Consideration of issues
98 In the following discussion I focus on matters raised by the submissions and evidence which I view as significant. It is convenient to commence by discussing the position after about 20 April 1998. That is, after ENA withdrew the option of employment under the board's determination. At that time a letter containing the April 1998 condition had been sent to a number of employees because they had indicated a preference for employment with ENA and later accepted the conditional written offer made earlier in 1998 subject to the establishment of an acceptable employment framework. The group on whose behalf these proceedings are brought are the employees who received that letter.
99 Notwithstanding the terms of the letter, the employees had a choice of employment under the board's determination, and not an AWA, until about 20 April 1998 when that option was withdrawn. It was then that an employee seeking employment with ENA clearly had no alternative but to sign both an AWA and an agreement to terminate the AWA before they could take up employment with that company. At this stage the insistence on acceptance of employment on the terms in the letter containing the April 1998 condition was pressure to enter an AWA. It is also clear that ENA intended this to be the case. That is, consistent with the objective senior officers of the company had articulated from time to time during the preceding months, ENA was intent on ensuring that any employee who took up employment with it did so after signing an AWA.
100 However the question raised by s 170WG is not answered, in my opinion, by first asking whether the prospective employer (as alleged in this case) applied pressure as a discrete question and then asking whether the pressure was illegitimate. The question raised by the section is whether duress was applied which can be answered by considering whether illegitimate pressure was applied to secure, at the very least, ostensible agreement to enter an AWA and thereby to secure, again at the very least, ostensible agreement to the terms and conditions of employment embodied in the AWA. That is, to repeat what I said in the judgment of 24 September 1999, whether illegitimate pressure was applied, and conduct was engaged in, by a person (in this case the prospective employer, ENA) that might result in illusory and not real negotiation or bargaining and general agreement about the terms and conditions of employment embodied in an AWA and about an AWA being the means of prescribing those terms and conditions. It is important to recognise, in my opinion, that the section is concerned with negotiation or bargaining by or on behalf of an individual employee or prospective employee with an employer or prospective employer. That is, it concerns negotiation or bargaining at an individual level.
101 At the time the option of employment under the board's determination was withdrawn the group to which the April 1998 condition applied were those employed in the APS who wanted to take up employment with ENA and had not, by then, signified acceptance of employment with ENA on the terms offered and signified agreement to enter into an AWA. Brushe, Walden, Schanka and Burns were in this group. Before considering the circumstances of the group more generally, it is convenient to consider the position of these four individuals. They were then seeking employment with ENA to do, effectively, the same or substantially the same work as they had done as an employee in the APS as part of the CES. That is, they were seeking employment with ENA to do the same job as they were then doing though with a different employer and in a different context in the sense that there was no longer to be an effective monopoly on the provision of employment placement services on behalf of the Commonwealth. As already discussed, the evidence establishes this was the position Brushe, Walden, Schanka and Burns were in after 20 April 1998 and before 1 May 1998. Burns did not take up employment with ENA (so there is no evidence enabling a comparison between work done before and after taking up such employment (a comparison which can be made in relation to Brushe, Walden and Schanka)). However it can be inferred from the letter he was sent which made reference to the position on offer being located in the Ballarat area and the enclosed duty statement, that he was being offered the position he held with the CES before being declared excess shortly before 1 May 1998.
102 I refer to this matter because the offer of employment in the same job is, in my opinion, the singularly most important of the matters particularised in par 69 of the statement of claim as evidencing illegitimate pressure. What effectively happened with Brushe, Walden, Schanka and Burns was that they were offered employment with ENA to perform the same or substantially the same work in the same position and location as they had done as employees in the APS employed in the CES. The offer was by a company associated with the Commonwealth. However each was, in substance, rendered impotent in negotiating or bargaining about the terms and conditions on which they would perform the work which differed from the terms and conditions they had, to that point, enjoyed and whether the employment would be regulated by an AWA (with, potentially, significant ramifications on their capacity to bargain collectively) by ENA's insistence on enforcing the April 1998 condition as a precondition to employment.
103 ENA knew in late April 1998 that Brushe, Walden, Schanka and Burns wanted to take up employment with it in preference to voluntary retrenchment, other APS redeployment and redeployment to Centrelink under a DEETYA/Agency Placement Arrangement. ENA would then have known that each of them securing other employment in the APS at that time was not assured.
