State of Victoria v Australian Education Union

REASONS FOR JUDGMENT 1 On 7 February 2013, I refused the application of the applicant, the State of Victoria, for interlocutory injunctions restraining the respondents, the Australian Education Union ("the AEU") and The CPSU, The Community and Public Sector Union ("the CPSU"), from organising or engaging in industrial action in support of claims for new enterprise agreements to be approved under the Fair Work Act 2009 (Cth) ("the FW Act"). These are my reasons for having done so. 2 This proceeding concerns industrial action taken, and proposed to be taken, by teachers, principals and education support class ("ESC") employees employed in the teaching service in Victoria pursuant to the Education and Training Reform Act 2006 (Vic). Their terms and conditions of employment have been regulated by agreements made under the FW Act, or previous legislation. Currently, there are two such agreements, the Victorian Government Schools agreement 2008, which covers principals, assistant principals and teachers, and the Victorian Government Schools - School Services Officers Agreement, 2004, which covers ESC employees. These agreements have passed their nominal expiry dates. The AEU represents employees covered by both of these agreements, and the CPSU represents employees covered by the second-mentioned agreement. 3 The respondents have recently made claims upon the applicant for the terms of new industrial agreements to replace the two to which I have referred. The AEU made its claim in relation to teachers and principals in December 2010 and in relation to ESC employees in March 2011; and the CPSU made its claim in relation to ESC employees in December 2011. Subsequently, the applicant and the respondents engaged in negotiations with respect to the two proposed agreements which were the subject of the respondents' claims referred to. 4 The respondents moved to organise the taking of industrial action in support of their claims for the making of new agreements. On 2 May 2012, the Fair Work Commission (then known as "Fair Work Australia" but referred to herein as "the Commission") made a protected action ballot order under s 443 of the FW Act on the application of the AEU. The question to be put to voters under the proposed ballot with respect to the schools agreement was whether they endorsed taking protected industrial action in the form of an unlimited number of state-wide or regional or sub-branch stoppages of work of 1-24 hours' duration, or bans or limitations on the manner in which work was undertaken. A like order was made, also on the application of the AEU, with respect to the proposed agreement for ESC employees, on 19 July 2012. On 26 July 2012, the Commission made a like order on the application of the CPSU. In all cases, ballots subsequently held pursuant to those orders approved the taking of industrial action. 5 Since the developments referred to in the previous paragraph, the respondents have organised the taking of industrial action from time to time in support of their claims for new industrial agreements. In each case, as I understand it, the industrial action was notified to the applicant pursuant to the requirements of s 414 of the FW Act. The industrial action has included 24-hour stoppages of work and industrial bans of various kinds. 6 Most recently, the respondents have notified the applicant of their intention to organise industrial action of two kinds. First, by letters dated 21 January 2013, they advised that their members in schools would impose bans on working more than 38 hours in any week. Secondly, by letters dated 6 February 2013, they advised that their members would undertake a state-wide 24-hour stoppage on 14 February 2013. This proposed industrial action is of obvious concern to the applicant not only because of the disruption to the actual operation of schools brought about by the foreshadowed stoppage, but also because of the range of duties that teachers, principals and ESC employees are, it seems, regularly expected to perform during hours beyond the first 38 in any week. As to the second aspect, there is evidence which would justify the provisional conclusion that the conduct of school camps in the period ahead would be severely disrupted, to the detriment not only of the students who would participate in those camps but also of the commercial undertakings, external to the applicant, which have been contracted to deliver the services associated with such camps. 7 The present proceeding was commenced on 4 February 2013, the originating application including applications for interlocutory injunctions which would restrain the respondents from organising, or continuing to organise, the industrial action to which I have referred, and from directing, inducing, procuring, advising or assisting any of their members to take industrial action of that kind. The questions which arose when these interlocutory applications came on for hearing on 7 February 2013 were whether the applicant had established a prima facie case that it would, at trial, succeed in obtaining the final relief which it seeks against the respondents, and whether the balance of convenience favours the imposition of the restraints which it seeks between now and the final hearing of the proceeding. In order to address the first of these questions, it will be necessary to say something briefly about the statutory framework which governs the rights and obligations of the respondents and their members with respect to industrial action. 