the Long Service

Leave Board. Where there is an issue on a building site

relating to Long Service Leave coverage, the immediate

concern must be to rectify the problem.

The unions agree to a 48 hour (2 working days)

period to allow an employer alleged to have committed the

breach, to comply with all requirements of the Long Service

Leave Scheme. While necessary steps are being taken to

establish this,the unions agree that all members are to

remain on site and perform normal work. The employee alleged

not to have long service coverage shall cease work.

To assist this process, employers agree to provide

all necessary information to both union and employer

representatives. Officers of the Long Service Leave Board

may also assist (the attached document entitled "Long Service

Procedure" shall be observed at all times).

3. UNION MEMBERSHIP

Employers shall take all reasonable steps to ensure

that employees, including sub-contractors' employees, are,

and remain financial unionists while working on site.

The attached document entitled "Union Membership

Checking Procedure" which contains all necessary details

shall be observed at all times.

It is agreed the Disputes Board shall hear all

claims for payment of lost time.

4. OCCUPATIONAL HEALTH AND SAFETY ISSUES

The parties agree to abide by the Victorian

Occupational Health and Safety Act and Regulations 1985, as

amended from time to time, and the Building Industry Safety

Code and appropriate Awards. Where the two codes are in

conflict, the former shall prevail.

The parties agree that all necessary steps shall be

taken to ensure that a full working understanding of the

relevant Act and Code is achieved and maintained throughout

the industry.

5. SITE AMENITIES

....

6. DEMARCATION

....

7. EMPLOYMENT PRACTICES

The parties agree that the employment practices

defined below are not acceptable in the commercial and

industrial building industry and all reasonable steps shall

be taken to prevent such practices.

. "All-In Payments" are defined, for the

purpose of this Agreement, as payments made at

a fixed rate which are made in lieu of any of

the prescribed award payments or conditions

including all or any of the following:

overtime, annual leave, public

holiday payments, inclement weather,

superannuation.

The attached Agreement entitled "All-In

Payment Prohibited" shall be observed at all

times.

. "Pyramid Sub-contracting" is defined for

the purpose of this Agreement, as the practice

of a sub-contractor, to whom a labour-only

contract is originally awarded, of subletting

that contract, or part thereof, to another

sub-contractor.

. Provided that the following circumstances

are excluded from this definition: Either,

Where a sub-contractor does not havethe

capacity to handle a specialist section

of the sub-contract, this section may be

re-let to a specialist sub-contractor; or

Where projects because of their size or

nature require the use of more than one

sub-contractor to carry out the works; or

Where a labour only sub-contractor is

unable to carry out his contract to the

satisfaction of the principal contractor,

he may be replaced by a new

sub-contractor, or in accordance with

this sub-clause. The unions agree to a

48 hour (2 working days) period to allow

the employer to present relevant

documents to the union. While necessary

steps are being taken to establish this,

the unions agree that all members are to

remain on site and perform normal work.

If the dispute is not resolved in

accordance with the above, the matter

shall be determined by the Disputes

Board. Lost time shall not be paid

unless awarded by the Disputes Board.

8. OTHER ISSUES

....

9. CONCILIATORS

....

ATTACHMENT K

ALL-IN PAYMENT PROHIBITED

It is agreed that the all-in method of payment to

employees is illegal.

1.1 All-in payments means any system of payment that is

hourly, weekly or daily which is either in lieu of

payment for overtime, or in lieu of one or more of

the various award conditions such as, annual leave,

public holiday payments, inclement weather, etc.

1.2 Provided that "All-In" payments do not include

casual engagement on terms prescribed by the

appropriate Award or Agreement.

1.3 An employer who engages a worker on all-in method

of payment breaches this Agreement. Any

sub-contractor found to be paying all-in payments

shall be dismissed from the site immediately. The

work in question shall be completed as decided by

the principal contractor.

1.4 If an employer has been paying a worker an all-in

rate the employer shall be required to pay to that

worker the difference (if any) between the worker's

actual earnings and what the worker would have

earned had the worker been paid award rates and

conditions during the worker's period of

employment, and meet all other statutory

requirements.

1.5 If a sub-contractor has been dismissed, the

principal contractor shall ensure continuity of

employment for the workers involved on the job

under award conditions, and at award rates of pay,

either directly or by the engagement of another

sub-contractor.

1.6 Any worker accepting an all-in method of payment is

in breach of this Agreement and that worker shall

be reported to the appropriate union for

consideration of any action which may be considered

necessary having regard to that union's policy.

Such action may include removal from the site.

61. As can be seen from these extracts from the VBIA, it tackles specific industry problems, but does not attempt to deal with detailed award prescriptions. These are left to a range of awards which have been developed over the years. The most significant for present purposes are:

Commonwealth

The National Building Trades Construction Award 1975

The National Building and Construction Industry Labourers (On

Site) Award 1985

The Carpenters and Joiners Award 1967

The Stonemasons Award (Victoria) 1968

Victorian

Carpenters Award (No 2 of 1987)

Builder's Labourers Award (No 1 of 1986)

Stonecutters Award (No 2 of 1987)

Tilelayers Award (No 2 of 1984)

62. A detailed statement of award conditions for the BWIU, which may be taken as typical of other unions, including the VSBTU, was prepared by Mr Henderson and reads as follows:

"Award Conditions

1. The award wage is made up of a number of individual

components which protects it from erosion

Base Rate $316.30

Industry Allowance 14.40

Tool Allowance 13.80

Additional Payment 50.80

plus a component for follow-the-job (52/50.4)

plus a special allowance ($7.93)

plus a travelling allowance ($8.70/day)

The award is a paid rates award - no employer can pay

less than any of these amounts irrespective of the

amount of work available.

Additional Award Conditions

Special Rates - covering such disabilities as confined

space, wet work, dirty work etc. (there are 40 such

rates in the award).

Multi-storey & Towers Allowances

Meal Allowances on overtime

Overtime time and half first 2 hours, double time

thereafter, double time all day Sunday.

Public Holidays (10 per year)

Annual Leave (4 weeks)

Annual Leave Loading (17.5%)

Rostered Days Off (13 per year)

Sick Leave (10 days per year)

Accident make-up pay

Living Away from Home

Inclement Weather (payment for 32 hours/month)

Bereavement Leave

Maternity Leave

Jury Service

Compensation for clothes and tools damaged by

deleterious substances or stolen from site.

Waiting time when wages are late."

63. In order to understand the nature and strength of the reaction of the unions to the arrival of Troubleshooters on the scene, it is necessary to know something of the background of the industry. That background has been particularly turbulent for a number of years, especially in the years leading up to the de-registration of the Builders Labourers Federation. Over those years the union movement has become very strong in the industrial and commercial sides of the building industry. This is illustrated by the closed shop which each building site represents. The expression "no ticket no start" is well understood in the industry and seems to apply without exception, at least in the metropolitan area of Melbourne, with which this case is essentially concerned.

64. Not only have the unions achieved complete coverage in the relevant parts of the building industry, they have also succeeded in obtaining very favourable conditions of employment. Over the years since the 1950s, there has been a transition from awards based on casual labour to comprehensive awards covering such matters as penalty rates for overtime and for work on Saturdays, Sundays or holidays, rostered days off applying throughout the industry, make-up pay to supplement Workcare payments following injury, and levels of pay which compare favourably with comparable work in other industries. Naturally enough, the unions - including the two respondent unions - are anxious to hold on to the gains which they have made and are generally opposed to any workers accepting employment on anything less than - or indeed different from - these conditions.

65. The respondents led evidence from an accountant who compared the potential earnings of a carpenter and a labourer working under award conditions with the same categories working the same hours regularly through Troubleshooters. It was necessary to make a number of assumptions about such matters as the amount of overtime worked and the number of days when work would be prevented by rain. These assumptions were challenged by counsel for the applicant, who were able to demonstrate a considerable level of uncertainty about the projected figures.

66. I do not find it necessary to consider these matters in detail because the final figures arrived at by the accountant showed the labourer on award wages earning $27,446 in a year and the Troubleshooters labourer $1,400 less. On the other hand, the carpenter on award wages would have earned $29,563 and the Troubleshooters carpenter about $1,630 more.

67. The applicant produced its own figures which, making some rather different assumptions - particularly as to the amount of overtime worked - showed the Troubleshooters carpenter making some $6,700 more than his award wage counterpart, and the Troubleshooters labourer making $2,000 more. If the overtime were omitted, the differences in favour of Troubleshooters men were $3,200 and $200 respectively. The respondents' accountant made some pertinent criticisms of the applicant's calculations. If it were necessary to decide the issue, I would say that the Troubleshooters carpenter would earn rather more than the award wages carpenter, and the two labourers would earn about the same, in years when the industry was busy. In a down-turn of activity, the results would be difficult to predict.

68. Counsel for the respondents were content to submit that there was no clear advantage either way. They certainly did not argue that Troubleshooters men were directly undermining award conditions by working for lower pay. This, however, leaves the argument that a proliferation of work through arrangements such as Troubleshooters' could weaken the power of unions and reduce the bargaining strength of workers, thus leading over time to an erosion of pay and conditions. I do not doubt that these thoughts are uppermost in the minds of union leaders.

69. The unions have had to come to terms with the fact that there will always be a number of small subcontractors working on projects in the building industry who are self-employed or work in small partnerships. This has become a feature of the industry and the unions accept the prevalence of such subcontractors. Indeed they normally insist that they join the relevant union.

70. Mr T A A McDonald, the Federal Secretary of the BWIU said,

"We recognize the right of an individual

to be either an employee or to go into

business on their own and to move from one to

the other as they see fit or as is necessary".

71. Mr Henderson said that, in his opinion, up to 30% of the carpenters belonging to the BWIU would regularly work as contractors or subcontractors. He would also regard 5 - 10% of the labourers in his union as subcontractors, but these would all be specialized labourers such as riggers, concrete finishers, scaffolders and steel-fixers.

72. The union, at regular intervals, negotiates standard rates to be paid by builders to subcontractors for houses being built for the Ministry of Housing and Construction. These rates are generally quoted as rates per square metre of measured floor area, with fixed rates for certain doors and cupboards. These figures are arrived at after considering time required, current wage rates, compensation for the absence of sick leave and annual leave, business expenses and overheads and an element of profit.

73. The VSBTU also negotiates housing industry rates for its subcontracting members. The union was formed in about April 1988 by an amalgametion of the Victorian Operative Bricklayers Society ('VOBS'), the Victorian Plaster Industry Workers Union and the Victorian Plasterers Society. The general secretary of the new union, Mr W C Giles, said that many of his union's 7000 bricklayer members were subcontractors, though some 1500 to 2000 bricklayers were on wages, in addition to 1000 labourers employed by contractors. The great majority of these labourers were skilled "in terms of being able to scaffold, drive winches (or) forklifts". The bricklayers who were subcontractors - perhaps 60% of the total - "go from .... the major contractors to the housing to work for themselves, as one- and two-man gangs and possibly three working together". Later he said,

"....I think every bricklayer is a potential

subcontractor, but I would say that it always

averages about 60% of our workforce is in

housing, and the other 40% lies within the

heavy construction and refactory

bricklaying..... We encourage the

subcontracting, we always have, right back to

our inception (i.e. VOBS) if we look through

the minutes of our books, then in 1856 you

will find that there were subcontract

bricklayers around then. That has not

changed. We fully support subcontracting, and

we put a present tremendous amount of work to

ensure that it operates properly and in a

correct manner."

74. The unions have also accepted that some workers may be lent by one employer to another for particular work. Under this system, known as "charge out", the worker continues to be paid by his original employer, who then requires compensation from the employer to whom he is lent. This compensation includes not only the amounts received by the worker but also allowance for the regular employer's labour on-costs, overheads and profits.

75. In addition to these cases, there are some companies which are in the business of hiring out labour; Kirbys and Skilled Engineering were most often referred to in evidence. Most of these companies employ their workers in accordance with the relevant awards and charge these payments, together with their charges, which may be part of the hourly rate quoted, to their clients. Provided these workers are paid in accordance with the awards the unions tolerate the use of such labour although, again, they would prefer that most workers were directly engaged by the builders and that additional labour was engaged from a labour hire firm only to meet temporary overload situations.

76. Helpful evidence was given by the owner of a smaller labour hire business, Hindoff Engineering Pty Ltd, Mr G R Hindhaugh, who had previously supervised a section of Skilled Engineering. After giving detailed evidence of his own and Skilled Engineering's operations, he spoke of an agreement entered into between such companies and the building industry unions the day before he gave evidence. The companies had, some time earlier, formed themselves into the Contract Labour Hire Group, which was now registered as an employer organization. The agreement is called the "Building and Construction Industry Labour Hire Agreement". At the time of Mr Hindhaugh's evidence it had been signed by the employing companies, and apparently approved, but not then signed, by the unions. The agreement was similar in form to one which had existed for some years in the metals industry.

77. In negotiations leading up to the signing, the unions had stipulated for a clause limiting the use of hired labour to a maximum of two weeks. The companies had objected, and the finally agreed form of words was set out in clause 1 of the agreement, which was in the following terms:

"AGREEMENT

BUILDING AND CONSTRUCTION INDUSTRY -

LABOUR HIRE ARRANGEMENTS

Preamble:

This Industrial Agreement between the company and the unions

listed and signatory hereto shall regulate the conditions of

employment associated with labour hire and the circumstances

under which labour hire arrangements are to apply on all

building and construction sites throughout Victoria.

1. The company, subject to the following provisions,

may provide building and construction labour for

the purposes of meeting unusual peak work load,

specialists trades work and where a shortage of

labour resulting from absence of normally employed

labour on site arises, provided that the work could

not reasonably be expected to be performed by

labour on site. If there are on-going direct

breaches of this clause the parties may review

their commitment to the process and make the

necessary amendments.

2. All workers employed by the company for the

purposes outlined in 1. above, shall be direct full

time employees of that company and be paid in

accordance with the appropriate award.

3. All employees subject to this Agreement shall be

registered with the Construction Industry Long

Service Leave Board for which contributions are

made by the company.

4. All eligible employees shall be registered with an

approved Union Superannuation scheme for which

contributions are made by the company.

5. All employees shall be financial members of the

appropriate union.

6. All employees shall be registered with and receive

the benefits of the Redundancy Pay provisions of

the Victorian Building Industry Agreement 1987-89,

and in accordance with the attached memorandum of

understanding for which contributions are made by

the company. It is understood by the parties that

any Award variation regarding redundancy provision

shall include an exemption clause for the Victorian

Building Redundancy Agreement.

7. All employees will be paid the relevant site

allowance paid on the site where work is performed.

The company will observe for its employees (any)

area or site agreement or practice negotiated by

the unions signature to this Agreement.

8. All employees will be covered for Workcare

provisions.

9. For income tax purposes, PAYE shall apply for all

employees.

10. The company shall observe all requirements of the

Victorian Building Industry Agreement 1987-89 with

respect to its employees working on site.

11. The company will not enter into any form of

sub-letting, self employment or cash in hand

payments.

12. The company shall provide protective clothing to

each employee in accordance with existing industry

practice pending any Award variation.

13. This Agreement shall apply for the same time as the

operation of the Victorian Building Industry

Agreement 1987-89 following which the parties shall

review.

14. This Agreement does not prejudice any existing

agreements reached between labour hire companies

and unions.

15. Protection of Parties

It is agreed that the parties to this Agreement

will use their best endeavours to ensure that

companies within the industry comply with this

Agreement and that the unions will ensure their

members are given a full working understanding of

such."

78. The unions' strongest objection in the area of labour hire is reserved for what they see as the related evils of 'body hire', 'cash-in-hand' and 'all-in payments'. 'Body hire', in this connexion, derives from past practices in the building industry where workers who could not get regular employment were hired on a casual basis through an agency. Mr Henderson conceded that today the expression is used loosely. He would reserve it for cases where overload labour is used unnecessarily in place of permanent workers on the job. In the union view, body hire becomes particularly obnoxious when it is linked to all-in payments.

79. The minutes of the May 1987 State Conference of the BWIU contain the following relevant entry:

"Body Hire:

Conference notes the alarming increase in the

number of body hire companies operating in the

building industry and declares this is a real

threat to the maintenance and improvement of

our Awards and working conditions because many

of these employers are engaging in

cash-in-hand and other unsavoury methods.

Traditional day labour employees are being

displaced by these operators who often ignore

requirements of amenities, health and safety,

long service leave, superannuation, etc.

We call on the SMC(State Management Committee)

to initiate action to limit the operation of

these companies in the building industry to

the extent that they are only permitted in

emergency or topping-up situations.

Roberts/Moore. CARRIED"

80. In the past, some builders have employed labour at a fixed hourly rate, paid in cash in order to avoid taxation, but usually without any of the penalty rates or special allowances which have been provided for in awards. This is 'cash-in-hand'.

81. It seems likely that changes to income tax laws providing for the PPS, referred to earlier in this judgment, have succeeded in largely eliminating cash-in-hand payments. The risks for builders who avoid their responsibilities under the tax legislation have probably become too great. Nevertheless, there is still a feeling in the union movement that workers who pay tax under the PPS probably find ways of escaping the full liability which they would incur under the PAYE system.

82. There is no doubt that the unions strongly oppose the making of 'all-in payments' as is clearly illustrated by the terms of the VBIA set out above. They see such payments at hourly rates as being an attack on the award conditions they have achieved over the years. Although the rates paid by Troubleshooters to its workers are never less than the prescribed award rates, and site allowances are always paid, the provisions for overtime and weekend payents are not as generous as those to be found in awards. The point has been made that payment to Troubleshooters men is likely to be financially rewarding to builders in the long run - if it were not so, builders would not employ Troubleshooters. However I am not satisfied that this argument is valid, because there may well be questions of convenience which affect employers' decisions on these matters without necessarily being reflected in lower costs.

83. Be that as it may, there can be no doubt about the general attitude of the unions in the building industry towards Troubleshooters. They have formed themselves into the Building Industry Group, a committee of union representatives which holds meetings from time to time on matters of general interest to building industry unions and which keeps minutes. Those minutes record that, on 3 March 1986, on the motion of the then Assistant Secretary of the BWIU, a resolution was passed in the following terms,

"Troubleshooters

That ban be placed on this company providing

any labour in the industry and that where

discovered colluding with builders contractors

etc., a 48 hour ban be placed on the

particular site".

A further item appears in the minutes for 11 March 1986, again under the heading "Troubleshooters", where it is stated that there is a need to warn builders about "body hire from unscrupulous companies". Both the assistant secretary of the BWIU and a representative of VOBS were present at this meeting.

84. Then, on 24 March 1986, under the same heading, appears the following,

"That MBA be informed that arrangements

between builders and Troubleshooters and/or

subsidiary companies in respect of body-hire

on a basis contrary to agreements will lead to

indefinite stoppage on those projects being

undertaken by that builder".

85. On 15 April 1986, Messrs Groves and Bosa attended a meeting of the Building Industry Group, at their own request, in order to explain to delegates the nature of their operation. Mr Groves did not believe that the union representatives showed any willingness to approach their differences with open minds or even to discuss the issues involved. The minutes tended to confirm that their approach was dismissed out of hand.

86. Asked whether his union felt obliged to carry out these resolutions of the Building Industry Group, Mr Henderson said that it did not. It observed those resolutions with which it agreed and took no notice of others. On the other hand Mr Giles, for the VSBTU, said that his union did observe the decisions of the Building Industry Group. He said that his union regarded itself as morally bound to implement the policies of the Group.

87. A special inter-union meeting, specifically concerning Troubleshooters, and attended by representatives of the Australian Council of Trade Unions and the Victorian Trades Hall Council, was held on 5 July 1988.

88. The first page of the minutes reads as follows:

"PRIVATE AND CONFIDENTIAL

NOTES OF DISCUSSION OF MEETING ON

TROUBLESHOOTERS AVAILABLE

5 JULY 1988

B. Giles V.S.B.T.U. (V.O.B.S.)

K. Eyssens V.S.B.T.U. (Plasterers)

B. Creighton A.C.T.U.

G. Weaven A.C.T.U.

N. Moore V.T.H.C.

K. Casey A.S.C. & J.

S. Borrow B.W.I.U.

D. Henderson B.W.I.U.

D. Cafferty O.P. & D.U.

P. Parkinson V.T.H.C.

Tom McDonald and Steven Borrow outlined the nature of

Troubleshooters operations in Victoria and Queensland and the

threat they pose to the future of trade union activity in the

construction industry. Among the issues raised were:

. the legal difficulties involved in outright refusal

to work on sites where labour provided through

Troubleshooters was being utilised;

. the possible use of the Victorian Building Industry

Agreement as a means of making life difficult for

TA;

. the negotiations which had taken place in order to

try to reach some accommodation with TA, possibly

based on the NSW 'body hire' agreements of some

years ago. TA repeatedly 'backed off' on each

occasion that agreement seemed imminent;

. there was evidence of links between TA (in

particular Groves) and the 'New Right';

. the fact that for some reason TA had 'gone quiet'

over recent weeks;

. the desirability of involving the Victorian

Government in discussions about the issue, and

. the desirability of ensuring that the MBAV

maintained its present position of opposition to

the activities of TA."

89. The minutes then go on to record legal actions involving Troubleshooters which were then current, legal advice given to the meeting about some of the issues raised in the present case, and an agreement to set up a working party "to explore some of the legal and industrial issues in greater depth".

90. At about the same time, the Victorian Trades Hall Council, acting with the knowledge and consent of the respondent unions, among others, distributed the following broadsheet on building sites. It is not clear just what involvement the BWIU had in its production, but it did help to distribute it. As can be seen, the only variation in this publication from other union attacks on bodies such as Troubleshooters is the apparent acceptance that the men engaged are or become subcontractors.

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 subcontractbody 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 conditions".

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

91. The BWIU attitude to Troubleshooters is well illustrated by the following extracts from an article headed "Last Rites for Body Hire?" which appeared in the union's journal in August 1988:

"'All-in' payments used by some body hire

agencies are clearly contrary to the Victorian

Building Industry Agreement 1987-89 (Green

Book), as was confirmed by a Disputes Board

decision earlier this year.

