Seven Network (Operations) Ltd v Communications, Electrical, Electronic, Energy Information, Postal, Plumbing and Allied Services Union of Australia

Mighell: 'I couldn't rule it [industrial action around the Olympics of the finals] out, Neil. Obviously we will play our cards close to our chests and it is a tactical situation with Seven I suppose that we are in. But, I can't rule it out, but that is a decision our members would take and they wouldn't take it lightly.' Okay Neil Mitchell: 'How many members do you have there?' Mighell: 'About eighty members there now.'" Later in the interview Mighell said "sometimes you have to put the shoulder to the wheel and actually threaten to take industrial action, otherwise you get nowhere". 6. By notice in writing dated 21 August 2000 signed by Mighell, the CEPU gave notice to Seven Network that Seven Network's Melbourne employees who were members of the CEPU intended to organise and engage in industrial action, being rolling stoppages in the news operations, outside broadcast and studio operations undertaken by Seven Network Melbourne as and from 25 August 2000, for a period of one month or until agreement was reached. 7. By notice in writing dated 21 August 2000 Mighell authorised the employees of Seven Network in Melbourne, who purported to be members of the CEPU, to engage in industrial action against Seven Network. 50 The media statements made by Mighell and McCallum caused Seven Network to place advertisements in the Herald Sun and The Age newspapers on Saturday, 19 August 2000 responding to "inflammatory statements" which "included a threat to disrupt coverage of the AFL Grand Final". 51 The respondents claimed that, although the media statements raised the possibility of industrial action, they fell short of a threat to take industrial action. In the context of s 170NC(1) a threat means to menace, or forewarn of an intention to take, industrial, or other, action. While the statements made by Mighell and McCallum did not state explicitly that industrial action was intended to be taken, I am in no doubt that the implicit warning in all the circumstances, including the continuing refusal of the CEPU to undertake not to take industrial action, was that if Seven Network continued to refuse to accede to the CEPU's demands, such action would be, or was likely to be, taken. Accordingly, I am satisfied that in the media interviews both Mighell and McCallum threatened to take industrial action against Seven Network. The fact that the threat was conditional does not make it any less a threat. Obviously, the s 170MO notice signed by Mighell constituted an additional threat of an intention to take industrial action. 52 The threats were plainly intended to bring pressure to bear on Seven Network to accede to the CEPU's demands for a local enterprise agreement: cf Hanley at [41]. 53 The main issue of fact raised by the respondents is whether the threats fell outside the purview of s 170NC(1) as they were intended to be threats to take protected action. If the respondents did not actually possess the belief they claimed the question of whether the belief could afford them a defence would not arise. 54 Mighell and McCallum are experienced union officials who were aware of the importance of membership eligibility rules. Mighell has been State Secretary since 1995, an organiser from 1988 to 1995 and has a "working knowledge" of the Act. McCallum has been an organiser since 1995. Mighell and McCallum were aware that, under the CEPU Rules, there was a real problem about the eligibility of Seven Network employees recruited by them. They each claimed that the CEPU was entitled to initiate a bargaining period because it had one employee who was eligible to be a member of the CEPU, but they also claimed that the employees' right to freedom of association and the rights of the CEPU to bargain on their behalf under Div 2 of Pt VIB entitled the CEPU to admit and list the employees as members and to act on their behalf in that capacity in enterprise negotiations with Seven Network. As explained earlier, Mighell and McCallum were aware that only one employee, an electrician, was eligible to be a member of the CEPU. Although they may have been entitled to represent the persons they recruited for the purposes of Div 2 of Pt VIB, I am satisfied that they did not believe that those persons were entitled to be members of the CEPU under its Rules. 55 Mighell and McCallum also claimed that they believed that, as the CEPU was entitled to initiate a bargaining period for Seven Network employees, it was also entitled to give a notice of protected action which enabled those employees to take action that was protected action under the Act. Mighell stated that advice he received on 19 or 20 August 2000 from Benfell, a senior industrial officer of the CEPU, confirmed his belief that the CEPU was entitled to take protected action, but when he received legal advice to the contrary for the first time from the CEPU's solicitor on 23 August 2000 he immediately withdrew the s 170MO notice. 56 The claim by Mighell and McCallum that they intended that the action threatened was to be protected action under the Act and that they received advice from Benfell to that effect is difficult to accept. The complex requirements of the Act in respect of the taking of protected action by individual employees had been strictly adhered to by Mighell and McCallum in respect of the industrial action taken by Seven Network employees in November/December 1999. It is most unlikely that Mighell and McCallum would not have been aware of the requirements of the Act concerning the taking of protected industrial action in relation to the AFL finals and the Olympic Games after the CEPU, rather than the employees, initiated the bargaining process in August 2000. Benfell, Mighell, and McCallum were aware that the statutory procedures that were required to be followed for action to be protected were complex; that they were breaking new ground in endeavouring to initiate a bargaining period with only one eligible member at Seven Network and in threatening industrial action for the benefit of employees who were ineligible to be members of the CEPU; and that they were undertaking a high risk strategy in making threats to disrupt the televising of the AFL finals and the Olympic Games. In the circumstances, I do not accept that Benfell, Mighell or McCallum believed that non-members of the CEPU who were not negotiating parties were entitled to take protected action without carefully considering or receiving legal advice concerning the protected action provisions of the Act, which they say they did not do. Certain evidence given by Mighell is consistent with that conclusion. Mighell said that he didn't have "industrial muscle or membership" to achieve the disruption threatened. He also said that he was aware of "how little ability" the CEPU had to do anything at the time and that he was aware of "how flawed our game plan was at the time". 