8 It is an object of the FW Act to provide a balanced framework for cooperative and productive workplace relations that promotes national economic prosperity and social inclusion for all Australians by achieving productivity and fairness through an emphasis on enterprise-level collective bargaining underpinned by simple good faith bargaining obligations and clear rules governing industrial action: s 3(f). An important, if not the central, feature of the system established by the FW Act for the determination of terms and conditions of employment is the enterprise agreement regime for which Pt 2-4 of that Act provides. Broadly speaking, that part provides for a regulated system of collective bargaining, the successful conclusion to which is presumptively the making of an enterprise agreement between the employer and the employees involved in the bargaining. Subject to the detailed provisions of the FW Act, such an agreement may be approved by the Commission under Subdiv B of Div 4 of Pt 2-4 of the FW Act. 9 As is apparent from s 3(f) of the FW Act, the taking of industrial action is an aspect of the system of good faith bargaining contemplated by the Act, albeit subject to "clear rules". Those rules include the direct prohibition, in some cases, of the taking of industrial action: see eg ss 417 and 418 of the FW Act. No such direct prohibition is, however, relevant to the circumstances of the present case. 10 The rules governing industrial action also include the provisions of Div 2 of Pt 3-3 of the FW Act, which deal with the subject of "protected industrial action". By s 408, industrial action is protected if it is, amongst other things, "employee claim action" as described in s 409. Subsections (1) and (2) of that section, in turn, provide as follows: (1) Employee claim action for a proposed enterprise agreement is industrial action that: (a) is organised or engaged in for the purpose of supporting or advancing claims in relation to the agreement that are only about, or are reasonably believed to only be about, permitted matters; and (b) is organised or engaged in, against an employer that will be covered by the agreement, by: (i) a bargaining representative of an employee who will be covered by the agreement; or (ii) an employee who is included in a group or groups of employees specified in a protected action ballot order for the industrial action; and (c) meets the common requirements set out in Subdivision B; and (d) meets the additional requirements set out in this section. …. (2) The industrial action must be authorised by a protected action ballot (see Division 8 of this Part). The provisions of s 409(2) explain the recourse which the respondents had to the Commission in mid-2012 for the purpose of obtaining protected action ballot orders. 11 Subdivision C of Div 2 of Pt 3-3 of the FW Act deals with the significance of industrial action being protected industrial action. Section 415 provides as follows: (1) No action lies under any law (whether written or unwritten) in force in a State or Territory in relation to any industrial action that is protected industrial action unless the industrial action has involved or is likely to involve: (a) personal injury; or (b) wilful or reckless destruction of, or damage to, property; or (c) the unlawful taking, keeping or use of property. (2) However, subsection (1) does not prevent an action for defamation being brought in relation to anything that occurred in the course of industrial action. Save for provisions which have no relevance to the present case, s 415 is the only provision of the FW Act which gives consequences to the circumstance that industrial action is protected pursuant to Subdiv A of Div 2. It should be noted that the effect of s 415 is to protect those engaging in, or organising, the industrial action from any action under a law in force in a State or Territory. Whether such an action would otherwise lie would, of course, depend upon the facts of the case at hand, and is not the concern of the FW Act. 12 At the centre of the applicant's case (both interlocutory and final) is that the industrial action which is to be organised by the respondents (and, necessarily, which has hitherto been so organised) would not be protected action within the meaning of the statute notwithstanding that it is to be taken in support of claims for the making of an agreement proposed to be submitted to the Commission for approval, notwithstanding that the action has, ostensibly at least, been authorised by ballots taken pursuant to the protected action ballot orders to which I have referred, and notwithstanding that the action has, again ostensibly, been duly