104 As to the terms and conditions of employment in the AWA, ENA knew that Burns was prepared to work under those terms and conditions at least temporarily. That was because he had indicated he would take up employment with ENA under the board's determination which embodied the same terms and conditions. However Burns made it clear that the acceptance of those terms prescribed by board determination was on the basis that they might be altered (and from his perspective potentially improved) by a certified agreement between the CPSU and ENA and before a certified agreement was made, the terms and conditions in the applicable Awards would prevail by operation of s 149 of the WR Act. Thus Burns was prepared to accept the employment terms and conditions in the AWA (though reluctantly) but was not prepared to accept an AWA as the means of regulating his employment. It was clear from the position Burns took that he was anxious that there be further negotiation about the terms and conditions of his employment though he was content for this to happen collectively. It was also clear that he wanted to negotiate the means by which the terms and conditions of his employment would be regulated. However he was effectively placed in a position where there was to be no negotiation or bargaining. He was presented with the options of employment on the terms proposed by ENA or no employment. The approach taken by ENA to Burns involved, in my opinion, the application of duress. It is true that when this issue of duress was raised with Foster, he effectively indicated to Burns that he would not accept him as an employee. However the fact that Foster took that approach does not alter the position Burns was put in as a result of the conduct of ENA. It simply meant that because Burns was not prepared to yield to the pressure brought to bear by ENA he did not take up employment with ENA.
105 The position of Schanka is not greatly different. He made no complaint when informed by Redgen that if he did not sign an AWA he would be employed on the terms and conditions the board had determined. Thus it cannot be said that Schanka was constrained by ENA's conduct in negotiating or bargaining about the terms and conditions themselves at least as they might apply for the time being. However it would have been clear to both Redgen and Foster that Schanka did not want to sign an AWA and his interest was in the terms and conditions of employment being regulated by a certified agreement with the CPSU negotiated collectively. The conduct of ENA meant that Schanka was effectively given no opportunity to negotiate whether the terms and conditions of his employment would be regulated by an AWA or by some other means such as a certified agreement with the CPSU.
106 The position of Brushe is also similar. It would not have been apparent to ENA from Brushe's initial discussions with Gillings and her subsequent return of the signed AWA with the standard form letter that Brushe took issue with the terms and conditions embodied in the AWA at least as an interim measure. However it would have been clear to Gillings that Brushe opposed the use of an AWA as the means of prescribing those terms and conditions and wanted her employment regulated by a certified agreement negotiated with the CPSU. The effect of an AWA is to displace other industrial prescription in the way discussed in the passage set out in par 89 above. She was given no effective opportunity to negotiate an outcome other than that ENA was insisting on, namely prescription by means of an AWA.
107 Walden's position is a little different. Having regard to his evidence, he was, in April 1998, concerned at least about the use of an AWA as a means of determining his terms and conditions of employment. There is no evidence that Walden spoke to anyone in a position of authority in ENA about his concerns at the time. There was, however, the conversation that Schanka had with Foster on 23 April 1998 concerning employees at the Sydney office which included Walden. It is probable that Foster knew Walden was one of the employees who, by 23 April 1998, had not signed an AWA. It is also probable that Foster then believed that Walden (and the other employees at that office) had not signed an AWA because his preference had been for the regulation of his employment under the board's determination. It was in this context that Foster gave the ultimatum to Schanka that AWAs had to be signed within the day or the offer of employment would be withdrawn. Foster would have then expected that ultimatum to be conveyed to Walden which it was.
108 ENA would have known that by entering an AWA each of Brushe, Walden, Schanka and Burns would have, if later employed by ENA, forgone the right to take protected industrial action in pursuit of particular terms and conditions of employment which might ultimately be agreed to by ENA and reflected in a certified agreement and particularly an agreement with CPSU: see s 170VU(1), and any existing award prescription would be displaced by the AWA. It cannot be assumed, as ENA effectively invited in submissions, that because it did not want to enter an agreement with CPSU, there never would be such an agreement which might then be certified.