Body hire undermines building workers' wages

and conditions. Some agencies make 'all-in'

payments to building workers who in effect

become subcontractors, yet are in reality

employees on the job. The hired bodies are

not paid proper award wages and conditions -

no holiday or sick pay and no long service

leave or superannuation.

So body hire sets a precedent to downgrade the

wages and conditions of building workers

directly employed and on the relevant award.

Such 'subcontractors' are usually poor trade

unionists, showing no loyalty to their fellow

unionists or to the working class in general.

NEW RIGHT

For those who want to smash unions, contract

labour is the way to go. It means the bosses

negotiate on a one-to-one basis rather than

negotiating with the representatives of tens

of thousands of active unionists. Such

methods are not new of course, and always mean

the bosses win the battle with workers over

wages and conditions.

These hired bodies are preyed on by agencies

since the workers are often blokes who can't

get regular jobs in the industry and are

desperate for anything. These blokes are not

covered by Workcare and on signing with the

agency have to state in writing they have

private medical and accident insurance, of

course many do not, and are left vulnerable.

The recent Disputes Board decision followed

allegations by the unions that the body hire

building workers were being paid 'all-in'

payments, contrary to the Green Book.

......

Part of the Green Book states, "Any worker

accepting an all-in method of payment is in

breach of this Agreement and that worker shall

be reported to the appropriate union for

consideration of any action which may be

considered necessary having regard to that

union's policy. Such action may include

removal from the site."

Bludgers

'Subcontract' body hire encourages tax

bludgers. Some pay as little as 10% income

tax, while most of us pay about 30% under the

Pay-As-You-Earn (PAYE) scheme. Who wants to

work alongside some bludger who hasn't paid

their fair share of tax so, for example, our

kids get a good education? Who wants to

support tax dodgers?

BWIU officials recommend that the best way to

rid the industry of the body hire scourge is

to force the principal contractor not to use

labour hire agencies which make 'all-in'

payments. Tell the boss the C.E.S. does

pretty well, and take action on the job."

92. The VSBTU attitude towards Troubleshooters was expressed by Mr Giles when he said,

"We have an on-going policy with our

union of all-in payments which we had a

programme or campaign going for about five

years continuously ..... we had to put a s

to it because it was affecting our industry.

It was going to in the long term affect our

awards, affect our training programs..."

"...We must have ongoing trained people

or the trade will disappear. So a very

important part of negotiating for rates (for

contractors) is to have a component in there

for training ... People on all-in payments

are not interested in training apprentices."

94. So far as the total picture is concerned, it is well illustrated by the answers of Mr Hindhaugh, a witness called by the respondents, to questions put to him by counsel for the applicant.

"Is it a fact that you have heard an official

of the BWIU or the bricklayers union saying

that they want to rid the industry of Trouble

Shooters?...Oh, yes, I have heard that.

Mentioned that by name?...Yes, I have heard

that, yes. I cannot say where I have heard

it, but I know it without a doubt. You would

have to be blind if you could not see that or

hear that."

95. Another point brought out by union officials in the course of the hearing, was that workers who are concerned to get on with the job in order to improve their take-home pay may cut corners on safety matters, or allow a builder to get away with site conditions which are not as safe as they should be. It is clear that the safety of building sites is a major bone of contention between builders and union officials. Those officials believe that they have to be constantly alert to detect risks to their members. Builders, on the other hand, clearly believe that there are times when artificial safety issues are created in order to advance some quite different industrial claim.

96. In the light of all the evidence, I am satisfied that there is a general tendency on the part of Troubleshooters men to accept conditions on a site which would not pass the critical scrutiny of a union official. I do not feel able, on the evidence before me, to make any general finding as to whether the Troubleshooters men can fairly be criticised, as a group, for their approach to safety matters. I do not believe that the men I saw in the witness box would accept any foolish or serious risks in their working environment, but I believe that they might allow to pass some situations which could quite properly be criticised. I am satisfied that a number of union officials genuinely believe that Troubleshooters men do not insist upon sufficiently high safety standards.

97. It is for all these reasons that the unions see Troubleshooters as a threat to the many award protections available to award workers.

6. ANALYSIS OF CONTRACTUAL RELATIONSHIPS Contracts Between Troubleshooters and Builders

98. In my view the facts outlined above in section 3, headed "Troubleshooters", make clear the nature of the arrangements between Troubleshooters and the builders who employ their services. I think that there is no contractual relationship established until a builder, who has been supplied with the Troubleshooters kit and has indicated his willingness to accept the terms laid down by Troubleshooters, telephones to order a worker or workers for a particular task. In other words, each builder who uses Troubleshooters enters into a separate contract for each worker, or group of workers, which is completed when Troubleshooters accepts his telephoned order. If the order is a straightforward one, and appropriate workers are known to be available, it may be accepted on the spot. Otherwise Troubleshooters may have to make enquiries before confirming that the order will be met. In practice, Troubleshooters accepts that once the order has been placed, it is to be taken as accepted unless it notifies the builder to the contrary.

99. The substance of the agreement is that Troubleshooters undertakes to supply a worker or workers (but not necessarily the same worker or workers continuously) having the qualifications and skills for which the builder has asked. These workers are to be supplied at the time and place specified by the builder and they (or their replacements) are to continue to work for the builder as long as he may require them. While on site the workers will perform the tasks asked of them by the builder's supervisors. The builder's requirements for men from day to day can be notified either to the worker or workers on his site, if it is their work which is required, or directly to Troubleshooters.

100. For his part the builder undertakes, by making the order, to pay Troubleshooters for all work done by the workers supplied, in accordance with Troubleshooters' prescribed terms, on receipt of a weekly invoice. He must pay for a minimum of six hours work on each day (or four hours if work is prevented by rain) unless the worker walks off the site, or is sent off for unsatisfactory work, in which case he will only be invoiced for time actually on site.

101. The contract between Troubleshooters and its workers is, I believe, similar to that between Troubleshooters and its builder clients. That is to say, each contract is for a specific day's work to be undertaken for a specified builder. That period can, of course, be extended if the builder so requests and the worker expressly or tacitly consents.

102. The agreement is, in each case, concluded when the offer of work is made, usually over the telephone, by the applicant, and the worker indicates his willingness to take the position. He thereby agrees to attend at the time and place indicated, to report to the person nominated, and to work as required for up to 8 hours on that day. 8 hours is the standard working day in the industry. If the builder indicates a continuing requirement for his work, the man may accept or reject each subsequent day's work as he pleases.

103. Troubleshooters, for its part, undertakes to pay the worker for any work which he performs and then reports to Troubleshooters. The detailed conditions of the contract between Troubleshooters and the worker are made up of the contents of the 'agreement to contract' which was signed at the time that Troubleshooters registered him as a person willing, from time to time, to accept work from the company. Also included in the contract would be any relevant discussions which took place over the telephone at the time the particular engagement was offered and accepted. Matters discussed at the time of the original interview between the worker and a representative of Troubleshooters could also be relevant.

104. It is my belief that no contract exists between the builder and the worker sent to him by Troubleshooters. An analysis of the undoubted contracts between Troubleshooters and the other parties to its arrangements leaves little scope for any contract to be implied between the builder and the worker. There is, in fact, no need for any such contract (cf. O'Sullivan v Thompson-Coon (1972) 14 KIR 108 at 114). Before the worker attends at the builder's site he has already been engaged by Troubleshooters to use his skills on behalf of the builder in accordance with detailed conditions and at an agreed rate of pay, for which Troubleshooters is responsible.

105. The builder, for his part, is already assured of a worker with the skills which he requires, attending at a given time and place to work for as long he, the builder, wishes on tasks which he will allocate. He does not control the selection of the particular worker. Although it is not usual, the worker may be changed from time to time during the continuance of a contract without the builder being consulted, except as a matter of courtesy. All that he is assured, by his contract with Troubleshooters, is that some worker with the necessary skills will attend each day that his requirement continues and be prepared to work as required for at least 8 hours.

106. If the worker performs negligent work, walks off the job before the 8 hours is up, or fails to return the next day after indicating a willingness to do so, the builder's only recourse, in my opinion, is to look to Troubleshooters for recompense. It is the contract between Troubleshooters and the builder which has been broken by the conduct of the worker. Troubleshooters would then be entitled to refuse payment to the worker or, if appropriate, to obtain indemnity from him.

107. The respondents, in their final amended defences, have alleged, as one of several alternative arguments, that in entering into agreements with builders, the applicant has been acting as agent for the workers concerned to secure work, tender accounts for work done and account to the worker for those amounts.

108. In my view there are overwhelming objections to this thesis. In the first place, when the builder's order is accepted - subject only to later notification of inability to supply - the particular worker to be allocated is not known. Some worker will later ring in and will be offered the job - he will accept or reject it as he sees fit. It would be highly artificial to suggest that the contract with the builder had already been made on his behalf. Indeed he may not have been on the applicant's books at the time the order was placed - he might only have completed his enrolment procedures during that day. An example of this was given in evidence.

109. Secondly, it is clear that the applicant accepts liability to pay the worker for work he has done, even if it is never paid by the builder. The applicant pays workers' claims promptly after they are notified each Tuesday. There is no suggestion that it renders invoices on behalf of the workers and then accounts to them. The amounts which have been paid to the workers are not discernible from the invoices sent to builders.

110. Another alternative argument for the respondents was that the applicant contracted with its workers as agent for its builder clients. This is a more plausible argument than the previous one, but it is still, in my opinion, fatally flawed.

111. I note in passing that the mere fact that a business may properly be described as an agency does not necessarily mean that it acts as agent for either of the parties that it brings into contractual relations; see International Harvester Co. of Australia Pty Ltd v Carrigan's Hazeldene Pastoral Co. [1958] HCA 16; (1958) 100 CLR 644 at 652-3, and cases there cited.

112. In the present case, there is nothing in the kit provided to builders to suggest that the applicant is offering to act as their agent in obtaining labour. All work done is paid for, on receipt of invoices sent by the applicant, by payments to the applicant. The builders accept no liability to make any payments to, or on behalf of (e.g. tax deductions, insurance, workers' compensation), the workers.

113. The applicant can substitute one suitably qualified worker for another without requiring the consent of the builder, and even though the builder may wish to keep the services of the first worker.

114. After the final addresses had been delivered, the respondents sought, on 22 March 1989, to amend their defences further by alleging, again as one of several possible arguments, that there was a direct contract, partly oral and partly to be implied, between builder and worker.

115. This application was eventually argued on 14 July 1989 and I reserved my decision. Having considered the matter, I believe the respondents should be allowed to amend in this way. The applicant was permitted to make quite substantial amendents at the time of final addresses. In order to establish its case of independent contractor status for workers, the onus is on the applicant to persuade the Court against other readings of the contractual situation, and all the respondents now seek to do is to specify a further possible reading. I can see no prejudice to the applicant if the request is granted, and accordingly I give leave to the respondents to rely on their Final Amended Defences in the forms submitted, dated 22 March 1989.

116. Counsel for the respondents, in their final address, pointed to certain direct communications, of an apparently contractual nature, which could pass directly between builder and Troubleshooters worker. These could include discussions about -

. the termination or extension of the period of

engagement,

. the working of overtime on any particular day,

. working on Saturdays or Sundays, and the rate to be

paid,

. moving to work at a different site where the

builder was operating,

. the acceptance of additional responsibilities as a

leading hand or safety officer, or

. the use of some particular vehicle or equipment

owned by the worker.

117. I am satisfied that matters such as these could be discussed between the worker and the builder's supervisors. They could also be raised with Troubleshooters, but a direct approach to the worker would be more likely. In my view, any agreement resulting from such discussions would represent either a carrying out of the existing agreement between the applicant and the builder (as in the case of an extension of the engagement or working overtime) or a variation of it (as in the case of a change of responsibility or of site) or an addition to it (as in the case of using and paying for special equipment).

118. If the original contract is being varied or added to, then in my view the worker is, to that extent and for that limited purpose, acting as the agent of the applicant. Such an amendment does not indicate either that the original contract was in truth between builder and worker, or that some fresh contract between those parties has been grafted on to the contract between the applicant and the builder.

119. In support of the argument that there is no contract established in the present case between worker and builder, the applicant relies particularly on Construction Industry Training Board v Labour Force Ltd (1970) 3 All ER 220.

120. There the arrangements were so strikingly similar to Troubleshooters' that the latter could well have been modelled upon them. Whether they were or not is unimportant. Certain differences in the conditions of hiring, such as the availability of overtime payments in the present case, are not sufficient to detract from the relevance of what was said, in the leading judgment of the Queen's Bench Division, by Cooke J (with whom Parker CJ and Fisher J agreed, without expressly adopting his opinions).

121. The appeal was from a decision of an Industrial Tribunal which had set aside a training levy imposed on Labour Force Ltd as an employer of labour. It is convenient to set out several quite lengthy passages from the judgment of Cooke J, because they are relied on by the applicant for other related arguments. His Lordship said,

"It is the contention of the respondents

that,.....the workmen who were employed under

the arrangements, which I shall describe in a

moment, were not employed by them, and in

particular were not employed by them under

contracts of service. Those contentions were

upheld by the tribunal.....

It is plain that the business in which

the respondents were engaged....was that of

suppliers of labour to the construction

industry. That involved them in relationships

with contractors in the construction industry

on the one hand and with workmen in the

industry on the other. I deal first with

their relationships with contractors. Briefly

the evidence came to this: contractors in

need of workmen were encouraged to apply to

the repondents stating their requirements in

terms of numbers of men in particular trades,

and to ask the respondents to supply those men

for work at a named site. The nature of the

scheme was described in a circular issued by

the respondents to contractors. On receipt of

an application from a contractor for a supply

of workmen, the respondents would send to the

contractor a document, which we have seen,

called 'confirmation of acceptance', stating

the number of men to be supplied in each

trade, and stating the rates and allowances

payable by the contractor. Those rates and

allowances were payable by the contractor to

the respondents. On the back of the

confirmation of acceptance were printed

conditions, of which I need to refer to a few

only. (These were set out)

On Wednesday of each week the contractor

notified the respondents of the times worked

by the men during the week ending on the

Tuesday. On the basis of this information the

respondents rendered their invoice to the

contractor and also made up pay packets for

the men which were sent to the contractor and

distributed by him on the Thursday.

To carry out these arrangements with

contractors, the respondents built up a

register of men who were willing to accept the

work under such arrangements. An application

to be entered on the register was made by the

workmen on a form. Men on that register would

inform the respondents of their availability

for work, and from the men so available the

respondents would choose men to send to a

contractor to satisfy his requirements......On

the front of the upper part of the form there

were entered particulars of the reporting site

and the pay and conditions. On the back of

the upper part of the form was a declaration

signed by the workman which read as follows:

"I (and the name and address are given)

hereby certify that I am engaged by (the

respondents) on a Sub-Contract Basis...."

......

The workman was paid by the respondents at the

rate agreed between him and them, and the

profit of the respondents was derived from the

difference between the sums which they paid to

the workmen and the sums which they received

from the contractor.

Against that background, I can turn to

the findings of the tribunal. The tribunal

dealt first with the question whether the

contractor was the employer of the workman or

had any contract with the workman. It came to

the conclusion that there was no contract of

any kind between the contractor and the

workman. It is sufficient to say that in my

judgment that conclusion was right. The

tribunal next considered whether in its

relations with the workman, the respondents

were an employment agency. As to that, the

tribunal said:

'There is similarity with the

employment agency in that (the

respondents) found work for persons

wishing to work and found workmen for

those with work to be done. But other

than that there is not similarity. The

contractor and the workman were not

brought into contractual relationship for

reasons already set out. When the

workman agreed to work he entered into a

contract with someone to do work and be

paid for it. That person we think was

Labour Force Ltd (ie the respondents).

After agreeing to accept work at the

place and for the hours and the pay

suggested, a contract came about between

the workman and (the respondents), that

if he did the work (the respondents)

would pay him. The full terms and nature

of his contract will later be dealt with,

but when it is found that the so-called

agent is itself the principal in the

contractual relationship, argument that

there is only agency is we think wrong.'

In my judgment it is plain that when the

workman agreed to work on a particular site at

a particular rate of pay, he was agreeing so

to do with the respondents as principals.

That in my judgment is sufficient to dispose

of the view that the respondents were merely

acting for the workman as an employment

agency. They were contracting with the

workman as principals.

That brings me to the third question

considered by the tribunal, namely whether the

workmen were the respondents' employees under

contracts of service or, as the tribunal put

it, were self-employed persons who agreed with

the respondents to do work for the

contractors. As to the terms and

circumstances of the contract between the

workmen and the respondents, the tribunal made

these findings, all in my judgment amply

justified by the evidence:

'(ii) The workman contracted only with

(the respondents). (iii) (The

respondents were) liable to pay the

workman the agreed rate per hour for the

hours worked and did so even when the

contractors defaulted in payments to

(them). There was no overtime rate. (v)

(The respondents) had no control over the

workman, even as to the place of work

which had to be accepted by the workman.

(vi) The contractors had all control over

the workman with regard to the work to be

done and the manner of doing it. (vii)

The contractor could end the work, even

summarily for misconduct to him. (The

respondents) could not put an end to the

work by any express provision. (viii)

(The respondents) under the agreement

with the workman (were) not responsible

for deduction of P.A.Y.E. tax, National

Insurance Contributions or holiday with

pay, payments or stamps, and did nothing

in those regards. (ix) (The respondents)

paid nothing when the workman was not

working; (they) paid no sick pay and

(they) paid no holiday pay. (x) There is

no obligation on the workman to work only

for (the respondents) or to work for (the

respondents) at all unless he agreed to

the work suggested.'

In approaching the question whether the

workmen were employees of the respondents

under contracts of service, the tribunal

sought to apply the familiar tests which have

been used to distinguish contracts of service

from contracts for services. In that

connection it is, I think, important to bear

in mind that the sole question which the

tribunal had to determine in this case was

whether the contracts in question were

contracts of service. If they were not, then

it followed that the board must fail on a

crucial point, and it mattered not whether the

contracts in question were contracts for

services or some third variety of contract

which was neither a contract for services nor

a contract of service. I will return to that

hereafter.

Nevertheless, the tests which have been

formulated for the purposes of distinguishing

a contract for services from a contract of

service are obviously of value in determining

whether a particular contract is a contract of

service, and I do not think that the approach

adopted by the tribunal can be said to have

been wrong. The tests which have been so

formulated have been referred to in a number

of recent cases... These tests are now so

familiar that in my judgment it is unnecessary

to set them out in detail. I merely observe

this. First, that no list of tests which has

been formulated is exhaustive, and that the

weight to be attached to particular criteria

varies from case to case. Secondly, although

the extent of the control which the alleged

employer is entitled to exercise over the work

is by no means a decisive criterion of

universal application, it is likely in many

cases to be a factor of importance. On the

one hand, the tribunal pointed out that an

hourly paid workman has no opportunity to

deploy managing skills or make money by doing

so. On the other hand, the tribunal took

account of the undeniable fact that in the

building industry there are many self-employed

persons.... The tribunal referred to the

declaration signed by the workman in which he

purports to certify that he is employed on a

sub-contract basis. Quite rightly, in my

judgment, the tribunal held that this did not

preclude it from enquiring into the true

nature of the contractual relationship. It

was, in my judgment, entitled to .... have

regard to the workman's promise, because that

is what it amounted to, to be responsible for

his own income tax returns, national insurance

contributions and holiday with pay payments.

I agree with the tribunal when it said:

"It may be that if the contract in

law is one of service, the term will not

protect the employer who by statute is

liable as employer, but that the parties

did contract to bring about the position

that employers' obligations of this type

did not lie on (the respondents) cannot

be ignored."

In my view, the fact that the parties have in

express terms sought to make a contract of a

particular kind, while it does not bind the

courts to hold that they have succeeded, is a

factor which can be considered in determining

the true nature of the contract. The tribunal

expressed their conclusions in these terms:

'Considering all the facts set out,

and mainly because there was no control

lying with (the respondents) at all, no

continuity of contract, no ordinary

responsibility of an employer at all such

as for sick pay or holidays, no bar on

the workman working for others when he

liked, we think that the proper decision

is that the contracts entered into

between (the respondents) and the

workman, from time to time as he worked,

were contracts to provide services to

agreed persons in return for an hourly

payment for hours worked paid by (the

respondents). We do not consider that

(the respondents were) the employer of

these men. That means that in so far as

(the respondents were) assessed on moneys

paid to the workmen who worked for

contractors, the assessment was not

justified.'

In my judgment, in reaching that conclusion

the tribunal applied proper tests in a proper

way. I can see no ground on which we could

hold that the conclusion was wrong in law. In

particular, in the circumstances of this case

I think that the tribunal was right in

attaching considerable weight to the fact that

the respondents had no control at all over the

work. In this case I think that that

particular feature was a strong indication

that the contracts were not contracts of

service. I think, however, that it is at any

rate possible that the tribunal might have

reached the same result in a different way.

The sole question before the tribunal on this

part of the case was, as I have said, whether

the contracts were contracts of service.

These contracts were contracts whereby the

workman contracted with the respondents to do

work for a third party, the contractor. It

was not a question of the respondents' lending

the services of one of their own employees to

the contractor, because the workman never

contracted to render services to the

respondents at all. I think that there is

much to said for the view that, where A

contracts with B to render services

exclusively to C, the contract is not a

contract for services, but a contract sui

generis, a different type of contract from

either of the familiar two. Had it been

necessary, I should have been prepared to

uphold the decision of the tribunal on that

ground.

As it is, I prefer, for my part, to rest

my view on the ground which I first stated,

which is that in my judgment the tribunal

applied proper tests in a proper way, and that

there is no ground for saying that it

misdirected itself in law....

I would dismiss this appeal".