notified by the respondents to the applicant. In order to understand why the applicant takes this position - which is fundamental to its interlocutory application - it will be necessary to refer to some other provisions of the FW Act. 13 A requirement of s 409(1)(b) of the FW Act is that the industrial action sought to be protected must be organised or engaged in against "an employer" that would be covered by the proposed agreement. By s 407, the word "employer" means "a national system employer". The applicant is not a "national system employer" within the meaning of s 14 of the FW Act. However, Div 2A of Pt 1-3 of the FW Act is relevant to the present question because the State of Victoria is a "referring State" within the meaning of s 30B(1): (1) A State is a referring State if the Parliament of the State has, before 1 July 2009, referred the matters covered by subsections (3), (4) and (5) in relation to the State to the Parliament of the Commonwealth for the purposes of paragraph 51(xxxvii) of the Constitution: (a) if and to the extent that the matters are not otherwise included in the legislative powers of the Parliament of the Commonwealth (otherwise than by a reference under paragraph 51(xxxvii) of the Constitution); and (b) if and to the extent that the matters are included in the legislative powers of the Parliament of the State. This subsection has effect subject to subsection (6). Then s 30D(1) provides that a "national system employer" includes any person in a referring State so far as that person employs, or usually employs, an individual. Without more, that would make the applicant a "national system employer". 14 However, the applicant next points to the terms of s 30H of the FW Act, which provides as follows: A provision of this Division has effect in relation to a State that is a referring State because of this Division only to the extent that the State's referral law refers to the Parliament of the Commonwealth the matters mentioned in subsection 30B(1) that result in the Parliament of the Commonwealth having sufficient legislative power for the provision so to have effect. The "referral law" which exists in relation to the State of Victoria is the Fair Work (Commonwealth Powers) Act 2009 (Vic) ("the CP Act"). By that Act, certain matters are referred to the legislature of the Commonwealth pursuant to s 51(xxxvii) of The Constitution. 15 The applicant next points to ss 4 and 5 of the CP Act. To the extent presently relevant, s 4(1) provides: (1) Subject to section 5, the following matters are referred to the Parliament of the Commonwealth- …. (b) the referred subject matters, but only to the extent of making laws with respect to any such matter by making express amendments of the Commonwealth Fair Work Act; …. The "referred subject matters" mentioned in s 4(1)(b), include the following: (a) terms and conditions of employment including any of the following- …. (iii) bargaining in relation to terms and conditions of employment; …. (c) rights and responsibilities of persons, including employees, employers, independent contractors, outworkers, outworker entities, associations of employees or associations of employers, being rights and responsibilities relating to any of the following- …. (iv) industrial action; …. but does not include any excluded subject matter; …. To this point, it would seem that the provisions of the FW Act which provide for collective bargaining, and for the rights and responsibilities of the respondents, and their members, with respect to industrial action, including the provisions which relate to protected industrial action, fall within the "referral law" of the State of Victoria for the purpose of s 30H of the FW Act. 16 However, s 4 of the CP Act is subject to s 5 thereof, and s 5(1) provides in part as follows: (1) A matter referred by section 4(1) does not include- (a) matters pertaining to the number, identity or appointment (other than terms and conditions of appointment) of employees in the public sector who are not law enforcement officers; (b) matters pertaining to the number or identity of employees in the public sector dismissed or to be dismissed on grounds of redundancy; …. In the present case, the applicant contends that a number of the claims made by the respondents in the prosecution of their cases for new enterprise agreements fall within the terms of paras (a) and (b) of s 5(1) of the CP Act. As such, according to the applicant, those matters are excluded from the reference under s 4 of the CP Act and, to the extent that the FW Act deals with them, the provisions in question are not sustained by s 30H and, to that extent, the applicant itself is not a "national system employer". It follows, so it is said, that an agreement about such matters to which the applicant is a party could not be made or approved under the FW Act, and that the provisions of the FW Act which provide protection for the taking of industrial action, in certain circumstances, can have no application where the claims in support of which the action is, or would be, taken include matters of this kind. 17 In the primary way in which it puts its case, the applicant submits that the provisions of s 409 of the FW Act must be read down under either s 38 of the FW Act or s 15A of the Acts Interpretation Act 1901 (Cth). In the secondary way in which it puts its case, the applicant says that federal legislation that would permit the making or approval of agreements which contained provisions of this kind, and which would provide protection for industrial action to be taken in support of claims for such provisions, would overstep the implied limitation on Commonwealth legislative power identified in Re Australian Education Union: Ex Parte Victoria (1995) 184 CLR 188 at 232-233. 