109 In these circumstances ENA insisted on Brushe, Walden, Schanka and Burns entering AWAs if they were to take up employment with the company and it was not, from about 20 April 1998, prepared to countenance the prescription of terms and conditions of employment by means other than an AWA. It was a deliberate policy which denied Brushe, Walden, Schanka and Burns any opportunity to negotiate or bargain about either the terms and conditions on which they would be employed or the means by which the terms and conditions would be prescribed. They were effectively forced to enter an AWA if they were to take up employment with ENA, and were given, after the withdrawal of the offer of employment under the board's determination, only days to make up their minds. While each was asked to (and all except Burns did) sign an agreement facilitating the termination of the AWA, it was to be effective only in the circumstances ENA aspired to achieve, namely a certified agreement under s 170LK.
110 It might be thought that unless ENA had taken the position it did, it would have effectively been precluded from negotiating with any particular employee transferring from the APS (and Brushe, Walden, Schanka and Burns in particular), terms and conditions of employment acceptable to both the employee and ENA and reaching agreement that the terms and conditions be regulated by an AWA. However ENA elected in late 1997 to embark on a sophisticated and potentially unfair stratagy of using the PEPE 100 to create a certified agreement of general application with the effect of both prescribing terms and conditions of employment of a significant number of employees precluding involvement of the CPSU and displacing the operation of the applicable Awards if, as a matter of law, they applied. The use of a small number of employees to create a certified agreement of subsequent general application has since been critically discussed by a Full Court in Mine Management Pty Ltd v Construction, Forestry, Mining and Energy Union [1999] FCA 847 and (1999) 164 ALR 73 at [121]-[127]. As events transpired, CPSU did have some involvement. However, ENA did not, in late 1997, simply embrace a strategy of negotiating AWAs, if that was ENA's preferred method of industrial prescription, with all employees it wished to take on from the APS when the time arose to do so. It is true that the ministerial announcement of 10 December 1996 tended to circumscribe what PEPE (and later as ENA) could do when it spoke of terms and conditions being determined by an "initial certified agreement negotiated by the PEPE and its staff organisations". However, ultimately, the approach of ENA and the evaluation of its conduct must be seen in the context of it having made the decision that, to the extent that it was at all possible, employees would be employed on AWAs. Having embarked upon this course, it was required to conduct itself in a way that was not proscribed by the WR Act. In relation to Brushe, Walden, Schanka and Burns it failed to do so and applied to them illegitimate pressure constituting duress.
111 It is, in my opinion, no answer to say, as suggested by ENA in its submissions, that the course ENA adopted was a defensive one necessary for its commercial viability and a response to the manoeuvrings of the CPSU. ENA wanted to employ the people to whom it made offers, both in a qualified way in February 1998 and an unqualified way in April 1998 (subject to signing an AWA), which included Brushe, Walden, Schanka and Burns. ENA wanted to employ them on the terms and conditions of employment it proposed and only in an industrial context where the applicable Awards could not apply and the CPSU was to have no role, or at least no role of negotiating on a collective basis. Moreover there is no evidence establishing what the commercial consequences were (or were believed to be) in a concrete sense to ENA in not taking the course it did, namely requiring employees to take up employment under an AWA on the terms it contained.
112 The operation of s 170WG was recently considered by Ryan J in Maritime Union of Australia v Burnie Port Corporation Pty Ltd [2000] FCA 1189; (2000) 101 IR 435 ("Burnie"). A number of other authorities were referred to by the parties but they are, in my opinion, of peripheral relevance and it is unnecessary to refer to them. The relevant circumstances in Burnie were as follows. In August 1999, Burnie Port Corporation ("the Corporation") had two vacancies in its workforce. The Corporation decided that the employment of the person engaged to fill each of those vacancies should be governed by an AWA. The employment of the Corporation's workforce had previously been governed by an enterprise bargaining agreement ("the existing EBA"). From December 1998, there had been negotiations between the Corporation and the Maritime Union of Australia ("the MUA") for a new EBA. In April 1999, the Corporation offered its workforce employment pursuant to an AWA rather than an EBA. By August 1999, agreement had not yet been reached between the Corporation and the MUA on a new EBA. During interviews for the two vacancies, the Corporation informed applicants that if they were successful, employment would be offered on condition that they enter an AWA. One applicant, Mr Rolls, a member of the MUA but not an employee of the Corporation, objected to such a condition. He was not offered employment. At the time, employment opportunities in the Burnie region were comparatively limited. The MUA brought proceedings alleging the Corporation had contravened ss 298K(1) and 170WG(1) of the WR Act in its conduct in filling the two vacancies. Ryan J held that the Corporation had contravened s 298K(1) by refusing to employ Mr Rolls for the prohibited reason that Mr Rolls was entitled to the benefit of an industrial instrument, namely the existing EBA. However, his Honour held that the Corporation had not applied duress within the meaning of s 170WG(1). The Corporation appealed against the finding of a contravention of s 298K(1). A Full Court upheld the appeal on the basis that Ryan J had erred in finding Mr Rolls was entitled to the benefit of an industrial instrument: see Burnie Port Corporation Pty Ltd v Maritime Union of Australia [2000] FCA 1768. The Union did not put in issue in the appeal Ryan J's finding that there was no duress within the meaning of s 170WG(1).