122. Counsel for the respondents, in the course of a detailed critique of the decision in the Labour Force case, made a number of points. In the first place, they pointed out that the question before the court in that case was whether the Tribunal had erred in law - whether it had applied the correct tests. This was really the only matter considered by Lord Parker CJ and Fisher J. They regarded the decision whether, on the facts as found, the workers in that case were employees, as a further question of fact. The only question of law related to the indicia to be used.

123. This being so, counsel argued, Cooke J's consideration of the facts and conclusions on the employment issue was unnecessary to the decision and so of little persuasive value. In addition, they argued, we do not have the benefit of any detailed analysis of the situation at the various workplaces involved. The findings of the Tribunal are not stated in any detail and Cooke J says nothing on these matters. Of the facts that we do have concerning the arrangements between Labour Force Ltd and the builders and workers, counsel suggested a number of points of difference from the present case. Only one of these, in my view, was a matter of any significance at all. This was that Labour Force Ltd paid its workers an hourly rate that was fully inclusive of overtime, wet weather time and site allowance. I do not regard this distinction as having any more than marginal importance.

124. In the final analysis - because of the other points made by counsel and because each case does depend, in my view, at least in part, on the industrial and economic realities behind the contractual facade, I have taken some comfort from the Labour Force decision, where Cooke J's views coincide with my own, but have not relied upon it as authoritative in the present case.

125. In spite of the view I have expressed above about the absence of any contract, either for service or services, between the builder and the Troubleshooters worker, I shall proceed to consider questions concerning the employer and employee relationship as if it were open to conclude that the workers are the servants of, or independent contractors to, either Troubleshooters or the builders to whom they are sent.

126. Before considering the nature of any legal relationship between Troubleshooters and the men for whom it finds work, or between those men and the builders for whom they then work, it is convenient to examine the present state of authority on the question as to how what is usually called a master and servant relationship is to be identified. I think it is better today to refer to an employer and employee relationship; the traditional phrase has an archaic ring to it in this impersonal age when powerful unions negotiate with governments or large employer groups the pay and conditions of most workers; and the right to dismiss is in many cases strictly limited by law or by industrial realities.

127. Copious authorities were cited by counsel, but I find it convenient to begin with the most recent decision of the High Court which has dealt with the issues involved in a comprehensive way. This is Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16, an action in negligence in which it was first necessary to determine the nature of the contractual relationship between a sawmilling company and certain men who worked for it. The relevant part of the headnote reads,

"A sawmiller engaged sniggers to move

felled trees to a loading zone and truckers to

carry the trees to the mill. Sniggers and

truckers used their own vehicles, set their

own hours of work, and were paid according to

the volume of timber delivered to the mill.

The sawmiller did not deduct income tax

instalments from the payments. Sniggers and

truckers were not guaranteed work and were

free to seek other work if weather or other

circumstances prevented them working for the

sawmiller. An employee of the sawmiller had

general supervision over operations, but

exercised no control over the manner in which

sniggers and truckers carried out their tasks.

While a log was being manoeuvred onto a truck,

a trucker was injured by the negligence of a

snigger.

Held, (1) by the whole Court, that neither the

trucker nor the snigger was an employee of the

sawmiller, so that the latter was neither

vicariously liable for the snigger's

negligence nor personally liable to the

trucker for breach of the duty of care owed by

an employer to an employee".

128. Mason J, (with whom Brennan and Deane JJ agreed on this issue) in approaching the question whether the workers' concerned were employees or independent contractors said, at 24,

"A prominent factor in determining the

nature of the relationship between a person

who engages another to perform work and the

person so engaged is the degree of control

which the former can exercise over the latter.

It has been held, however, that the importance

of control lies not so much in its actual

exercise, although clearly that is relevant,

as in the right of the employer to exercise

it: Zuijs v Wirth Bros. Pty. Ltd. (1955) 93

CLR 561 at 571; Federal Commissioner of

Taxation v Barrett [1973] HCA 49; (1973) 129 CLR 395 at 402;

Humberstone v Northern Timber Mills (1949) 79

CLR 389 at 404. In the last-menioned case

Dixon J said:

"The question is not whether in practice

the work was in fact done subject to a

direction and control exercised by an

actual supervision or whether an actual

supervision was possible but whether

ultimate authority over the man in the

performance of his work resided in the

employer so that he was subject to the

latter's order and directions."

But the existence of control, whilst

significant, is not the sole criterion by

which to gauge whether a relationship is one

of employment. The approach of this Court has

been to regard it merely as one of a number of

indicia which must be considered in the

determination of that question: Queensland

Stations Pty Ltd v Federal Commissioner of

Taxation [1945] HCA 13; (1945) 70 CLR 539 at 552; Zuijs'

Case; Federal Commissioner of Taxation v

Barrett (1973) 129 CLR at 401; Marshall v

Whittaker's Building Supply Co (1973) 109 CLR

210 at 218. Other relevant matters include,

but are not limited to, the mode of

remuneration, the provision and maintenance of

equipment, the obligation to work, the hours

of work and provision for holidays, the

deduction of income tax and the delegation of

work by the putative employee."

129. Later, at 28, his Honour referred to "the traditional approach of balancing all the incidents of the relationship between the parties". And beginning at the same page, speaking of the 'legal authority to control' test, he said,

"The traditional formulation, though

attended with some complications in its

application to a diverse range of factual

circumstances (Federal Commissioner of

Taxations v Barrett (1973) 129 CLR at 400),

nevertheless has had a long history of

judicial acceptance. True it is that

criticisms have been made of it. It is said

that a test which places emphasis on control

is more suited to the social conditions of

earlier times in which a person engaging

another to perform work could and did exercise

closer and more direct supervision than is

possible today. And it is said that in modern

post-industrial society, technological

developments have meant that a person so

engaged often exercises a degree of skill and

expertise inconsistent with the retention of

effective control by the person who engages

him. All this may be readily acknowledged,

but the common law has been sufficently

flexible to adapt to changing social

conditions by shifting the emphasis in the

control test from the actual exercise of

control to the right to exercise it, "so far

as there is scope for it", even if it be "only

in incidental or collateral matters": Zuijs v

Wirth Bros Pty Ltd (1955) 93 CLR at 572.

Furthermore, control is not now regarded as

the only relevant factor. Rather it is the

totality of the relationship between the

parties which must be considered."

130. Mason J, at 26-28 considered the 'organization' test which was first suggested by Lord Wright in Montreal v Montreal Locomotive Works (1947) 1 DLR 161 and later developed by Denning L.J. in Stevenson Jordan and Harrison Ltd v MacDonald and Evans (1952) 1 TLR 101 and Bank Voor Handel en Scheepvaart NV v Slatford (1953) 1 QB 248 at 295. His Honour regarded that test as simply a further factor to be weighed, along with control, in deciding the nature of the relationship. He said,

"Of the two concepts, legal authority to

control is the more relevant and the more

cogent in determining the nature of the

relationship".

131. The organization test was also dealt with by Wilson and Dawson JJ to similar effect.

132. Deane J, at 49, after expressing his agreement with Mason J, added the comment that,

"The distinction between "employee" and

"independent contractor" has become an

increasingly amorphous one as the single test

of the presence or absence of control has been

submerged in a circumfluence of competing

criteria and indicia".

133. Wilson and Dawson JJ in a joint judgment said , at 35,

"The classic test for determining whether

the relationship of master and servant exists

has been one of control, the answer depending

upon whether the engagement subjects the

person engaged to the command of the person

engaging him, not only as to what he shall do

in the course of his employment but as to how

he shall do it: Performing Right Society Ltd

v Mitchell and Booker (Palais de Danse) Ltd

(1924) 1 KB 762. The modern approach is,

however, to have regard to a variety of

criteria. This approach is not without its

difficulties because not all of the accepted

criteria provide a relevant test in all

circumstances and none is conclusive.

Moreover, the relationship itself remains

largely undefined as a legal concept except in

terms of the various criteria, the relevance

of which may vary according to the

circumstances. Thus when Windeyer J. in

Marshall v Whittaker's Building Supply Co

[1963] HCA 26; (1963) 109 CLR 210 at 217 said that the

distinction between a servant and an

independent contractor "is rooted

fundamentally in the difference between a

person who serves his employer in his, the

employer's, business, and a person who carries

on a trade or business of his own", he was

really posing the ultimate question in a

different way rather than offering a

defination which could be applied for the

purpose of providing an answer. So too when

Denning LJ in Bank Voor Handel en Scheepvaart

N V v Slatford (1953) 1 QB 248 at 295 observed

that the test of being a servant does not rest

nowadays on submission to orders but "depends

on whether the person is part and parcel of

the organization". As a restatement of the

problem, this observation may place a

different emphasis upon the tests to be

applied but of itself offers no new test for

the solution of the problem, although a

submission to the contrary was made on behalf

of Stevens in this case: see also Stevenson

Jordan and Harrison Ltd v MacDonald and Evans

(1952) 1 TLR 101 at 111, per Denning L J;

Ready Mixed Concrete (South East) Ltd v

Minister of Pensions and National Insurance

(1968) 2 QB 497 at 524, per MacKenna J. We

would be doing no more ourselves if we were to

suggest that the question is whether the

degree of independence overall is sufficient

to establish that a person is working on his

own behalf rather than acting as the servant

of another, but putting it that way does at

least indicate that the question is one of

degree for which there is no exclusive

measure.

In many, if not most, cases it is still

appropriate to apply the control test in the

first instance because it remains the surest

guide to whether a person is contracting

independently or serving as an employee. That

is not now a sufficient or even an appropriate

test in its traditional form in all cases

because in modern conditions a person may

exercise personal skills so as to prevent

control over the manner of doing his work and

yet nevertheless be a servant: Montreal v

Montreal Locomotive Works (1947) 1 DLR 161 at

169. This has led to the observation that it

is the right to control rather than its actual

exercise which is the important thing (Zuijs v

Wirth Bros Pty Ltd [1955] HCA 73; (1955) 93 CLR 561, at 571)

but in some circumstances it may even be a

mistake to treat as decisive a reservation of

control over the manner in which work is

performed for another. That was made clear in

Queensland Stations Pty Ltd v Federal

Commissioner of Taxation [1945] HCA 13; (1945) 70 CLR 539 at

552, a case involving a droving contract in

which Dixon J observed that the reservation of

a right to direct or superintend the

performance of the task cannot transform into

a contract of service what in essence is an

independent contract.

The other indicia of the nature of the

relationship have been variously stated and

have been added to from time to time. Those

suggesting a contract of service rather than a

contract for services include the right to

have a particular person do the work, the

right to suspend or dismiss the person

engaged, the right to the exclusive services

of the person engaged and the right to dictate

the place of work, hours of work and the like.

Those which indicate a contract for services

include work involving a profession, trade or

distinct calling on the part of the person

engaged, the provision by him of his own place

of work or of his own equipment, the creation

by him of goodwill or saleable assets in the

course of his work, the payment by him from

his remuneration of business expenses of any

significant proportion and the payment to him

of remuneration without deduction for income

tax. None of these leads to any necessary

inference, however, and the actual terms and

terminology of the contract will always be of

considerable importance.

Having said that, we should point out

that any attempt to list the relevant matters,

however incompletely, may mislead because they

can be no more than a guide to the existence

of the relationship of master and servant.

The ultimate question will always be whether a

person is acting as the servant of another or

on his own behalf and the answer to that

question may be indicated in ways which are

not always the same and which do not always

have the same significance".

134. Bearing in mind the several reservations or warnings expressed by the High Court in Stevens v Brodribb about the use of indicia, and the further thought that the presence of a particular indicator may be decisive and yet its absence may be neutral, I turn to consider the applicability of those which could be considered relevant to the present case.

135. This is obviously a very important consideration in most cases. The only reason it is not as decisive in determining the nature of the contract as it is in determining its content is that the parties may intend to create one type of contract, but include in it provisions which require the law to classify it differently. Allowance must also be made for the fact that the expressed intention of the parties may be a sham, designed to achieve some taxation or other advantage; but in that case the real intention of the parties is to be ascertained from material other than their declared intentions; see, for example, Ferguson v John Dawson and Partners (Contractors) Ltd [1976] EWCA Civ 7; (1976) 1 WLR 1213; Massey v Crown Life Insurance Co (1978) 1 CR 590 at 594.

136. However, where the parties are behaving honestly, and where the nature of their proposed relationship is such that it could become that of either employer/employee or principal/contractor, then it is open to them to mould their legal relationship in either form; DCT v Bolwell (1967) 1 ATR 862 at 868, per Lush J. See also Queensland Stations Pty Ltd v Federal Commissioner of Taxation [1945] HCA 13; (1945) 70 CLR 539 per Dixon J at 552. Their intentions will then tend to influence the details of their agreement, and any apparently contrary indicia would need to be closely examined against the background of the parties' intentions. Beattie J, in Harker v Boon (1956) AR (NSW) 178 at 183 said,

"The important matter is to determine

whether the intention of the contracting

parties was to establish the relationship of

employer and employee, and the facts of the

particular case, looked at as a whole, may

well negative the conclusion that the exercise

of control by one party over the work of

another flows from the relationship of master

and servant".

137. Denning LJ in Massey (above, at the page cited) after dealing with dishonest labels attached to contracts went on to say,

"On the other hand, if the parties'

relationship is ambiguous and is capable of

being one or the other, then the parties can

remove that ambiguity, by the very agreement

itself which they make with one another. The

agreement itself then becomes the best

material from which to gather the true legal

relationship between them. This is clearly

seen by referring back to Inland Revenue

Commissioner v Duke of Westminister (1936) AC 1".

138. This statement was cited with approval by the Privy Council in Australian Mutual Provident Society v Chaplin (1978) 18 ALR 385 at 389, where the Privy Council also said of a clause in an agreement stating a relationship to be "that of Principal and Agent and not that of Master and Servant", that

"Clearly cl 3 which, if it stood alone,

would be conclusive in favour of the Society,

cannot receive effect according to its terms

if they contradict the effect of the agreement

as a whole."

139. In the present case although, as between Troubleshooters and builder, there are no formal contractual statements of the parties' intentions, the Troubleshooters Company Profile distributed to builders does state in its opening paragraph that the workers it supplies are "bona-fide self-employed sub-contractors" and all the other material, including contractual documents, refers to the workers as "sub-contractors". And the "Agreement to Contract" signed by workers when they are first placed on Troubleshooters' books begins with the words "I....acknowledge and agree that there is no relationship of Employer - Employee with Troubleshooters....". There are a number of provisions in that document which point in the same direction, and only one - the provision for payment by hourly rates - which points in the opposite direction.

140. Just as important as the written word, in my view, is the evidence of the workers themselves. I found them to be an impressive group of men and, generally speaking, I accept the evidence of each of them - subject of course to possible errors of recollection. It is worth noting, in passing, that the witnesses were not hand-picked by the applicant to make an impressive showing. They were, in effect, chosen by the respondents; because they were the Troubleshooters men who happened to be on the various sites which were disrupted by the actions of the respondents (to be dealt with later) and who were most directly involved in and affected by those actions.

141. Having listened to the evidence of all these witnesses I am left with no doubt that they wish to be considered, and think of themselves, as self-employed independent subcontractors. They have deliberately chosen a working pattern which gives them maximum control over their working lives while still earning a steady income. Although, as we shall see, some of the other indicia are not as helpful to the labourers as to the tradesmen, on this point I could detect no difference.

142. The tradesmen left me in no doubt that, as they moved from their own work, which was clearly subcontracting, into work obtained through Troubleshooters - and back again - they felt no difference in status, in their relationship to supervisors, or in responsibility.

143. Dealing with the labourers in detail, Mr A M Rask gave his occupation as "subcontracting labourer'. He had previously owned his own manufacturing business and retail shop in New Zealand for fifteen years, and before that had been a self-employed commercial fisherman. After coming to Australia he worked off-shore for a Bass Strait construction company for nine months, and then for eighteen months at the Portland Aluminium Smelter.

144. He said that he began working for Troubleshooters in September 1987 because working as a sub-contractor and being independent appealed to him. Later he said it was his own decision whether he would work every day of the week, but added,

"...I just do not sort of waltz around and say

'I am coming today and not tomorrow'. If I

agree to do a job, I will do it, but the

decision is still mine".

145. Mr Rask said he now gets all his work through Troubleshooters. The longest jobs he gets last about five to six weeks.

146. Mr P R Kellick gave his occupation as builders' labourer and said he was self-employed. He has worked regularly through Troubleshooters for about five years and gets 90-95% of his work that way. Before 1984 he had worked on a semi-regular basis with Troubleshooters. His longest jobs had lasted up to ten weeks and his shortest one day. On some occasions builders for whom he had worked have offered him full-time employment, but he has not been interested. Asked why, he said,

"Because I prefer to work in the system I

work in. I am quite happy with it. It suits

me to work that way.....I have a greater say

as to where I work, what I do, who I work

with, how long a period I work for before I

have a holiday, how long I have for holidays.

All these sorts of things are up to me and I

like it that way."

Before working regularly as a builder's labourer he had worked for wages in the hotel industry. Since working in the building industry he has employed an accountant to prepare his taxation returns.

147. Mr R C Witham gave his occcupation as "subcontractor, labourer". He sometimes works as a scaffolder. He is also a state enrolled nurse and sometimes works for himself through a nursing agency. He has worked through Troubleshooters for three or four years. He normally works each day the job requires, but said

"...it all depends on my requirements. If I

need the money, I work. If I do not need the

money and I feel like having a couple of days

off that is exactly what I do...I live a

pretty busy social life, so I do it quite

regularly".

"I do not like to go to a site and stay there

for the completion of the site.... I would

rather go and work a day here, a day there.

Quite often, as I have mentioned, I go and do

a little bit of nursing....".

"...I find the advantages I am now under best

suited to my lifestyle. I would not last five

minutes in a wages position."

(I should say in passing that Mr Witham's approach to

regularity of work was not typical of other witnesses.)

148. Mr D T Joyce said that he was now a cleaning supervisor, but had previously worked as a bottle-shop manager in various hotels and had done a fourteen months course in sound engineering, hoping to find work in films. He had then worked as a labourer through the agency of Troubleshooters for about three and a half years, until very recently. He had worked as a subcontractor. At the same time he had done some work in the industry through his own contacts, mostly at weekends. This other work had sometimes been at hourly rates, and in the case of some building clean-up jobs, he had quoted a price and provided his own cleaning equipment.

149. The overall picture presented by these cases is one of men having capacity for quite responsible tasks, who have chosen to work for a time as builders' labourers. Their taking of work through Troubleshooters is consistent with their apparent desire to be self-employed, though all have worked for wages at some time in the past. Mr Groves expressed the opinion that if they were forced to convert Troubleshooters to an agency like Mr Hindhaugh's, the men now working through Troubleshooters would walk out. This expression of opinion was broadly consistent with the evidence from the workers themselves. I see them quite clearly as providing their services for the use of a builder, not providing themselves to serve that builder; see WHPT Housing Association Ltd v Secretary of State for Social Services (1981) ICR 737 at 748-9.

150. They were under no legal obligation to work beyond the day to which they had committed themselves. And their freedom to choose from day to day was real, not merely theoretic. They were not tied either to Troubleshooters or to a particular builder by economic necessity, a factor which weighed heavily in Gray J's recent decision that certain owner-drivers were in truth employees of the companies for which they regularly worked; see In the matter of an Application by Donald Alexander Porter for an Enquiry into an Election in the Transport Workers' Union of Australia ('the TWU Election Case') (unreported, 23 June 1989).

(b) Arrangement of worker's affairs - creation of goodwill or

151. There was evidence, which I accept, that a significant number of Troubleshooters men arranged their businesses as partnerships or, in a few cases, companies or family trusts. Most of the partnerships were with the worker's wife, who may have handled his business affairs for him. An 80/20 partnership arrangement in such cases seems to have been typical.

152. The general evidence taken from Troubleshooters records was that, of 1860 workers then registered with Troubleshooters, 35 required payments to be made to a family company, 23 to a trust, 131 to a partnership and 50 to a registered business name. It was submitted on behalf of the applicant that, in such cases, when Troubleshooters arranged for a worker to go to a particular site, it was contracting with the alternative entity rather than the individual. In light of the way in which Troubleshooters deals with individual workers, I am not persuaded that this is so. Its willingness to send statements and payments to a nominated company, trust or partnership is not, in my view, sufficient to alter the essentially personal nature of the contract which it makes, usually over the telephone, but sometimes across the counter, with its workers. It follows that I do not accept the applicant's resulting argument that the Troubleshooters men are not employees because companies cannot be employees and it is unusual for employees to have partners; see AMP Society v Chaplin (1978) 18 ALR 385 at 391. That argument , of course, has no application to the relationship between worker and builder, because the builders have no notice of the workers' business arrangements.

153. Nevertheless, the existence of such companies and businesses does tend to support the accuracy of the workers' view of themselves as independent contractors. There is a consistency in such behaviour.

154. Evidence from individual witnesses showed as follows:

Mr Buckingham is a carpenter, in partnership with

his wife, who does bookkeeping and some ordering for him. He

works about 60% of his time for Troubleshooters, the

remainder being a mixture of domestic and commercial work

which is clearly of an independent contracting nature. Mr

Buckingham is a member of the MBA.

Mr Chazikantis is a bricklayer, in partnership with

his wife on an 80/20 basis. She does bookkeeping and

banking. At the time of his evidence, Mr Chazikantis had

obtained only two jobs through Troubleshooters.

Mr Peter, a boilermaker and welder, is also in an

80/20 partnership with his wife, who does his secretarial

work. He gets about half his work through Troubleshooters.

The rest is largely local work which he gets through

word-of-mouth or local advertising. In summer he also

carries on a water-carting business.

Mr Robinson and Mr Norton are two carpenters who

usually work together, though each is in partnership with his

wife rather than his fellow-worker. It is clear that, in

recent years, they have worked as independent contractors on

many jobs which they have found for themselves, partly by

advertising. But in recent months they have worked largely

(80-90%) through Troubleshooters. Robinson and his wife also

operate another business, hiring out videos. This is largely

carried out by Mrs Robinson, but Mr Robinson sometimes leaves

work early to assist her.