57 Although I do not go so far as to find that Benfell, Mighell and McCallum knew that the industrial action threatened was not capable of being protected action, I am satisfied they did not have a belief that the action was protected action. The probability is that the employees represented by the CEPU did not intend to disrupt the television coverage of the AFL Finals or the Olympic Games and that Mighell and McCallum, being aware of the absence of any such intention but having recruited those employees as members, felt obliged to make threats of such action in an endeavour to pressure Seven Network to accept, at the least, some of the CEPU's demands. As Mighell and McCallum were aware that it was most unlikely that the industrial action threatened was going to be taken, they did not believe that it was critical to the CEPU's strategy that the action be protected action. That belief assists in explaining the failure of Benfell, Mighell and, to a lesser extent, McCallum to more carefully consider the rights of the CEPU under the Act. 58 Mighell and McCallum stated that they had been advised by Benfell of the CEPU's entitlement to take protected action. In one sense the advice was correct as the CEPU, as a negotiating party, was entitled to take protected action as an organisation. However, such action was of no utility as the CEPU was unable to take any action that would affect Seven Network telecasts. I do not accept that Benfell advised Mighell or McCallum that employees of Seven Network, who were not eligible to be members of the CEPU and who Benfell knew were not negotiating parties, were entitled to take protected industrial action. I am satisfied that Benfell would not have given such advice in the circumstances of the present case without seeking legal advice on that issue, which he did not do. 59 In the above circumstances there can be little doubt that the conduct of Mighell and McCallum on behalf of the CEPU was coercive conduct. In summary, I am satisfied, on the probabilities, that the following factors constituted coercive conduct of the CEPU for the purposes of s 170NC(1): (a) The CEPU recruited as members Seven Network employees who had the power to interfere with or interrupt the televising of the AFL finals and the Olympic Games but who were not eligible to be members of the union; (b) The CEPU misrepresented to Seven Network that it had up to 80 members employed at Seven Network, including members who had the power to interfere with or interrupt the televising of the AFL finals and the Olympic Games; (c) The misrepresentations were made for the purpose of bringing pressure to bear on Seven Network to accede to the CEPU's demands for a local enterprise agreement for Seven Network's Melbourne employees; (d) At all material times, but unbeknown to Seven Network, the CEPU had only one person, an electrician, who was employed at Seven Network in Melbourne who was eligible to be or was a member of the CEPU and that person had no power or capacity to interfere with or interrupt the televising of the AFL finals and the Olympic Games; (e) The Seven Network employees represented by the CEPU did not form an intent to take industrial action to interfere with or interrupt the televising of the AFL finals or the Olympic Games; (f) Notwithstanding the above matters, in order to bring pressure to bear on Seven Network, the CEPU made media statements implying that industrial action would be, or was likely to be, taken by Seven Network's employees to interfere with and interrupt the televising of the AFL finals and the Olympic Games if the CEPU's demands were not acceded to; (g) On 18 August 2000 the CEPU gave notice to Seven Network under s 170MO of the Act of the intention of its "members" to take industrial action; (h) At the time the s 170MO notice was given the CEPU had no members who had the power or capacity to take the industrial action threatened and the persons it had been representing that had that power or capacity (ie the persons the CEPU recruited as members), did not have an intention at that time to take the action threatened; (i) If the action threatened had been taken by Seven Network's employees (who were not members of the CEPU) that action would not have been protected action under the Act and would therefore have been unlawful; (j) The CEPU did not hold a positive belief that the action threatened was protected industrial action; rather, the CEPU believed that the action threatened may not be protected action but refrained from making any proper enquiry concerning that matter; (k) The conduct engaged in by the CEPU was intended to negate Seven Network's choice in favour of a national, rather than a local, enterprise agreement and to obtain Seven Network's agreement to provide the benefits the CEPU was seeking to gain for Seven Network employees it had recruited as "members" under a local enterprise agreement. 60 The conduct engaged in by the CEPU constituted a threat to take industrial action with intent to coerce Seven Network not to agree to a national enterprise agreement but, rather, to agree to the local enterprise agreement sought by the CEPU. The conduct was coercive as it was a threat to take action that, in all the circumstances, was unlawful, illegitimate or unconscionable. The CEPU, through its officers Mighell and McCallum, was aware of all the circumstances set out in paras (a)-(h), (j) and (k) above that made the threat unlawful, illegitimate or unconscionable. 