113 Ryan J summarised the case of the Union under s 170WG(1) as follows (at par 63):
"The Union contends that the Corporation's conduct in this case went beyond merely requiring successful applicants to enter into AWAs as a condition of engagement and amounted to "duress". That contention relied on the combination of two circumstances surrounding that requirement. First, employment opportunities in the Burnie region were, to the Corporation's knowledge, abnormally restricted, and, secondly, it was said, the Corporation's motive in requiring the new employees to enter into AWAs, which revealed by the evidence to be the Corporation's pursuit of increased productivity. Those circumstances, it was submitted, combined to support the conclusion that the Corporation had taken unfair advantage of the situation of prospective employees in its pursuit of increased productivity (and presumably, profit). To exploit an unfair bargaining advantage of that kind, it was said, was to apply duress in connection with an AWA in contravention of s 170WG."
114 His Honour dealt with the Union's submission as follows (at pars 65 to 72):
"It must be acknowledged that the WR Act is generally concerned to regulate the conduct of industrial relations which it governs. The need for regulation is born of the competing interests of employers and employees to achieve the most favourable terms on which work is respectively utilized and provided. Employers are often (though not always) motivated by a desire to achieve an advantage over, or at least maintain parity with, their competitors through increased productivity and profit. Regulation under the WR Act is a means by which the effect of this instinct on employees is mitigated in the public interest, as determined by Parliament.
There is discernible in many provisions of the WR Act, including s 170WG, a policy that wages and working conditions are to be determined by a process of bargaining at arm's length using weapons, including protected industrial action, which the legislation impliedly regards as fair, but without resort to proscribed tactics or techniques which are to be characterised as unfair.
It can readily be envisaged that an employer in pursuit of its own economic advantage will seek from the bargaining process contemplated by the WR Act, to restructure its workforce or to achieve economies through greater flexibility without endeavouring to reduce in real, or even relative, terms, the remuneration of the employees concerned.
If accepted in its entirety, the Union's submission would preclude an employer from utilising the legislatively-sanctioned employment instrument of an AWA (within other limitations set out by the WR Act) to achieve the object to which I have just referred, solely because entry into an AWA, whatever its terms, was insisted on as a term of engagement of new employees.
I cannot agree that Parliament in enacting s 170WG intended that the concept of duress should be capable of an application as wide as that. The WR Act expressly limits the advantage to an employer which might be gained by requiring an AWA as a condition of entry into an employment contract. That limitation somewhat diminishes the force of the Union's submission so far as it is directed to showing that the Corporation's object was to increase productivity whatever the cost to its employees. The WR Act conditions the operation of each AWA on its passing the "no disadvantage" test prescribed by s 170XA. The result is to narrow considerably the detriment that can be imposed on an employee and the advantage that can accrue to the employer when the latter successfully insists that their relationship be regulated in future by an AWA.
It may be that, in future, if the designated award that provides the criteria for application of the "no disadvantage" test is not adjusted to reflect market trends evidenced by relevant certified agreements and AWAs, the utility of the "no disadvantage" test in ensuring minimum standards will gradually diminish. However, that circumstance is not said to have arisen here and it is unnecessary therefore to consider its impact in bringing the conduct of the Corporation in relation to its AWAs within the concept of duress.