Colin and Paul Smith are father and son. Both are

carpenters and they were, at one time, in partnership (along

with their wives) when they were carrying out a lengthy

contract. Neither is now in partnership, but Colin Smith

trades under the name of Gwent Builders. He spends about

half his time on jobs for which he has quoted a price and the

remainder working for hourly rates on jobs which he either

finds himself or obtains from agencies - including

Troubleshooters.

155. The four builders' labourers referred to earlier (Rask, Kellick, Witham and Joyce) are not involved in partnerships. Their work patterns have already been dealt with.

156. It is important to note that, however the worker may have arranged his own business for accounting and taxation purposes, Troubleshooters sends each man to a job as an individual. It is only when it comes to sending out payments and statements that Troubleshooters recognises any different business arrangement.

157. So far as the regularity of working through Troubleshooters is concerned, it is clear that there is a wide range of choice and of behaviour. Some workers choose to work only through Troubleshooters, others will do all of their building industry work in that way, but may have some other work which takes up some or most of their time. Of those who stay with the building industry there will be some who use Troubleshooters as their primary source of work and others who use it only as a backstop. Troubleshooters is happy to accommodate all these work styles though, naturally, a regularly available worker is most convenient for it.

158. It is obvious that only those workers who at times work independently of Troubleshooters could build up goodwill or any other saleable asset - such as a client list. And their work through Troubleshooters could add nothing to their goodwill or other asset. However, I do not regard the absence of this indicator as significant in the overall picture.

(c) Power to delegate, substitute or employ others - right to

159. As Mason J said, in Stevens v Brodribb (above, at 26),

"The power to delegate (by employing

another worker) is an important factor in

deciding whether a worker is a servant or an

independent contractor...."

Mr McDonald, the Federal Secretary of the BWIU, said that,

"the (BWIU) is called upon from time to time

to distinguish between a legitimate

subcontractor and what we call a 'bodgie'

arrangement. The first thing we look at is

whether the contractor employs other people."

However he conceded that, if there were no such employees, other matters then had to be considered.

160. Because of the way in which Troubleshooters works, there is virtually no scope for a worker to exercise such powers. Each man is sent to a site as an individual, and if he is unable to attend, his obligation is to notify Troubleshooters so that a replacement can be arranged. In an emergency a worker might ask a friend who was similarly qualified and on Troubleshooters' books to stand in for him, but Troubleshooters would have to be notified as soon as possible and alter its records accordingly.

161. Some tradesmen have had young men apprenticed to them at the time they signed on with Troubleshooters. In such cases Troubleshooters tries to persuade builders to take the apprentice on at the same time as the tradesman. If it succeeds, the apprentice is charged for separately at labourer's rates and the appropriate part of the moneys received is passed on to the tradesman.

162. The other side of the coin presently being considered is the right of any putative employer to the exclusive services of the worker. It is clear that Troubleshooters cannot and does not expect its workers to be regularly at its disposal. It hopes that some of them will be, but the choice is entirely that of the worker. There is no commitment except from day to day.

163. The same applies to the expectations of the builders. They are entitled to expect (as against Troubleshooters) that any worker allocated to them will complete his day's work. They have no entitlement to his particular services on the next or any later day. Naturally, a worker may indicate a willingness to continue a job for a given period of time, and thereby create a moral obligation to do so. But if he fails to attend, Troubleshooters may substitute another qualified worker and, if that does not happen, the only recourse of the builder would be against Troubleshooters.

164. Thus it is only on any given day that it could be said that there is a right to the exclusive services of the worker. And even this relates only to normal working hours; there is no provision for compulsory overtime. The right to exclusive services during normal hours resides in the builder as against Troubleshooters and in Troubleshooters as against the worker. The obvious sanction in each case for a refusal to work normal hours would be a reduction in payment.

165. On balance, I believe this indicator favours the applicant's case.

166. The High Court, in a series of cases culminating in Stevens v Brodribb (above), has left no doubt about the importance of this criterion in determining the existence or absence of an employer and employee relationship. This is to be expected because, at the heart of that relationship, lies the duty of the employee to obey the employer's lawful orders. However, as Gray J found in the TWU Election Case (above), although the control test may be very helpful when the right to control can be found in an express term or terms of the contract, it may be much less helpful if its application depends upon an analysis of the conduct of the parties.

167. In the event, I have found great difficulty in trying to apply this indicator in the present case because, on the evidence,

(a) I can find no difference in the degree of

control exercised by builders over Troubleshooters tradesmen and over other tradesmen who are clearly independent contractors;

(b) I can find no significant difference in the

degree of control over Troubleshooters tradesmen and Troubleshooters labourers, apart from the fact that labourers may be given more short-term tasks; but even here the difference is one of emphasis rather than of kind; and

(c) I can equally find no significant difference

in the degree of control over Troubleshooters labourers and over the builder's own labourers employed on wages - except that the Troubleshooters men may tend to be more intelligent and reliable than the general run of employed labourers.

168. Thus it is possible to move along the range of workers from the unarguably independent tradesman to the unarguably employed labourer and find no difference in outward control that cannot be better accounted for by the management style of the foreman or supervisor or the personal attributes of the worker. As counsel for the respondents said, in their final written submissions,

"....the evidence is that there is common

supervision of all workers on site. The

degree of supervision does not vary according

to the status of the worker but is common to

all workers and varies according to the

abilities of the men and the nature of the

foreman's personality...... It is the job of

the site foreman to co-ordinate all activities

on site regardless of who performs them..."

169. As long as this statement is understood to include acknowledged subcontractors, Troubleshooters men and the builder's wages employees, it reflects accurately the view that I have formed on the subject.

170. Respondents' counsel provided a long list of points which, they submitted, indicated the exercise of control over Troubleshooters workers by Troubleshooters itself or its builder clients.

171. All the points said to show control by Troubleshooters were, in my view, no more than terms of the contract between them or sensible administrative arrangements for securing work and making payment. For example, the worker was not compelled to ring Troubleshooters on Tuesday nights to report his week's work. It simply meant that if he did not ring at the prescribed time he would not be paid promptly. This was hardly an example of control being exercised. In truth, Troubleshooters made no attempt to control the way men performed their work for builders.

172. As to control by builders, I shall deal shortly with the nature of oversight by foremen and other supervisory staff. There are only three other points raised by counsel for the respondents which I need mention.

173. Counsel have argued that the builder may direct a Troubleshooters worker to leave one site and go to work at another. This consideration was found to be important in one of the instances considered by Burchett J in Tony Glambed v Commissioner of Taxation (unreported, 16 March 1989). Several workers in the present case agreed that, on rare occasions, a builder might ask them to move from one site to another on the same day. One witness accepted the phrase 'directed to move' when a question was so framed. However I am satisfied from the whole of the evidence that a builder could only request such a move, unless it had been pre-arranged. The location of the site was a condition, and often an important condition, of the work offer which the man accepted from Troubleshooters. No doubt a request to move would normally be accepted if the sites were in the same general area, and would often be accepted even if they were not. But the worker was entitled to decline and still claim his 6 hours minimum payment if there was no more work for him at the first site.

174. Secondly, it was said that Troubleshooters men are often required by the builder to work in teams performing a common task. It is clear that this did happen from time to time. Sometimes it would involve Troubleshooters tradesmen being allocated employed labourers to assist them, sometimes tradesmen would work together - a Troubleshooters man with an employed tradesman or with an independent contractor on hourly rates, and sometimes a Troubleshooters labourer would be asked to assist a tradesman - who could be an independent contractor, a wages employee, or another man from Troubleshooters. Labourers might also be asked to work together on a job requiring more than one.

175. I can see no significance in these necessary arrangements.

176. Finally it was said that a Troubleshooters man on a continuing job may be promoted by the builder to a supervisory position. It is true that this can occur, in effect, but in my view it represents only a variation of the original contracts between builder and Troubleshooters and between man and Troubleshooters, after proper consultations involving Troubleshooters.

177. Turning from actual control to the legal authority to control, I am unable to find any greater assistance. The respondents seek to rely, in this connexion, on one sentence in the material supplied by Troubleshooters to potential builder clients. It reads,

"The personnel we supply to you are yours

to direct and the onus of inspection and

satisfaction is yours."

178. In my view the statement is ambiguous, because 'direct' may mean 'control' or merely 'allocate to tasks'. Read in its total context, I believe the latter was the intended meaning. With its careful insistence on the subcontractor status of its workers, Troubleshooters would hardly have intended to include a statement to the directly opposite effect. This reading is, I think, confirmed by the reference to 'inspection and satisfaction', which suggests to me the review of a completed task rather than continuing oversight, even though the next sentence - "If, for any reason, you are unhappy with our sub-contractor, simply send the person off site and inform us of your dissatisfaction" - makes clear the right, at any time, to veto the continued nomination of the particular person allocated to the task.

179. Looking at the practicalities of the Troubleshooters situation provides, in my view, no clearer guidance. A subcontracting carpenter may be engaged to hang all the doors in an office building, for example. The foreman is likely to indicate the sequence in which he wants the work done, and if he is not satisfied with the quality of work in a particular case he may require it to be done again. But he will not stand over the tradesmen, telling him how to do his job. He has no right to do so.

180. If the carpenter were an employee on wages the situation would really be no different. He would be obliged by his contract of service to carry out the lawful directions of those in authority over him, but that would not extend in practice to telling him how to exercise the skills of his trade.

181. There would be a more clear-cut difference if the independent contractor had quoted for a particular job. He could not then be directed to leave that task and assist in another. But if a person who was clearly an independent contractor, with his own business, had merely contracted to make his skills available for a fixed period, or the duration of a job, to carry out tasks allotted to him, then the test of legal authority to control does not, in my view, help to distinguish him from an employee carpenter. One must look elsewhere for the distinction - in the intention of the parties, the duration and incidents of the contract and so on.

182. Even in the case of labourers, I find the indicator unhelpful. Such a labourer may have particular skills, for example as a scaffolder or steel-fixer or concrete-layer, which he will employ under the general supervision of a foreman in much the same way as a tradesman would. Only the level of skills is different. But even if he is a general labourer, provided he has had some experience, he can be expected to achieve a specified result by demolishing a wall quickly and safely, digging a straight ditch for a stated purpose, or cleaning up a site, without having to be closely supervised or controlled. The BWIU maintains that all its general labourer members are properly classified as skilled labourers.

183. The main difference between a general labourer and a specialised labourer or a tradesman, is that the general labourer is more likely to be moved from one task to another as the needs of the job dictate. But as each task is given to him, he is then, like the tradesman, left to his own devices in performing it.

184. There is evidence from Troubleshooters labourers that they were sometimes left entirely alone on a site with a given task. This was particularly likely to happen in the first and last stages of a job - site preparation and clean-up.

185. Although the legal authority to control a general labourer by directing him from one task to another is certainly relevant for present purposes, I do not regard it as particularly helpful in drawing the line which must be drawn at some point of the range referred to above.

186. Generally speaking, an employer has power to dismiss an employee for good cause or to terminate his service on proper notice. On the other hand, an independent contractor has the right to complete the task which is the subject of his contract. There is no common law right to suspend either an employee or a contractor. Either could sue for damages for breach of contract.

187. If a subcontractor is engaged not for a job but by the hour, then the principal can, in the absence of any specially agreed or implied terms, conclude the contract at any time and pay only for hours actually worked.

188. Troubleshooters makes it clear to its builder clients that, if they are dissatisfied with the work of a Troubleshooters man, they may send him from the site and a replacement will be provided as soon as possible. If this occurs, Troubleshooters will have to hear both sides of the story before deciding

(a) whether to pay the man for the whole day

or for the hours worked;

(b) whether to keep him on their books; and

(c) whether to invoice the builder for the

time actually worked, or for a six hours

minimum payment if it appears that a

foreman or supervisor has acted unreasonably.

189. Since each contract for the supply of labour is understood by all concerned to be on a day by day basis, and since it can obviously be terminated during a day by either the builder or the worker for good reason, there is no assistance to be gained for present purpose by considering other theoretical possibilities.

190. There is clearly no right in a builder to suspend a worker, and since Troubleshooters is not obliged to find work for any particular person registered with it , and that person is not obliged to hold himself available for Troubleshooters, the concept of suspension by Troubleshooters would be meaningless.

191. I do not derive any assistance from this indicator.

(f) Provision of equipment, materials and protective clothing

192. There are some cases in which the provision of equipment will be decisive, because on a proper analysis it is seen that the contract really concerns the hire of that equipment, and the work of the operator is incidental to that hiring. As Dixon J said in Humberstone v Northern Timber Mills [1949] HCA 49; (1949) 79 CLR 389 at 404,

"In the present case the contract by the

deceased was to provide not merely his own

labour but the use of heavy mechanical

transport, driven by power, which he

maintained and fuelled for the purpose. The

most important part of the work to be

performed by his own labour consisted in the

operation of his own motor truck and the

essential part of the service for which the

respondents contracted was the transportation

of their goods by the mechanical means he thus

supplied. The essence of a contract of

service is the supply of the work and skill of

a man. But the emphasis in the case of the

present contract is upon mechanical traction.

This was to be done by his own property in his

own possession and control. There is no

ground for imputing to the parties a common

intention that in all the management and

control of his own vehicle, in all the ways in

which he used it for the purpose of carrying

their goods, he should be subject to the

commands of the respondents".

193. None of the Troubleshooters men who gave evidence supplied machinery in the same way as Mr Humberstone. But some significant equipment was provided by tradesmen, and this is clearly a matter to be taken into account. In the case of labourers, where equipment is not usually required, the supply of protective clothing may provide a straw in the wind.

194. The evidence showed that practice in the industry is by no means uniform, but it can generally be said that an independent contractor will supply his own light equipment and protective clothing. He may also supply materials, but this will depend upon the particular contract. Thus when a bricklayer quotes for a job, he may or may not be asked to include in his quotation the cost of the bricks and other materials. Generally speaking, he will not be asked to do so in smaller contracts. The larger the contracting firm, the more likely it is to be asked to quote for both labour and materials.

195. On the other hand, an employed tradesman will normally only provide his hand tools, and the employer will provide protective clothing such as boots and overalls. Generally a builder will provide hard hats for all workers on the site, as well as for visitors, but some independent contractors may prefer to carry their own.

196. It is convenient to look at each trade in a little more detail. So far as carpentry is concerned, I am satisfied that, while all carpenters carry their own manual tools there is no requirement for an employee carpenter to provide any power tools at all. On the other hand independent contractors are, in most cases, expected to supply smaller power tools, up to the level of drop saws or their equivalent in some cases, but in all cases electric hand saws, drills and planers. They all use a vehicle of some sort - perhaps a utility truck or a trailer - to carry their equipment from one site to another. Mr Robinson estimated the value of his tool kit as being over $5,000.00. He said that he would not often use equipment provided by the builder. Mr Buckingham said that about 95% of the time he would just use his own tools, not those larger ones which could be obtained from the builder. Other carpenters who have worked through Troubleshooters gave evidence to similar effect. By way of contrast, the secretary of the BWIU, Mr Henderson, said that when he was working on wages he would very rarely use his own tools, because that would be frowned on by other workers. Like every carpenter, he owned a power saw, electric planer and electric drill; but it was contrary to principle for an employee to use his own tools. When he worked on his own account Mr Henderson provided, as well as hand tools, such things as scaffolding, sanders, nail guns, rip saws, ladders and a drop saw.

197. Mr Hardwick said his company expected its employees to have all their own hand tools, including chisels, saws, planes and levels, but not power tools. Most carpenters in fact have electric drills, saw and plane; if they have occasion to use them on a job they would be paid for doing so.

198. The evidence has left me in no doubt that the supply of a range of power tools is the hallmark of the self-employed carpenter, and that the Troubleshooters men regularly provide such power tools when they go on a building site. It seems that there are some builders who provide power tools both for their own employees and for the use of contractors, but this is not the normal practice - except, of course, in the case of heavy equipment.

199. In the case of bricklayers, Mr Giles said that a smaller contractor would have a mixer, mortar boards, such things as buckets and shovels, some scaffolding and a levelling instrument. He could also own his own brick-cutting machine, costing about $2000 with a $400 blade. Larger contractors would have a number of mixers and brick-cutting machines. Mr Burmeister, who had managed a large bricklaying firm, added forklifts and trucks in the case of larger firms.

200. Mr Chazikantis, the only bricklayer employed by Troubleshooters who gave evidence, is able to supply his own cement mixer, scaffold tubing, planks, mortar boards, a grinder, and a wet saw. However, contrary to the general trend of the evidence, he said that when he is working on an hourly rate, he generally provides only his hand tools.

201. On the other hand Mr Peter, who is a boilermaker and welder, gave evidence that when working through Troubleshooters he uses the same range of equipment as he does when doing his own private work as a contractor. This equipment includes an oxy-acetylene set with long hoses, a welder with long leads, grinders, and a pipe bender. Occasionally a builder will provide some or all of this equipment, but Mr Peter regards himself as obliged to have it available for each job. I am satisfied, on the whole of the evidence, that the picture painted for carpenters and for Mr Peter as a boilermaker and welder is typical of the tradesmen who work through Troubleshooters. Mr Chazikantis, in my view, represents the exception that tests the rule.

202. So far as labourers are concerned, although they may at times make use of their own hammer or some other piece of equipment which they have available to them, they will normally use only tools and equipment provided by the builder. One reason for this lies in the varied nature of the work which they may be given to do and the difficulty of predicting what may be required. This makes it impossible to draw any distinction on this score between the Troubleshooters men and labourers employed by builders on wages.

203. However I am satisfied that a distinction can be drawn when it comes to protective clothing. Frequently a wages employee will have all his protective clothing, such as jackets and boots, provided by the employer. This is often included in a particular site agreement.

"... all they get is what is written into the

particular site agreement... normally it is

one bluey coat, two pairs of overalls, a pair

of safety boots. We would also supply outside

of that gumboots, wet weather gear, safety

goggles, helmets."

204. But the evidence discloses that labourers supplied by Troubleshooters will regularly provide their own protective clothing. Thus Mr Rask has always supplied his own jacket, boots, and gloves. He also has his own helmet, although quite often a builder will provide one for him. On only one occasion has a builder provided him with boots and a jacket. This occurred pursuant to a local site arrangement after he had been on the same job for three or four weeks.

205. Mr Witham provided his own protective clothing on the site about which he was questioned.

206. Mr Joyce had been employed to do angle grinding on several sites and for this purpose he had his own protective glasses and ear muffs, but found in practice that they were always supplied by the employer. Mr Joyce also has his own jacket, boots and hard hat but said that some of the larger building sites did make clothing issues.

207. Amongst the employer representatives who gave evidence, Mr Byrne said that Leonard Constructions supplies protective clothing to its own employees but labourers obtained through Troubleshooters provide their own. Mr Bell said that Truman supplied protective clothing to its own employees at the Beaumaris Hotel site, which was the one in question in the present case. The gear provided consisted of clothing, boots, gloves, hard hats and, where necessary, glasses. The company did not provide any of that gear to labourers employed through Troubleshooters. Mr Abblitt said that Bowden Fraser supplies work clothes, including jackets and safety boots, to its own employees but not to men engaged through Troubleshooters. It does however provide hard hats for all workers on site, as required by the Department of Labour. Other employer evidence was to the same effect.

208. On the subject of materials, there was evidence that subcontractors who quote a price for a job will quite often be asked to include the cost of some materials in that quote. It is obviously not appropriate to do so when work is paid for at an hourly rate. The significance of that difference in method of payment is dealt with next.

209. Before leaving this topic, I note that, in considering the general question whether a worker is an employee or an independent contractor, one special situation which should be recognised is that where machines and men are hired together. Examples of this in the building industry include hiring of cranes, concrete mixers, backhoes and bulldozers. In the case of backhoes and bulldozers these will usually be hired at an hourly rate, which covers both machine and driver. Cranes will also be hired on the same basis, with a crew of several men included in the price. Concrete mixers will usually be paid for at a rate per cubic metre, covering equipment, materials and working crew.

210. Where a man and machine are hired together at an hourly rate, that method of payment tells little about the relationship between the man and the hirer. The fact that the man supplies equipment suggests that he may well be an independent contractor, but other circumstances may produce the result that he is found to be an employee; see the TWU Election Case, above.

(g) Method of remuneration - hourly rate, overtime payments and site allowances.

211. It is clear that a person may be paid by commission, or for piece-work, or otherwise by results, without this fact assisting much in determining if he or she is an employee; see Stephen J in Federal Commissioner of Taxation v Barrett [1973] HCA 49; (1973) 129 CLR 395 at 405-6. In Sadler v Henlock [1855] EngR 106; (1855) 4 E&B 570 at 578, which was cited by Stephen J with apparent approval, Crompton J said,

"The test here is, whether the defendant

retained the power of controlling the work.

No distinction can be drawn from the

circumstance of the man being employed at so

much a day or by the job".

212. However, that case concerned an ordinary labourer, called in to dig a ditch and paid five shillings for his work. And in Barrett's case there were strong indications that the contract was really one of service. I believe that there are cases where the quotation of a price for a job will clearly establish an independent contract, and other cases where the payment of an hourly or daily rate points strongly towards a contract of employment.

213. In the case of the building industry, Mr McDonald said that, in his opinion, the second important test of an independent contractor was whether there was "a genuine tendering arrangement", involving inspection of plans and specifications, inspection of the job, and arrival at contract terms and a price. There was evidence of other views to the same effect.

214. On the other hand, a good deal of evidence was given as to the prevalence of hourly rates of pay for independent contractors. In the light of all that evidence, I am satisfied that the usual method of remuneration for independent contractors is payment of a contract price which has been quoted by the contractor (based on plans and specifications, estimations and bills of quantity, or his own calculations) and accepted by the builder - or sometimes, in the case of standardised work, stated by the builder and accepted by the contractor.