18 For reasons which will presently appear, it will not be necessary to consider the detail of the claims made by the respondents which the applicant contends would yield the consequences to which I have referred. To give some idea of the applicant's case in this regard, however, I note that one of the claims is for employment to be "ongoing", which the applicant submits would interfere with its right to make fixed-term appointments; and that another of the claims is for classes in schools not to exceed a certain size, which the applicant submits would effectively oblige it to make appointments of additional teachers. The question whether these and similar contentions around which the applicant's case is built are well founded is a difficult one, and the present interlocutory occasion is not appropriate for its resolution. Looking across the range of matters which, according to the applicant, would be excluded by s 5 of the CP Act, my impression is that the applicant's case is not uniformly strong with respect to all of them. However, I would not be disposed to resolve the present interlocutory application adversely to the applicant on the basis that its contentions with respect to the application of s 409 of the FW Act to the industrial action proposed to be taken by members of the respondents is self-evidently weak. When I refused to grant the relief which the applicant sought on 7 February 2013, I did so for other reasons. It is to those reasons that I now turn. 19 With one exception, the final relief sought by the applicant is for declarations with respect to the exclusion of the respondents' claims under s 5 of the CP Act, to the power of the Commission to approve any agreement which the respondents might make with the applicant by reason of that exclusion, to whether any such agreement would be a "proposed enterprise agreement" within the meaning of ss 408 and 409(1) of the FW Act, to whether the respondents could organise or engage in protected industrial action for the purpose of supporting or advancing claims in relation to the agreements proposed, to whether any such industrial action would be protected for the purposes of s 415 of the FW Act and to whether the protected action ballot orders made by the Commission in relation to the proposed agreements were valid. The exception to the above pattern of claims is the following claim, made in relation to each respondent: An injunction restraining the [respondent] (whether by its officers, employees, delegates, agents or howsoever otherwise) from organising or engaging in industrial action for the purpose of supporting or advancing claims in relation to the [respondent's] proposed … agreement. 20 A feature of the application for final relief is that it identifies no jurisprudential basis upon which the court would restrain the industrial action which the respondents propose to organise, and which their members propose to take. Let it be assumed, at least on a prima facie case basis for present purposes, that that action would not, in relation to at least some of the claims identified by the applicant, be protected. On the materials presently before the court, the only consequence of that circumstance would be that the proposed industrial action would be unprotected; that is to say, those taking and organising the action would be exposed to the prospect of an action under a law in force in Victoria of the kind for which, if the action were protected, an immunity would arise under s 415 of the FW Act. Such a conclusion would not be sufficient for the applicant's present purposes, as it would not provide a basis in law for the court to conclude, on a prima facie case basis, that the industrial action would be unlawful. Put another way, and in the absence of the court's attention having been drawn to any other respect in which the action might be unlawful, it is not sufficient for the applicant to establish, prima facie, that an action would lie under a law in force in Victoria in relation to the proposed industrial action: the present proceeding does not involve such an action, and the applicant's application is not crafted in any such way as would invoke the jurisdiction of the court to deal with such an action. As put by Gleeson CJ in Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd (2001) 208 CLR 199 at 216 [8], the applicant has not established its equity for the interlocutory restraint which it seeks; see also 232 [61] per Gaudron J and 241 [91] per Gummow and Hayne JJ. 21 Counsel for the applicant pressed upon me the conclusion that their client's entitlement to an interlocutory injunction (subject, of course, to discretionary considerations) was established by the judgment of the Full Court in Transport Workers' Union v Lee (1998) 84 FCR 60. I do not accept that. Relevantly to the matter presently under debate, in TWU v Lee it was held that the court had jurisdiction to hear a proceeding in which declaratory relief was sought with respect to the availability of the protected action defence and the operation of a predecessor of s 415 of the FW Act in circumstances where proceedings had been commenced in a State court in relation to industrial action said to be protected. The interlocutory injunction there granted related to the proceeding in the State court. The relevant cause of action was given by the federal provision which provided that no action lay in the circumstances. The jurisprudence established by TWU v Lee does not supply the deficiency which confronts the applicant in the present case. That deficiency relates not to the jurisdiction of the court but to the substantive unlawfulness of the industrial action proposed to be taken. Absent a prima facie case with respect to that question, the applicant has not made good its title to an interlocutory restraint. 22 The second consideration by reference to which I refused the applicant's interlocutory application was a discretionary one. I do, of course, recognise the importance of the work which teachers, principals and school administrators perform within the Victorian public education system. Of itself, that would provide a strong reason why the taking of arguably unlawful industrial action should be restrained on an interlocutory basis, if otherwise the applicant's title to such relief had been made out, and in the absence of any disqualifying circumstances. The court as presently constituted would need no persuading that the normal course of school education should not be interrupted by industrial action. As against that, I must also recognise the important place which industrial action occupies in the bargaining system for which the FW Act provides. Ostensibly at least, the respondents have brought themselves within the relevant terms of the FW Act and, if ultimately it should be held that their industrial action would have been protected under s 409, the granting of the interlocutory relief sought by the applicant would by then have seriously interfered with the exercise of their statutory rights, and thus with the achievement of the objects of the FW Act itself. 23 There is, however, a powerful discretionary consideration which should lead to the denial of the interlocutory relief which the applicant seeks. As indicated above, the logs of claims upon which the respondents rely were served on the applicant in December 2010 and in March and December 2011. It is now more than six months since the Commission made the relevant protected action ballot orders, and the taking of industrial action in support of the claims in those logs was authorised. The applicant has known for an even longer period that the respondents were pushing for outcomes which included the claims now said to fall within the exclusions in s 5 of the CP Act. Rather than give its early attention to those respects in which the subject matter of the claims did, or might, fall within those exclusions, and invoke the court's jurisdiction to deal with the substantial legal issues which would thereby be raised, the applicant has allowed time to pass to such an extent that it now asks the court to deny the respondents the one effective means at their disposal for pressing their members' claims upon an unwilling employer, and to do so on incomplete materials, without the respondents having had an opportunity to put their cases at trial, and upon having itself established no more than a prima facie case. It has often been said that an applicant who intends to invite the court to hold respondents out of their conventional rights upon a prima facie case basis should act without delay. The present case is a good example of why that should be so. Had the applicant moved in, say, July 2012, given the importance of the case, it is a strong prospect that the court would by now have been able to give the parties a final ruling on the questions which arise. It was the applicant's own choice that that course was not adopted. I regarded the applicant's delay in these respects as sufficient of itself to preclude it from the grant of the interlocutory relief which it seeks. Taken together with the considerations referred to earlier in these reasons (ie with respect to the absence of apparent equity for relief), there is a combination of persuasive circumstances which together point to the refusal of the present application. 24 It was for the reasons set out above that I rejected the applicant's interlocutory claim on 7 February 2013. I certify that the preceding twenty-four (24) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jessup.