This is not a case in which those alleged to have been subjected to duress were in any relationship with the Corporation, other than that of applicants for the vacant positions. If such a relationship, from pre-existing employment or otherwise, had existed, it would have been relevant to examine the circumstances of the employer's conduct to determine whether there were features which rendered illegitimate or unconscionable a threat or inducement offered to procure entry into an AWA and thereby amounted to duress.
The terms of the proposed AWA in relation to those available to the rest of the employer's workforce and the relevant labour market as a whole will also have a bearing on this question of duress. In the present case, the Corporation has sought to compel prospective employees to enter into AWAs which are not markedly disadvantageous in their terms. Having regard to those considerations, what is left of the alleged duress in the present case is that entry into the AWAs was made a condition of appointment to vacancies in circumstances where the prevailing scarcity of employment made it more likely that the condition would be accepted by those interviewed. I have been unable to discern any positive conduct by the Corporation beyond its decision to offer employment under the AWAs, albeit with some knowledge of that circumstance. This, I consider, does not amount to illegitimate pressure of the kind needed to establish duress under s 170WG."
115 In my opinion, the circumstances in Burnie are materially different from the present case. There, the conduct alleged to constitute duress was, in essence, the making of offers of employment to strangers, who had no pre-existing relationship with the employer, conditional on the entering of an AWA, in circumstances where the employer knew that the regional labour market was unfavourable to job applicants. In this case, the impugned conduct occurred against a background in which a government employment agency was effectively being abolished and its functions transferred to private employment agencies working under contract with the Commonwealth which included a company which had an association with the Commonwealth, ENA. The applicants in this case were employees of the agency and were being offered employment with a Commonwealth authority, ENA. The applicants' circumstances raise a range of matters which were not present in the circumstances considered by Ryan J. Indeed, his Honour expressly adverted to a situation, different from that in Burnie, in which the persons alleging duress stood in a pre-existing relationship with the employer alleged to have applied duress. While the applicants in this case had no prior legal relationship with ENA, they were, in substance, being invited to continue to do the jobs they had formerly done by a company associated with their existing employer, the Commonwealth.
116 Several of the matters that point to the application of duress to Brushe, Walden, Schanka and Burns are not directly addressed in the evidence as they may have arisen in relation to the other members of the group presently under discussion. That is, the evidence does not directly address what the individual position was in relation to all other employees who took up employment with ENA (or, indeed, were simply offered employment with ENA). For example, it is not apparent whether all other members of the group were being offered the same or substantially the same position they held prior to 1 May 1998 as a member of the APS. While it may be that all the employees in the APS wanting to take up employment with ENA, or at least very many of them, were being offered, in substance, the positions they held in the CES immediately before 1 May 1998. However I cannot infer, as I was invited by the applicants to do, that as a matter of fact this was so of each and every member of the group on whose behalf these proceedings are brought. These are proceedings for a penalty and it is thus appropriate to apply the Briginshaw standard of proof: see Briginshaw v Briginshaw (1938) 60 CLR 336 at 362; Maritime Union of Australia v Geraldton Port Authority (1999) 93 FCR 34 at [200]-[201], Employment Advocate v National Union of Workers (2000) 100 FCR 454 at [25]-[29] and Seven Network (Operations) Ltd v Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia [2001] FCA 456 at [48] and the evidence in this matter falls short of establishing, to that standard, that each and every member of the group was being offered the position they held before 1 May 1998. There was one portion of a paragraph of an affidavit of Colmer (the last sentence of par 4(a) of an affidavit of 10 August 1998) that might have provided some direct evidence tending to prove the position generally. However the portion of the affidavit was objected to and not read. Paragraph 43 of the statement of claim appears to involve an assertion (though it is ambiguously expressed) that employees recruited by ENA would do the same or substantially the same work as they had done prior to 1 May 1998 in the APS. However, this is not admitted in the defence.