215. However I am also satisfied that exceptions are not uncommon. This is particularly true where the work involved is renovation rather than new building. Uncertainties as to what work may prove to be necessary after a partial demolition will often lead to the fixing of hourly rates rather than agreement on a fixed price. Hourly rates may also be used on jobs that are particularly intricate and so hard to estimate and on other jobs where site problems, such as difficult approaches or muddy areas, are likely to cause delays which are difficult to predict. It is also common in the industry for variations to be charged for at hourly rates even though the basic contract is for a fixed price. Thus, as Mr Henderson conceded, many building contracts make some reference to hourly rates. This was confirmed by other witnesses, such as Mr Hardwick, who said that most tenders his company submitted were required to state an hourly rate to cover variations to the contract.

216. As would be expected, there was also evidence that hourly rates are used by some builders for small jobs on which they use a tradesman whom they know and trust. This is known in the trade as "do and charge".

217. Of the Troubleshooters men who gave evidence, Mr Buckingham had recently done some framing work, arranged by private contract, at a price of $18.00 per hour. He has also worked for a builder on a commercial site at an hourly rate. Mr Chazikantis normally works on an hourly rate, even on work he has contracted for privately. He said that some 70% of his work is paid for on that basis. Mr Peter normally charges $18.00 per hour for his work done locally for private clients. He was also paid an hourly rate when he worked for some time as a subcontractor to a firm called Riffin Constructions.

218. Mr Henderson, in his evidence, relied heavily upon the use of an hourly rate, as distinct from quoting a price for the job, in arriving at his firm conviction that Troubleshooters men are employees.

219. After agreeing that some facets of renovation work justify hourly rates, because they are hard to price, Mr Henderson was asked in cross-examination,

"Will you accept that a sub-contractor

might take on a fairly large renovation, by

that I mean something that would perhaps

occupy a carpenter for 3 or 4 weeks at a time

and work on hourly rates?"

"It would happen; I do not know that I

would accept it."

"...by and large I would say that if he did it

for more than a week he would have to be

regarded as an employee of somebody".

220. Later, speaking about Mr Chazikantis, who often does domestic bricklaying on his own account at an hourly rate, rather than per thousand bricks, Mr Henderson said,

"...on some occasions I had no difficulty with

him being a contractor, but...the times he

said he priced on all hourly rates. I had

some difficulty within my mind about that."

221. Asked if it would have made any difference if Mr Chazikantis had been sent to a householder by Troubleshooters, Mr Henderson said he believed that would have made him an employee of Troubleshooters "if he is going there on an hourly rate at their behest; that is the way I view it".

222. However, when sent by Troubleshooters to the London Tavern site, that made Mr Chazikantis, in Mr Henderson's opinion, probably an employee of the builder, Leonard Constructions, because that company directed him in his work in a way that a householder could not.

223. But if Mr Chazikantis had charged Leonard Constructions per thousand bricks laid, he would have been "more likely to be a sub-contractor", though other factors such as long-service leave entitlements would still have had to be taken into account in making that decision.

224. Mr McDonald also laid stress upon the nature of the arrangements for payment as a guide to whether a worker is an independent contractor or not. He said that you look for the value of labour, overheads and profit as the three main elements in the fixing of a price. He referred to the need for a proper inspection before arriving at a price, and provision in the contract for progress payments and retention money.

225. The fact that an independent contractor accepts responsibility for the quality of his work is certainly highlighted by the practice of the builder retaining part of the contract price until some time after the work has been completed. These retention moneys will normally be paid after the work had been passed by an architect, building inspector or supervisor.

226. Mr Giles said that VSBTU members who are subcontracting bricklayers normally quote for their work either in a lump sum or as a rate for 1000 bricks (or 100 blocks). In these ways, allowance is made for business expenses (such as truck replacements) overheads and profits. Hourly rates may be agreed to where there is an unknown quantity in the job, as with some instances of renovation or alteration.

227. Mr Giles made the interesting observation that where builders employ men on wages rather than subcontracting to them, "production drops by half". This is because "they have not got a contractor organising them and pushing them along to get the job done". It is "up to the skill of the contractor to produce work out of his members....If they do not perform they get the sack."

228. I note in passing that this last sentence paints a rather different picture from that given by a builder called on behalf of the respondents. Mr Conwell said that, in practice, the only grounds upon which a worker in the industry can be sacked are theft and assault. Incompetence, laziness, insolence and even drunkeness will not suffice, at least unless a number of warnings have been given.

229. Having considered all the evidence on this issue it is my opinion that the remuneration of Troubleshooters men at an hourly rate is probably the strongest indication that they may well be employees rather than independent contractors. However the point is by no means conclusive and must be considered along with all the other relevant indicia.

230. Generally speaking, the men employed through Troubleshooters work the same site hours as all other workers on the job whether they be employees or independent contractors. The only difference is that an independent contractor who has quoted a price for the job is theoretically free to start and stop when he pleases within the range of normal working hours. The same would be true of a contractor who has quoted an hourly rate for a particular task. In each case it would be expected, of course, that the contractor would fit in with any other trades working in the same area and observe the reasonable requirements of supervisors.

231. In fact the freedom to come and go at will is probably rather illusory. Thus, speaking of his members who subcontracted their bricklaying, Mr Giles said,

"In the real world every builder who

engages you to do a job, he expects you to be

on site early in the morning and put in a full

8 hours. He wants his job finished".

"Contractors...normally start fairly

early and they usually put in...from 8 to 9

hours".

233. Mr Conwell, the director of a construction management company, asked what control he had over subcontractors' hours of work, said,

"We would tie them down contractually wherever

we could on the basis that they had to meet

our programme, and so we would demand that

they worked whatever hours were necessary to

meet that programme. That does not always

work but that is the intention."

234. Of course Troubleshooters men are engaged not for a particular task but for an indefinite time, although the builder will have particular tasks in mind. These are usually only conveyed to the worker when he arrives at the site.

235. Thus, although it may be accepted that in some cases Troubleshooters men may work, by arrangement, less than the normal site hours, the general requirement to work 8 hours each day does tend to differentiate them from some contractors who have quoted a price for a job, particularly those working on smaller jobs which are less strictly controlled by the builder.

236. However, all self-employed workers are likely to work the full hours available in order to maximise their incomes. This is true whether they are paid by the hour or have quoted a price for the job. On the other hand, wages employees, who are paid on a weekly basis, will attend at the work site because they are required to do so by their contract of employment, not because of any incentive to work the full number of ordinary hours. Even if the employee works only six hours on a given day he will be paid as if he has worked eight. The Troubleshooters man who works only six hours will be paid only for six hours.

237. The fact that Troubleshooters men receive additional pay (time-and-a-half) for working more than eight hours in a day is, in my view, another argument for regarding them as employees rather than independent contractors. However the agreed rate is not the same as that to which an employee is entitled pursuant to relevant awards, because they provide for double time after the first two hours, whereas Troubleshooters men remain at time and a half however much overtime they work. Another, more significant, difference is that employees may be required to work reasonable overtime whereas, in the case of Troubleshooters men, they always have a choice whether or not to accept the overtime work.

238. Troubleshooters workers will normally be paid time-and-a-half for any work on Saturdays, whereas wages employees are entitled to double time after the first two hours. Sunday work is not common for Troubleshooters men and, if it occurs, it is usually paid for at double time; but there have been instances, on smaller jobs, where men have worked for less than these prescribed rates on Saturdays and Sundays. They will, of course, only do so if it suits them.

239. Site allowances are usually negotiated with the relevant unions and apply to all workers. They would normally be paid both to employees and to subcontractors charging an hourly rate. Subcontractors who have quoted a fixed price may also require an additional payment of site allowance as part of their contract.

240. The payment of a wet weather allowance to Troubleshooters workers is also of some significance. This payment of a minimum amount when work is prevented or cut short by wet weather is more appropriate to an employment situation than to a contractual arrangement. However, in my view, all these incidents of overtime, site allowances and wet weather allowances arise from the circumstance that the basic rate of pay is on an hourly basis. They are all natural adjuncts to that method of payment and really add nothing to it as an indicator of the existence of an employer and employee relationship. Once it is conceded that a contractor does not have to give a fixed quote for a job and take all the risks involved, but may prefer to contract at a rate for the number of hours worked or for units of work performed (as in the case of a bricklayer who quotes for the laying of so many thousand bricks) these other factors cease to play any significant role in discriminating between an employee and an independent contractor.

(h) Entitlement to annual leave, sick leave, long service

241. It is clear that none of these employment advantages, which apply to employees generally, are available to men who work through Troubleshooters. They must accept that if they take any form of leave their income ceases, and if they wish to be covered against the possibility of illness or accident which prevents them from working, then they must take out their own insurance. This is made clear to all Troubleshooters men when they are first interviewed, and they sign a document indicating their willingness to accept such terms if employment is offered to them.

242. The absence of these normal incidents of employment would not in all cases be persuasive in favour of a finding that the workers concerned were independent contractors. One could well imagine a case in which economic necessity had forced men into a position where they would agree to forgo some of their entitlements. However it is clear in the present case that no such constraints apply. I am satisfied that all those who gave evidence worked through Troubleshooters because they preferred to do so, and they sacrificed sick leave, annual leave and insurance entitlements because that was the necessary price which they paid for being free to work or not to work each day as they chose, and to maintain control over the work which they agreed to do from time to time.

243. So far as long service leave is concerned, the Troubleshooters men receive no contribution from the builders to whom they are allocated from time to time, but they make their own provision, if they choose to do so, under the statutory scheme for working subcontractors. Section 22 of the Construction Industry Long Service Leave Act 1983 (Victoria) provides for a register of "working subcontractors" who are defined in section 3 (1) of the Act as

"(a) a person who, whether or not -

(i) he is an employer; or

(ii) he is in partnership with another

person - performs work for fee or reward

under a contract for labour only, or

substantially only; or

(b) a person, not being an employer, who

performs electrical trades work or metal

trades work for fee or reward..."

It is of course significant that the legislation recognises the existence of persons who are subcontractors and who are specifically contrasted with persons working under a contract of employment, but who do their work under a contract entirely or substantially for labour only.

244. The fact that the applicant tries to persuade its workers also to take out worker membership of the long service leave scheme does not, in my view, assist in determining their status. It is clear that this requirement is in order to deceive union officials into believing that men working through Troubleshooters are in fact ordinary employees of the builder.

245. As I have said earlier, tradesmen who work through Troubleshooters have to maintain a significant level of equipment, to the value of some thousands of dollars, in the nature of power tools. It will also be necessary for them to maintain a work vehicle of some sort to carry that equipment from one site to another. In addition, all workers who work through Troubleshooters will normally carry their own sickness and accident insurance. These, together with the provision of their own protective clothing, are the main features which distinguish them from employees in the building industry, so far as expenditure is concerned. This is not a significant indicator in the present case. Much larger expenditure on a truck was recently held not to be as significant today as it was forty years ago, when Humberstone (above) was decided; see the TWU Election Case, above. The same could be said of the ownership of power tools.

246. Workers who gain their employment through Troubleshooters invariably pay PPS tax, which is deducted by Troubleshooters and remitted to the taxation office (in amounts up to $150,000 each month), and not the PAYE payments which are deducted by employers and made by employees generally. The taxation department has accepted that PPS payments are appropriate for Troubleshooters men, and it checks Troubleshooters books twice a year, but, apart from noting the consistency in the approach of Troubleshooters and its workers, I do not believe that this is a significant factor in determining their true status. It flows directly from Troubleshooters' designation of its workers as subcontractors.

247. Troubleshooters men all lodge either a self-employed person's tax return or a partnership or company tax return, as appropriate. They claim their various expenses as tax deductions and are required to substantiate those expenses. On the other hand, the BWIU has an arrangement with the Commissioner of Taxation whereby employees may claim a fixed amount per day for fares and travelling, and another fixed amount for a meal, without having to substantiate either claim.

248. I do not regard the contributions made by Troubleshooters to the union superannuation scheme as any evidence of an employer and employee relationship between Troubleshooters and the workers. It is clear that the membership of the scheme is designed to deceive union officials as to the status of the workers concerned and that the arrangement whereby Troubleshooters pays an availability allowance, and then deducts the same amount by way of superannuation payment, is a mere device to support the deception. The same is true of the use by Troubleshooters of artificial companies to act as nominal employers of the workers for the purposes of the scheme.

249. In the result, membership of the scheme does amount to a valuable additional benefit for Troubleshooters men, but I do not find it helpful in determining whether they are employees or independent contractors.

250. The same comment may be made about the fact that all Troubleshooters men belong to their respective unions. As has already been noted, this is a requirement of the industry, which applies even to those who are unarguably subcontractors but who work on a building site.

251. The only exception is the agreement reached between the MBA, HIA and BWIU (the evidence did not indicate whether other unions were involved) that members of the MBA or HIA, working on site on their own behalf, need not join the union. But if they are working for another contractor, they must join.

8. THE RELATIONSHIP BETWEEN TROUBLESHOOTERS AND ITS WORKERS

252. It is argued for the respondents that the men who obtain work through Troubleshooters should be regarded as its employees. It is true that this argument is not put as forcefully as the alternative argument that Troubleshooters men are employed by the builders to whom they are sent. However the respondents (particularly the VSBTU, through its general secretary, Mr Giles) press this first argument and I now proceed to deal with it.

253. 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.

254. However it is clear that the arrangements which Troubleshooters makes with its workers are very different form 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.

255. 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.

256. 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.

257. 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.

258. 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.

259. In reaching this conclusion I am encouraged by a recent decision of the Full Court of the Supreme Court of Victoria concerning the applicant. In Odco Pty Ltd v Accident Compensation Commission (16 June 1989, unreported) the Court said,

"In his reasons for judgment (the trial

judge) held that whatever be the nature of the

relationship between (Troubleshooters) and the

(workers), it did not amount to a contract of

service at common law. As his Honour pointed

out - the arrangements lacked the element of

control over the employees work which must be

present in some form or degree in every

contract of service. His Honour's conclusion

in that regard is clearly correct, and as it

has not been challenged before this Court need

not be the subject of further consideration".

260. The Court then went on to find that Troubleshooters men do not fall within the extended meaning of 'worker' in the Accident Compensation Act 1985 (Vic) and, accordingly, no workcare levy was payable by the present applicant in relation to those men - as distinct from its own office staff.

261. However, as counsel for the respondents point out, the common law question concerning a contract of service was not argued by the Commission before the trial judge, and the evidence of the nature of work done by Troubleshooters men was much more limited than the evidence before me. Accordingly I treat the Full Court's words as tending to confirm the view I have otherwise reached, rather than as authority for that view.

9. THE RELATIONSHIP BETWEEN TROUBLESHOOTERS MEN AND THE

262. If I am right in the conclusion I expressed in section 6 above, headed 'Analysis of Contractual Relationships', that there is no contract at all between Troubleshooters workers and the builders, there can clearly be no employer/employee relationship between them. I note in passing that, because the workers are not selected by the builders and work for them only on finite tasks, the present case is clearly distinguishable from cases such as Howard v Wilson [1832] EngR 153; (1832) 4 Hagg Ecc 107, 162 ER 1387 and Willett v Boote [1860] EngR 922; (1860) 6 H & N 26, 158 ER 11, where the payment of wages by an intermediary did not prevent a master and servant relationship being created. Nevertheless I now consider the situation on the opposite assumption that contracts of some sort do come into existence between Troubleshooters workers and the builders to whom they are sent.

263. The respondents' primary contention is that Troubleshooters acts as the agent of both builders and workers, and when it brings them together the result is an employer and employee relationship. In my view the strongest indicator in favour of such a relationship is that Troubleshooters men do not quote a price for a job but are invariably paid an hourly rate, which is fixed in advance by Troubleshooters, without regard to the precise nature of the work the men will be asked to do. In this way the element of risk, on the part of the worker, is removed from the contract. The builder does not know at the outset of the task what the price to him will be.

264. On the other hand, it is clear that working for an hourly rate is not uncommon in the building industry - or indeed in other industries - even though the worker concerned may quite obviously be an independent contractor who is accepted as such by both parties to the contract, and over whom no significant control is exercised as he carries out his tasks.

265. It is the common acceptance by both worker and builder that the relationship between them is not one of employer and employee which most strongly leads me to the conclusion that no such relationship is created. There is no suggestion in the evidence before me of any type of coercion, either economic or otherwise, which would lead either party to pretend an independent relationship which was contrary to their real understanding or intentions. I believe that, in the circumstances which apply when a builder seeks a worker through Troubleshooters, each of them genuinely sees it as being in his own interest that they should maintain the type of arms-length relationship which applies in the case of an independent contractor, rather than the interdependent relationship which characterises the employer and employee.

266. Thus the builder simply wants to get a particular job done. He does not want to take more employees on to his pay-roll, with all the obligations to them which that would bring about. In return, he accepts that he will not have the same level of control, or assurance of continuity, which he would obtain if he were to engage an employee.

267. For his part, the worker accepts that he will have to provide his own protective clothing and, in the case of the tradesman, power tools. Also, he will not have the same protection by way of accident insurance or sick leave benefits, nor the same provision for annual leave, which he would enjoy if he were prepared to accept the restrictions of full-time employment. It suits his particular work style to sacrifice those benefits for the greater freedom to choose the work that he does on a day-to-day basis. This freedom to choose each day whether to work or not, and to refuse overtime work, is a significant indicator of independence rather than employee status. It tends to counter-balance the receipt of an hourly rate of pay.

268. As I have already indicated, I do not find the test of the legal authority to control the worker to be very helpful for present purposes. This is mainly because such a fine line exists between the types of control exercised by supervisors over employees on a building site and over persons who are on the site, quite clearly, as subcontractors, but are paid an hourly rate.

269. In the final analysis, I find the genuine intention of all parties, as expressed in contractual documents and in their conduct, to be more persuasive than any of the other indicia which I have dealt with above. I think "the degree of independence overall is sufficient to establish" that Troubleshooters workers are not employees; see Wilson and Dawson JJ in Stevens v Brodribb, above, at 35.

270. Accordingly I find that when Troubleshooters men, whether they be supervisors, tradesmen or labourers, are engaged to work for a builder at a particular site, they do so as independent contractors and not as employees; and their contracts are with Troubleshooters, not the builder.

271. It is against the background of this finding that the conduct of the respondents at a number of sites where Troubleshooters men were working falls to be considered. But before coming to the series of actions by the respondents which the applicant alleges to be in breach of the law, it is convenient to consider those laws which are said to have been broken.

10. THE TRADE PRACTICES ACT 1974

272. The relevant sections of the Act, for present purposes, are ss 45D, 45E, 75B, 80, 82 and 84. The relevant parts of these sections read as follows:

45D (1) Subject to this section, a person shall not, in

concert with a second person, engage in conduct that hinders

or prevents.....the acquisition of goods or services by a

third person from a fourth person (not being an employer of

the first-mentioned person), where-

(a) ....

(b) the fourth person is a corporation and the

conduct is engaged in for the purpose, and

would have or be likely to have the effect, of

causing-

(i) substantial loss or damage to the

business of the fourth person or of a

body corporate that is related to that

person;

or

(ii)....

(2) ...... a person shall be deemed to engage in

conduct for a purpose mentioned in (sub-section 1) if he

engages in that conduct for purposes that include that

purpose.

45E (1) Subject to this section, a person who has been

accustomed, or is under an obligation,.....to acquire goods

or services from, a second person shall not make a contract

or arrangement, or arrive at an understanding, with a third

person (being an organization of employees, an officer of

such an organization, or another person acting for or on

behalf of such an organization or officer) if the proposed

contract, arrangement or understanding contains a provision

that-

(a) has the purpose of preventing or hindering the

first-mentioned person....from acquiring or

continuing to acquire any such goods or

services from the second person;

(b) .....

(3) In a case where the person first mentioned in

sub-section (1) is not a corporation, that sub-section

applies only if the second person mentioned in that

sub-section is a corporation.

75B A reference in this Part to a person involved in a

contravention of a provision of Part IV or V shall be read as

a reference to a person who -

(a) has aided, abetted, counselled or procured the

contravention;

(b) has induced, whether by threats or promises or

otherwise, the contravention;

(c) has been in any way, directly or indirectly,

knowingly concerned in, or party to, the

contravention.....

80 (1) Subject to sub-sections (1A) and (1B),

where, on the application of the Minister, the Commission or

any other person, the Court is satisfied that a person has

engaged, or is proposing to engage, in conduct that

constitutes or would constitute-

(a) a contravention of a provision of Part IV or

V;

(b) attempting to contravene such a provision;

(c) aiding, abetting, counselling or procuring a

person to contravene such a provision;

(d) inducing, or attempting to induce, whether by

threats, promises or otherwise, a person to

contravene such a provision;

(e) being in any way, directly or indirectly,

knowingly concerned in, or party to, the

contravention by a person of such a provision;

or

(f) conspiring with others to contravene such a

provision,

the Court may grant an injunction in such terms as the Court

determines to be appropriate.

(4) The power of the Court to grant an injunction

restraining a person from engaging in conduct may be

exercised-

(a) whether or not it appears to the Court that

the person intends to engage again, or to

continue to engage, in conduct of that kind;

(b) whether or not the person had previously

engaged in conduct of that kind; and

(c) whether or not there is an imminent danger of

substantial damage to any person if the

first-mentioned person engages in conduct of

that kind.

82. (1) A person who suffers loss or damage by conduct of

another person that was done in contravention of a provision

of Part IV or V may recover the amount of the loss or damage

by action against that other person or against any person

involved in the contravention.

84. (1) .....

(2) Any conduct engaged in on behalf of a body

corporate-

(a) by a director, servant or agent of the body

corporate within the scope of the person's

actual or apparent authority; or

(b) by any other person at the direction or with

the consent or agreement (whether express or

implied) of a director, servant or agent of

the body corporate, where the giving of the

direction, consent or agreement is within the

scope of the actual or apparent authority of

the director, servant or agent,

shall be deemed, for the purposes of this Act, to have been

engaged in also by the body corporate."