61 Mighell was actively involved in the conduct set out in sub-paras (a)-(h), (j) and (k) and was personally aware of the matters set out in those sub-paragraphs. Mighell's conduct in relation to the threats he made was such that the threats I have found constituted a breach of s 170NC(1) by the CEPU also constitute a breach by Mighell. 62 McCallum's role as an organiser was secondary to that of Mighell. However, I have found that McCallum's media interviews also constituted threats of industrial action against Seven Network. When McCallum made those threats he was aware of the matters set out in sub-paras (a), (d), (e), (j) and (k). Thus, although McCallum was not a signatory or party to the s 170MO notice, I am satisfied that the threats made by McCallum also breached s 170NC(1). McCallum's secondary role is relevant to penalty but not to breach. Div 2 Pt VIB - The Corporations power 63 Finally, Seven Network claims that the s 170MI notices of the CEPU are invalid as the CEPU had no power under the Act to negotiate an enterprise agreement on behalf of persons who were not eligible to be members of the CEPU. Accordingly, so it is argued, the CEPU's notice of its intention to negotiate a local enterprise agreement on behalf of members of the MEAA who were not eligible to be members of the CEPU was invalid. 64 The argument fails to recognise the fundamental change brought about by the federal parliament's reliance upon the corporations power as the source of its legislative power to enact Div 2 of Pt VIB. 65 Section 170MI(1) authorises a union to initiate a bargaining period if it "wants to negotiate an agreement under Division 2…in relation to employees who are employed in a single business or a part of a single business…". Under Div 2 an employer which is a constitutional corporation may make an agreement with an organisation of employees if, when the agreement is made, the organisation has at least one member whose employment will be subject to the agreement and the organisation is entitled to represent the industrial interests of the member in relation to work that will be subject to the agreement: see ss 170LH, 170LI and 170LJ. 66 Seven Network appeared to accept that on a literal interpretation of s 170LJ the CEPU was entitled to give the s 170MI notice dated 11 August 2000. However, it argued that the "scheme of the Act" only enabled industrial organisations to represent the industrial interests of their members and not the industrial interests of members or persons only eligible to be members of other organisations. Thus, so it is said, I ought to infer an implicit limitation on ss 170LH, 170LI and 170LJ to the effect that: · the employees the subject of the agreement referred to in those sections are persons who are members or eligible to be members of the organisation wanting to negotiate the agreement; · the agreement is confined in its operation to employees who are members or eligible to be members of the organisation or is otherwise shown to be in the industrial interests of those persons. 67 Although the Act, in general, provides for industrial organisations to represent the industrial interests of persons who are members or are eligible to be members of those organisations, that is not so in Div 2 of Pt VIB. The clear intent of Divs 2 and 8 is that an organisation with at least one member (whose interests it is entitled to represent) employed in a business of a constitutional corporation is entitled to initiate a bargaining period in order to negotiate a certified agreement in relation to the employment of that, and other, employees of the corporation. The agreement must be approved by a valid majority of employees (s 170LJ(2)). Further, where the organisation, rather than the employees, is the relevant negotiating party, only it or its members employed by the corporation can take protected action in relation to the agreement (ss 170ML(2) and 170MO(2)). I do not regard the operation of these provisions as anomalous or otherwise inconsistent with the objects or scheme of the Act. 68 In my view Seven Network's argument concerning the operation of Div 2 Pt VIB is contrary to the ordinary and natural meaning of the words used. Further, it seeks to read into ss 170LI and 170LJ words that are not warranted and are inconsistent with the clear legislative objective of giving the Division a wider and different operation to other parts of the statutory scheme that are founded on the conciliation and arbitration power and are concerned with the traditional role of industrial organisations in that process. 69 For the above reasons the Seven Network has not established an entitlement to declaratory relief in respect of the CEPU notices given under s 170MI. Conclusion 70 I am satisfied that the CEPU, Mighell and McCallum have contravened s 170NC(1) of the Act. In these reasons for judgment I have considered the allegations made against each of those respondents on the basis of a single breach being alleged against each of them. However, Seven Network in its written submissions contended that each threat upon which it relied should be regarded as a separate breach. That issue was not addressed in any detail by the parties. In these circumstances it is appropriate to adjourn the further hearing of the matter to enable submissions to be made in respect of that issue and penalty. As Seven Network has

not made out its claim for the declaratory relief it sought in respect of the s 170MI notices, when the final orders are made it will be appropriate to dismiss its application for such relief. I certify that the preceding seventy (70) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Merkel.

Associate: Dated: 26 April 2001 Counsel for the Applicant: Mr JL Bourke

Solicitor for the Respondent: Electrical Trade Union

Date of Hearing: 13 March 2001 and 10 April 2001