117 Nor does the evidence address directly whether any other employee who had not signed an AWA by 20 April 1998 had made known to ENA that he or she did not want to be employed under the terms and conditions embodied in the proposed AWA, did not want the prescription of those terms by an AWA or both. While an inference might be drawn from the evidence as a whole that there were employees in addition to Brushe, Walden, Schanka and Burns whose position was the same, their identities and precise number is unknown. This is an important matter as these are representative proceedings in which the applicants seek the imposition of penalties on the footing that ENA applied duress to each member of the group. Moreover the applicants ultimately sought a declaratory order that ENA had applied duress to each and every member of the group. In my opinion, the question of whether duress was applied as alleged turns fundamentally on the question of whether ENA, in conducting itself in the way it did, was requiring each member of the group to sign an AWA when it knew that the individual wanted to negotiate or bargain about the terms and conditions contained in the standard AWA or about whether the terms and conditions of his or her employment should be prescribed by an AWA. Or, at the least, it was known to ENA this was the likely position. In the absence of evidence that would support a finding that any particular individual wanted to negotiate or bargain about these matters, (or it was likely the individual wanted to), it cannot be said, in my opinion, that the conduct of ENA did, or probably would, deny or tend to deny the individual the opportunity to negotiate or bargain freely. One is left not knowing whether the conduct of ENA involved the application of duress nor knowing whether the pressure was being applied to an individual who wanted to negotiate or bargain.
118 This can be illustrated by the position of Ashfield about which there is some evidence. He is a member of the group on whose behalf these proceedings are brought. He gave evidence that he willingly signed an AWA. It is plain he did not wish to negotiate or bargain with ENA about the terms and conditions of employment in the AWA nor to negotiate or bargain with ENA about whether an AWA should be the means of prescribing those terms and conditions. In the absence of evidence of an expressed desire to negotiate or bargain on one or both of these matters (or even an unstated desire to be inferred from the circumstances) or evidence that this was likely to be the position, it cannot be said, in my opinion, that ENA applied duress to him. No question of negotiation or bargaining, whether free or illusory, arose. I do not accept that the imposition of the April 1998 condition, viewed in isolation and without regard to the circumstances of each of the individuals on whom the imposition of the condition might operate, was conduct intended to be proscribed by s 170WG having regard to what I view as the purpose of the section discussed earlier.
119 For these reasons, the evidence only establishes that in the period after 20 April 1998 ENA applied duress to Brushe, Walden, Schanka and Burns and not other members of the group. The absence of evidence about the circumstances of any particular individual for the period prior to 20 April 1998 would lead to a similar conclusion. That is, the evidence does not establish that in this earlier period duress was applied to any person in the group.
120 Moreover, I am not satisfied duress was applied to any person before about 20 April 1998. No person was then being required to sign an AWA because, at that time, the option of employment under the board's determination was available (even in relation to people who before 25 March 1998 may have signed an AWA). It is probable this option was known to be available by each of the recipients of the letter containing the April 1998 condition. It follows that each person who received the letter knew he or she was able, before 20 April 1998, to refrain from entering an AWA (notwithstanding the terms of the letter) and free to take up employment with ENA under the determination. While the evidence suggests that any person who had wanted to follow this course (and if the option had not been withdrawn) would have had to have been persistent, there was nonetheless scope, in a real sense, to negotiate or bargain about entering an AWA or not.
121 It is true that the board's determination reflected the terms and conditions of employment in the AWA and accordingly a person could not avoid those terms and conditions by taking up employment under the determination. However the lack of choice about the terms and conditions arose because of the unusual circumstances in which ENA was commencing operations including the existence of the prescription of conditions power which was quite unusual. Whether, more generally, the position the individuals being offered employment were in before 20 April 1998 was unfair and inequitable, or the behaviour of ENA was unconscionable, is presently irrelevant. Any employee who did not want to accept the terms and conditions offered by ENA which were contained in the proposed AWA could reject them by rejecting employment under an AWA. The fact that a person who was free to reject the terms and conditions (as they were proposed in the AWA) by rejecting the AWA, would (if the AWA was rejected) nonetheless be bound by the same terms and conditions because of the board's determination if he or she took up employment with ENA, does not gainsay the freedom the person had to reject the terms and conditions in the AWA as enlivened by the making of an AWA. What is unusual about this case is that the board of ENA had available, at least arguably, a legal means of insisting on the terms and conditions it desired by imposing them by exercising the prescription of conditions power even in the face of rejection of an AWA. It purported to do so by making the determination and it thereby effectively frustrated or rendered ineffective any rejection of the terms and conditions by the rejection of the AWA. Nonetheless each person offered employment with ENA was in a position where they could reject the AWA, (and, by operation of the AWA, the terms it contained) until about 20 April 1998.