273. So far as s 45D is concerned, in the way in which the case is put for the applicant,

The first person is each of the remaining

respondents;

The "second person" is each other of the

remaining respondents, other union officials

and other union members;

The "third person" is the applicant's client

builder in the case in question;

The "fourth person" is the applicant;

The conduct complained of is preventing or

hindering the client builder from acquiring

services from the applicant.

274. In the case of s 45E, the first person is the applicant's client builder; the "second person" is the applicant; and the "third person" is each of the remaining respondents.

275. The applicant, in its Final Amended Statement of Claim, dated 9 February 1989, alleges that, by threatening industrial action if the Troubleshooters men remained on site, the respondents acted in concert on four named building sites - London Tavern, Beaumaris Hotel, 181 Chapel Street and John Street, Brunswick - for the purpose of inducing the builder in each case to cease acquiring labour agency services from the applicant, and for the further purpose of causing substantial loss or damage to the applicant's business.

276. The applicant further alleges that the respondents were successful, in the case of three of the sites, in inducing the builder to terminate the services which the applicant supplied, thus causing it substantial loss and damage. In the case of the fourth site, John Street, Brunswick, the respondents would have succeeded in their aims had it not been for interlocutory injunctions granted by this Court.

277. The applicant further alleges that the first and fourth respondents intend, in concert with the other respondents and each other, to maintain their underlying policy of not permitting the applicant to operate its present system of labour hire in the Victorian building industry, and to do so by using the same tactics on building sites as they did on the four named sites. They instance, by way of example, more recent events at the College of the Bible site in Mulgrave.

278. In addition, the applicant alleges against the respondents the common law wrong of inducement to breach of contract, relying upon the same facts as would establish, if fully proved, breaches of ss 45D and 45E of the Trade Practices Act 1974.

279. They rely upon the often-cited statement of the law on this point by Lord Denning MR in Torquay Hotel Co Ltd v Cousins (1969) 2 Ch 106 at 138-9. His Lordship said,

"The principle of Lumley v Gye (1853) 2 E & B

216 is that each of the parties to a contract

has a "right to the performance" of it: and

it is wrong for another to procure one of the

parties to break it or not to perform it.

That principle was extended a step further by

Lord Macnaghten in Quinn v Leathem (1901) AC

495, so that each of the parties has a right

to have his "contractual relations" with the

other duly observed. "It is," he said at p

510, "a violation of legal right to interfere

with contractual relations recognised by law

if there be no sufficient justification for

the interference." That statement was adopted

and applied by a strong board of the Privy

Council in Jasperson v Dominion Tobacco Co

(1923) AC 709. It included Viscount Haldane

and Lord Sumner. The time has come when the

principle should be further extended to cover

"deliberate and direct interference with the

execution of a contract without that causing

any breach." That was a point left open by

Lord Reid in Stratford (J.T.) & Son Ltd v

Lindley (1965) AC 269, 324. But the common

law would be seriously deficient if it did not

condemn such interference. It is this very

case. The principle can be subdivided into

three elements:

First, there must be interference in the

execution of a contract. The interference is

not contined to the procurement of a breach of

contract. It extends to a case where a third

person prevents or hinders one party from

performing his contract, even though it be not

a breach.

Second, the interference must be

deliberate. The person must know of the

contract or, at any rate, turn a blind eye to

it and intend to interfere with it: see

Emerald Construction Co v Lowthian (1966) 1

WLR 691.

Third,the interference must be direct.

Indirect interference will not do. Thus, a

man who "corners the market" in a commodity

may well know that it may prevent others from

performing their contracts, but he is not

liable to an action for so doing. A trade

union official, who calls a strike on proper

notice, may well know that it will prevent the

employers from performing their contracts to

deliver goods, but he is not liable in damages

for calling it. Indirect interference is only

unlawful if unlawful means are used. I went

too far when I said in Daily Mirror Newspapers

Ltd v Gardner (1968) 2 QB 762, 782 that there

was no difference between direct and indirect

interference. On reading once again Thomson

(D.C.) & Co Ltd v Deakin (1952) Ch 646, with

more time, I find there is a difference.

Morris L.J., at p 702, there draws the very

distinction between "direct persuasion to

breach of contract" which is unlawful in

itself: and "the intentional bringing about

of a breach by indirect methods involving

wrong-doing." This distinction must be

maintained, else we should take away the right

to strike altogether. Nearly every trade

union official who calls a strike-even on due

notice, as in Morgan v Fry (1968) 2 QB 710-

knows that it may prevent the employers from

performing their contracts. He may be taken

even to intend it. Yet no one has supposed

hitherto that it was unlawful: and we should

not render it unlawful today. A trade union

official is only in the wrong when he procures

a contracting party directly to break his

contract, or when he does it indirectly by

unlawful means. On reconsideration of the

Daily Mirror case (1968) 2 QB 762, I think

that the defendants there interfered directly

by getting the retailers as their agents to

approach the wholesalers.

I must say a word about unlawful means,

because that brings in another principle. I

have always understood that if one person

deliberately interferes with the trade or

business of another , and does so by unlawful

means, that is, by an act which he is not at

liberty to commit, then he is acting

unlawfully, even though he does not procure or

induce any actual breach of contract. If the

means are unlawful, that is enough. Thus in

Rookes v Barnard [1964] UKHL 1; (1964) AC 1129 (as explained

by Lord Reid in Stratford v Lindley (1965) AC

269, 325 and Lord Upjohn, at p 337) the

defendants interfered with the employment of

Rookes-and they did it by unlawful means,

namely, by intimidation of his employers- and

they were held to be acting unlawfully, even

though the employers committed no breach of

contract as they gave Rookes proper notice.

And in Stratford v Lindly (1965) AC 269, the

defendants interfered with the business of

Stratford-and they did it by unlawful means,

namely, by inducing the men to break their

contracts of employment by refusing to handle

the barges-and they were held to be acting

unlawfully, even in regard to new business of

Stratford which was not the subject of

contract. Lord Reid said, at p 324:

"The respondents' action made it

practically impossible for the appellants

to do any new business with the barge

hirers. It was not disputed that such

interference is tortious if any unlawful

means are employed."

So also on the second point in Daily Mirror v

Gardner (1968) 2 QB 762, the defendants

interfered with the business of the "Daily

Mirror"-and they did it by a collective

boycott which was held to be unlawful under

the Restrictive Trade Practices Act, 1956-and

they were held to be acting unlawfully.

This point about unlawful means is of

particular importance when a place is declared

"black." At common law it often involves the

use of unlawful means. Take the Imperial

Hotel. When it was declared "black," it meant

that the drivers of the tankers would not take

oil to the hotel. The drivers would thus be

induced to break their contracts of

employment. That would be unlawful at common

law. The only case in which "blacking" of

such a kind is lawful is when it is done "in

contemplation or furtherance of a trade

dispute." It is then protected by section 3

of the Trade Disputes Act, 1906: see Thomson

(D.C.) & Co Ltd v Deakin (1952) Ch 646, 662,

663 by Upjohn J; for, in that event, the act

of inducing a breach of contract of employment

is a lawful act which is not actionable at the

suit of anyone: see Stratford v Lindley (1965)

AC 269, 303 by Salmon LJ, and Morgan v Fry

(1968) 2 QB 710, 728 by myself. Seeing that

the act is lawful, it must, I think, be lawful

for the trade union officials to tell the

employers and their customers about it. And

this is so, even through it does mean that

those people are compelled to break their

commercial contracts."

280. It will be necessary to return later to the application of the above principles of statute and common law to the particular case, after the evidence of what happened at the sites in question has been considered. I note in passing that the summary of the statement of claim which I have set out in the previous section is a necessarily imperfect precis of a long and complex document. I believe that I have adequately stated the gist of it.

281. This job involved the substantial renovation of the Beaumaris Hotel in Beach Road, Beaumaris. The hotel was owned by the Pavilion Group, which also owned other hotels, and the contract for the renovations involved a cost of about $900,000. A firm called Truman Constructions Pty Ltd had been engaged as contract managers for a fee, and all the usual trades were employed on a subcontract basis. There was a requirement for labourers, particularly to carry out the demolition part of the contract and for site cleaning. The Pavilion Group provided a few labourers, but these proved to be inadequate, some of them being unreliable. Truman Constructions therefore arranged through Troubleshooters for two additional labourers to be employed. There was also a requirement, at a later time, for carpenters.

282. Troubleshooters men engaged to work on the site were Alastair Rask and John Stares, labourers, who both worked from 22 September 1987 to 6 November 1987, with the exception of a week ending 6 October 1987, and Bruce Yates, a carpenter, who worked at the site on 6 November 1987. An order had been placed the previous day for two carpenters, but only one was able to be supplied on 6 November. A further carpenter would have been provided for the next working day, 10 November.

283. Troubleshooters contracted with Truman Constructions which issued certificates for payment by the Pavilion Group.

284. The site manager for Truman Constructions was Mr Winston Bell and the site foreman was Mr Ian Wayth. Mr Wayth said in evidence that he found both Rask and Stares very reliable workmen and was able to trust them to do some quite responsible work, such as the erection of Acrow props to support the second level of the building when walls of the first level were being demolished, without close supervision. They were appreciably better than most of the Pavilion labourers.

285. In order to understand later events fully, it is necessary to provide some of the background to industrial disputes which had occurred on the site. These began on 25 August 1987 when a State Government inspector drew the attention of Mr William Oliver, a BWIU field adviser, to the fact that asbestos had been discovered on the site. Oliver went to the site and instructed the men working there to cease work while an approved sub-contractor was employed to remove the asbestos, taking all necessary health precautions. This was done, and work resumed on the site on about 7 September. Another problem which arose at about this time was the discovery that the Pavilion employees on site were not being paid all their award entitlements. In particular, it seems that the Pavilion Group was not making the contributions to the BUS scheme which it was obliged to do, nor was it making appropriate payments to the Long Service Leave Board in relation to its employees. When this situation was brought to the attention of Truman Constructions, Mr Bell eventually persuaded the directors of the Pavilion Group that they must make the necessary payments.

286. It was against this background that it came to the notice of Mr Oliver that there were some Troubleshooters men on the site. Mr Oliver gave evidence to the effect that this came to his notice in the course of a casual conversation with Rask and Stares, but I prefer the evidence of Mr Rask about the sequence of events on 6 November 1987. I found him to be an intelligent and, at most times, a straight-forward and reliable witness. There were a few occasions when I felt that he found it convenient not to remember matters. Mr Oliver was also quite a good witness, but some of his evidence was self-contradictory and at other times it was inherently unlikely to be accurate.

287. Before coming to Mr Rask's account, I should say that I accept the evidence of Mr Wayth that he had twice been asked by Mr Oliver, before 6 November, if there were any Troubleshooters men working on the site, and on each occasion he had denied it, although he knew that he was telling an untruth. He explained that, although he did not like having to lie, he had heard enough about the attitude of unions to Troubleshooters to make him believe that, if he admitted that their men were present on the site, it would lead to industrial trouble - particularly in view of the other difficulties which had recently occurred. Truman Constructions and the Pavilion Group were both particularly anxious to avoid any further industrial trouble because the job was coming towards its end, and the hotel owners were very keen to have the work finished in time for the heavy trading at Christmas time.

288. Mr Rask's account of the events of 6 November was as follows:

"When Mr Oliver came to the site, did he speak

to you?---Yes.

What did he say?---Initially he said: we are

going to have a meeting in the lunchroom. He

spoke to, I have got to recall this, to John

Stares and myself particularly, and there was

no one else - he took us up to the lunchroom

and said: Who do you work for? I said we

worked for - the name of the company was The

Pavilion. They were actually the company who

were at the hotel and that is who we were, and

he said: Are you sure you work for Pavilion?

I said yes, and he said: Look, I know you

work for Troubleshooters. I said: I do not

work for Troubleshooters, I work for Pavilion.

He said: Look, you might as well own up, we

know you work for Troubleshooters. At that

stage I admitted that I did work not for

Troubleshooters but through Troubleshooters,

and he said: We do not like you working - we

do not like people - I cannot remember the

exact words but they were to the effect that

we do not like people working as

subcontractors, you should be working on

wages. I think I said I did not want to work

on wages, I preferred to work as a

subcontractor, and he said: Well look, I will

have to go away and speak to Winston about

this. So he left. He said: You just wait

here, do not go back to work. We sat in the -

that was John Stares and myself - sat in the

lunchroom, I think it might have been half an

hour, three quarters of an hour, and Winston

came back and said: Look, I am offering you a

job on wages, will you work for me on wages?

I said: No, I do not want to work for wages,

I prefer to go on as I am, and he said - and

these - I do not remember these exact words:

Look, if you will not work for wages I will

have to put you off, I cannot fight the unions."

289. I think it reasonable to infer from Mr Rask's account, which I accept, that Oliver had some previous information that Troubleshooters labourers were employed on the site and this accounted for his pressing first of Mr Wayth and later of the labourers themselves for an admission that this was the case.

290. Having obtained the admission that he sought, and told Rask and Stares to stay in the lunch room, Mr Oliver gave evidence that he then spoke to Mr Wayth and said,

"You have got Troubleshooters there, you

had better contact Winston Bell and discuss

the Victorian Building Industry Agreement

about all-in payments".

291. Mr Wayth, who showed uncertainty about much of his evidence, though I felt he could be relied upon when he did commit himself, does not recall this discussion but remembers that his knowledge that the union was aware of Troubleshooters on the site prompted Mr Bell and himself to decide to get rid of Troubleshooters. He gave evidence that Rask came to see him and told him that he had admitted to Oliver that he had obtained his work through Troubleshooters and that the same applied to Stares. Wayth said that he reported this to Mr Bell.

292. Mr Bell's evidence is that Wayth telephoned him from the site and that, when he went there, Wayth told him that the union organiser had recognized Troubleshooters men. Bell said he then decided, in the interests of Truman's client, to terminate the Troubleshooters men. He was concerned about the site being closed down, preventing the job being finished before Christmas. The Christmas trade was obviously a matter of considerable importance to the owners of the hotel.

293. Mr Bell says further that he then spoke to the workers on the site. He told them that it was most likely they would have to leave or be terminated. Mr Bell said he had not had any threats made to him by Oliver; he acted on his own initiative in the light of his own knowledge of the industry. Although he was reticent, and gave the impression of not wanting to be involved in the present proceedings, I think I should accept his evidence.

294. Mr Groves of Troubleshooters said that he received a telephone call from Mr Bell and went to the site. He told Mr Bell that the union had no right to require men employed through Troubleshooters to leave the site. However Bell was definite that they had to go. Groves spoke to two directors of the Pavilion Group and they confirmed the request that the two men should leave the site. This they did, and no men were employed through Troubleshooters for the remainder of that contract.

295. A later letter written by a director of Truman Constructions to the applicant, on 24 November 1987, confirmed that Troubleshooters men had been sent from the site "because of uncertainty over the industrial situation".

296. Mr Wayth said in his evidence that he would have kept the Troubleshooters on the job until it finished, because they were very good workers, if there had been no trouble with the unions.

297. There was, however, no evidence that Oliver demanded that the Troubleshooters men be sent from the site or that he made any threats as to what action might be taken if that course was not followed by Truman Constructions. It is argued for the applicant that the situation on the site was so delicate that all Oliver had to do was to draw the attention of management to the presence of Troubleshooters, and his knowledge of it, and their understanding of industrial realities was such that they knew they would have to take action to appease the union. However Oliver maintains that all he did was to draw the attention of the representatives of Truman Constructions to the provisions of the Green Book (the VBIA) which was clearly designed to forbid the making of all-in payments. I am satisfied that Mr Oliver had an honest and understandable belief that the VBIA forbade the making of all-in payments and that he was entitled to draw the attention of management to the apparent breach of the agreement, which applied throughout the building industry. The only arguably unlawful action taken by Oliver was to order the men concerned to wait in the lunch-room while he spoke to Wayth. However the men would have been paid at least the six hour minimum for the day's work, so no loss was suffered by the applicant as a result of this particular direction.

298. I think that Mr Bell took it upon himself to act upon the representations which Oliver had made and, while he no doubt feared industrial action in what was already a volatile situation and at a difficult time, the fact remains that the decision was his and it was not based upon any unlawful conduct on the part of Oliver.

299. While the case gives an interesting insight into industry knowledge and fear of the strength of union opposition to Troubleshooters, nevertheless I do not believe that in this instance the applicant's case against the respondents is made out.

300. This job involved the renovation of the London Tavern Hotel in Hawthorn Rd, South Caulfield. The hotel was owned by Carlton & United Breweries ('CUB'), and Leonard Constructions Pty Ltd, acting as construction manager for CUB, provided a labourer and general site management and supervision. There were gangs of sub-contractors on site, and two bricklayers and one labourer were arranged by Leonard Constructions through Troubleshooters. The bricklayers' names were Theo Chazikantis, who gave evidence, and his usual work-mate, Bruno Aleks. They worked on the site from 7 to 11 March, and on 16 March 1988. The Troubleshooters labourer was Peter Kellick who worked on site from 5 February to 16 March 1988.

301. Mr Kevin Byrne was the site foreman for Leonard Constructions. He exercised general supervision over all the trades on the job, whether they were Leonard employees, subcontractors or contractors. Mr Byrne said he would wander around the site every twenty minutes or so and check on all workers. He found Mr Kellick in particular to be a very good and intelligent labourer.

302. The problems affecting Troubleshooters began on this site on 11 March. On that day the respondents Oliver and Harkins, an organiser, arrived on the site, representing their respective unions, BWIU and VSBTU, and entered upon a check of union tickets. Oliver asked Kellick who he was working for and he replied, "Leonard Constructions". Harkins went to the two bricklayers and asked them the same question. They also replied that they were working for Leonard Constructions, but in the course of further conversation about what wage they were receiving it became apparent that Harkins realized that they were working through Troubleshooters. He said to them,

"Do you realize that these guys are taking us

to court to sue us?"

303. Harkins then approached Kevin Byrne, the site foreman, and asked him what the company was paying the bricklayers. After some discussion he said to Byrne that the bricklayers could not work on the site because they were being paid an hourly rate. He said that he did not want Troubleshooters on site. His attitude, to use Mr Byrne's words, was "very rude and arrogant".

304. Shortly after this, worked ceased on the site for the day; but I am prepared to accept that the primary reason for this was the heavy rain which was falling, rather than the presence of Troubleshooters men. However, before Oliver and Harkins left the site, another meeting was arranged for the following week at which the CUB company would be represented.

305. There was some dispute as to whether the purpose of this meeting was to deal with the Troubleshooters problem or to discuss a site allowance. I am satisfied in the light of all the evidence that the primary purpose of the meeting, so far as the union representatives were concerned, was the question of Troubleshooters. There can be no doubt that Harkins raised that question on 11 March. I find it incredible that he did not mention the matter to Oliver, although that is what Oliver has said in his evidence. Oliver does however concede that he knew on 11 March that Harkins had discovered that the bricklayers were being paid all-in payments. This was the "problem with the subbies" which he wrote into his diary later that day, as a record of the discussions he had had on the site. Mr Byrne maintains that when the two officials arranged a meeting for the following Wednesday they told him that the purpose of the meeting was to talk about Troubleshooters. In this connexion, it is significant that the directors of Troubleshooters attended the site at the time of the meeting.

306. 16 March was the next working day at the site, following a public holiday and a rostered day off. On that day the three men from Troubleshooters arrived at the site at their usual time of 7.30 a.m. Kellick had been assigned to work that day as a bricklayer's assistant for the two bricklayers. He had been performing the same task on Friday 11 March when spoken to by Oliver.

307. Having been notified by Leonard Constructions of the proposed meeting, to include CUB representatives, Groves and Bosa, the directors of Troubleshooters, also attended the site. Mr Groves introduced himself to the union representatives when they arrived but they did not reply to his approach except, as Oliver says, that he asked rudely who Mr Groves was. However it is clear from another passage in his evidence that Oliver knew perfectly well who Groves was and had pointed him out to Harkins.

308. At this point the union officers decided to have another ticket check, and on this occasion Kellick, after first maintaining that he worked for Leonard Constructions, then admitted that he had been employed through Troubleshooters when Oliver put that direct question to him. It is clear that the purpose of the ticket check was to try to identify just which of the 10 or 12 workers on site had been engaged through Troubleshooters.

309. While Oliver was having this conversation with Kellick, Harkins came up and confirmed to Oliver that the bricklayers were also from Troubleshooters. Oliver then told Kellick that he and the bricklayers had been declared black for 24 hours and ordered him to leave the site immediately. The reason given by Oliver at the time was that a demarcation dispute had arisen because he had been acting as a bricklayers' assistant, work which should have been done by a member of Mr Harkins' union. However it is my opinion that this was a spurious reason, because Oliver had seen Kellick doing exactly the same work on the previous Friday, had seen his BWIU ticket, and made no comment about it. Further, it was strange conduct on the part of Oliver to send a member of his own union off site for 24 hours without first trying to settle any problem amicably. As Mr Henderson said in evidence, about Troubleshooters men generally,

"....I think it needs to be said, these people

quite often are members of our union, and we

do not want to tip our own members off the

job..."

There was no evidence that Harkins had raised a demarcation issue. It is worth noting on this as well as the other issues affecting this site, that Harkins, although available, was not called to give evidence.

310. In order to discover the true reason why these three men were sent from the job it is not necessary to go any further than Oliver's diary entry for 16 March which reads,

"Discovered Troubleshooters on job.

Asked for them to be removed from site".

311. In fact, as Oliver said in his evidence, he and Harkins gave the builder and CUB the option of either employing the Troubleshooters men directly on wages or of sending them from the site. Mr Byrne said in his evidence that Mr Jim Black, the project manager from CUB who had come to the site for discussions, said that it was not really up to him but, for the sake of peace on the job, he thought that Troubleshooters should not be used. He said that it was generally agreed between CUB and the union representatives that Troubleshooters would not be on site in future. Oliver said that Black told him he would fix the matter up in a day or two and that he, Oliver, had accepted this. The two union officials then asked Byrne to tell the three Troubleshooters men to leave the job and Byrne did so.

312. It is clear from this evidence that the union representatives not only succeeded in having the three Troubleshooters men sent from the site immediately, they also obtained an assurance that no further men would be employed through Troubleshooters on this site. When Kellick tried to get permission to remain on the job as a general labourer after the bricklayers had left, Harkins told him that he was black and that he had to leave the site. When Kellick pointed out that the representative of his own union, Oliver, had not told him that he could not work as a general labourer. Harkins replied, "Well I am telling you to go".

313. I have no doubt that, by ordering these three men from the site, and backing that up by persuading the site foreman to send them home and the CUB representative to secure the result that Troubleshooters men were not again employed at the site, Harkins and Oliver directly and deliberately interfered with the performance of the contract between Troubleshooters and Leonard Constructions. The same action amounted to conduct to prevent or hinder the acquisition of services by Leonard Constructions from Troubleshooters. Further, Harkins and Oliver induced Leonard Constructions to arrive at an understanding between themselves and the unions they represented on the one hand and Leonard Constructions on the other, which contained a provision that Leonard Constructions would not continue to acquire services from the applicant. The decision that Troubleshooters would no longer work on the site was conveyed by Byrne to Groves by telephone later on 16 March.

314. So far as the direct involvement of the unions is concerned, there was evidence that Oliver reported to Mr Henderson on 16 March about Troubleshooters workers on the London Tavern site. There was no evidence as to the form of those discussions. Harkins similarly reported to Mr Giles and told him there was to be a meeting with CUB representatives on the subject. Mr Giles says he may then have been told that bricklayers had been sent from the site. Certain it is that no words of Henderson or Giles to their respective organisers prevented the termination by Leonard Constructions of its hiring contracts with Troubleshooters.

315. None of the three workers in question ever returned to the London Tavern site. The evidence showed that had this action by Oliver and Harkins not been taken, Kellick would have been on the site until the end of the job, and the bricklayers would also have been used for quite a long period, as there was a good deal of patching up work to be done. Leonard Constructions engaged other contracting bricklayers to do the work which they would have done, and paid them an hourly rate, for quite a long period after the Troubleshooters men had left. There can be no doubt that the understanding that Troubleshooters men would no longer be employed on the job, and would not be re-employed, was induced by Oliver and Harkins, or that they were directly and knowingly parties to that understanding.

316. This work involved substantial extensions and alterations at 82 John Street, Brunswick, the site being owned by Kortex Australia Ltd. The builder in charge was Tilley Constructions Pty Ltd which, in the course of the contract, was bought by J P Cordukes Pty Ltd ('Cordukes'). There was a project manager, Paul Howard, from Cordukes attached to the site, but in charge of the actual building work was Vince Luicci, the site foreman. Luicci had been employed for some years by Tilley Constructions and later by Cordukes.

317. Mr Bruce Tilley, a director of Tilley Consulting Group Ltd, gave evidence about the John Street site, and its union problems. He said that the project was a very important one to the company and had to be got under way very quickly. His company put their own one or two full-time labourers on site to carry out general duties and the preparation of site amenities, when work started in early December 1987. One or two employee carpenters were also there. Being a large job spread over 5 acres, and mainly one of demolition to begin with, a large labouring force was required. Troubleshooters provided all other labouring personnel, which amounted at times to 30-40 people. After Christmas 1987, the balance changed, and about 30-34 carpenters and 6-8 labourers from Troubleshooters were on site.

318. Regular site meetings would take place at John Street with the client. Normally at these meetings, the foreman, the builders, the project manager and the client would be present or represented.

319. On 14 April 1988, the respondents Oliver and McPartlin, field advisers from the BWIU, went together to the site and had a general look at safety matters, which the union had criticised some weeks earlier. It was then decided that a ticket check should be carried out immediately after the lunch break, while the men were still in the lunchroom.

320. Mr Peter Kellick, who had been on the London Tavern site, was also labouring on this site, and he gave a clear account of that day. I found him to be an impressive and generally careful witness, though perhaps inclined to overstate things at times. Kellick stated that Bill Oliver walked into the lunchroom and announced his name and union position. Oliver then stood directly opposite Kellick and said, "I notice we have our friends Troubleshooters on the job", or words to that effect. Oliver then left the lunch shed, found Paul Howard and, as he said in evidence asked,

"Are you aware of the Victorian Building

Industry Agreement page 73, of all-in

payments?"

Howard made some non-commital answer and Oliver then wanted to know how many Troubleshooters were on the job. Howard said he didn't know, and Oliver asked him to contact the office to find out.

321. Oliver and McPartlin then rejoined the meeting in the lunchroom, by which time everybody on site had gathered there. Kellick told the Court that a shop steward was appointed as well as a health and safety representative. An official safety walk was embarked upon and 20-30 problems were noted. Oliver and McPartlin then showed the list of problems to the meeting, saying they needed to be fixed up under the terms of the Agreement. A vote was put to the workers as to whether or not the job should stop for 24 hours. Oliver was adamant in his evidence that he did not suggest this, but that the proposition came from the floor. In any event, the majority voted against a 24-hour stoppage, and also against going out for the rest of the day. Thus appropriate labour was used to fix up the safety problems, whilst the rest of the workforce, as instructed by Oliver, stayed in the sheds. This procedure was in accordance with the VBIA. Oliver then told Paul Howard to contact the MBA and arrange for a representative to be on that job in the morning to have further discussions about safety, double time and all-in payments.

322. The next morning, 15 April, a regular site meeting took place, and was attended by the usual parties. Tilley was also there as a result of the union problems arising the day before - particularly the Troubleshooters problem.

323. It seems that Oliver and McPartlin saw Mr Henderson at the BWIU office before this meeting. He told them to handle the dispute strictly in accordance with the Green Book and to write down everything that was said. He also said that they could not walk away from the safety aspects of the problem.

324. Oliver and McPartlin arrived together about 7.15 a.m. at John Street. The excerpt from Oliver's diary read as follows:

"BWIU members numbering 30. Management did

not contact MBA. Phoned them ourself at 8

o'clock. They came. Told them we wanted men

off job where breaking Victorian Building

Industry Agreement. Reported back all details

to Don Henderson".

325. Oliver said that there was no sign of Howard or Vince when they arrived, so they went on site and spoke to the men who were mingling around the lunch room. Not long after 8 am, Michael Clarke from the MBA arrived, and Oliver told him he had been called because of safety problems and all-in payments on the job.

326. David Allen from Cordukes arrived, as did Mr Jarratt from the plumbers' union, the PGEU. Mr Allen had heard of the problems on site the day before, so had come himself. A meeting then took place, and it involved Oliver, McPartlin, Jarratt, Clarke, Luicci, Allen, and the bricklayers' shop steward. The safety issues were discussed and then it appears the topic of all-in payments was brought up. McPartlin pointed out page 73 of the Green Book to Allen, saying if the Troubleshooters were put on the full-time payroll of the builder, there would be no problem.

327. The meeting broke up soon after, and Clarke spoke to Allen and Bruce Tilley. Oliver thought that Groves was on site by this time too.

328. When the meeting reconvened, it was decided, on the suggestion of the Cordukes representatives, that as the matter couldn't be resolved, Tilley would contact Don Henderson, and also Bluey Rutherford from the PGEU. Oliver said that he thought this would be a good way to try to fix the situation, though there was other evidence that he appeared reluctant not to deal with the matter on the spot.

329. The union officials then checked that safety requirements had been met and went to talk to the workers. Work then resumed on site, as agreement had been reached about paying double time, which covered the time that had been lost sitting in the sheds.

330. Mr Tilley's view on the events of that morning was rather different. He impressed me as an honest witness, though having an imperfect memory and a tendency at times to speak without sufficient reflection. Initially he was unconcerned about the stoppage and union pressure when he arrived about 9 am, as he had sold his business and it was now primarily Cordukes' problem. Mr Allen was evidently a little nervous through lack of knowledge of the situation, having recently arrived from Sydney. Tilley stated that Oliver and McPartlin told him that it was known Cordukes used Troubleshooters, and that there were too many on this site. Tilley was told, as he remembered it,

".....there is not enough of our employees

group on site per ratio of Troubleshooters

guys and that we had to either get all the

Troubleshooters guys on to salary or get rid

of them off the site otherwise the safety

issues and the other issues on a day-to-day

basis would be inspected closely by the union

and they would have a continuing presence on

the site, and just the normal form of

harassment that is in the industry".

331. I accept Mr Tilley's evidence that this was the substance of what was said to him.

332. Tilley said he was happy to make himself available for discussions with the union, and said he was not an expert on the legalities of the problem. However, it appeared a stalemate developed, as Tilley insisted the men keep working. He said to Allen that the decision was really his (Allen's), as his company (to which Tilley was now a consultant) was the one which was going to pay the liquidated damages if the building contract were to run over time.

333. Mr Tilley's evidence was corroborated generally by Mr Allen whom I found to be a careful and reliable witness. He said that when the union organisers first spoke to him they said there were safety issues and they had stopped the job, but the real issue was Troubleshooters. They wanted those men off the site.

334. Finally it was put to Oliver and McPartlin that the matter should go to the Disputes Board and be sorted out there. Cordukes was trying to avoid being caught in the middle of a fight between the unions and Troubleshooters and thus thought this the best course. Mr Henderson said in evidence that it was he who urged this course on Mr Allen at a meeting at the MBA. He also spoke to Mr Groves on the same subject, and although his initial feeling was that the dispute was with the builder, and Troubleshooters had no place in it, he later relented and, when the Disputes Board was finally convened, he supported Mr Groves' right to be heard.

335. At the end of the day Tilley spoke to Groves who said he would contact the BWIU and try and get some of the union pressure taken off the site. Tilley was concerned because Oliver had produced a list of other Cordukes sites. Tilley told the Court, and again I accept the substance of his evidence, that Oliver showed him the list and then,

"They said: we have been around the other

jobs, these are the jobs you have got going,

and, you know, we will be back visiting the

jobs and the issue of safety and the old - the

normal position saying that you have got to

help us fix this Trouble Shooters thing or we

are just going to be giving you a tough time

on those jobs...".

336. After 15 April there were no more stoppages on the site, and the project was completed just before the contract date.

337. After considerable pressure from Mr Henderson, a Disputes Board was finally convened. The account of that hearing has already been given in the judgment which I delivered when dismissing the action against the sixth respondents on 4 October 1988 (unreported).

338. In the light of the above facts, the applicant alleges that organisers from the BWIU attempted, and did all they could, to interfere with the contract between Troubleshooters and the builder, Cordukes, and to hinder Cordukes from continuing to acquire services from the applicant, and to induce Cordukes to enter into an arrangement no longer to acquire those services. These attempts were frustrated because the builder stood firm and the men on the site - many of them engaged through Troubleshooters - voted against industrial action.

339. The adverse decision of the Disputes Board - to the effect that the Troubleshooters men were employees of Cordukes - was, it is said, wrong in law. But, in furtherance of it, Troubleshooters contract would have been broken and its men put off site if an injunction had not been granted by the Court.

340. The events at John Street were, according to the applicant, part of a course of conduct by union officers which was designed to harm Troubleshooters.

341. These jobs involved two substantial construction sites in Chapel Street, Prahran. 181 Chapel Street is on the corner of High and Chapel Streets, and number 233 is not far away. Only 181 Chapel Street is mentioned in the pleadings, but both sites were referred to in evidence. The builder at both these sites was D. Pomeroy Industries Pty Ltd ('Pomeroys'), which had put together a building, design and construction package for its client, P. W. Securities.

342. Troubleshooters supplied seven workers to these sites pursuant to a contract with Pomeroys. Of these, David Joyce a labourer worked at 181 Chapel Street first in December 1987 and later from 22 February 1988 to 16 August 1988. William Bourke, another labourer, worked at the same site from 26 July 1988 to 16 August 1988. Greg Mitchell, a labourer worked there on 25 July 1988, 29 July 1988, 2 August 1988 and from 8 to 16 August 1988. Colin Perrin, a scaffolder worked there from 10 May 1988 to 17 August 1988.

343. The conduct relied on by the applicant to make out its case in this instance is mainly that of an elected union organiser of the BWIU, Mr Martin Bingham.

344. On 8 August 1988, Mr Bingham briefly visited the site at 181 Chapel Street. He gave evidence that he introduced himself to Mr Peter Gray, the site foreman, and began a safety inspection. Having seen a labourer throwing down bricks from an upper storey, he castigated the worker. He stated that it was at this stage that Gray told him;

"We've got Troubleshooters on this job. Why

don't you get rid of the bastards?"

"Well, I can't do that, that is not my job.

We are only here to do a safety job."

345. A list of items needing rectification to comply with safety standards was made, and Bingham left the site within about 15 minutes.

346. However I accept the evidence of Mr Joyce that, when Bingham saw him in the course of this visit, he recognized Joyce as a man with whom he had previously worked, and whom he knew had worked through Troubleshooters. Joyce says that Bingham called him by his first name and asked him who he worked for. When Joyce replied, "Pomeroy Industries", Bingham said, "You are not lying, are you, David?" Joyce replied, "No, Martin, of course I would not lie to you." At which Bingham grinned and turned away. He then asked other labourers who they were working for.

347. Mr Bingham, in the course of his account of this visit, said that he did not recall recognising Mr Joyce. However where their evidence is in conflict, I prefer Mr Joyce's evidence. He was a more convincing witness and I think he is more likely to have a clear recollection of what occurred. I found Mr Bingham's account of the way in which the site foremen, Mr Gray, had told him of the presence of Troubleshooters on the site to be entirely unconvincing.

348. Mr Dug Pomeroy, the managing director of Pomeroys, gave evidence that Bingham telephoned him on the night of 8 August and said that he had recognized some faces on the site and that it was obvious that Pomeroys was using Troubleshooters. Bingham said,

"You are a naughty boy for using them.

You should not be using them."

Mr Pomeroy said further that Bingham told him his attitude would ruin the union movement, or words to that effect, and added,

"You will not have any sites to work on

if you continue with this attitude".

349. Mr Bingham at first denied this in giving his evidence, saying that he doesn't threaten or intimidate anyone, but later admitted he might have said something like it. He said that all organisers are under strict instructions from the Union Secretary and Assistant Secretary to overlook the fact if Troubleshooters men are found on site, and to continue doing the normal job. Mr Bingham did say that he was unhappy with that attitude of the senior union officials.

350. I found Mr Bingham's denial of parts of this conversation unconvincing and I prefer to accept the substantial accuracy of Mr Pomeroy's account.

351. Bingham's threats to this point amounted, in my view, to a direct interference in the performance of the contract between the applicant and Pomeroys. It also constituted an attempt to prevent or hinder Pomeroys from acquiring services from the applicant and an attempt to induce Pomeroys to enter into an understanding with Bingham that the applicant's services would no longer be required.

352. A meeting was arranged for the following day to discuss the Troubleshooters situation with the union, amongst other issues, but this was later cancelled.

353. On 12 August, Mr Varrall, the assistant director in charge of construction for Pomeroys, met Mr Hugh Harkins from the bricklayers union, to discuss the site package that had been previously arranged at Trades Hall. This visit followed a demarcation dispute between bricklayers and labourers on site during that week. That dispute, however, did not s work on the job. Mr Harkins made requests which included that there must be separate smoking and non-smoking sheds; everybody on the job was to contribute to the agreed severance payment fund; and all people on site would pay PAYE tax. Varrall stated that he would agree to the first two matters, but could not control the latter, as there were subcontractors (plumbers and bricklayers) on site.

354. On 16 August, Harkins was formally told that the third requirement could not be met. At that meeting with Mr Varrall there were Harkins, Bingham, George Thomaidis, from the ASC & J, and another union official. It was during this meeting that Bingham apparently asked who the "peggy" was, and for whom he worked.

355. In fact the "peggy" was Mr Joyce, and Varrall told Bingham that he was employed by Troubleshooters. Mr Varrall said in evidence, and I accept, that at this point the three union officials became agitated and walked away from him. Harkins and Bingham abused Varrall, and Bingham said that Troubleshooters were parasites on the industry. Bingham added that he was not frightened of having a writ against him from Troubleshooters. Mr Varrall gave evidence that, after the union officials left the meeting, they went on a site walk. This was the second such walk that they had done on the same day. They had previously been around before the meeting began. After that first walk they had placed a ban on steel-fixing which was being done by a Troubleshooters man. Bingham told Varrall that he had a problem with the particular person who was doing the steel-fixing. At the time he seems to have said something about the need for a person doing such work to have a steel-fixing ticket. However, in evidence, he said that his reason for taking action was that the steel-fixer was not being paid correctly. In my view it is probable that Bingham either knew or suspected that the steel-fixer had been employed through Troubleshooters and that this was a significant factor in his placing of a ban on steel-fixing work.

356. After their second site walk, the three union officials claimed to have found several safety items and declared the job black, telling Varrall that no further productive work was to proceed.

357. The major safety faults to which attention was now drawn concerned the requirements of dual access to upper floors, barricades that were missing from particular areas, and the fact that the site sheds on the ground floor were exposed to the risk of falling debris and needed a protective cover over them. It seems that these three complaints about safety on the site were all legitimate matters for criticism, but I think it is more likely than not that the timing of the union officials' action on these matters was directly related to their concern at having found Troubleshooters men on the site. This view tends to be confirmed by the fact that Mr Varrall's later request to keep some workers on site to attend to the safety items was ignored by the union officials.

358. The union officials next went down the street to 233 Chapel Street. Bingham gave evidence that 233 was a disgrace so far as safety was concerned and Thomaidis took photos of unsafe practices. These photographs were tendered in evidence. Bingham stated that the foreman there, Mr Pitman, had a very bad attitude and refused to go on a safety walk with the union representatives. Mr Bingham denied that the walk and photos took place before they made themseles known to the foreman. The job was closed by the unions and, according to Bingham, it was only later that he became aware that a prohibition notice from the Department of Employment and Industrial Affairs, requiring work to stop in an area until certain scaffolding had been fixed, had been served on that site on 10 August and not yet complied with.

359. The union representatives then returned to 181 Chapel Street, when Varrall requested that reparatory safety work be allowed to be carried out, but was told by Bingham that the site was black, and everybody should go home. The safety requirements were attended to in the days that followed and the ban was lifted on 19 August.

360. Mr Varrall agreed in his evidence that some of the safety issues did need attending to, but in areas that were localised, and did not involve the ground level of the site, where there was some work that could usefully be done, though not very much. It was not generally within his experience that a whole site would be black-banned because of such localised safety problems. I note in passing that an unnecessary total closure, preventing even the fixing of safety problems, was contrary to the provisions of the VBIA.

361. Mr Pomeroy gave evidence that, when he arrived home on the evening of 16 August, there was a message for him that Mr Bingham had called. He returned the call and was informed, in graphic language, that he was in a lot of trouble. He asked,

"You mean get rid of Troubleshooters off the

job?"

"You won't have a problem in the world if you

fix it."

Bingham also protested about work being done - even work on safety matters - after he had 'blacked' the site. I accept the substance of this discussion as deposed to by Mr Pomeroy. It was not substantially contradicted by Mr Bingham.

362. In cross-examination, Mr Bingham admitted that some months before this incident he might have taken industrial action on a site if he had found Troubleshooters men present. However he had been warned by the secretary of his union not to take such action. This warning had been given at least 12 months before the incidents in question.

363. In my view, Mr Bingham was trying to observe the letter of the instruction which his union secretary had given him, while at the same time achieving the result that Troubleshooters men would not be employed on the job in question. He was concerned to make it clear to both Pomeroy and Varrall, while avoiding any direct statements to that effect, that there would be industrial trouble on the site if Troubleshooters men were continued in employment.

364. In the course of his discussions with Pomeroy, Bingham had said that he would not be available for a further meeting and asked Pomeroy to contact a Mr Torpey, another organiser, at the union office.

365. Pomeroy spoke to Torpey the following day, 17 August, and told him that he had "sorted the matter out with Martin Bingham", and that "Troubleshooters would be removed from the job". Torpey said that people were working on the 233 Chapel Street site and no productive work was to be carried out at either site, though he also said that there were no outstanding safety issues to be resolved. Both sites were locked up and closed.

366. On 19 August, Pomeroy, Varrall, Bingham and Raffa, assistant secretary of the BWIU, met and, as well as other matters, discussed each party's respective views on Troubleshooters. It was agreed that Troubleshooters men would not be used again and, in return, the unions agreed that 181 Chapel Street could begin to operate again. Mr Pomeroy's evidence about the nexus between Troubleshooters men not being employed and the site reopening was contradicted by Mr Bingham's account. But this was not put to Mr Pomeroy in cross-examination, and neither Mr Torpey nor Mr Raffa was called. I accept Mr Pomeroy's evidence.

367. Although the evidence is rather contradictory, I think it is likely that only one Troubleshooters man returned to the 181 Chapel Street site and he only for one day. However Bingham said it was permissible to use other labour hire companies, such as Kirbys and Skilled Engineering, and this was done for a time, but not very successfully. However Troubleshooters continued to be used at 233 Chapel Street, although not immediately following these problems.

368. Mr Groves gave evidence concerning these sites, as he visited both of them following phone conversations with Varrall and Pomeroy. He stated that Pomeroys had been using 32 Troubleshooters at their various sites around Melbourne but, by 23 August, 21 of these had been let go.

369. In my view, the dealings of Bingham and Harkins with Pomeroys, in concert with each other and with other union officials, constituted interference in the performance of the contract between the applicant and Pomeroys. It also amounted to conduct which hindered Pomeroys acquiring the services of the applicant. By a series of statements and actions the officials concerned made it clear to Pomeroys that, if it continued to use Troubleshooters men, it would have industrial problems on its hands. If it ceased to use them, the troubles would also cease.

370. On 19 August the BWIU, through its officers, arrived at an understanding with Pomeroys that it would not acquire further services from the applicant. This understanding was induced by Bingham, among others, who was a fully informed party to it. The pleadings made no allegation against Mr Harkins in relation to these sites, but his participation provides relevant background to the course of conduct alleged against him at other sites.

371. This job involved the construction of the College of the Bible, which is a Uniting Church theological college in Jacksons Road, Mulgrave. Bowden Fraser Constructions Pty Ltd ('Bowden Fraser') was the construction firm given the original $3 million contract. The contract later expanded into a project involving the building of live-in units and faculty residences as well as the original lecturing, administration and library areas and the chapel.

372. Bowden Fraser had an average of seven employees of its own on site, and in August 1988 they consisted of a foreman, 2 or 3 labourers, 2 apprentices and 3 carpenters. All the other trades' work on site was subcontracted out, and there were 4 Troubleshooters men engaged. Mr Witham was a labourer/safety officer, Mr Peter a welder, Mr Evans a general clean-up labourer, and Mr Kelly a junior foreman.

373. Mr Michael Ryan, the site foreman, gave evidence that his first awareness of union trouble on the site concerning Troubleshooters men, was in August when he saw certain stickers. These offensively-worded stickers, attacking Troubleshooters men, and calling for them to be removed from building sites, were put up on the outside of the sheds, site office and amenities. Mr Ryan did not see anyone put them up, but they appeared shortly after a visit to the site by the respondent McPartlin. A related poster was seen, at about the same time, in the car of Mr Ferrari a shop steward member of the BWIU employed by Bowden Fraser. Mr McPartlin was seen by two other witnesses to deliver posters to similar effect to another site at around the same time. In spite of the obvious inference to be drawn from this testimony, neither he nor Ferrari was called to give evidence, and I think it is probable that McPartlin was responsible for the delivery of the stickers to the College of the Bible site. I should say, in passing, that Mr Henderson, acting for the BWIU management, was totally opposed to the use of these stickers and did everything he could to prevent their use. In this he seems to have been successful over time. These stickers were not part of any official BWIU campaign, nor did the senior officers of the union turn a blind eye to their use.

374. On 10 August 1988, Mr Abblitt, the construction supervisor for the site and a director of Bowden Fraser, received a telephone call from Willy Shacklock, a BWIU official, who told him that there were men at the site who were not being paid in accordance with the VBIA and he, Shacklock, did not want them on the site. Mr Abblitt was left in no doubt by Mr Shacklock that he was referring to Troubleshooters men. He mentioned a labour hiring company. He went on to say, as Mr Abblitt put it,

".....if I did not abide by the Building

Industry Agreement, exactly as it says, he

will make an example if the project; it will

be the safest one in Melbourne."

Shacklock next spoke to Abblitt about the issue at a meeting of the Disputes Board, about an unrelated problem at the site, on 17 August. On this occasion Shacklock referred directly to Troubleshooters. He asked if Abblitt had done anything about the matter. Abblitt said he had not, and, as they left the meeting, Shacklock told him to make sure he did something about it or he might have trouble on his hands. Abblitt said he would deal with the matter. He asked Shacklock not to take any action until he (Abblitt) had had a chance to see the foreman at the site.

375. The later events on the College of the Bible Site were deposed to by several witnesses. One of these was Mr R C Witham who, for some years, had from time to time worked as a builder's labourer through Troubleshooters. I found him to be a rather outspoken witness, but quite persuasive in his recollection of the matters of which he had personal knowledge. Mr N L Peter is a boilermaker/welder who also works through Troubleshooters. By contrast, he was a rather hesitant and uncertain witness. It was obvious that his memory was not strong and I did not find him to be very persuasive. Matteo Lombardi, a builder's labourer employed directly by Bowden Fraser, was a witness who gave his evidence carefully and, in my view, accurately. I felt that I could rely upon him after making due allowance for memory lapses with the passage of time. Mr Tony Abblitt, a director of Bowden Fraser, impressed me as a particularly careful, accurate and intelligent witness. It is significant that Mr Shacklock, who played a major role for the BWIU in these matters, was not called to give evidence. Even more to the point, the respondent Harkins, who played a major role and who was present from time to time during the hearing of this action, was not called either.

376. It is convenient to begin this account of the activities that occurred on 18 and 19 August with the evidence of Mr Lombardi, who was present at the union meetings which occurred on each of those days and who was called to give evidence for the respondents. It is clear that both Mr Witham and Mr Peter missed a large part of one of those meetings when they were asked to leave, and I think it is likely that the same thing occurred at the other meeting. They both had difficulty in distinguishing between the two meetings, which tended to leave their evidence in a somewhat confused state.

377. It seems clear that Mr Shacklock first came out to the site on 18 August to tell the men what had happened at the Disputes Board hearing on the previous day. All workers on the site attended this first meeting.

378. According to Mr Lombardi, there were 20 or 30 men at the meeting and one of them asked what the position was about Troubleshooters, because there was a rumour that they were on site. Shacklock replied that he could not put Troubleshooters off the site, because "he would have a writ slapped on him". At some stage of the meeting, Troubleshooters men were asked to identify themselves. They did so and were asked to leave. Mr Lombardi said that no formal motion was put, but somebody suggested that the men should not work with people from Troubleshooters and somebody then suggested that a vote be taken on the matter. Troubleshooters men were not able to put any argument in reply because they had already left the meeting. It seems that the matter was then put to a vote, although Mr Lombardi said that he did not vote himself and he could not see how many of the other workers present did indicate a vote. By the time the meeting finished Mr Lombardi believed that a motion had been passed although he was not aware of its terms. These had never been clearly put. It was not clear how many had voted, but certainly the Troubleshooters men themselves had not been given an opportunity to vote. Whatever the intention of those voting may have been, it seems that Mr Shacklock stated expressly that the site was not 'black' and there was nothing to stop anybody going back to work if they wished to do so.

379. Mr Ryan said that, after the meeting, Shacklock told him that the majority of men had voted that they would not go back to work until Troubleshooters were off the site. According also to Mr Ryan, the plasterers, plumbers, roofers, electricians and mechanical tradesmen returned to work, although the bricklayers remained in the shed. Lombardi and Ferrari, two Bowden Fraser employees, did not return to work that day. According to Mr Lombardi this was because it was too late to start work that day. He returned to work the following morning, and said in evidence that Mr Ferrari was the only Bowden Fraser employee who did not go back to work. One or two of the bricklayers also refused to work. In the event, work continued as usual after the meeting on 18 August, except that Ferrari, some bricklayers, and perhaps a handful of other workers, stayed away.

380. On 19 August, according to Mr Lombardi, a few organisers turned up in the middle of the morning and another meeting was called. The organisers were Mr Harkins and Mr Valentine from the VSBTU and another from the PGEU. All the witnesses who attended that meeting referred to a very stirring speech by Mr Harkins. Apparently he dwelt at some length on the fact that Troubleshooters workers avoided tax, paying only 15%. According to Mr Lombardi, Mr Harkins left no doubt about what he thought should be done with Troubleshooters men; he believed that they should be sent off the job. Both Mr Witham and Mr Peter recalled clearly the speech that Mr Harkins made. They both spoke about a large man who stood behind Harkins and glared at them. After Harkins speech both Witham and Peter were told to leave the meeting and did so. They waited outside for what seemed to be about an hour and were then told that they must leave the site.

381. Mr Lombardi said that, after the Troubleshooters men had left, a vote was taken which was similar to one on the previous day - to the general effect that the men would not work with Troubleshooters.

382. The organisers then left the men and went to speak to Mr Ryan. They told him that the men had decided not to go back to work until the matter of Troubleshooters on site had been resolved. Mr Ryan told them he did not want to take any action until Mr Abblitt arrived. Once again Mr Lombardi did not vote for the motion himself and could not tell what numbers of people had voted on it.

383. Mr Abblitt arrived at the site at about eleven in the morning. He spoke to the organisers who told him that "they wanted the hire people from Troubleshooters off the site". When he asked them why, they told him that they knew of his previous discussions with Shacklock and said that he had agreed with Shacklock to put Troubleshooters off the job. Abblitt said that he denied any such agreement.

384. This conversation clearly indicates that the moves which Mr Shacklock had begun on 10 August were well known to his fellow union officials, who may have believed that they were acting in support of an agreement which had previously been reached with Mr Abblitt.

385. After some negotiations, the Troubleshooter question was settled between the organisers and Mr Abblitt on the basis that Bowden Fraser would send the boilermaker and the two labourers from the site and would put the junior foreman on to their own wages book. All this apparently took some time, largely because, if Witham was to go, it would mean that there was no safety officer on the site.

386. After these discussions, Mr Abblitt attended the meeting of workers and put to them the proposal that he would get rid of the Troubleshooters men and would put Kelly, the junior foreman, on the Bowden Fraser books.

387. It is clear that Mr Abblitt did not take any steps to remove Troubleshooters men from the site after his original discussions with Mr Shacklock on or about 11 August. Indeed two additional Troubleshooters men began work on 11 August - though this may have been due to orders which had been placed the previous week.

388. Abblitt said that he arrived on site early on 19 August and spoke to Herbie Valentine and Hugh Harkins of the bricklayers' union, as well as somebody from the Plumbers and Gasfitters Union, after they had called another meeting of the men.

389. Abblitt explained to the organisers that the Troubleshooters men were there for a reason: Mr Witham was on site following discussions with McPartlin of the BWIU, who said there must be a safety officer there whilst two Bowden Fraser men were on a safety course; Kelly was there because there were no other leading hands or junior foremen available; the labourer, Mr Evans, was present as there were problems in keeping the site clean; and Mr Peter was there because the contractor for the structural steel work did not have a welder available.

390. An agreement was reached for Witham to leave, and the site to be allowed to carry on without a safety officer for the remainder of the week - until a Bowden Fraser employee had completed the safety course. Mr Evans was going to be put off that same day anyway, as he had performed his function. The junior foreman, Mr Kelly, was allowed to remain on the understanding that he would go on to Bowden Fraser's payroll (though he did not - he stayed for a time before leaving for unrelated reasons). Mr Abblitt stated that negotiations got no further, so the welder also had to leave the site and it was agreed that the steel contractor would provide his own employee, which he did approximately one week later. The evidence established that the welder, Mr Peter, would otherwise have stayed on site for several more weeks until his tasks were completed, as would Mr Witham.

391. This proposed agreement was put to a meeting of workers and accepted. Witham, Peter and Evans left the site within about an hour. Mr Giles gave evidence that Harkins and Valentine had been sent to the site in response to a telephone call saying there could be a problem. I think it is reasonable to infer that they knew before they went that the problem related to Troubleshooters. Mr Harkins later rang Giles to tell him that the men would not work because Troubleshooters men were on site. It seems, in the light of the evidence given, and that of Mr Lombardi in particular, that this was a very incomplete and misleading statement of what had happened, but Mr Giles apparently did not query it. Of course neither Mr Harkins nor Mr Valentine was called to give his account.

392. It is now convenient to summarise the alleged conduct of the respective respondents which is said by the applicant to have been contrary to law and thus to give rise to the various remedies which are sought. I shall deal with these questions, in the first place, on a site by site basis.

393. I have already found that there was no relevant unlawful conduct on this site by Mr Oliver, the BWIU official directly involved; there was no suggestion of wrongdoing by any other person connected with the respondent unions. The builder broke its contract with the applicant beause of what it feared the BWIU might do, but there were no express or implied threats established by the evidence. Mr Oliver had, I accept, an honest belief in the correctness of his cause when he drew the provisions of the VBIA to the builder's attention.

394. For the reasons already given, I have found in this case that both the respondents Harkins and Oliver directly and deliberately interfered with the performance of the contract between the applicant and Leonard Constructions. That contract was for the supply of two bricklayers and one labourer for as long as Leonard Constuctions might require them. At the time they were sent from the site as a direct result of the two respondents' actions, the bricklayers had been working for 6 days and the labourer had been there for about 6 weeks. No further labour was engaged for this site from the applicant.

395. This same conduct of the two respondents constituted a breach of s. 45D of the Trade Practices Act 1974. Oliver and Harkins, acting in concert, engaged in conduct that hindered the acquisition of services of labour hire by Leonard Construction from the applicant in a situation where that conduct was engaged in for the purpose, and was likely to have the effect, of causing substantial loss or damage to the applicant's business. Thus the conduct proscribed by sub-s 45D (1) of the Act was established; see Tillmanns Butcheries Pty Ltd v AMIEU [1979] FCA 85; (1979) 27 ALR 367. In my view, the likely substantial loss of the applicant's business was established partly from the fact that the contract had some months to run and the applicant earned a gross profit margin of about $32 for a labourer and $43 for a tradesman, from each day worked by each worker, and partly from the natural reluctance of Leonard Constructions to use the applicant's services in future. As the news of the unions' success spread on the industry grapevine, there was also likely to be some flow-on effect on other builders. The applicant was thus able to point to a substantial actual loss and the real likelihood of further and greater losses.

396. I am also satisfied, for reasons which I shall develop when dealing below with the involvement of the respondent unions, that the unions and their officials were and are keen to see the applicant's business become so unprofitable that either it ceases to be viable or the applicant is forced to change its procedures to those followed by other labour hire agencies such as Kirbys and Skilled Engineering. Thus the purpose of the respondents Oliver and Harkins, in acting together as they did, was to damage the applicant's business so as to contribute to making it unprofitable.

397. I also accept the applicant's submission that there was a breach of s 45E of the Act in that Leonard Constructions was accustomed to acquire services, in the form of labour hire, from the applicant on a day by day basis, and it arrived at an understanding (in the sense of a meeting of minds, see Trade Practices Commission v Email Ltd [1980] FCA 86; (1980) 43 FLR 383 at 385) with officers of the BWIU and VSBTU, both organizations of employees, which contained a provision which at least hindered Leonard Constructions from continuing to acquire such services from the applicant.

398. Oliver and Harkins, in my view, induced Leonard Constructions to arrive at the understanding and were directly and knowingly concerned in the contravention of s 45E of the Act by Leonard Constructions; see ss. 75B and 80 (1) of the Act.

399. Here the threats made by the respondents Oliver and McPartlin are relevant to the general question of injunctive relief; they help to establish a continuing course of conduct by those officials and thus, as I explain later, by the union they represent.

400. On the other hand it must be noted that Mr Henderson played a major part in having the dispute between the parties aired before a Disputes Board. This was a sensible and responsible course and must also be borne in mind when the question of injunctions is dealt with.

401. In the light of the facts found above, I have no doubt that the activities of the respondent Bingham, working together with Harkins and other union officials, on the 181 Chapel Street site, constituted direct and deliberate interference in the performance of the labour hire contract between the applicant and Pomeroys. Pursuant to that contract the applicant had supplied at least four workers to Pomeroys, two of them for a number of days and two for several months. As a result of the conduct of Bingham, acting closely in concert with those other union officials, these men were sent from the site and did not work there again - with one possible minor exception. The same conduct played a part in the fact that the number of Troubleshooters men engaged by Pomeroys at different sites around Melbourne was reduced from 32 to 11.

402. As at the London Tavern site, and by reason of the same analysis, there were breaches by Bingham of s 45D of the Trade Practices Act 1974. Bingham was also responsible for directly and knowingly inducing Pomeroys to arrive at an understanding with him and the BWIU which constituted a breach of s 45E of the Act.

403. Here it was McPartlin and Harkins, of the respondents, who were engaged in deliberate and direct interference with Bowden Fraser's contract with the applicant and in breaches of ss 45D and 45E of the Act upon the same analysis as for the London Tavern and 181 Chapel Street sites. Damage was not pleaded in relation to this site, but the behaviour of the respondents is relevant to the Court's discretion to grant declarations and injunctions.

404. 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.

405. 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.

406. 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.

407. 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 labour is copied by others and more and more workers come to regard themselves as contractors rather than employees.

408. 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.

409. 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.

410. 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.

411. 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.

412. 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.

413. 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.

414. 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.

415. 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.

416. 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.

417. 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.

418. 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.

419. 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. See Trade Practices Commission v Tubemakers of Australia Ltd [1983] FCA 93; (1983) 47 ALR 719 at 738-40.

420. The respondents, in their pleadings, raised several special defences. The only one finally relied on was that of justification at common law. In relation to each of the London Tavern, 181 Chapel Street and John Street, Brunswick, sites it has been pleaded on behalf of the appropriate respondents that they were justified because the "alleged agreement" between the applicant and the builder in each case "was unlawful, or attended by unlawful conduct" of the applicant. The respondents also plead that they are lawfully entitled in future to implement a policy that builders not be permitted to use a service such as the applicants', because they would merely be preventing unlawful conduct at building sites.

421. These pleas of justification depend upon allegations of unlawful conduct which, in turn, depend upon Troubleshooters workers having the status of employees. As I have found that they are not employees, these defences necessarily fail.

422. It is worth noting that the defence of justification , and arguments going to discretion as to remedies, are the only points at which the two basic disputes, about conduct at sites and as to the status of Troubleshooters workers, actually come together. Even if the Troubleshooters men were employees, the actions for wrongful conduct at building sites would still succeed unless the defence of justification could be made out - in which case only the common law action would fail.

423. In my view that defence cannot justify the otherwise unlawful conduct of the respondents at the London Tavern or 181 Chapel Street sites in any event. The outcome at the John Street, Brunswick site showed what could be achieved by responsible union leadership - admittedly reinforced by a Court injunction. There could be no excuse for the respondents forcing the issue as they did at the two sites in question.

424. The applicant has finally sought a declaration concerning the status of its workers in the following terms:

"Declare that a person who performed work on a

building or construction site in pursuance of -

(i) an agreement between himself and the applicant

for the performance by him of that work and

for his remuneration therefor by the

applicant,

and

(ii) an agreement between the applicant and the

builder or building contractor or

sub-contractor for whom or on whose site the

work was performed for the provision by the

applicant of a person to perform the work and

for the payment therefor to the applicant by

the builder or building contractor or

sub-contractor,

was not, in relation to that work, an employee of

the applicant or of the builder or building

contractor or sub-contractor."

425. The declaration is framed in the past tense in response to the argument of the respondents that a declaration expressed in terms applicable to the future would make no allowance for possible changes in the arrangements between the applicant on the one hand and its workers and builder clients on the other hand. The point is valid, and I accept that any declaration must be based on the situation which obtained in 1988 and which was described in evidence before me. It ought not to relate to the future or to the indefinite past. I therefore propose to insert the words "in 1988" in the first line of the declaration to make the point abundantly clear.

426. After giving the matter most careful consideration I have decided, in the exercise of the Court's discretion, not to grant any injunctions to the applicant. In doing so I do not overlook the long campaign of opposition to Troubleshooters waged by the respondent unions and others over the years, nor the clear evidence before me of wrongful conduct by the four individual respondents.

427. On the other hand it is important to remember that the respondents all believed that they had right on their side. I am satisfied that they genuinely believed that Troubleshooters workers were employees and that the VBIA applied to their situations. Nor was this an unreasonable belief; counsel for the respondents have presented cogent arguments in support of this view.

428. In addition, justifiable union concerns about "cash-in-hand" payments, tax avoidance and the availability of cheap labour at worse than award conditions have fuelled the fires of union opposition to Troubleshooters. In this I believe the unions are wrong. In my opinion the payments made to Troubleshooters by builders, and by Troubleshooters to its workers are comparable to, though different from, award pay and conditions. Workers who accept the absence of such things as annual leave and Workcare cover do so by choice in return for the freedom to choose their own work from day to day or week to week.

429. There is no evidence to suggest that builders choose to engage men through Troubleshooters because they are cheaper.

430. All payments made are fully recorded and subject to appropriate taxation. There is no evidence of tax evasion or avoidance. Those workers who enter into partnerships with their wives are only doing what many members of the community do, and are subject to the same scrutiny.

431. In spite of the strength of feeling of union leaders and some union members (many others appear to be unconcerned by the situation) responsible officers such as Mr Henderson and Mr Giles appear to have been able, for the most part, to hold the line during the time this matter has been before the Court. No doubt the existence of interlocutory injunctions helped them to do so.

432. I am confident that the same responsible approach will be evident in the reaction to the findings of this Court and that there will be a reassessment of attitudes in light of the findings that, as a matter of law, Troubleshooters men are not employees - either of Troubleshooters or of the builders to whom they are sent. Counsel for the respondents, in their final written submission, said,

"The evidence as to the Unions' policy

and its purpose clearly shows that the Unions

do not intend to conduct themselves in the

future in breach of the law, whatever may have

been the situation in the past as to the

individual dispute sites".

433. In all the circumstances, I think it would be wrong for me to assume that, even in the light of these findings, unlawful industrial action against these men and Troubleshooters will continue. If it does, then of course Troubleshooters will be able to bring the unions and the officials involved back to the Court and appropriate action can be taken.

434. In reaching this conclusion I have not overlooked the provisions of sub-s 80 (4) of the Trade Practices Act (above). It is clear that the Court has the power to grant injunctions even if it is not satisfied that the respondents intend future breaches of the Act.

435. However, the decision about the status of the Troubleshooters men as contractors changes the perceived situation so radically that I believe it would not be appropriate to issue injunctions on the basis of past behaviour, and I am cautiously optimistic about the future. Nevertheless I shall retain control over the situation, until these proceedings are finally determined by the disposal of questions of damages, by reserving to the applicant liberty to apply to the Court for injunctions. In the meantime the interlocutory injunctions presently in force will be discharged.

436. Damages are claimed against the respondents both at common law and pursuant to ss 82 and 75B of the Trade Practices Act, see above. By agreement of the parties, these questions of damages have been left for separate consideration after determination of liability. It is to be hoped that the parties can reach agreement on this issue, particularly bearing in mind the need for 'peaceful co-existence' in the industry. I shall fix a directions hearing some six weeks after this judgment is handed down, when the future conduct of the action can be considered.

437. In view of the complexity of this matter and the need for careful consideration of the Court's findings, I think it is appropriate that time should not begin to run for the purposes of any appeal from this decision at least until after the next directions hearing. I shall order accordingly.

438. I can see no reason why the applicants' costs of the proceedings to this date should not be paid by the respondents. But in view of the fact that the proceedings are not concluded, and a further directions hearing is to be fixed, I shall reserve costs at least until the date of that hearing.